Buy Your Home In 7 Simple Steps

Buy your home in 7 simple steps

At Vistura, our professional agents are committed to helping you find your dream home. Our agents work on a 100% commission basis, with their commission paid through Escrow once your lender transfers the funds for the agreed purchase price. We are ready to serve you. Here are 7 steps to guide you on what should be done to have a great home-buying experience.

Step 1 Secure Financing

Before you start searching for homes or engaging a real estate agent, it’s crucial to understand what mortgage you qualify for. We recommend checking with your current bank, a local credit union, and an independent broker who works with multiple lending institutions. This will help you compare interest rates and find the best deal. There are also special programs for first-time homebuyers that may allow for a smaller down payment. Your agent can assist you in locating these programs.

Note for First-Time Homebuyers:
If your pre-approved amount isn’t sufficient to buy in your desired city, you have two options:

Become an Investor: Purchase a property within your approved price range in a rentable area. The rental income can help cover your mortgage, taxes, and maintenance. When the market improves, you can sell or refinance the property for a larger down payment on a home in your desired city.
Consider Nearby Cities: Purchase a home in a city where you can afford to live, with the intention of moving in 2-5 years. As property values increase, you can sell or refinance to buy a home in your preferred location.

Step 2 Find a Trustworthy Agent

Working with a real estate agent offers several benefits. It's important to note that licensed Seller Agents (real estate agents representing the seller) will require you to have your own agent representation before you can view any open houses or schedule home tours.

Step 3 Sign a contract with your real estate agent

Real estate agents work hard for their commission, and they value direct communication with their clients. It might take viewing 40+ homes or submitting 5+ offers before finding the right one, so it’s important to be patient and supportive. Signing a simple 3-month contract assures your agent of your commitment and builds trust.

Understanding the Contract:
The Buyer Representation and Broker Compensation Agreement outlines that the home buyer is responsible for compensating their real estate agent. However, this compensation typically comes from the home seller as part of the purchase process. Once the transaction closes, your agent receives their commission.

Recommendations for the Contract:

Representation Period: Sign for 3 months to allow sufficient time to find the right home.
Type of Representation: Choose exclusive representation to avoid confusion and overlap between agents.
Property Type: Specify all types you’re interested in, such as Single Family Residences (SFR) or Multi-Family homes.
Location: List the counties you’re interested in. Clients often change their preferred location after viewing homes in different areas. Covering multiple counties in the contract ensures your agent is compensated.
Compensation: The norm is around 2.5%, but we recommend setting it at 3%. This allows your agent to negotiate better deals or provide buyer credits.
Financial Considerations: Indicate that you don’t have sufficient funds to pay the broker, so they should seek compensation from the home seller.

Step 4 Visit Homes in your price range

With your pre-approval in hand, your agent will guide you through viewing homes within your budget. Review the list of homes that meet your criteria, and schedule visits. Remember, you can only view homes with a licensed real estate agent.

Step 5 Make an offer on your dream home

Once you’ve identified the perfect property, work with your agent to quickly submit a written offer. Your agent will conduct a neighborhood analysis to help determine a competitive offer price. In competitive markets, sellers may receive multiple offers, so be prepared for potential counter-offers or rejections.

Counter Offers:
If you receive a counter-offer, your agent will help you decide whether to continue negotiating or accept the new terms. Always have alternative properties in mind as backup options.

Short Sale Note:
If the property is a short sale, be prepared for a lengthy process. It can take 4-9 months to know if your offer is accepted, as it requires approval from both the homeowner and the bank.

Step 6 Navigate the escrow process

Once your offer is accepted, escrow is opened. The process can take 30-60 days, depending on your financial institution’s efficiency and the documentation required. For cash offers, the process is faster, usually taking 10-30 days.

Earnest Money Deposit (EMD):
You’ll need to submit an EMD, typically up to 3% of the purchase price. While this deposit is usually non-refundable, your agent can help you recover it if undisclosed issues arise.

Inspection:
You have a few days to inspect the property. Hire a professional inspector immediately to identify any major repairs needed. Your agent can then negotiate for buyer credits or a reduced purchase price.

Appraisal:
Your lender will appraise the property to ensure it aligns with the purchase price. If the appraisal is lower than expected, you can either cancel the agreement or cover the difference yourself.

Step 7 Closing

Review the loan terms and conditions carefully before signing any documents. This process can take 2-3 hours. Once everything is finalized, you’ll receive the keys to your new home within 2-3 business days or as specified in the contract.

Congratulations on Your New Home!