HOME BUYING STEPS
Step 1 - Overview of Memphis and surrounding cities.
This is an important visit for several reasons. There are many differences in the various communities and it helps to get familiar with them, their "look", their personality, their amenities, etc. and where they are located in relation to your job. We will explain the role of a Buyer's Agent. We will give each client a REALTORS® map of Shelby County before we head out. It also gives the buyer a scope of the size of the area and where each community is located.
The research must be done prior to viewing the homes. Buyers can see for themselves whether or not the criteria they have (or wish to have) actually is available. If not, we can tweak. We will set the appointments. This is very easy to do. Most of the homes have lockboxes, and sellers are very accommodating. When looking at new homes it is very important that the reatlor is with the client at the initial visit.
We also go over what it takes to present an offer, such as having a commitment letter to accompany it and what your contract consists of. Even if a buyer is a seasoned one, having sold multiple properties in the past, if he/she is coming from another area, terminology and methods may be different here.
Step 2 - Obtaining A Mortgage
It is important to start this process first, sometimes even before looking at properties. A second benefit is that the buyer will know beforehand exactly what they're qualified to buy, what issues might need to be addressed. We can put the buyer in the hands of a recommended local loan officer with access to many programs, who can counsel and guide a buyer.
The loan officer will give you a Good Faith Estimate of the closing costs involved with the financing. There are recurring costs that you pay that are included in the monthly payment, such as homeowner's insurance and property taxes (the monthly payment consists of principal, interest, taxes and insurance and is referred to as PITI). The one-time closing costs are the origination fee, usually one point (or 1% of the loan amount) and any other points sometimes called discount points (the more points, the lower the interest rate). The appraisal fee, credit report, and other lender fees, such as document preparation, underwriting fee, are further one-time closing costs.
Loan approval documents needed upon application: Two most recent pay stubs, W-2s for last 2 years (or if self-employed, 1040s for 2 years), federal tax returns for the last 2 years, last 2 months' bank statements, long-term debt information (credit cards, child support, auto loans, installment debt, etc.), proof of funds for your down payment.
Step 3 - Making an Offer
Locating the right house and making the offer. We have done our homework and we are ready. The first thing we do is to check the comparable home sales in that subdivision to see if this home is priced fairly, and how it relates to others similar to it that have sold. This CMA (comparable market analysis) tells us the price range of sold properties are in the area, what the average time on the market for them has been, and what the average sales price per square foot of the recent solds are. In some cases there will not be enough that have sold. I will find out how long the property has been on the market or if there have been any price reductions during the listing period, if there have been any other offers on the property, and what the motivation of the seller is. When you are comfortable with what we will be offering, we begin to prepare the contract. We go over this contract very carefully, so that each paragraph is understood. The first part acknowledges agency, and that we exclusively represent you as a buyer
Next is the earnest money, which is held by the listing real estate company until closing and becomes part of the down payment. The property description follows, and an extensive paragraph outlining what and does stays with the house.
Next are the terms of the offering price, including which method of financing. Then we fill in the closing date and possession date desired. The title company chosen is stated, and what their role is, and lists the title insurance policy commitment, including the Conditions, Covenants and Restrictions (CC&Rs), and that they will make the proration and what the title company provides.
Next addresses the disclosures. You will be pleased to know that Tennessee requires that the seller provide a disclosures and If the home was built before 1978, a lead-based paint disclosure is necessary.
There are provisions for a Home Inspection, Home Warranty and any other inspections the buyer may elect. We can provide you with a list of Home Inspection company.
3 to 7 days before closing, there is a final walkthough to make sure all is as it was when inspected, or if any repairs that were requested and agreed to have been completed.
Remedies for Breach are addressed, whether by buyer or seller.
There are additional terms, such as compensation of the Brokers (it is paid by the seller and the amount is agreed upon in the listing agreement). This is a synopsis of the terms of the contract.
Okay, now what? As buyer's agent, We present the contract to the seller's agent, who in turn presents it to the seller. However, negotiation is done from us to the seller's agent. May I say, that as a top producer, We have a successful career based on negotiating skills? We will definitely be working on the buyer's behalf! You can count on it. There may be multiple offers, there may be counter offers. Time is of the essence as the contract states. A fair offer usually generates a fair response. There will be no stone left unturned to get you the best possible outcome. Now, we have an accepted offer. What's next? We have 5 to 15 days in which to do a Home Inspection. We both attend because you will learn much about the mechanisms of the home. Should you be out-of-area, We will attend. You will have a note book for listing every detail of the home, including the roof. Any repairs will be requested in writing immediately, and the seller has 3 to 5 days in which to respond. After inspections are completed and approved, we enter our next phase, the closing!
Step 4 - What Happens Before Closing?
We will help you select an attorney to handle and prepare the paperwork for closing. This is the time to be in touch with the lender to provide whatever is necessary for the final loan documents,As a buyer, you will want to arrange for the utilities to be turned on when the seller's is turned off. Don't forget to have for the seller to take care of any requested repairs, and for the lender to go through the underwriting process. the phone company ready to turn on your new service as well. Make sure all magazines, bills, and family and friends, have your new address! Anything related to school registration should also be done well in advance. Moving preparations should be made as soon as you know the offer is accepted.
Step 5 - At the Closing!
Meet at our office (an exception could be an out-of-state or out-of-country buyer, in which case documents are Fedex and need to be notarized). Buyer and seller close separately, and the keys are not given to the buyer until they exchange closing papers or the seller receives payment, which may be that afternoon, or the next morning. Time your movers accordingly.
Buyers (and sellers) and their agents will be given an audit sheet (the settlement sheet) showing the closing costs beforehand, so there are no surprises, and the buyer will know exactly how much his cashiers check should be. Other closing costs will consist of attorney fees, processing fee (escrow settlement fee), document prep fees, recording of the deed, pre-paid interest*, homeowner's insurance, property tax, and a notary fee. Pre-paid interest - Since mortgage loans are due on the first day of the month.