The Home Buying Process
A real estate purchase is one of the largest purchases you will make in your life. There are many facets to the buying process, so it is important to have an agent to assist you and represent you. Best of all, our services to you as a buyer are completely free. Through buying process below, we will help you every step of the way…
1. Identify your priorities
In order to find your “perfect home”, you need to define what it is you’re looking for. Things to consider:
- House Size/Square Footage
- Style of Home
- Number of bedrooms and bathrooms
- Yard size and other needs (Pool, play area, covered patio, etc)
- Garage size
- Closet/Storage Space
- What type of lot (corner, cul-de-sac, middle of street) Neighborhood Considerations
- Amount of traffic
- Distance from work, shopping, and attractions
- Sense of community
- Proximity to community parks and recreation
- Quality of school districts
- Private neighborhood vs Home Owners Association
- Area views
- Value of homes around you
- Potential for home appreciation
- Property taxes
- Soil conditions
- Flood plains
2. Understand Market Conditions
Buying a home, it’s critical to understand the market you are buying in. Slow market = more inventory and more negotiating room. Active market = more competition and less negotiating room.
3. Seller’s Pay All Commissions
Unless a home is for sale by owner, the seller has agreed to pay real estate commission when their home sells. A portion goes to listing agent, a portion to buyers agent. Because the listing agent represents the seller, it is important as the buyer to have your own representation. Would you hire the opposing attorney to represent you in a law case – or an IRS auditor to look after your best interests in a tax audit? If you answered no to these questions – why would you hire the seller’s agent to represent you in purchasing a home? Using an agent protects you, and saves you time and money.
4. Select an Agent
Make sure you select an agent that you are comfortable with and who will look out for your best interest, bla, bla. Work with them closely so they understand what your needs are, and let them work for you in locating a property, negotiating the best price, and following the entire process through closing.
5. Get Pre-qualified for a Loan
This way you'll know what you qualify for and what payment are comfortable with. Seller’s also expect buyers to be pre-qualified, and your offer will be taken much more seriously when a pre-qualification letter acompanies it.
6. Find a Property
Now that you know your priorities and have selected an agent to work with, use the priorities you defined to search… use our mls search tool, as you drive around the area – make note of properties that interest you and give us a call. Notify us of any property you find from any source, and let us make the first contact with the seller. We will help you research, and will set appointments for viewings.
7. Write an Offer
Agent will use a standard Utah State Real Estate Purchase Contract (REPC). Earnest money is required – usually a minimum of $1000, or 1% of the purchase price is common. Earnest money shows your true intent to purchase the property and is fully refundable if the offer is not accepted. There are many details and contingencies within the offer that your agent will help with.
8. Present Offer
After REPC is complete, agent will present the offer to the seller and/or their agent. Once the seller has reviewed the offer, one of three things will happen: the seller will accept the offer, counter if with different terms, or reject it. Counteroffers are common – and sometimes multiple counteroffers might be necessary until both parties agree on price and terms. Until both parties have fully agreed, and signed – there is no contract.
9. Inspections and Due Diligence
Buyer will have period of time to have professional inspection, termite inspection, survey, etc. Buyer will also be able to review community rules and regulations, soils reports, and seller’s disclosures (seller’s documentation regarding the properties condition). This is your opportunity to make sure the property is as you expected – and decide if you want to proceed with the purchase.
The appraisal is an evaluation from a qualified third-party to establish an estimated value for a property. An appraisal is optional if you are paying cash, required if you’re getting a loan. The lending institution usually orders it. We will communicate with the lender, and the appraiser and will discuss the completed appraisal with you.
11. Preparing for Closing
During the term of the contract, and up until the actual purchase (closing) – do the following: order homeowner’s insurance, order change of utilities, final walk-through of the home. Get ready to move!
12. Loan Process
During the term of the contract, the lender will be coordinating the paperwork, appraisal, etc. Once completed, the paperwork will be submitted to underwriting, where everything is double-checked and verified for accuracy. The underwriter ultimately approves the loan, at which time loan documents are prepared and sent to the title/escrow company.
This is when you sign the necessary paperwork to complete the purchase. The title company handles the paperwork and closing. Prior to settlement, the title/escrow company will search the title to make sure it is free of liens or problems, and will issue a title insurance policy at closing to insure that the title is clean. Prior to settlement the title company will notify you of the amount of money (including down payment and closing costs) you need to bring to closing.
Once the paperwork is done and the lender funds the purchase, the title co will process the paperwork with the county. Once the county records the transaction, the deal is “closed” and the house is officially yours. You can generally take possession of the home immediately after closing. However, it is very common for the homeowner to ask for 2-3 days after closing to move out.
The David Ellis Real Estate Group is happy to help in any way to make the home buying process a smooth one.
Get Other Helpful Buying Tips & Tools
Let The David Ellis Team represent your best interests in your search for a new home. While you can see a million homes on the web, actually buying your home is another matter entirely. Call us anytime for help, or to have your questions answered at: 435-862-9199, or email.
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