"Seven Steps to Buying A Home"

For most of us, buying a home is the biggest financial decision we’ll ever make. It’s not a single decision to “just do it” – but a process made up of many decisions along the way. In fact, the first step, which may not even be conscious, is usually to just look around and see what’s out there. Most people prefer to do this on their own without a pesky agent asking personal questions. That’s one of the reasons I use the Homequest program to allow you to search individual neighborhoods to your heart’s content. Then, when the time is right, you can call me and arrange to view the homes you like. Understanding this decision-making process now will save you invaluable time and heartache later.

Step One: The Decision to Buy
You’ve been searching for weeks, looking in the paper, driving through neighborhoods, checking the web; but not thinking you’re too serious yet. Suddenly you see a couple of homes you really like. What do you do?  You could head out on your own, as most people do, and run through a couple of open houses. If this sounds like fun, great! But it may not be in your best interest. Being caught in the nether land of finding something you really love, but not being properly prepared to make a decision, leaves you vulnerable. Getting caught-up in the emotion of the moment without a competent agent by your side is a recipe for trouble. The first decision you should make is whether or not you’re going to buy. If you can’t answer this question with confidence, don’t put yourself and your family in a compromising position.

Step Two: Seek Professional Guidance
A professional Real Estate broker is not an ambulance chaser. We do not try to catch people unaware or pressure them to make a commitment when they aren’t ready. That stereotype is simply not the case with the vast majority of professional, residential brokers. A professional broker will insist that you sit down with them and discuss this important decision you’re about to make. We’ll talk to you about your motivation to buy, your likelihood of finding your dream home and what pitfalls you might encounter as you go through the process. We’ll help you understand the dynamics of the market, prepare you for the financial commitment you’re about to make and help you understand the timing of buying and selling so you won’t be caught with two mortgages or without a place to live. All of this is critical to the buying process.

Step Three: The Search
You’ve already looked at homes on the web and know the general areas you’re interested in. Once we’ve created a list of criteria, I can perform a number of searches that will reveal virtually every home of the type and price you’re looking for in a particular area. If you’ve been using my Homequest service, you may have several homes on your “clipboard” that can give me a clear idea of the home you want. My knowledge of the market can be invaluable to you as you go through your search. I can tell you when a particular neighborhood is “hot” or “cold” and how the pricing compares to the rest of the market. That can give you a good idea of whether to act quickly or take your time. 

Over the past few years the Portland/Vancouver market has been red-hot. That has created a “seller’s” market pushing prices higher and often bringing in multiple offers on a newly listed home. Having a Real Estate professional who understands the market, does their homework and is a good negotiator can be the difference between getting the home you want or suffering through numerous failed offers.

Step Four: Making the Deal
When you make an offer, you present “earnest money” with the contract. This is more than simply a good-faith gesture. It’s a true representation of how serious you are about making the deal work out. So, often in a multiple-offer situation, someone with a larger amount of earnest money will be perceived as more serious. This is an issue your agent can help you decide, but it should not be taken lightly. The earnest money is applied at closing to your side of the transaction as a credit; but you may lose it if you don’t live up to your side of the agreement. This is another reason to have a professional broker watching out for your interests.

It’s not uncommon to receive a counter offer after your offer has been submitted. Upon receiving a counter offer, you donot have a deal. Only when all the terms and conditions have been agreed upon and all parties to the transaction have signed is the deal complete. As the process goes back and forth, anything can happen and it’s one more time when it’s critical to have a good broker looking out for you. One missed deadline or failed delivery can lose the deal for you. A professional broker will help keep both sides of the transaction on task and on time.

Step Five: Now the Real Work Begins
O.K., now that you’ve signed the deal, there are a number of deadlines to be met. Your first order of business is to contact your lender and start the loan application process. Since you were pre-approved for financing that should not be complicated; but it is important that you start immediately should any problems arise. You will receive a “Good Faith Estimate” of closing costs from any lender with whom you’ve made application.  It may be a good idea to apply to more than one so you can compare.  The estimate is based on the loan officer’s  past experience and may not include all of the closing costs. Your Broker should offer to review the estimate, answer questions and highlight any items that appear to be missing or estimated on the low side. A few minutes of your time here may save you more heartache later.

Step Six: The Home Inspection Period
Typically, you’ll have a couple of weeks in which to conduct inspections of the property. A general inspection of all the physical attributes and functional systems in the home costs between $200 & $400 and is customary and strongly recommended. Your agent will offer recommendations for inspectors and can suggest when special or unusual inspections may be called for. The inspection period is set in the earnest money agreement and must be adhered to. For that reason, your agent will schedule the inspection as soon as possible. You should be on-hand for that inspection and most inspectors will give you a verbal review upon completion. They will give you a complete written report within 24 hours.

One popular misconception is that the seller is obligated to fix whatever is wrong with the property. That is not true. The seller is best advised to fix anything that constitutes a serious or material defect in the home since he will be required to disclose that to any future buyer. However, he is not required to fix anything and the buyer’s only recourse is to unconditionallydisapprove of the inspection report. The buyer does not have to specify a particular problem, only unconditionally disapprove and the deal is terminated. So, it is in everyone’s best interest to negotiate reasonable repairs. Most sellers want to leave their home in a respectable condition and will agree to make some repairs; but the buyer may be faced with accepting the house “as-is” or walking away from the deal.

Step Seven: Escrow
To finalize the sale of a home a neutral, third party (a title company) is used to insure that all the terms and conditions of the contract have been met before all the papers are signed, the money is distributed and the property is recorded. This third party also prepares all the required forms, obtains certain release documents and generally assures that you will receive clear title to your property. The title company will call you when everything is ready and make an appointment for you to sign the papers. This may occur before the “closing” date, although all of the terms, conditions and the payment of all obligations are adjusted to the closing date. If everything is completed early, the buyer and seller may decide to close early. That is their choice and no one else’s.

Upon completion of all escrow requirements, closing can take place. Think of closing as a “settling” of all outstanding debts, taxes and obligations. Title to the property is then transferred to the seller by “recording” the transaction with the county in which the property exists. Then title insurance, which you paid for, is issued both to you, the buyer, and to your lender to guarantee that the title is clear.   In other words, to assure that there are no claims on the property that might harm your right to own it.

Once this is finished, the property is yours to enjoy. Your agent will collect and bring you the keys.