This is the home buying process that we use in Minnesota. Not all Real Estate Brokers are alike so the way we do things may not be the way that all Realtors do them. Other states have different ways of doing things so what you see on TV is not what you may experience when you purchase in Minnesota.
The purchase process by Attractive Realty:
Step 1 Gathering your information.
The Buyer will find a Realtor (like Dale Frisch with Attractive Realty)
Most people want to look at homes first, and this is wrong. The first thing that you need to do is have your Loan officer dial in your monthly payments which will include taxes and insurance for the home. Once the Loan officer knows your payment range they can calculate the purchase price you are pre-approved for.
Now you know what purchase price you can afford, you need to make a list of wants and needs.
Now you can take your pre-approved purchase price and your wants and needs list to your Realtor (Attractive Realty)
Don’t hold anything back from your Realtor or your Loan officer. My wife and I are Full time Real Estate professionals that have been doing this long time and we have seen most situations and how to handle them. We are here to help and the sooner we know the problem the more likely we will be able to solve them.
Your Realtor and Loan Officer are on your team and they are working to get you the best home and best mortgage that you qualify for. What better team can you get when the Realtor is Married to the Loan officer. The most expense house in your price range is not always the right home for you. When you work with us, we work to get you the right home that fits your budget and your needs.
Step 2 looking for homes.
Once your Realtor has all your information, they may email you current homes for sale or you can send them listings that you want to see. The Realtor will setup a tour of homes. Then you will go with them and view homes until the right one is found. This can be 3 or it could be 50.
Step 3 Making the offer.
You have found the right home, now what? Your Realtor will put together a purchase agreement and explain all the parts to it. You will need to put down earnest money. Earnest money is money that is held until closing and goes towards to your closing cost. Normal this is 1% of the purchase price. Your earnest money can be lost and your Realtor will need to explain when it is in danger. Short sales are different and also will be explained by your Realtor.
Step 4 is Submit the offer.
Now your Realtor will send over your offer with a copy of your earnest money and your pre-approval letter to the list agent. They will submit/present to the seller or bank depending on the property you offer on.
Step 5 the offer response.
The offer will be accepted, rejected or countered.
If the seller accepts the offer, they will sign it and then the clock (for inspection and financial contingencies) will start ticking once it received by your Realtor. Your Realtor need to make sure that the home inspector and Loan officer are all timed correctly or you could lose your earnest money.
Most sellers want to sell so they tend to counter rather reject since a rejected offer is the end of negotiations. You can re-offer, but the seller is already not happy about the last offer and maybe less like to even look at your next offer.
With a countered offer you can counter back or walk away.
Step 6 is Home Inspection period.
The inspection period is typically 5-10 days. Your Realtor will have a home inspector or several that you can choose from. Depending on the results of the inspection you can cancel the purchase agreement or ask for financial compensation and your Realtor will be able to explain this.
Step 7 getting the mortgage approved (Clear to Close) and Title insurance.
From this point to closing (when you sign) your loan officer will be gathering all the financials that are need to present to the mortgage underwriting department. The loan officer will also order the appraisal for the property which will tell the bank what the value is. Once all this is collected, underwriting will review everything and may give back conditions (items that need to explained or presented) for the bank or mortgage company to give you a loan. Once you receive a clear to close on your mortgage, the mortgage company will send it over to the title company.
Your Loan officer will also order title on the property. Title insurance makes sure that there is no taxes liens or other issues that would come back to effect the buyer after the closing.
Step 8 The closing.
This is the day you have been waiting for. You will go to the title company and once the buyer and seller sign, and the mortgage company funds (verifies the transfer of money) the home is yours. With bank owned properties you may have to wait for the bank representative to sign. Sometimes they are in different time zone. In this case you may not get possession of the property until later in the day or the following day and that is why your realtors and loan officers’ abilities are very important since you may have a moving truck lined up and you don’t get possession until Monday when you signed on a Friday.