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  • 1. GUIDE TO THE HOME BUYING PROCESS
  • 2. 1. START WITH A REALTOR® Did you know that there’s a difference between a real estate agent and a REALTOR®? A REALTOR® is a member of the National Association of REALTORS® (NAR). In addition to the state exam and license to practice real estate that all agents must take, REALORS® also prescribe to a legally enforceable Code of Ethics. • • • • • • • • Protect & promote clients’ interests while treating all parties honestly. Refrain from exaggeration, misrepresentation, or concealment of pertinent facts related to property or transactions. Cooperate with other real estate professionals to advance the clients’ best interests. When buying or selling on their own account or for their families or firms, Realtors make their true position or interest known. Make sure that contract details are spelled out in writing and that parties receive copies. Give equal professional service to all clients and customers irrespective of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation. Paint a true picture in their advertising, marketing, and other representations. Make only truthful, objective comments about other real estate professionals. All CENTURY 21 Award agents are REALTORS®.
  • 3. CHOOSING YOUR REALTOR® Your agent will be your guide and advocate during your real estate process and it’s crucial that you feel comfortable and connected. RESEARCH. Before selecting an agent, check them out through Google, Yelp/other review sites, and speaking with past clients. INTERVIEW. Agents should provide guidance on the real estate process, and will also address any questions you might have. Make sure you feel comfortable and have a rapport that allows for a successful business relationship. MATCH THEIR EXPERIENCE TO YOUR GOALS. Are you a first-time buyer? Investor? Looking at the luxury market or in a specific neighborhood? Make sure that you are comfortable with their capabilities. SET EXPECTATIONS. What type and frequency of communication do you prefer? How often do you wish to view homes and on what days? Outline your needs. CHECK THEIR SUPPORT. Does the agent work on a team or have support? Office staff and in-house services make a big difference in the level of service an agent can provide.
  • 4. 2. GET PRE-APPROVED Knowing what you can afford will set your search in motion. This number depends on how much of a monthly payment you can afford as well as how much a lender will loan you (based on your credit history, income and current debts). If you aren’t paying in cash, being pre-approved for a loan gives you clout and strengthens your position when you are ready to make an offer. Your lender will ask for several pieces of information, including your current job, assets and residence history. They will also run your credit score and report. Based on this information, you will be pre-qualified up to a specific amount. Your lender will provide you and your REALTOR® with a pre-qualification letter to include in any offers that you make.
  • 5. 3. FIND YOUR HOME Your REALTOR® will help you narrow down your options when it comes to location. Prepare yourself to make choices by thinking about the following: CONSIDER YOUR LIFESTYLE. Are you looking for a walkable or bikeable neighborhood? Do you prefer something more secluded or in the hustle of the city? CREATE A PRIORITY LIST. What is more important, the kitchen or the backyard? School district or a pool? Lots of space or proximity to metropolitan conveniences? You may not have to make choices between amenities and features, but having a prioritized list will help you should the occasion arise. THINK ABOUT YOUR CURRENT AND ANTICIPATED NEEDS. Consider your next few years as you determine what meets your needs. DON’T FORGET MAINTENANCE. Whether you perform the work yourself, hire a professional or choose a home with some services included, your home will need taking care of over time. SORT AND VIEW. You may be able to look at a property’s online listing and determine if it doesn’t fit your needs. Visiting a property is the best way to know if it is the home for you.
  • 6. 4. MAKE AN OFFER Once you’ve found a home you want, your REALTOR® will help you formulate an offer. DETERMINE THE OFFER PRICE. Regardless of the price the home is offered at, it is important to review comparable properties to an appropriate offer price. SELECT NEGOTIABLE TERMS. The length of escrow, inspections and repairs, closing costs, home warranty and services like title and escrow are examples of negotiable terms. MAKING AN OFFER INVOLVES STRATEGY. Your agent will help you determine if additional materials, such as sharing your story, should be included. NEGOTIATE. The seller may choose to accept, reject or counter your offer. In the event of a counter, you will be provided with a revised offer. Your REALTOR® will review the new offer terms with you carefully. You will choose to accept, reject or counter again. Sometimes, there are multiple counters until a mutually agreeable offer is reached.
  • 7. 5. THE ESCROW PERIOD Congratulations, your offer has been accepted! The period between acceptance and closing is called escrow, and escrow also refers to the independent third party who oversees the transaction and makes sure that all terms of the contract are adhered to. Once escrow has opened, many things will occur based on the terms of the contract. Your transaction may include: LOAN APPLICATION AND APPROVAL. You will work with your lender to submit a formal application for your loan. An appraisal of the home will be ordered. CONTINGENCY PERIOD AND INSPECTIONS. Contingency allows the stipulation that a specific condition must be met or event must occur before the sale can be finalized. Often this includes buyers inspection contingencies, appraisal contingencies and loan contingencies. It can also include the contingency for the sale of the buyers current home. The contract will have specific dates related to each contingency, typically 17 days from the date of acceptance, and they must be removed in writing. During the BUYERS INSPECTION CONTINGENCY period, you will review reports, disclosures, and, if you choose, the home inspection results.
  • 8. WHO IS INVOLVED IN ESCROW? THE TRANSACTING PARTIES. A real estate transaction requires one or more buyers and one or more sellers. The transacting parties will also typically be represented by real estate agents. THE ESCROW OFFICER. This is a neutral third-party selected to carry out the escrow process according to the timeline, instructions and process laid out in the escrow instructions. THE UNDERWRITER AND THE LENDER. If a loan is being secured for the transaction, these two parties will be involved. The UNDERWRITER checks over the loan figures, makes sure all paperwork is in order and guidelines are met, and ultimately gives final loan approval. The LENDER is the singular point of contact for the home loan. He or she works with the escrow officer to facilitate loan funding before closing. THE TITLE OFFICER. This person is responsible for investigating titles to real estate and land prior to sale, specifically looking for any irregularities that may affect the transaction or use of the property. If any issues are found, he or she will facilitate their research, assessment and resolution with the necessary parties. Typically, the title officer also facilitates the Recording of documents.
  • 9. TIPS FOR A SUCCESSFUL ESCROW BE PREPARED. You will be expected to provide lots of information, including copies documents, such as trust documents (if applicable), and title vesting choice. REVIEW & UNDERSTAND BEFORE SIGNING. Make sure to read and understand your escrow instructions before signing them. Mistakes an happen! Once instructions have been executed, they cannot be deviated from except in an Amendment, which will also need to be signed by all parties. COMMUNICATE REGULARLY. Be sure to be available and in contact, especially with the escrow officer and lender. BE RESPONSIVE. Throughout the process, you will be sent documents for signature. Do not delay handling these documents as doing so may delay the transaction. Do not hesitate to ask any questions should they arise! TELL YOUR LENDER ABOUT CREDITS. You may be entitled to credits at the close of escrow, however lenders typically have allowable thresholds when it comes to money back. Be sure that your lender and escrow offers are aware of any credits; these should be included in the escrow instructions.
  • 10. THE CLOSING: WELCOME TO YOUR NEW HOME! When all the conditions required in the escrow instructions have been satisfied, the escrow is complete. At this time, the escrow officer will release funds and documents according to the instructions, pay all bills as authorized, and prepare and deliver a final closing statement, known as a HUD-1, to the parties. This statement is a final accounting and itemized list of all charges and credits in connection to the escrow account. Recording signifies that the title company has released all the necessary documents to the county where the property is located and they have been officially Recorded. This typically occurs the following business day after the funding, however it is sometimes possible to record on the same day. Your REALTOR® will pre-arrange for delivery of keys and any other items such as garage door openers. CONGRATULATIONS, YOU ARE A HOMEOWNER!