Objectives
A buyer’s objectives are the most important piece in the decision making process.
What are your goals?
What are your expectations?
What is most important to you?
Market dynamics
To gather a pulse of the Real Estate Market, experts use what we call “Month’s Supply of Inventory”. This is the amount of time it would take to sell all current listings if no new listings became available.
“Seller’s” market is defined as inventory of less than 3 months supply of houses on the market.
“Buyer’s” market is defined as inventory of more than 6 months supply of houses on the market.
“Neutral” market is defined as inventory between 3 and 6 months of supply of houses on the
market. In which the buyer’s and seller’s negotiating positions are equal. Typically this market
does not last long.
Shopping
Once you know what you can afford and have a clear understanding of the current market
conditions, we can begin your home search.
This process is a learning experience. It allows me to gauge how realistic your expectations are
and it also allows me to get a sense of exactly what you are looking for. I will also educate you
on the market regarding past sales, which are referred to as Comparable’s or “Comps”.
What can and can’t you change?
You CAN”T change lifestyle, schools, lot size, freeway noise or the neighbor’s yard.
You CAN change paint, flooring, layout, kitchen, bathrooms and yard.
The home you choose is going to be fully your decision. It is my job to guide you on making
that decision by providing information about the area and home. Once we find a home you can
see yourself owning, we are ready to write an offer.
Writing An Offer
What do we need to submit a complete offer?
1. Pre-Approval letter written in the past 30 days
2. The Residential Purchase Agreement (RPA) is a California Association of Realtors standard form. This form was created to keep both the buyer and seller protected. It maps out the timelines and responsibility of both the buyer and the seller. I will provide a sample contract that we will go over in detail prior to you making your offer.
3. Proof of Funds. Often times the listing agent will ask for documentation showing you have the funds to purchase or make the down payment for your property. What are Terms? Money, Time, Services
How much to offer?
What do you want to take possession?
How long do you need to complete your due diligence (Inspections, appraisal, and loan)?
Who pays for what service? (Termite, Escrow, Title Insurance)
Negotiations
The seller may do one of three actions below when responding to your offer:
1. Accept
2. Counter
3. Decline
Acceptance: This is when the Seller accepts your offer with all your terms. The Seller signs and the listing agent send confirmation of acceptance. The listing agent will then “Open Escrow”
Counter: This is when the Seller accepts your offer, subject to specific terms, ultimately amending your original offer. Sometimes there will be a “multiple counter”, which means you are competing with other buyers on the same property. Decline: The seller does not wish to engage in any negotiations with the presented offer.
Acceptance & Timelines
Congratulations! Your offer was accepted!
Week One:
1. Open Escrow. The listing agent does this when they receive the purchase agreement, any/all addendum(s) and counter(s) signed by both parties. Buyer has three business days to deliver Good Faith Deposit to Escrow, which is typically 3% of purchase price.
2. Schedule all desired home inspections (i.e. professional home inspection, termite, plumbing, electrical, etc.)
3. Order Appraisal. Your lender will handle this part.
4. Receive all seller disclosures ad title reports. This will give a clear picture of the condition of the home and any past repairs or improvements that have been completed. The property must have clear title, which means no liens and the seller doesn’t owe anyone money that they
shouldn’t.
5. Lender receives the appraisal and verifies the value of the home. If the home doesn’t appraise (Come in at value or what you offered) then this will either be negotiated between
seller and buyer to come to an agreement of price or the buyer is required to come up with the difference in value. The lender will only fund up to the appraised value of the home.
Timelines & Process
Week Two:
Review inspection report and the seller disclosures. If there are any additional inspections that
need to be scheduled we need to do it in week two. Once we review all inspections, the buyer is
allowed to make certain requests to the seller to either credit or repair/replace any item that is a
safety, structural, or material defect that was not apparent at the time the offer was accepted.
This is the time to make certain this property is right for you. If there is anything revealed during
the inspection period that is a red flag and the seller is not willing to remedy it, then you have
the right to cancel the contract pertaining to the inspection contingency.
If there are any safety, structural or material defects that you would like to request for the seller
to repair, we would submit what is called a “Request for Repair”. This is another step in the
negotiation process. The seller does not have to agree to do anything or can counter with their
terms. If the seller agrees to your requests, in return the seller will ask for a full contingency
removal. This means that in order to agree to your requests your good faith deposit will become
non-refundable by removing all contingencies.
We will only remove all contingencies if we have final loan approval from the lender, the
appraisal came in at value, and you feel comfortable knowing everything about the home you
are purchasing.
Week Three:
Once we receive final loan approval, the loan documents will be sent to escrow. There may be
required items that are called “conditions” that a lender will ask to get resolved prior to sending
out loan documents. It is important to make sure you work efficiently on retrieving that
information so nothing gets held up.
Escrow and your lender will provide you with a final number of the remaining down payment
balance to wire or write a cashiers check.
You will need to schedule signing at the escrow office or with one of the lender’s mobile notaries
at either your home or office. Plan accordingly because this is where a majority of the delay in
escrow happens.
You will need to wire or get a cashier’s check for the remaining funds to escrow in order to
close.
This is a good time to make arrangements for all utilities to be transferred or scheduled. You
should also make arrangements for moving. I have a great list of preferred vendors.
Process & Closing
Week Four:
Closing week! All lending conditions have been met and loan docs have been received.
Once Escrow receives the lender’s funds, they will send title down to the county to record your
name on title.
When title has confirmation that your name has been recorded, they will contact escrow and
myself to let us all know we have “confirmation”.
Escrow has officially closed!! CONGRATULATIONS!!
I will provide you with all the keys and necessary information for the home once I receive
confirmation. Due to the liability, there is no possible way to give possession of the property until
I have that confirmation.
