The Home Buying Process

Buying a home can be stressful, but it can also be quite fun. If you are a first-time buyer you will need to know the steps to buying an Helotes home.

First, interview several Buyer’s Agents.

Choose one to work with and let him or her know your price range and what you are looking for in a home and in a community. Many buyers will already have homes to look at picked out from internet searches.

The Offer

Your Buyer’s Agent will look at homes that have sold recently that compare favorably to the one you want to purchase to determine a good offering price. He or she will write the offer using a promulgated contract including any addenda required if needed. Along with the contract signed by the buyers they will need to write a check for earnest money and another for the option fee. The earnest money can be 3-5% of the offer price. The option fee can be as little as $100 or as much as $500 depending on the price of the home.  The higher the price, the higher the earnest money and option fee.

The offer will be presented to the Listing Agent along with earnest money and the option fee. There might be negotiations or the offer might get accepted right away. If both parties agree on everything the sellers sign the contract and the Listing Agent receipts it. The Listing Agent takes the contract to the title company and turns it along with the earnest money over to the title agent. The check is deposited into an escrow where it remains until the contract falls apart or closes. It the contract falls apart the buyers should get the earnest money returned to them.

If the buyers have a home to sell before they can buy the contract is a contingency. The Listing Agent will change the listing in the Multiple Listing System to C. Ideally the buyers home will be under contract when they make the offer. If their closing does not happen the contract will be voided and the best back-up offer will be negotiated. Basically the home buyers will lose their new home.

The Option Period

The option period is usually around 7-10 days. The option money check is held by the Listing Agent along with a copy of the signed and receipted contract. The option period begins at midnight the day the contract is receipted. The Listing Agent will change the listing in the MLS from A, meaning an active listing, to P for contract pending. This tells buyers that they can see the property and can offer a back-up offer if the first offer falls through.

Very early in the option period inspections should be done.  A licensed home inspector will inspect the home.   A pest inspector will look for termites and carpenter ants.  A septic inspection should also be done if the home is not on a sewer system.  If anything needs to be repaired then these should be negotiated.

 

During the option period the lender will have the property professionally appraised. It the appraised value is at or above the dales price the lender will proceed with the loan. If the appraised value comes up short the buyers will either have to come up with additional escrow funds, renegotiate the sales price or pull out of the contract.

Closing

Once the option period ends both sides will move toward closing. The sellers will remove all furniture and belongings and should have the house cleaned. The title company will do a title search to see if anyone has a claim to the title. What might a claim be? It is usually a lein from a repair that was done and remained unpaid, but it could also be a long lost half sibling that the buyers never knew about. In any cast, any “cloud” on the title would need to be cleared before title insurance could be issued.

Once title insurance is issued and the loan is approved the title company will provide both buyer and seller an estimate of closing costs. This estimate is usually very close to the actual closing costs.

At closing the seller usually goes in first to complete paperwork. The buyer usually goes in later. Sometimes both parties are present, but this can sometimes be uncomfortable depending on the relationships of the parties and the agents. At closing the buyers will be provided keys, an alarm code if there is one, keys, garage door openers and any other items that need to transfer. Both parties will also receive all closing document.

I have probably left a few minor items out, but a good Buyer’s Agent can walk buyers through all of this.

If you are interested in Helotes homes, please give me a call at 210-589-1038.

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