Before you start shopping for your property, it is a good idea to make some preparations
PREPARING TO BUY
A green file contains all your important financial documents. You will need it to secure financing for your property. The typical green file should contain:
-Financial statements
-Bank accounts
-Investments
-Credit cards
-Auto loans
-Recent pay stubs
-Tax returns for two years
-Copies of leases for investment properties
-401K statements, life insurance, stocks, bonds, and mutual account information.
Check Your Credit Rating
Your credit score will have a huge impact on what type of property you can buy and at what price. It is first recommended that you check your credit rating with an experienced lending institution so that I can determine what you can afford. The lender will research your credit ratings from the three credit reporting agencies: Equifax, Experian and TransUnion. I will be happy to recommend experienced, knowledgeable lenders in the residential, construction, and commercial and investment real estate fields.
Be Careful With Your Finances
Now is not a good time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability.
Buying a property requires making many important financial decisions, understanding complex issues, and completing a lot of paperwork. It helps to have an expert in your corner when undertaking such a large purchase.I can guide you through this process and provide you with access to property listings before they hit the general market.
Here are some factors to consider when choosing your real estate professional.
Look for a full-time agent – one who has experience completing numerous transactions like yours.
Interview a few agents: Are they familiar with the area in which you are interested?
Ask how much time the agent will have for you and if they are available at night and on weekends.
Ask about their credentials and education: A good agent will continually strive to improve and gain knowledge of the latest real estate trends and hold the highest designation in their respective fields of expertise.
Does the agent return your calls promptly? Time is money when attempting to buy a property.
Ask for a list of properties they have sold or a list of references.
Choose an agent who listens attentively to your needs and concerns. Pick an Agent, with whom you feel comfortable and trust.
Once those preparations are out of the way, it is time to find the right property for you.
Take a Drive
Get to know the neighborhoods, complexes, or subdivisions, which interest you. Drive around and get a feel for what it would be like to own a property in the area. Start getting a sense of the properties available in those areas.
Narrow Your Search
Select a few properties that interest you the most and have your real estate agent make appointments to visit them. Make sure to ask your real estate agent questions such as the potential long-term resale value of the properties you are considering, etc.
Time to Buy
Once you have picked out the property you want to purchase, your real estate agent can help you make an offer that the seller will accept. A good agent will investigate the potential costs and expenses associated with the new property. An agent can also help you draft your offer in a way that gives you an advantage over another offer.
The Process Step-by-Step
The Initial Agreement and Deposit
An effective agreement is a legal arrangement between a potential purchaser and the property’s seller.
Some important tips to keep in mind to streamline the process
Keep written records of everything. For clarity, it will be beneficial to transcribe all verbal agreements, including counter-offers and addendums, and convert them into written agreements to be signed by both parties. I will assist you in drafting all the paperwork for your purchase and ensure you have copies of everything.
Stick to the schedule. Now that you have chosen your offer, you and the seller will be given a timeline to mark every stage in closing the real estate contract. Meeting the requirements on time ensures a smoother flow of negotiations so that each party involved is not in breach of their agreements. During the process, I will keep you constantly updated so you will always be prepared for the next step.
The Closing Agent. A title company or an attorney will be selected as a closing agent. The closing agent will hold the deposit in escrow and will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to restrictions, such as building or parking restrictions, that limit activities. There may be recorded easements and encroachments, which limit the rights to use your property.
How to Hold Title
Consider consulting an attorney or tax advisor on the best way to hold the title. Different methods of keeping a title have different legal, estate and tax implications, especially when selling or upon the death of the title holder.
Inspections. Once the seller accepts your offer, you must have a licensed property inspector inspect the property within the agreed-upon time frame in the effective contract to purchase. You may elect to have different inspectors inspect the property if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). If you are purchasing a commercial property, you will need an environmental audit done on the site for the lending institution. I can recommend several different inspectors.
Depending on the outcome of these inspections, one of two things may happen:
Either each milestone is successfully closed, and the contingencies will be removed, bringing you one step closer to the close, or The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of the contract (usually the price).
Appraisal and Lending. You must keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser via a third party to determine the value for the lending institution. This is done so that the lending institution can confirm that their investment in your property is accurate. Appraisers are specialists in determining the value of properties based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc.
When you are within two weeks of closing, double-check with your lender to be sure the loan will go through smoothly and on time. Association Approval. If the property you purchase is conditional upon an association’s approval, request the rules, regulations, and other essential documents from the seller as soon as you have an effective agreement to purchase. Ensure that the application documents and processing fees are submitted to the appropriate person at the association by the required time. Fill out all the information completely and legibly so there is no delay in processing the application. If you must meet with the association for your approval, make an appointment for the interview as soon as possible. Most associations require a certificate of approval before moving in. Your closing agent will request that the original copy of this approval letter be brought to the closing so that it can be recorded with the deed in the county public records.
Property Insurance. If you are obtaining a loan, your lender will require you to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the property’s purchase price. You may save hundreds of dollars yearly on homeowner’s insurance by shopping around for insurance. You can also save money with these tips.
Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
Ask your insurance agent about discounts. You may get a lower premium if your home has safety features such as deadbolt locks, smoke detectors, an alarm system, storm shutters, or fire-retardant roofing materials. Persons over 55 or long-term customers may also be offered discounts.
Insure your house not the land under it. After a disaster, the land is still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.
We happily recommend experienced, knowledgeable insurance agents for every property type.
If you have come this far, then this means that it is almost time for congratulations, but not yet. Do not forget to tie up these loose ends:
Final Walk-Through Inspection
More of a formality than anything else, the final inspection occurs a day before or the day of the closing. You will visit the property to verify everything is in working order, everything is the same as when you last viewed the property, there are no extra items left behind, and everything included in your purchase is still at the property: Home Services and Utilities. After the closing, I will provide a list of valid numbers for activating home services and utilities.
Be Prepared
We are ready to assist you should an unforeseen glitch occur, even at this last stage. If something at the property breaks down or some other minor detail occurs, there is no need to worry. I have encountered these problems before, so I know how to handle them efficiently and stress-free.
Closing
The closing agent will furnish all parties involved with a settlement statement, which summarizes and details the financial transactions enacted in the process. You and the seller(s) will sign this statement, and the closing agent will certify its accuracy. If you are obtaining financing, you must sign all pertinent documentation the lending institution requires. If you cannot attend the scheduled closing, arrangements can be made depending on the circumstances and the notice I receive. If you bring funds to the transaction, you can either have the funds wired electronically into the closing agent’s escrow account or bring a certified bank check to the closing in the amount specified on the settlement statement. The seller should arrange to have all property keys and any other important information for you at the closing so that you may receive these items at this time.
