Steps in the Buying Process
1. Get Pre qualified through a reputable Lender. I recommend:
Joanne Rotella, Shelter Mortgage, 404-290-4800
Geoff Smith, Assurance Financial, 770-674-1433
Toksy Ogunyemi, Evergreen Anchor Capital, 404-698-0768
Request a Good Faith Estimate to see an estimate of your monthly mortgage payments. Also request a prequalification letter from the Lender, you will need this to make an offer on a property.
2. Choose a Realtor to be able to search, guide, and negotiate on your behalf with your best interest in mind.
3. Once a property is selected to look at, let your Realtor know so they can schedule an appointment with the Seller and to check availability. Some listings will have a 24 hour notice to show, so it is important to keep that in mind when you are trying to schedule to see properties.
4. When you find a property that you want to make an offer on, begin by letting your Realtor know as soon as possible because in many cases, especially in the event that it is a new listing, the first offer is the one the Seller considers most and you may be able to get it under contract before you are in competition with other offers as in a multiple offer situation.
5. Your Realtor will make your offer on the Purchase and Sale Agreement written by the Georgia Real Estate Commission. You (with assistance of your Realtor) will determine the offer price, contributions from the Seller (if any) for the Buyer’s financing closing costs, date of closing, and date of possession of the property after closing. Earnest money is established at this time. Earnest money is typically 1% of the sale price and the Buyer places as good faith to the Seller letting the Seller know that the Buyer is committed and ready to secure the property. The Earnest Money is presented within 3 business days of the Binding Agreement and held by the Real Estate Brokerage of the Realtor until the day of closing when it is given back to the Buyer as a part of their down payment.
If your offer is accepted, the Binding Agreement date takes place at the point the Seller presents the Purchase and Sale Agreement (now termed as the contract) back to the Buyer with the Seller’s signature. All the contingencies time limits in the Purchase and Sale, begin on the day the Purchase and Sale becomes a binding contract. The contingencies in the contract are written to protect the Buyer’s Earnest money. If the Buyer goes beyond the contingencies deadlines, and then wants to terminate (back out of) the agreement, the Earnest Money will be given to the Seller as repayment for the Buyer’s default on the contract. So it is imperative the Buyer stays within the time restraints of the number of days from the Binding Agreement date. For example, the Due Diligence period offers the first contingency. The Due Diligence period is typically from 7 days to 14 days from the Binding Agreement Date. This is the period that the Buyer can back out of the contract for any reason whatsoever (and no reason at all for that matter) and still obtain their Earnest Money refund.
The Due Diligence is the time period to do all inspections, surveys, etc. to determine whether or not the Buyer wants to move forward in purchasing the property. The home inspection cost is the first (besides the Earnest money) of upfront money the Buyer will need. Home Inspections cost $350 – $450. The cost is determined by the amount of square feet, number of floors, and the age of the house. During the Due Diligence period the Buyer will request any major repairs for the Seller to take care of prior to closing on the property.
The next contingency is the Appraisal Contingency, and then the Financing Contingency, in which the Buyer has a certain set amount of days to do the Appraisal and to obtain Loan Approval. The Appraisal Contingency amount of days are typically 14-21 days from the Binding Agreement Date. The Appraisal is done to determine the property’s value and is required by the Lender. The Lender will order the appraisal for the Buyer and this is another upfront cost for the Buyer. Appraisals typically cost $450-$550 depending on what type of loan you are obtaining. FHA Loan Appraisals are on the high side of that. If the determined appraised value is less than the purchase price, the Buyer has the right to terminate the contract and obtain the Earnest Money refund if the Seller does not lower the purchase price to the appraised price.
The Financing Contingency is typically 21-25 days from the Binding Agreement Date. During this time it is imperative the Buyer work promptly to give the Lender ALL the documents they request or anything else the Lender is requesting the Buyer to do as the loan is going through the underwriting process. During the Financing Contingency period, if the Lender determines that the Buyer will not be able to obtain full approval for the loan, the Buyer can terminate the contract and the Earnest Money will be refunded.
6. Once all the contingencies are met, the process moves forward to close on the property. The Realtor will have already been working with the Closing Attorney to make it a smooth transition for everyone. The Closing Attorney will clear the Title so that there will be no encumbrances on Title at the time of Closing.
The Buyer will receive a Closing Disclosure from the Lender three days prior to Closing. The Buyer will need to sign this and promptly send it back to the Lender. At that time, the Buyer will wire their amount of funds to the Closing Attorney’s escrow fund to be used on the day of Closing. The Lender will then send the Closing Disclosure to the Closing Attorney who in turn will place all the numbers on a Preliminary Settlement Statement and send to both Buyer and Seller within 24 hours of the Closing day.
7. The Realtor will schedule a final walk through of the property to take place 24 hours in advance of the Closing day. This is to ensure that everything is left like the Buyer first saw on the day of the showing the property and no damage has occurred in the meanwhile.
8. The last and final step in the Buying process is the Closing day- a time of joy and excitement for the purchase of your new home! Closing typically takes one hour because it is a lot of signing for the Buyer entailing all the many documents the Lender requires prior to them funding the loan. The Closing Attorney then sends the signed documents to the Lender for the final review and then the Lender will wire their funds so the Closing will be complete. When this happens, the keys and garage remotes (if any) will be given to the Buyer and the happily ever after story begins!
The Advantages of a Buyer Agency Agreement
YOUR INTERESTS ARE PROFESSIONALLY REPRESENTED
Enlisting the services of a professional Buyer’s Agent is similar to using an accountant to help you with your taxes, a doctor to help you with your health care, or a mechanic to help you with your car. If you had the time to devote to learning everything about accounting, medicine, and automotive mechanics, you could do these services yourself. But who has the time? This is why you allow other professionals to help you in their specific areas of expertise. I will take care of the hassles of everyday real estate transactions for you. This will let you concentrate on your full-time job, while I do my job. I make it my priority to guide you through the home-buying process and exclusively represent your interests as I help you find a home, present your contract offer, negotiate, and close on your home!
YOU GET A PERSONAL SPECIALIST WHO KNOWS YOUR NEEDS
Just as your accountant, doctor, and mechanic understand your specific needs, your Buyer’s Agent gets to know your real estate needs and concerns. This type of relationship is built through open communication at all times. I will save you a lot of time by providing you all the details about any home before you see it.
WHAT IS THE BUYER’S AGENCY AGREEMENT?
Entering into a Buyer’s Agency Agreement has countless advantages. When you sign the agreement, you are simply agreeing to “hire” a personal representative who, by law, must represent your best interests to the best of his/her ability. All of this personal service is available at absolutely NO COST TO YOU! The Seller’s Brokerage is responsible for paying the Buyer’s Brokerage fee. You get a professional agent devoted to protecting your needs and assisting you in making one of the most important investment decisions of your life – and you don’t even have to pay a fee!
YOU WILL QUICKLY AND CONVENIENTLY GET A GREAT HOME
The advantage to signing a Buyer’s Agency Agreement with me is that you will have a professional Realtor working to find and secure the ideal home for you. It is nearly impossible to find a home that meets your needs, get a contract negotiated, and close the transaction without an experienced Realtor. You won’t need to spend endless evenings and weekends driving around looking for homes or trying to search computer networks by yourself. When you tour homes with your professional Buyer’s Agent, you will already know that the homes meet your criteria and are within your price range.
If you are purchasing a resale property, we highly recommend that you have a professional home inspector conduct a thorough inspection. The inspection will include the following:
Air conditioning and heating
Roof and Attic
The inspection is not designed to criticize every minor problem or defect in the home. It is intended to report on major damage or serious problems that require repair. Should serious problems be indicated, the inspector will recommend that a structural engineer or some other professional inspect it as well.
Your home cannot “pass or fail” an inspection, and your inspector will not tell you whether he/she thinks the home is worth the money you are offering. The inspector’s job is to make you aware of repairs that are recommended or necessary. The seller may be willing to negotiate completion of repairs or a credit for completion of repairs, or you may decide that the home will take too much work and money. A professional inspection will help you make a clear-headed decision. In addition to the overall inspection, you may wish to have separate tests conducted for termites or the presence of radon gas. In choosing a home inspector, consider one that has been certified as a qualified and experienced member by a trade association. I recommend being present at the inspection or come to summary of the inspection at the end of the inspection. Home Inspections take 2-4 hours depending on how large the house is and how old it is. The summary at the end is less than 45 minutes. By attending the summary you will be able to clearly understand the inspection report, and know exactly which areas need attention. Plus, you can get answers to many questions, tips for maintenance, and a lot of general information that will help you once you move into your new home. Most important, you will see the home through the eyes of an objective third party and the home inspector can show you first hand the areas of concern.
I also recommend getting a termite inspection done. The termite inspection company I recommend is Contractors Best. They do a termite inspection for $35 and are very reasonably priced with the purchase of a Termite Bond. You will want to protect your investment by getting a Termite Bond. Contractor’s Best will inspect your home on an annual basis, and retreat if necessary. Their phone number is 678-765-6525. I can also call them when the home inspection is scheduled to be able to schedule the termite inspection on same day as the home inspection.
What is a “Real Estate Closing”?
A “closing” is where we meet with some or all of the following individuals: the Seller, the Seller’s agent, a representative from the lending institution and a representative from the title company, in order to transfer the property title to you. The purchase agreement or contract you signed describes the property, states the purchase price and terms, sets forth the method of payment, and usually names the date and place where the closing or actual transfer of the property title and keys will occur. If financing the property your lender will require you to sign documents, a promissory note as evidence that you are personally responsible for repaying the loan, and a mortgage or deed of trust on the property as security to the lender for the loan. The mortgage or deed of trust gives the lender the right to sell the property if you fail to make the payments. Before you exchange these papers, the property may be surveyed, appraised, or inspected, and the ownership of title will be checked in county and court records.
At closing, you will be required to pay all fees and closing costs in the form of “guaranteed funds” in a wire transfer to the Closing Attorney’s Escrow fund. Your Lender or the Closing Attorney through your agent will notify you of the exact amount at closing.