|Buying a home is one of the most exciting and beneficial investments a person will ever make. However, the process of purchasing a home can be confusing and quite scary--especially if you do not have a reliable and experienced Realtor representing you in your purchase. This is why it is extremely important that you obtain representation when purchasing your home.
Here is an overview of the general process in buying a home. There are many more details involved, and if you have any more questions, feel free to give us a call. In addition, the Oregon Real Estate Agency has written a Buyer Advisory to help guide you through the real estate process.
If you are thinking of purchasing a home, the first step is to sit down with a Realtor for a consultation. During this appointment, we will discuss market conditions and will council you on all of the steps in the buying process. Most importantly, we will gather the information of the house that you are looking for, so that once you have decided to purchase, we can start searching for the right house for you.
Another step during this initial period that you can make is to call a couple of loan officers to get what are called Good Faith Estimates (GFEs). A GFE is an estimate of all of the costs involved in obtaining a loan, except for the costs of having any inspections done on the property. The loan officer will probably give you a couple of estimates, based on different prices and/or different down payment options. Our recommendation to you is not to get approved with a loan officer until you are sure which loan officer best fits your needs. The reason for this is that every time you have your credit report pulled up by a lender, your credit rating is lowered by 20 points, which can alter how much you can qualify for.
After you have gathered your estimates from the loan officers and decided on which loan program to use, the next step is to get pre-approved for a loan. Typically, you would get pre-approved for a loan prior to writing an offer for purchase (unless you find a house you want to buy right away!). The reason for this is two-fold: first, if you enter into a multiple offer situation, you want to be able to show the seller that you are approved to buy the house. The second reason is that right after you get an accepted offer on the property, your time will be spent on conducting and coordinating inspections--finding and obtaining a loan will be one less you don't have to worry about!
Make sure to check out our links page, which contains a couple of our favorite loan officers names and phone numbers.
It is important that you understand the process in searching for a home. When we search for a home for you, our method is to gather criteria of the house that you are looking for and enter it into a database. From there, we either e-mail, fax, or call you with updates as to everything new on the market. We search for new listings for you every day and update you when new listings are available. This method ensures that you know about every house that matches your criteria, right after it comes on the market.
Once you have found a house you would like to buy, the next step is to write an offer. The key to this process is working with a Realtor who is experienced, who knows the best methods of communicating and negotiating and will help guide you in determining the price of your offer.
After your offer is accepted, you will deposit your earnest money, and then we will enter the inspection period of the sale. Once again, this is an area that is really important in finding an experienced agent in working with, as we tend to have knowledge of the best inspectors in their field. In addition to having a general, overall home inspection done, it is highly recommended that you search the property to make sure that there are no abandoned oil tanks and that you have someone check out the sewer line to make sure that there are no breaks in the line.
Once you are satisfied with the condition of the property, the next step is to have the appraisal. Sometimes the process of having an appraisal done on the property and having a home inspection done can be a little confusing--people tend to think that the two are one and the same. The difference between the two is that the appraisal is for the bank to determine the bank's value (not the condition) and the inspection is to determine the condition of the property (not the value).
After the appraisal, the transaction is ready to proceed towards closing. Usually you will sign your closing documents a couple of days prior to the transaction actually closing. For clarification, many people call the appointment where you sign your closing documents "closing" which may lead people to think that the transaction is closed once the documents are signed. The transaction is typically closed a couple of days after you sign your closing documents, but be sure to ask us, the escrow officer, or the loan officer to clarify.
That's pretty much it! Although it seems like an overwhelming process, we have the resources and expertise to make the transaction as smooth as possible for you.
Here are a couple more points about the home-buying process:
Many people are surprised to find out that it does not cost you anything to work with a Buyer's Agent. When a Realtor fills out a listing agreement with a seller, the Realtor builds payment to a Buyer's Agent into the contract. On that same note, many buyers think that if they go to a listing agent directly, that it will somehow benefit them financially to do so. This is not the case. If a Realtor represents both parties in a transaction, the Realtor would get both sides of the payment: the Buyer's Agent's side, and the Seller's Agent side.
A word about For Sale By Owners (FSBOs). A FSBO is a seller of real property who wishes to save the brokerage fee that he or she would normally have paid to Realtors. Even though the For Sale By Owner is not working with a Seller's Agent, they are typically very happy to have an agent who is representing the buyer in the transaction bring an offer, especially if the seller knows that the agent will help guide the transaction. So, if you are interested in a FSBO, make sure to let us know about it, because we can typically help represent you during the transaction, just like any normal real estate transaction.