Downsizing Queen

The Buying Process

  1. GETTING STARTED. Reviewing your financial picture is the first step in looking for a house. First, check  your credit report for errors and fix anything that can be fixed. Then, you’ll need to reduce your debts – credit cards, car payments, etc. – as much as possible and start saving for a down payment plus closing costs.


  1. MORTGAGE PRE-APPROVAL. When you contact a real estate agent to begin your search, he or she will recommend that you contact a mortgage broker to get a mortgage pre-approval. This will help determine how much house you can afford. The Mortgage Counselor will take a look at your credit rating and your income and, using a standard formula, calculate the maximum monthly payment (which includes principal, interest, taxes and insurance) you can comfortably carry. Armed with that information, your agent can select properties in your price range and in the areas that appeal to you for your review.


  1. WORKING WITH YOUR AGENT. Be sure to tell your agents what you are looking for in a home…style, number of bedrooms and baths as well as other things that might be important to you: neighborhood, school system, garage, fireplace, basement, etc. That way, the agent can narrow the focus of your search and only show you properties that might be appealing.


  1. MAKING AN OFFER. It’s not always about money. Sometimes other factors are just as important. For example, the sellers might be in a hurry to move so a fast closing would be appealing. Or, they haven’t found another house so a distant closing would work better. Taking a house in “as-is” condition often reduces the selling price.  If you are a first time home buyer and don’t have another property to sell, you won’t need a sale of home contingency that states you can get out of the deal if you can’t sell your home. This is an attractive incentive for the sellers.


  1. THE AGREEMENT OF SALE. This is a complicated, lengthy legal document that your realtor can help you understand. It basically outlines your offer which includes the amount of sale, amount of down or earnest money and the contingencies that could affect the sale: you must be able to qualify for a mortgage and you have the right to have a property inspection. If the inspection turns up something major that the  sellers are unwilling to fix, you would have an opportunity of bowing out of the agreement. Other issues are also covered in the agreement: radon, lead paint in houses built before 1978, water and sewer, etc.


  1. CLOSING THE DEAL. You’ve made an offer and the seller has accepted. This puts the property Under Contract –  but does not guarantee the deal will close. You have to get your mortgage approved and locked in and you need to get a home inspection that covers  such things as radon, lead paint, water and sewer, wood eating insects, structural and mechanical problems, etc. Depending on what your inspection turns up, you will have the opportunity to negotiate with the seller to make the      repairs, credit you for the costs at settlement or lower the price on the house.


  1. CONVEYANCING SERVICES.  Buying real property is a complicated process that entails searching the title to make sure there are no outstanding liens like unpaid property takes or other encumbrances and that no other party has claim to the property. Once the title company has searched the title, title insurance is issued.  The conveyancer coordinates all the paperwork that has to be in order at time of closing. This includes the title work, mortgage commitment for the buyer and payoff for the seller, unpaid taxes and utilities, use and occupancy permits, collection of first and second deposits, property insurance, etc. If any of these documents are missing, closing can not take place.


  1. THE SETTLEMENT TABLE. At last –  the moment of truth. Buyer and seller along with their realtors assemble at a title company and the signing of the paperwork and dispersal of the funds takes place. All paperwork must be in order or settlement is delayed. After closing, the seller turns over the keys to the buyer – and the property has officially changed hands. The seller is supposed to leave the property in broom swept condition – so it is advisable to do a final walk through of the property before going to closing.