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What are the most important things I need to know
before jumping into the real estate market?
How do I get started?
You will learn answers to these critical questions in the Real Estate Web Guide -- the focus is to give you some valuable information and tools to help you understand the fundamental workings of the real estate industry. Although some of the materials are directed to home buyers, many of the subjects will also apply to prospective tenants. For many of you, leasing is a short term transition before you buy your dream home.
The wonderful advantage of the internet is that there
are so many sources of information. They can help you
become much better prepared when you're ready to begin
your search. The more prepared you are and the more
knowledgeable you are about the process, the easier
and more pleasant the experience will be.
7 Step Home Buying Process
- How
to Hire a Realtor
This is probably the most important step in the
process. Buying a home is a very exciting but stressful
event in your life - you will need to find someone
that you can trust and can communicate with to help
you find the right home and make the process a pleasant
experience. Under the related section, How
to Hire a Realtor, you will gain knowledge of
your options when deciding how to conduct your search
as well as some tips on interviewing Realtors -
Questions You Should Ask
When Interviewing a Realtor.
- Perfect
Home Buying Experience
Ideally the first meeting you have with your realtor
should be a listening consultation. The 3
main goals of this meeting are:
- Get to know each other and understand how
you will work together - including how each
of you are available to look at homes, timing,
how you'll communicate (how often to be contacted
and updated, calls, e-mail, etc.).
- Familiarize you with the process - walk through
the steps, give an overview of all the paperwork
that will be required; explain the agency relationships;
discuss financing options and give references
for lenders (see the next section).
- Fully define your goals for this move - determine
your needs, locations or areas you prefer, your
price range and timing for your move. To help
you formulate your goals and plan, the Home
Buying Manual contains additional forms "My
Perfect Home Buying Experience" and "Home Search
& Lifestyle Questionnaire."
- How
Much Can I Afford?
The lender you select and the preparation of a pre-qualification
and pre-approval are very critical steps
in a smooth transaction. Shopping lenders for the
best rates is not generally the best route to take.
Rates fluctuate daily. There are many mortgage choices
and many options. Underwriting criteria vary with
lenders. It is much more important to select a professional
who can help you understand the process and obtain
the best loan for your situation.
Pre-qualification or pre-approval are beneficial
first steps before you even begin to look for your
home. With a pre-approval your loan is actually
approved pending the qualification of a house,
appraisal and inspections. It puts you in a
much stronger position with a seller and you and
your realtor are very comfortable about your loan
approval and house search.
These areas are discussed in greater detail under
this related section How
Much Can I Afford? which has helpful articles
and checklists, a mortgage calculator, and links
to other calculators related to home buying and
selling.
- Home
Search
Before deciding which house to buy, think about
your lifestyle, your current and anticipated housing
needs, and your budget. Finding the right house
involves striking a balance between your wish list
and the reality of the housing market in the area
you wish to live. The Home Buying Manual includes
further descriptions and questionnaires to help
you decide what type of home you are looking for
- "My Perfect Home Buying Experience" and "Home
Search and Lifestyle Questionnaire."
When you go out to look at homes, review them with
a notepad or checklist form to help you keep track
of the properties and their differences. Limit the
number of homes you look at in a day or it will
be too much and you won't be able to remember them.
It's important to talk openly with your realtor
on what you like and don't like and why. This way
your realtor will get a better idea of what you're
looking for.
If you see advertised properties of For Sale by
Owners (FSBO's) or new home communities, call your
agent to check them out for you. Most properties
and new home projects will cooperate with agents,
but only if the agent accompanies
you on the initial visit and registration.
When you've narrowed down the homes to one or two
that you like, your agent can do whatever research
is necessary to help you make your decision. Information
is available from school districts, local chambers,
and planning and zoning offices. Your agent can
do a comparative market analysis - a listing of
comparable homes in the same area that sold, and
those that are currently listed, and how they compare
to the homes you have selected.
- Offer
& Negotiation
When you're ready to make an offer, the final price
you're willing to pay will be based on what it's
worth or it's fair market value. The value
is what other buyers were willing to pay for properties
similar to yours in the same neighborhood or area.
It is best to have a good idea before you make an
offer of what you're willing to pay and at what
terms. Negotiating strategy depends on the situation
and parties involved and the current market.
A successfully signed contract is a balance between
the parties of sale price and terms that are acceptable
to each one. Determine ahead of time what items
are important and not negotiable by you and which
ones would be. Offers and counteroffers can go back
and forth several times. It's important to focus
on your goal or Ultimate Scenario and not get upset
or angry at the seller or the negotiations. Focus
on the big picture and on what you want to accomplish.
- Clauses
& Contingencies
Once the terms are acceptable to both sides and
all parties have initialed all the changes, the
date of the last signature or initial becomes the
effective date of the contract. This effective
date is a trigger for many of the time frames in
the contract, clauses and contingencies, which are
deadlines that must be made. Contingencies can include
loan approval, inspections, sale of property, receipt
of acceptable condo or homeowners association documents,
and many others. Several other items that must be
obtained and reviewed are title insurance, survey
(including elevation certificate if required), and
property insurance (including flood insurance if
required).
I like to recommend that all these items be taken
care of as early on in the process as possible to
avoid the last minute rush prior to closing. If
a pre-approval was obtained prior to your home search,
there is no need to wait for loan approval before
you do them, thereby making it a much less anxious
and frustrating process.
- Closing
& Moving
At least 10-14 days prior to closing arrange to
have utilities transferred to your name as of the
closing date. Many companies will require a deposit.
Arrange for a mover as soon as possible to obtain
competitive rates and reserve the date you want.
The last item prior to closing is the final walk-through
inspection. You will be checking to see that all
the items the seller agreed to fix or replace have
been completed. Secondly, per the contract, all
electrical systems, plumbing, appliances, heating
and air conditioning need to be in working order
at the time of closing.
At closing, you will be required to either bring
a cashier's check from a local bank made out to
the title company or send wired funds. Personal
checks are not acceptable. If your closing with
a loan, the signing of loan documents can seem never-ending.
Your title agent and realtor will help you understand
everything. Don't be afraid to ask questions.
As a member of the Multiple Listing Service, I have
access to a database that covers from Boynton Beach
south to the Broward / Dade County line. I also
have developed my own database of properties that
are not listed in the MLS system - new home communities,
For Sale By Owner homes (FSBO's), and also the major
rental communities. Together we can select the homes
that you would like to see. By setting appointments,
you can see these homes in a short period of time
and have a clearer idea of what is right for your
needs.
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Isabella
Scott
