Topics:

Talk to a lender

Find an agent

Area Knowledge

What you should know prior

Making the Offer - step by step

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Talk to your lender-

The very first step is to talk to your lender or ask your agent for a local lender they recommend to find out what you qualify for. Find out exactly what you can afford with a 30 year fixed loan on your actual household income in addition to the total amount of your debt owed and expenses.. This includes any monthly payments you may have with vehicles, credit cards, other loans, utilities...etc.

Find an Agent-

Now you need to find an agent who will represent you. You need a buyer's agent. Do not let a seller's agent (the listing agent) represent you. The seller's agent has the seller's best interest in mind. If the agent can practice Dual Agency, then they will not be able to advise you in anyway on the terms of your offer.  Read more about Dual Agency in the Working with Real Estate Agents link below.

When purchasing real estate, you'll want to find an agent who is experienced to ensure you are protected and safely guided through a real estate purchase. When you have found an agent, he or she will provide you with a brochure titled Working with Real Estate Agents. This brochure explains the difference between a seller's agent, a buyer's agent, a dual agent and a sub-agent.  Please read this brochure carefully and ask your agent if you have any questions. Prior to making an offer, you must sign an agency agreement with your agent.

No consumer should have to pay a buyer's agent to represent them, the seller commonly pays the commission which is split betweent the seller's agent and the buyer's agent. Be sure to find an agent who has sold many properties representing the buyer only.

Area Knowledge-

When you are looking to purchase real estate on the coast, be sure you know the area well or find an agent who is very familiar with the area. For example: If an ocean front home is very affordable and seems too good to be true. That is most likely because it is. Some ocean front homes are located dangerously close to the tideline and most likely will not have the protective dune line covered with mature vegetation. Without this duneline, there may be problems including depreciating real estate value, high insurance expense, increased erosion of land, health department issues and higher risk of flood damage. Be sure to find out the cost of flood insurance prior to making an offer.

Prior to making the Offer-

Here are some things you need to know prior to making an offer:

1. Comps-Be sure your agent provides you with recent sold comparable properties (comps) to justify the asking price or what you would like to offer.
2. Cash Flow Analysis-You'll want to know how much this home will cost you or generate for you on a monthly basis. Have your agent prepare a cash flow for you..
3. Fees/Assessments-Be sure the agent provides you with covenants, association fees or any pending or future assessments for condominiums or subdivisions with and HOA (Home Owner's Association) prior to making the offer.
4. DOM-Find out how many days this house has been on the market and how many times it has been relisted.
5. Original Asking Price-Find out what the starting price was compared to what it is now.
6. Original Sold Price and Debt Owed-Most importantly, in addition to asking how much the seller originally paid for the property, ask your agent to research the debt owed on the property including any equity lines.

The Offer-

All this information should give you the knowledge you need to making a smart offer:

1. Decide on an offer amount
2. Be prepared to submit an Earnest Money Deposit check. It should be about 1% of the offer price.
3. Closing Attorney-You'll need the name of a local attorney your agent trusts and uses often. This attorney should keep you informed at all times. If you can, select an attorney who will be directly in contact with you.
4. Decide on your contingencies. It is standard to have these contingencies:
   1. A home inspection
   2. A pest inspection
   3. An appraisal
   4. Others may include:
      1. Survey
      2. Septic
      3. Pool/Spa
      4. Elevator
      5. Whether the lot coverage/city/subdivision will allow a pool
      6. cost of repair
5. Do you want to ask for closing costs to be paid by the seller at closing? There was a day when the seller would pay some closing costs but for the most part now a seller is having to sell for the same amount or less than he paid for the home and may not be willing to pay any closing costs.
6. Closing date-For a typical loan, it shouldn't take more than 45 days to close. Don't expect the closing to occur on the exact day it is scheduled. A closing could be delayed anywhere from a couple of days to a couple of weeks .
7. A pre-qual letter from a financial institution stating you have been pre-qualified for a loan. It is important for the seller to know you have started the process.
8. Your lender will need to provide a loan commitment letter on or before the date specified on the offer. This date should be the same or a couple of days prior to the closing date. If the lender says you can not get the loan on or before that date, your earnest money is returned to you.
9. Be sure your agent reviews with you and you fully understand the terms of the offer. If you don't understand a term, don't hesitate to any questions.

If you have any questions, feel free to shoot us an email info@allaboutobx.com or call 252-207-1147.

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