Purchasing a property is most likely the biggest financial decision you will ever make. Whether you are a 1st time home buyer, or an investor buying multiple houses a year, it must be done carefully. Click through the following icons to learn about the process from start to finish!
Answer the question: Why do you want to buy?
- Are you tired of paying rent?
- Have you decided to pay your own mortgage instead of the landlords?
- Have you outgrown your current home?
- Are you building an investment portfolio?
- Are you looking to purchase rental properties?
- Do you need a larger yard?
- Would you rather live in a different area, or closer to work?
Having a clear sense of your reasons for buying will help you choose the right property.
Answer the Question: Has your income grown?
Property Ownership is an excellent investment that supports the strategy of financial independence. We believe in that here, and we would love to help you achieve that goal as well! With added income comes added options for financing at higher levels. We work with lenders that realistically pre-approve you to take action on your purchasing goals.
Whether you're looking for your dream home, a rental property, or just expanding your investment portfolio, we have the system to get you going!
Before you start shopping for your property, it's a good idea to make some simple preparations:
Build your application document file:
You will need these documents to secure financing for your property and having this put together is going to make the process SO much easier. Your packet should include the following:
- Financial Statements
- Bank Accounts
- Credit Card Statements
- Auto Loan Statements
- 2 Recent Paystubs
- Last 2 year's Tax Returns
- Copies of Leases for any rental properties
- 401K statements, life insurance, stocks, bonds, or mutual account information
Check your Credit Rating:
Your credit score will have a huge impact on what type of property you can buy, and at what price. It is first recommended to check your credit rating with an experienced lending institution to determine what you can afford. The lender will research your credit ratings from the three credit reporting agencies Equifax, Experian, and Trans Union. We are happy to recommend experienced and knowledgeable lenders that can help you get the ball rolling.
Be Careful with your Finances:
Now is not a good time to make sudden career changes, or large purchases. You want to approach your property purchase from a position of financial stability.
Buying a property requires making many important financial decisions, understanding complex issues, and completing a lot of paperwork. It helps to have an expert in your corner when undertaking such a large purchase. We can guide you through this process, and provide you with access to property listings in real time as they come on the market, and in some cases even before.
Here are some factors to consider when choosing your real estate professional:
- Look for a full-time agent -- One who has experience completing transactions similar to yours.
- Interview a few agents. Are they familiar with the area in which you are interested?
- Ask how much time the agent will have for you, and if they are available at night and on the weekends.
- Ask about their education. A good agent has knowledge of the latest real estate trends and keeps up to date on industry changes.
- Does the agent return your calls promptly? Time is money when buying a property, this is important!
- Ask for a list of properties they have sold or listed, or possibly a list of references.
- Choose an agent who listens attentively to your needs and concerns. Pick an agent that you feel comfortable with.
You know what you want. You've been Pre-approved. Awesome!
Now... the Hunt begins!
Take a Drive!
Get to know the neighborhoods, complexes or subdivisions that interest you. Drive around and get a feel for what it would be like to own a property in the area. Start getting a sense of the properties available in those areas.
Narrow Your Search!
Select 3 - 5 properties that interest you the most and have your real estate agent make appointments to visit them. Ask your agent about the potential long term resale value of the properties you are considering.
Time to Offer!
Once you have picked out the property you want to purchase, your agent can help you make an offer that the seller will want to accept. A good agent will investigate the potential costs and expenses associated with the new property. An agent can also help draft your offer in a way that gives you the advantage over another competing offer.
At this point, the seller has accepted your offer, and there is a legal agreement between the prospective buyer (you) and the property's seller.
Some important tips to keep in mind to streamline the process:
- Keep records of everything. Your agent will provide you digital or hard copies of all agreements and addendums. Don't discard these documents, as they are important!
- Stick to the schedule. The contract has multiple deadlines, all of which your agent will ensure you are aware of. Now that the seller has chosen our offer, we will be given an opportunity to mark every stage of the process of closing the deal as we move forward. Meeting these deadlines on time ensures a smoother flow of negotiations so that each party involved is not in breach of their agreements. During the process we will keep you constantly updated, so you will always be prepared for the next step.
Once your offer has been accepted by the seller, you will want to have a licensed property inspector inspect the property within the time frame that was agreed upon in the purchase contract. Aside from bringing in a trusted home inspector, you may elect to have different inspectors inspect the property if you wish to obtain professional opinions from inspectors who specialize in a specific area (like roof, HVAC, structural, etc). We have established relationships with amazing inspectors that are affordable, and incredibly thorough. We are happy to refer you to them when the time comes.
Depending on the outcome of these inspections, one of two things will typically happen:
1. Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the close...
2. The buyer, after reviewing the property and the inspections, requests a renegotiation of the terms of the contract (usually price or repairs).
Appraisal and Lending:
It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional on financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a 3rd party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of measurements, building costs, recent sales of comparable properties, operating income, etc. As we get closer to the closing date, we'll want to check with the lender to assure that they have everything they need to close the deal smoothly, and on time.
If the property that you are purchasing is conditional on an HOA association approval, then we will request the rules/regulations and other documents from the seller as soon as we enter into a contract to purchase the property. We will need to make sure the application documents and processing fees are submitted to the appropriate person at the association by the required time. You'll want to fill out the application completely, and legibly to prevent any delays in the approval of the application.
If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on that property. The value will depend on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowner's insurance by shopping around.
You can also save money with these tips:
- Consider a higher deductible: Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
- Ask you insurance agent about discounts: You may be able to 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. People over the age of 55, or long-term customers may also receive special 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 may pay more than you should.
We would be happy to recommend experienced and knowledgeable insurance agents for every property type.
The Closing Agent:
Either a title company or an attorney will be selected as a closing agent. The closing agent will hold the deposit in escrow and will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing. Some properties are subject to restrictions which limit various activites such as building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use your property. If it can be found, the closing agent will find it.
How to Hold Title:
You may wish to consult with an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate, and tax implications. Especially when selling or upon death of the title holder.
We finally made it! Welcome to Closing Day! Hopefully it's been a smooth and fun process for you! Here are some things that we will do to wrap up this transaction and get you the keys to your new home!
Final Walk Through Inspection:
More of a formality than anything else, the final inspection takes place a day before, or on the day of closing. You will visit the property to verify that all is in working order, everything is the same as when you last viewed the property, that there are no extra items left behind, and that everything included in your purchase contract is still at the property.
Home Services and Utilities:
It is likely that your escrow closer, or even your home inspection company has services that takes care of transferring over your utilities into your name. Ask your agent to confirm.
We are ready to assist you should an unforeseen glitch pop up, even at this last stage. Something at the property breaks down, or some other minor detail - no need to worry. We have encountered these problems before so we know how to handle them efficiently and in a stress-free manor.
The closing agent will furnish all parties involved with a settlement statement, which summarizes and details the financial transaction enacted through this process. You and the seller will sign this statement, as well as the closing agent, certifying its accuracy. If you are obtaining financing, you will have to sign all the pertinent documents required by your lender. If you are unable to attend the scheduled closing, arrangements can be made depending on the circumstances and notice the closing agent receives. If you are bringing funds to the transaction, you can elect to either have the funds wired electronically into the closing agent's escrow account or bring a certified bank check to the closing in the amount specified on the settlement statement. The seller will arrange to have all property keys and any other important information for you at closing.