The Buying Process
A Step by Step Overview of the Entire Home Buying Process
It's a lot more involved than you might think
 

Click on the menu choices below to go step by step through the process involved in purchasing your new home. Below is a description of the subject matter covered under each menu choice.

Agent/Agency - Choosing the right agent & info about agency & types of  representation. The Search - Insights and the steps involved in searching and finding your dream home. The Offer - What's involved in putting together an offer/purchase contract. Home Inspection - Information on Home Inspections and required repairs, etc. Appraisal - Info on the home appraisal (valuation of your new home for mortgage purposes). Taxes & Insurance - Info you need to know about property taxes and homeowners insurance. Title Insurance - Title Insurance: What it is & why you need it and more. Final Walk Thru - The final walk-thru inspection, repairs and  things to consider. Closing - The closing process, closing costs and things to do after the closing.

Agents/Agency Topics Covered Below Related Topics and Important Information Selecting an Agent Agency Disclosure Forms Understanding Real Estate Agency The Buyers (Selling) Agent The Listing (Sellers) Agent The Transaction Broker (Buyer and Seller) Understanding How Agents Get Paid - Cost of Homeownership Agency: - Single Agent - Transaction Broker - No Brokerage Relationship   Buying a home can be a difficult process. The level of anxiety and stress associated with buying or selling a home can be enormous. Let us help you find your dream home and save you $$$ in the process. You can search the MLS right from this site, but if you'd like contact us and we'll set you up on Our E-mail MLS Listing Service and we will e-mail you listings that meet your criteria as they become available. You'll be the first to know of new listings which is important in today's market. Selecting A Real Estate Agent Making the wrong choice can cost you thousands. First be sure you hire your own buyer agent to represent your interests. You will not get a better deal calling the listing or advertising agent, in fact you may end up paying more. Many buyers choose a real estate agent by accident, choosing the first agent they meet. Usually their main concern is finding a home. Many is the time I've tried to explain how the real estate business works and the advantages we offer through our rebate programs. I'm sure you can guess, but the answer I get from most is "I just want to find a home" which I find shocking. This is one of the largest transactions in your life, taking a bit of time to learn more about the details could save you thousands. The fact is all agents have access to ALL home listings through the MLS (Multiple Listing Service). Finding the right home is the least of your worries. Our e-mail listing service will insure you get all the listings in a timely manner. What you really need to worry about is who'll give me the straight facts as well as honest advice and counsel about the home I choose. And, once you've found the right home who will provide the best representation. In other words who has the experience and expertise to determine the right purchase price, negotiate the best possible price, terms and conditions and help you to coordinate and complete the transaction from inspections to mortgages, avoiding any problems or pitfalls along the way. Not only can Florida Rebate Realty help you find the right home and provide professional representation services WE CAN SAVE YOU MONEY THROUGH OUR REBATE PROGRAM. Your comfort level is important since you will probably spend a significant amount of time with your agent. You'll want an agent that understands your needs and desires and promptly returns phone calls or e-mails day or night. Buying a home is one of the most significant transactions of your life so don't leave it to chance. More often than not, the keyword in the real estate industry is "sell" rather than "represent". Far too many brokers and agents appear to have an undeclared mission statement that reflects "salesmanship" rather than "representation" of their clients. First and foremost, ethically and legally, a real estate agent should be continuously aware of his or her responsibility to the client. Top of Page Top of Section Agency Disclosure Forms These disclosure forms should be discussed and signed at the first substantive meeting with your agent. The forms specify the different types of agency and what your agent's duties to you are. There is the Single Agent Disclosure and the Transaction Broker Notice. Have your agent discuss these forms with you so you're clear what type of agency and representation is best for your situation. You may also choose a third option No Brokerage Relationship Top of Page Top of Section Understanding Real Estate Agency On the surface all real estate agents seem alike. Most buyers don't understand the difference between a listing/seller's agent and a buyer's agent. Further, they have no idea in what capacity these agents are acting; a single agent,  a transaction broker or who represents whom in a transaction. A Single Agent represents either the buyer or seller but not both parties. A Transaction Broker represents both parties but in a limited fashion. Top of Page Top of Section The Buyer's (Selling) Agent The buyer's agent represents the buyer exclusively. He or she has a responsibility to represent the buyer and look out for their interests. Most people hate being fooled or given inadequate information. They want to be presented all the available information at the outset so they can make an informed decision. Under these circumstances most people are willing to accept responsibility for the events that follow. What they don't like is not being informed about something that would have made a difference in how they saw things and how they approached the decision-making process. A buyer's agent can secure all the information available about a property and share it with you so that you can make informed intelligent decisions about the most important investment in your life. Top of Page Top of Section The Listing (Seller's) Agent The listing agent is the seller's agent exclusively. He or she has a responsibility to represent the seller and look out for the seller's interests. The listing agent almost always has a written agreement called a listing contract that specifies among other things, the price, commission amount, and the authorization to put the property in the MLS, split the commission with the selling/buyer's agent, and put a yard sign in front of the property. The listing agent will share any and all available information about any buyers with the sellers. Information such as the buyers motivation, how much they are willing pay, etc. so you're better off using your own buyer agent to represent you. Top of Page Top of Section The Transaction Broker (Buyer and Seller) There are times when a real estate agent will represent both the buyer and seller in a transaction. This happens when a buyer who is not represented by a buyer's agent calls on a sign, ad, or Internet listing. The listing agent will show their property listing to the buyer. If the buyer decides to write an offer for the home without employing their own agent they will ask the listing agent write the offer. Before writing the offer, the listing agent has the buyer and seller sign the Transaction Broker Notice which discloses that the agent will not work to represent one party to the detriment of the other party when acting as a transaction broker to both parties. This is perfectly legal but not always in the best interest of the buyer. When you make an offer to buy a house, you are entering a negotiation. The seller wants as high a price as possible and the buyer wants the lowest price possible. If a Realtor represents both sides, there is a conflict of interest, though an ethical Realtor can equally represent both sides. Most Realtors are very ethical and take their responsibilities seriously. However, if the listing Realtor knows how much you are willing to pay for a home or the loan amount you have been qualified for, and that information somehow gets passed on to the seller even though they are also representing you as the homebuyer, you are at a disadvantage. You won't be in this position, wondering if you're getting a good deal, if you hire your own buyer agent to protect your interests. Top of Page Top of Section Understanding How Agents Get Paid Many buyers don't understand how real estate agents are paid. Here's how it works: When a seller lists a property for sale, the listing agreement includes a commission clause that stipulates how much commission the seller will pay. It's usually a percentage of the final selling price, let's say six percent. Typically that 6% commission will be split between the buyers agent and the listing agent at the close. The listing broker lists the home in the MLS notifying all the other brokers that the commission split is 3% to the selling buyer's agent. If you go directly to the listing agent they keep the entire commission. Due to self interest and company policy they are not going to give you, the buyer, a break. If they'd give anyone a break it would be their client the seller. Most home buyers think the seller pays the entire commission. The bottom line is that indirectly it's you the buyer who is paying the commission which is built into the sales price. At Florida Rebate Realty we can save you $-thousands or even $-tens-of-thousands with our commission rebate programs. Top of Page Top of Section   Searching For A Home Topics Covered Below   Searching For A Home: Introduction The Right Frame of Mind Making a Time Commitment to Your Home Search Viewing Homes For Sale Considerations When Viewing a Home Timing: Selling Your Present Home Other Sources of Property for Sale What if You Discover a Home You Like on Your Own Open House Etiquette Can't Find the Perfect Home   Introduction If the first thing an agent wants to do is to drive you around, go find another agent. Experienced agents don't drive people around before interviewing them first. Also, a good agent will have you begin the loan process immediately. We're not talking about getting pre-qualified, we're talking about getting approved for a loan. This will put you in the strongest possible negotiating position. Buying a home can be an emotionally draining experience. Finding the right home can be a time consuming endeavor. You must be willing to make a commitment of your time and effort to work with your agent. The best properties sell quickly, prices are up, and it can be tough to find a home with just right mix of size, location, amenities, and emotional appeal. Before starting your search make out two lists of what you are looking for in a house: those things that you must have, and those things that you would like to have. When talking to your realtor, go over not only what you want, but why you want those things - a good realtor may be able to suggest homes that don't meet your stated requirements, but do meet your needs. Shop with a pad of paper - make notes. Share your feelings with your realtor - not just yes or no, but what things you liked and did not like about each house. This will help your agent help you to find the right house. Top of Page Top of Section The Right Frame of Mind With the right mindset, buying a home will be easier and less stressful. Below are some tips to help you. 1. Help Yourself Learn as much as you can about the entire process through books, friends and the Internet. Investigate neighborhoods by driving around and learn price ranges, check commute times to your place of work. Most importantly be sure you feel comfortable about the neighborhood. You'll need to drive around to open houses and see property. If you wait around for your agent to drive you around on Saturday or Sunday for a couple of hours you aren't helping your agent or yourself. The more you know about the area and the price of homes in the area the easier it will be for you to determine the value of homes you view and eventually put in an offer on. 2. Be emotionally detached If you can keep a check on your emotions you'll think more rationally and be able to make better decisions. When you find a house that seems to fit acknowledge that the house may fit your needs and price range and leave it at that. Remember, there are many behind-the-scenes things that may be taking place--other buyers competing for the home, unforeseen issues with the physical condition of the property or other issues that may make it a poor choice. Bottom-line, acknowledge the house may be a fit, but don't get carried away with emotion. Remember there are many hurdles you need to overcome. Let your agent deal with the seller's agent to find out about all of the behind-the-scenes issues and then move quickly to submit a good clean offer. Once you are safely under contract and past the physical inspection, you can relax a bit and start thinking about the future. 3. Patience and understanding Sellers may make unreasonable demands or get upset over certain issues. This is part of the process. The sellers may not want to sell their home but they may be in a situation where they must. They may be selling due to a job transfer, a divorce, money problems, old age, or illness. Selling under these conditions might get anyone upset. Have patience, be calm and try to see the sellers point of view. Your agent should be able to work any problem with the seller's agent. If the purchase contract was written properly you should be protected from the majority of issues that may come up. 4. Problems prior to closing It's not uncommon for there to be problems before the closing. The problem could come up from the lender, title agent, or someone else involved with the transaction. Don't panic, almost all problems can be resolved. If your agent is experienced he or she has probably handled similar problems in the past. Remember, stay calm, call your agent and let them take care of the problem or steer you in the right direction. Top of Page Top of Section Making a Time Commitment to Your Home Search Be ready to make a big time commitment. You are making one of the biggest decisions of your life, both emotionally and financially. You will spend endless hours driving around neighborhoods, looking at homes, view open houses and weighing the pros and cons of each neighborhood and each home. Add in the time getting approved for a loan and you get the idea. Finding the right home probably won't happen by just setting aside a few hours on a Saturday afternoon. This is serious business, the decisions you make will have long lasting implications, so be prepared to devote the proper time. Top of Page Top of Section Viewing Homes For Sale First I will print out the home listings from the MLS that meet your price range and requirements. I will drop off, fax or e-mail these listings for you to review. Look over the listings and call me back with the houses that appeal to you. I will contact the listing agents and eliminate any homes that are sold or under contract (pending). The market can move quickly and the best homes that are priced right will sell quickly. Also, many agents do not update their listings on the MLS in a timely manner. I will call you back with the homes that are still available and you may take a drive around to look at the homes and neighborhoods from the outside. Call me with the homes you liked from the outside and I will make appointments to view these homes. Top of Page Top of Section Considerations When Viewing a Home If you walk into a home and immediately don't like it, let's not waste time. Let me know that it's not quite right for you and lets move on to the next house. If the listing agent talks to much, just say to them, Do you mind if I take a look around on my own and then I'll ask you if I have any questions. If you like a home try not to show it. We don't want the listing agent or seller to know. Don't feel you must explore every inch of a home. It can be very difficult to set up appointments the same day, unless the home is vacant. It is best to schedule 24 hours in advance. It may be difficult to arrange a showing early in the morning or late at night, on holidays, or on Saturday or Sunday mornings. Some people are slobs and the house will be a war zone. Look beyond the clutter and imagine the place cleaned and painted. Many good deals have been passed over by buyers who didn't use their imagination. Your agent can usually point out the repairs or modifications that could be done to make the house fit your needs. Top of Page Top of Section Timing: Selling Your Present Home If you have a home to sell, you'll want to put it on the market, as soon as possible if not sooner. The ideal situation is to have the closings as close together as possible or in some case a week or two apart, giving you enough time to move and clean-up your old home and paint and/or clean up the new one. This may be possible if your home goes on the market priced correctly. Once the closing date for your existing house is set, you can then go about selecting your new home without worrying about timing. You don't have to sell your home first, but there are many downsides. Prospective sellers may not consider any offer you make if the contract is contingent upon your selling your home first. Some sellers my accept your offer but keep their home on the market seeking a better offer and giving you the first right of refusal. Now you have to hope and pray your home sells before another buyer comes along to buy your dream home. Just the stress of worrying if someone else will buy your dream home is enough but imagine that someone else does buy it. You are better off first selling your house. If the buyers of your house want to move in quickly and the sellers of your new home can't move fast enough then the solution is a short-term rental of an apartment. Getting the home of your dreams may be worth a short-term inconvenience. Top of Page Top of Section Other Sources of Property for Sale In addition to the homes I send you from the MLS, I always recommend that my clients scan other sources of homes for sale. The reason is that many times my clients will see something that catches their eye that is in a completely different area than they were considering. This scenario also helps illustrate an important lesson I learned about finding your home. It can sometimes be very difficult to articulate what you are looking for. However, when you find it, you'll know. What I believe is that most buyers are looking for a particular feeling they get from a house. Some want a feeling of security they get from a home with tall fences and gates. Some want a feeling of nature from a home with lush green landscaping. Some want that family warmth and coziness from a home with a large kitchen that overlooks the family room so they can cook while still talking to friends and family. Remember: All real estate agents have access to the MLS and can show you any home you see advertised by another real estate agent. Calling the listing agent may not be the best of ideas because they represent the seller not you. Top of Page Top of Section - The Internet The Internet is an excellent way to view listings and get a feel for the market. You can search for available listings anywhere in the country 24 hours a day through my website. However, be aware some of the listings may be out of date or inaccurate. Consult your agent to get up to date information and more detailed information about a property or neighborhood. - Harmon Homes, Homes & Land and The Home Review Magazine These are free weekly periodicals that can be picked up at newsstands and convenience stores. These convenient magazines have many photo ads of properties listed by agents. This is another great tool to use in your property search. - The Local Newspaper Real Estate and Open House Section I always recommend that my buyers grab the local newspapers to check the open house section. This way you can see what will be open on the weekend and go see the homes that interest you. - Open Houses Open houses are a great way to learn the market and see what's for sale. Your agent will also be able to tell you what's open that weekend. If you are interested in a particular area, drive that area on Sunday and you'll be sure to find some open houses. - Tuesday Broker's Caravan Usually every Tuesday between 11am and 2pm agents/brokers will hold an open house to get a property exposed to other agents. This enables other agents to preview the new listing inventory for their buyers. However, anyone is welcome to stop by. I frequently send or accompany my clients to Tuesday caravan so they can get a jump on the competition. Usually, food and/or refreshments are offered to entice agents to stop by. - For Sale By Owners (FSBO) The FSBO can be another great source of properties for sale. Sometimes sellers want to try to save real estate commissions by selling their home themselves so they run newspaper ads in the real estate classifieds and put up lawn signs. If the seller is truly motivated this can be an excellent way to find a property. If you do find a FSBO that looks interesting, have your agent call the seller and make an appointment to view the home. Most sellers will cooperate with an agent if that agent has a bona fide buyer. In fact, many times they're grateful there is an agent involved because they quickly realize that it's not easy to coordinate all of the paperwork and forms needed in a real estate transaction. The seller usually ends up paying a 2.5 or 3% commission so everyone's happy. It is a good idea to have someone represent your interests and help negotiate the best possible deal. Top of Page Top of Section What to Do if You Discover a Home You Like on Your Own If you see a sign when driving around, walk in to an open house, read a newspaper ad, or see a property on the Web that interests you, call me right away. I will pull all the info about the property & fax or e-mail it to you immediately! I will immediately call the listing agent and find out the details about any property and get you the inside scoop! Agents don't have exclusives. All agents have access to all MLS listings. Top of Page Top of Section Open House Etiquette The main goal of an agent at an open house is to meet potential clients and induce them to work together. They can be a little pushy at times and start asking you all types of personal questions. If you walk in to an open house, please let the agent know immediately that you are already represented and hand them your agent's card. This will cause most agents to back off and go back to whatever they were doing. Top of Page Top of Section Can't Find the Perfect Home If you know exactly what you want and it isn't on the market we can help. Whether it be a specific home or group of homes or a particular neighborhood we will find you a home. We will contact the owners and let them know we have a client that is interested in purchasing their home. After viewing the home or homes, if you are interested, we can start negotiations and put in an offer on your behalf. Be advised there is not much room for negotiation when you approach someone to buy their home. Top of Page Top of Section The Offer Topics Covered Below   Before Putting In An Offer: Introduction Check the Sale Comps Check out the Neighborhood Check out the Seller Check the Commute Making An Offer: Introduction Contract Contingencies Minimizing Closing Costs Making the Offer The Counter Offer Process Disclosures Condos & Townhouses: Points to Consider Tenants in the Property   Introduction - Before Putting in an Offer Once you find the right home that fits your budget and requirements the next step is to make an offer on the property. Before you make an offer you need to get as much information as possible so that you can make an intelligent offer. A good agent will provide you with all the information at his disposal so that you can make an informed decision. Top of Page Top of Section Check the Sale Comps The first and most important thing your agent should do is to provide you with a report showing what comparable properties in the neighborhood have sold for in recent past. In general, the more recent the sale the more relevant it is. Lacking any recent sales in the particular neighborhood then your agent should provide you with sales comps on similar homes in similar neighborhoods within the area in question. Your agent should be able to interpret the reports and give you an opinion on the true value of the home within a range. Top of Page Top of Section Check out the Neighborhood If you haven't checked out the neighborhood yet then do it now before putting in an offer. Drive around the neighborhood at different times to get a feel for the neighborhood. If possible, walk around and talk to other property owners to get their opinions of the neighborhood. Ask your agent for their opinion and what they know about the neighborhood. Top of Page Top of Section Check out the Seller Why are they selling, divorce, debt, job relocation or retirement? Your agent should be able to find out this information from the listing agent and possibly a clue as to how motivated the sellers are to sell. Information is the key to putting in a good offer. Top of Page Top of Section Check the Commute If you commute, drive from your job to the house. Or better yet take the morning drive from the house to your job. You want to be sure the commute time is acceptable. Top of Page Top of Section Introduction - Making An Offer Before you even get to the point of making an offer ask for and read a purchase contract to get familiar with the various clauses and paragraphs. Below are the points to be aware and the steps in the offer process. Top of Page Top of Section Contract Contingencies A purchase contract contains many contingencies that protect a buyer. A contingency is an event that must transpire in order for the purchase contract to stay in full force. In other words, if A, B and C do not take place then the buyer may walk away from the contract and get a refund of all deposits made to that point. For example, most contracts have a loan contingency that says the buyer must get the loan approved within the terms agreed to in the contract. As an example other contingencies may include approval of the Home Inspection Report, sale of your present home, approval of the Condo Documents (condo purchase only) or anything else that both parties agree too. These contingencies help protect buyers. In the past, there were fewer contingencies and disclosures. It was a "buyer beware" atmosphere. This is no longer the case, but that doesn't mean you should not be diligent in protecting your interests. Top of Page Top of Section Minimizing Closing Costs A technique to reduce the cash out of pocket to purchase your new home is to ask the seller to pay some or all of your Closing Costs . Basically what you're doing is financing your closing costs. What happens is that once you've agreed upon a price for the home you then add your closing costs on top of the sales price and the seller agrees to pay for your closing costs. This is written into your purchase contract. The increase in your monthly payment is minimal and you save thousands in out of pocket expenses. Be aware that the home must appraise for the sales price including the closing costs. Keep in mind a few simple rules. On conventional loans you can only ask the seller to pay non-recurring costs, not pre-paids or items to be paid in advance. If you are putting ten percent down or more, the most the seller can contribute is six percent of the purchase price. If you are putting less down, the most the seller can contribute is three percent. On VA loans, you can ask the seller to pay everything. VA loans do not require the buyer to make a down payment or to pay any closing costs. On FHA loans, it is backwards. You can ask the seller to pay your pre-paids and impounds, but it doesn't normally make sense to ask the seller to pay your non-recurring costs. The exception is that there are some fees a seller has to pay on a FHA loan, so you won't be paying those anyway. Also, if the seller wants to pay discount points (not your loan origination fee) or pay for a buy down, that is allowed. The reason it does not make sense for the seller to pay your normal buyer's costs on an FHA loan has to do with how the FHA loan amount is calculated. Instead of just using a percentage of the purchase price like everyone else, FHA calculates your loan amount based on the purchase price