What is the process for buying a home?
If you're a first time buyer or looking to take the next step in purchasing a Central Oregon home, it is important to understand the proper steps for a successful and snag free transaction. There is no “one size fits all” path, and expectations and negotiation tactics change constantly due to property value and market inventory. Without proper guidance from a professional that has their finger on the pulse of current market trends, it is very difficult to understand how negotiations and property selection can vary from time to time. It is our duty and skill set to make sure we at Atlas Realty Group have a clear understanding of your individual needs and goals so we can guide you through your transaction with a clear understanding of expectations.
So what are the steps? Let us give you a brief description of events from obtaining your mortgage to getting your keys in hand!
Step #1: Mortgage Pre-Approval
🏠 Many times it is easy for buyers to get excited and start shopping online with all of the “at your fingertips” sites that give you access to available properties before truly knowing what you as a buyer can afford. It may seem to make sense to “see what’s out there” before committing to the sometimes believed to be “daunting task” of getting a pre-approval. Unfortunately, this can lead to grief and disappointment when a buyer finds something they love, but are not prepared to move forward and end up missing out. It is wise to avoid this by going through the pre-approval process before shopping so when complete, you have a clear understanding of what you can afford and have the ability to move on a property with confidence! Don’t know where to start? We are here to help!
🏠 Do I go to my bank, or do I visit a mortgage broker? What’s the difference? Here at Atlas Realty Group we are asked this question frequently. Yes, it’s true you may have been a customer of your personal bank for decades and it seems that it should make sense that you deserve some preferential treatment. Here is the problem…yes, your bank may offer mortgage solutions, but do they really specialize in it? Are they knowledgeable of transaction timelines and deadlines? Are they able and willing to explore multiple lenders to search for the best deal within one credit pull? At the end of the day, they are just a bank and do not specialize in ONLY mortgage lending like a professional mortgage broker.
Mortgage brokers are in our opinion always the best option. They are knowledgeable of all the moving parts of a real estate transaction and that knowledge is essential for meeting deadlines and closing on time! This saves you money, time, and headache by knowing your lender is on task! Need help finding the right mortgage professional for the job? Just ask, we can have you set up with a professional and even sometimes have you pre-approved the same day!
Step #2: Time to Shop!
🏠 Ok, we must confess, this is the fun part! After following step 1, you now know what you can afford, what it will cost you, and how long to expect to process to take. You will even have a letter from your mortgage broker in hand that certifies that you are a qualified and willing buyer. This lends important strength to your offer and proves you're serious and have done your homework when you find the home that is “the one!”
Now we can start personally visiting available homes that meet your pre discussed criteria of what you need in your new home. Our Central Oregon agents are professionals at sizing up properties and helping you identify potential “deal killing” situations such as property condition issues that may cause financing roadblocks. It is also our agent’s responsibility to research the property to give you a better knowledge of the property’s history and true market value. When it is time to take that step, you should be comfortable knowing that the risk of surprises is minimal and that the investment of your time and money is reasonable.
Step #3: We have found a property! How do we make an offer?
🏠 This is where the true value of a skilled agent really matters. Our skilled agent will have already discussed with you, all of the things to consider in making a successful offer such as:
Value through a ‘Competitive Market Analysis’
Market Inventory which is important based on simple supply and demand.
Transaction deadlines that are important to not default a deal causing you to lose the home
Purchase contingencies, such as “what if the home doesn’t pass inspection?” OR “what if for some reason I lose my financing?”
What are my out of pocket costs going to be after down payment, closing costs, inspections, and appraisals?
What is the process for special situations such as the property having a private well, private septic, lead based paint potential, uncertified wood stove heat, etc…?
There are a lot of moving parts in a real estate transaction, a skilled and knowledgeable agent is key to a successful and timely close of escrow! Once a successful negotiation on a home has taken place, your agent will then put the transaction to task and get the wheels turning by providing documents and communicating with all other team members, such as your lender and escrow company.
Step #4: We are in contract! What’s next? - Home Inspection
🏠 The home inspection is likely the most important stage of the transaction. Your agent will be able to recommend a skilled and professional home inspector in Central Oregon that will thoroughly inspect every working function of the home from roof to crawl space. As the buyer, you will have a 10 business day contingency window to conduct all inspections and in turn, request any applicable repairs to be completed by a licensed and bonded professional at the expense of the seller. Please keep in mind that this is a negotiation and therefore the seller doesn’t have to agree to anything. However in this case as the buyer, you will have the ability to remove your offer and get your Earnest Money returned to you.
A common belief of new buyers is that the home either passes or fails inspection. This is simply not the case. As a buyer, the decision of what is acceptable and was is not is entirely up to you. It doesn’t matter if a repair is as simple as a squeaky light switch or a total roof replacement. This is your opportunity as the buyer to educate yourself with every function of your new home. It is the inspectors job to provide you with a detailed and photo filled report that helps you to make an educated decision when deciding if the property is right for you. With the guidance of your agent, you can now decide how to proceed with repair negotiations!
Step #5: Appraisal - Is the home I’m buying worth what I’m paying?
🏠 The home appraisal is a process that will be required for your mortgage lender to determine an actual lendable value. The appraiser will be hired by your lender as a neutral third party to the transaction. Stipulations as to the potential of personal or working relationships between lenders and agents have been tightened since the housing market crash. The appraiser will be selected by a neutral third party round-robin system that strengthens neutrality. What the appraiser checks for in determining value has several layers, some being sales comparable’s, loan type, and property conditions. The appraisal will be delivered to your lender upon completion and is typically the final item needed by your lending underwriter to complete your full approval. This will allow the release of mortgage funds following full lending disclosure and signing of loan documents by the buyer. Don’t forget! Should the appraisal not sufficiently cover the sale price as agreed, the buyer then retains the right to renegotiate sale price or withdraw their offer based on contingency and receive their Earnest Money back!
Step #6: Closing Day!
🏠 Congratulations! Contingencies have been met, lending is in place, and it is time to sign the closing documents and make this official! When everything is ready, your Central Oregon Title Officer will contact you to make an appointment to sign your documents and pay any required down payments and/or closing costs to balance out the purchase. By this point your lender will have delivered to you for your signature what is known as a truth in lending disclosure. This disclosure will detail all the conditions of your loan such as payment, interest rate, loan term, etc. The actual signing of all of your loan documents will take place at the signing appointment.
Other documents that you will sign will be forms required to transfer the deed into your name within the county of jurisdiction. Once the Title Officer has collected all funds and signed documents necessary to complete the sale, they will then cooperate with the lender and the county to officially fund and record the transaction. Once the county records the deed, the transaction will officially be closed. Congratulations! You’re officially a home owner and one step closer to independent wealth!
In Closing:
Please understand that this information is of opinion for the purpose of a blog. To truly detail this process would require a book not a blog. This information is solely for the purpose to educate a client of the importance of having a professional for your representation. To go over any of this in greater detail please contact any of our agents. We are here to provide you with a valuable resource of experience and knowledge that creates success in meeting your real estate goals. Thanks for reading!