8/19/2017

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Buying A Home

Once you decide to buy a home, whether it is your first, or one of many, you should take steps to ensure that it is a positive and pleasant experience.

Buying a home is fun and exciting, but it can also be very stressful if things don't go as you would like them to. By planning and making the right choices, you can alleviate much of the stress and make your purchase a positive experience.

Before you start looking at homes, make sure that you are ready. A home is probably the biggest investment you will ever make and just because you can qualify for it on paper doesn't mean that you should buy it. In other words, buy what you can afford and make sure that you don't get in over your head.

Talk with a realtor about your ambitions and plans and let them know what type of home you want. Keep in mind that it is you who is going to have to make the monthly mortgage payments so don't let anyone sell you a home with payments that are over what you know you can reasonably pay.

Shop around for the best interest rates and fees. Today, most listing agents require a pre-approval letter to be submitted along with offers on their listings. Try to obtain a pre-approval letter before you start looking because many realtors require it and won't present an offer without it.

Do not let each lender you talk with run your credit report. You can go online once a year to one of the major credit reporting agencies to get a free copy of your credit report. Although online credit reports may not show everything on your credit, it will give you an idea of what is there.

Remember! Each time a lender runs your credit, whether it's for a home loan, car, credit card, or other credit, it shows up as an inquiry and may have a negative impact on your credit score when you try to qualify for a home loan.

If it is a sellers market, homes may sell fast so you should be ready to make an offer as soon as you find a home that you like. But before you make the offer, take a good look at the property and ask questions, especially if there is something that catches your attention.

Feel free to ask about the roof, the plumbing, the electrical wiring and outlets, and if there is any problems with the neighbors or the neighborhood. Ask the selling agent if he is aware of any defects in the property and have him or her provide you with a disclosure report.

Even if the realtor is working with both the seller and you, the law requires him or her to disclose any material fact about the property that he or she may be aware of. Withholding this information may result in serious disciplinary actions against the realtor.

Once you have made an offer on a home and it has been accepted, the next step is to open escrow. In most cases, the seller reserves the right to chose the escrow and the title company, but that can be negotiated. The escrow instructions are sent out to you for your signature and you are asked to return them along with any other documents the escrow officer may require to facilitate the transaction.

Your realtor should notify you that you have the right to hire a home inspection company to inspect the home. This report should be independent of the seller and should be obtained by and paid for by the buyer. The home inspection is not mandatory but it is highly recommended, even if the home looks good or is relatively new. This type of inspection should be done to make sure that there is no hidden damage or to find problems not disclosed by the seller.

An appraisal should be ordered immediately by your lender to determine an estimated value of the property. The appraisal is usually paid for by the buyer to make sure that he or she is buying the home at fair market value.

  • Note: The physical home inspection and the appraisal are totally different things so don't get them confused.

A termite report should be ordered by the seller or the realtor and if the termite inspector concludes that the home has termites or if there is dry rot, water damage, mold or fungus, the extermination and repair work should be done prior to the close of escrow and evidence of the report and completion should be submitted to escrow and presented to you for your approval and signature.

Once your loan has been approved, the lender draws your loan documents and sends them to escrow for your signature. When all necessary documents have been received, reviewed and signed by you, and the escrow officer is satisfied that everything is in order, the funding of your loan is requested and the escrow is ready to close.

When the escrow is first opened, a title company should be selected to issue a policy of clear title. This means that the title company will facilitate a search of the title to make sure that the property doesn't have any unpaid liens or other clouds on it that will present problems for the buyers in the future.

When the escrow is ready to close, funding is requested by the title company. The deed, signed by the seller, is sent to the Title Company for recording and once that is done, the escrow is said "to be closed."

Once the escrow is closed, the escrow company gives you your closing statements, pays commissions and other costs, and the seller turns the keys to the property over to you. Congratulations! The sale is complete and the home belongs to you.

Note: This is just a quick scenario of what happens during the course of buying a home and there may be other things that might occur. Most escrows take anywhere from 15 to 60 days to close but sometimes longer depending on the circumstances surrounding the sale.

About the author

John M. Roberts is the owner of John Roberts Realty located in Moreno Valley, California. You may contact him at jrobertsrealty@yahoo.com.

 

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