The Home Buying Process

The Initial Interview with your Realtor
An interview lets you discuss with your Realtor what you need and want in a new home. The Realtor will then show you homes until you find one that meets your needs.

Pre-Qualification or a Pre-Approval Letter
Pre-Qualification is the process of talking with us about your financial situation. We will determine the price range you are qualified for and comfortable buying. During this discussion your lender can advise you on the best way to structure a loan to meet your needs.

Experiment with calculator provided and plug in your numbers to see how the down payments and monthly payments, interest play out.

Calculators (View all of our calculators)

Pre-Approval is the process of submitting your application and financial papers to obtain a written loan commitment.

A lender will then provide a pre-qualification or pre-approval letter for your Realtor to attach to your Offer to Purchase and Contract.

These letters let the seller know that you are qualified to buy the home. They can also give you an edge if there are multiple offers on the home.

Offer to Purchase and Contract
This document is the written agreement between the buyer and seller that explains the terms of the real estate transaction. Once signed, by both parties, it becomes a legal document. A pre-qualification or a pre-approval letter is often attached and required.

Due Diligence Money
In real estate, due diligence is the period of time between an accepted offer and closing. This money in NC is non refundable  It is paid to the seller directly for taking their property off the market . It has a definite time of a certain amount of days. It will be applied to the purchase price at closing. It gives you, the buyer, time to get an appraisal, a title search, perform property inspections and more, so you know you're getting what you're paying for. Once the time of the Due Diligence is up, then the countdown to closing takes place and the next check (earnest money) is put into play.

Earnest Money
This is the initial down payment given by the buyer. It is held by the listing company or an attorney. It must be deposited within three days after the contract is signed by both parties. It will be applied to the purchase price at closing.

Home Inspection
A home inspection is performed by a home inspector to verify that the home is in good condition. If the buyer feels that there are any repairs that the seller should make prior to closing, the agreed upon repairs or costs are made part of the contract.

Home Appraisal
Your lender will probably order an appraisal on the home to verify that it is being sold at a fair market value.

The Mortgage Process You can apply in person, by phone, or online. Depending on your situation. They will need some or all of following documentation. W-2’s for the past two years pay stubs for the past 30 days Tax returns for the past two years and the most recent bank, mutual fund, or retirement statements.

You will choose a closing attorney. The attorney will perform a title search, obtain title insurance, and can advise you on the need for a survey. Your attorney can also advise you on any issues which may arise during the transaction or guide you as needed.

You will choose an insurance agent. Homeowner’s and hazard insurance are the same thing, and will be required to protect you and the bank on any major damage that may occur to your home.

Your application, supporting documents and appraisal are sent to the bank for approval, your lender will notify you if any additional documents are required for final loan commitment. The day before closing we will call to let you know the exact amount of money that you need to bring. This cash to close needs to be a cashiers check made payable to the attorney’s trust account, or the funds can be wired directly to the attorney.

Pre-Qualification vs Pre-Approval

If you’re considering the purchase of a new home, you may be concerned with the issue of finance. Attaining the right mortgage is a key step in the home buying process, but it doesn’t have to be a stress-inducing one.
Most lenders offer pre-qualification, pre-approval or both to help you know where you stand. Let me explain the difference between pre-qualification and pre-approval:

Pre-Qualification
Pre-Qualification is a preliminary estimate of how much you can afford to pay for a home based on information you provide. Because credit and employment information are not validated during pre-qualification, it can only be considered a rough idea of a monthly mortgage payment and loan size. This can be a useful guide as you begin the home buying process, however.

Pre-Approval
Pre-Approval is a written commitment from a lender to finance your home purchase up to a set amount. This indicates that the lender has taken a close look into your financial history and has agreed to lend you a specific amount of money, reliant on certain details like a finalized sales contract and professional inspection. Pre-approval indicates to sellers that you are a serious home buyer. Regardless of which option you utilize, or even if you take both steps, you’ll be able to shop with much more confidence. Why wait until you find the perfect home to discover problems with obtaining a mortgage? If you would like more information on how either process can help you get into the home of your dreams, give me a call. I’d be happy to answer any of your real estate needs.

Buyer Representation

A “Working with Real Estate Agent” agreement form and a “Exclusive Buyer Agent Agreement” form are available either by setting up an appointment with me or I can E-Mail them to you, for you to read over, and discuss them with you and upon your satisfaction, they can be e-signed.

As your Buyers Agent

The new laws in North Carolina have changed as they apply to Buyer Agency Compensation. We used to always receive our compensation from the seller, but under the new laws, the seller is no longer required to pay for the Buyer’s Agent. It is a negotiable item with the seller and the listing agent. Although some sellers may still pay for both the selling and listing agent’s fees or commissions, it is not an understood provision anymore. Therefore, the new Buyer contracts are set up to allow the buyer to pay their agent directly from the closing procedures should the seller not pay the Buyer’s agent. We will always strive to investigate with the seller’s agent to see if the seller is paying anything towards the Buyers agent’s commission, and if not, the contract will spell out what is required from the Buyer.
 

Prices? Offers? Value?

When a decision is made to make an offer to purchase a home, be sure to go back and take a second look. It is so much easier changing your mind about a home before a contract offer is made than after a contract offer is accepted and signed by the seller. This second appointment would be a perfect time to bring along others who may have an impact on a buying decision, such as parents, friend, contractor, etc.

Go through the home a second time and look beyond the owner’s décor, whether it was the home just previewed, the first one seen earlier in the day or the one previewed last week. Why? There are many reasons, but most importantly is seeing if the second look creates the same good feeling as the first, and then taking a closer look to see if there are aspects of the home missed during the first preview which may alter the decision to submit a contract offer.

So what is the right price to start with?

That depends on several things, such as the risk of losing the home to another buyer, how close to market value the seller’s asking price is and what is the maximum price willing to be paid for the home. As mentioned earlier, there is no cardinal rule that there must be some fixed amount that a seller will negotiate from their asking price.

Even if the current market is considered a buyer’s market, there are many properties on the market for sale where the listing price is at, or very near market value, and where price negotiation will not be as great as other properties on the market that are priced well above market value.

In fact, don’t be surprised to find that there are multiple offers being submitted and negotiated. This does occur more often than most buyers imagine, and it happens when a seller prices their home to sell and sets a very attractive list price to attract buyers and sell fast.

When negotiating a real estate purchase offer, the seller wants to sell at the highest price and the buyer wants to buy at the lowest price! The reality is that a home will sell for what is worth, whether a seller is looking to get more, or a buyer wants to pay less. Contract negotiation is all about getting an agreement.

Often overlooked by home buyers at this point in the home buying process is the experience and value of their RESNC REALTOR in the contract negotiating process. In preparing to make a contract offer, a buyer needs to obtain as much information as possible, and much of that information will be provided by their buyer agent.

This is the point in time when buyers need to have trust in their REALTOR when asking for recommendations and guidance. The truth of the matter is that this is the point in time when the buyer must know and believe that their agent’s concerns are for them, and not for themselves!

An experienced buyer’s agent should prepare, provide and review a market analysis of the home and provide the history of the listing with their client when preparing a contract offer. In addition, a buyer should also a obtain a seller’s disclosure if one is available and obtain additional background information about the home, such as the sellers desired closing time frame, if any offers were previously submitted or if a contract offer is currently being negotiated. This is information buyers should have when preparing to make a contract offer. Information like this is invaluable when deciding what price to offer and how to negotiate when submitting a contract offer.

So how does a buyer start negotiating to purchase a home?

That depends on the home. There may be homes on the market for sale that are simply overpriced, some slightly over priced, and then there are those listings that are priced to sell. There are home sellers who are pricing their home at three years ago price levels and will sell only if they get their price, there are sellers who must sell within a certain time frame and there are sellers who just have to sell.

In contract negotiations, one size does not fit all.

While there are many homes on the market, only one buyer gets to own the home in contract negotiations. A home buyer needs to decide how much they want for a specific home and at what price!

This where the agents at RESNC can take the guess work out and create a win for their clients that will last for years.