Purchasing a home involves dozens of individuals, most of whom you will never meet. Your primary advocates throughout the home buying process will be your Rivers Realty agent and your lender (mortgage broker). Your lender is the person responsible for securing a loan so you can purchase a home. Rivers Realty agents have worked with many lenders over the years and can help you choose one that suits your specific needs. Other key individuals involved in your transaction will be the property inspector, the insurance agent, and the escrow officer.
In a world of smart-phone-wielding millennials, most home buyers begin their home search online well before contacting a real estate agent. However, it can be extremely beneficial to engage a knowledgeable real estate agent at the beginning of your search to help guide you through the entire process, which will minimize stress and frustration. Rivers Realty agents have significant experience representing both buyers and sellers and are in the business because they love helping people. Take advantage of their expertise and engage them at the start.
After you have met with your Rivers Realty agent and selected a lender, the next step will be to obtain a pre-approval. Most listing agents and sellers require a buyer’s pre-approval letter or proof of funds (if paying cash) before an offer is deemed complete. A pre-approval letter reassures the seller that a buyer is ready, willing and able to buy before accepting an offer and removing their home from the market.
The lender will present various financing options and give you an estimate of your monthly payments and funds needed to buy a home. After checking your credit, debt, assets, and income, the lender should be able to provide a pre-approval letter stating your loan approval amount. Then, we will be able to submit the pre-approval letter with your offer to reassure the seller that you are qualified to purchase their home.
At Rivers Realty, we tailor the home search to fit your specific needs. We work with you to pinpoint exactly what you are looking for in your next home. Then, we set up an automated online search based on that criteria to alert you when properties that meet your needs hit the market. Let us know when one of the properties looks like a potential fit, and we will arrange a time to view the property.
Additionally, we can schedule property tours in which we view multiple homes in the span of a few hours. This approach can help you to narrow down your search very quickly and is particularly beneficial if you have a short timeline.
Once you have identified the property that meets your specific needs, it’s time to make an offer. Your Rivers Realty agent will help you make the right offer for the chosen property based on recently sold comparable properties and market conditions. Price is only one of the many negotiable components of an offer. Your agent can work with you to craft an offer that will optimize your offer’s chance of being accepted by the sellers.
Negotiations with the seller can vary from a quick acceptance of the offer to a complex and lengthy back-and-forth negotiation, especially on properties that have seen high levels of interest and multiple offers. The key is having a seasoned agent who can help you navigate the process and come out on top.
Once your offer has been accepted and the house is under contract, the next step will be to schedule a licensed property inspector. This step can be one of the more stressful parts of the buying process. The property inspector’s job is to point out flaws and potential issues in the home, and the idea that your dream home has flaws can be difficult to accept. Because no house is perfect, the key is being able to differentiate between the small and large issues. Your Rivers Realty agent and your property inspector will be able to help you distinguish the major from the minor issues to enable you to make an informed decision.
All of this will take place during your negotiated option period (typically 7-10 days). The purpose of an option period is to allow time for the property inspection, negotiation of repairs, or termination of the contract if an insurmountable defect is revealed. Typically, any amendments or cancellations must be completed in writing by midnight of the last day of the option period.
Your lender is going to require proof of a homeowner’s policy on the new home. Home owner’s insurance protects you and the lender in the event of catastrophic damage to the house such as a fire, earthquake or tornado. If you have not already selected a homeowner’s insurance provider, now is the time. Your Rivers Realty agent can recommend several homeowner’s insurance providers. Additionally, you may want to consider purchasing flood insurance (standard homeowner’s policies don’t cover flooding) on your new home.
Many buyers also choose to purchase a home warranty. A home warranty is an optional policy that covers the home’s major systems such as the air conditioner breaking down or if the dishwasher stopped working. It is important to read the details of a policy to ensure you understand what is covered and what is not.
As the closing date nears, the lender will order an independent appraisal of the property. The appraiser will come up with an assessment of the value of the property based on multiple factors such as the property condition, features, and comparable homes sold. Rarely does the appraiser’s opinion of value match the sales price perfectly. It is very common for the appraisal to come in a little above or a little below the contracted price, particularly in a “hot” real estate market. In the event the appraisal comes in a little low, there are several options that your Rivers Realty agent can guide you through.
Unless the sellers provide an existing survey (and no structures or property lines have changed), a new survey is typically required by most lenders. The survey is a depiction of the property boundaries and dimensions of existing structures on the property. The survey clarifies exactly where the property boundaries are and what is being included in the purchase. Because of the importance of this document, many buyers choose to have a new survey completed even if an existing survey is provided.
In the final weeks before closing, your lender will work to finalize the loan and may request additional documentation from you. It is important to return the items in a timely fashion to ensure you close on time. Once underwriting is complete and your lender issues a full approval, they will send instructions to the closing department. These instructions will then be forwarded to the escrow officer at the title company. The escrow officer handles the closing and preparation of the final closing statement.
It is important to know that the lender will perform a last-minute credit check and verification of employment, which has caused many buyers to lose their financing just prior to closing. Any major purchase you might be considering needs to be discussed with your lender prior to the transaction. New debt or a reduction in your cash reserves could negatively impact your final loan approval.
On closing day, you will meet at the title company, where the escrow officer will go over the documents requiring your signature to finalize the purchase of the home. After you and the seller have signed all the documents, the title company will alert the banks involved, asking permission to fund the loan. Once the loan has funded (the money has been transferred), the house officially becomes your home. Your relationship with your Rivers Realty agent does not end with the purchase of your home. We will be there to help with any future real estate needs.