The Home Buying Process
Before viewing any homes for sale, the most important part of the buying process is to pre-qualify with a lender. With the ever changing loan regulations and qualification guidelines it is essential to see how much you can afford under today’s guidelines. This process is just a preliminary process which consists of giving the lender basic information over the phone so that they can determine a price range in which you should qualify for. They will then send us a pre-qualification letter so that it can be presented with any offer we might make on a home. If you need recommendations of local lenders in Colorado Springs, we can help. You can also fill out the short form on our site here This will be given to a local lender for review and they will contact you to let you know what you pre-qualify for.
Determine Home Criteria
Once we have the pre-qualification letter. We will discuss what you would like in a home, such as: areas you desire, number of beds, baths, garage spaces, amenities etc.
Set Up Personal Home Search Web Page
Once we have your criteria established, we will set up a personal web page for you that will automatically locate properties that meet your criteria in the multiple listing service (MLS). Although you can search through 7,000 listings on our website search engine, this will narrow the search to your specific criteria which will be populated to the site. The very second new listings hit the market, they will be placed into your webpage. You never know when that screaming good deal will hit. When it does, you want to see it right away without sifting through 7,000 other listings to find it. You will be able to see each property listing and place them into folders labeled, Favorites, Possibilities or Rejects.
Touring homes is really an educational process. We will go look at your favorite properties to determine if there are any of them you would like to purchase. The educational portion comes in this process by weeding out areas that you may or may not like, as well as, home styles and features you really like or dislike. This will help us narrow your search criteria even more.
Determining Value Of The Home Chosen
There are many homes on the market for sale. Not all are good deals, but we are looking for that one gem. When we locate a home in which you would like to make an offer, we will complete an analysis of that home to determine its value. In some cases the home may be a screaming deal which we will need to move quickly to get it under contract before someone else. In other cases the price may be reasonable or too high, in which, we will need to negotiate downward to an acceptable level. Regardless, we are experts at determining value and giving you all the information you will need to make the best decisions in your purchase.
We will prepare an offer based on all the information we have gathered in our analysis of worth and condition of the property. It will be prepared on an e-contract that you will be able to sign with your mouse from the comfort of your own home. We will then send the offer and the pre-qualification letter to the listing agent representing the seller.
Once the offer is accepted, the buyer will give earnest money (usually around 1%) to the seller’s agent to hold until closing. At closing, this money will be credited to the buyer’s portion of the down payment or given back to the buyer depending on the type of loan they are getting. The closing of the sale usually takes about 30-40 days. During this 30-40 day period we will complete an inspection, review covenants, review title work etc.. During this process there will be certain contingency dates in which the buyer can back out of the contract if the due diligence items do not meet their expectations.
The Loan Process
Once the offer is accepted by the seller, we will send the contract to your lender to start the full loan process. The lender will contact you to sign paperwork and turn in information requested to verify your income, bank accounts and other pertinent information needed to obtain the loan.
Within the first 10 days of the contract we will inspect the home using a professional home inspector. An average cost to the buyer for an inspection will be around $200-$400 depending on the square footage of the home. This is a good time to spend several hours inside the home looking at many details that might not have been seen during the initial preview. If inspection items are found in the home that you are not comfortable with, we will write up an inspection notice to correct these items. The seller has an opportunity to reject the items or offer an alternate resolution. If the buyer is not comfortable with the home after the inspection or after receiving the sellers alternate resolution, they may walk away from the contract and get their earnest money back.
Title Work Review
In the contract it states that the seller shall provide title insurance. A title company will research the title of the property and all names associated with the title in order to determine whether there are any liens or judgments. All liens and judgments will have to be clear in order for the title company to issue a clear title. Once the title insurance is in place, this will guarantee the buyer a free and clear title for the property after closing. We will review this title work and correspond with the title company if there are any issues that need to brought to your attention. You will also receive this paperwork from the title company to review. If for any reason a clear title cannot be obtained, you can back out of the contract and get your earnest money back.
Association Documents And Covenants
If the property is in an association or an area that has covenants, we will obtain the financials of the association and the covenants for your review. This way you can see if there are any restrictions that you were not anticipating, such as parking an RV on the property etc. If there are objections to any of these items, you may back out of the contract and get your earnest money back.
Once the inspection items are negotiated, we will instruct the lender to order the appraisal. The lender will order a licensed appraiser to go to the property to determine its value. If the value does not come in at the value of the contract or above, you will be able to back out of the contract and get your earnest money back.
Final Walk Through
Once the loan is in place and all the due diligence items are completed, a closing will be scheduled. Before signing on the dotted line, it is important to take one final look at the property. This way we can be sure there wasn’t any vandalism to the property while it was vacant, all the inspection items were completed by the seller and that it didn’t burn down overnight.
We will meet at a title company with the sellers and their agent to sign all the paperwork for the closing of the home. We will get to review all the paperwork for accuracy and sign for the home. Once the signing is complete, all keys will be turned over to you and you will walk out a proud homeowner.