Our Complete Guide to the Home Buying Process
The Search
The Search is a very exciting time in the house-hunting process. We want to make it a great experience, but before we start, here are some things you need to know.
Preparing for Showings
• Check your portal when you get a notification, especially if you are looking in a hot-property price range
• Keep your portal clean. Delete homes you do not like and favorite those you do like.
• If it seems there are too many homes, do drive-bys before scheduling a showing(s).
• If your schedule changes and you need to cancel your appointment, please let your agent know ASAP.
Showings
• We must stay on schedule. If you find you need more time, we will schedule a second showing.
• Wear comfy, easy-on, easy-off shoes. We will honor requests to remove shoes in seller homes.
• Stay together and with your agent as we tour the home.
• If you have your children with you, please keep them by you at all times.
• It is best not to use the restroom at the home. Let your agent know if you need to make a pit stop.
• No photos or videos are to be taken inside or outside the home without prior permission from seller.
• Be very careful what you say inside the home, sellers may be listening.
• Please do not handle personal property.
• Do not push buttons, especially big red ones.
• Open closets and cabinets, but not dresser drawers.
• If you do not like the home when we pull up, as a courtesy, your agent will go in, turn off lights and leave a card.
• Please let your agent know if you need to stop for a restroom break, something to drink or a snack.
• Feel free to have a drink or snack in the agent’s car.
Important Things to Know
• 2nd showings will be scheduled for final choices.
• Remember, for some homes, “If you sleep on it, you may not sleep in it”. Your agent will let you know if you are looking at a “hot property” and need to act quickly.
• You may have questions that we are unable to answer because it violates Fair Housing Law. Please understand, REALTORS are held to the utmost standards and answering some questions violates the law.
• Pre-Approval is imperative! Please be sure to get preapproved before looking at property.
• Inspections occur after an offer is made on a property, and the buyer and seller have a contract. You may bring family and friends through the home prior to making an offer, but you may not climb into attics, walk on roofs, test appliances or have a formal inspection until you are under contract to purchase the home.
• If other parties will be part of the decision-making process, bring them along for all showings. It is important that all decision-makers have the same perspective and understanding of the market, and this involves being part of the process from the very beginning.
• If you need important measurements for furniture placement, please do so during the 2nd showing or during inspections. Once you are under contract we need to limit the amount of time we displace the sellers’ family.
The Financing
It is important to be pre-approved prior to beginning your home search. You will want to know how much home you can afford, how much home you want to afford and what your home buying expenses will be. Having the right loan officer in place is crucial to a successful transaction. Make sure to ask for the lender by name so that you connect with the right person.
Your lender is as important as your REALTOR! We recommend you speak with more than one lender when shopping for your mortgage. The link above will take you to our list of recommended lenders. We prefer these lenders because they have proven to be great partners with our team. They are familiar with the terms of our contracts and will be present with you at the closing table. Don’t worry about credit inquiries made from each lender. The major credit bureaus understand you will be comparison shopping. Multiple mortgage-related inquiries should not drop your credit score after the initial inquiry as long as those requests are made within a 30-day time period.
It is VERY important to follow the advice and guidance of your lender. Be especially mindful of opening a new line(s) of credit, making a large purchase(s), depositing a large sum(s) of money, and making a job change(s). Consult with your loan officer immediately if you do any of these activities. Do not wait until the week of closing to inform your loan officer of any of these activities you undertake. All of these activities can affect your loan and delay closing. Stay in close touch with your loan officer throughout the entire process.
The Offer
Once you find that right home, it is time to write an offer. We will use the 11-page contract provided by the local Board of REALTORS. When it is accepted, it is very important to remember you are under contract. We will work hard to ensure you meet your contractual obligations.
Are You Competing?
We may or may not know if other buyers are making offers on the home. The seller is NOT required to inform us. It may be in the seller’s best interest to not let us know. Different strategies are employed by selling agents to get the best deal possible for the seller. Please know, just as we have a fiduciary responsibility to act in your best interest, the agent for the seller has that same responsibility to her clients. You may get a rejection and never have an opportunity to put in a better offer. For that reason, you should ALWAYS put your best foot forward.
It is not unusual for a seller to have their home priced at or below market. For that reason, there may be other buyers who love the home as much as you and make an offer with a higher price than the list price. Sellers will assess the offers and may determine to take an offer lower than your offer because of the strength of the buyer. If you do not win in a multiple offer situation, we will not know until the home closes what the agreed upon price is. In the end, the published closing price can be lower than originally negotiated price depending on inspection or appraisal negotiations that happen during the term of the contract. Don’t beat yourself up if you do not win in a multiple offer situation.
Terms
When making an offer there are several things to consider. Price, earnest money, home warranty, closing date, closing costs and personal property are the most common terms that are negotiated. We will provide you with a marketing analysis to assist you with price. Earnest money is the amount of money you are willing to place into an escrow account should you and the seller come to terms. Your lender should advise you on whether or not to ask for closing cost assistance, and if so, how much to request. Most closings take between 30 to 45 days. Being flexible on your closing date can sometimes be the thing that wins the home for you. Personal property would be items that are not attached. For example, a refrigerator, washer, dryer and swing set.
Counteroffers
Let’s face it, negotiating can be exciting, stressful and intimidating! Sellers will look at your offer, and if it isn’t what they want, they will come back with a counteroffer. You can review their counteroffer and decide if you want to accept it, reject it or counteroffer it. Counteroffers aren’t just about price. The seller may counteroffer on the home warranty, closing costs, closing date or personal property. We will walk you through the counteroffer process.
The Contingencies
Once you are under contract (“In Escrow” as seen on TV), you will want to begin working diligently to resolve the contingencies in the contract. Our contracts have several contingencies built in, and those contingencies have deadlines. Below we will talk about the built-in contingencies in our contract.
Inspections
We strongly recommend you perform any and all inspections you need performed to satisfy your need for information about the home you are purchasing. The cost of inspections is the responsibility of you, the buyer. Payment for those inspections is expected at the time services are rendered. Your inspector will let you know the cost, and the accepted forms of payment.
The goal of Inspections is to provide you with information about the home. You may discover defects that you desire the seller to fix. We will go through your inspection reports and work with you to determine what defects you want to request the seller correct. No home is perfect, and your inspector(s) will find defects and imperfections. The goal of the inspection is not to create a perfect home at the seller’s expense. The goal is to provide you with information about your future home and give you an opportunity to request correction on those items most important to you.
At a minimum, The Jean Lewis Homes Team recommends a whole house, wood destroying insects and radon inspection. If you are purchasing a home on private sewer, we strongly recommend you inspect the private sewer. It has become quite common to have a sewer-cam scope of the sewer line from the home to the public sewer lines. If you are purchasing a home with a pool, we also recommend a pool inspection. Please note, if you are inspecting the pool, and it has not been opened, you will be expected to pay for the opening of the pool, and, if in the winter, the closing of the pool again. If you are purchasing a home with a sprinkler system, we recommend you have that system inspected. If the sprinkler system has to be de-winterized, that expense is the responsibility of the buyer, and the buyer will be expected to winterize it after the inspection. We have a list of inspectors in the area who can manage all of these inspections, and more.
We will provide you with a list of inspectors for all the inspections you wish to perform. Once you decide who you want to inspect the property, go ahead and schedule the inspections. Per the contract, you have 20 days from the Effective Date to have any and all inspections completed. It is best to schedule the inspections sooner rather than later. If you are able to schedule them around the same time, that would be helpful for the sellers.
We encourage you to attend your whole house inspection. We have found it works best if you arrive during the last half-hour of the inspection. Most inspections take about 2 to 3 hours. By arriving at the end, that will permit the inspector to thoroughly inspect the home uninterrupted. When you arrive, he can go over the report with you and show you the areas of concern. Also, if you need measurements of the home for furniture placement, during the inspection is the best time to do it.
Financing
The contract is very clear in stating the buyer is to immediately work towards obtaining financing as soon as the property is under contract. You will need to contact your loan officer and begin providing the requested documents. Please note, you will likely be asked for the same document more than once. This can be frustrating, but it is not unusual. We recommend keeping a secured file in your cloud or on your computer in a folder titled: “Sent to Lender”. Then, if you are requested to send a document you have already sent, you can easily pick that document out of the folder and re-send it.
There are 2 “levels” of financing. The first is pre-approval. Pre-approval is what we submit with your offer. It is scratching the surface of your finances and does not provide all the information the underwriter will need to complete your loan package. The second level is final loan commitment. This is a more extensive process and requires a lot of timely cooperation from the buyer and loan officer. Final Loan Commitment is a contingency in the contract that must be met by the specified deadline. Typically, that deadline is 10 days prior to closing. This means you must be diligent in providing financials to the loan offer and loan officer’s processor in a timely manner. It is important to know, if you do not meet your Loan Commitment deadline, and the buyer has a backup offer, the buyer can immediately terminate the contract and you will no longer be the buyer of that home. It is crucial to be organized and timely with your financials.
Be very aware of the instructions given to you by your loan officer. Particularly when it comes to changes in spending habits, or job changes. Even a promotion with more pay can have an impact on the timing of your loan package! It is important to keep your loan officer in the loop on your current financial situation, good or bad, during this process. Postpone large purchases, job changes and large deposits during this time period unless you first discuss it with your loan officer. We cannot stress this enough!
Appraisal
The Appraisal is different from the market analysis we provide you. The appraiser is more like the scientist in this process. The appraiser looks at the home less from a market value standpoint, and more from a property value standpoint. The job of the appraiser is to determine the actual value of the home.
If you are paying cash for a home, you may elect to waive the appraisal. If you are purchasing utilizing a mortgage, an appraisal will be required. The appraisal will be ordered by the lender, and the purpose of the appraisal is to collateralize the loan, not to determine the actual value. This is why you see many appraisals match the agreed upon purchase price. You will receive a copy of the appraisal. If the property does not appraise to the agreed upon purchase price, we will move forward with renegotiation of the purchase price.
Selling Your Home
If you must sell your home, or desire to sell your home, in order to purchase your new home, we will add the Contingency Addendum to the offer. Please be advised, if you are in a multiple offer situation, this may affect your ability to be the selected buyer for the home. There are financial products available that can assist you with buying a home while still owning another home. We can help you assess this scenario to determine if it is best for you.
If you proceed with a purchase contingent on the sale of your home, it will be expected that your current residence is on the market, priced competitively and in acceptable condition. If the home is not on the market, it will be expected that steps are being taken to get the home on market as soon as possible. We recommend having your home ready to market prior to making an offer contingent on the sale of your home.
If you are purchasing contingent on the sale of your home, you will likely have a kick-out period. The kick-out period is the time the buyer and seller agree upon to allow the buyer to remove the contingency. As soon as notice is given of a kick-out, the buyer must produce, within the kick-out time period, a letter from the loan officer stating the buyer’s ability to purchase without the sale of the home, or a proof of funds letter if paying cash.
The Closing
Final Walk-Thru
The final walk-thru can take place up to 4 days prior to closing. We recommend the walk-thru take place as close to closing as possible in order to ensure the home is in acceptable condition. Many sellers will not have personal property removed from the home 4 days prior to closing, and it is best to walk through the home when all items are removed. The purpose of the final walk-thru is to confirm completion of inspection items (you are welcome to hire your inspector to review the repairs), ensure the property is in the same condition as it was the date of contract, and to identify any defects that may have been hidden by furniture or other items.
If the home had items hanging on the wall, it is to be expected that there will be nail holes and marks on the walls from those items. Some owners will patch those holes, others may not. The contract does not give direction on correcting these imperfections. We advise clients to not expect they will be corrected unless there is significant damage to the walls. Most sellers are frantically packing and doing everything they can to empty the property. They likely will not have time to make those corrections.
The home is expected to be broom-swept clean. The definition of “clean” is different to everyone. Expect that you will likely want to come in with your own cleaning products to clean the home to your satisfaction. If there is trash and personal property left in the home, it can be expected that closing could be delayed (which could be costly to the buyer and seller), or an arrangement will be made between buyer and seller to have the trash removed. Our Team will work with you on negotiating this should it arise.
Utilities
As we approach the closing day, you will need to have all utilities transferred to your name. This will include electric, gas, sewer, water and trash. We will work with you on determining who you need to contact. Do not wait until the day of closing to do this. Some utilities require you visit in person to make a deposit and fill out information.
Closing Day
You made it! Closing day is the day you will take possession of the home. Prior to coming to the title company, reach out to your loan officer to determine how much money you will need to wire or bring in the form of a certified check. Be sure to bring your photo id and make sure it is NOT expired! We will meet at the title company for your signing at the designated time. Expect the process to take about an hour. Feel free to bring your children if you are unable to make arrangements for them. You will be given the key after the funding has been approved by your lender. Some sellers do not have keys! So, the only key you may get is the one from the lockbox. We recommend you re-key all doors when you move in. You never know who the former owners may have given keys.
When you get settled in your new home, reach out to our team and invite us over to see your new digs! We would love to see what you’ve done with the place!