The Home Buying Process
Buying your first home is a dream that many first time home Buyers have and can be one of the exiting times in your life. Just think, no more rent payments and the gratitude of owning your own home. The house payments that you make today are an investment for your future. As a Realtor, we will to share with you my knowledge of the home buying process so that it is a pleasant experience and one that does not have to be frustrating.
How does a Realtor get Paid?
As a Buyer Agent, we often get asked how we are paid for our services. Realtors are paid for their services after a successful transaction has occurred. When a Seller signs a listing contract with a Realtor to sell the property, the listing agent and Seller also agree to share the listing fee or commission with the Buyers Realtor. Realtors receive compensation only after the deed has been recorded and the transaction has been funded.
Getting Yourself Pre-Qualified
When Buyers first start thinking of purchasing their home, it is very easy to overlook the first step. We know the temptation of Buyers is to look at a few homes first, but you really need to take the first step and that is to get yourself pre-approved for a loan by a Loan Officer. The Loan Officer will ask you numerous questions about your income and will need to have your permission to perform a credit review. To get a great loan rate you will need a credit score of 650 or higher. If your credit score is lower, your Loan Officer will help give you advice on how to bring the score up. This will enable you to achieve a lower interest rate and in doing so you will be able to afford to purchase a home with the amenities that you may desire. After you have been pre-approve to purchase a home, be sure that you and your Realtor ask for and receive a pre-approval letter from your lender. A pre-approval letter is very important once you find the home that you want to make an offer to purchase. Having this letter is very powerful with your Earnest Money Agreement during the presentation of your offer. It is important to show the Seller that you have done your home work and that you are qualified to purchase their home. If another Buyer submits an offer during the responds time of your offer and does that have a pre-approval letter, changes are that the Seller will go with the Buyer that is the most qualified providing that the offered price and conditions are relatively the same. This is the most important step of getting yourself ready to purchasing a home that fits what you can afford and to meet your needs.
Searching for a Home
After the first step in getting yourself pre-approved, you can now enter the marketplace with confidence in searching and viewing homes. We have found that most Buyers like to take a very active approach to finding their home as well as relying on their Realtor to find properties that they are seeking. We have found that the most successful approach to finding a home is one of working together in searching for homes on the market. If you are one of those Buyers that likes to search for homes using the internet (90% of the Buyers are using the internet in searching for homes today), we strongly recommend that you sign in with our MLS data base. Here you can save your search criteria, receive a instant e-mail once a new listing that fits your criteria appears on the market and any status change of one of your saved properties, such as a price reduction. With the new age of finding a home with the use of the internet, with a real time data base, you will be provided with any new homes that come on the market after your first search. If you need help in setting your criteria in our MLS data system, please call us at our La Grande Office @ 541-663-9000 or our Baker City Office @ 541-523-7390 or just send us an e-mail @ email@example.com and we'll be glad to help you. Your Realtor will also keep track of properties that come on the market. After you have seen several homes and find the one that you want to make an offer on, this is when the discussion of what price and conditions you may want to present and then the negotiating begins.
Writing a Sales Agreement
Before you decide on the price it is very important to review comparable properties that have closed. This gives you a good base for the most important part of the Sales agreement, which is the offer price. Your Realtor will assist you in coming to a good decision of what your offer price should be. There are two approaches to take with your offer. Some Buyers try to reach the Sellers counter zone to see how far they come off there asking price. And some Buyers like to challenge the Seller to accept their offer without a counter offer. Sellers know that once they counter a Buyers offer they are releasing them from their obligation to purchase their home if it is a reasonable offer.
You need to apply Earnest money with your offer which can be $500 dollars to $2,000. Generally you can apply a 1% percent rule. As an example a $100,000 offer would require $1,000 dollars in Earnest Money. The Earnest Money is applied towards the purchase of the property. Another important step is to have an addendum with the Sales Agreement for a home inspection. The cost is generally $300 to $350 dollars. Having the home professionally inspected by a qualified home inspector will tell what the condition of the home is in and if any repairs are required before closing. Also be careful not too ask too much from the Seller. The Seller may have received another offer from a Buyer before accepting yours with fewer contingencies and requests.
Your offer has been accepted ? now what?
Now the work begins for the Realtor, the Home Inspector, the Loan Officer and the Title Company. We know you may have thought the Realtor is not involved that much at this point, but actually the Realtor is the coordinator that works with the Loan Officer, the Title Company, the Seller's agent and you the Buyer during the closing of the transaction. You will also receive a Disclosure statement from the Seller. The Seller is required by Oregon law to provide disclosure statement for the Buyer. You will need to take your time to review the statement with your Realtor. If you see any item that is of concern, now is the time to address it and ask for clarification from the Seller. You also have 5 days to withdraw from the Sale of the property if you find that you disagree with the disclosure. The clock starts once your agent has received the disclosure statement.
Home Inspection Process
Now you need to contact the Home Inspector to schedule an appointment to have the home inspected. Most often Buyers will be with the Home Inspector during the inspection process. Remember that you have 10 days or the date that was used to have the home inspected, and to have a report sent back to you and your Realtor. If there are items in the report that needs to be address, then your Realtor will have to respond with an addendum asking for the repairs to fix or come to some negotiated agreement with the Seller during this 10 day period or what the time frame that was used. If you need more time to respond to the inspection report, then ask for that in your addendum also.