1. Financing and Lender Pre-Approval

It is important to communicate with a lender prior to beginning your home search to find out how much you are qualified to invest in a home. It would be devastating to find your dream home then to later find out you cannot qualify to purchase it. On the other hand, perhaps homes that you think are out of reach are actually realistic.

Your lender will educate you about different loan programs and current mortgage rates. The lender you select will also review your financial information to determine the amount you are eligible to borrow and will issue you a pre-approval letter. It is very important to have a pre-approval letter from a lender to submit with your offer. Sellers do not want to risk taking their home off the market for someone who may be unable to obtain a loan. In addition, the lender will let you know how much money you will need to put down and inform you how much you will pay in closing costs. The lender will answer any questions you have and will explain the loan process.

Your lender may require the following documentation:

  • Your Social Security number
  • Pay stubs for the last two months
  • W-2 forms for the past two years
  • Bank statements for the past two or three months
  • One or two years of federal tax returns
  • Information on current debt, including car loans, student loan, credit cards, etc

Keep in mind that the amount of information required will vary by lender.

There are many lenders and it is important to find one you trust. An incompetent lender can be detrimental "I had a first-rate and fun home-buying experience with Jessie as my agent. At the beginning of the process I was unsure of what I was looking for or what I could afford. Jessie patiently led me through the entire process from start to finish."

- Shawna to your purchase. My clients have been extremely pleased with a handful of lenders who I am happy to refer you to. You may want to interview multiple lenders to determine which lender is the best match for you.

Closing Costs: Closing costs are fees associated with the purchase of a home. The buyer and seller share some of the costs while also incurring separate costs.

Buyers typically pay for half of the total title and escrow fees along with recording and document preparation fees, pro-rated property taxes and homeowner’s insurance reserves. Buyers are also responsible for fees associated with the loan such as a loan origination fee, appraisal, credit report, etc.

Sellers pay real estate commissions, excise tax, half of title and escrow fees, document preparation, recording, and reconveyance fees, pro-rated taxes from tax due-date to date of closing and any costs involved with paying off their loan. There may be additional costs as well.

2. Determining Your Wants and Needs

I need to know what you are looking for in a home. The more I know about what you need and what you would like, the better I can assist you in your home search. I will discuss your criteria from number of bedrooms and bathrooms, square footage, investment range, location, lot size, price, school district, age of home and garage size to type of home so I can refine your search and filter out homes that will not work for you. Keep in mind that very specific criteria may not yield many options while a search that is too broad may overwhelm you with matches

3. Reviewing Listings/Online Shopping/Drive-bys

After our discussion about your criteria I will customize a search for you in the Northwest Multiple Listing Service (NWMLS). The MLS hosts listings from every real estate agency, so it is an all-in-one home database that only real estate agents can access. Once I set up your search I will see the homes that match your criteria and will forward the listings to you.

The number of listings in the initial batch I send you will vary depending on your criteria. Look through the listings and let me know which ones look interesting. "Jessie took me on an all-encompassing tour of homes. She gave me a thorough overview of houses available on the market, and an in-depth review of the various areas. With each viewing she took a full assessment of my likes and dislikes. She used this information to refine the list of possibilities for a home that would fit my needs and wishes. I was thoroughly impressed by how quickly Jessie could understand at what I was looking for, even when I was unable to articulate it myself."

- Skippy I will be alerted when a new listing enters the market that meets your criteria and I will promptly forward the new listing information to you. I will also forward listings that have reduced in price. If you see listings that look interesting let me know!

Many people enjoy looking at homes on the internet. If you are interested in searching for homes online there are a lot of great websites you can go to including www.JessieGrandpre.com. My website is powerful and has all of the features you need to make your search process simple and efficient. Again, if you find listings that interest you please let me know what the MLS #'s are so I can check availability and provide you with supplemental information that is only available to real estate agents.

In addition to searching online, many people find it helpful to drive-by a home and scout out the neighborhood to determine if they have any further interest. A home may turn out to be located next to a freeway, gun range, dairy farm, train tracks, etc and the location alone might disqualify a home for you. Many homes are eliminated from lists after people see the home and check out the surrounding area.

4. Previewing Homes

There will most likely be many homes that you are interested in seeing after reviewing the listings. Great! This is when the fun begins! We will schedule a day and time to preview homes. We can look at vacant homes anytime. I will schedule appointments with homeowners for homes that are owner-occupied. If a home is rented, we are required to give the tenants 24 hours notice prior to previewing the home. I will organize the route, schedule appointments and supply you with the home and property information.

The process of finding the right home for you may be quicker or take longer than you expected. You may find the perfect home on our first outing. Or we may end up looking at what feels like a million homes. Either way, we'll work together until we find the right home for you.

5. Making an Offer

Once we find a home you love I will explain the Purchase and Sale Agreement and review all the components involved in making an offer. I will do a comparative market analysis on the property and will consider many factors in order to strategize our approach to the seller. I will work with you to decide the terms and conditions of the offer and will provide my expertise and advice on how to structure the offer.

One of the many components involved with an offer is earnest money. Too little earnest money can lead sellers to believe you are not a strong buyer. Too much earnest money is simply not needed and creates unnecessary risk. Earnest money in the amount of 1% of the purchase price is standard. Your earnest money will be deposited within three days of your offer being accepted and will apply to your down payment or closing costs.

I will include several contingencies in your contract to protect you, such as home inspection and financing contingencies. Your earnest money will be refunded to you, if you decide to terminate the purchase due to one of the contingencies we included in The Purchase and Sale Agreement. If you default on the contract, without a legal excuse, or after your contingencies have expired, you may forfeit your earnest money. I provide protection for the earnest money in the Purchase and Sale Agreement and diligently monitor timelines and contingencies.

I will also discuss strategies to make your offer stronger in a competitive situation. The seller has the option to accept your offer, reject your offer, or make a counter-offer. There may be a couple rounds of counteroffers before an offer is rejected or accepted. I excel at negotiating the best terms possible for my buyers.

6. Addressing Contractual Contingencies

Finding a home that you want to purchase and submitting an offer is only the beginning! After your offer is accepted there will be several steps and deadlines involved in the purchase process. I will make you a calendar of the timelines and will assist you with every step.

6.1 Home Inspection

A home inspection will determine if there are unknown flaws or problems with the house and will give you a better understanding of the overall condition. Typically we will have up to 10 days after your offer is accepted to complete your home inspection and submit the response to the seller. I will recommend excellent certified home inspectors to you. The fee for a home inspection ranges between $375 and $425 for average sized homes. Condos and townhomes may be less expensive while larger homes or properties with outbuildings will be more expensive. You will pay the inspector directly for his or her services at the inspection.

I strongly recommend you attend the inspection as it is a fantastic opportunity to learn more about the home you are purchasing, however your presence is not required. The home inspection will take approximately three hours. The inspector will evaluate the structural integrity and condition of the home and specifically address the exterior, foundation, basement, crawlspace, roof, interior, garage, heating, plumbing and electrical systems.

The inspector will give you an overview of the home and will advise you of any concerns detected. You will receive a comprehensive report discussing the findings to fully inform you about the condition of the property. We will use the report to prepare our inspection response.

If the inspection is flawless, I'll put a sold sign up and proceed towards closing. If the inspection yields numerous or significant defects, you may choose to terminate your offer. If there are items that need correcting (there usually are) we'll discuss the items and decide which ones to ask the seller to correct. The goal is for both parties to come to a reasonable agreement so we can move forward with the purchase. If an agreement is not reached we will terminate the transaction and resume our home search. In this case, your earnest money will be refunded to you, provided we are within the timelines agreed upon on our contract.

6.2 Re-Inspection

If you are purchasing a property that has a septic system the seller will have the system inspected and if necessary pumped at the seller's expense. The seller will order the inspection. You will have the right to attend the inspection and the seller will provide you with a copy of the inspection report. It is not necessary or required to re-inspect a system that was inspected in the prior 12 months.

6.3 Septic Inspection

If you are purchasing a property that has a septic system the seller will have the system inspected and if necessary pumped at the seller’s expense. The seller will order the inspection. You will have the right to attend the inspection and the seller will provide you with a copy of the inspection report. It is not necessary or required to re-inspect a system that was inspected in the prior 12 months.

6.4 Well Inspection

If the property you are purchasing is on a community, shared or individual well you are entitled, at your expense, to test the flow rate, check the purity standards, verify the source is adequate and that the system meets federal, state and/or local standards.

6.5 Financing

Unless you are paying cash, I will include a financing contingency in your offer. This contingency provides time to work with your lender to confirm you qualify for financing with acceptable terms. There are many conditions that need to be met in order to obtain full financing approval. In addition to your income, debt and credit scores, financing approval is subject to a satisfactory appraisal, clear title and other factors pertaining to the home and property. The lender will place orders for the appraisal, flood determination, a title search and title insurance and will also lock the rate on your loan.

It is important to discuss the timing of locking your rate with your lender. Locking your interest rate protects you from increases in interest rates that may occur while you are waiting to close. It is important you know that once your rate is locked you will not be able to change it - even if rates go down before your closing date. Even the professionals have a hard time predicting whether mortgage rates will go up or down. Therefore, once you have a rate that makes the monthly mortgage payment one that you are comfortable with, it can be a good idea to lock the rate, so you will know exactly what to expect.

Once all of the necessary information is obtained, the lender will submit your file to underwriting for review and approval. The underwriter may require additional information from you, which will be communicated to you via your lender.

It is critical that you supply the documentation or information requested as quickly as possible in order to prevent a delay of closing. Once final approval is given by the underwriter, your lender will confirm all fees and order the loan documents to be drawn up. The loan documents will be sent to the escrow company.

The standard timeline for the financing contingency is 30 days. It is imperative to obtain full financing approval during the agreed upon timeline in order to protect your earnest money.

6.6 Appraisal

Your lender will order an appraisal to confirm the value of the home is consistent or higher than the agreed upon purchase price. The appraisal is essentially the banks way of making sure the loan they are extending on the home is a good investment. A licensed appraiser will visit the property and will perform a general inspection. You do not need to be present for this appointment and the fee for the appraisal (approximately $450-$500) will be included in your closing costs.

The appraiser will use comparable sales and current market information to complete the appraisal. The appraiser often determines the value of the home is consistent with the sale price. It is extremely rare for the appraisal to indicate a value higher than the sale price.

If the appraised value is less than the sales price, you will have a few options. You can request a reconsideration of value by the initial appraiser or order a second appraisal. Another option is for the seller to agree to reduce the sale price to the value indicated in the appraisal. A final option is for you to pay in cash the difference between the price we've agreed upon with the seller and the appraised value. If the above options fail you will terminate the contract and your earnest money will be reimbursed to you.

6.7 Title

It is important to determine if there are any liens, encumbrances or any other issues on the title that would restrict transfer of ownership. A title search could reveal unpaid taxes, delinquent mortgages, easements, judgments against previous owners and many other court actions or recorded documents, which can have a negative effect on the property.

The title report is typically ordered right after mutual acceptance of the Purchase and Sale Agreement. Copies of the report are distributed to the lender, the escrow company, real estate agents and the buyers and sellers. A title expert will review the title report and will inform us if there are any irregularities.

Many homes are located in communities that have Codes, Covenants and Restrictions (CC&R's). The CC&R's will be described in the title report. It is important that you review the CC&R's to make sure you are aware of community rules and to confirm the property meets your needs.

Title Insurance: Once title is cleared title insurance can be issued. First American Title explains title insurance as "Insurance that, if any undisclosed claim covered by your policy arises out of the past to threaten your ownership of real estate, it will be disposed of, or you will be reimbursed, exactly as your title insurance policy provides."

The premium for title insurance is a one-time expense paid for at closing. The title policy will protect you as long as you own the property.

6.8 Homeowner’s Insurance

During your financing period you will need to obtain homeowner's insurance. Contact your insurance agent and let them know you are purchasing a home. Your insurance agent will prepare an insurance binder and will forward the binder to your lender. Homeowner's insurance is required to obtain a loan as it protects you against loss or damage due to theft and fire. Depending on the location of the home, you may need flood insurance as well.

6.9 Homeowner’s Association

If the community the home is located in has a Homeowner's Association you will have an opportunity to review and approve documentation pertaining to the association. This documentation may include financial statements, rules and regulations and minutes from previous meetings, etc.

Once all of your contractual contingencies have been satisfied and your loan has been approved you'll be very close to owning your home!

7. Utilities

At this point you need to start preparing for your move, which includes setting up all of the utility accounts in your name. You'll need to call the local electricity, water/sewer, garbage and gas companies to notify them of your move in date and establish your accounts. You may also want to schedule a cable and/or internet provider and any other companies whose services you desire.

8. Escrow

The escrow company is a neutral third party that holds and processes legal documentation and funds on behalf of a buyer and seller. Escrow agents work with the real estate agents, lenders, buyers and sellers to facilitate the closing of the transaction. The escrow company has many responsibilities including:

  • Clearing title by going through each lien and clearing it
  • Obtaining an insurance binder from your lender
  • Obtaining information pertaining to mortgage balances, homeowner’s dues, utilities, real estate commissions, taxes, etc
  • Preparing an estimated settlement statement
  • Preparing legal documents
  • Overseeing the signing of the closing documents
  • Disbursing funds

Once your loan is approved the lender will send your loan documents to the escrow company. The escrow officer will review your documents and then will generate an Estimated Settlement Statement. This statement will itemize your closing costs, which are all of the fees involved with your purchase. In addition, the statement will reflect how much money, if any, you will need to bring to closing.

The escrow officer will call you to schedule your signing appointment and will let you know how much money you need to bring in to close. The officer will also supply instructions as to how you can get the necessary funds to escrow.

In a perfect world your loan documents would arrive at escrow three days prior to closing. However, this is usually not the case. Documents more often than not arrive behind schedule. As a result, you need to be prepared for little notice prior to your signing appointment and you may need to quickly arrange obtaining and/or transferring the funds for closing.

Your signing appointment at escrow will take approximately 45 minutes. Make sure you bring the necessary identification. You will sign many closing and loan related documents. The escrow closer will provide a brief explanation of each document so you understand the forms you are signing. Please notify the escrow agent if you have any questions about the paperwork or if you see any errors.

9. Closing

After your escrow signing appointment the waiting begins. The escrow officer will send the documents back to the lender for final review. "Jessie is absolutely amazing! She went above and beyond what she needed to do. I had unsuccessful relationships with a few real estate agents before finding Jessie and now I can say that I found a real estate agent for life!"

- Nick Once the lender gives the final OK they will release the funds to the escrow company. The escrow officer will then send the necessary documents, the Deed signed by the seller and the Deed of Trust for the new loan(s) signed by you, via courier, to the county court house to be recorded.

Once the documents are recorded the escrow company will inform me they have recording numbers and will release the proceeds of the sale to the seller. It is common to get confirmation that the sale has recorded minutes before 5pm on the closing day. At this point the home is all yours! Congratulations!!

It is extremely important to be aware that the closing date agreed upon in the contract is not set in stone. It is a goal that everyone will work very hard to accomplish, but there are many steps in the purchase process and a delay in one step could result in a delay of closing. For example, the appraisal could take longer than expected, repair work may need to be done on the home, the title report may show there is lien on the property that needs to be resolved, etc.

The possibility of closing being delayed is something you need to be prepared for - especially if you are giving notice to a current landlord or have a trip planned or any other events scheduled near closing. Delays are even more likely when a home is under construction.