The Home Buying Process

Buying a home is a big step. There are many things to consider. The professional Realtors at Clements Realty Group will help guide you through the process and provide the tools you’ll need to make good decisions.  Here are the main home buying steps:

Choose an Agent:
Buying a house is a complex legal matter and in most cases the largest investment some of us will make. While you can find a home on your own, it will give you more security and confidence to work with a professional Real Estate Agent. An agent will help you to obtain information about the properties and the selling trends of a particular area, which play a key role in the negotiation process. Our Real Estate professionals keep a constant pulse on the Chicago Real Estate market and can simplify the process of finding and viewing properties. An agent will also explain the buying process, legal documents, handle negotiations, and write and present an offer. Within your first few interactions with a realtor you will be given an Illinois Agency Disclosure form. This form establishes three different types of Agency representation; Seller’s Agent, Buyer’s Agent, or Disclosed Dual Agent. The Buyer’s agent option gives you the most security because the agent acts as your representative. Establishing a relationship with a buyer’s agent is beneficial to you because you have someone representing you and your interests throughout the purchasing process. The seller usually has an agent representing his or her interests, and the seller’s agent has the legal obligation to be loyal to the seller. Having an agent working for you puts you on a level playing field with the seller, and gives you confidence throughout the process. 

Pre-Qualify and Pre-Approval:
Most people don’t know the difference between a pre-qualification and a pre-approval. A pre-qualification is not an agreement between you and a lender, rather an estimate of how much you can afford based on income, credit history, current debt, monthly bills, etc. You can be approved for more than you thought, however, you might not be willing to pay a large monthly payment for a more expensive mortgage. This will give you only an estimate of how large of a mortgage you can afford. A pre-approval is an agreement with a lender. The lender has agreed to lend you up to a certain amount of money. This determines your final maximum budget for purchasing a home. We recommend that all our clients get pre-approved before they begin the buying process. Having a pre-approval is the assurance that when you find the home you want to buy, you have a lender already working for you. 

Choose a Home:
So much goes into buying a house. Before you begin viewing homes, it is helpful to decide what you need and want. What type of property; condo, townhouse, loft, studio, single family, multi-family? How many bedrooms? Do you need parking? Are there good schools in the area? What are important community features? Think about location, and house style, age of the home, condition, square footage, interior rooms, baths, basement, as well as interior miscellaneous features. Other factors to consider are heating and cooling systems, building materials, roofing style and materials. Create a list of features you want in your next home, starting with the most important features, and ending with the least important. Then draw a line where everything above the line is a need and everything below the line is a want. Keep this list in your mind while viewing properties; you must be able to decipher needs from wants, which will help you when making your final decision. 

Make an Offer:
Once you have found a property that you are interested in buying it is time to submit an offer. An offer is a legally binding statement of your interest in buying a property. A home inspection usually takes place in the following two weeks. In addition, the offer will have a financing contingency covering the need for the bank to ok several things about the house. Your offer must be in writing, for legal purposes, along with an earnest money deposit. This deposit is to ensure the offer and is credited toward the sale price. The seller has the opportunity to accept or reject your bid.  If it is rejected, you can continue bidding until an offer is accepted. Once your offer has been accepted you have a legal interest in the property, and are on your way to owning the home. 
 
The Purchase and Sale Agreement:
The Purchase and Sale Agreement is a contract between the buyer and seller, which states the terms as to how the property will change hands. Included in the document is the price, payment terms, amount of initial money deposit to be held in escrow, time frame the contract is to be executed, and any contingencies for purchasing the property. A common contingency is the home and fire inspections. “Time is of the essence” seller and buyer must keep to timetable as stated in contract. As the buyer you risk losing your deposits if you fail to meet any of the terms on time. 
 
Home Inspection:
Legally, all known problems must be disclosed to the buyer before actual purchase of the home. The home inspections are designed to inform you of all the positive and negative aspects about the condition of the home. Remember, do not use a home inspector that is recommended by the seller, not only is it not in your best interest, but it is also illegal. The report should verify that the home is structurally sound. In addition the inspector will be able to detect possible future problems, hazardous materials, water damage etc. Finally he will inspect the workings of the house including, plumbing, heating, air-conditioning, and electrical systems. The house may not be perfect, so you need to weight both the positive and negative. Determine if you can afford or want to make the repairs, how long they will take and how urgent they are. 
 
Prepare for Closing:
Your Clements Realty Agent will guide you through all necessary steps in order to ensure the home is ready for closing. Contact the utility companies to arrange for their services to be put into your name the day of the closing. On the day of the closing you will check out the house to make sure there are no surprises. Generally, the house is to be empty and "broom clean." 
 
The Closing:
The buyer puts down the rest of the purchase money at the closing. The listing agent will have a certificate from the fire department confirming that the house has working smoke detectors in the appropriate places and that the house numbers on the house are correct and visible from the street for emergency vehicles. The buyer signs the mortgage documents and the Seller presents a new deed conveying the house to you. Your attorney or the bank’s attorney will put this new deed on record with the Registrar, confirming that you are now the new owner! You may now bring in your furniture - the place is yours!