If you’re reading this… You are considering the purchase of real estate. Congratulations on taking the first step!
ORDER OF EVENTS:
Select your Real Estate Agent
Get pre-approved (if not paying cash)
Discuss what you’re looking for with agent/set up search
Make an offer
Go under contract!
Step One: Secure a Real Estate Agent
-Your real estate agent is paid through the sales process by the listing broker (seller’s agent) and the agreed commission that will be provided for a cooperating broker (buyers agent) out of the sales price. You do not pay for this service out of your own pocket.
-When you chose a real estate agent, you work with the agent on any property you find, including anything you see when you’re browsing on Zillow. If you see something you like, reach out to your agent and they can show you ANY property you find available.
Step Two: The Pre Approval
-It is essential in today’s market that this is done before going to view properties with your agent as it is pertinent to be ready/willing/able to submit an offer ASAP if you really love something that you view. Some listings will not accept showings until your agent submits your pre-approval prior to the appointment.
-A pre-approval/pre-qual is a letter from a lender stating that they have briefly reviewed your income and/or credit and deemed it likely that they will provide financing up to X amount at X terms and are typically valid for a few months.
-It takes about a day to receive this from a lender and is a relatively easy process.
-If you have a bank you already work with, you can call them to see if they’re the best option. If you don’t, we have a list below of local lenders with recommend. Give them a call or email and let them know you’re interested in getting a pre-approval for a real estate purchase. If you prefer, your real estate agent can reach out to a lender of your choice and make the introduction to start this process.
-If you’re planning to pay cash, skip this step and provide a POF (Proof of Funds) to your Realtor so they will have that ready to go to submit. A POF can be any liquid account statement, black out any numbers or secure information.
Matthew Craig, MLB Plattsburgh
William Sheldon, Homestead Funding
John Homkey, Homestead Funding
Tesha Perry, GFNB
Kevin Porpora, GFNB Glens Falls
Step Three: The Wish List
-Discuss with your real estate agent the following:
-Budget (top amount of your pre-approval)
-Location (school district, close to…, waterfront/etc)
-Any other important specs (min bed/bath count, must have garage, acreage)
-Your agent will create a subscription for you directly on the MLS so that you are notified immediately when something within your interests hits the market or price drops
-Once you see something you like, you will schedule an appointment directly with your agent to see the house
-If you’re out of town, your agent can do a video tour first to be sure you want to make the trip up. We often suggest viewing a few similar homes if available to at least be able to compare/contrast.
-If you’re in town, you can do a drive by first as this often tells a lot!
Step Four: View Properties
-Your agent will book your showings through the listing agent to gain access to the properties and confirm your appointment with you to meet them there. If viewing multiple properties, your agent will schedule them in the best order, or the order in which they are available to view, and confirm the first house to meet at and you will usually follow them to the next.
-After the showing, your agent will get answers to any outstanding questions you have on any properties, often the agent will need to speak to the seller to get some of the details that were not available for the showing.
-If you don’t like a house, this is NO problem, you might see one house and know it is the one, you might see 100 before you feel it is right. Your agent is by your side for the process and that is our job.
Step Five: Making an Offer
– To put in an offer your agent will need the following:
-Full legal name/address of anyone going on the financing (if not financing, anyone going on the deed)
-Pre approval or proof of funds (all offers are presented with this to show you are ready, willing, and able to strengthen our offering position)
-Offer price that you have discussed with your agent
-Copy of the first deposit check made out to the LISTING BROKERAGE (your agent will supply you with that name). A photo of this check will be submitted with your offer, then if your offer is accepted it will be held in the listing broker’s escrow account until closing, in which it goes towards your purchase. Should your deal fall apart, your deposit is returnable under any contingencies that are in place in your contract (attorney review, inspection[s], mortgage).
-There are two important components in an offer: the price, and the terms. Cash, no inspections is the most attractive offer, and is difficult to compete with, but adjusting the terms of an offer that is financed with inspections can help.
-Writing a competitive offer (in a seller’s market- multiple offers- to win the bid):
-Price: You will want to put your best foot forward with price. We tell clients to think of your highest price limit that you would pay where after the fact, if you saw the house’s sale price, you would say “yeah, I would not have paid that much” NOT “shoot, I would have paid that, I should have offered higher”.
-Escalation Clause: You can add an addendum that states that you will pay X amount higher than the highest price up to X amount. This can protect you from over shooting and paying much more than you could have, however we suggest still starting at an aggressive base offer and not relying completely on the escalation to take effect.
-An Appraisal Guarantee: to help ease the sellers’ anxiety with the factor of the house needing to appraise for the purchase price, you can add an appraisal guarantee as part of your offer meaning you would agree to pay up to X amount cash should the appraisal come in lower than purchase price.
-Larger Deposit: A significant deposit will show you are putting more “skin in the game”
-Increase of the inspection threshold: As the contract reads, any item coming up in inspections over $1500 to remediate is means for buyer to cancel and receive deposit back. Raising this amount for example to $5000-$10000 can show a seller that you are only looking for major items and increased likelihood of the deal progressing past the contingency. Of course, no inspections is the most attractive to a seller, in which as your agent we would never push to recommend, it is an option to waive inspections.
-Your agent will write up the offer documents and you will sign those via e-sign. These documents will include the purchase contract and any disclosures available.
-Once you e-sign everything and get the other items needed to your agent, the agent will present your offer, and get back to you with any feedback/response.
-Your offer might receive a counter offer rather than being accepted or flat out declined, and you might end up negotiating back and forth and come to an agreement, or not. Your agent will work through this process with you.
Step Six: Go under contract
-Now that your offer (or counter offer after negotiations) was accepted, you are under contract and will move forward through the next steps!
Once you’re under contract, be sure to check out our “Buyer’s Guide 2: Under Contract on a Property”.