We’re thrilled to bring you the show notes from the ‘Real Estate 101’ podcast we are sponsoring. This interviewed featured Rose & Womble’s Jean Johnson, a REALTOR from our Shore Drive Resale Office. She gives great information about the process the majority of home buyers go through when purchasing a home.
To listen to Jean’s outstanding interview please subscribe on iTunes.
Today’s guest is REALTOR® Jean Johnson from Rose & Womble Realty’s Shore Drive Office in Virginia Beach, VA. Jean specializes in residential real estate and has been with Rose & Womble for almost two years. Today’s topic, The Steps To Buying a House, was inspired by a client Jean is currently helping.
Interview and hire a REALTOR® and Loan Officer.
One of the first conversations that Jean recommends is to talk over the main steps through the process. While every transaction is different there are some big steps you’ll have to take in order to purchase a home.
Most buyers start looking online – you need to create your team. You need to find a REALTOR® and lender. The first mission is to choose who is going to help you through the entire process.
You should be asking about their experience, have they worked with different types of buyers -specifically things you will be dealing with like relocation or first-time home buying. Ask for references from people they’ve worked with before to get an idea what type of reflection their work leaves after the transaction is over. Also, ask them what their negotiation strengths are and how they like to negotiate.
Personality is important, Jean recommends speaking with several REALTORS®. One way Jean recommends for finding REALTORS® is to visit open houses. You can also ask for referrals from friends and family.
For your loan officer you can go with some recommendations from your REALTOR® or other recommendations from friends and family. You will want to compare rates, origination fees, and the true amount of the loan you will be paying over time. A well educated loan officer should be able to easily explain the full loan.
Get Prequalified for Your Loan
While it can be intimating to find out what you can qualify for, you will need to know how much house you will be able to go after. The worse thing a home buyer can do is begin to shop for houses and fall in love with a house they cannot afford. Having a set maximum number helps to narrow your home buying focus.
Sign a Buyer Broker Agreement
When you’re ready to get serious about your home buying you will want to sign a Buyer Broker agreement. It is a commitment between a buyer and the REALTOR® that states their loyalty lies with the buyer. It also shows that the buyer will commit to purchase a house from that REALTOR®. This agreement can be short, but it ensures that the REALTOR® is legally bound to protect you and your interests.
Now Start Looking for Houses
This is one of most fun parts of the whole process. Start out making a list of must haves in terms of the house and the neighborhood. Based on those criteria, along with price and location, your REALTOR® will help you narrow down you choices. During the process you may notice what really matters to you in terms of your future home.
Make the Offer
Once you find the home it’s time to write the offer. This can be a stressful time of the process, but when you sit down your REALTOR® and write the contract, he or she will go through all the details. Jean recommends for all of her buyers a property inspection contingency so a professional property inspector can examine every nook and cranny of the house. This contingency can help get you out of the contract in case items come back unrepairable or if the seller is unwilling to correct them.
During this process the REALTOR® should do a comparative market analysis of the neighborhood – it helps to determine the market value range to help you create a number to give to the seller.
During the offer several things could happen – if it is accepted you move on to the next step and schedule inspections. When it is rejected it can be heartbreaking, but the majority of sellers will counter. Sometimes when an offer is flat out rejected it could mean you came in too low. If you arm yourself with knowledge you should be able to work out a deal with the seller.
When the Offer is Accepted
Now that the offer has been accepted, it is the time to hire inspectors. Often your REALTOR® will have professionals they love to work with, but ultimately it is your choice. While you don’t want anything to come back from the inspection report, if it does don’t panic if something need to be repaired. Jean suggests you put together your list of those items that must be fixed for you to move into the house. Some people have a tendency to ask for upgrade type of things, but really it’s intended for things that need to be repaired, not just nice to have.
Yes you may have been prequalified, but now is the time when you’re actually applying for the loan. With the new changes on how loans are processed, three days before your house is scheduled to close you will receive documents that clearly outline who is paying for what, and if you need to bring any money to the closing table. All of those details are being worked out over several weeks and during that time it is so important to provide any documentation your loan officer requires.
The day before closing you do a walk-through to check out any repairs that were agreed to and overall condition of the property.
The Closing Table
Then you get to sign the papers! You’ll sign all of the papers and receive the keys to your house.
With the right people on your team you should go through the process smoothly. Jean believes that at the very beginning you should talk to a few folks. It’s not a one-sized fits all solution with a REALTOR®, you need to make sure the person you choose is someone who is going to fight for you, smart with the market, and will educate you along the way. Someone that fits with your personalty that you can trust and will work with you through the whole process.
All of the advice given on Real Estate 101 Podcast is for informational purposes only. For specific real estate advice please contact a licensed professional REALTOR® in your area to consult.