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Step-by-Step Buyer’s Guide
Because a real estate purchase is one of the largest investments in your life, it is important that you select the right agent, know the neighborhoods, and thoroughly understand the real estate transaction process.
While no agent is “right” for everyone, we believe that experience, training, education, background, and specialization all contribute to success.
Nowadays, it is easy to locate properties through a combination of open houses and online searching. It may not, however, be in the client’s best interest to wait until they locate a house to select a specific agent.
Our agents can help identify the right neighborhood, coordinate financing, explain the tax consequences of home ownership, filter out inappropriate properties, identify off-market opportunities, and answer questions that come up along the way. Additionally, our agents will notify you when suitable properties come on the market.
Our agents will personally take you to some of the neighborhoods, give you an overview of the area, and show a few representative homes. Generally, clients should not purchase a home until they are familiar with the neighborhoods and have seen enough properties to truly recognize an excellent fit.
Generally, you should begin the pre-approval process immediately after meeting with our agent. If any issues come up, such as inaccuracies that make your credit score lower than expected, you will have time to resolve them. Our agents can help you through this process and recommend excellent lenders and mortgage brokers. Our recommendations are completely free of any conflict of interest; our agents do not benefit monetarily from providing recommendations.
Disclosures contain many important items, most notably the property and pest inspections, the seller’s disclosures, and the title report.
Property Inspection Report
The property inspection is the inspector’s opinion on the home’s plumbing, electrical systems, foundation, roof, and overall condition. This report will list all issues the inspector finds. The property inspector does not provide the cost estimates. Generally, items found in the property inspections are not addressed by the seller, but they are your responsibility to repair.
Other Environmental Reports
Although the most common inspection performed by buyers is the property inspection report, there are also other inspection and testing the buyer can consider when purchasing a home.
- Radon inspection
- Well water inspection
- Septic tank inspection
- Lead/asbestos inspection
- Oil tank inspection (for underground tanks)
Pest Inspection Report
The pest report will look for any damage to wood, most likely caused by termites. Unlike the property inspection report, the pest report will usually list the costs required to alleviate these issues.
The pest report describes current problems with the home, such as active termite infestation or dry wall damage in which water has rotted away at the wood underneath the flooring or walls. The report also describes future problems with the home, ones that could lead to pest or water damage in the future, such as a lack of caulking by the bathtub that could lead to future water damage.
Generally, the seller is responsible wood damage issues and the buyer is responsible for the anticipated problems with the home. However, if you purchase the home in “as-is” condition, you are responsible for addressing the wood damage issues. In a seller’s market, the vast majority of homes are taken “as-is.”
The seller’s disclosures contain answers to questions, such as whether any remodeling has been done, and if so, whether the remodeling was done with permits. The laws are very protective of homebuyers and requires sellers to disclose all known material problems a property may have.
The title report is issued by a company, such as First American or Chicago Title, and insures that the seller can convey clear title without any liens preventing a smooth conveyance. All liens that may be on the property, such as unpaid property taxes, are listed in the title report. Problems with conveying title are rare.
Homeowners Association (HOA) Documents
If you are considering a townhouse or condominium, it is likely that the HOA documents will be included in the disclosures or be quickly forthcoming. Important issues to consider include the size of financial reserves, whether any litigation or special assessments are looming, and whether there are plans to heavily increase HOA dues. Unlike the interest on your mortgage, HOA dues are not tax deductible. Together, you and our agent will review the disclosures and discuss any concerns either of you may have with the information contained therein. Only after you feel comfortable with the disclosures should you consider making an offer.
If your purchase contract has contingencies, such as a property inspection contingency, then you will find inspectors to evaluate the home during the contingency period. During this period, you can determine whether you want to proceed with the purchase. If you back out of a contract for a reason related to a contingency during the contingency period, then you are entitled to a full return of your “good faith deposit.” Our agents can assist you and ask the seller to credit you for any new problems. Usually, an agreement can still be reached if the seller accepts your requests. If your findings uncover a major issue, such as bad foundation, then you will likely want to back out of the deal without seeking a credit, as this involves a lot of risk. If you have a loan, as most homebuyers do, then an appraiser will appraise your home. Also, our agents will work with your loan officer to ensure that the loan proceeds arrive on time and with little hassle.
Congratulations on making it through the buying process and Enjoy your new home!