The Process

All About the Process of Buying a Home

1. Contact Us. No matter how much you think you know about buying a home, it's not enough to fully protect your interests. This is a huge financial investment, so let us help you. I am an Accredited Buyer's Representative (ABR), which means I've completed specialized training focused on how to best represent buyers like you.
2. Secure a Mortgage Professional. This person will analyze your financial situation and credit, tell you how much money you can borrow and help you understand the various loan options available to you. It doesn't make sense to look for a home before you know how much you can afford. You'll obtain a pre-approval letter from your mortgage professional, which letter will document what you'll be able to borrow. If you need a mortgage professional, go to our One Stop Shop.
3. Meet With Us. We'll discuss your budget, what you need/want in your new home and where you think you may want to live. We'll give you a list of homes that might your requirements.
4. Drive Around. Take your list of potential homes and go to see the communities in person. If you'd prefer, we can drive you around the various areas. Get a feel for the neighborhoods, your commute to work, the surrounding services and amenities, schools, safety, etc. Pay as much attention to where you want to live as you will to the homes themselves.
5. See Homes in Person. Once you determine the neighborhoods you like, we'll narrow down the list of homes. Then we'll go to see all the homes on your now shortened list. We'll help you understand the features and benefits in each home as well as the risks or potential problems. This step will end with you choosing your favorite home!
6. Make An Offer. Once you decide on the home you'd like to buy, we'll help you make the written offer: Depending on the home, the full written offer will likely range from 40-60 pages and will ultimately comprise the full agreement between the buyer and seller. In Maryland, the full agreement is called a Residential Contract of Sale. This will include:
   • Price: We'll prepare a pricing analysis to be sure you know what to pay, after taking into consideration market value and what improvements you need to budget
   • Contingencies: Will your purchase be contingent on your financing, your sale of a current home, or any other things that need to happen? We'll help you negotiate these conditions and make sure all the required addenda are in your contract.
   • Inspections: You'll want to have a basic home inspection as well as other inspections depending on the home. We'll be present at all of these inspections, help you navigate through the findings and assist you in the negotiation of any repairs you'll require.
   • Financing: Most sellers will require a "pre-approval"letter showing them that you have been approved for the financing you'll need to buy the home. Your mortgage lender will provide this to you.
   • Deposit: The seller will require a deposit to secure your obligations under the contract. They're taking their home off the market, so they want to be sure you're serious about buying it and doing what you've agreed to in the contract. You'll write a check to your buyer's broker, who will hold it in its escrow account. The deposit will be applied to the purchase price at closing.
   • Other: Depending on the home, you might have neighborhood covenants/restrictions, mandatory fees, ground rent or front foot fees. Your true property boundaries may be hard to determine and sections of your property might be part of preservation or restricted areas. We'll help you assess all of these potential risks so you know what you're buying.
7. Negotiation. Once the seller receives your offer, they'll either sign it as-is, reject it entirely, or prepare a counter-offer. A "counter-offer" is when the seller changes the terms are unacceptable to them, initials their changes then sends them back to you. At this point, you can either accept or modify their changes. This process goes back and forth until both all parties agree with and initial everything in the agreement. We'll obviously facilitate this back and forth, negotiate on your behalf and advise you during the whole process.
8. Ratified Contract. Once all parties have signed and initialed everything in the agreement, you have a "ratified" contract. Now it's time to do everything you need to accomplish to get to settlement on time.
   • Financing: Even though you've been "pre-qualified" for your mortgage, now's the time to complete the formal application, provide any required documentation including pay stubs, W-2's, bank statements, proof of employment, etc. We and your mortgage lender will also coordinate the appraisal and title search required by the lender.
   • Inspections: You'll have a window of time to complete your inspections of the home. We'll accompany you to all of these inspections and help you interpret the results. Once they are completed, you will submit a list of deficiencies that you want the seller to repair/remedy, if any. The seller can agree to fix everything, nothing, or some of the items. This process goes back and forth much the same as the contract negotiation.
   • Appraisal. Your lender will require that an appraiser create an appraisal of the home's value. The appraiser will research other homes similar to yours in the area (comparables or comps), determine their sale price then use that and other area data to issue a formal appraised value on your home. If the appraised value comes in lower than your purchase price, it could adversely affect your loan approval.
   • Title search. This process is performed by your title company. They will research the official documents associated with your property in the county or city's land records. The purpose of this research is to uncover any liens or legal claims against the property, to locate any encumbrances such as a promise to share a driveway or allow someone else to use part of the property, and to be sure that the seller really owns the property and has the right to sell it. You'll purchase title insurance to protect yourself against any of these items that might exist but not be recorded in the land records.
   • HOA/Condo Associations: You'll be provided with a "resale package" from the applicable associations, which packages will including the covenants, restrictions and rules of the community and its governing association. Be sure to read these documents.
   • Survey. In most cases, you'll obtain a location drawing, which is a sketch of your property showing the house and any other structures. This location drawing is intended to provide you a sense of how your property is laid out, but is not 100% accurate and shouldn't be relied upon to erect fences, install or remove trees or build any structures close to a property line. A boundary survey, which is a bit more expensive, will give you a more accurate picture of your property, so, if you're looking to do anything close to the line such as building a fence, you should pay for the boundary survey.
   • Insurance: Your lender will explain what insurance you'll need on the home, which you'll need to have ready prior to settlement.
9. Settlement. Once everything is complete and you're within a few days of settlement, you'll need to do the following:
   • Utilities: About a week before closing, you'll want to contact all utility providers to set up your accounts. This includes gas and electric, phone, internet, TV and any others specific to your situation.
   • Final Walk-Though: We'll accompany you to the home just before settlement to be sure everything is the way we expected it. If you required repairs from the inspections, we'll make sure those are complete. You'll also be checking for damage that was hidden by furniture and making sure the house is clean.
   • Funds to Close: The title company, which conducts the settlement, will provide us with a settlement statement (or HUD-1). This will show how much money you need to bring to closing, as well as the details of everything you're paying. You'll need a cashiers check for this amount, so be sure to transfer funds into your main account as needed a few days before settlement.
   • Documents: You'll be asked to sign dozens of documents at settlement. Most will be associated with your mortgage loan and others will be required to transfer the ownership of the property. While many of these documents are standard and typically not read at closing, some of the key documents should be reviewed carefully. We'll be with you at settlement and will help you through this. You should insist that your mortgage lender attend the closing as well.