Entering into the world of homeownership is a daunting feat for anyone but it is especially daunting to first time buyers who have never experienced the process before. It can be a confusing, whirlwind of information and can often leave buyers in a bad position if they aren’t well informed as to what it is they’re getting into. As a certified First Time Buyer Specialist, I am capable of guiding my clients through the process with a variety of tools to help them understand what is going on during every step of the transaction. This is a long post, so bare with me.
- First things first, speak with an agent about what it is you’re looking for.
An agent will be able to pinpoint specific traits that you’re looking for, have an understanding of what the current market is like and what neighborhoods will be a good fit for your unique needs. They will also be able to recommend other professionals, such as financial advisors, lenders, accountants, etc. to help expedite and smooth out the process. Often times, the agent will have you sign a Buyer Representation Agreement or BRA, which states that you are allowing them to exclusively represent you.
2. Speak with a Lender & get prequalified.
Your next step is to speak with a lender to better understand your financing options and what different loan types are available to you. During this meeting, you’ll have the opportunity to discuss what your budgets are and what you’ll be comfortable with paying on a monthly basis. Even if you’re just in the beginning steps of searching, it is important to get this step out of the way so that the transaction process can be streamlined once you do find a home that you’re interested in.
3. Look for properties
Now that you’ve spoken with a lender and understand what your budget is and have spoken with your agent about what it is you’re looking for, it’s time to start looking at properties. Based on the information you have given your agent, they will use an MLS (multiple listing system) to scour the area for available homes that meet your search requirements. Agents will use the feedback provided by you at every showing to continue narrowing down what you like and don’t like so that they can find a home you’ll love.
4. Submit an offer
Once you’ve found the perfect home, you will submit an offer. This is where you will discuss with your agent 1) what the market is like in the immediate area, 2) current sales comparables, and 3) what offer price you would like to submit to the sellers. There is a lot of paperwork involved in this part of the transaction and it is crucial that you go through them in detail with your agent so you fully understand what you’re signing. Some of the documents you will sign include: Residential Purchase Agreement, Transfer Disclosure Statements, Market Condition Advisory, FHA/VA Addendum (if applicable), Agency Relationship Disclosures, and various other forms. Each transaction is unique so the forms that you sign will be structured to support your transaction. Your agent will submit a “purchase package” to the listing agent once all forms have been signed, proof of funds is available, and a preapproval letter has been provided by the lender.
5. Accept/Reject/Counter Offer
Once the offer has been submitted to the listing agent, the offer will either be accepted by the sellers, rejected by the sellers, or most likely, the sellers with counter back with a negotiation of price and terms. During this time is when you and the sellers will decide who pays what (closing costs, home warranty, etc.), agree on a purchase price, and finally have the offer accepted once everyone agrees on the purchase price and terms. Once the offer is accepted, the agents will open escrow with a third party escrow company.
6. Contingency Removals
This is where your agents main job lies. Your agent will work within specific time frames to ensure that various contingencies are removed so that escrow can close on time (typically 30 days after acceptance of the offer). Some common contingencies include a home inspection contingency, appraisal contingency, HOA document contingencies, and more. Once all contingencies have been removed, and the funds have been deposited, you will be able to successfully close escrow.
7. Close Escrow & Get the Keys!
Congratulations! Now that you’ve closed escrow, you officially own the home. Your agent will meet you to hand over the keys and welcome you to your new home!
Of course, these are the basic steps and due to every transaction being unique it might meant that some of these steps change or other steps are implemented. That’s why you want to work with a trusted, experienced agent to ensure that you understand what is going on with your transaction.
Ready to purchase a home of your own? Contact me today to explore your options and discuss what you’re looking for.
Mackenzie Black | REALTOR® | email@example.com | (602)430-3206 | CalBRE#02004975 | ©Berkshire Hathaway HomeServices California Properties | 516 Fifth Ave, San Diego, CA 92101