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The Buying Process

After meeting with us to determine your real estate needs, we will help you secure financing with a reputable local lender. Your Geiger Realtor will assist you in selecting homes for viewing in accordance with what fits your needs and requirements. Geiger Realtors have full access to all listings within our own company, those found throughout the multiple listing services (MLS), for sale by owner, expired listings and properties we hear about for sale privately.

buying-process

What can you expect before a showing?

  • Schedule all showings in advance with your Geiger Realtor. Some properties will require a 24 hour notice, so it is helpful to schedule these in advance to make sure we can access all properties that you would like to view.
  • Stay in your price range. That is why we recommend you getting pre-qualified to make sure you are able to afford and live comfortably in your new house.
  • Wear shoes that slip off easily.

During a Showing:

  • Pay attention to the home’s curb appeal, floor plan and overall amenities.
  • Take notes, ask questions and make comments. This helps your Geiger Realtor understand your needs and what you did or didn’t like about a particular home.
  • Most importantly…relax, have fun, and keep an open mind! Realize when you look at a home, not every house will be perfect, sometimes you will need to look hard to see the possibilities. Your Geiger Realtor will help by eliminating homes that do not meet your criteria and tracking down those that do. The showing process can be draining at times, but once you find that perfect house, it will be forever rewarding.

Writing an Offer to Purchase

You’ve potentially reached the end of the searching process-but first you will meet with your Geiger Realtor to draft an Offer to Purchase. Here are some important factors to consider when writing your offer to maximize your chances of getting the property you want at the price you want.

What Are You Willing to Pay?

Think about how much you’re willing to pay and what is a fair price for the home. By examining what are called comparable sales (homes similar to the one you want to buy in terms of location, size and amenities) you can get a sense of what the market says is a fair price for the home in question.

But what is a fair price to you? If the home is uniquely valuable to you, you might see nothing wrong with offering full price (or even more than the asking price) to make sure no one beats your offer. In many situations, simply offering full asking price with reasonable terms will be enough to get your offer accepted immediately.

Determine Your Highest and Best Price

You usually won’t know if there will be other people placing offers on the home when you’re writing your offer. If the seller gets multiple offers, he or she may go back to each potential buyer asking for highest and best offers. Decide at the outset, what the maximum is that you’d be comfortable and happy paying for the home while you’re still thinking somewhat rationally and before a potential bidding war arises.

Choose Your Closing Date

Your offer will state how quickly you want to close on the home. You may be thinking, “I’d like to move in tomorrow!” but because of the legal and financial aspects of purchasing a home, 30 to 45 days is standard. Also, a closing date at the end of the month will reduce the amount of cash you need to close the deal because of prepaid interest.

Mortgage payments are made on the first of the month to cover the previous month, so your February 1 mortgage payment will pay for the month of January. But if you buy a house on December 20, you won’t make a partial payment on January 1 – instead, you’ll pay that money on December 20 then make your first mortgage payment on February 1. There’s nothing wrong with prepaid interest, because you’re getting what you’re paying for – it’s just that many home buyers are tight on cash and would rather have that 30 day cushion before they start making any mortgage payments.

Decide on Your Contingencies

To protect yourself, you should include contingencies in your offer. These are clauses that let you walk away from the purchase without financial or legal penalties in certain situations. An inspection contingency means that if the home inspection reveals substantial problems, you can walk away. A financing contingency means that if you can’t secure financing, you can walk away. (If you were paying cash, you wouldn’t have a financing contingency.) There will also be a time limit on the contingencies, such as 14 days, to keep the process moving along and prevent the seller from losing too much time if you have to back out.

Understand the paperwork you will be required to sign. Your purchase offer probably will not be just one page, like you might think, but several pages of detailed (but boilerplate) legal documents. Make sure you understand everything you’re signing, because it’s a very important contract. Your Geiger Realtor is highly trained to make sure you understand these contracts in detail.

Be Prepared to Negotiate

Lastly, plan for a counteroffer. Sellers will commonly not accept the first offer you write, but come back to you asking for more money, different terms, or both. You then have the option of countering the counteroffer. It’s usually a good idea to be reasonable during these negotiations as sellers can get emotional and not want to work with you if they think you’re trying to take advantage of them. On the other hand, it’s just business, and if you want to play hardball, there’s no reason not to as long as you’re willing to accept that some sellers may not want to deal with you as a result.

Once your offer gets accepted, you’ll be under contract in a primary position. You’ll need to put down a good faith earnest money deposit (usually 1%) showing that you’re serious about the purchase and aren’t just going to waste the seller’s time. The good faith money will be counted toward your down payment.

Close and Become a New Homeowner

The closing process basically consists of reviewing and signing your loan documents, but it’s not as simple as it sounds. You’ll be relying on multiple parties to do their jobs correctly and promptly, and the only part of the process you can control is the part that you’re responsible for. This section will discuss that process.

The Next Step For Your Loan

At this point, you’ll need to review and understand the Closing Disclosure form. Earlier in your loan application process, you should have received a form called a good faith estimate that outlined the closing costs you’ll be responsible for paying.

The Closing Disclosure is similar to the good faith estimate, except that with its proximity to your closing date, the numbers should theoretically be more accurate. The Closing Disclosure, however, is still considered an estimate. Because of this, one of the line items on this form will be an extra couple hundred dollars that you pay up front in case any of the estimates were low.

In theory, the estimates should be pretty accurate and most of the cushion money should be returned to you after closing, along with a closing statement detailing the exact costs incurred for each item on the Closing Disclosure form.

You’ll see numerous fees on the good faith estimate, Closing Disclosure form and closing statement. The fees will include items such as the loan origination fee, points (if you’re paying any), seller credit (if any) such as a credit toward closing costs or future repairs, title report fee and earnest money, along with several others.

It’s important to review the Closing Disclosure carefully to make sure it closely matches the good faith estimate you were given, that the amounts are correct and that you aren’t being charged any unreasonably high fees or junk fees. If anything is wrong, you’ll need to get it remedied ASAP, but keep in mind that the time involved in correcting things might delay your closing and a delayed closing can have penalties.

Sign the Loan Paperwork

The loan documents could very well be 100 pages long and the other people at the signing might pressure you to get through them quickly, but ignore them. These are some of the most important documents you’ll ever sign in your life. You need to review them carefully to make sure there are no mistakes or unusual clauses. Make sure your loan officer is either present or readily available by phone to answer any questions you may have. After you sign the loan documents, the title company will execute the closing instructions and your loan funds will be distributed to the seller. At this point, the transaction is almost complete.

Then, the property gets recorded in your name. Once the funds have exchanged hands, the city or county will be notified of the transaction and record you as the new owner of the property. At this point, you’ll finally get the keys.

CONGRATULATIONS YOU ARE A NEW HOMEOWNER!

Hopefully, Geiger Realtors has made the process of buying a home seem a little less intimidating and a lot more manageable. There’s no question that it’s complicated, time-consuming enough to feel like a second job and often stressful, but millions of people have gone through the exact same process and come out relatively unscathed.

Owning a home can be a significant source of wealth and at least as importantly, a significant source of comfort, stability and happiness. The important thing is to educate yourself before you do it – don’t let the mystery factor or the intimidation factor of the home-buying process scare you away from your dream of home ownership. Our role as your buyer’s agent is to help you make smart real estate decisions. We are always here to help!