Expert Buyers. Exceptional Service.
Are you ready to buy a home? Whether you are buying your first home or you've gone through the process before, the Spotlight team is here to light your way through the process. From mortgage pre-approval, to home tours, offers and inspections, and settlement - Spotlight has you covered. We know that the prospect of buying a home can be daunting but you can get started with confidence knowing that in your corner is...
An Expert Realtor.
STEP 1: PRE-APPROVAL
Get Your Mortgage Pre-Approval
The first step in the home buying process is to obtain a pre-approval from a qualified lender. A pre-approval is a letter from a lender acknowledging the buyer’s ability to get a mortgage. The most important information on the pre-approval will be maximum purchase price and type of mortgage.
You want to get pre-approved prior to looking at houses to ensure that you are searching for homes in the correct price range. In order to have a seller consider your offer, you must have a pre-approval. Follow the steps below to get your pre-approval
Meet With a Qualified Lender
Spotlight has a list of preferred lenders who will help guide you through the pre-approval process.
Checklist of Things To Have On Hand
Before you meet with the qualified lender make sure you have easy access to the following documents that the lender will need to prepare your pre-approval:
W-2's of all buyers to prove income
List of all debt and outstanding loans (cars, credit cards, student loans, etc.)
Most recent tax returns of all buyers
The qualified lender will evaluate your W-2's, debts, and tax income. They will then run a credit check to evaluate your credit score. Once this information has been reviewed the lender will help you choose the best loan type and the target price range of the home you are qualified to buy.
The Home Buying Process: A Step by Step Guide
STEP 2: HOME TOURS
The Search is ON!
Once you've been pre-approved for a mortgage it's time to start the search for your new home! Meet with the Spotlight team to discuss your ideal home. What does it look like? What are your must-haves vs. your wants? Once we are aligned on your wish-list we will work together to find you the perfect property.
Based on your price range, location, and preferences, we will send you email updates with homes that meet your criteria as soon as they hit the market. This gives you the quickest and most accurate information possible.
Know The Market
The real estate market is constantly changing. You should know if it’s a buyer’s market or seller’s market. This will change your approach to buying a house. When you meet with your Realtor for your Buyer Consultation, they will help guide you through the current market situation.
Open Houses/ Model Homes
Touring open houses and model homes can help you learn the market first hand. You will start to narrow down location, get an idea of what layout you prefer and will begin to better understand home values. When visiting open houses and model homes, let them know that you are working with a buyer’s agent.
When your ready, we can tour houses together. Your agent can show you any property listed by any company. We can provide information about the property and answer any questions you may have about the property.
STEP 3: OFFERS & INSPECTIONS
Make an Offer, Ace an Inspection
Offers must be in writing and include either a mortgage pre-approval letter, or proof of funds (if paying cash). The seller will have the option to reject, counter-offer, or accept. The offer is a binding legal contract, so when the seller accepts and signs, you are officially "under contract".
Your agent is looking out for your best interest and will recommend a negotiating strategy specific to the market conditions, fair market value vs. list price, how much you want the property, and if you are willing to lose it if you don't get a great deal.
When you make an offer, there are a few terms that are negotiable, but 95% is price. (See our pricing section to understand fair market value) The second most important is settlement date. Third is inclusions/exclusions , this includes items such as washer/dryer, blinds, furniture etc. The seller will also consider the strength of your offer based on:
1% of the home's purchase price is standard deposit amount with a minimum deposit of $1,000. If you are able to offer a higher deposit, you are a more attractive buyer.
When financing a property the buyer will consider the type of financing: cash, conventional mortgage, FHA, or a private loan. Sellers will select the buyer that has an easy financing situation. They will also evaluate what you plan to put down, the higher your downpayment the more attractive your offer. Finally, the seller will evaluate if the lender is reputable and local. If the listing agent and the lender already have a relationship that can expedite the process.
From the sellers perspective, the fewer inspections, the better. Ideally the buyer would agree to purchase a property "as-is, with no inspections", but that is rarely advisable to a buyer.
You will choose which inspections you want, the big 3 are Home Inspection, Termite Inspection, and a Radon Inspection. We can discuss additional inspections based on the property type: septic, well mechanically, water quality, pool, chimney, stucco, and others.
Once the contract is accepted your agent will manage the entire process. It is a team effort! Your home inspectors will inspect the house and provide detailed reports. Your mortgage broker will start formal application, get mortgage commitment, and finally, a clear to close. Your attorney will conduct a title search, order a survey, create the closing document, and facilitate the signing at settlement. Spotlight has strong relationships with everyone you need, and we are happy to refer them to you.
When you are finished with inspections and have all of the reports, you will be able to negotiate repairs to be made by the seller, or a reduction in price. This is only for items discovered at the inspection that were not previously disclosed. With the exception of catastrophic discoveries (structural, septic failed, etc), the typical final negotiated amount in repairs is approximately 0.5-1% of the purchase price. There is a contractual deadline for your inspection negotiation period. If you do not reach an agreement with the seller within this time period, the contract will be voided and you should get your deposit back.
STEP 4: FINAL WALK
THROUGH & SETTLEMENT
Time To Get the Keys and Move In
Three days before settlement you will receive the "closing disclosure" from your lender. This is the final loan document that shows your interest rate, monthly payments, down payment, and lender fees. Once approved, this information will be sent to the lawyer and they will produce the "closing document" which is your total cost. This includes everything from the lender, plus transfer tax, pro-rations, seller assistance, title search, and lawyer fees. The "closing document" is what you will be signing at settlement as well as the deed that will make the property officially yours. And if you're getting a mortgage, there is a huge stack of papers to sign for the lender at closing.
The final walk through is typically the day of settlement, one hour prior to settlement. It is the last check to make sure the house is still standing, and is in the condition that you last saw it. At this time you will also make sure all of the furniture has been removed. The property doesn't need to be sparkling clean, but should be "broom clean" so if you ran a broom across it you wouldn't sweep up any significant debris. Depending upon the extent of repairs made by the seller after the inspection negotiation, you may want to do a walk through prior to your final walk through to confirm that you are satisfied with the repairs. It will be difficult to make any repairs or changes after the final walk through without causing a delay in settlement. The last thing you are checking is to make sure all the inclusions are still in the house (ie. washer/dryer if included).
Settlement is held at the lawyers office. The buyer pays the lawyer, and the lawyer represents the buyers interest. The seller does not typically have an attorney present. The settlement will include the buyers, buyers agent, sellers, sellers agent, lawyer and sometimes the mortgage broker. It will be your last chance to ask the seller any questions. You and the seller will sign the final documents to make the sale official.
You will get the keys to your new home!