Define Your Needs
Congratulations on your decision to purchase a new home! It is important to
select a professional real estate agent to work with you before you begin house
hunting, so that your agent can help you define what kind of home and
neighborhood would best suit your desires and needs. The finer the details on
your wish list, the more effective your home search will be. To further define
your needs, you may want to divide your lists into negotiable and non-negotiable
items, so your agent can operate with some flexibility when scouting for homes
on your behalf.
Now that you know what you want in a home and neighborhood, you need to find
out what you can afford. The best way to do this is to get prequalification or
preapproval for a home loan. Your real estate agent can refer you to a mortgage
broker to begin the process. In most markets, preapproved buyers are preferred
by sellers over those who are prequalified.
Your preapproved status lets the seller know:
- You have gone through an extensive financial background check.
- A lender is willing to do business with you.
- The likelihood of unexpected obstacles regarding financing is minimal.
Let the House Hunting Begin
Now you are ready to embark on your home search an endeavor that can prove
overwhelming if not approached with some forethought. The most efficient route
is to allow your real estate agent to do the initial scouting for you. Using
your wish list as a guide, he or she will alert you of new and existing listings
that have strong potential. If these listings pique your interest, your agent
will arrange home tours at your convenience.
Many agents send alerts via email sometimes as often as daily, depending on
the available inventory in your market. Let your agent know how you’d like to
receive these alerts, whether by phone, email or fax.
You also can do some research on your own. Read local real estate
publications, contact your local neighborhood associations, visit the local
chamber of commerce, surf the Internet, or drive around your favorite
neighborhoods. While these methods certainly can lead to your dream home, it’s
important to note that 82 percent of home sales are the result of agent
connections.* That means it’s more likely your agent will find your dream home
through being in the real estate business than you driving around on the
Make an Offer
When you’re ready to make an offer on a home, your real estate agent will
help you determine the offer price by reviewing recent sales of homes similar in
size, quality and amenities. With your input, your agent will draft a written
contract that outlines what needs to be done by both parties to execute the
transaction. If the seller accepts the offer, the document becomes a binding
agreement, so it is imperative that you carefully review it with your agent and
speak up if anything is not clear to you. It’s important to note that if the
seller changes any aspect of the offer, it is not a binding agreement until the
buyer agrees to the seller’s changes.
Strike a Deal
Sometimes, you get lucky and the seller accepts your offer as is. However, in
most instances, the seller will make a counteroffer. This is where your real
estate agent’s experience in negotiations will be invaluable. Keep in mind
almost everything is negotiable when you are buying a house. This can give you a
great deal of leverage in the buying process that is, if you have adequate
information and you use it in an appropriate manner.
Some items you may negotiate:
- Closing costs
- Move-in date
- Appliances and fixtures
Remain in close contact with your real estate agent so you can quickly review
any changes from the seller.
Remember: Bargaining is not a winner-take-all deal. It is a business process
that involves compromise and mutual respect.
Prepare for the Closing
When an offer becomes a binding agreement, your real estate agent will help
you tackle the checklist of action items that you, as the buyer, have agreed to
perform prior to closing.
Depending on how the responsibilities are divvied up in the agreement, this
is typically when you will:
- Conduct a home inspection
- Get an appraisal and finalize your financing
- Secure title insurance
- Shop for a home warranty
Having these procedures done in a timely and professional manner is a must,
as any delays could threaten a successful closing. A first-rate real estate
agent should be able to serve as your one-stop shopping referral source
for service providers. Your agent also should serve as your advocate, helping to
coordinate activities and making sure the vendors have access to the property to
perform their jobs.
Close the Deal
Congratulations! The moment you’ve been anticipating has arrived. The closing
is where home ownership is legally transferred from the seller to the buyer. It
is a formal meeting that most parties involved in the transaction will attend.
Closing procedures usually are held at the title company’s or lawyer’s office.
The closing officer will coordinate all the document signing and the collection
and disbursement of funds.
In advance of your closing date (24 hours at minimum), your lender will send
a final closing statement that outlines your closing costs, if applicable. Your
real estate agent will review this document with you to ensure its accuracy, as
well as help you gather any necessary documentation that you’ll need to bring to