Assemble Your Home Buying Team
Buyer's Agent - A Lender - Home Inspector - Attorney - Insurance Agent
Buyer’s Choice Realty is committed to making the process of buying as stress free and enjoyable as possible. In order to assist you in the process. We believe in the concept of a home buying team strategy.
By utilizing your Buying Team, you'll find yourself well prepared when the time comes to make an Offer to Purchase your new home. In cooperation with your Buyer's Agent, we suggest you assemble your Buying Team within the first two weeks of house hunting. Your Buyer's Agent will provide you with a list of qualified names of local service providers for you to interview and consider as part of your Buying Team.
Remember, your Buyer's Agent is like the quarterback for your Buying Team. Your Agent is always there to assist you assembling and coordinating your Buying Team activities, as well as answer your questions during each stage of the buying process.
Most Buyer's are under the misconception that the more properties they see, the better educated they are about the market. A better plan is to work with your Buyer's Agent to view only properties meeting your criteria. You and your Buyer’s Agent can eliminate the great majority of all listings by carefully screening the current inventory of available properties before you ever leave home or get out of the car.
- Your Buyer's Agent will assist you in locating houses meeting your specifications by using our computerized Multiple Listing System (MLS) system which connects all local Realtor offices. The MLS advertises all newly listed homes by any Realtor, to all Realtors and their Buyers. Houses not meeting your minimum requirements and criteria will be immediately ruled out.
- You should drive-by the properties that you and your Buyer's Agent believe are good prospects. There is no need to make buying real estate a regimented schedule. Dedicate some convenient time in your schedule to view the neighborhoods and curb appeal of properties you may be interested in viewing. You'll be surprised how many prospects can simply be ruled out due to poor location and lack of exterior appeal. When you find a property that you feel is a strong possibility, contact your Buyer's Agent immediately to make arrangements for a formal viewing. Usually twenty-four hour advance notice is necessary, especially if the owners are still living on the premises. Your Agent will then confirm the showing and meet you at the property.
- Remember, YOU are a part of a Buying Team. You may find a property in the newspaper, through a personal referral, or by chance. If you find a property not brought to your attention by your Buyer's Agent, contact him or her to research the property and to make contact with the Seller or the Seller's Agent to arrange a viewing.
With your Buyer's Agent, buying a house moves at a comfortable pace set by you. There is no reason that house hunting needs to be a stressful and tiring process. Buyer's Choice will make buying a comfortable and enjoyable process to find your family's new home.
Most buyers are going to require a loan in order to make a home purchase. We suggest that you interview and apply for a loan "pre-approval" with a reputable lender. Perhaps even more than one. By being approved by more than one lender, you have a better chance of negotiating a great interest rate, and your financial strength can be used as a negotiation bargaining tool by your Buyer's Agent. Some things to consider:
- A lender doesn't work for you. The lender works for the lending institution or the investor providing the loan money.
- Although the lender doesn't work for you under a written contract, the lender is required to legally keep your personal and financial information confidential. You should instruct the lender to speak only with your Buyer's Agent and your Attorney regarding your personal and financial matters. You do not want the lender to disclose any information to the Seller, Seller's Agent, or Seller's Attorney.
- Secure pre-approvals for the highest amount that you can afford. You then work with your Buyer's Agent to determine your financial comfort level. You don't need to buy at or near the maximum pre-approval limit, but knowing that limit will help you better understand your financial position.
- Always mention Buyer’s Choice when you contact a lender, and let the lender know which of our Buyer Agents you've contracted. Have the lender call your Agent with an initial pre-qualification figure followed by faxing the full written pre-approval. Remember, your Buyer's Agent is under contractual obligation to keep your personal and financial information confidential, and having this information is an essential part of your Agent's assistance process.
- Since most lenders require the same information to pre-approve your loan, when assembling your information, make extra copies of your originals. Give one copy to each of the lenders you choose. Always keep your original information in a safe, convenient place in case you need it again during the buying process.
- Your pre-approval should include the lender verifying your income, credit, employment, and other factors that determine your ability to qualify for a mortgage loan. We recommend that your pre-approval be subject to only a signed Purchase and Sale agreement and the lender’s appraisal.
- There are basically three types of lenders, each qualified to provide you with funds, but providing distinctly different levels of service and flexibility. Buyer's Choice does not recommend any one type of lender over another, but does advise you to interview several and apply to the lenders that you feel most comfortable with using. Consult your agent with any questions.
Bank: Usually a local savings bank that secures your loan with the institution's own money.
Mortgage Banker: A lender that has it's own money to secure your loan, but usually sells your mortgage to a third party investor either before or immediately after closing your loan. Many mortgage bankers will provide the service to your loan, but will not actually hold the mortgage note after closing.
Mortgage Broker: A mortgage broker lends money from it's investors exclusively. A mortgage broker will take your mortgage application, shop your loan to a multitude of investors that offer different rates and loan programs, until finding the best loan alternative they can recommend. The loan is usually sold to the investor at closing as part of the closing process.
You should strongly consider hiring an attorney to review the Offer to Purchase or Purchase and Sale Agreement before you sign. Although real estate agents are trained in the negotiation and purchase of real estate, most aren't trained, practicing attorneys. That's the best reason to have a trained legal professional review your purchase contract to make sure that all your legal considerations have been incorporated into the final documents.
Choose an attorney who specializes in real estate. You may choose any attorney you wish, but your attorney should incorporate real estate law as the bulk of the attorney's practice, and should be willing to meet with you to explain and if necessary, revise the Purchase and Sale Contract to protect your legal interests.
- During the negotiation of Purchase and Sale language and terms, your attorney should be available to discuss any items with the Seller's Attorney or Agent if the need arises.
- Discuss professional fees and precisely what you will be getting for your money. Ask if there will be an additional charge for negotiating the terms of the Purchase and Sale Agreement with the Seller’s Attorney (if necessary) or if the fee for reviewing and revising the Purchase and Sale Agreement covers all negotiation.
Many attorneys give you a choice between hourly fees or a flat rate fee for standard Purchase and Sale review. Be aware that hourly fees can quickly add up if there are any unusual circumstances with the property or sale. We recommend negotiating a flat rate fee not to exceed a specific amount of dollars per hour unless your attorney first notifies and receives your permission to proceed.
You’ll need a home inspector after the Offer to Purchase has been accepted and signed by the Seller. Your Buyer’s Agent will speak with you regarding your rights to various home inspections and contingencies for those inspections which will be included as part of your Offer to Purchase. We recommend that you inquire about inspectors, fees, and types of inspections prior to an accepted Offer to Purchase. When choosing home inspectors always insist on an itemized, written report. Your Buyer ‘s Agent is allowed by law to recommend specific inspectors if you choose.
It is important to keep in mind that a home inspection serves different purposes:
- Home inspections allow new information to be discovered, which will enable you to decide whether or not to move ahead with the purchase.
- Home inspections provide you with a brief education on items like age and maintenance of the different systems (electrical, plumbing, heating, etc.) in the home.
- Fortunately Massachusetts does not require licensing for home inspectors. When interviewing an inspection company, ask if the specific inspector is licensed in any particular field of expertise. A licensed builder, architect, or engineer is a great qualification, but not the only one to consider. Ask if the inspector is a member of the American Society of Home Inspectors or any other recognized organization that has standards of training and requirements of membership. Make sure the inspection company is insured, and inquire as to what their insurance covers in the event you need to make a claim for a poor inspection or a missed item.
- If you are applying for a government type loan such as a VA (Veterans Administration), FHA (Federal Housing Authority) or HUD (Housing and Urban Development) loan, your inspector needs to provide a pest inspection on the FHA/VA approved pest inspection form. Ask for this form specifically.
- You should consider having comprehensive inspections. A few dollars spent up front can save your thousands of dollars and headaches after your purchase. Ask the inspector to provide the following minimum types of inspections:
General Home Inspection
- This inspection is an overall look at the building and its important systems such as structure, electric, plumbing, and exterior condition of a property.
- A structural inspection focuses on components such as the foundation, columns, beams, joists, rafters, walls and roof.
Heating and Cooling Inspection
- The best heating inspection is performed by a heating and cooling contractor who will inspect the furnace, boiler, burner, and/or air conditioning system.
- This inspection is best done by an electrician or a general home inspector specializing in understanding and reporting on the condition and safety of a property’s electrical system.
Sewer and Waste Systems
- Private Sewer, including septic and cesspool systems, require that the system passes a Title V compliance inspection. This inspection needs to be performed by a licensed Title V inspector and is usually the Seller’s responsibility.
Domestic Water Test
- This is the "potable" drinking water. A domestic water test will show if there are any dangerous chemicals, lead, or radon levels in the property’s drinking water.
- Radon is a commonly found natural gas that is believed to be a carcinogen. This gas usually enters the house from cracks in the foundation or slab.
Pests including insects and other vermin
- In New England, it is common to find some evidence of insect damage in older homes. Termites, carpenter ants, powder post beetles, mice, squirrels, and bats are commonly found to have visited a home during its existence. This inspection should help reveal if there is any active infestation and the extent of damage that may have been left behind from previous activity.
Chimney, Wood/Coal Stove and Fireplace
- Commonly found problems may include a damaged flue or liner, need for a chimney cap, and repair to missing mortar in joints called "pointing."
Federal Law requires that the Buyer have the right to inspect the property for the presence of lead paint. If you have a child under six that will be living in the home, it is your responsibility to bring the property in compliance with the federal and state lead paint laws. Ask your Buyer’s Agent for more details and for a copy of the Lead Paint Disclosure.
In most cases, an insurance agent will need to provide you with an insurance binder prior to closing. You should contact a local insurance agent, price the types of insurance you desire, and have that agency contact your Buyer's Agent with any questions. Many insurance agencies offer home warranties. These home warranties generally cover some of the home’s systems and appliances. We recommend that you consider a home warranty if you are buying anything except new construction which usually comes with a builder's limited warranty.
Our Buying Team strategy allows you to move through the various stages of purchasing real estate with a sense of confidence and security. Here is a checklist of the significant stages of your home buying process:
- Interview and hire a qualified and trained Exclusive Buyer Agent.
- Obtain a free loan Pre-Approval from up a reputable mortgage lender.
- Secure the services of a qualified real estate attorney.
- Decide what criteria are most important in a home.
- View and evaluate properties, then decide with your Buyer's Agent whether or not to make an Offer to Purchase.
- You and your Buyer's Agent will discuss the true value of the property, negotiation strategies, and presentation of the Offer to Purchase.
- Your Buyer's Agent will keep you apprised of the entire negotiation of your Offer to Purchase, allowing you to make decisions that accomplish your predetermined buying goals.
- Once an Offer is accepted, you'll have your Home Inspections of the premises.
- Your Buyer's Agent may renegotiate any undisclosed items found during Home Inspections.
- Your Attorney, Buyer’s Agent, and you will review a Purchase and Sale Agreement confirming all of the negotiated terms of purchase.
- The day you sign the Purchase and Sale Agreement, you'll need to bring a personal check for the amount of the escrow deposit agreed to on the Purchase and Sale Agreement. Ask Your Buyer's Agent about the escrow process and to whom you make the check payable.
- Contact your Insurance Agent to obtain an insurance binder.
- Obtain a Commitment Letter from the Lender with which you have been pre-approved.
- The commitment due date is clearly defined on the Purchase and Sale Agreement. Check with your Lender to confirm that you are "Approved" for your loan prior to that date before you sign the Purchase and Sale Agreement.
- Have your Lender mail or fax a copy of your Commitment letter to your Buyer’s Agent once issued.
- Your Buyer's Agent will schedule a final "walk through" of the premises prior to closing to ensure that the property is in the condition you expect.
- After your walk through, you’ll attend the "closing" of the transaction.