Chanda Proffitt Broker | Realtor®  Wilson Realty Co.                                  P.O. Box 4570 Davidson, NC 28036 310-591-4754 Talk/Text

10 commandments of home buying

1.) You Shall consider your goals, needs and wants (spending limit, size, location, amenities, and features of the home/property) and then discuss with your Buyer's Agent (your agent, representing you). At this point in time (or just prior to) the agent Should have you review and sign the WWA Disclosure (Working With Real Estate Agents). It's the law. We are required to provide this disclosure to any consumer that may provide us with any personal financial information in respect to buying or selling real estate. It's not a contract but a professional disclosure that articulates the rules and responsibilities of the agent in respect to how they represent you. Sample of the WWA Disclosure below.

2.) You  Shall now review and sign the Buyer's Agency Agreement with your Agent. This is a contract "Agreement" between you and the Agent. This provides you with confidentiality protection by the agent and by law. It will now be the agent's fiduciary duty-obligation to represent you with your best interest at the most ethical and legal level of responsibility. Read it carefully as it also protects the agent, it is an "Agreement" contract. Realtors are also obligated to provide all parties of a transaction the highest level of ethical responsibility possible. This agreement will also provide a disclosure on commission (how we get paid) this is negotiable between you and the agent (and the agent's Firm). Buyer's Agent commission's are typically paid by the Seller, so in most cases there is no fee for service to the Buyer- although there are some Firm's that do so.  

3.)  You Shall research and decide on a Lender. Choosing a lender is just as important as choosing an agent and of course "the house". All lenders are not the same, nor can they all service the same types of loans, and/or at the same rate. Depending on the type of loan you can qualify for will determine the rate, in addition to credit score and history.

4.) You Shall meet/or communicate with chosen lender and begin the conditional approval process. Terms to know: Pre-Approval & Conditional Approval. Pre-Approval is good to hear, but a Conditional Approval is a few more steps further down the approval road to home ownership. Some lenders can actually have you through the most stressful part of underwriting "Prior" to placing an offer on your new home. This is the best position to be in when making an offer! Aside from extra cash, this position gives you more leverage when finding yourself in a multiple offer situation. 

5.) You Shall set-up your personalized client gateway with your Buyer's Agent and begin researching properties on the market. Property searches can include (but not limited to) New Construction, Active Listings, and For Sale By Owner listings- so long as they will agree to work with an agent- most cases they do. Our local MLS has automated search ability that provides our clients with the most current listing data available. Getting a good look at what is out there in the area that you desire will give you a better indication of what you can afford. Sometimes this can be a little surprising, either in a good way or a not-so good way.

6.) You Shall proceed with Lender on obtaining Conditional Approval. Once you have a better idea of what type of property you can afford based on your criteria; location, size, amenities, price (payments) and so on, then you are ready to have a base limit set to be "Conditionally Approved". This number can fluctuate sometimes depending on what type of payments your willing to tackle, but it's a good idea to go ahead and have this process completed prior to making an offer. When you finally decide to submit an offer- your agent will submit the approval letter from your lender along with your offer. This is also a good time to consider the amount of funds you are willing to provide with an offer (these funds are in addition to any down-payment funds on the lending side). Discuss this with your agent- This part can become a little tricky. It's not typically "required" for a buyer to provide any EM or DD funds with an offer- but in most cases it really helps. Terms to know: Earnest Money & Due Diligence Fee. Earnest Money is a deposit to the transaction- it's typically held by the Attorney or Selling Firm or Buying Firm (whichever is agreed upon to hold). These funds are part of the transaction and will reduce the total purchase amount owed at closing by the amount of EM funds you provide. EM funds are a deposit and can be refunded to you so long as you decide to back out (for whatever reason) within a specified time-frame (with time being of the essence). Due Diligence funds are also part of the transaction and will reduce the total purchase amount owed at closing by the amount of DD funds you provide- however if you choose to back out at any point in time- you are not entitled to receive those funds back as these funds are paid directly to the seller. DD funds are an extra nudge to the seller that you really want this property. There is no set or exact amount for either deposit- you base it on the amount of funds you have available and how serious you are to follow through with the purchase. There are some situations where a seller will ask for a higher or specific amount of deposit funds- these are typical negotiating tactics.

7.) You Shall Look, Look, Look at properties! Now that you are clear on where you stand with buying power- you are confident in looking at those properties! Ask questions, take notes, and look again. It's a big investment (for most anyways) so check and double check.

8.) You Shall choose a property and make an offer! You've come this far- might as well follow through with it! Once you've found the one you want and your agent has provided you with the market data- you decide on an educated amount to offer and proceed. Hopefully at this point your offer is accepted and you then move on to the investigative due diligence process. If not, then renegotiate your offer through your agent and or repeat step 8.

9.) You Shall diligently inspect the property! Yay! Your offer has been accepted- you now have a specific amount of time to get certain necessary tasks completed. Depending on the loan type an inspection may be required- it's a good idea to have one either way. Your agent should have inspector contacts if you don't already have one in mind. All property investigations are done at this point to rule out any reason that you would not want to proceed with the transaction. So long as everything pans out satisfactory during this time you then continue on. Or, you renegotiate or terminate.

10.) You Shall move forward with transaction closing! Now there is no turning back. You've reached the point of no return- well not really but if you do you'll surely be out some substantial cash. Closing day is approaching- you've completed your investigations (with the diligent assistance of your agent), utilities are now transferred to your name. How to prepare for closing? Your lender would have already provided you with an estimated amount due at closing (so no surprises), you will also receive a final settlement disclosure a few days prior to closing with the amount due at time of closing- typically from the closing attorney. Funds due at closing are typically "always" required by wire transfer. It's a good idea to have this completed the day prior to closing or early the morning of if possible, to avoid any delays. **Best Practice is to Always Contact Attorney Prior To Submitting Wire Transfer** Wire Fraud is on the rise! Bring along your Drivers License or Personal Identification and a good hand ready to sign many documents. All funds are accounted for, Keys will be issued & Deed is recorded at the Register of Deeds! Congratulations- You're Now A Home Owner!

Chanda Proffitt | 2019


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