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YOUR EXPERT
BUYER GUIDE
Pre-Approval
Sellers need to know you are financially ready to buy. A pre-approval letter must accompany any offer you make. For pre-approval, you may need the following...
Your social security # for
a credit check
Last year's
tax returns
Last year's
W2
2 most recent pay stubs
2 most recent bank statements
PRE-APPROVAL IS...
A letter from an accredited source indicating that you are eligible for a loan up to a certain amount.
PRE-APPROVAL IS NOT...
A loan application or guarantee of loan approval.
THE 4 BUYER FEARS
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Losing to another offer
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Missing something
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Paying too much
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Something wrong
with property
Negotiate
There are many negotiation points in a contract. The most obvious is price, but other factors come into play.
Pre-Approval
Terms are as important as price. Does your closing date line up with the sellers needs? Are you well qualified with a reputable lender? Can you move through the contingencies in a timely manner? Do you have the cash for you own closing costs or do you need to negotiate those with the seller?
Time is of the essence. Respond to counteroffers in a timely manner. Sellers are looking at how you will be to work with during the contract to close process.
Know what you’re dealing with. The side with the most information will do better. Is the seller motivated to close quickly? Have they transferred jobs and need to move? Have they rejected previous offers? I do the background research to help you craft an informed offer and counter offer.
THE FLOW
Submit offer on
Purchase & Sale Agreement
Seller accepts or counters.
Repeat as needed.
Buyer + Seller agree and sign a binding agreement.
Buyer submits earnest money
Negotiate
Contract
Pre-Approval
Buyer Representation Agreement Outlines my duties to you as your agent.
Purchase & Sale Agreement A ten page document that is the heart of the contract. Outlines the terms of the offer including price, timelines, contingecies, etc.
Counter Offer Counters to the original offer will be made on this form. All terms included in the original offer remain the same except for changes specified on this form.
Confirmation Of Agency Establishes the representation for both the buyer and seller in the transaction.
Disclaimer Notice States that the real estate brokers are not home inspectors, termite inspectors, etc. Recommends hiring independent, qualified professionals for inspections.
Property Condition Disclosure Sellers furnish a Property Condition Disclosure unless the property transfer is exempt. The seller completes the form to the best of their ability. This document does not take the place of a home inspection by a licensed inspector. You sign a copy to acknowledge receipt.
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Get a Home Inspection and Survey Outlines the various inspections available to the buyer as part of your due diligence and what to expect from them. It is your responsibility to be an informed buyer.
Repair/Replace Amendment Once the home is inspected, repairs may be requested by the buyer. Once those repairs have been negotiated and agreed upon, this form is completed and signed and becomes part of the contract.
Notification Form Provides official notice from one party in the transaction to the other in writing in accordance with the provisions of the Purchase and Sale Agreement.
WE USE THE TENNESSEE ASSOCIATION OF REALTORS (TAR) CONTRACT AND FORMS FOR YOUR TRANSACTION.
There are over 100 forms available to use during a transaction depending on the nature and complexity of the deal; these are forms used in every transaction.
APPRAISAL
Your lender must know whether the house you are interested in buying is worth the amount you are willing to spend. They are loaning you the money, so if you default they are stuck with the house.
Pre-Approval
AN APPRAISAL IS...
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A written estimate of a property’s market value completed by an independent third-party appraiser.
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The value is based on market analysis of recent sales for similar properties and properties physical condition.
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To make sure the home meets lender minimum property standards.
YOUR LOAN OBLIGATION...
Within 3 Days​:
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Provide seller with name and contact info for your lender.
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Make applicaton for the loan and pay for the credit report.
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Within 14 Days​:
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Request that the appraisal be ordered and pay for it.
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Secure home owners insurance.
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Notify lender of intent to proceed and have available funds to close per loan estimate.
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We must notify the seller of the lender’s name and contact info and confirmation of these actions in a timely manner or be in default of the contract.
INSPECTION
The inspection is your time to evaluate the home without the influence of anyone who benefits financially from the purchase. Your licensed home inspector is the unbiased expert on the condition of the property.
Pre-Approval
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Hire a licensed home inspector. Meet the inspector at the end of the inspection if possible to review and discuss the inspection while in the home.
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Discuss the inspection results with the inspector. This is a critical step. As a licensed REALTOR®, I do NOT interpret home inspection reports. Don’t be afraid to ask your inspector for clarification or further information.
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Get the inspector’s advice on what to request to be repaired. You create a list of repair request items and the home inspector’s input is valuable.
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Provide a list of items to ask the seller to repair.
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The Seller either a) accepts, b) counters, c) rejects and terminates the contract.
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Once you and the seller have agreed upon a list of repairs, we transfer the list to a Repair Amendment and both parties sign.
AN INSPECTION IS...
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Evaluate the physical condition: structure, construction and mechanical systems.
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Identify items that need to be repaired or replaced.
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Estimate the remaining useful life of major systems.​
AN INSPECTION IS NOT...
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Objections to items of a purely cosmetic nature (eg decorative, color or finish items).
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Refer to lines 254-256 of the Tennessee Association of REALTORS® (TAR) Purchase & Sale Agreement.
CLOSING CHECKLIST
Provide additional docs requested by the lender.
Arrange in advance for utilities to be turned on in your name on day of closing.
Review & Sign Closing Disclosure 3 days before closing.
Schedule wire transfer for closing funds.
Do final walk-through.
Sign documents with the Title Company
YOU BOUGHT A HOUSE!
OUR PARTNERS IN CLOSING
Lender
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Prepare loan documents and submits to underwriting.
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Be prepared to provide lender with any additional required financial documents.
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Title Company
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Prepare & distribute the closing disclosure. This is the accounting of transaction. You must sign to verify that you have received a copy 3 days prior to closing.
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Provide wire instructions for your closing costs and downpayment.
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Order title insurance. Title insurance is required by lenders and protects against title defects.
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Prepare closing documents and walks you through signing them.
Recap
30 days
Typical duration between contract and closing date.
10-14 days
Typical inspection and appraisal period of buyer due diligence.
$500-
$1500
Average amount for upfront costs (inspections and appraisal)
1%
Standard earnest money deposit. This is applied to your costs at closing
2-4%
Average closing costs for mortgage loan origination, taxes, insurance, etc.
