Be an Informed Buyer

Whether it's your first or your third or your fifth, purchasing a home is an exciting, scary and sometimes overwhelming endeavor.

Here are some Basic Steps for Buying Real Estate although each buyer's specific situation may require additional activities:

If you are working with a Realtor, tell her/him that YOU EXPECT TO BE INFORMED ABOUT ALL AVAILABLE PROPERTIES ON THE MARKET WITHIN YOUR SEARCH PARAMETERS, including those brokered by flat fee MLS listing companies and discount realty companies. If your Realtor is screening out properties listed by specific companies, she/he is not performing her/his Realtor duty to "Provide brokerage services to all parties to the transaction honestly, fairly and in good faith."

Get PRE-APPROVED for a mortgage loan BEFORE you step inside any houses. When you’re pre-approved for a loan, you know the price range of what you can afford. This will save you (and sellers) lots of wasted time. The fact that you are pre-approved lets you enter into negotiations with speed and confidence. It makes your Offer To Purchase much STRONGER in sellers’ eyes compared to offers from other buyers.

Depending on your financial situation, you may qualify for a mortgage loan that requires little down payment. Additionally, there are programs for first-time home buyers and buyers with not-so-great credit ratings.

EDUCATE YOURSELF about the home buying process. FREE home buying information is available on the Internet. Spend some time doing research using different search engines and key words. Purchasing a home is ONE OF THE MOST IMPORTANT DECISIONS that you'll make in your life. We recommend any of Robert Irwin’s books for detailed information about buying and selling real estate. He's recognized as an industry expert. You can view and purchase these, and other, realty books at amazon.com. 

If you are NOT working with a Realtor, use the services of a REAL ESTATE ATTORNEY to review all real estate forms and answer questions. We provide our sellers with the legal forms required to proceed with negotiations (Real Estate Condition Report, Offer To Purchase, Lead Based Paint Addendum for houses built before 1978, and more). An attorney will explain what the forms mean, help you complete the forms, and offer guidance about counter-offer(s) if you decide to make them.

TIP: Some title/closing companies have real estate licensees or attorneys on staff who can assist with negotiations, as well as the closing requirements.

After negotiations have occurred and your Offer To Purchase has been accepted, pay deposit (earnest money) that the seller usually requires. This protects the seller in the event that you back out of the agreement without good reason or fail to make a good faith effort to remove contingencies. In effect, it compensates the seller for time lost when the property was off the market. At closing your deposit is typically applied toward your down payment on the property.

The deposit can range from as little as $500 to thousands of dollars depending on the price of the property. Typically an escrow holder (a neutral third party) holds the deposit money. Common escrow holders are attorneys, real estate brokers, title companies, and banks.

Contact a licensed Home Inspector to perform an inspection of the property. Cost is between $250-$500 in Central WI and is WELL WORTH THE MONEY. Defects an inspector may uncover could cost many, many times more than his fee ... and it will be coming out of your pocket, once the house is purchased. Provide a copy of the home inspection report to the seller and your attorney. If there are defects uncovered or repairs to be made, you may want to negotiate with the seller over who will pay for them.

A few days before closing you should arrange for a final walk-through inspection with the seller. This gives you assurance that the property is in the condition that was agreed to in the sales contract.

Attend the closing on your new home! The title company selected by the seller, or by your mortgage provider, will have information about your closing. Call the title/closing company periodically to keep up-to-date about closing details. In most cases, closing involves signing loan documents, paying closing costs, and transferring the deed.