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- Wants & Needs Analysis
- Find Property
- Offer & Deposit
- Counter-Offer
- Negotiation
- Go to Contract
- Apply for Mortgage
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- Additional Deposits
- Inspection
- Hazard Insurance
- Title Insurance
- Re-inspection
- Final Walk-through
- Review Closing Statement
- Close
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STEP 1 |
Meet with
your buyer's agent for a Wants & Needs Analysis |
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It's important
before beginning your property search to sit down with your
buyer's agent to discuss your wants and needs. Your
buyer's agent is trained to listen and advise you on
which properties and financing options will best fit your
circumstances. Knowing these things ahead of time puts
you in the best possible position when looking at properties.
You may also want to contact a financing institution or
professional to discuss possible financing.
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STEP 2 |
Find your
property |
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Using your Wants &
Needs Analysis, your buyer's agent will be able to narrow the
vast choice of properties available to only those that best fit
your criteria. She (or he) will then take you inside
each property you want to consider until you find one on which
you would like to place an offer.
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STEP 3 |
Place an
offer on the property & put down an earnest money deposit |
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Together with your
buyer's agent, you will put together a written offer for your
desired property. This offer will include all your
required contingencies (i.e. sale of your current home,
passing inspection, etc) and your preferred closing date.
You will also give your buyer's agent an earnest money deposit
to hold in escrow until closing. This money shows the
seller you are serious about purchasing the property.
The customary earnest money deposit is $1000. You may
also pledge additional earnest money for some point in the
near future (i.e. "additional $5000 within 10 business days
from contract execution").
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STEP 4 |
Receive
acceptance of your offer, or a counter-offer from seller |
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Within 24-48 hours
you will receive an answer to your offer from the seller's representative
(through your buyer's agent). This answer will either be
an acceptance of your offer as written, or a counter-offer
containing the seller's requirements for accepting your offer.
You may accept a counter-offer as written, or counter again
with your own new offer.
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STEP 5 |
Negotiation
of contract terms |
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Your buyer's agent
will continue to negotiate with the seller's agent, on your
behalf, until an agreement is reached. There is no limit
to the number of counter-offers that can be passed between
buyers and sellers.
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STEP 6 |
Go to
Contract |
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Once the offer or
counter-offer is signed by both you (the buyer) and the
seller, showing an agreement of terms, a contract is formed.
ie - you signed a counter-offer from the seller, or the seller
signed your original offer or subsequent counter-offer.
At this point, both you and the seller are bound by the agreed
terms in the contract.
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STEP
7 |
Apply for
your mortgage (if applicable) |
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Once you have a
signed contract, you must apply for your mortgage. It
takes about 30-45 days from the time you apply until you can
close on the property. Your lender will review your
application and give you an approval. An appraisal of
the property will be ordered by the mortgage company, and your
loan will be contingent upon the appraisal. Your buyer's
agent can help you find a lender who will meet your needs.
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STEP 8 |
Give your
buyer's agent or broker any additional earnest money deposits
required in the contract |
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If required by
your contract, you will give any additional earnest money
deposits to your buyer's agent or broker within the time frame
specified in your contract. Offering to put down
additional deposits before closing is another way to show the
seller you are serious when you first send the offer.
All deposits will be held in escrow by your broker and will be
credited to you at closing.
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STEP
9 |
Order an
inspection of the property |
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Once you have a
signed contract, you will order an inspection on the property.
A professional property inspector will disclose any seen or
unseen structural and pest-related issues with the subject property.
You may also want to consider a mold inspection and/or a free
energy survey by FPL at this time.
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STEP 10 |
Secure
hazard insurance |
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Before you can
close on the property, you must obtain hazard insurance. Be sure to get several quotes.
You will be required to pay a year's premium in advance of
closing. This amount may be required before obtaining the policy or
may be debited at closing (depending on the insurance
company).
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STEP 11 |
Select
Closing/Title Company (if applicable) & obtain title insurance |
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It is critical
that you opt to purchase an "owner's title insurance policy"
to protect yourself should someone step forward (anytime
within 30 years) with a claim to the property. (This is
in addition to the bank's title insurance policy that your
lender will require as well). At the time of contract,
it is determined who (buyer or seller) will be paying for your
title policy. If you pay, you get to choose the place &
time for the closing (on the pre-determined date in the
contract). If the seller pays, they get to choose.
Title insurance is optional, but going without it puts
you at grave risk to not only lose the property, but to still
owe the total amount of your mortgage. Title
insurance premiums are debited at closing.
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STEP 12 |
Order
re-inspection (if necessary) |
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If the property
inspection uncovered items to be fixed by the seller prior to
closing, it is advisable to pay the inspector to come back
(usually only $100-$200) and make sure the repairs were done
right. This should be done a few days before closing.
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STEP 13 |
Final
walk-through |
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The day before
closing you are entitled to walk through the property to
ensure it is in acceptable move-in condition and that the
seller has removed their personal property. Your buyer's
agent will schedule this and go with you.
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STEP 14 |
Review
Closing Statement with your buyer's agent in advance |
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The day before
closing, your buyer's agent will review the closing statement
with you to explain all the relevant line items. Any
discrepancies uncovered now can be fixed, ensuring a smooth
closing the next day. You will be informed at this time
how much money (in the form of a cashier's check) to bring to
the closing for pre-paid items and closing costs.
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STEP 15 |
Close |
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Bring your
driver's license and a cashier's check for the amount of your
pre-paid items and closing costs to your closing. Your
buyer's agent will attend the closing with you to ensure
everything goes smoothly. You will leave the closing
with a pile of documents to keep and the keys to your new house!
Congratulations - you are a homeowner!
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