Buyer’s Guide
The Purchasing Decision.
Buying a home or commercial property is one of the most important financial decisions you could make. Whether or not this is your first purchasing experience, the decision to purchase a new property must be carefully thought through and processed.
What Is Your Reason For Buying?
Knowing exactly why you are interested in purchasing a new property can ease your buying process and help you make the right choices for you. Whether you are tired of paying rent, looking for an investment opportunity, or have simply outgrown your current home, having a clear idea of your reasons for being in the market for a new property can greatly assist your decision-making process.
Interested in Investment Opportunities?
Regardless of the type of property you are interested in purchasing, owning real estate is a low-risk way of building equity and an exceptional investment opportunity.
Build Your Green File.
A “Green File” contains all of your valuable financial information essential for securing financing for your property.
The typical green file should contain:
• Financial statements
• Bank accounts
• Investments
• Credit cards
• Auto loans
• Recent pay stubs
• Tax returns for two years
• Copies of leases for investment properties
• 401K statements, life insurance, stocks, bonds, and mutual account information.
What Is Your Credit Rating?
The type and price of property you can buy is greatly influenced by your credit rating. We recommend that you have your credit score checked by and experienced lending institution in the beginning of your property purchasing journey in order to assist you and your real estate agent in determining the correct price range for you. The credit reporting agencies that will be utilized by the lender are Equifax, Experian and Trans Union. We will be happy to recommend experienced, knowledgeable lenders in the residential, construction, and commercial and investment real estate fields.
Proceed With Caution
Due to the current economic state, now is not a good time to make major and unexpected career changes or sudden and hasty purchases. It is important for you to be financially stable and secure before proceeding with property purchases.
Choosing a Real Estate Agent
Purchasing a new property is an important decision that requires the knowledge and understanding of issues and paperwork that can be complex, confusing, and overwhelming. Having a professional and experienced agent on your side to help clarify and guide you through the process can be wise when deciding to take on the responsibility of a large project such as purchasing a new home.
Here are some factors to consider when choosing your real estate professional:
• Look for an agent who has experience with processing and completing transactions similar to yours.
• Interview a few agents about their expertise in the type of purchase that you are interested in before committing to a specific real estate professional.
• Make sure that the real estate agent you choose has plenty of time to spend on your particular purchase, and find out whether or not he/she will be available to you during evening and weekend hours.
• Verify your agent’s education and credentials; a good agent is one who is committed to continually improve his/her knowledge in the field and sustain a level of education regarding new developments and advancements related to his/her area of expertise.
• Time is of the essence when going through the process of buying a new property. Make sure your agent promptly returns your calls and is available when important decisions need to be made.
• Inquire about the agent’s previous sells and ask for a list of references that your may contact to verify the agent’s experience.
• Choose an agent who is attentive, cares about your needs, and makes you feel comfortable.
Take a Drive
Once you have made the necessary preparations and before you settle on a particular property, drive around and familiarize yourself with the neighborhoods, complexes, or subdivisions you are interested in. It is important to have a realistic idea of what it would be like to own a property in a particular area.
Narrow Your Search
It is easy to become overwhelmed by the amount of properties that may be available. Select a few properties that you are most interested in and have your real estate agent schedule appointments for you to go look at them. Make sure to inquire about the potential long-term resale value of the properties you are considering.
Time to Buy
When you are ready to put an offer on your desired property, your agent can assist you with making an offer that will be acceptable to the seller. Your agent should examine any potential expenses coupled with your purchase, and draft an offer that gives you an advantage over other buyers.
The Purchase Process, Step-by-Step
The Initial Agreement and Deposit
In order for an agreement to be effective, a legal agreement must be made between the buyer and the seller of a particular property.
The following are important tips to keep in mind during the purchasing process:
• Keep written records of everything. It is extremely important to keep written records, signed by both parties, of all agreements and counter-offers including verbal ones. Make sure that your agent assists you in transcribing all of the information into written records, and that copies of all records are provided to you.
• Stick to the schedule. Once you and your seller have settled on an offer, both sides will be given a timeline marking the different stages of the process of sealing the deal. Make sure that your agent is informed of the deadlines so that the process of closing the contract is done smoothly and efficiently, and neither party is in breach of the agreements.
The Closing Process. An escrow will be selected as a closing agent. The closing agent will hold the deposit in an escrow account until all examination of the property by the insurance company is complete, and all requirements of the agreement are met.
How to Hold Title. There are multiple ways of holding title which may have different legal, estate, or tax implications and consequences. Consulting an attorney or tax advisor may assist you in the holding title process. Discussing your options with your agent or asking for referrals to professionals who may help could be beneficial.
Inspecting Your Property. One your offer has been accepted, and before escrow has been closed, you must have the property inspected by a professional in order to make sure that all codes are met and up to date. We work with different inspectors and will be able to recommend someone to thoroughly examine the property. It is important to know whether or not some work has to be done on the property in order for it to pass inspection and be ready for closing.
A couple of things could happen depending on the results of the inspection:
- A successful inspection could remove all contingencies and move towards closing, or
- Renegotiation may be requested by you upon review of the inspection outcome.
Appraisal and Lending. Appraisers are specialists who determine a property’s based on a combination of different facts. Your lender will inform you if additional information is needed in order for your application to be approved and your loan to go through. Therefore, it is crucial that you stay in touch and communicate with the lender often, especially once you are within two weeks of closing, to make sure that all documents are in and the loan can go through smoothly and in a timely manner.
Association Approval. If your property requires certification by an association, it is important that all requirements are fulfilled by the association’s determined deadline. If the association requires a meeting prior to approving your application, make sure to schedule an appointment as soon as possible in order to complete the interview and provide the association with your certification of approval; this certificate is often requested by the association prior to you moving into the property.
Property Insurance. If you have applied for a loan, your lender will request that you purchase property insurance.
Here are a few tips that could help save you some money:
• Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
• Ask your insurance agent about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Persons over 55 years of age or long-term customers may also be offered discounts.
• Insure your house NOT the land under it. After a disaster, the land is still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you need to.
Make sure to shop around before settling on a particular insurance agency. We will be happy to recommend experienced and knowledgeable insurance agents for every property type.
Closing Day
It is almost time to end the property-buying journey. But first, make sure that all loose ends are tied and you are ready for finalizing your purchase…
Final Walk-Through Inspection.
The final inspection is mainly a formality. However, it is important that during the last walk-through of the property you make sure that everything is intact, working, and the same as it was when you first viewed the property.
Home Services and Utilities
Please notify your agent if you are interested in a list of contact information for activation of home services and utilities.
Be Prepared
Sometimes problems arise even during this last stage of the process. If you are experiencing minor break-downs or other details that may require attention, we have experience handling these situations and will be able to assist you in an efficient manner.
Closing
All parties involved will be provided with a summary of the settlement which includes details of finances and transactions. All parties – buyer, seller, and agent – will sign the settlement statement in order to confirm its accuracy. If loans are involved, make sure that all paperwork required by the lender is signed and processed. Any funds you may be bringing to the closing must be in the form of a certified check, or you may arrange for them to be electronically transferred directly into the escrow account. At this time, the seller should provide you with keys to the property, and all other important information that you may need.
READY TO SERVE YOU WITH ALL YOUR REAL ESTATE NEEDS
