The Real Estate Market has moved from a strong Seller market to a Buyer market. You would think this would make it easy to find and buy the house of your dreams but this is not always easy. Prices have not dropped as much as most buyers and others predicted. Well priced homes in good conditon in desirable locations are still selling at close to asking price. The major change in the current market is that you can negotiate price and you have more choices then a few years ago. However contiongency sales are still not well accepted by most sellers.

Inventory has decreased in the last few months and many properties are selling faster then at this time last year and closer to list price. Interest rates are on the low side but will likely be moving up and down by a 1/4 to 1/2 point during the year.

BUYER'S CHECKPOINT LIST: Getting the Home

· 1. In a strong Buyer’s market you will be able to negotiate price however it may not be by as large a margin as you were expecting or hoped to obtain. Review recent sales in area with your Agent. It is important that you know what is happening in the market where you wish to purchase. If recent activity shows the property to be well priced you will probably only be able to receive a small amount off the price. Knowing market value is the key to successfully buying the home you want at the price you deem suitable.. It helps if you know why the sellers are moving. If they are relocating or have purchased a new home then you may be able to negotiate a lower price then if they are thinking about moving nearer their children. But don't be surprised if the seller doesn't want to reveal information on motivation.

Have your agent give you a market analysis for properties in the area. Be sure they include Active listings, Pending listings and Sold properties for the last three months. Three months reflects what is happening in the current market. In changing markets you need recent information. Have realistic price and terms in mind before you make your offer. A home listed at $2,000,000 on a walk street with a view isn’t likely to sell for $875,000. However that same home at $1,875,000 could be a steal. Even in a Buyer’s market coming in with an extremely low offer on a fairly well priced home, may insult the seller to a point where he won’t negotiate with you. So be wise in your negotiating technique. If a home has been on the market for some time with no price reductions or reductions have not reached near market value the seller may not be a motivated seller. If a seller is not motivated he will be very difficult to negotiate with about the price or terms

A note to remember: Terms can often be more important then price to a seller… if a seller wants a long escrow you might get a better price if you can meet his needs…

You will need to meet with a lender prior to making an offer and give him permission to run a credit check, verify your employment and verify your assets. If you are self employed you will need to have copies of your tax returns. If you distribute salary through a personal corporation then you will need to be sure your lender knows how to handle retained corporate earnings. If you have been pre-approved by a lender you stand a better chance of getting the home you want at the price you desire. Note: The well qualified buyer is like the 500 pound gorilla in today’s market.

· 2. Respond within time framework noted on the counter offer (if any). Time is always of the essence in a Real Estate transaction. In this market you may find that you will negotiate price and terms three to five times before you each an accord.

3. Congratulations...Your offer is accepted. Now the hard part starts. Ernest money funds for the deposit must be good upon acceptance, so be ready to transfer money if necessary. You must also be ready to verify all funds needed for the transaction. If your parents are giving you money it must be available now. Your lender will have to send a letter to the seller confirming that you have money for downpayment and closing costs in an open account. If you have a home for sale and monies will be coming from proceeds of sale you will need to provide escrow information and copies of all paperwork pertaining to the sale.

WITHIN 10 DAYS FROM ACCEPTANCE:

4. Schedule a Building Inspection and any other needed inspections as soon as possible. Remember all inspections must be completed within the time frame agreed upon between Buyer and Seller in the Deposit Receipt.
Also all requests for repairs must be within the time frame. This is a crucial period.. be sure you get all paperwork completed as soon as possible, especially requests for repairs.

You will need to check off and sign the form releasing all contingencies by date noted in contract. Due to changes in the contract you will need to keep track of all time frames.

5. Review Escrow papers with agent and sign and return to escrow company

6. Review all paperwork from Seller with agent ( Disclosures, Hazards Report, Preliminary Title, etc. within specified days .. usually 5 from receipt of reports.. approve or disapprove reports)

7. Contact lender and make sure he has all documents needed to process your loan application.

8. Call your Insurance company and check rates for Homeowner policies. You will need proof that you can obtain insurance on the home. This can take time so start early. Many companies are not writing new policies so be sure to check your company. It is a good idea to check out rates from all companies. They can vary a great deal.

9. Make a list of dates all items must be approved or disapproved and deadlines met. Be sure to be on time with notifications to Sellers. Agent will help you coordinate.

10. Return all documents required by lender as soon as possible ( tax returns/W 2’s, verifications,etc)
10-20 DAYS INTO ESCROW ( AFTER INSPECTIONS COMPLETED)

11. Check with your Bank, Stock Broker, Mutual Fund etc. and make sure all funds for the downpayment will be available when you need them. REMEMBER YOUR FINAL MONIES DUE TO ESCROW MUST BE IN THE FORM OF A CASHIER CHECK…NO PERSONAL CHECKS ARE ACCEPTED.

12. Check with Lender to see if they need any more documents. (They will always need something strange about three days before Escrow closes, but will not be able to tell you what they need until it is a crisis…THIS IS NORMAL)

13. Call your Realtor about any questions you may have. This is a slow time during the escrow period and not much seems to be happening (as all work is with Lender). You need to be careful now and don't buy anything major or open any new credit accounts. The lender will re-check your credit about 2 days before close of escrow and major purchases ( a new car) could be a problem. When in doubt, ask your agent for advice.

14. This is a good time to think about what you want to do to property before you move in (repairs, painting/carpet) Get estimates from service people. Your Agent will help.

15. Call Moving companies.. get estimates on fees and schedule approximate date of move.

20 TO 30 DAYS (YOU ARE ALMOST A HOMEOWNER)

16. Call your lender to see if they need any further documentation.

17. Check with the Escrow company. Make sure they have all documents they need from you.

18. Call utility companies.. disconnect service from old address and set up turn on date at new property. FOR NUMBERS SEE IMPORTANT PHONE NUMBERS ON MY WEB PAGE

19. Call phone company arrange hookup and get new number

20. Get change of address forms from Post office

21. Check with Lender about formal loan approval and approximately when loan docs will be sent to escrow. YOU MUST BE AT ESCROW TO SIGN LOAN DOCUMENTS. MANY PAPERS NEED TO BE NOTARIZED. MAKE ANY ARRANGEMENTS NECESSARY TO DO THIS . YOU CAN’T DELAY. DOCUMENTS MUST BE SIGNED FAST. (IT MAY BE NECESSARY TO ARRANGE FOR A POWER OF ATTORNEY TO BE DRAWN BY ESCROW IF YOU WILL BE OUT OF COUNTRY AND SPOUSE NEEDS TO SIGN FOR YOU)
The escrow officer will tell you how much money you need to bring in to close the transaction. The figure will not be exact. It is usually padded a bit to cover any unexpected costs determined by the title company. You will receive a refund of any excess funds.

22. Be prepared to go to bank and have cashier check drawn and delivered to escrow.

23. Set up schedules for all repair people to start work (if necessary) once escrow is closed. You will generally receive key after escrow company receives notice of recordation of deed from title company. Sometimes this happens late in afternoon, so don't schedule anything until day after escrow closes to be safe.

24. Schedule final walk through (4-5 days before close of escrow) to inspect all work to be done by Seller. This will happen about same time as you sign loan documents

25. Make arrangements with agent to pick up keys at close of escrow

CONGRATULATIONS!!! YOU ARE A HOME OWNER…

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