Buying a home is one of life’s best experiences! Excitement is in the air and buyers are full of hope and anticipation. The dream of owning a home to call your own seems to be a universal one. Of course, the fun nostalgia of touring prospective houses will hopefully lead you to the home of your dreams.
But then what? Regardless of whether you have a smooth-sailing transaction or road block after road block on path of home ownership, the process of purchasing real estate is a complicated one. Here are some items you can expect to include on your checklist once you’ve found the home of your dreams:
Write Your Offer
There is far more to negotiating the terms of your offer than simply the purchase price. Sellers will consider other factors such as the type and legitimacy of your financing, whether you have a home to sell, whether you’re willing to waive certain contingencies and more. You’re Realtor will help you understand your options in order to craft your offer as competitively possible for the circumstances.
Once you submit your offer, it is usually reasonable to expect a counteroffer from the seller. Of course, each party is hoping for the best possible terms of the contract. If you’re buying a home, it’s best to use a Realtor that is representing you exclusively. If the agent (who has a legal obligation to represent the seller with whom they have a contract) or the agent’s firm also represents the seller they have created a dual agency. Use an Exclusive Buyer’s Agent that is interested in ensuring your best interests in the negotiations.
Once both parties have mutually agreed to the terms, as the buyer you can expect to write your first check of the transaction. The Earnest Money check is a good faith deposit you used to show the seller your vested interest in closing the deal. The dollar amount will have already been agreed upon and used as part of your negotiation. Fear not, home buyer; your Realtor has your best interest in mind and your earnest money should be protected based on the following contingencies:
- Inspection – A good inspector will tell you about any safety concerns or major repairs the house may need. The inspection is also your time to learn about your home and any functions or defects. Plan on investing three to four hundred dollars (in the Spokane area) and a few hours of your time because it is well worth it! You will have an opportunity to renegotiate your terms based on the inspection.
- Appraisal – Your lender will order an appraisal to determine the value of the home to protect you (and the bank) from paying more than fair market value for the home. Expect to pay five to six hundred dollars for your appraisal fee. Many lenders will wrap this in to your closing costs or loan and those are terms you’ll have to discuss with your lender. If the appraisal comes in below purchase price your Realtor will guide you through that process. In addition, VA and FHA loan appraisers will be looking for additional conditions such as roof life, broken windows, chipping paint and more.
- Financing – This contingency is to protect you as the buyer from being obligated to purchase the home if you are not able to obtain financing on reasonable terms. You must make reasonable efforts to obtain the financing.
- Title – If the title on the home does not come back clear (for example: the home owner has a lien on his home from unpaid debts) your Realtor will help you explore your options.
Other Road Blocks
Throughout the process of buying a home you should expect one or two if not several hiccups to cross you: your lender could ask you to pay off a student loan, something major could turn up on the inspection, the curtains you loved were removed upon the seller moving out, etc. Your Realtor is your representation. Utilize someone you trust to guide you in the right direction upon these happenings.
During the final weeks you can expect your lender and closing agent to be preparing all of the documents needed to close your transaction. Your Realtor is there to help facilitate the process. The last steps are to sign a giant stack of paperwork, fund the sale and record the transaction.
The moment we’ve all been waiting for! Those keys are worth a lot of money (to you and the seller) so don’t expect to receive them a moment before the process is fully completed.
CONGRATULATIONS ON YOUR NEW HOME!