Buyers Guide:  Buying a home or property is a detailed process. Before you begin, you’ll want to ensure that you are properly informed and guided by a professional realtor.

Step 1.  Buyer Consultation

Buying a home or property is one of the most significant purchases in a lifetime. It is essential to have an experienced agent in your corner, always looking out for your best interest. A buyer agent’s fiduciary responsibility is to represent the buyer and to ensure that they are protected.  A real estate agent will be able to assist you every step of the way—from your initial property search and financing to negotiations and the eventual close. Your agent will also use his or her expertise to help you avoid potential pitfalls and capitalize on unique opportunities.  
Contact and interview a real estate professional once you’ve decided to buy.   When evaluating potential agents, be sure to consider each candidate’s local market knowledge, experience and track record.  Discuss the type of property you’re looking for including location and price range.  You will want to sign a buyer’s representation agreement with a realtor that outlines their ethics owned to you, including confidentiality, and discuss any fees for their service.

Tip:  There are two types of buyer representation agreement.  Exclusive and Non-Exclusive.  An Exclusive Buyers Represetation Agreement means you can only work with the realtor you signed the agreement with.  A Non-Exlusive Buyer’s Representation Agreement allows you to work with multiple realtors but you typically need need to use the realtor that showed you a property if you decide to make an offer.

Step 2.  Get Pre-Approved for Loan (if applicable)

Prior to looking at property, it’s in your best interest to get “Pre-Approved.” Our realtors can recommend several qualified loan officer whom we feel will take great care of your interests. You will be asked to provide financial and asset verification terms andoptions when it comes to financing.  If paying cash, a letter with proof of funds will be required.

Tip:  In todays market, having a pre-approval letter or proof of funds readily available can make the difference between having an offer accepted and not accepted, especially if there is an offer deadline over the weekend.

Step 3.  Search for your Home/Property

Your realtor will check the market every day for properties that may interest you and send them to you.  Your realtor may also suggest off-market homes, for sale by owners homes and in-house listings.  These properties are usually not publically for sale but may possibly be for sale.  If you see a home you are interested in, you should notify your realtor ASAP so they can schedule a showing.  If you are readily available, it is possible for your realtor to do a pre-view on your behalf or conduct a virtual tour.

Tip:  You should be prepared to view a property in a timely fashion.  Some prime listings may go pending in a couple of days.  

 Step 4.  Make an Offer

Your realtor will put together an offer once you have selected a property. You and your realtor can discuss the options and stratgies available to put together an offer you are comfortable with.  Some of the items that will be discussed include earnest money, purchase price, closing date, terms of payment/financing, required inspections and other proerty to be included such as furniture and appliances.  Once the offer is sumitted, this is where the negotiations begin.  It is not uncommon for a counter offer to go back and forth a couple of times.

Tip:  Most offers are electronically signed.  Which means you can submit an offer from the comfort of your home or work.  Time is of the essence in submitting an offer and offers are routinely submitted over the weekends and even on Holidays.

 Step 5.  Offer is Accepted

Congrats!  Once the offer has been fully signed by all parties, you are now “under contract” and the property is pending.  You will need to pay the earnest money if you have not already done so.  A copy of the fully signed purchase agreement will need to be provided to your loan officer and sent to a local title company to prep for closing.

Step 6.  Apply for Mortgage/Arrange Inspections (if applicable)

Ways to finance are to pay cash or use one of a variety of different loans which include Conventional, FHA, VA, USDA, 203k, and more. Your loan officer will help you determine your best fit.   Your realtor can arrange for any required inspections.  Home inspections are typically paid by the buyer and can range from $300-$500.  Septic/well inspections are typically paid by the seller.

Tip:  You will have loan costs associated with your loan.  These are called “Closing Costs.” Closing costs can average 3%-5% of the purchase price.  They include loan fees, title and recording fees, taxes, and possibly some other expenses. We can discuss asking the seller to pay for a portion of these fees when you sumbit your offer. Your loan officer will help guide us as to what’s best for you.

Step 7.  Inspection Period

Once the inspection(s) is complete, we will review the reports.  You will have the option of accepting the reports and proceeding, asking the seller to do repairs or modify the price or cancel the purcahse agreement altogether and ask for your earnest money back.

Step 9.  Review Appraisal and Inspection Results (if applicable)

If you are applying for a loan, the property will have to be appriased by a certified appraiser. The appraisal will provide the bank with an independent opinion of the value of the home.

Step 10.  Reivew Title Committment

A Title Committment will be prepared by the Title Company that lays out the steps needed for you to get clean title to the property.  You will need to purchase Title Insurance if you are applying for a loan.  For cash buyers, Title Insurance is optional.

Step 11.  Clear to Close and Review Settlement Statements

Once your loan officer issues Clear to Close, you will receive final settlement statements to review and we will set up the final walk through.  The settlement statements will detail all the financial expenses of the transaction.

Step 12.  Final Walk Through

We will take on more look at the property to make sure everything is to  the buyers satisfaction  This includes making sure any needed repairs were done,  personal property such as appliances are left as previously agreed to and the property is in the same general condition as when the offer was submitted and accepted.

Step 13.  Attend Closing

Closing will be set by the Title Company.  Closings can be done in person or remotely.

These property buying resources will assist you in answering the many questions that arise during the home buying process. When you’re armed with the right information, and an experienced real estate professional, you’ll be closer to reaching your goal – buying your dream property, and for the best price.

If you have any questions about buying a property in Northern Minnesota, please contact us for assistance.