Buyer's Guide

A mortgage professional will let you know how much of a home you can afford. They will want financial information about your income, debts, and savings in order to provide a pre-approval letter. The more information you provide a loan officer upfront the better prepared you will be once you find a home that suits your wants, needs, and budget. The loan officer will also run your credit score. 

Besides letting you know how much of a home you can afford, the pre-approval process is a good time to ask questions about what additional documentation you will need before you will obtain a loan commitment. In addition, you'll need a pre-approval letter in order to make an offer on a home.

At this stage, there isn't a need to shop around for the best loan terms because you haven't found a home, and a lender isn't going to lock in an interest rate until you do put a home under agreement. You are not under any obligation to obtain your loan from the lender that provided a pre-approval letter, but you should allow that mortgage professional to compete for your business once you have found a home.

Narrowing down the areas you want to live in, as well as your “must haves” vs “nice to have” attributes of the will make for a more efficient home search. 

For example, how many bedrooms and bathrooms, general size, and parking options are you looking for? Any licensed real estate agent should be able to provide you access to the multiple listing service (MLS). This multiple listing service is the service realtors use to enter their listings (properties for sale).  At Compass, we will set you up with a curated, collaborative search tool called a Collection. This tool will give you access to homes that are not on the public market, and provide you with direct communication with your agent about each property through the collaborative comment section. 

The time it takes to find a home varies for homebuyers. Some find a home they want to make an offer on after seeing just a few houses and others may see 10-20 homes.

Once you find a home you want to make an offer on, your Realtor should perform a comparative market analysis, also referred to as a "CMA." When you have your initial meeting with your Realtor, ask how they put together a CMA and what information will be provided to you, so you can make an educated decision about the market value of the home you want to buy.  

The Margie McShane Group provides a market analysis that includes key data points of comparable properties; homes currently on the market, homes under agreement (have accepted offers), and homes that have sold.  The data for all properties should be within a 6 month period, as this is the same time range appraisers use to appraise a home for a mortgage.  Please keep in mind that each home is unique.  Even if the square footage, number of bedrooms and baths are the same, prices are reflective of the location, and condition of each home.

A written offer is submitted by your buyer agent to the listing agent (who works for the seller). Included with the offer will be:

1. A copy of the first deposit check, typically $1,000 (referred to as the good faith deposit).
2. Your pre-approval letter. 
3. State and local required forms, which your real estate agent will explain to you. 

Circumstances may vary, but it is customary to provide the seller with about 24 hours to respond to an offer. A written and signed offer is a binding contract.  Again in today’s sellers’ market we try and get our offers accepted or countered in less than 24 hours.  This strategy always doesn’t work, but in this competitive market, and with a great offer, with little contingencies it is worth trying.

Once the offer is accepted the next person to hire/engage for your team is your real estate attorney.  It is highly recommended that you hire a real estate attorney to negotiate your Purchase and Sale (also referred to as the P&S), with the seller’s attorney, and to handle your closing. Your real estate agent will have a couple of attorneys to suggest you interview if you do not already have one. 

The seller's attorney will draft the P&S, and your buyer's attorney will work with them on your behalf to ensure you are protected legally in the transaction. They will use your accepted offer as the basis for this document. However this document is much more detailed, multiple pages, etc. 

Once the attorneys have an acceptable P&S to both parties, you should schedule a call with your attorney to review the P&S, and to ensure you clearly understand it prior to signing. 

Your buyer’s agent will arrange for electronic signatures of the agreed upon purchase and sale.  As the buyer is the first to sign the purchase and sale, you will be required to have a bank check, or wire transfer, of the deposit for purchase and sale.  The amount that you will give at the signing of the purchase and sale agreement is agreed upon in the offer.

A week prior to close you will need to arrange for utilities to be transferred into your name.  In addition, you will be required to have homeowners insurance.  Usually, the lenders require a year's homeowner's insurance in advance.

This is when you will meet with your attorney, and sign all the closing documents, including the mortgage and title.  You will need to bring your ID.  Meet with your attorney 2-3 days in advance to review the Closing Disclosure and review the final funds due at closing. Ask your attorney regarding how final funds will need to be provided. Typically these are wired in advance or you will need to bring a cashiers check. 

Keys to the home will be provided to your real estate agent once the closing is final and the transaction is “On Record”, or rather the registry has recorded the transaction. 

Make sure to schedule movers late on the day of closing or the following day to be safe.