Real Estate Interview
Loan Officer A
Loan Officer B
Loan Officer C
Select & Commit to One Agent
Submit documents such as ID, SS, pay stubs- last month, bank statements- last 2 months, tax returns- last 2 years, etc.
Sign Buyer Representation Agreement.
Agent sets up daily search, and Buyer selects favorite houses
Buyer watches the market while waiting for pre-approval from the loan officer (LO).
Compare, select and commit to one LO who provides the best package for you
If Buyer is unable to approve for a loan
The LO & Buyer develop an action plan to address issues to get back on track
Time to go house shopping with your Agent.
Once Buyer is pre-approved, LO will issue a pre-approval letter to Buyer & Buyer’s Agent
The fun part begins. Buyer selects top 10 favorites, narrows it down to 5 to view with Agent first. Think you found THE PERFECT HOME and are ready to make a decision? WAIT!
Have your Agent run a comparative market analysis (CMA) of similar homes. Look into tax assessments and future developments, if any, and similar homes that sold within the last six months.
Look at all disclosures; check out the neighborhood; test the commute to and from work since these will affect your daily life once purchased.
If everything looks good and you are comfortable making an offer, have your Agent write up a Purchase Agreement (PA). Pay close attention to a few items on the PA:
Closing date - Give 35-45 days from the purchase contract date. Most lenders need 2-3 weeks to process a file. If the Buyer currently rents, be sure to confirm your lease expiration to see if it will be a conflict and take that into consideration. Most Buyers don’t want to pay rent and a mortgage at the same time.
Inspection – A home inspection is always recommended. It is an out-of-pocket cost ($300+ depending on size of the home) and worth every penny. Make sure to have the inspection completed early, so you can go back to Seller to re-negotiate on repair or replacement items. Stay within the contingent period (average 5-10 calendar days).
Other Miscellaneous – Discuss items such as earnest money, percent down, fixtures, personal properties, Seller contribution, written statement to Seller (check with LO on this date to see if suggested date is doable on their end). Once all that is done and you have signed the purchase agreement, your Agent presents your offer to the Listing Agent.
Once your offer is received, the Listing Agent should be able to tell your Agent whether it's a multiple-offer situation or not and when you can expect a response from the selling side.
The negotiation process can play out as follows: Seller can either accept your offer, counter your offer, or reject it if they feel your offer is unreasonable. When there’s only one Buyer involved, the negotiations could go back and forth a few times until all parties reach a mutual agreement. When it’s a multiple-offer situation, you might want to seek your Agent’s opinion on the offer price and terms. Take into consideration that the Sellers have more than one offer to consider. Sellers will choose the best offer. If this home is a must-have for you, make sure you submit your highest and best offer, so if you lose out to another offer, you know you gave it your best.
Congrats! Your offer has been accepted. Once the Seller signs the PA and delivers it back to you, it’s a ratified contract. Things will start to move very quickly from here on out.
Your Agent is required to complete the following: Earnest money check to Listing Broker within 48 hours of PA date. Send a copy of executed PA to the LO and the title company you selected to help you process your closing. Your Agent can assist you with inspection as needed.
When Buyer chooses to have an inspection - This will be an out-of-pocket cost for the Buyer. Buyers need to respect the inspection contingency days. This means calendar days, not business days. Example: if it's 7 calendar days that means the Buyer will have 7 days to complete the inspection and negotiate for repairs or back out of contract within that period. Note: Sellers have the right not to honor any of Buyer's negotiation on repair items. The rule of thumb is “If it’s not broken or hazardous, Sellers don’t have to honor the Buyer’s request.” If the Buyer’s request is past the inspection contingency period, then Buyers need to move forward to the next step.
When all parties reach a mutual agreement and inspection conditions are removed, the property is now under PENDING status.
Buyer's Agent will notify the Title Company that the Buyer has selected to help assist with the closing to order the title work and the loan officer so he/she can place an appraisal order.
Buyers can start shopping for home insurance quotes. Buyers should compare 2-3 quotes to see which agency provides the best coverage. Once Buyer selects and commits to one agency, the Insurance Agent will reach out to Buyer's loan officer and submit the insurance binder.
By now, Buyer should receive the first round of disclosures from the lender's processing team. Buyer is required to review the disclosed documents and acknowledge receipt. At this time, Buyer can choose to lock in the interest rate or wait, depending on how they feel about the market rate. Once interest rate is locked, they cannot change it for the next 90 days.
The Appraisal - This is another out-of-pocket expense to Buyer. There are lenders who charge up front, and there are lenders who will add it into the closing cost fees. Appraisers normally have 5-10 days to turn in their report. It's an opinion of value on the property. Once your lender receives the report received back from the Appraiser, your loan officer or processor will forward you a copy of the report. Note that your real estate Agent will not get copy.
If the property appraised at or more than the purchase price, the Buyers can we’re moving forward. If the property appraised less than purchase price, when that happens the Buyer will most likely go back to the Seller to re-negotiate the contract price. (due to Lenders will only lend up to appraised value.) A few scenarios can play out.
#1 - Sellers and their Agent can argue their case by providing similar comparables within a certain radius to prove to the Appraiser that the property should be higher or at contract price. If they cannot build their case, and the Appraiser sticks with the original numberhe/she came up with, the Buyer can then can ask for the Seller to entertain appraised value.
#2 – Seller and Buyer can come to a mutual agreement to meet halfway or whatever compromise is comfortable to both parties.
#3 – Buyer can out-of-pocket the difference if Seller is not willing to budge on the original contract price and the Buyer really wants the home.
#4 – Lastly, if Buyer and Seller cannot come to terms, then either party can call for a cancellation. Buyer will receives their earnest money refund, and the Seller’s home goes back on the market.
Scenario where all is good on the appraisal - Buyer’s file will move to underwriting team. They underwriter will review, verify all sources and ask for any repair receipts (only if there's repair). By this time, Buyer’s lending team should have all documents needed, employment verification, interest rate locked in by the Buyer, insurance binder, closing fee, and any other miscellaneous fees associated with the transaction. Then, a second round of disclosures will be sent to the Buyer for review and acknowledgement.
Lender then will notify Buyer and Title Company when file is clear to close (CTC). Meanwhile, the Title Company will run the title search to make sure Buyer will have a clear title at the closing. If there are issues found that need resolution, they will be in touch with Seller’s Agents to make sure everything is addressed prior to closing.
When Buyer's Title Closer receives the CTC, they will configure all numbers and send out a Buyer's ALTA Settlement Statement to Buyer. Buyer and Buyer’s Agent need to review and confirm accuracy of all numbers. This will show how much the Buyers need to bring to closing. Note: Regards to Buyer bringing money to the closing, certain Title Companies required a wire instead of a certified check and certain Title Companies are okay with a certified check. Buyer needs to check to see what's acceptable. When Title Company requirds a wire transfer, they will provide wiring instructions to Buyer. Buyer can take that to their bank and ask the Banker to complete the wire. It is recommended to complete the wire a day before the closing date. If Title Company is okay with a certified check, then the Buyer can purchase a certified check for the closing. Certified check fees are usually lower than a wire fee.
Finally, the closing date is here! It is always recommended the Buyer have the final walk-through with your agent the day before or the hours before the closing to make sure everything is being deliver as agree upon. Closing time! Come prepared. Bring your ID and a second ID since you never know if you might need it. Bring your checkbook in case of any last-minute changes, and if you need to come up with an additional amount.
Signing time - Buyer's closer will go through all the closing numbers on the ALTA Settlement Statement with the Buyer again, along with many other required documents from the Lender and Title Company. Closing time normally takes about 1-2 hours.
Voilà! You are done! We hope the excitement of owning a home overshadows the cramp in your hand from signing all those documents! The Listing Agent will present you with the keys to your new home. Before parting, the Buyer remembers to ask the Seller any miscellaneous questions that are important. Typical topics are: garbage day, alarm code, garage code, mailbox key if any, utility company and the transfer to new owner.
CONGRATULATIONS! You are now a new homeowner. Start moving in and fill your home with many wonderful memories!