I realize that many first-time home buyers don’t know what is involved in the buying process, so I have itemized below the main points with which you may not be familiar:
- Are you aware that you do not pay your Buyer’s agent a commission? This is paid by the Seller. All the more reason to use an exclusive buyer’s agent who will be looking out for your interests and walking you through all the negotiations.
- Making your first offer can be scary. However, the purchase contract is designed to protect you by setting contingency periods that you need to meet in good faith. But, if you cannot, through no fault of your own, meet these time-frames, then you can cancel the contract. The main contingencies are:
- Loan and Appraisal – generally 17 days, and
- Inspection – also 17 days.
- If you are unable to receive a loan, the property does not appraise, or are unhappy with the inspection report, and the Seller will not make any concessions, then you can walk away from the deal, and your good faith deposit will be refunded.
- Once you have removed all your contingencies, however, then your deposit funds become hard.
- The purchase contracts are mostly standardized and your agent will walk you through the parts that can be customized to your requirements, the main ones being:
- Length of escrow period.
- Length of contingency periods (loan, appraisal and inspection).
- How much home warranty plan to purchase and what it shall include.
- What items you would like to request that the Seller leave, etc. fridge, washer/dryer, etc.
- Your agent will assist you with finding a home inspector and help you understand the report once delivered. He or she will also help you decide whether to hire additional inspectors based on the first report. They will also help you draft a “Request for Repairs” should you so wish.
- Your agent will work with your lender to ensure that things move forward in a timely manner as much as possible. They will also follow-up with the listing agent to make sure that you receive all the required disclosures due from the Seller. These are important as the Seller has to disclose everything they know about any faults the house may have.
Basically, the escrow process is quite straightforward, at least it should be if you are working with a capable agent who is representing your interests. The information above is a pretty basic overview of that process. I you would like a more detailed description, please do not hesitate to contact me and I will provide you with a step-by-step guide.
