06 Oct Navigating the Home Buying Process
By Jessica Rosato
Luxury Residential Specialist
Nestler Poletto Sotheby’s International Realty
The time has come and you have decided to purchase a home. Now what to do? Many of us have already been through the home buying process, but there are many of you who have not—and if you don’t know the ins and outs, it can be a bit intimidating. There’s a lot more to a home purchase than just finding the right realtor and the right property (both of which are incredibly important), but having a clear sense of expectations and timelines and the overall process from contract to close will only assist in making the process fun and seamless.
As shocking as it may be, many people don’t realize that they need money to buy a house. Crazy, you say? Not so crazy at all. Saving money and having enough to put down on a home is the first and most important step of the process—that, and talking to a lender if you plan on getting a loan. This preparation is critical before you venture out with a realtor to look at homes.
The next step, as touched on above, is to find out what you can truly afford. If paying cash, it’s much simpler, but if cash is not an option for you, then a mortgage will be. Getting in touch with a local lender is critical. Getting your lender the documents they need to issue a “real” pre-approval is a huge time saver and always of benefit to you. There is no point in looking at a home only to find out that you can’t afford it or to find out that you’ve missed out on it because you’re backtracking to get a pre-approval letter to submit with the offer.
Knowing what you want is also always a good thing. There are so many choices when looking for a home, but if you really sit down and think about your lifestyle and how you live your life day to day, a lot of those questions will be answered. If you prefer an urban feel with amenities right at your fingertips, then a gated community in West Delray is not going to be a good fit. Thinking through what really “speaks” to you will make the process much simpler.
As you begin to look at homes, you will want a clear understanding of the offer process. It is critical that you (and your agent) know the contract inside and out. And as showings are set and you begin viewing homes, you will see that you don’t need to look at 15 to 20 homes to find the right one. If your agent has done a good job in listening to you and your needs, seeing 5 or 6 options should be plenty. A cookie cutter approach doesn’t exist in real estate, but too many options can be confusing. Feeling like you have to see everything to make sure you’re not missing out on something better is not the best way to find your “perfect home” and often results in your missing out on the one you really wanted after all.
An offer is a lot more than just saying, “I like this house and I want it.” An offer includes your intentions from price to closing date to purchasing terms with verification to show the seller that you are serious and have the means to turn this offer into a closed deal. Verbal offers are inappropriate. Put yourself in the seller’s shoes and see if you would accept a verbal offer with nothing to back it up or even a low-ball offer. Low-ball offers are always detrimental. I firmly believe that you end up paying less by offering a little bit more initially. No one is insulted. Everyone is ready to play. Expect that you may have to come up a little more than you thought to get the house you love. Sellers have to anticipate that they may settle for a little bit less than they ideally wanted. Don’t get married to a number.
The most commonly used contract today is the FAR/BAR “As-Is” Contract which means that you are purchasing the home “as is” but with the right to inspect it. If you inspect the house and don’t like what you find within the specified inspection period, you cancel it. Simple as that. No monetary consequence. There are also no monetary repercussions if your loan is denied within the specific time frame noted in the contract either. But, be sure to listen to your lender when he says to be very careful during the mortgage process. The slightest change can cause your loan to be denied. Don’t buy a car, don’t run up credit card debt, don’t switch jobs. These are just a few items to keep in mind. Always keep an open line of communication with your realtor and your lender. In every transaction there can be setbacks, but if a buyer still wants to buy and a seller still wants to sell, there is always a solution.
It is a great feeling when your offer has been accepted, you have a fully executed contract in hand, you’ve inspected the home and found you still want to buy it, the home appraised out, the loan commitment is in, and you’re HOA approved. That’s fabulous! Only thing left to do is put the utilities in your name, review the closing documents to be sure all is accurate, wire remaining funds for the balance to close, and show up for final walk through and closing with identification. Congrats!
This may be a snapshot, but refer to it as needed as you navigate the home buying process.