The home-buying process, part one

Whether it is your first or your fifth purchase, buying a home is a complicated process and we think of it as being two stages: first, finding the right home and second, getting from contract to closing. McSharry and Associates works closely with buyers throughout the entire process, guiding you through every step.

We start each new relationship by listening to what you have to say. While criteria like list price, number of bedrooms, and number of baths are all very important, they are not the only things that matter. So we ask about lifestyle, family composition, and aspirations for the future. Once we have a sense of what you are looking for, we create an individualized plan for realizing your real estate goals. We have a blog post dedicated to helping buyers determine what they are looking for, so click here to read up on this step.

After determining what you need and want in your next home, it is important to understand what you can afford to purchase. It can be hard to start the home search, find a great possibility, and then learn that it is out of your price range. To avoid disappointment, it makes sense to talk to a lender and get “pre-qualified”, which is a quick process of determining how much money you should be able to borrow. This can be done easily, during a phone conversation with a bank or mortgage broker. If you prefer, you can also get “pre-approved”; a more in-depth process that can include application fees. The benefit of pre-approval is that you will be able to close more quickly when you do find a property that suits you. Some banks will only issue pre-approvals, so check with your lender to see what they do.

McSharry and Associates understands that finding the right home can take time. You will never get pressure from us to decide. Sometimes your dream home is the first one you walk into and sometimes it is the twenty-fifth. We say that a day where you see several homes and strike-out is still a useful day, as you end with a better understanding of what you don’t want. While we aren’t contractors or home inspectors, we have been in a lot of homes and take our job of helping you find a good house very seriously. We point out assets and limitations of homes we see together, not to dissuade you from a particular house (though we have talked buyers out of homes that we thought weren’t right for them) but so that you can accurately evaluate if it will meet your needs.

At some point, you will walk into a home that feels like the “right” one and you will want to make an offer. We will assist you in determining what price you want to offer. We will provide you a detailed analysis of the market, by looking at data on recently sold homes in the same neighborhood. Once you have an offer price in mind we will get the offer in writing, using a standard form, Contract for Purchase and Sale of Real Estate, which is common practice throughout our region.

Briefly, here is an explanation of terms in the Contract for Purchase and Sale of Real Estate.

• Terms of Sale: Defines the obligations, on both the part of the seller and the buyer, for completing the transfer of title. Parties are identified, the property is identified, and the ground rules for the transaction are created (including sale price, date of transfer, etc).
• Various Contingencies: Contingencies protect you, the buyer, should you become aware during the inspection of a property defect, for example, or should your ability to procure a mortgage change. Contingencies, included in the contract, will have dates by which they must be completed. Typical contingencies include, but are not limited to: attorney approval, mortgage approval, structural soundness and a satisfactory pest inspection.
• Property included in the sale of the premises: It is important that you specify what you expect to remain with the house. If not explicated, this can be a source of misunderstanding.
• Miscellaneous adjustment: On the transfer of title, taxes are pro-rated and adjustments are sometimes made for fuel. Certain expenses are either the seller’s or the buyer’s responsibility and these, as appropriate, are defined in the contract.
• Buyer and seller signature: Once the negotiation process has been completed and the contracts are executed, a legally binding contract has been created.

If the terms of your offer are not acceptable (and they often aren’t) to the seller, you will likely be presented with a counter offer. The counter might concern the price you offered, the terms of financing, or the suggested closing date, for example. 

We will assist you in crafting a response to the seller’s counter offer. It is crucial to us that you are comfortable with the terms of the contract, and we will go back and forth as many times as necessary.

Many factors go into deciding how much to pay for a property. Some factors include: market value, school district, location, and emotions associated with the home. We will help you prioritize these factors to come up with your final offer. Buying a home is probably the largest purchase you will make and during the negotiation process you are talking about thousands of dollars. That's why it's crucial to have a skilled Realtor on your team!

Once you have a fully signed contract you are on to what we consider stage two! More on that next time!