Hire a Buyer's Broker
- A buyer's broker will represent only you and have a fiduciary responsibility to look out for your best interests.
- Buyer's brokers may ask you to sign a buyer's broker agreement, but it is the seller who pays the commission.
- Interview brokers until you find an broker you trust and with whom you feel comfortable.
Get Pre-qualified / Pre-approved
- Ask your broker for a referral to a mortgage broker, but also compare rates offered by your own bank and/or credit union.
- Ask the lender to give you a loan pre-approval letter, which means it will verify your income and pull a credit report.
- Determine your maximum loan amount, but choose only a mortgage type that you understand and a payment level with which you feel comfortable, which may very well be less than the maximum for which you are approved.
Look at Homes for Sale
- Narrow your search to those homes that fit your exact parameters to find that perfect home.
- Ask your broker to give you MLS print-outs of comparable sales in your targeted neighborhood.
- Consider all homes on the market, including fixer-uppers, REOs, foreclosures, short sales and those overpriced homes with longer DOM(days on market).
Write a Purchase Offer
- Consider writing seller's market offers in sellers markets and buyer's market offers in buyer's markets.
- Select a home offer price based on the amount you feel a seller will accept or counter.
- If you are considering a low ball offer, ask your broker to substantiate this price for you.
- Prepare for multiple offers if the home is considered desirable in a sought after area.
- If your offer is rejected, ask your broker to explain why.
Negotiate and Write Counter Offers
- Expect the seller to issue a counter offer.
- If the seller counters at full price, continue to negotiate.
Make an Earnest Money Deposit
- When your offer is accepted, your broker will deposit your earnest money check with the appropriate party.
- Do not make your check payable to the seller.
- Your offer should contain contingencies that will return your earnest money deposit to you if you cancel the contract.
Open Escrow / Order Title
- Your broker will open escrow and title, if the listing broker hasn't already done so.
- Your broker will provide you with the escrow officer's name, phone and escrow file number.
- Give this information to your lender and your insurance broker.
- Your lender will require an advance payment for the appraisal.
- If you receive a low appraisal, discuss options with your broker.
- Ask for a copy of the appraisal.
Approve Seller Disclosures
- Read and question items you are unsure of on the Seller Property Questionnaire, natural hazard report, pest inspection / completion and other documents such as a preliminary title policy.
- Read every document in its entirety; ask questions about all seller disclosures.
Order Homeowner's Insurance Policy
- Order your homeowner's insurance early.
- Sometimes previous claims by a home owner can make it difficult to get insurance.
- Get replacement coverage.
- Take full advantage of the neighborhood review time period.
Conduct Home Inspection
- Hire a reputable home inspector.
- Bring a home inspection checklist with you.
- You and your broker should attend the home inspection.
Issue Request for Repair
- If the home inspection turns up health and safety issues, issue a request for repair by asking the seller to address those issues or give you a credit for them.
- Realize no home is perfect, and the inspector will find faults.
- Make sure your loan is firm and the appraisal is acceptable before removing your loan contingency.
- If you do not remove contingencies, the seller can issue a request to perform and then cancel the contract, on top of demanding your deposit.
Do Final Walk-Through
- Do not pass up doing a final walk-through.
- Inspect the property to make sure it's in the same condition as when you agreed to buy it.
- If you find a serious issue, address it now before you close.
- Bring a certified check payable to escrow.
- Expect escrow to pad the amount, so you will receive a refund after closing.
- Consider asking your bank to wire the funds to escrow, saving you the hassle of waiting in line at the bank.
- Your property deed, seller's re conveyance and deed of trust will record in the public records.
- Title will notify you and your broker when it records.
- After recordation, unless your contract specifies otherwise, the property is yours -- change the locks immediately.