7-SMART-STEP PROPERTY BUYING PROCESS
Property Buying Step 1: Get a free consultation
- Real estate consultation
Getting a free real estate consultation from a top local real estate consultant can save you lots of time and money. Ask him/her for up-to-date local real estate statistics, such as real estate sale/price trends for active listings, pending listings and sold listings. Ask him/her the smart way to achieve your real estate goals and satisfy your needs. Ask him/her how to help you pay less closing costs.
- Lending consultation
You also need to speak to a lending consultant to learn more about financing process and costs involved in the transaction. Down payment, interest rate, points, closing costs, third party fees, amortization and your ability for repayment are some important factors you need to discuss with your lending consultant. Lending guidelines such as property type, property condition, maximum loan-to-value ratio, minimum debt-coverage-ratio, cash flows generated by property, property’s financial history and income documents for the past 3 years are very important to many lenders.
Property Buying Step 2: Get your loan pre-approved
If you plan on financing your real estate purchase, you should get your loan pre-approved from your lender prior to your serious shopping venture. Getting your home loan approved prior to submiting your real estate purchase offer is a wise decision because it helps and protects you in many ways. You can always contact our preferred lenders today to get your loan pre-approved.
Property Buying Step 3: Shop for the right property
Many real estate websites offer online MLS listing information free. Realtor.com, zillow.com, trulia.com, loopnet.com, fsbo.com are big names in real estate industry. You may use these websites to get a feel of what is available out there and at what price.
We also suggest that you contact a qualified local real estate agent to assist you in finding what you need. Many real estate agents are very happy to help you. Your real estate agent will become very helpful if the property you are looking for is very hard to find.
At Kellson Real Estate, we offer interactive MLS map search for Arizona real estate and California real estate listings (residential and commercial) with direct broker-to-customer supports.
When finding a residential property (single family homes, condos, townhouse), consider at least the followings: your lifestyle, your family needs, location, schools, neighborhood, and price. If you’re looking for a commercial properties, take a close look at actual cash flows, potential cash flows, value-added potentials and other factors that are very important to you.
Property Buying Step 4: Make an offer
How much is the offer price? This is the big question for almost every buyer. Zillow.com and a number of other websites offer free value estimates but the result is not always reliable.
If you’re working with a real estate broker, you can ask for a free Broker Price Opinion report (aka BPO), stating the fair market price in that broker’s opinion. To make sure you’re not paying more than the fair market value, an appraisal clause should be use for your purchase offer.
It is wise to discuss with our real estate agent the following factors before making an offer:
- Price, down payment, amount of earnest money, inspection period
- Appraisal, financing and inspection conditional clauses
- Close of Escrow date; offer expiration time and date
- Financial disclosures provided by seller
- Property disclosures provided by seller
- other items such as personal properties, seller-carry financing, seller concessions…
Property Buying Step 5: Inspect property and verify seller’s disclosures
Inspecting property and verifying seller’s disclosures are two important tasks right after receipt of executed contract. We normally suggest our clients to use a professional inspection service to assist buyers with inspection.
Verifying seller’s property disclosures, financial disclosures, and other required disclosures are also important. Buyers may encounter many surprised findings during this process.
Property Buying Step 6: Clear required conditions (for financed purchase
only)
If you apply for a purchase loan, your loan approval is normally subject to certain conditions. In order to get fully approved, all conditions need to be verified and found satisfactory to a lender. Your loan officer, broker, escrow and you – the buyer – are normally working together to get this step done.
Property Buying Step 7: Close the transaction
Once all real estate and loan conditions, if any, have found satisfactory, you’re now ready to go to “settlement” or “closing” table for singing final paperwork (normally take place at your escrow office for CA & AZ properties).
If you’re a cash buyer, you will need to bring or wire your money to Escrow and your Escrow is responsible for paying out to seller and other involved parties.
If you borrow a loan, signed paperwork from buyer and seller are sending to the lender for review. If lender found satisfactory, it will fund the loan. After the loan get funded, Escrow or an assigned party will record your ownership document along with some other documents at an appropriate County Recorder’s Office.
A purchase transaction is considered to be closed once the money is funded appropriate parties and ownership document is recorded.
Disclosure: This 7-step Property Buying Process is a general guidelines for buying a property in California or Arizona. However, you can follow your own buying process that is best for you.
