Buying a property is likely the most significant financial decision you’ll ever make. Whether you’re a first-time buyer or experienced in real estate, it’s essential to approach this decision with careful consideration.

Why Do You Want To Buy?

Are you tired of renting and ready to invest in your own mortgage instead of your landlord’s? Have you outgrown your current home or are you seeking to diversify your investment portfolio with real estate? Perhaps you’re interested in acquiring a rental property, expanding your outdoor space, or relocating to a different area to shorten your commute. Clarifying your motivations for buying will guide you in selecting the perfect property.

Has Your Income Grown?

Owning property is a solid investment choice, whether you’re seeking your dream home, a rental property, or to diversify your investment portfolio. Real estate ownership offers relatively low risk compared to other investment options, making it an effective way to build equity and potentially achieve a higher return on your initial investment.

Before you start shopping for your property, it’s advisable to make some initial preparations.

Build Your Green File.

A green file holds all essential financial documents necessary for securing financing for your property. The typical green file should contain:

• Financial statements
• Bank accounts
• Investments
• Credit cards
• Auto loans
• Recent pay stubs
• Tax returns for two years
• Copies of leases for investment properties
• 401K statements, life insurance, stocks, bonds, and mutual account information.

Check Your Credit Rating.

Your credit score significantly influences the type of property you can purchase and its price. We advise you to first check your credit rating with a reputable lending institution, allowing Patti and Autumn to assess what you can afford. The lender will examine your credit ratings from the three credit reporting agencies: Equifax, Experian, and TransUnion. We can recommend experienced and knowledgeable lenders specializing in residential, commercial, and investment real estate fields.

Be Careful With Your Finances.

It’s advisable to refrain from making sudden career changes or large purchases at this time. It’s essential to approach your property purchase from a position of financial stability.

Navigating a property purchase involves numerous significant financial decisions, extensive paperwork, and more.  It helps to have an expert in your corner when undertaking such a large purchase. Patti and Autumn can assist you throughout this process and grant you access to property listings before they become available to the general market.

When selecting your real estate professional, consider the following factors

1. Seek a full-time agent with a track record of completing transactions similar to yours.
2. Interview multiple agents to assess their familiarity with your desired area.
3. Inquire about the agent’s availability, including evenings and weekends.
4. Verify their credentials and ongoing education to ensure they stay updated on industry trends.
5. Evaluate their responsiveness to your inquiries, as timely communication is crucial in property transactions.
6. Request a list of properties sold or references to gauge their past performance.
7. Opt for an agent who attentively listens to your needs and makes you feel comfortable.

Once you’ve completed those preparations, it’s time to begin the search for the perfect property for you.

Take a Drive.

Explore the neighborhoods, complexes, or subdivisions that intrigue you, and consider the option of having Patti and Autumn guide you through different areas. Their expertise in each neighborhood and understanding of the amenities can provide valuable insights as you consider your options. Take some time to drive around and envision what it would be like to own a property in these areas, gaining an understanding of the available properties along the way.

Narrow Your Search.

Choose several properties that catch your eye and consider having Patti and Autumn accompany you to visit them. During these appointments, they can assist you in asking the seller’s agent important questions you may not have considered. Be sure to discuss with your real estate agent the crucial matter of the potential long-term resale value of the properties you’re considering.

Time to Buy.

Once you’ve selected the property you wish to purchase, your real estate agent can assist you in crafting an offer that will be appealing to the seller. A skilled agent will thoroughly research the potential costs and expenses associated with the new property, ensuring you make an informed decision. Additionally, they can help structure your offer in a manner that positions you favorably compared to other potential buyers.

The Process, Step-by-Step

The Initial Agreement and Deposit.

An effective agreement is a legal arrangement between a potential purchaser and the property’s seller.

Some important tips to keep in mind to streamline the process:

• Keep written records of everything. For the sake of clarity, it will be extremely useful to transcribe all verbal agreements including counter-offers and addendums and to convert them into written agreements to be signed by both parties. Patti and Autumn will assist you in preparing all necessary paperwork for your purchase and ensure you receive copies of everything.
• Stick to the schedule. Once your offer is selected, both you and the seller will be provided with a schedule to mark each stage of the real estate contract closing process. Timely completion of these requirements ensures seamless negotiations and prevents any party from breaching agreements. Throughout this process, we’ll keep you consistently informed, ensuring you’re always prepared for the next step.

The Closing Agent.

The earnest money deposit will be held in escrow by the escrow company. The title company will conduct thorough research into the property’s history to verify that the title is free from any encumbrances by the closing date. Additionally, any new encumbrances will be properly added to the title. Certain properties may be subject to restrictions that impose limitations on activities such as building or parking.There may be recorded easements and encroachments, which limit the rights to use your property.

How to Hold Title.

You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the title holder.

Inspections.

Upon acceptance of your offer by the seller, you will need to arrange for a licensed property inspector to assess the property within the agreed-upon timeframe outlined in the purchase contract. If desired, you can engage various inspectors specializing in specific areas (ex. roof, HVAC, structure) to obtain professional insights. Patti and Autumn have a network of reputable inspectors and can recommend suitable professionals for your specific inspection needs.

Based on the results of these inspections, one of two outcomes may occur:

1. Either each milestone is successfully completed, and the contingencies are removed, bringing the transaction closer to closing, or;
2. The buyer may request renegotiation of the contract terms, typically the price, after reviewing the property and associated documents.

Appraisal and Lending.

Maintaining frequent communication with your lender is crucial, as they will inform you of any additional documents required to approve your loan application and finalize your loan. If the agreement is contingent upon financing, a licensed appraiser will assess the property’s value. This appraisal is conducted to ensure the accuracy of the institution’s investment in your property. Appraisers specialize in evaluating property values using various factors, including square footage, building costs, recent sales of comparable properties, etc.

 

Property Insurance.

If you’re securing a loan, your lender will mandate that you purchase a specific amount of insurance for the property, which will vary based on the lending institution and the property’s purchase price. Shopping around for homeowners insurance can potentially save you hundreds of dollars annually. Additionally, consider these tips to further reduce costs.

• Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
• Consult your insurance agent regarding potential discounts. You might qualify for a reduced premium if your home features safety enhancements like dead-bolt locks, smoke detectors, an alarm system, fire-retardant roofing materials, etc. Discounts may also be available for individuals over 55 years old or long-term customers.
• Insure your house NOT the land under it. In the event of a disaster, the land remains intact. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.

Patti and Autumn will be happy to provide recommendations for experienced and knowledgeable insurance agents who specialize in various property types.

Closing Day

Once you have reached this stage,, it’s almost time for congratulations, but not quite yet. Before we celebrate, make sure to tie up these loose ends:

Final Walk-Through Inspection.

More of a formality than anything else, the final walk through occurs either the day before or the day of the closing. During this visit, you’ll ensure that everything is in working order, consistent with your previous viewings, and that no additional items have been left behind. It’s important to confirm that all items included in your purchase are still on the property.

Home Services and Utilities.

Patti and Autumn will provide you with a list of useful contact numbers for activating home services and utilities after the closing.

Be Prepared.

Patti and Autumn are prepared to assist you should any unforeseen glitches arise, even at this final stage. Whether something breaks down at the property or another minor detail arises, there’s no need to worry. They have encountered these problems before, so they know how to handle them efficiently and in a stress-free manner.

Closing!

The closing agent will furnish all parties involved with a settlement statement, which summarizes and details the financial transactions enacted in the process. You and the seller(s) will sign this statement, as well as the closing agent, certifying its accuracy. If you are obtaining financing, you will have to sign all pertinent documentation required by the lending institution. If you are unable to attend the scheduled closing, arrangements can be made depending on the circumstances and the notice that we receive. If you are bringing funds to the transaction, you can elect to either have the funds wired electronically into the closing agent’s escrow account, or bring a certified bank check to the closing in the amount specified on the settlement statement. The seller should arrange to have all property keys and any other important information for you at the closing so that you may receive these items at this time.