Sonya's Steps to Buying a Home

Step#1         Step#2   Step#3     Step#4        Step#5        Step#6      Step#7      Step#8          Step#9             Step#10

Step #1:  SELECTING AN AGENT TO WORK WITH

Buying a home is one of the largest and most important purchases you will make in your lifetime and it is important to select an agent that will represent your interests to the fullest.  Choose an agent that is both a Realtor® and an Accredited Buyer Representative. A Realtor® is a real estate professional who is a member of the National Association of Realtors and subscribes to a strict Code of Ethics.  An ABR or Accredited Buyer Representative is a real estate professional that has earned the ABR designation through REBAC and has had extensive training on how to work with buyers.

During the first meeting with potential clients, we will review the “Working with Real Estate Agents” Brochure, required by the North Carolina Real Estate Commission. This brochure will give a better understanding as to whether an agent is working with you as a Buyers Agent, a Sellers Agent, a Dual Agent or a Designated Agent.  It is extremely important to understand the relationship you have with the agent you are working with and how this affects you. I will also provide a blank copy of a Buyers Agency Agreement for you to review.  Although it is not required that you sign a buyers agency agreement, it is something that I strongly suggest to my clients so that they are fully represented before we begin a home search (We will need to have a written buyer’s agency agreement in writing before presenting an offer on a home).   All of my clients will receive their own “Homebuyers Toolkit” to help them with their home search and to help keep them organized while searching for homes.

Our initial consultation will enable us to talk about the specifics of the home you are searching for and what features are priorities for you.   Together, we will access your needs and wants using my Buyer Home Search Assessment Form.  This form will help me determine what is most important to you in your home search and give me the basic criteria to search for in your new home.  If your home search takes us out of my work area, I can refer you to a real estate professional in the area closer to your search area. 

One of the most important criteria in searching for a home is determining the correct price range.  In order to determine that range, your first step is to talk with a qualified mortgage professional.   See Step #2

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Step #2:  QUALIFYING FOR A MORTGAGE

Before you begin your home search, it is important to talk with a qualified Mortgage Professional to determine how much you are able to qualify for.  If you do not have a name of a mortgage lender, CLICK HERE for a list of local mortgage professionals I would recommend.  My website is full of Mortgage Resources to help you through the process.  

Your lender will have you complete a loan application and then pull your credit report from all three credit reporting agencies.  Once you are approved for one of the many lending programs available, your lender or mortgage broker will be able to furnish you with a pre-qualification letter or pre-approval letter, stating the amount of mortgage you qualify for.

Your lender will provide you with a Good Faith Estimate of closing costs that may be incurred with your loan.  Check out my Buyer Reports for a list of common buyer closing costs.  Many closing costs may be deductible on your next tax return.  Be sure to talk with your accountant about those deductions.  

Along with the loan application, you may be asked to provide some or all of the following items to your lender for pre-approval:  CLICK HERE for a check list.

2 most recent paystubs, W-2’s for the last two years, Tax returns/1040’s for the last two years (if Self-Employed) along with all Schedules, Last 2 months Bank Statements / Savings account statements, Proof of funds for down payment, Landlord letter/ proof of rent, 

Once you have your loan commitment letter in hand, it is time to start your Dream Home Search! Remember…. There are some wonderful tax advantages to owning a home and many of your closing costs may be deductible.  Make sure to check with your tax accountant for all the benefits  See Step #3 

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 Step#3  YOUR DREAM HOME SEARCH

At our initial meeting, you completed my Buyer Assessment Form that let me know what features you were looking for in your Dream Home and you have talked with your mortgage professional to determine the price range of the home you will qualify for.  Now it’s time to find that home!  

At our second appointment, we will sit down together at my computer and search for homes in our area that fit your criteria.  We will develop a search together through our local Multiple Listing Service that will have all the features you desire within your price range and you can see for yourself how many home you may have to choose from.  We may need to widen or narrow the search further depending on the amount of homes that are available. We will search resale homes, new construction homes and foreclosures to find the right home.  We will continue to tweak your search until we have several nice homes that we can make appointments to view.  Your search will then be saved in my database and I will set up your own personal web page that will allow you to track all the homes available in inventory, new listings, price changes, homes removed from inventory and the ones that go under contract.  This wonderful tool will help keep your home search organized and will keep you up to date on all new listings.

Once we have a selection of homes to view, I will set up showing appointments through our showing service.  This is a very easy process as most of the available homes have lockboxes.  I like to keep showings to a maximum of 5 per day so that the homes do not start to blend together.  If buyers see too many homes in one day, they lose track of the best features of the homes and it becomes overwhelming.  You will be able to keep track of the best homes in your Homebuyer’s Toolkit you received at our initial meeting.

Before we hit the road, I will go over what it takes to present an offer on a home.  We will review the Offer to Purchase form and go over the rest of the steps to purchasing a home so that there are no surprises. I will give you a packet of blank forms that we may use during the home buying process.  This will enable you to take the forms home and read them over thoroughly.

Once all your questions or concerns have been answered, we will start looking at the homes you have chosen.  After looking at several homes, we may have to make some changes to your initial search regarding location or desired features.  It is my objective to help you find that perfect home and keep the process fun and stress free.

You found your Dream Home! Now, it is time to get to work. Before making an offer on the home you have selected, I will get some additional information on the home so that you will be assured it is the right home for you.  Some things you may want to investigate beforehand are: Schools, Neighborhood Profile, Crime Rate, Amenities, Covenants and Restrictions, area home values and foreclosure rates.   Some or all of these factors will play a role in the amount you are willing to offer for a home.   See step #4  

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 Step#4  PRESENTING THE OFFER TO PURCHASE

You found the perfect home! Now what?  It is time to sit down and gather some information in order to make a good offer on the home.  I will call the seller or the seller’s agent to gather any additional information that may be helpful before we write up an offer such as: The sellers timeframe for moving, seller motivation, any personal property that may be included or excluded in the sale, answers to any questions that you may have about the home, any additional offers on the table or any previous offers, any price reductions and so forth.  My objective is to get as much information as possible from all sources so that you are fully informed and able to make the best offer.  We will check the days on the market, sales of comparable homes in the area and carefully consider the condition of the home and the reason for the sale. We will also review any covenants and restrictions and bylaws if the home you select is in a subdivision with a Home Owners Association.  All these factors will have a huge impact on the terms that you will offer for the home.

Together we will sit down and complete my Pre-Offer Form (this helps me to fill in the blanks on the offer to purchase) and then carefully go over every detail of the North Carolina Offer to Purchase Contract.  This contract has been written (and re-written several times!) by the North Carolina Association of Realtors, their attorneys and members of the Forms committee.  It has been written to protect both the seller and the buyer and spells out very specific terms of the agreement between the parties.   The first section of the offer defines the names of the parties, the specifics of the property being purchased and the legal description, followed by the section titled “Fixtures”.  This area is very detailed and spells out what stays with the home.  The rule of thumb is “anything nailed, glued or screwed” stays but that is not always the case.  In some instances, the seller may choose to remove something that has been permanently affixed (such as a light fixture or appliance) or leave something that is considered “personal property or you may decide to ask the seller to leave something specific in the home (such as window treatments or swingset). 

The next section covers the purchase price offered, amount of earnest money to be presented with the offer, seller financing or option fees and specific terms of any bank financing.  This area spells out in detail the dates by which you must apply for financing, you loan obligations and what happens if you are unable to obtain financing.  It is very important that we choose the dates carefully to allow enough time to complete the finance paperwork as these dates are “Time is of the essence” meaning it must be done by that date.  The next few sections cover details and conditions such as Flood zone, special assessments, appraisal dates, liens, warranty deed and use of the property.  We will go over each one carefully.  

Section 9 covers any pro-rations for taxes, utilities, homeowners due or rents that may be billed at a later date.  This ensures the seller will pay for their portion up to the closing date.  Section 10 covers expenses that may be incurred by the buyer during the transaction and has a section that enables the buyer to ask the seller to pay for some of those expenses.  We will cover home warranties and review the NC Property Disclosure Form again for this property and mark the appropriate box.  If the home you are purchasing was built before 1978, we will also review the Lead Based Paint Disclosure on the home and go over what you should know about Lead Paint.  I have a brochure that will give you some valuable resources for Lead Paint.  

Section 16 covers inspections that the buyer is entitled to have on the home including Home Inspections, termite, radon, septic and well and which items are to be “functioning as intended”.  This area is very detailed about what items should not be in need of repair and what items are covered during repair negotiations.  It is important to choose an inspection date that will give enough time to complete all inspections you may require.  We will spend some time on this section to make sure you understand this thoroughly.

The next section that we will need to consider carefully is the closing date section.  This date is “time is of the essence” and we need to be sure we check with the lender to ensure we have enough time for the lender to process your loan, have enough time for inspections and any repairs that may need to be completed by the seller.  This date is important because our new contract spells out a penalty for either party that may delay the closing.

Section 20 covers other provisions and addendums.  This section lists other forms that may be presented with your offer to purchase depending on your situation.  Some of the forms are:

1.        Additional Provisions: This form covers septic system specifics, contingency of another home closing and presenting a deadline for acceptance of rejection of your offer.

2.       Backup Contract Addendum: Used if the home you are putting an offer on already has an accepted offer in place.

3.       Contingent Sale Addendum: This form is used if you have another home to sell first and it is not yet under contract.

4.       Lead Based Paint: Used if the home is built before 1978.

5.       Insurance Availability: This form says you must be able to get insurance on the property.

6.       Seller Financing: This is used if the seller if financing all or part of the home.

7.       Owners Association Addendum: This form spells out what is covered with the Home Owners Association Dues.

There may be other addendums that are necessary to complete along with your offer to make sure you are covered in every situation.  It is important to note that the more demands and contingencies you present with your offer to the seller, the less favorable your offer will look to that seller. A pre-approval letter from your lender should accompany the offer to purchase. The objective is to present a fair offer based on the facts we have obtained regarding the home and the current market conditions.

Once all the forms have been completed and signed, I will collect a check from you for the earnest money deposit that you agreed to put down and then get to work!  I will contact the seller or the seller’s agent and set up a time to meet with them to present the offer.  In some instances, this may be done via: fax, phone, in person or email.  My job as your buyer’s agent is to negotiate the best possible price and terms for you and that is what I will do!  Several things may happen once your offer is presented: The seller may accept all the terms as presented (that would be nice!), they may make some changes and return a counter-offer, they may reject it completely and suggest that we present a new offer with more acceptable terms (with a Memo to Buyer form) or they may just reject it completely.   This process can repeat itself several times before coming to an acceptable agreement. Remember, do not take a rejection of your offer personally, it is all a part of the process.  You may not come to terms on the first home you place an offer on and you may have to continue your search.  Most of all, have patience and know that we will get you a wonderful home!  

When all parties have agreed to the final terms, the contract is signed and initialed by all parties and copies are distributed to the sellers, buyers, agents and attorneys.  Congratulations! You are now under contract for your new home but there is still much to do….

Once you are under contract on your new home, it is time to select the professional services you will need to complete the transaction.  We will complete the Professional Services Agreement in which you will select or waive such services as: Closing Attorney, Appraiser, Survey, Septic Inspection, termite, home inspection, Insurance, Home Warranty and any other services required.  I have a list of Professional companies that I can refer you to that I have used in the past and can feel confident in their abilities.  You can request a copy of my Professional Services Sheet from my website.  Now it is time to schedule inspections.  See step #5  

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 Step#5   INSPECTION

 Step#6  PREPARATION FOR CLOSING 

The contract is signed and inspections have been ordered but there are several other things we need to get started at the same time.  Once you have chosen an attorney you would like to perform the closing, I will send a copy of the contract over to them and schedule a specific time to sign the final papers.  I will also contact your lender and get the ball rolling for final loan approval.  Your lender will collect all the final paperwork and order an appraisal on the home.  Some lenders may require a survey to be done.  Your lender will order a title report from the attorney you have selected and work directly with them to ensure a smooth closing.  Your attorney will order a title search and will issue a title insurance policy that will protect your interests in the property.  

You will need to select a company for your Homeowners Insurance.  The attorney will gather information from the sellers to get their mortgage payoff and may prepare their deed for closing.  About 1 week before the closing date, the lender will send all the paperwork for final underwriting and order the documents to be sent to the attorney.  Once the attorney receives the loan documents, they will prepare a settlement statement (HUD1) that will list all the closing costs associated with the transaction and email a copy to you, the seller, the lender and the agents for final review. The HUD should include all costs associated with the transaction including appraisal fees, inspection fees, lender fees, any tax or homeowners association dues pro-rations, earnest money deposit, real estate commission fees and any other costs incurred.  If all is approved by the lender, funds will be wired to the attorney for closing.  Hopefully, all of these steps will be done well in advance of closing, but under most circumstances, the HUD is not received until the day before closing.  You may need to bring certified funds to closing to cover closing costs and down payment.  Your lender will let you know how much you will need to bring to closing.  Rest assured I will be with you every step of the way, updating you on progress and letting you know what the next step is.  

You will also need to make plans for moving and connecting your utilities.  I will get a list of the utility companies for you to call to set up services.  Visit my moving resources for great tips on packing and be sure to check your Homebuyers Toolkit for a wonderful moving checklist.  Be sure to visit my resources page for relocation information and other moving tips.  You will also want to check with the post office to have your mail forwarded, have medical records forwarded and school registration completed.  A good checklist will keep you on tract and organized. 

One to two days before closing, we will schedule a final walk-thru with the sellers to ensure that requested repairs are completed and all personal property has been removed from the home.  You may elect to have your home inspector come back for a follow-up and ensure all repairs have been completed properly.  In accordance with the contract, the seller is to have all debris removed from the property.  We will address any issues with the  seller and their agent. Now onto the closing!  See step #7  

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 Step#7  CLOSING DAY

On closing day, we will meet at the attorney’s office to complete the closing.  You will sit down with the attorney and sign lots of documents (sorry, no way out of this unless you pay cash!)  A good attorney will explain all the documents to you in detail and answer any questions you may have.  The seller will also come in to sign the deed and the settlement statement unless they are out of state (in that case documents would have been sent overnight in advance).  After all papers have been signed and notarized, the attorney will take the deed to the Register of Deed to record it.  Upon recording of the deed – You now own the home and you will receive the keys!  This may happen the same day as the documents are signed or the next day depending on the time of closing and when the funds are received from the lender so plan accordingly.  You will receive copies of the documents you signed at the closing and the title insurance policy and deed of trust will be mailed to you later. 

It is important for you to keep your closing documents where you can access them at tax time.  You should check with your tax advisor as some of the closing costs may be tax deductible as well as moving expenses.  I always provide my buyer clients with a spiral bound notebook to keep your receipts and all your house documents in one place and I will make sure you have yours on closing day!  Now on to the big move…… See step #8  

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 Step#8  THE BIG MOVE

Hopefully at this point you have visited my moving page and relocation resources many times and are organized and prepared for moving day.  I will be available for any issues that may arise, so please feel free to call me.  To keep the stress out of moving day, have a plan.  Make arrangements for someone to watch to children, have lots of drinks and snacks on hand, have cleaning supplies and necessities (such at toilet paper, paper towels and soap) handy and order out for dinner!  Be sure to check with the utility companies to ensure your phone, gas and electricity are connected (it’s a bummer to have the lights turned out on your first day!)  Most of all – Relax and have fun!  

I want to let you know that the closing of your home is not the closing of our relationship.  I keep in touch with my clients in several ways on an ongoing basis.  I send post cards on special occasions, email my monthly newsletter to keep you up to date on local happenings and real estate news and pick up the phone ever so often just to say “hi” and see how you are doing.  It is my goal to have satisfied customers and I hope that your experience was a pleasant one.  Make sure to check my website often for new resources and feel free to call anytime for any reason!   On to Step #9 

 Step#9 KNOW YOUR HOME 

You survived the home search, you made it through closing and you tackled the moving like a pro – now what?  Whether you are a first time home buyer or a seasoned house buyer, there may be some things about your home that you are not familiar with.  Some buyers have never had to deal with a septic system or private well for water, you may not know what a heat pump is or how to find a cabinet to match the ones you have.  This is where I come in.  I have many contacts that I have worked with over the years that can help answer your questions.  Whether you need a handyman to make some changes to your new home, a plumber or electrician for minor repairs or any other professional, please call me anytime and I will be happy to refer you to someone.   As a service to my clients, I will have a discount coupon sent to you from Lowes for 10% off as well as their Creative Ideas magazine and other discounts.  In my monthly newsletter, I will be sure to pass on any home improvements discounts I may run across.  Go to Step #10  

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 Step#10  HAVE FUN