Buying a home may be the largest single purchase of your life and the process can be daunting. Organize your plans and expectations in the following order to simplify and smooth your way into home ownership.

Set Your Priorities
Whether you are a first timer or a repeat homebuyer, this is an emotional and financial decision. The best negotiators are the most informed. What can you afford? What is your credit rating? Do you have a down payment? Do you know the neighborhoods you prefer? What are the recent sold prices of the homes there?

Hire a Real Estate Agent
The process isn’t easy, and you will be glad to have experienced, professional advice to help your find properties, as well as guide you through with the maze of forms, financing, inspection and negotiating. Find an agent who you like and who knows the community well.

Arrange Financing
Most buyers need to finance the home purchase. Consult with a lender to find out the different types of mortgages and how you quality. Find out how much you can afford to borrow and get pre-approved. This is a crucial step before beginning your home search.

House Hunting
Looking at properties can be fun, frustrating and challenging. Where to live? What style of home? Old or new? Ready-to-go or a fixer-upper? Searching websites will bring up thousands of homes for sale. As you educate yourself on the market, your agent will help you narrow your priorities and make an informed decision about your final choices.

Make an Offer
This is another area where your agent is invaluable in negotiating for you. Decide whether or not you will go with the asking price. The offer will include conditions, or contingencies, necessary for the sale. These are items that must be satisfied within a set time frame for the sale to go through. A home inspection also should be scheduled.

Close the Deal
Closing or settlement or escrow are all terms for finalizing the sales transaction. The buyer and seller sign numerous documents and the closing agent disburses the money. The title company is responsible for having the deed and other documents recorded at the county office.

The Keys, Please
The home is yours. Your contract states when you can take possession of your new home. Ask your agent if you will get the keys at closing or after the deed is recorded. Along with the keys, you should receive garage door openers and security alarm codes if those are included. Then you are ready for the moving van, unpacking boxes and hanging pictures!

When closing is finally complete and the keys to your new home are in your hand, there are a number of things you will want to do to make your move as smooth as possible. If your schedule allows, plan on a day or more to get your new place ready before the boxes actually come through the door. Then move through the following checklist.

Change the Locks
You really don’t know who has keys to your new home, so changing the locks gives you assurance that you are the only one with access. New deadbolts are the smartest choice, and installation is not expensive.

Locate the Mains
Find the location of your new home’s breaker box. You don’t want to put this off until an incident leaves you fumbling in the dark looking for a flashlight that is still packed away. If the breakers aren’t labelled, get this done to save guesswork later. Finally, find the main water valve to your new home.

Pest Proof
Setting off a bug bomb or having an exterminator spray before you move in is a good plan. Even if you don’t see any crawly things, they are likely there, and you don’t want to share your new place with them.

Deep Clean
It will never be as easy to clean your new house again as when it is empty. Wipe out cabinets and add shelf paper if you like. Dust baseboards and windowsills. Have the carpet steam cleaned. Run a phantom load through the dishwasher and washing machine. Wipe out the refrigerator, freezer, and oven.

After the Movers Leave
Inspect everything after the boxes and furniture have been moved into your new home. Unpack the essentials first, including towels, bed linens, toiletries, and a enough clothes for the next few days. Find the coffee maker and the pet supplies, A few bumps and scrapes are likely during unpacking, so unpack a few basic first aid items. Make the beds. Other things for your “open first” box: toilet paper, trash bags, paper towels, kitchen basics and scissors. Once all those are done, you can move onto everything else from organizing closets to hanging pictures.

Let Everyone Know
You have a new address, and you need to share it. Fill out change of address information with the post office, credit card companies, banks, insurance company, and magazine subscriptions. If you have moved to a new state, your automobile registration, driver’s license, and voter registration will need to be updated.

A foreclosed property is one where the owner has been unable to meet monthly mortgages payments and the property is now owned by the bank. A foreclosed home is also referred to as an REO, or a Real Estate Owned property.

Although some REOs may be vacant or need repairs, they frequently look just like other homes on the market. Typically, they are sold in as-is condition, but they are often in move-in condition which may make they appealing to many buyers. Be aware, however, that the buying process of an REO is not exactly the same as other home purchases. Working with an agent skilled in the REO transaction will be a huge help answering questions and streamlining an REO purchase experience.

Banks are always motivated to get these properties off their books, and they usually hire a real estate agent to list it for sale. That means you can expect to find REOs listed alongside homes being sold traditionally in the same neighborhood.

Pros to Buying a Foreclosed Property

• You can often expect to pay below-market price for the property.
• You can secure financing for your purchase with a traditional mortgage the same as you would a “normal” home purchase.
• You can do inspections, purchase title insurance and make your mortgage arrangements before completing the purchase.

Cons to Buying a Foreclosed Property

• You will find that many banks will only sell these properties “as-is”, meaning you will be responsible for paying for necessary repairs.
• Banks rarely negotiate the price they’ve set on foreclosed properties. They’ve researched the market and have set a price that they find reasonable and are very unlikely to go lower. However, since most REO properties are priced below other homes for sale in the same neighborhood, this isn’t necessarily a bad thing for you as the buyer.
• The purchase process frequently takes longer than a traditional home purchase.

The Difference between a Foreclosure and a Short Sale

As explained above, an REO is a foreclosed property that is now owned by a bank. A short sale is a transaction that happens when an owner owes more on the mortgage than the home is currently worth and the bank agrees to a sale less than the mortgage balance in order to avoid a foreclosure. These properties belong to the current home owners, not to the bank. The number of short sales has increased in recent years so you are likely to run into properties like this during your home search. Like REOs, short sales can be complicated, so you will want to work with an agent experienced and trained in negotiating these transactions.

Short sales look like other listings, but they likely have a lower asking price than other comparable properties. The term “short sale” is a contradiction because the sales process can take longer than a traditional purchase. However, because more and more short sales are appearing on the market, lenders are streamlining their procedures making it less time consuming. Data shows the amount of time necessary to close a short sale has decreased in recent years.

Possible Short Sale Challenges

• Second mortgages: It is possible that a second lender might not agree to the same terms that have been set by the seller and the primary lender.
• Mortgage Insurance: The mortgage insurance company is another entity that must agree to the short sale
• Other liens on the property: A lien is a claim by a third party on a property for money owed. Liens must be addressed before the home can be sold whether or not the transaction is a short sale.
• Government-backed loans: If the seller’s loan was an FHA or other government-backed loan, it can cause delays and challenges because the government must approve the sale arrangements.
• HOA’s: Home Owners Associations may have transfer fees, document costs and unpaid dues. All of these must be addressed and a lender may or may not agree to pay these expenses.

You need patience and persistence in closing a short sale. A couple smart tips for short sales include hiring an agent experienced in this area and getting prequalified for your mortgage. Have a home inspection done, but be aware that you will likely be responsible for all repair costs, so weigh that against the reduced price of the property. You also need to know who is paying the agent’s commission and if you have to make up any differences there.

A real estate agent is a professional in a field where most buyers and sellers are novices. This is very likely the largest single purchase you will ever make. After all, how often do you drop a quarter of a million dollars or more on a shopping spree? Home buying and selling is full of pitfalls that can be avoided with an agent to provide you with expert assistance, knowledge of the market and negotiation skills.

• Your agent is the unbiased voice of reason who brings objectivity to the table. An agent helps sellers see past their emotional connection to their home and helps buyers deal with a multiple bid situation.
• Your agent can recommend a good independent home inspector who can provide a list of repair needs. Then, the agent will help evaluate which repairs are reasonable and which are excessive as you get your home ready to sell. Your agent also has contacts with excellent contractors to make the necessary repairs.
• Determining the price of your home is difficult: you want to realize a maximum profit without scaring off potential buyers with sticker shock. With their experience in your market area, most real estate agents can set the price of a home very quickly.
• If you’ve ever bought or sold a house, you know that it involves a mountain of paperwork. Your agent can really save the day here because the possibility of missing something — such as initialing all the proper boxes — can drop substantially when you are working with a pro who knows all the paperwork nuances.
• Professional real estate agents are familiar with local zoning ordinances and codes to be able to know if you can add on a new bedroom or put up a privacy fence. The agent should be able to make sure the city will allow your changes.
• Licensed agents are required to keep a complete set of all your real estate transaction documents, making them a good resource for years after the deal has closed.
• Plenty of pitfalls are can appear in the final hours of a sale that might kill the deal. Your agent knows to watch for trouble before it’s too late. Problems with the title or financing or timing are all things the agent knows to watch for and take steps to avoid. Agents are used to dealing with these kinds of issues and can work through nearly any challenge that might occur.

  Nearly 90% of buyers purchase their home through a real estate agent, according to the National Association of REALTORS®. Your agent is an expert in sales, as well as marketing, social media and data analysis. Home sale rules are always changing and it’s your agent’s job to stay on top of the market and bring that expertise to you. Why wouldn’t you choose to have a professional like that working for you as you make this momentous purchase?

Purchasing a home involves a lot of money, many steps, and many documents. Because the transaction is complex, buyers and sellers do not exchange money directly with each other, but through a neutral third party in an escrow account. The escrow period begins when the seller accepts the buyer’s offer and the buyer puts down earnest money. The escrow officer, usually the title company or the listing office depending on what area of the country your sale takes place, holds the money and related documents until closing.

Other duties of the escrow officer includes keeping all parties aware of status of documents and funds related to the purchase; securing a title insurance policy, facilitating the requirements of the lender; prorating and adjusting insurance, taxes, rents and other fees; recording the deed and loan documents; and keeping track of all money owed and deposited.

During the escrow process, the sellers must carry out escrow instructions, including providing the deed to the property. They must also submit all other documents requested by the escrow officer, such as tax receipts, home warranties and insurance policies.

Buyers’ responsibilities include submitting a down payment and executing a deed of trust to secure the mortgage loan. They approve inspection reports, preliminary title reports and any other items specified in the sale agreement.

When the deed is filed and title to the property is transferred to the new owner, the deal is complete and the escrow is closed. The buyer and seller will receive a final closing statement which should be kept with their important papers. The documents will be needed the next time income taxes are filed.