Real Estate

Steps Through the Real Estate Buying Process

Fri Jun 24, 2011 11:09 am
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Real Estate Buying Process

There are various factors that go into preparing for the process of buying real estate. The order in which you complete each step is important for ensuring a successful outcome.

Many people want to own a home, but begin without a plan or understanding of what they are getting themselves into. In this article we will examine and explain each step. We will start with the initial desire to purchase a home, although the process applies equally to the purchase of acreage, investment property or condominiums.

The First Step in any Real Estate Purchase

Buying real estate is not a game, it is a process that can be daunting if you don't have a plan. Therefore it is important to have a well organized plan and stay with that plan throughout the process beginning to end.

The first thing to do is to have a candid discussion with your spouse relevant to the big question. Why are we doing this and do we really want to do this, whether it is buying a home or land?

Some of the questions that need to happen in that discussion include: can we afford to buy a home and do we understand that our lifestyle will change dramatically? - read more of this article - The Decision to Purchase Real Estate

After you have decided to move forward in the process the next step is to understand the roles that Attorneys and Buyers Agents play in the process.

Who To Contact to Purchase Real Estate

Once an individual or couple has decided to purchase property the second decision is who should be contacted before actually looking at any real estate.

Mortgage Options

Check with your local financial institution to find out if they provide mortgage loans and second the terms they would offer. Be wary of anything you find on the web. Some web sources are great and others are questionable. Again, doing your homework is essential to the decision process. read more of this article – Real Estate Attorney and Buyers Agent

Once you have set up a meeting with a lender you need to ask the right questions. This is a crucial step to having things move smoothly and to limit the surprises that may come up.

The Questions Buyers Need to Ask the Lender

Once a Buyer(s) have made the decision to make a real estate purchase, and have begun the process of looking for a lender, attorney and a Realtor, there are some relevant questions to ask.
First questions to a lender.

Can we lock into a rate?
Will we be able to get the lower rate at closing, should the rate go down, if we have already locked in a rate?

read more of this article - Questions to ask a Lender

Having a real estate attorney is a way to protect yourself and limit your exposure to predatory lenders, while preserving your rights in the process of purchasing real estate.

Questions for Buyers to Their Real Estate Attorney

I have repeatedly stressed the importance of securing the services of a competent real estate attorney for any real estate transaction.

Never accept the word of a Realtor or lender telling you "oh, why get an attorney and pay the extra cost". The cost of an attorney is minuscule when compared to the peace of mind from an attorney's knowledge and guidance. - read more of this article - Involving a Real Estate Attorney in the Purchasing Process

The next step is to find a Realtor to meet your needs. You have to be comfortable with this person and be able to rely on the expertise through the searching and closing process.

Finding A Real Estate Agent

See also - How to Find A Real Estate Agent

Once you have been through the process of finding the best lender, and a competent Real Estate Attorney the next step is to find the right Real Estate Agent for your needs.

Lenders and Attorneys are two of the three key people necessary in a home purchase. The third component of the buying process is to secure the services of a Buyers Agent/Real Estate Agent. Just how to do this is sometimes more of knowing the right process than the actual decision of who to choose. The choice of an agent will come naturally through the search process. You will know the right Buyers Agent once you have had time to ask the right questions. - read more of this article - Finding A Real Estate Agent

Questions Buyers Should Ask

Questions, information, analysis, and decisions are all a part any real estate purchase. How a buyer goes about navigating through the process of buying a home is subject to the "group" that you/they have assembled ahead of time.

Attorney, Lender & Realtor – Creating Your Real Estate Team

This group includes your Lender, Attorney and Realtor. Think of this group as though they were all in a canoe with you. What would happen to the canoe if everyone did not row in unison. Well, if each member of you team were to row in opposite directions the likelihood is the canoe would turn over and you would be left floundering in the water. Not what you want to happen to you. - read more of this article – Questions Buyers Should Ask

The concept of Buyers Remorse is understandable to anyone who agonizes over a purchase, only to find out they are not happy with what they receive. This is a process that needs to be well thought out and taken seriously to avoid potential problems that may arise.

The Unintended Consequences of Poor Decisions

In any real estate transaction there are consequences and unintended consequences that result from "performing" or "not performing" on a "ratified" purchase agreement/contract. Potential Buyers and Sellers try hard to avoid those unintended consequences.

When ratified, a purchase agreement/contract has been signed/initialed and reviewed by both Purchaser and Seller.

Performing on a ratified real estate contract/purchase agreement essentially means that both seller and buyer will do (perform) as the contract has stated.

To not perform on a ratified contract would be considered to be in violation of the contract and therefore non-performing. - read more of this article - Real Estate Contract Law

The Home Inspection Process

The process of purchasing a home, new or resale, is not for the lazy or faint of heart. A home purchase is, for most people, the single largest purchase they will make in their lifetimes.

A part of the buying process that is key to not having any regrets after the fact is the "Home Inspection". An experienced home inspector is worth every penny they will charge. By the way, most home inspections fall in the range of $250-$500 depending on the square footage. Larger homes will be appropriately more than $500. - read more of this article - The Home Inspection Process

Prepaid Items and Home Closings

If all of the conditions are ultimately met buy a buyer in the home purchase contract process then that buyer will need to understand the cost of prepaid items relating to any house closing/settlement.

Prepaid items include some substantial cost items such as: typically one year extra in advance the cost of a hazard/home owners policy, up to six months taxes, up to six months interest and any other item deemed required by the lender. One of the other items that, if the property being bought is designated on flood maps, could be very costly is Flood Insurance. - read more of this article - Prepaid Items and Home Closings

Property Taxes at Home Closing

Property taxes are a part of all home closings/settlements. In most cases property taxes are paid by means of an escrow account through the lender to the government agency (City, County) twice a year, usually in June and December of each calendar year.

The previous owner (seller) or builder (if new construction) will have most likely paid some of the taxes in advance of their due date. In that case there is a proration of taxes by the closing attorney. The seller will have a Credit Due to them and the buyer will need to compensate the amount due at the closing. - read more of this article - Property Taxes at Home Closing

Preparing for the Closing Process

Having been through the process of finding the home of your dreams, and working through the conditions as set forth in the terms of your real estate purchase agreement/sales contract, the day for settlement/closing is fast approaching.

What must you do to prepare for your day of settlement? First if your attorney, lender and Realtor have been actively engaged in the process, as they should be, you will have all the information necessary.

Your Realtor will probably join you at the day of closing. It is customary that the best Realtors will take the time to be present at the closing table along with your Attorney. I would encourage any buyer to ask, at the time you engage a Realtors' services if they will in fact do this service for you. - read more of this article – Preparing for Closing on a Home

The last step in the process is moving in.

Moving into Your New Home

Once you have received the keys to your new home the move-in process is your next challenge. If you elected to be your own moving company then you will have found out that securing the correct size moving vehicle and having enough friends/family to help is a must. - read more of this article – Moving into Your New Home

These are the basic steps you should look forward to when beginning the process of buying a home. There are always issues that were unforeseen, and that is why assembling the correct team and understanding the process completely can make this a much easier endeavor.

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