Understanding the Process - French Real Estate

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Understanding the Process

Buying a home doesn't have to be complicated. In the mythical, perfect transaction, the buyer gives the seller cash, and the seller gives the buyer the deed to the property. Unfortunately, it just doesn't happen that way anymore. Even with a seemingly straightforward transaction, there can be any number of events that jeopardize the closing. The following is a partial list of events, which typically take place in most transactions. The text following the * are some of the problems that can arise with each.

•	If your home must be sold, get it on the market. We can help you with a FSBO scenario as well.
•	If you have a lease, consider going month to month.
•	View homes and prioritize.
	-	Observe potential problem area
	-	Only remember the top 3 or 4
	-	Watch for things that could affect resale
	-	Neighborhood characteristics
		*	Having unrealistic goals
		*	Not pre-approved
		*	Stress
		*	Unorganized
		*	Trying to remember all of the homes you see
•	Get pre-approved
	-	Know the difference between how much home you can buy and how much home you can afford
	-	Understand when you should lock the loan interest rate
	-	How much time will lender need to provide loan commitment
	-	Make appointment with bank
	-	Gather supporting documentation
	-	Fill out Residential Loan Application - make copies
	-	Understand the Truth-in-Lending Law
	-	Select lender
	-	Understanding loan closing cost
		*	Being denied credit
		*	Credit issues which must be cleared prior to purchase
		*	Paying too high an interest rate
		*	Paying too much for closing cost
•	Make offer on home
	-	Earnest money...how much is enough
	-	Requiring inspections and testing
	-	Determine how taxes should be prorated
	-	Determine offer price
	-	Understand that competition may exist.
	-	Understand your negotiating position
	-	Negotiating style
	-	Contingencies - include or not include
	-	Understanding a bump option
	-	Understand the benefits of Seller/Buyer separation
		*	Worrying about things that don't need to be worried about
		*	Buyer's remorse
		*	Becoming too emotionally attached to the house
		*	Offering too low
•	Work at removing any contingencies
	-	Earners Money
	-	Home Inspection
	-	Well/Septic Inspections and test
	-	Other inspections or test
	-	Finance Contingency
	-	Other Contingencies
		*	Home inspection or test come back adverse
		*	Finance problems - appraisal
		*	Can't meet dead-lines
		*	Title work reveals problems
•	Homeowner's insurance
		*	60 Amp electrical service issues
		*	Overpriced premiums
		*	Not arranged in a timely manner
•	Title evidence is received
	-	Review it
•	Utilities Cutover
•	Change of Address
	-	Phone
	-	Cable/TV
	-	Newspaper
	-	Voting Registration
•	Pre-Closing walk-thru
		*	Things removed that shouldn't be
		*	Things not removed that should be
		*	Damage done since offer was made
•	Understanding closing
	-	Two Step process; you get (from bank),or bring the money, and the Seller gives you the deed.
	-	Step one: Getting the Money - all the documents - sign, sign, sign.
		*	Mortgage
		*	Note
		*	Re-sign your application
		*	Verify your social security numbers
		*	How are the taxes/insurance to be paid
		*	Automatic payment?
		*	Closing Statement
		*	Handing over your money
		*	Other bank documents
	-	Step two: Giving the money to the Seller
		*	The Deed
		*	Transfer return
		*	Seller affidavit
		*	Keys/garage door control
		*	Last chance for questions
		*	Congratulations
			• Last minute problems with just about anything
			• Accounting errors
			• Paperwork missing
•	After Closing
	-	Moving in
		*	Buyer's remorse
		*	Finding problems not previously detected

If the deal falls through, there is a whole different arrangement of scenarios. There could be earnest money returned, or there could be damages and lawsuits.