When buying a home, there is nothing more important than the person you choose to represent you. The job of your real estate broker is to support you in finding your home under the best possible terms, and to aid you through the entire process. Your broker will explain the process of buying a home, and familiarize you with the various activities, documents and procedures you will experience throughout the transaction.
Tips For Selecting A Real Estate Broker
- Knowledgeable about the communities of interest to you
- Awareness of the complicated local and state requirements affecting your transaction
- Effective in multi-party, face-to-face negotiations
- Highly-trained, with access to programs for continued learning and additional certifications
- Supported by professional legal counsel
Most brokers and mortgage lenders recommend pre-qualifying for a loan before selecting a home to purchase. This process will help:
- Identifying an affordable price range
- Understanding how you qualify for different types of loans
- Determine your monthly payment
- Estimating the down payment and closing costs
The Loan Process
Your broker will help you select a mortgage lender. Once you have made your decision, these are the steps of the process:
Application - All pertinent documentation is obtained. Fees and down payments are discussed, and the borrower will receive a Good Faith Estimate (GFE) and a Truth-in-lending statement (TIL), itemizing the rates and associated costs for the loan. You will be asked to provide certain documents to your lender in order that your loan can be processed in a timely manner.
Loan Submission - Once all the necessary documentation is in, your completed file is submitted to a lender for approval.
Loan Approval (Underwriting) - Loan approval, or underwriting, generally takes 24 to 72 hours. All parties are notified of the approval and any loan conditions that must be received before the loan can close.
Closing - Once all parties have signed the loan documents, they are returned to the lender. If all the forms have been properly executed, the lender sends the loan funds by wire transfer. At this point, the borrower finishes the loan process and actually buys the house.
Finding and Choosing the Right Home
There are many factors to consider in selecting a property, including location, bedroom and bath count, schools and amenities.
Your broker will apply their extensive community knowledge and resources to research available properties, and show you the homes that best meet your needs. If you find a property that interests you through your own research, let your broker know so a showing can be arranged.
As you view different properties, your criteria may change. Open and direct communication with your broker is a key element of a successful property search.
Making an Offer
Once you have found the home that you wish to purchase, your broker will apply their professional training and do all the necessary research to help you structure an effective offer.
This is where your broker’s negotiation skills come into play. When an offer is made, the seller will have the option of accepting, rejecting or counter-offering. Your broker will negotiate the best possible terms for you.
Your broker will draft the purchase agreement, advising you of protective contingencies, customary practices, and local regulations. Home warranty, title and escrow arrangements will be detailed in the offer. Although your broker will give you advice and information, it is your decision as to the exact price and terms that you wish to offer.
Managing the Escrow
When the purchase agreement is accepted and signed by all parties, your broker will open escrow for you and your earnest money will be deposited. The escrow is a neutral third-party that will receive, hold, and distribute all funds associated with your transaction.
Prior to closing escrow, all of the contingencies of the Purchase Agreement must be met. Your broker will coordinate this process.
Typical contingencies include:
- Approval of the Seller’s Property Disclosure Statement
- Approval of the preliminary title report
- Loan approval, including an appraisal of the property
- Physical inspections of the property
- Pest inspection and certification
- Acquisition of homeowner's insurance
Closing Escrow and Moving In
When all of the conditions of the purchase agreement have been met, you will sign your loan documents and closing papers. You will deposit the balance of your down payment and closing costs to escrow, and your lender will deposit the balance of the purchase price. The deed will then be recorded at the County Recorder's office and you will take ownership of your home. Your broker is a valuable source of helpful tips for planning and coordinating your move.