A Practical Guide to the Home Buying Process
Our goal in presenting information about the Real Estate Buying Process is to put into words our real life, day-to-day experience when we’ve assisted a Buyer find and purchase a property. Note: This Guide is not intended to cover every possible situation that could be encountered in the Buying process.
The Buying Process almost always starts when we receive a call, or an email, from someone wanting to look at one or more properties they’ve seen online. An explanation by the person calling about why they are looking for a property usually follows.
How We Help
At this point in the conversation, there are a few “housekeeping” items that need addressed. It’s best if these items are addressed sooner rather than later! We will ask you a few questions relating to these “housekeeping” items, these questions are:
- Have you signed an “Exclusive Agreement to Represent Buyers Contract” with any other Realtor that is still in effect? If the answer to this question is “yes,” you are contractually bound to work with that Realtor, and we will direct you back to that Realtor. If the answer to this question is “no,” we can work with you and represent you with your property purchase!
- If you will not be paying “cash” for your property purchase, have you recently received from a Bank a Pre-approval Letter for financing? If yes, GREAT JOB! If no, we will explain how we can help you secure financing!
- Do you have a property that you need to sell first before purchasing a different property? If yes, we will need to know the status of your home sale. If you don’t have a property that needs to be sold before purchasing another, that certainly simplifies things!
Now that we have answers to these important questions, we can proceed with getting those showings scheduled and getting you into those properties!
Things You’ll Need To Do
Prior to the first showing, there are two forms you will be asked to sign. Typically, these forms are presented/explained at the first showing. These forms are:
- Real Estate Relationships Disclosure. The purpose of this form is to disclose to you what real estate relationships Shore to Shore Realty LLC offers. This is NOT a contract. It is a disclosure form that is required by law.
- Exclusive Agreement to Represent Buyers. The signing of this form creates a legally binding contract between Shore to Shore Realty LLC and you for the purpose of assisting you in acquiring an interest in a property. From the Realtor point of view, the preparing for and showing of properties is a lot more work than it looks on HGTV’s House Hunters show! The benefit to you to sign the Exclusive Agreement is it creates loyalty between you and your REALTOR®!OR
Non-Exclusive Agreement to Represent Buyers. The signing of this form indicates that an Exclusive Agreement to Represent Buyers is not in force with our company.
- Note: Whether a Buyer signs an Exclusive or Non-Exclusive Agreement, the REALTOR® owes duties to the Buyer which include good faith, loyalty and fidelity.
Seven Great Tips
- If you are not paying cash for your property purchase, obtain a Pre-Approval Letter from your Bank.
- Give us as much notice as possible of what properties you would like to see. In many instances, Sellers have a 24-hour notice to show. It gives the Seller appropriate time to prepare their home for your showing, as well as helps your Realtor prepare so that your time looking at properties is as productive as possible.
- If running late for a showing, let us know as soon as possible so that we can shuffle around the schedule, if needed.
- When looking at properties, try your best to look past any clutter or undesirable paint colors. The Seller’s stuff won’t be there when you take possession and paint is cheap!
- Make your offer to purchase contingent on satisfactory inspections. Buyers pay for the inspections.
- Submit an earnest money payment with your offer. We can recommend what is an appropriate amount of earnest money.
- Be tolerant of the many hoops you will need to jump throughout the home-buying process. After all, purchasing a property is a major purchase that doesn’t happen every day!
Frequently Asked Questions
Can a Buyer have a property checked out before purchasing it?
Yes. When a real estate agent or REALTOR® is assisting the Buyer prepare the Purchase Agreement, there is a section in the Purchase Agreement for “Inspections.” The most commonly done inspections are home, pest and radon. Buyers pay for inspections. The Seller has the ability to accept or not accept the Buyer’s request to have inspections conducted. If the Seller does not grant the Buyer the ability to have inspections done, the Buyer has to decide if the risk is worth it to proceed without inspections.
What are Buyer Contingencies?
A Buyer Contingency is a provision in a Purchase Agreement that specifies the contract would cease to exist upon the occurrence of a certain event. The most common contingencies that a Buyer will name in a Purchase Agreement are Inspections, Financing and the Sale of a property currently owned by the Buyer. The Seller has the ability to accept any or all of the contingencies a Buyer may name.
What is Earnest Money?
Earnest money is an amount of money paid by the Buyer that accompanies the Purchase Agreement. Earnest money is a way for a Buyer to show a Seller that the offer is being made in good faith. Once a property is under contract (an offer has been accepted), the earnest money is deposited into the Listing Broker’s Real Estate Trust Account (RETA) until the closing. Earnest money is applied to the purchase price on the Buyer’s Closing Statement. If any of the Buyer contingencies are not met in a satisfactory manner, the Earnest Money should be remitted back to the Buyer and the Purchase Agreement is no longer valid.
What does MLS mean?
MLS is an acronym for Multiple Listing Service. An MLS is a marketing database set up by cooperating REALTORS® who are governed by a Local Board, a State Board and the National Board, which is known as the National Association of REALTORS® (NAR). A real estate agent is a REALTOR® when he or she becomes a member of NAR, the world’s largest professional organization. The benefit to being a member of an MLS is that REALTORS® can show properties listed with the MLS even if they are not the listing agent. An MLS system is a great marketing tool for Sellers because it makes their property available to many REALTORS® to be able to sell. An MLS system is a great benefit to Buyers because they can have the same REALTOR® show them multiple properties. We are members of the Meridian Association of REALTORS® based in Yankton, SD.
What is the difference between a real estate agent and a REALTOR®?
All real estate licensees are not the same; only those who are members of the National Association of REALTORS® are properly called REALTOR®. REALTOR® subscribe to a strict Code of Ethics. REALTORS® subscribe to a strict Code of Ethics. Kaye O’Neal and her Team are members of the NAR, and thus are REALTORS®! We are members of the Meridian Association of REALTORS® based in Yankton, SD.
How do REALTORS® make money?
Real estate agents and REALTORS® make money by earning a commission when they represent either a Seller or a Buyer in a real estate transaction. The commission is typically a percentage of the sales price of a property, when a transaction closes. The commission is typically paid by the Seller. If a real estate agent or REALTOR® works with a Buyer or a Seller for weeks or months without a resulting transaction, they aren’t paid for their time nor reimbursed for any expenses the real estate agent or REALTOR® incurred marketing a listed property. Real estate agents and REALTORS® can also make money by performing Property Management functions, which is the day-to-day managing of property that is owned by another party or entity.
Contact us for more information, or if you have other questions about purchasing a home.