Home Buyer Tips May 15, 2023

Buying a Home: A Start-to-Finish Guide

You want to buy a home.

Where do you begin?

 

When you’re ready to buy—or maybe just ready to start seriously thinking about it—there’s a lot you can do to prepare. Here is a checklist to help you get started…

 

1. Determine a Price Range

Step one is finding out your budget for your new home. The best way to do that is to meet with a mortgage professional who will review your income, assets, and credit history in order to pre-approve you for a loan. Not only does getting pre-approved allow you to narrow your home search, but it also makes your offer stronger when it comes time buy. If you don’t currently have a mortgage professional, your buyer’s agent can recommend one.

You can also use our Home Monthly Payment Calculator to experiment with different principal amounts, interest rates, down payments, taxes, and insurance to get an idea of what you can afford. Keep in mind that these calculations are meant to be estimates—interest rates change weekly and will be determined by your credit score.

 

2. Make a Wish List

Imagine your ideal home. How many beds/baths does it have? How big is the backyard? How close is it to the local park? Use our Wish List to guide you in your search online and with your agent.

 

3. Start Your Searching

Once you know how much you can afford and what you’re looking for in a home, it’s time to start your search. Our online search tool makes it easy to search for homes, keep track of your favorites and subscribe to property alerts when a fitting listing hits the market in your area. Your real estate agent can also send you potential homes and take you to tour them in person once you’re ready to get serious.

 

4. Know What to Avoid

As you prepare to buy, knowing what not to do can often be just as helpful as knowing what to do. By understanding the pitfalls buyers can fall into, you can identify the signs of these common buying mistakes ahead of time. Check out this article on buying homes that have been flipped, too.


 

You’ve found the home.

What now?

 

Once you’ve found the home you can see yourself living in, what’s next? There are many steps to go through before you can officially call yourself a homeowner. Your buyer’s agent will guide you through this process, but in the meantime, here’s a preview of what you can expect.

 

1. Negotiation

When making an offer on a home, your buyer’s agent will negotiate on your behalf in order to attain the best terms for you. This can include negotiating the price, repair costs, timelines, and contingencies.

 

2. Purchase & Sale Agreement (Contract)

This is the legal contract you and the seller will enter into once your offer has been accepted by the seller. It outlines the terms and conditions of the sale and is signed by both parties.

 

3. Inspection

Once the Purchase and Sale Agreement is signed, a home inspector is hired to examine the home’s health, safety, and major mechanical systems. If any issues arise from an inspection, you may be able to renegotiate.

In a competitive offer situation where you wish to waive your inspection contingency in order to make your offer more appealing, your agent may advise you to conduct a “pre-inspection”—that is, an inspection that is conducted before you put an offer in on the house.

 

4. Financing

After your offer is accepted, the next step is to get final loan approval. During this process the lender will decide if they’re willing to approve your mortgage based on things like your creditworthiness and the title history and appraisal of the home you want to buy.

 

5. Title Report

This is a report for you and your lender detailing the history of the home you’re buying to ensure there are no legal barriers to purchasing it.

 

6. Escrow

Escrow is an impartial third-party process in which documents and funds are deposited by buyers, sellers, and lenders to facilitate the closing of a transaction. To learn more, read this short guide to understanding escrow.

 

7. Closing

During this final step of the home buying process, ownership is transferred from the seller to the buyer, closing costs are paid, and several legal documents are prepared and signed, all leading to the closing date. After closing is finalized and recorded and the funds are disbursed, the home is yours!

 

8. Moving Day!

Check out our printable Moving Checklist as you get ready for the big day.

 


 

Windermere Mercer Island

 

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We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative, and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

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© Copyright 2023, Windermere Real Estate/Mercer Island.

Home Buyer Tips September 20, 2019

Key Buyer Protections You May Need for Your Home Purchase

When purchasing a home, there are a number of protections—called contingency clauses—that you can write into your contract to allow you to back out of the sale for specific reasons.  For instance, if your inspection reveals major problems with the home that the seller can’t or won’t fix, your loan financing falls through, you find out the HOA rules or neighborhood weren’t what you were expecting, etc. The sheer quantity of available contingencies is dizzying. Our list includes 26 provisions alone on preprinted forms, not including any specific requests your broker might negotiate in.

Clearly, not all contingencies are used in a typical transaction and many make your offer less competitive. Still, we think it’s critical for you to understand the legal implications and trade-offs of each contingency so you can make the smartest decisions possible.

Financial

We’ll start with contingencies that relate to financing. Except in extremely competitive situations or non-financeable home sales (think dilapidated homes, major structural issues, or land-value sales), a financing contingency is relatively commonplace. It generally protects you in the event you can’t secure a loan (provided you follow the agreed upon protocol). It includes an appraisal contingency to protect you in the event the lender feels the homes is worth less than you agreed to pay for it.

If you have an existing home that needs to close before you can complete your home purchase, there are two standard contingencies available to you. The first, Buyer’s Sale of Property Contingency, is used when you have not yet secured a buyer for your current home. It sets time periods to both actively list your home for sale and to secure a buyer contract. It ties the closing of your new home to the closing of your current one, and because of this, sets very specific protocols for accepting an offer. It has a bump provision that allows the seller to accept a non-contingent offer if you don’t remove your contingency within a predetermined time frame.

The second contingency, Buyer Pending Sale of Property Contingency, is used when you have already secured a buyer for your home and are awaiting its closing. Because your home is already under contract it is far less controlling than the Sale of Property Contingency, but it protects you if your first sale falls through.

Less common financial contingencies include a standalone appraisal contingency available for cash transactions, a seller-financing attorney review, and a contingency related to homeowner’s insurance availability.

Home and Property Condition

In highly competitive situations a buyer may need to conduct their due diligence before making an offer. In most other scenarios, though, the buyer has countless opportunities to investigate a potential property and walk away or renegotiate if it doesn’t measure up to expectations.

The inspection contingency includes the ability to evaluate the structural, mechanical, and general condition of the structure(s), compliance with building and zoning codes, an environmental or hazardous materials inspection, a pest inspection, and a Geotech or soils and stability inspection. In addition, it includes the option to allow a sewer system inspection or a neighborhood review and permits an inspection to determine the presence or non-presence of oil storage tanks on the property.

Specific separate contingencies allow for evaluation and review of documentation related to wells and septic systems, assessment the presence of lead-based paint, or review of lease agreements for components like propane tanks, security systems, and satellite dishes, etc.

There is an option to make the sale contingent upon seller providing a home warranty or require cleaning and personal property removal prior to buyer taking possession.

Buyers wanting to determine if a home or property is suitable for their intended use (think building, remodeling, platting or development) would incorporate a feasibility contingency into their offer. Buyers of vacant land might include the Land and Acreage Development and Use addendum that incorporates both disclosures and contingencies.

Built into the standard local purchase and sale agreement is an Information Verification Period that gives the buyer 10 days (unless modified) to verify statements made by the seller of listing firm related to the property.

Title

In Washington State, the buyer most commonly receives a deed at the time they purchase a property. That deed is subject to financial liens and encumbrances, restrictions, and physical encroachments. A standard title review contingency allows the buyer the opportunity to review these items and object to any they cannot live with. A buyer has the option to complete a survey of the property boundaries and purchase extended title insurance if desired. Surveys are exceedingly expensive and most typically completed on valuable parcels of land such as waterfront and commercial property.

Community and Homeowners Association

Many communities have homeowner’s associations that govern rights and responsibilities within a community. A homeowners’ association review contingency requires the seller to deliver documents and meeting minutes to buyer that are then subject to buyer’s approval.

Condominiums and Common Interest Communities are also regulated by statute and have specific requirements for review and approval of budgets, documents and meeting minutes like traditional contingencies. Although governed by statute, it’s important for buyers to ensure they receive and review the resale certificate or public offering statement within the allotted time frame to avoid an automatic waiver.

Perhaps you are making an offer in a community or neighborhood you know nothing about and don’t have enough time to check it out. A neighborhood review contingency allows you to do things like research crime statistics, talk with neighbors, explore traffic patterns, and check the noise level (nothing like finding out about that incessantly barking dog after closing). This is something that ideally you do before writing your offer to make it as strong as possible, but it’s nice to know its available in a pinch.

Leases

When buying a property subject to an existing lease that will continue after closing, a lease review contingency will require the seller to deliver a copy of the lease along with books, records and other agreements and provide for your review and approval within a specified time frame.

Attorney Review

Finally, an attorney review contingency will allow you a defined time period with which to have your attorney review and approve specific provisions or the entire purchase contract.

 

No two homes, buyers, or sellers are the same. Every offer you write should be tailored to the specific situation. Nothing tops having an experienced broker to guide you through the process. This is what we do every day. Together, we’ll create the best strategy for you.

Choosing the right broker can save you thousands on your home purchase. Whether through local market knowledge and pricing analysis allowing you to make a smarter offer, recommendations and resources to thoroughly conduct your due diligence and avoid costly mistakes, or savvy contract negotiation to help you get the terms you need, having a Windermere broker on your side is one advantage you can’t afford to sacrifice.

 


Find a Home | Sell Your Home | Property Research | Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

© Copyright 2019 Windermere Mercer Island.