Buying a home should be a joyful process. At Oak Tree Real Estate, we believe the more you know, the more you understand the buying process, the happier you will be.
We have summarized the entire buying process in 14 simply steps.
Assuming that you have decided to seek professional help (and you should), here is what to expect through this process:
Step ONE:You choose a Realtor®
Some people like to get a referral from their close friends or family. Some like to do
some homework on their own & choose for themselves. Both are a good way to do so. If you are choosing for yourself, look for some testimonials see what previous clients had to say about the Realtor you are looking at.
Remember: You are not tied to any one Realtor® for life. So, don't stress over this. Take your best pick & go with you instinct.
Question:Why meet a Realtor® first?
A Realtor® is a professional licensed by the state through the Real Estate Commission. They are also part of the National Association of Realtors® and must adhere to a strict Code of Ethics to maintain membership. Once you hire a Realtor®, they have a legal duty to protect you as their client and look after your best interest.
WARNING!! Do not meet a lender first!
Lenders have no legal duty to represent you. They work for their employer & they are there to sell you their financial products, no others. A Realtor® is bound by law to represent you & must use their knowledge and experience to point you in the right direction. Not all lenders have the same loans available. Some have higher rates & some charge more fees. Your Realtor will make sure you have a good loan and a good rate. Talk to your Realtor first & get some ideas as to which lenders offer the loan better suited for your financial situation.
STEP TWO:You meet with a Realtor®
Pennsylvania Real Estate law mandates that at the first meeting, before having a “discussion of substance”, your Realtor® must explain to you who represents who to make sure you understand if the Realtor before you is working for you or for the seller.
To do so, your Realtor® is going to go over a form with you. Don’t worry. This form was actually created for your protection. So, they are a good thing!
The Consumer Notice explains the various business relationships possible between you & a licensee (a Realtor®).
Q - Is this a contract?No the Consumer Notice is not a contract & it clearly states so on it first paragraph. It was created to protect you by telling you, for example, that an agent working for the seller in not on your side when you a buying a home. Some exceptions apply. Be sure you understand this form & ask as many questions are you need to be comfortable with it.
Once you go over this document, the Realtor® has fulfilled their first legal duty & will be able to talk to you about Real Estate in more detail.
STEP THREE:You choose a Realtor® to help you.
During that initial meeting, your Realtor® may also ask you to go over a Business Relationship Agreement. This document is in fact a contract. It binds you to that Realtor® for a certain period of time. Most Realtors will not spend much time with you unless you are willing to work with them. Understand, most of them are not getting paid by the hour & will not be able to bring a paycheck to their family at the end of the day, unless you use them as your agent.
Don’t worry! This document is designed for you to remain in control as well. Keep in mind: You control the period of time. So, you don’t have to sign an 8 month agreement with a Realtor® you just met. Use your instincts and sign up only for a time period you feel comfortable with. If you don’t feel comfortable at all, don’t sign it. Make an appointment to meet with another Realtor®. Make sure you feel comfortable.
STEP FOUR:Talk about your personal situation
After you choose a Realtor® to represent you, now you should talk to your Realtor® about your personal financial situation & get some recommendations as to where you could get a better interest rate & secure a loan that better suits you.
Ready to see homes?? No, your Realtor® will & should insist that you get pre-approved first. It is in your best interest to truly know where you stand financially before your start looking at homes.
STEP FIVE: Get Pre-Approved
Using your Realtor®’s recommendation, meet with a lender of your choice. The lender will probably ask you for all sorts of personal & financial information in order to run your credit & pre-qualify you. Sometimes you can even do it over the phone. Ask your Realtor® for details.
Once you are pre-approved & the lender has issued a pre-approval letter, you are now ready to go see homes!!
STEP SIX:Tell your Realtor® about your future home
Our new web-based MLS system allows your Realtor® to be very specific on your home search. Be sure to explain all the must-haves to your Realtor so they can search only for the homes that meet your needs.
Your Realtor® may in fact save your requirements so that the MLS system sends you automatic updates via email as soon as any Realtor for the local area lists a home for sale in the MLS.
But let’s concentrate on the task as hand. Let’s go see some homes!!
After running a search in the MLS, your Realtor will probably handle you a stack of MLS sheets with all the homes for sale that meet your requirements.
STEP SEVEN:Drive-by – pick the best locations – Make appointments
After your Realtor® handles you a stack of MLS sheets, they best thing to do, is to go over them, make sure they all meet your most basic requirements & then get out there and take a quick look by driving by the homes yourself.
Q – Why?Because appearances are deceiving. Some homes will have amazing pictures on paper & not really be all that appealing once you actually see them while standing outside. Some will not look great at all on picture, but might be a much better home in real life. Go see the homes & make a list of the ones you actually want to see inside. Call your Realtor & ask him/her to make appointments.
WARNING! Do not call the listing agent. Remember who is working for who. Call your Realtor®.
STEP EIGHT:Go see homes with your Realtor®
Your Realtor® will probably meet you at the homes or drive you to them, Either way, be sure that once you are there, you ask as many questions are you may have & you take as much time as you like to see the home.
If you don’t like any of the homes, just see some more. Trust us, once you walk into your future home, you will know it. Your mind will quickly switch from asking which home to asking what color you are going to paint the walls & how you furniture will better fit in it!
For now.. let’s assume you found your home!
STEP NINE:Write a contract
Once you find your future home, your Realtor will recommend that your write a contract as quickly as possible. Most people simply head out to their Realtors® office right after finding their home to be sure they can write a contract before someone else buys the home.
Talk to your Realtor® about current market conditions. Ask them to pull some comparable homes that sold in the neighborhood so that you know without a doubt how much the home is worth & use that information to write your offer.
WARNING! Get an inspection! Unless you have a lot of experience with home building, electric, plumbing, and other systems in a home, be sure you request a home inspection.
This needs to be done at the time when you are writing your initial offer. Once your offer is accepted, it is too late to add inspections to a contract & you will be bound to buy the home without any.
Ask your Realtor® to recommend you a few reputable inspection companies.
STEP TEN:Mortgage application
Assuming that your offer is accepted & the contract is ratified. Your Realtor® will send you to meet with your lender & make a formal mortgage application. This is different than the pre-approval process. It is now property specific & it requires more information.
STEP ELEVEN: Go to your home inspection
Though it is not required, it is best for you to go to your home inspection. There you can meet your inspector & ask questions direct as he/she goes through the home inspection process. It is truly the best time to ask questions. Be sure you make it!
STEP TWELVE:Request Repairs
If your inspection found some items that the seller should repair, be sure you address it with your Realtor® immediately. Remember: there is a limited time window for you to ask for repairs. You generally have 7 days after the inspection. If you let that time go by, you will not be able to ask for any repairs at all.
STEP THIRTEEN:Settlement
Assuming that repairs were no issues & that everything went well during your mortgage processing, you will find yourself scheduling one of the most joyful moments in life: your settlement.
Settlement is when you actually purchase your home. You sign all the documents needed & you get your keys!!
WARNING!Most sellers will schedule the disconnect of utilities for the day of settlement. You must call the various utility companies to ask them to switch to your name instead otherwise, you might find yourself moving into a home with no electricity or worst, no heat!
STEP FOURTEEN:Move in
WELCOME HOME!
There it is. The entire process in a nutshell. Of-course, there are many details in between that your Realtor will explain, but this summarizes the process. Now that you understand it. Let’s get started!
