A Little Perspective
We’ve all taken vacations that didn’t turn out exactly as planned. Delayed flights, lost luggage, and unseasonable weather are commonplace. And while these surprises challenge our patience at the time, we try to take them in stride and, in the end, are happy with the trip. Sometimes, in retrospect, we even find the adventure more memorable because of the “detour” in our plans. Home buying experiences can be a lot like this. As you venture into the home buying process, be prepared to make some adjustments as you encounter the unexpected. A flexible attitude, along with a good road map, will keep you moving forward toward your desired destination and will make the journey more gratifying.
GETTING STARTED
Choosing a REALTOR®
• Choosing a REALTOR® - Whether you select a
REALTOR® by referral, or by an interview process,
working with the right agent reduces the stress and
confusion that often accompanies the purchase of a
home. Good communication with one person is key.
• Discuss Agency - With the REALTOR® you have
selected, take time to define the part he or she will
play throughout the process. Your REALTOR® may
represent you, the seller, both you and the seller, or
neither party. This discussion is crucial and mandated by
State Law.
• Identify Your Priorities - Your REALTOR® can now
help you rank or prioritize a list of property features.
In this step, “required features” become distinguishable
from those that are merely “wants” or “wishes.”
Possible Documents:
Agency Disclosure Statement, Buyer Agency Agreement,
GETTING YOUR FINANCING FIRST
Pre-approval First is a Must
• Multitude of Possibilities - Take your pick! For
example: FHA, VA, Rural Development, Conventional
Fixed or Adjustable, PMI Fixed or Adjustable, Balloon, etc.
Ask your lender for some guidance.
• Which Lenders Should I Consider? - Compare
the rates, fees and lending policies of those financing
institutions that have the experience required to
efficiently process and deliver the type of loan you desire.
• Become the Next Best Thing to a Cash Buyer -
Sellers generally respond more favorably to offers from
“pre-approved” buyers. Also, imagine shopping with
the assurance that you can buy any home in your preapproved
price range.
Possible
Documents:
Good Faith Estimates
Lender’s Application Checklist
Loan Application
Credit Report, VOE, VOD
Pre-Approval Letter or Certificate
GETTING THE RIGHT PROPERTY
Searching for the right home
• Your Home Search - Discuss with your REALTOR®
the best search strategies for the kind of property
you are shopping for. Listing Brokers enter property
information into the MLS which is shared with your
REALTOR® and hundreds of other websites. You
should discuss with your REALTOR® how you can get
direct access to the MLS to stay current on accurate
information. You may also want to discuss which other
websites may be beneficial in your home search.
• Viewing Homes – When you find a home you want to
view, contact your REALTOR® sooner rather than later
to set up a showing. Keep in mind that there can be
several other parties involved in scheduling a showing
(the seller(s), other agents and buyers).
• Back to the Drawing Board - If you are still
shopping and not getting any closer to finding the right
match, it may be time to review and adjust your priority
list and re-examine your options.
• Disclosures & Use Restrictions - When you have
successfully narrowed the field to your top choice,
obtain a copy of the Seller’s Disclosure Statement, Lead
Based Paint Disclosure and Use Restriction Information
(Public and Private) for that property and examine
thoroughly before drafting an offer.
• Offer to Purchase - Bring your checkbook for the
“earnest money” deposit. With your REALTOR’s® help,
read and complete the Buy and Sell Agreement.
Possible Documents:
MLS Property Data Sheets
Seller’s Disclosure Statement
Lead Based Paint Disclosure & Pamphlet
Plat/Deed Restrictions
Zoning Ordinances
Buy and Sell Agreement
Agency Addendum
Wire Fraud Notice
Counteroffer Form
GETTING YOUR INSPECTIONS
PEACE OF MIND AND UNDERSTANDING
• Wood Destroying Insects - In Southwest Michigan,
there are several types of insects that damage wood.
Make sure a licensed pest inspector checks the
property carefully for wood destroying insect activity.
• Investigating the Property - Most homes need
minor repairs or improvements. To reduce major
surprises, hire a qualified professional to inspect
and help you become more familiar with your future
home. You may want to test for radon as well!
• Well and Septic - If your chosen property is not
serviced by public water and sewer, a local health
authority or private evaluator should make sure you
have a system that properly provides acceptable
drinking water and a system that properly discharges
wastes. Review the report with the sanitarian if you
have any questions or want recommendations for
water testing beyond the typical tests for nitrates and
bacteria.
• Environmental - Discuss the need for
environmental inspections with your home inspector,
the local health sanitarian and any other state or local
government personnel that may be aware of hazards
in your area.
• The Property - To identify potential boundary
problems you should obtain a survey report. A report
could include: approximate boundaries, recorded
easements, setbacks, building locations, elevations etc.
The information provided by a survey report can vary
widely depending on the type: mortgage report, stake
survey, ALTA survey etc. To identify potential use
limitations you should obtain a copy of the preliminary
title commitment and copies of all documents (deed
restrictions, oil and gas lease, easements etc) as well
as inquire with the local municipality about how the
zoning impacts the property.
Possible Documents:
Investigation Reports
Wood Destroying Insects
Structural/Mechanical/Safety
Radon Test
Other (mold, lead-based paint)
Well/Water
Septic
Estimates of Repairs/Remediation
Survey
Investigations Addendum
Preliminary Title Work & Copies of All Documents
GETTING THE GO AHEAD FROM YOUR LENDER
CHOOSING YOUR LENDER
• Application - Your lender will want to get to know
you very well. Obtain a list of the items you will need
for your loan application, which may be in-person,
over the phone or online, depending on your chosen
lender.
• Appraisal - Your lender may hire an Appraiser to
ensure there is enough value in the property to secure
your loan.
• Verifications - Your lender must verify everything to
best serve and protect the investor that is providing
the money for your purchase. Cooperation with the
process can really speed things along.
• Final Conditions - Often a lender will issue an
approval subject to certain conditions being satisfied.
Typical examples include paying off a debt, making
specific home repairs, and providing the lender with
additional verifications, copies of the inspection
reports and a home owner’s insurance policy.
• Approval - Your lender is now prepared to provide
the funds you need to complete your purchase. Be
advised, these funds are normally available for a limited
time.
Possible Documents:
Loan Estimate
Requested Documents
Appraisal
Mortgage Title Insurance Commitment
Surveyor’s Mortgage Report
Closing Disclosure
Inspection Reports/Repair Verifications
GO AHEAD! COMPLETE YOUR PURCHASE
• Pre-Closing Walk-Through - A quick walk-through
before closing will reassure you that the home you
agreed to purchase has not changed significantly.
• The Closing - This is the day you take ownership of
your new home. Allow approximately one hour to sign
the necessary papers. Be sure to bring certified funds,
photo ID, and appropriate home owner’s insurances
papers.
• Possession Arrangements - Before leaving the
closing, make sure arrangements have been made to
obtain all keys for the property and transfer all utilities
and services into your name.
• Move in and enjoy your new home! – Please
remember to file your change of address (post office),
and follow up on your Principal Residence Exemption
(PRE) with your municipality.
Possible Documents:
Closing Disclosure
Homeowner’s Insurance Policy/Binder
PRE (Principal Residence Exemption) Form Property Transfer Affidavit
Home Warranty
Change of Address Form