A Guide in Simple Language to the Home Buying Process

You’ve heard the saying in real estate, “Location, location, location!” Well, here is another, much more important, “Be prepared, be prepared, be prepared!” You are embarking on a journey that will hopefully lead to the purchase of your HOME. This may also be one of the biggest financial decisions you will make. So with some work and following a few steps, the process can remain civilized, fun, and rewarding.

1. The Home Buying Process:
   If you understand the process of something you are far less likely to get stressed out about it. Purchasing a house can definitely be stressful, but if you are made aware of what’s going to happen when, a lot of that can be eliminated. Here are basically the steps you will go through:
   
   
   1. Once you find the home you would like to purchase, you make an offer using a contract form (Realtor’s Contract). This will also include a good faith deposit made out to the Agency’s trust account.
   2. Your agent presents your offer to begin negotiations with the seller.
   3. If you and the seller come to what is referred to as a “Meeting of the Minds, that is an agreement on price and contract terms, the seller signs and dates your offer. Now you have a contract to purchase the property.
   4. The contract is then immediately faxed to both buyer and seller attorneys. This begins the "Attorney Review" process.
   5. During Attorney Review, the lawyers adjust the contract for your particular situation. Once this is accomplished, the contract is binding.
   6. The home inspection is completed.
   7. If any issues turn up due to inspection, they are negotiated through the attorneys. At this point if you cannot come to an agreement, the contract is cancelled; you get your good faith deposit back and the home goes back on the market. However, if all is agreed upon, you move on to closing.
   8. The full deposit, which will include our good faith deposit, is sent to the seller’s attorney to be held in a trust account and will be applied to your closing costs.
   9. The mortgage commitment is finalized. The bank will order an appraisal.
   10. Your attorney will order the title search and survey, and prepare the necessary closing documents.
   11. Your attorney will provide you with a HUD. This is a document that describes all the funds needed for closing.
   12. On your way to the closing, you will go to the house for a final walk through inspection to make sure everything is as it should be.
   13. You go to your attorney’s office to first close on the mortgage, and then close on the home.
       
       
2. Choosing the Right Professionals:
   
   
   1. Mortgage Banker – consider using only an FDIC mortgage bank and only a licensed mortgage banker.
   2. Attorney – use an attorney who does a large amount of residential closings in his/her practice. Communication is key; you will need a good rapport with your attorney. Make sure he/she understands your needs.
   3. Home Inspector – make sure you select a NJ licensed inspector. Most have websites you can research. You can also get referrals from your agent and attorney. At the very least you will want to inspect the structural soundness, if there are any signs of pests, such as termites, and radon. You can ask for anything else that may be a concern to you.
   4. Your Real Estate Agent – he/ she is exactly that, YOUR’s.  Your agent should show complete loyalty and give you the very best service possible. Communication is the number one requirement. If you and the agent can’t understand each other, find another agent. Your agent should be your strongest advocate and your best source for information and guidance. A good agent will take the extra time to prepare and educate you so you can make the best decisions for yourself. He/she should understand exactly what your needs are presently and for the future. Mostly, your agent should never make you feel unduly pressured.
      
      
3. The Mortgage:
   In this market, it is imperative to speak with a qualified mortgage lender before you even think about starting to look at properties. Do not be stingy with information. He/she will use the factors you communicate to choose the mortgage product that is best for you.
   Only use a direct lender, or in other words an FDIC licensed mortgage bank. The other companies are mortgage brokers, they are not licensed and they go to other banks to get their funding. Essentially, they are the middlemen. This can create added fees usually with no advantage to you.
   
   Be careful how you shop for a mortgage. Too many credit inquiries can lower your credit score. It is a waste of time to inquire about rates months in advance, because the rates fluctuate day to day. If your credit files show many inquiries, this can affect your credit score. Don’t be fooled by a company that advertises cheap products. If it sounds too good to be true, it probably is. Think about it this way, when you are shopping for your groceries, you inspect every mark on the produce, read every label, why would you do anything less in preparing for one of the biggest purchases of your life?
   
   
4. Locations:
   It is best to choose a few areas you think you will like. Then research thoroughly each town, for example, the schools, commuting, and the general feel. Drive through the areas different times of the day. Notice the types of homes in the area. How comfortable are you feeling in the neighborhood? Speak to some of the people if possible. There are many houses out there, but once purchased you can’t change the location.
   
   
5. The Inventory:
   Learn the inventory. Go to as many homes as you can and take your time. Take notes as you go through a home. Take pictures if you would like, you can refer to them for details. Your agent, if you are using one, should keep you abreast of what is for sale, under contract, recently sold listings in the area of interest. Collect as much information as you possibly can. Learn the history from your agent. This will assist you in making your final decision, and prepare you in submitting an offer.