You will be asked to “Go to a Mortgage Lender”. This is because it is important to find out what price range you qualify for in a home, what your closing costs will be, if you qualify for any loans or cash back from the seller, and your credit report
Going to a lender first makes sure you know what price range to look in for your home and also provides you with a pre-approval letter. That pre-approval is a guarantee that someone will lend you the stated amount, and it does not stop you from checking interest rates with other lenders at a later date.
First, look for a REALTOR, and be prepared to sign papers. Pennsylvania law requires that a potential Buyer or Seller be given a Consumer Notice on the first meeting where there is a substantive discussion about real estate. The Consumer Notice is NOT a contract, but a disclosure that explains how we work as agents with the different types of representation available to the public. At the same time a business relationship agreement should be discussed.
We start by checking the computer to see all the current available homes in our database that fit your criteria. This database is known as the Multi-List System (MLS). If we are representing you, we also check the office exclusive list which gives information on all listed properties which are not posted in the MLS. We also check the “For Sale By Owners” in the area. We try to adhere to what you tell us you want in a home but after years of experience, we sometime take the liberty of adding something which might not fit your criteria but that we think might be worth your time to see.
First we will do a Comparable Market Analysis (CMA) of the property to confirm the price is a fair market price. Next, we will complete the purchase agreement form. We use the Pennsylvania “Standard Agreement for the Sale of Real Estate” form to make the offer. In most cases we have provided you with a blank copy to review long before you’re ready to make an offer. We will review all the options with you to help you decide what works best in your situation. We also work with your lender to provide you with an estimate of closing costs prior to signing the agreement of sale.
At this point you will have to give a deposit made payable to the listing Broker. The deposit is sometimes called “good faith money” or “earnest money”. The amount is negotiable, and the check will not be cashed until the contract is accepted. The check does not have to be for the full amount you will be putting down, but should be substantial enough to let the Seller know you are a serious Buyer.
After everything is signed by you, we present the offer to either the listing agent, or if feasible, directly to the seller. The seller can accept, reject, or counter the offer. If a counter is made, all the changes must be signed and initialed by all parties.
THE OFFER IS NOT A CONTRACT UNTIL ALL PARTIES HAVE SIGNED AND/OR INITIALED ALL THE CHANGES AND ALL PARTIES HAVE A COPY OF THE AGREEMENT.
While it rarely happens, a Seller (or Buyer) can verbally accept everything, and change their mind anytime before everything is signed and delivered back to their agent.
Any deadline outlined in the contract must be met, or you will be deemed in “default”. The inspections chosen, your mortgage application and mortgage commitment dates are examples of a few deadlines. If you are in default you have no recourse if a problem is found, or, in the case of the mortgage application deadline, could leave you in danger of losing your deposit. Unless otherwise agreed upon in the purchase agreement, you will have 10 days to go to a lender and complete a full mortgage application. This is different from a pre-approval letter as this will be an application for the purchase of a specific property. You can compare various lenders, and are not obligated to use the lender who originally gave you a pre-approval letter as long as you do this and have a completed application into the lender of your choice within the 10 day time frame. If you have chosen to have inspections completed on the home you are purchasing you will need to choose an inspector for various items you may want to have inspected. Three of the major inspections are Home, Wood Boring Insect and Radon. We will gladly supply names of inspectors and contact information. Once inspections are completed we will have contractors provide repair estimates so we can negotiate these repair costs with the seller. These repairs can be done prior to closing, money can be escrowed and arrangements made to have the work done after closing, or you may be offered a monetary credit allowing you to arrange and pay for the repairs at your convenience. The repairs agreed upon will be put in writing and both you and the seller will need to sign the form.
You, as the buyer, can pick the attorney (or settlement agent) you would like to use for the closing process. Again, we can provide names and contact information if you need it. The Attorney/Settlement Agent is responsible for putting together all the paperwork including the final costs to purchase your new home and also will supplying Title Insurance.
These are a few things that happen before closing:
1. We will supply you with a reminder notice stating the day and time of closing.
2. We do a final walk-thru of the property.
3. At settlement you will be required to show a government issued picture ID such as a driver’s license.
4. The amount you need to bring to the settlement will have to be paid with a cashiers or certified check from your bank.
The Real Estate Disclosure Law requires that I provide you with a written consumer notice that describes the various business relationship choices that you may have with a real estate licensee. Since we are discussing real estate without you having the benefit of the Consumer Notice, I have the duty to advise you that any information you give me at this time is not confidential and any information you give me at this time will not be considered confidential unless you and I enter into a business relationship.