Buyer's Guide

Notice I said to determine your budget—not determine how much the mortgage company will lend you.  In many cases, a mortgage company will pre-approve you for more than you’re comfortable spending, which is why you need to determine the monthly payment you feel comfortable with before talking to a lender. This likely includes doing a full household budget and taking into consideration what new expenses, other than a mortgage payment, you will become responsible for once you move into your new home.  If you’ve lived in an apartment or with roommates, you may overlook new expenses like garbage collection, water, or HOA fees. A mortgage payment calculator can help you come up with a mortgage payment for budgeting purposes. You can find one online. Also, once you determine your monthly budget, the monthly payment can be used to suggest a home price you can afford.

Can you shop for, look at, and ultimately make an offer on a home without a real estate agent? Technically, yes, but why would you when it costs you nothing for an agent like me to take much of the stress off your shoulders?  The listing agent of the house has a fiduciary responsibility to the seller…you should have someone advocating for you and negotiating on your behalf.

As your buyer’s agent, I have fiduciary duties to you which include reasonable care, undivided loyalty, confidentiality, and full disclosure.  There is no financial benefit from buying without a buyer’s agent since the seller pays all commissions. Not only will I help you identify properties you might be interested in, arrange showings, and ultimately handle the offer process, I also have intimate knowledge of the market and relationships with previous clients and other realtors which can sometimes lead to available properties before they are formally listed for sale.  In our market, realtors have the opportunity to tour active listings at broker open houses twice a week, so I have been inside many of the homes in our area, which is very helpful when putting together a comparative market analysis for your offer to purchase.  During the course of a real estate transaction, you will potentially need a mortgage lender, home inspector, real estate attorney and other professionals depending on the results of your home inspection.  I can refer you to some of the best in our area. Once you have an accepted offer, you will need to move quickly, so it’s best to have a real estate attorney and inspector you trust on hand.  As your buyer’s agent I will help coordinate everyone involved in the process to help ensure you avoid any closing delays.

Once you have found the perfect home, I will work with you to craft a fair offer based on the value of comparable homes on the market, recent closed transactions, and the current climate of the market. Depending on the home’s list price and whether the current environment is a buyer’s or a seller’s market, your offer may be below, at, or even above the asking price. I will be advising you on your offer terms. In a seller’s market it is especially helpful to consider contingencies, inspections, and closing dates to make your offer the most compelling. Once you have submitted an offer, there may be a dialogue of negotiations between both parties. At this point you will need to identify who your real estate attorney and inspector will be.

This next step is handled differently in many parts of the country. At this point in the Greenwich market, you will hire a building inspector and potentially pool, septic, and well inspectors. If your inspection report reveals any red flags, you may need to hire a trades person who specializes in the area of concern. Depending on the climate of the market, I may be able to negotiate some of the items on your inspection report be taken care of before closing or a credit to be issued upon closing. It is best to get through this part of the process as quickly as possible because the listing agent can continue to show the property until you sign a purchase agreement contract.

Now that you know the exact purchase price and the address of the home you are purchasing it’s time to go back to the mortgage lender who pre-approved or pre-qualified you and choose your mortgage.  If you were not previously pre-approved, you will begin the mortgage application process now.  If you are a cash buyer, you will skip this step.  You will be presented with various options based on your unique financial situation, including fixed-rate, variable-rate, 15-year, 30-year, or special programs such as VA loans or FHA loans.  You can work with your mortgage lender to select the option you feel the most comfortable with and officially start the application process.  Your application and supportive financial documents will be sent to and underwriter.  The underwriter is a financial expert that will review your credit history, earning history and determine if the bank will approve your loan.  Interest rates are subject to change so if you don’t already have yours locked with your lender make sure you do this as soon as possible.

Cash buyers will skip this step.  You are almost ready to close. At this stage your lender has approved your loan.  However, your lender may still recheck your credit and employment status one more time between this step and the closing so it’s important not to make any large purchases or increase your debt in between this step and the closing. Your lender will typically organize a closing date with your real estate attorney within a few days of your loan being cleared to close.

Congratulations if all contingencies have been met you are ready to close!  The closing typically happens later in the day the same day as the final walk through. You will meet at either the seller’s attorney’s office or your attorney’s office and sign the final sales contract. Once the contract is signed, your attorney will wire the balance of the purchase price to the seller’s attorney. Once the seller receives notification from their attorney that the balance has been wired, you will receive the keys to your new home!