Happy House Hunting!

Purchasing a property is the one of the biggest financial decisions you'll make. Whether this is your first purchase or you're an experienced buyer, this decision must be made carefully.

Why Do You Want To Buy?

Tired of paying rent? Outgrew your current home? Looking for an investment portfolio or rental property? Need a larger yard? Rather live in a different area? Want a shorter commute? Having a clear sense of your reasons for buying will help you choose the right property.

Has Your Income Grown?

Property ownership is an excellent investment; whether you're looking for your dream home, a rental property, or to expand your investment portfolio. Owning real estate is one of the least risky ways to build equity and obtain a greater return on your initial investment.

Before you start shopping for your property, it is a good idea to make some preparations.

Build Your Green File.

A green file contains all your important financial documents. You need it to secure financing for your property. It should contain:

• Financial statements
• Bank account statements
• Investments
• Credit cards
• Auto loans
• Recent pay stubs
• Tax returns for 2 years
• Leases for investment properties
• 401K statements, life insurance, stocks, bonds, mutual fund information.

Check Your Credit Rating.

Your credit score has a huge impact on what type of property you can buy and at what price. We recommend you first check your credit rating with an experienced lending institution to help determine what you can afford. The lender will research your credit ratings from the credit reporting agencies (Equifax, Experian, Trans Union). We are happy to recommend experienced, knowledgeable lenders.

Be Careful With Your Finances.

Now is not a good time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability.

Buying a property requires making many important financial decisions, understanding complex issues and completing a lot of paperwork. It helps to have an expert in your corner when undertaking such a large purchase. We can guide you through this process.

Here are some factors to consider when choosing your real estate professional:

• Look for a full-time agent; one who has experience in the neighborhood you're buying in and in completing transactions similar to yours.
• Ask how much time the agent will have for you, and if they are available at night and on weekends.
• Does the agent return your calls promptly? Time is money when attempting to buy a property.
• Ask for a list of references or of properties they've recently sold.
• Choose an agent who listens attentively to your needs and concerns. 
• Pick an agent with whom you feel comfortable.

Take a Drive.

Get to know the neighborhoods or complexes which interest you. Drive around and get a feel for what it would be like to own a property in the area. Start getting a sense of the properties available in those areas.

Narrow Your Search.

Select a few properties that interest you the most and have your real estate agent make appointments to visit them. Ask your agent about the potential long term resale value of the properties you're considering.

Once you picked out the property you want to purchase, your real estate agent can help you make an offer that the seller will accept. A good agent will investigate the potential costs and expenses associated with the new property. An agent can also help you draft your offer in a way that gives you the advantage over another offer.

The Initial Agreement and Deposit.

An effective agreement is a legal arrangement between a potential purchaser and the property’s seller.

Some important tips to keep in mind to streamline the process:

• Keep written records of everything.  We will assist you in drafting all the paperwork for your purchase and make sure that you have copies of everything.
• Stick to the schedule. Now that you have chosen your offer, you and the seller will be given a timeline to mark every stage in the process of closing the real estate contract. Meeting the requirements on time ensures a smoother flow of negotiations so each party involved is not in breach of their agreements. During the process we will keep you constantly updated so you'll always be prepared for the next step.

The Closing Agent.

A title company/attorney will be selected as a closing agent. The closing agent will hold the deposit in escrow and will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing. There may be recorded easements and encroachments, which limit the rights to use your property.

Inspections.

Once the seller accepts your offer you must have a licensed property inspector inspect the property within the time frame that was agreed upon in the contract to purchase. You may elect to have different inspectors inspect the property if you wish to obtain professional opinions from those specializing in a specific area (eg. roof, HVAC, structure). If you're purchasing commercial property you need to have an environmental audit done on the site for the lending institution. We can recommend several different inspectors.

Depending on the outcome of these inspections, one of two things may happen:

1. Each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the close, or

2. The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of contract (usually the price).

Appraisal and Lending.

It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on square footage measurements, building costs, recent sales of comparable properties, operating income, etc. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time.

Property Insurance.

If you're obtaining a loan you'll be required by your lender to purchase a certain amount of insurance on the property. The value depends on the lending institution and the purchase price. You may be able to save hundreds per year by shopping around for home owners insurance. 

Closing Day.

If you've come this far this means it is almost time for a congratulations, but not yet. Do not forget to tie up these loose ends:

Final Walk-Through Inspection.

More of a formality than anything else, the final inspection takes place a day before, or the day of the closing. You will visit the property to verify that all is in working order, everything is the same as when you last viewed the property, that there are no extra items left behind, and that everything included in your purchase is still at the property.

Home Services and Utilities.

We will provide a list of useful numbers for the activation of home services and utilities after the closing occurs.

Closing.

The closing agent will furnish all parties involved with a settlement statement, which summarizes and details the financial transactions enacted in the process. You and the seller(s) will sign this statement as well as the closing agent, certifying its accuracy. If you are obtaining financing, you have to sign all pertinent documentation required by the lending institution. If you are unable to attend the scheduled closing, arrangements can be made. If you are bringing funds to the transaction you can elect to either have the funds wired electronically into the closing agent’s escrow account, or bring a certified bank check to the closing in the amount specified on the settlement statement. The seller should arrange to have all property keys and any other important information for you at the closing so that you may receive these items at this time.