Sunday, June 27, 2010 -
By Suzanne Grace
Special to Relocation.com
Buying a home, especially your first home, can be an overwhelming experience. You can go through many different emotions, including happiness, fear, frustration and so much more.
Hopefully this will help clear up some of the mystery surrounding it and help you feel a little less in the dark about the entire process. (It's written from the perspective of California law and procedure, but is largely applicable elsewhere.)
I have set this up as a step-by-step process as a brief but concrete idea of what you can anticipate.
1. Let's meet! During this first step we meet to determine the best way we can work together to meet all of your needs. We share with you our knowledge on the community you are interested in, answer all of your questions, and get a general feel of your style and methods.
Sometimes clients want us to remain close by during the entire process and others just want it done -- and to wake them when it is over!
After we meet we begin the loan pre-qualification process for your mortgage; you will complete a universal loan application which I then take and submit to our loan officer who then runs your credit (you will also be provided with a copy), reviews your assets and income as well as submits to the in-house underwriters (not every loan officer takes this step; while this does take a day or two longer, it does ensure that if there are going to be any problems, we can get them solved before we are in escrow and under contractual deadlines) and reports back to me what programs are available to you, what the costs/fees involved will be, and the loan officer give you an estimated closing statement.
He will then work on obtaining your full loan approval. The loan officer will be able to give you "real" numbers on what your payment will be and the various loan programs that are available and will advise you on the best programs.
2. Let's find you a home! The next step is to shop for a home; when we take you to see properties, your comments (love the floor-plan, hate the kitchen, etc) let us know what you like so in the future we take you only to see those homes we know you'll like. We can appreciate how valuable your time is and want to make the best use of it. Keep in mind the first time out can be a little frustrating as you may not be sure exactly what you're looking for.
3. We found it! Once we have found your home, the next step is to write an offer on it. We will try to collect as much inside information as we can from the other agent and/or seller (including reviewing current title information) in order to know what the seller is looking for so we can guide you appropriately.
When the offer is written (and signed by you, all of this taking about an hour), we present it to the seller and/or the seller's agent. In most cases, the seller/seller's agent will come back to us with a "counter offer" and this usually gives us an idea of what they really want; sometimes it is a counter offer just on terms (they want a 30 day escrow, we asked for 45 days) and not price but we then sit with you and discuss your options on how you want to respond. Just because they counter does not mean they don't want to accept it, it is just another step in the process; you can "counter" their counter as many times as it takes to reach an acceptable contract.
4. It's accepted! Once an offer has been accepted, we "open escrow" the next business day. This is when we take your deposit check (typically is it 3% of the purchase price but this is also a negotiable item) and officially open the escrow.
Escrow is a third party who ensures that all terms of the contract are met as well as coordinating with the banks on ensuring your loan documents arrive on time, assisting with the signing, etc. The Escrow Officer cashes your check within a few days and then begins to translate what is on the contract into written format. These are called "Escrow Instructions" and are either mailed to your home or given directly to us and we then go over these with you.
(During this period, the loan officer "shops" your loan to the 100s of banks they are approved with; whoever comes back with the best rate/terms is then proposed to you and then the loan officer will "lock it in" and begin the process with the appraiser, he will gather any required information the bank is seeking as well as communicating all of this to you.)
5. Let's Inspect it! Upon acceptance of your offer, we schedule an inspection with a licensed home inspector -- we have a preferred list of inspectors who rates and fees can be discussed with you prior to scheduling; you will need to come to the inspection but you typically do not have to be there the entire time as we are there on your behalf. It is a good idea to show up about 1.5 hours into the inspection and then when the inspector is done, he will discuss the report findings with all of us (sometimes the seller is there, too).
We will be given "disclosures" from the seller, letting us know what has been done to improve the home, anything they know that is wrong with it, etc. We also will be given a termite report; the seller hires a termite inspection company and they inspect any findings and these items are repaired as appropriate, typically by the seller (based on California laws).
6. Back to the Seller! After we review the inspection report (and I always advise sleeping on it as well after reading through it thoroughly) we discuss what we want to ask the seller to repair (and in some cases the seller will give us a monetary credit in escrow in lieu if the repairs, covering the items we have mutually agreed upon) and then we write it up on an official form (Request for Repair) and submit it to the seller/seller's agent. They will respond with their willingness to make repairs and at that point you can decide whether you want to proceed with the purchase. (Homes in the state of California are sold in as is condition and it is up to the parties of the transaction to come to a mutual agreement on this.)
7. Onward! Once we have gotten through this portion of it, the only thing left to do is confirm your loan and get an appraisal (which is as mentioned above is organized with the loan office; sometimes you will pay for this upfront or it may be paid through escrow).
8. Is it Ready? Approximately five days before escrow closes, we do a "Final Verification of Property Condition" walk-thru which is our opportunity to make sure the repairs were made and no damage was done to the property while in escrow. Once this is signed off, we wait for the bank to fund the loan!
9. It's All Yours! The day your loan funds -- although one of the most exciting days of your life -- is not the day you move into your new home. Because the home sale has to be recorded with the County Recorders Office, you are officially the owner the day after it funds and the home has been recorded; sometimes it takes until 3 p.m. for this to happen but once it has, and the seller has moved out, it is all yours! Congratulations, you are now a home owner!
Suzanne Grace is a real estate agent in Thousand Oaks, California