Steps of Buying Real Estate
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Buying real estate is a big step full of things that, until you've done it, you may not expect. The biggest of which is emotion. When you find real estate that you like or really want, emotion can be your worst enemy. Whether you’re buying real estate for the first time or the tenth, emotion can hinder good decision making. A large part of our efforts go toward making sure you make decisions that are in your best interest.
Finding the right real estate for you and your family is just the beginning of what we offer in terms of service. Once we find the condo or home right for you, the contractual process begins. This is probably the single-most important aspect of the entire process. Not being meticulous in this area can be devastating. If your contract is not written correctly, you run the risk of forfeiting earnest money, losing the property to some other buyer or getting stuck with a lemon. Alabama is what they refer to as a "buyer beware" state. This basically means, your contract MUST protect you from getting bound in to an agreement that is wrong for you. Our team has been writing and amending real estate contracts for over 40 years and fully understand the correct way to protect you and your family.
Because Baldwin County is our market, we will provide you with detailed information about our areas communities, the different cities and school systems. We have a clear understanding of our local market and also current economic trends and financial info coupled with investment strategy to ensure you are poised to put you and your family in the best scenario for YOU, not us. We employ the latest R.E.T.S listing information to ensure the real estate you shop for on our web sites is accurate and very detailed. You can shop on the main sites or use the mobile search 24-7 / 365.
The real estate purchase process is complex and full or paperwork that is important. We handle all of this. Here is a synopsis of what will transpire through the entire process.
• We discuss your priorities and establish an efficient course-of-action
• We discuss the market and what to expect during the negotiations
• We research different communities and find several that are right for you and your family
• Once we get ready to start viewing listings, we will apply for your financing
• Before we write any offers, we help you to understand the seller’s requirements
• Find you home, condo, lot, etc..
• Complete and present a Real Estate Purchase Agreement (Contract)
• Negotiate the details of the contract until we reach an agreement
• Conduct a professional home inspection
• Coordinate all of the additional documents needed to go to closing
As a buyer sometimes the need to move is facilitated by buying a home and that home may not be close by. In this instance, much more thought goes in to a move if the destination is several states away or even to another country. Whether you're changing homes due to work, city attractions, children and schooling or just moving back to the place you grew up, you will want a realtor knowledgeable in the real estate market you plan to buy in.
We us experts in each area of Baldwin, Escambia and Mobile counties to ensure when we are showing property, we are not depending on a G.P.S. to find the listings. We have a team of Re/Max agents throughout our area ranging from Pensacola, FL to Mobile, AL and everywhere in between.
We will add below some key points in the home buying process to help better understand the steps involved, as well as, show how easy and stress-free this process can be with proper help.
- Starting the process and getting ready to buy
- Choosing your Realtor
- Getting pre approved for your loan
- Starting the search for your new home
- Negotiating with contracts for your new home
- Terms for financing
- Insurance and what coverages you will need
- Closing on your home
- Getting moved in
#1 Starting the process and getting ready to buy
Whether it's time to buy a home and start a family or continue with a growing family or you're just ready to buy a home for whatever reason, we have vast experience in each market we sell real estate in and offer our expertise to you and your family to ensure you are well informed and make the right choices. First, ask yourself
- What are we looking for in our new home?
- Are you financially able to buy a new home?
- How is your credit?
It's helpful to make a list of things you like and dislike in your home to help with narrow options.
#2 Choosing your Realtor
The first thing to do is research on the area you plan to move to and the agencies in that area.
- Search the internet for agencies in the market in which you plan to buy
- Local publications, if available, are a good source for agent advertisements
- Calling these agencies to discuss business models and fees and other pertinent considerations such as marketing campaigns and sales volume is good to know. (This helps to find out how active your potential agent is. In today's market, they should be easy to find online)
- If you are moving in to another local community, call some friends and most likely, they can make credible recommendations.
Do not be opposed to meet with several different agents. They are competing for your business and should handle your request accordingly. Also, be honest and up front if you are interviewing agents. They should be fine with this and also appreciate and respect your candor.
Consider asking some or all of the following questions:
- How much experience do you have in the industry and in this particular market?
- Do you primarily work with buyers, sellers or both?
- What certifications do you have?
- What contractual time frame would I enter as your client?
- Explain paperwork I would need to sign
- Can you explain the differences in sales scenarios for the properties we would potentially buy?
- What is the fee for your service?
- How will you represent me as a buyer?
- What services will you provide for me as an agent?
- Can you provide me with ALL of the information for the area that I may need to make the best decision?
Once you have chosen an agent, it's important to formulate a plan of action and establish specific goals that you need to meet. An open, honest line of communication between you and your realtor is very important.
#3Getting pre-approved for your loan
It's a good idea and important even to get pre-approved for a loan amount before you start searching for homes. Not only does this give you the freedom to look around and not worry about declination after finding the home you want, but it let's the seller know you are serious. When the seller sees on the contract that the buyer is already pre-approved, they feel much more comfortable negotiating. After all, no one wants to go through the emotional atmosphere of buying and selling a home only to find that the contract is void due to inability to obtain financing. Get pre-approved, it will only help.
#4 Starting the search for your new home
- Where are you moving to and where do you want to live is the first step?
- What is the neighborhood like you are looking in?
- Is there room to expand if you want to add on?
- Is there zoning regulations in the area? Chances are that there are, so have your Realtor check in to this and explain.
- Will the home have an opportunity to appreciate?
- What amenities does the home have? How about neighborhood amenities?
- What is your price range?
- How many bedrooms and bathrooms do you want?
- How far is the home from your job?
- What is the crime rate?
- How is the school district?
- What area attractions are near by? Restaurants, theaters, golf...etc.
Finding homes is so much easier than years ago. The internet is a very powerful tool in finding real estate. The M.L.S. or Multiple Listing Service makes finding homes for sale simple.
#5 Finding the perfect home
Starting the search for your new home is an exciting feeling. It's like looking for your first car times ten. Make sure to communicate with your Realtor.
Making a list of the features and things you want and don't want will greatly help your Realtor locate properties for your consideration. Examples are:
- Price range
#6 Negotiating with contracts for your new home
Selecting the home is an easy part of the process. Next comes making an offer and opening communications with the seller and their agent. Be careful if your agent is also the seller's agent. This can be a good situation with a good agent, just be careful in limited consensual dual agency.
There are several steps in the contract negotiations: accept the seller's counter offer, counter the seller's counter offer, agree to different terms all together and have your agent write a new offer. These are all things involved in the contract process and your agent will walk you through all of this and make sure you completely understand at all times what is going on in the negotiations.
#7 Terms of financing
Do some research before you choose a loan. There are a variety of different types of loans available. Choosing the right loan for your needs will save you time and money in the long run. Keep in mind these factors:
- How is your credit?
- Is this your first home?
- How much money will you put down?
- Are you doing and ARM or adjustable rate?
- How long do you plan to keep the home?
The financial institution will require the completion of a loan application and need a variety of different financial info such as: pay stubs, tax returns, and financial documents. Your loan can come from a number of different places like: commercial banks, mortgage brokers, credit unions, insurance companies, savings and loan associations or mutual savings banks.
#8 Insurance and what coverages you will need
Insuring your home is investing in your future with the home. The right insurance is protecting your home and you and your family from some one or something taking your home away.
Here are some of the various types of insurance:
- Home Warranty - This offers buyers and sellers comfort in knowing that basic wear and tear over the course of time is covered. This coverage should cover heating and air conditioning, electrical systems, plumbing. It will be repaired, and replaced in certain scenarios, without costly expense.
- Homeowner's Insurance - This protects your home from theft, fire, hurricanes and also accidents in your home by visitors.
- Flood Insurance - As is sounds, this protection is for flooding
- Title Insurance - This is an important coverage and protects you from unpaid taxes, liens and other factors that would make the home sale void.
#9 Closing on your home
This process is always evolving. Often referred to as "escrow" or "settlement", it's no longer required for both parties to be present for this transaction to sign simultaneously.
Closings often take around 30 days. They can happen faster depending on financing and other factors. This time frame is used to give ample time for everything to be coordinated by the bank, title company and various other parties which participate, like: appraisers, inspectors, brokers and insurers.
The closing process is the legal process of transferring title from the seller to the buyer. It's a highly entailed process with multiple parties contributing to make sure the process is a success. The buyer will receive keys to the property and a deed to the land that the bank will hold until the property is completely paid for. During this process, the seller will receive payment for the property. If it's owned outright, the seller will receive all of the proceeds, if partially, the seller's mortgage is paid off and their bank releases the deed to the new mortgage holder and the seller will collect any amount over what they owed their bank.
Before the closing process, it's important that the seller walk through the property to make sure the condition is unchanged since their previous viewing. It's also important to make sure the paperwork signed at closing reflects the terms agreed to in the original contract.
#10 Getting moved in
This can be a little unnerving. You and your family is in a completely new environment. This will require an adjustment period and this is completely normal. Understand that things will settle down and, with time, this will become your new home and place of respite.
Here is a list of things that will help you settle:
- Everyone should discuss their feelings about the new environment
- Get outside, take a drive and learn your new surroundings
- Email family, friends and acquaintances and let them know where you are. You may be surprised to find that you are close to some of them. Facebook and other social networks are great for this.
- Make notes of thing liked about the area such as:
- New friends
- Neighborhood things
- Area attractions