What is the basic sequence of purchasing a property

Question

Hello all...I've been piecing together tons of info. from the site and am sort of putting it all together.  I am, however, still fairly unclear on few steps in the basic sequence/process of purchasing a property.

Generally speaking:

-Find the prop.

-Make offer.  If you're working with a realtor, is this something that is done solely from their office or can it be done over the phone/internet.  If you're not working with an agent, however, what does the offer sheet look like/consist of.

-Wait for the offer to be accepted?  How long will a buyer usually take to decide?

-When are the inspections and appraisals performed?

Thanks!

Eric Wang · Answer

First thing you need to do is talk to a lender and see how much you qualify for.  No point looking at a 600K house, if you only can borrow 400K.  Your loan officer should be able to answer any questions you have regarding lending, if he or she can't find someone else.

I would recommend you to work with a agent.  Make sure you find a good one thats able to fill your needs, if not, find someone else that can.  
Realtor handles all the paper work and can guide you through the whole process.  If you don't understand something, ask your Realtor.  Realtor is working for you.

Lynn Z · Answer

On a straight sale I would add:
1) Run the idea by your banker. What's the interest rate and terms?  Will he go interest only for 6 months/year.?  Loan fix up money etc. Does he need an appraisal? Most will want 20% down.  Do you have the cash? How much repair does this house need to be lived in/rented?

2) Have a good termite company relationship.  Make that call to have someone crawl the house and see if you have termite damage. It could affect your consideration and amount you're willing to pay.

2) Make it your mission to know who realtors think is a great home inspector and book him immediately.  You have 10 or 11 business days from contract to make demands from the report and most of the good ones are booked.  Make sure they look at the roof or have a roofing contractor look at it for you.

3) In our state you are required to have a disclosure from the owner of the property at the contract signing.  Agents will not provide it often unless told you have to have it.  Mold and other issues are covered on these disclosures.  Even FSBO's are required to produce this document.

4) Make your offer is based on comps and logic.  I don't give more than 24 hours for a counter or call the offer dead.

Ben Larson · Answer

You don't really need to expedite the process.  Usually if there is a decent offer on the table the bank will postpone the auction to see if they can sell it to this new buyer instead of having to foreclose.  If you find a property you want, make an offer, and ask the bank to give you time for your due diligence and to get a loan in place.  They usually won't postpone anything unless you show proof of funds, or a pre-approval.  There's a lot more to the process of working those deals, but that should get you the time you need to close.

Ash Seth · Answer

kenvest - Very informative for newbies... 
Can you suggest the steps for Pre-Forclosures those are near to auction date? Also if auction is due in next 2 weeks how can I expedite the process assuming owner is willing to work with me.

Thanks.
Seth

Ken Mitchell · Answer

to my knowldege, you can't stall the proceedings before the auction usless you arrange payment.

you can, in NC, stall the proceedings once the foreclosure goes to auction.  We have a 10 day upset peroid on each bid meaning if you go to auction and submitt the high bid, you still have a 10 day upset period to wait through before you are designated the winner of the auction.

to keep the property tied up, all you do is just keep upsetting your own bid.  there is no limitation to my knowledge of how long you can keep this up so you could tie up a property for 20 years i guess.

the only catch, each bid requires a 5% deposit.  once the home is sold and the foreclosure is satisfied, you get your deposit back.

Ken Mitchell · Answer

1.  find a lender and understand what they will require on the contract.  meaning...contingencies and time needed to process loan..

2.  find property, run comps, pull tax roles to see if there could be any equity in it before wasting your time.

3.  call listing party to schedule a showing, ask them why they are selling, ask them if they feel it needs repairs, how long it will take them to close, are all parties on the title located and getting along well enough to meet at the closing table, ask them if they have any inspection reports or if the proeprty has a termite bond, get ALL the listing parties contact info.

4.  view property, formulate a rehab budget, re-examine comps based on what you've seen.

5.  offer on property.  in NC we use a standardized "offer to purchase" contract which will eventually become the sales contract once it has been negotiated out and all parties sign it.  Make sure all contingencies and closing period needed by your lender are accounted for before presenting the contract.  This can be done from the car if you are so equipped....

6.  negotiate contract and after all parties are good with the terms, make sure you can still read the contract as they can get a little fuzzy if they've been faxed back and forth several times.

7.  deliver your original copy of the contract to your closing attorney so they can do title work and schedule closing.  deliver the earnest check to the attorney at this time and send a copy of the check and the attorney's acknowledgement that they reciecved it to the listing party.

8.  immediately call your lender and give them the contact info needed to schdule their required operations.  they will probably insist on using their approved inspectors and appraisers.

9.  call everyone daily to insure everything is going as planned.

10.  use the information found during inspections and appraisal to renegotiate the contract if you need to in order to meet your contingency requirements.

11.  meet all parties at the attorney's office and close the deal.

12.  the closing attorney records the deed.  DON'T DO ANYTHING TO THE PROPERTY UNTIL THE DEED IS RECORDED BECAUSE IT ISN'T YOURS UNTIL THIS IS DONE!!!

I'm sure i left something out but i'm sure someone will chime in...