Today’s Home Purchase Process Demystified

By Michael Edlen | Special to the Palisadian-Post

Although the same contract forms are used in the selling and buying of a home, the process and timing are not at all the same. Sellers often decide to sell within a few months of actually putting their home on the market, whereas most buyers begin their search for a new home six to 18 months before they contact a real estate agent.

With so much information available online, real estate search sites have made it easy for most buyers to search on their own for their ideal home. In fact, many current buyers believe they don’t need to use a real estate agent except to do the necessary paperwork.

Buying a home, however, involves much more than collecting data, facts and numbers. A lot of information may require careful analysis and expert judgment. That is one reason why it is so helpful for prospective buyers to allow themselves to be educated by an experienced professional Realtor® before starting to take a serious look at properties.

A skillful agent will be willing to devote at least an hour with a prospective buyer to begin a counseling process. Their first discussion will include seeking to understand what the potential client’s wants and needs are and what the ideal home might be for them. The agent can help educate the buyers on the purchase process, various community amenities, the paperwork involved, inspections that may be beneficial, how escrow works and more. The agent also should be able to ask questions the buyer has not yet thought to ask.

The prospective buyer can benefit greatly by establishing a committed relationship with a Realtor® early in the process. Verifying that he or she is not just a licensed real estate agent, but one who is an active member of the National Association of Realtors®, ensures they are held to an even higher standard of conduct. Their code of ethics requires that they maintain a fiduciary role with any client they accept.

Unless the purchase will be all-cash, as is the case today in about 30 percent of the sales in our area, it will be essential for the buyer to make every effort to be pre-approved for financing even before seeing properties. The Realtor® will be able to suggest a few reliable lenders to start the pre-approval process. The Realtor® may also share some important initial guidelines and tips regarding credit scores and more.

Viewing and eliminating potential homes almost always begins on the Internet. Having seen many homes inside, an agent can be helpful by providing more detailed information. Buyers may prefer to stop by open houses, although their agents can also arrange for private showings by appointment.

It can be invaluable to work with an agent who is experienced in multiple-offer situations and has successfully represented at least a few buyers in the past year. Such an agent will be able to explain the complexities and challenges in the current market environment and what to expect if there are multiple offers.

Once a contract has successfully been negotiated, it is important for the buyer to have professional inspections done on the home and property. This is not a time to try to save a few hundred dollars by not having the sewer line or chimney scoped by a specialist. The buyer should also carefully review all seller disclosures and ask for further information or clarifications about any questions raised by inspections or disclosures.

The escrow process involves a lot of paperwork and far more if the buyer is obtaining a loan.  Once inspections have been completed, typically the buyer will make some requests of the seller.  There may be some credits negotiated or repairs the seller agrees to have done before the escrow closes.

The final phase of the purchase process involves the coordination of myriad details, including arranging movers, scheduling utilities to be transferred or turned back on and more.

There is a final walk-through in the five days before escrow closes to be sure that the property is essentially in the same condition as when the contract was signed.

Michael Edlen has worked with several hundred buyers since 1986 and is available for buyer counseling through michael@michaeledlen.com or (310) 230-7373.  He also has an effective nationwide referral network that is helpful in identifying ideal agents to work with in buying or selling homes anywhere in the country.