Real Estate Buyer Resources
Our goal is to provide you with all of the resources you need to make the best buying decision and manage the real estate process with ease and peace of mind. Below we have included a few resources which will help you get started with the home buying process.
7 Steps to Buying Your Home
Define Your Needs
Congratulations on your decision to purchase a new home! Before you go house hunting, it’s a good idea to define what kind of home and neighborhood would best suit your desires and needs and make a wish list. Share this list with your real estate agent. The finer the details, the more effective your home search will be. To further define your needs, you may want to divide your lists into negotiable and non-negotiable items, so your agent can operate with some flexibility when scouting for homes on your behalf.
Get Prequalified or Preapproved
Now that you know what you want in a home and neighborhood, you need to find out what you can afford. There are two ways to go about this: prequalification or preapproval for a home loan. Your real estate agent can refer you to a mortgage broker to begin the process. In most markets, preapproved buyers are preferred by sellers over those who are pre-qualified.
Your preapproved status lets the seller know:
- You have gone through an extensive financial background check.
- A lender is willing to do business with you.
- The likelihood of unexpected obstacles regarding financing is minimal.
Let the House Hunting Begin!
Now you are ready to embark on your home search – an endeavor that can prove overwhelming if not approached with some forethought. The most efficient route is to allow your real estate agent do the initial scouting for you. Using your wish list as a guide, he or she will alert you of new and existing listings that have strong potential. If these listings pique your interest, your agent will arrange home tours at your convenience. Many agents send alerts via email – sometimes as often as daily, depending on the available inventory in your market. Let your agent know how you’d like to receive these alerts, whether by phone, email or fax.
You also can do some research on your own. Read local real estate publications, contact your local neighborhood associations, visit the local chamber of commerce, surf the Internet, or drive around your favorite neighborhoods. While these methods certainly can lead to your dream home, it’s important to note that 82 percent of home sales are the result of agent connections.* That means it’s more likely your agent will find your dream home through being in the real estate business than you driving around on the weekends.
Make an Offer
When you’re ready to make an offer on a home, your real estate agent will help you determine the offer price by reviewing recent sales of homes similar in size, quality and amenities. With your input, your agent will draft a written contract that outlines what needs to be done by both parties to execute the transaction. If the seller accepts the offer, the document becomes a binding agreement, so it is imperative that you carefully review it with your agent and speak up if anything is not clear to you. It’s important to note that if the seller changes any aspect of the offer, it is not a binding agreement until the buyer agrees to the seller’s changes.
Strike a Deal
Sometimes, you get lucky and the seller accepts your offer as is. However, in most instances, the seller will make a counteroffer. This is where your real estate agent’s experience in negotiations will be invaluable. Keep in mind almost everything is negotiable when you are buying a house. This can give you a great deal of leverage in the buying process – that is, if you have adequate information and you use it in an appropriate manner. Some items you may negotiate:
- Closing costs
- Move-in date
- Appliances and fixtures
Remain in close contact with your real estate agent so you can quickly review any changes from the seller. Remember: Bargaining is not a winner-take-all deal. It is a business process that involves compromise and mutual respect.
Prepare for the Closing
When an offer becomes a binding agreement, your real estate agent will help you tackle the checklist of action items that you, as the buyer, have agreed to perform prior to closing. Depending on how the responsibilities are divvied up in the agreement, this is typically when you will:
- Conduct a home inspection.
- Get an appraisal and finalize your financing.
- Secure title insurance.
- Shop for a home warranty.
Having these procedures done in a timely and professional manner is a must, as any delays could threaten a successful closing. A first-rate real estate agent should be able to serve as your “one-stop shopping” referral source for service providers. Your agent also should serve as your advocate, helping to coordinate activities and making sure the vendors have access to the property to perform their jobs.
Close the Deal
Congratulations! The moment you’ve been anticipating has arrived. The closing is where home ownership is legally transferred from the seller to the buyer. It is a formal meeting that most parties involved in the transaction will attend. Closing procedures usually are held at the title company’s or lawyer’s office. The closing officer will coordinate all the document-signing and the collection and disbursement of funds. A few days before your closing date, your lender will send a final closing statement that outlines your closing costs, if applicable. Your real estate agent will review this document with you to ensure its accuracy, as well as help you gather any necessary documentation that you’ll need to bring to closing.
Deciding How Much House You Can Afford
Before you start house hunting, you need to determine how much house you can afford, which will entail getting either prequalified or preapproved for a home loan. A real estate agent can help you find a mortgage broker to begin the process. While getting preapproved is a more in-depth process, a preapproval letter lets both real estate agents and sellers know that you’re a serious shopper who means business.
What Do I Do to Get Prequalified?
A prequalification can be done online or over the phone and does not require your submitting financial documents. You will be asked to provide basic information about your finances — for instance, your household income versus your debt load. With this information, the lender will estimate what your maximum loan amount could be if you were to apply.
What About Getting Preapproved?
A preapproval is more involved and a real estate agent can help you prepare your documentation. The lender will perform an extensive review of your finances, requiring pay stubs, tax records, credit accounts, bank statements and more. This figure will not only be a more reliable estimate of what you can afford, but your preapproval also indicates that a lender is willing to do business with you, pending the purchase price, market appraisal and the underwriting process.
What Should I Ask When Shopping for a Lender?
Your real estate agent should have a mortgage broker they are willing to put you in contact with – this lender will be someone they have done business with in the past, and feel comfortable recommending. However, if you decide to do a little comparison shopping and look for a lender on your own, here are a few important questions to ask.
What loan programs do you offer and which one do you think is best for me?
How long will the loan approval process take?
What line items of the loan agreement – if any – are negotiable?
What is your policy for locking in interest rates, and will you honor a lower rate if it declines during the lock-in period?
Are there fees for prepaying on my loan?
Making Your Home Wish List
Before the home search begins, your real estate agent will want to know as much as possible about the features and amenities you desire. To help your agent better serve you, divide your preferences into “negotiable” and “non-negotiable.” Here are some details to consider:
Type of property (house, condominium, town home, loft):
Age of property:
Preferences in architectural style:
Number of stories:
Type of foundation:
Lot size and/or location:
Landscape preferences (fencing, built-in sprinkler system):
Garage or carport:
Number of bedrooms:
Number of bathrooms:
Minimum square feet:
Electrical or gas appliances:
Formal dining room:
Home office or study:
How much renovation would you be willing to do?
Must your home accommodate any special needs?
Location, Location, Location
Where you buy not only affects the home’s current and future value, but it also affects your lifestyle. Your agent will be able to conduct a more targeted home search if you outline your preferences in neighborhoods and nearby amenities. Here’s a checklist of items you should consider and communicate to your chosen real estate agent.
- Urban, suburban or rural
- Commute time
- School districts
- Desirable neighborhoods
- Proximity to the airport
- Proximity to restaurants and retail
- Access to major highways and thoroughfares
- Access to public transportation
- Health care facilities
- Parks and recreation
- Length of time you plan to live in the home (Your agent should be knowledgeable about growth trends and projections that could affect your investment.)
Opting for New Home Construction
Whether to buy an existing home or have one built is yet another decision to make during the home-buying process. If you decide to go with new construction, a real estate agent can be a powerful advocate in your corner as you negotiate upgrades, a move-in date and other terms with the home builder.
Below are some basic pointers to prepare you for the journey ahead.
Selecting a Builder
Shopping for a large production or custom home builder can be a daunting task. Start by defining what architectural styles appeal to you and then seek out the builders in your area who offer those styles. Due diligence is essential. Ask friends for referrals to get firsthand accounts; verify the builder’s state license status, if applicable; and check whether they’re certified by the National Association of Home Builders.
The Builder Representative and Your Real Estate Agent
A builder representative’s ultimate goal is to sell you a home. His or her role is to provide a wide range of information to help you in your decision-making, from building restrictions, roads and easements to inspections, warranties, rebates and upgrades. A real estate agent knowledgeable in new-home construction will be able to help you wade through all the data and point out the downsides and upsides of each line item. Your agent also can look out for your interests in reviewing the builder’s contract, which often contains more legal jargon than consumer-friendly language.
It's All About Timing
Market conditions greatly dictate a builder’s incentive to make a deal you cannot refuse. When a builder has inventory on his hands, his carrying costs start adding up. When this happens, a builder might be more amenable to strike a favorable deal, whether it’s throwing in upgrades or taking a bit off the asking price. A real estate agent can help you know when market conditions are right for these benefits. Also, watch for builder close-out sales. Builders promote these special events when a new subdivision is near completion but empty inventory still remains.
A Word About Paying Up
While there are always exceptions, most builders require a deposit when a purchase agreement is signed. They also require that the buyer pay for any upgrades prior to closing. If you back out prior to closing, unless the agreement states otherwise, you will lose that money. Make sure you understand every detail in the builder’s contract before signing it.
How Can a Real Estate Agent Help Me?
Whether you’re in the market for a primary residence, an investment property or a second home, purchasing real estate involves many important considerations and decisions. A real estate agent can provide the focus, due diligence and expertise needed to help you find the home of your dreams.
A real estate professional will:
- Assist in determining how much house you can afford and help you get pre-qualified or pre-approved for a loan.
- Simplify your search by helping you define home and neighborhood criteria.
- Screen new listings daily and alert you of homes that match your criteria.
- Keep you abreast of local market conditions, so you can make informed decisions.
- Gather in-depth detail on each home, schedule tours and point out the advantages and possible drawbacks of each property.
- Work with you in drafting an appropriate offer and serve as your representative when presenting it to the seller.
- Negotiate a contract that considers your goals and leads to a successful closing.
- Personally refer you to proven service providers, such as inspectors, appraisers, title companies, warranty providers, insurance agencies, attorneys, carpenters, movers and more.
IMPORTANT TO NOTE: Real estate professionals can represent the buyer, the seller or both. When agents represent both parties, it is called dual agency. In some states, dual agency affects the real estate professional’s fiduciary responsibilities to the seller. Keep in mind that real estate laws differ from state to state and even from locale to locale. For more in-depth answers, talk with a knowledgeable real estate professional and ask about local practice.
10 Things You Should Ask a Real Estate Agent
Having the right real estate professional by your side can greatly improve your home-buying experience. A good rule of thumb is to interview a minimum of three candidates.
Here are 10 questions to ask during an interview:
- Are you a full-time professional REALTOR®? How long have you worked full-time in real estate? What geographic areas do you specialize in?
- Do you have a Website? What information can I find there?
- How will you keep me informed during my home search and throughout the transaction?
- Do you have a staff or a team? If so, what roles will they play in my transaction?
- Will you show me properties from other companies’ listings? (Some real estate companies do offer their buyers’ agents a higher commission if they are able to sell “in-house” listings. In those instances, there can be added incentive to limit the range of homes you are shown. This may affect your home search and how much you your agent’s fee will be.)
- Will you represent me exclusively, or will you also represent the seller? May I have that in writing?
- How will you get paid? How are your fees structured? May I have that in writing?
- What distinguishes you from other real estate agents? What is your negotiating style?
- May I contact some of your recent clients as references?
- Do you have a performance guarantee? If I am not satisfied with your performance, can I terminate our buyer agency agreement?(In the heavily regulated world of real estate, it can be difficult to offer a performance guarantee. Typically, agents will outline verbally what you can expect from their performance. Keller Williams Realty understands the importance of win-win business relationships: The agent does not benefit if the client does not benefit.)