Resources for Home Buyers

Buying or selling a home is one of the biggest decisions you well ever make. It requires a large commitment of financial resources and, often, emotional resources as well.

10 Steps For Buying A Home

1. Select a REALTOR® and establish a relationship.
   Your navigator throughout the home purchase process is your REALTOR®. It is his/her job to represent your best interests throughout the entire process. You should hire a REALTOR® who is familiar with your local market area, including sales prices and home sales trends in your desired neighborhoods. . She must understand real estate contracts, financing options and advertising venues. In addition your REALTOR® should good working relationships with other agents as well as allied services (title companies, escrow companies, service vendors).
   
2. Evaluate your needs and resources, including your purchasing power.
   How many bedrooms? What kind of yard? Are schools important? These are a few of the criteria you will need to identify. You REALTOR® will also direct you to mortgage lenders who can not only help you establish your purchasing power but also “get the job done” in a timely fashion. Your mortgage professional will provide your REALTOR® with a statement indicating your financial qualifications—your “resume” for making an offer.
    
3. Identify property to buy.
   Your REALTOR® will search the Multiple Listing Service (MLS), as well as her personal store of homes that might be coming on the market, to help you find the right home. In this process she may search beyond your criteria. As one buyer put it, “A good REALTOR® will help you discover a home that offers you something you didn’t even think of, or didn’t dream was possible.”
    
4. Write a purchase offer.
   Sometimes called a bid, your purchase offer is much more than that. Your REALTOR® will draft the agreement, which lays out your offer price, down payment and financing terms. It will also address protective contingencies, customary practices and local regulations. Your REALTOR® will discuss the seller’s motivation with you (if known), the sales history for the neighborhood and trends in real estate prices. When it is likely that there will be more than one offer on the property, your REALTOR® will offer tips on how to be a winner in a “hot” market.
   You will need to provide an “earnest money” deposit,” usually 1 to 3% of the purchase price. (Your check is not cashed until your offer has been accepted by the seller). You will also need a letter from a lender indicating your ability to perform at the specified rate and terms.
   In addition, it is an excellent idea to draft a personal letter to the seller, complete with photos of you and your family. This technique can help the seller connect with you as a person.
    
5. Present your offer.
   Your REALTOR® will present your offer and supporting documentation to the seller’s agent. Many times, the presentation is done orally with the seller present. The seller has three options: accept your offer, counter your offer or reject your offer. Your REALTOR’S® personal knowledge of your needs and qualifications will help her represent you in the best way possible.
    
6. Seller’s response.
   Your REALTOR® will review the seller’s response with you. Her negotiation skills, as well as her understanding of local market conditions and your needs, are critical. Quite often, there are counter-offers from both you and the seller at this stage.
    
7. Acceptance and opening of escrow.
   When the purchase offer is signed by all buyers and sellers, your REALTOR® will open escrow for you. Escrow will cash your earnest money deposit, as well as hold and disburse all funds for your transaction.
    
8. Contingency period.
   Your purchase agreement specifies certain contingencies and time frames during which you perform your inspections, obtain financing and homeowners’ insurance, and approve various reports provided by the seller. You must approve these in writing before escrow can close.
    
9. A few days before closing…
   Your escrow officer will provide an estimated closing statement, indicating the funds needed from you to close escrow (your down payment and closing costs). At this time you will give escrow a cashier’s check or arrange for a wire transfer. In addition, your lender will wire funds to escrow for your loan. In California, you do not need to be present for this process; however, you must provide live signatures on your loan documents—which can be arranged wherever you are.
    
10. Close of escrow
    The deed is recorded at the county recorder’s office, and you become the proud owner of your new home.

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