There are many phases and components involved in a residential real estate transaction. We hope this advice and procedural guidance proves helpful.
- Price, Location, Style, Characteristics
Before you begin the actual buying process, we highly recommend you first get your mortgage financing arranged and understood. The mortgage prequalification process, among many other benefits, will enable you to define one of the key parameters of the house hunting phase, "How much can I afford?" or, phrased another way, "What is my maximum sales price?" Click here to Get Prequalified.
Prequalification addressed the price parameter, now you need to consider the location, style, and characteristics of the house you want to buy. Before getting into the specifics, we suggest you step back and consider your motives to buy at this time. With thorough and careful consideration of your motives and needs, the other parameters of the house will become more easily and accurately defined. To assist you in defining the house specifics, we suggest you complete the Home Search Questionnaire.
Your selection of a real estate Agent is an important decision. After all, you will be working with this professional, trusted advisor for perhaps many months, relying upon his/her guidance to help you make better and more profitable decisions. By entering into an Exclusive Buyer Agency Contract, your real estate Agent will have a fiduciary responsibility to you. This arrangement, which we highly recommend, enables your Agent to legally represent you, but still get paid by the Seller. You should ensure the Agent you select will be willing to work for you in this "buyer-broker" capacity and you should understand agency relationships in general.
Additionally, you should evaluate and select your real estate Agent based upon his/her knowledge, honesty, work ethic, reliability, attention to detail, and familiarity with the geographic area you are targeting. Lastly, we suggest you ensure that the Agent does not impose any office fees, such as a "conveyancing fee" or "broker service fee." You should not have to bear any costs to work with your real estate Agent.
We hope you consider Professional Realty Consultants LLC (PRC) to represent and help you through the buying process. See About PRC. Our concept is unique in the real estate industry in that one person can find and finance your new home.
Savings:
PRC takes pride in that we never impose any office fees, such as "broker service" or "conveyancing" fees or "Buyers Commission". This equates to a $250 - $600 savings to you. It's pretty simple: You pay 0 to PRC (even if the Seller pays less than brokerage required minimums).
Additionally, PRC has no affiliation with, nor owns a title insurance company. As such, we encourage you take advantage of your federal right to shop and select your own provider. If you would like some recommendations of discount title insurance companies, we can provide such contact information to you upon request. This unique philosophy and business structure will additionally save you at least $1,000.00 (based upon sales price) compared with your typical real estate office-owned or affiliated title insurance company. In total, this saves our clients $1,000-$3,000 minimum in every transaction.
Service: With respect to honesty, work ethic, reliability, and attention to detail, click here for Reviews from previous customers. 100% of our 2018 clients were either previous customers or referred by previous customers.
After you have been prequalified, considered your house parameters, and selected your real estate Agent, the fun part begins -- house hunting. Your real estate Agent will review your prequalification report and Home Search Questionnaire with you, ensuring he/she thoroughly understands your parameters, wants, and needs. Your Agent will scan through the local multiple listing service, select some properties that meet your criteria, then schedule showing appointments with the Seller or listing Agent. You and your Agent will then begin the tour.
Don't be discouraged if you don't find your dream house on your first or second tour -- most people don't. Also, we suggest that you remain flexible regarding your house criteria. Chances are, especially if you're a first-time home buyer, you'll be altering and changing the priorities of your criteria as you view more and more houses. We suggest you print and use the Home Comparison Chart and/or Home Evaluation Chart to help you track and organize notes of the houses you visit. Eventually, the characteristics of your future home will become more clearly focused and your house hunting tours will become more productive. If you wish, your real estate Agent can e-mail listings that meet your criteria as well. Sooner or later, you'll find The House, and thus will want to make an offer.
Per Pennsylvania law, you must have an opportunity to review the Seller's Property Disclosure Statement prior to submitting an offer. This disclosure details the Seller's knowledge of the property's condition and history. Assuming this disclosure is satisfactory to you, then, along with your Agent's assistance, you will put forth an offer to the Seller, a.k.a. PA Sales Contract.
This is a lengthy, formal, legally binding contract. We suggest you review this blank sample copy beforehand to familiarize yourself with it, and your options. This way, once you find the right house, you can submit your offer quickly. Speed is an important factor, with still many areas experiencing greater demand than housing supply, i.e. a "Seller's market."
Once prepared, your real estate Agent will promptly deliver it to the listing Agent for the Seller's consideration. All offers, no matter the real estate office that is servicing the listing, must be presented to the Seller.
The Seller has three options once your offer has been presented. The Seller can 1) accept it, 2) reject it, or more than likely, 3) make a counter offer. Once you have been informed of the counter offer, you have the same three options. Bear in mind, the negotiation is strictly between you and the Seller; the real estate Agents are simply facilitators. The following is a list of the key points typically negotiated: sales price, settlement date, amount and timing of escrow payments, any personal property and fixtures which should stay with the property, issues associated with the mortgage contingency, issues associated with a house sale contingency, Seller credit towards buyer's closing costs, and inspection options (home, wood infestation, indoor air quality, well water, on-site septic, etc). There may be a series of back & forth counter offers as these key points, among others, get negotiated. Ultimately, you and the Seller will agree upon all of the terms in the contract, and you will finally have a fully executed Sales Contract.
It's a contract: You and the Seller have agreed upon the terms and conditions of the purchase transaction. Now, it is your responsibility to meet those conditions and any selected contingencies within the prescribed time frames. The times frames are predicated upon the date the contract became fully executed - the date the last person initialed and/or signed the last change. The normal contingencies in a sales contract are the mortgage application and mortgage approval, the home inspection description video, the Wood Destroying Insect Inspection, the indoor air quality inspections, the well inspection (if on-site) and septic inspection (if on-site).
These contingencies need be to addressed immediately, as the typical time frame for delivery to the listing Agent and/or Seller is 10-15 days from the execution date. Time is of the essence! If you wish, your real estate Agent can help you select these various service providers, place the order, and ensure the inspection reports are delivered within the time limits. Per federal law, it is your right to select the inspector, or any other real estate service provider, of your choosing. It is your choice because it is your expense.
Once the contingencies are satisfied, you need to continue to work with your Mortgage Broker to ensure all outstanding underwriting and closing conditions are resolved. You also need to shop and select your title insurance company and homeowner's insurance company. You also should begin to plan for your move -- shopping for a professional moving company or arranging your own boxes, labor, & transportation. You need to notify all of the utility companies (water, electric, telephone, gas, etc.) of the settlement date, the date in which service should be available and in your name, as owner. Again, your real estate Agent should be able to assist you with these issues, if you wish, and should be prompting you along the way.
As you get closer to the settlement date, your real estate Agent and/or Mortgage Broker should do a final review of all of the charges from all of the parties to the transaction. This is important as you need time to arrange to have the necessary funds available so that you can pick up a cashiers check from your bank. In some instances, the title insurance company will require that your funds are covered for a specific amount payable to the title insurance company.
Finally, just as you thought it would never end -- it does, at settlement. Settlement usually takes place at the title insurance company's office, on the date noted in the Agreement of Sale. At settlement, all of the parties to the transaction sit around a conference room table. At the head of the table, the title insurance Agent sits and conducts the proceedings. On the one side of the table, the Sellers and listing Agent sit. On the other side of the table, you, the Buyers, sit with your selling Agent and your Mortgage Broker.
Though it is not customary for the Mortgage Broker to attend settlement with you, we highly recommend that you insist on it. After all, the Mortgage Broker is the best qualified person to explain the pile of mortgage documents you are required to sign. Also, his/her presence helps ensure that the mortgage costs that were quoted to you up-front are what you actually are charged at the end.
The Seller has only a few forms to sign; you, on the other hand, have a whole pile of mortgage documents to sign. You should feel comfortable and not feel rushed. If you need more time to understand the documents you are signing, so be it. Once you have understood, agreed, and signed all of the mortgage disclosures, then you will be presented with the Closing Disclosure and ALTA Settlement Statements. Up until now, you have received ESTIMATED costs from your real estate Agent, Mortgage Broker, and title insurance company. The Settlement Statement details the EXACT and final charges from all of the parties. You will review this document closely, ensuring the charges quoted earlier in the transaction are what you're actually seeing at the end of the transaction.
Assuming the Settlement Statement is satisfactory, you then present your cashier's check to the title insurance Agent. If your check is in an amount exceeding what you owe, you will immediately receive the difference back from the title insurance company Agent. You then receive ALL of the keys from the Seller, copies of ALL of the paperwork you signed, and a big CONGRATULATIONS -- you're now the owner of your new home!
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Member of Bright MLS
Licensed by the PA Real Estate Commission
