Jan. 15, 2020
Buying a Home Without a Realtor
Do you really think you need a real estate agent to buy a home? Is it possible without one, but is it a wise move?
Here is the process you will need to know to buy a home without a real estate agent.
Step 1: Apply for A Mortgage
You will need to get approved for a loan, so that you know how much you can afford. You do not want to shop for homes that are outside of your budget. It all shows sellers that you are serious about buying and that your financing will not fall through.
Step 2: Research the Neighborhood
Know what's in and around the neighborhood. How are the schools rated? How far away is your commute? What are the homes selling for in the neighborhood?
Step 3: Find a property
Now that you know all about the neighborhood and what homes are selling for, it's time to start looking for that home. Look for homes that are in your budget and know if that home is priced correctly. There are lots of ways that you can find a home. So, search the internet. Make sure that you can see the home before you make an offer. Schedule with the listing agent or the home seller. (If the seller does have the home listed with an agent, know that that agent is representing that seller and not you.) You need to know the condition of the property and know what's included with the sale.
Step 4: Ask for Seller's Disclosures
Sellers need to disclose any known issues with the home. You also need to know if the sellers have done any remodeling. Here are some other seller's disclosures that you need to know.
· Plumbing heating or electrical issues
· Structural issues
· Any lead-based paint or asbestos
· History of damage from termites or wood boring insects
· Toxins in the soil
· Mold and water damage
· Structural issues draining issues
· Roof issues or Repairs
The seller is responsible to tell you about any issues that they are aware of. You also need to know of any county or city disclosures. There may also be county or city government retrofit standards that have to be done when a house is transferred. Like gas retrofit valves or sidewalk inspections or Sewer Lateral inspections. So do your research!
Step 5: Making the Offer
Now you found the home it's time to make an offer. You need to decide how much to write the offer on the home and it sometimes can be tricky depending on the prices of homes in the area, how long they have been on the market and the home's condition. After deciding how much you want to offer…you can now write your offer. Here are some things that you should include with the letter. (Know that most lenders will only except an contract on a legal contract form.)
· The full address of the home including the APN number.
· Your full legal name and anybody else buying the home with you
· How much you are going to offer for the home
· Your earnest money deposit amount
· How much you are going to finance
· How much of a down payment you are putting down
· Who pays for title, escrow, etc.
· Any contingencies that you are requesting. (Things that might need to be completed before the sale is done. Appraisal, inspections, and full loan approval.)
· Any seller concessions you might be requesting.
· Items you want to include in the sale like, appliances or window coverings
· The date you would like for the seller to respond to your offer
· The date you expect to close
· The date you would like to move in
· The time you will get the keys
· You also might get a counter offer so, be ready to negotiate!
Step 6: Hire a Lawyer, Home Inspector and Termite Inspector
You want to think about getting a home inspection and a termite inspection. They're usually not required by your lender, but you do not want to have any hidden issues that the seller might not know about. (Some Loans do require a termite inspection and repairs.) These inspections should cover plumbing, appliances, structure, HVAC system and you may even want to consider getting a roof inspection.
Even though California is not an attorney closing state, you might want to hire a lawyer to finalize the sale of your home. You will need a lawyer so they can help you with any paperwork and any legal Gray areas that might arise.
Step 7: Negotiation
After you have any inspections and have all the disclosures you need, you might want to ask for repairs. You can ask the seller to repair any items before the home closes. You can also ask for credits towards your closing costs, so that you can get the repairs done after you move in.
If there are too many issues with the home and you cannot reach an agreement, you can always cancel the sale.
Make sure you keep all negotiations in writing and keep all records of emails between you and the seller.
Step 8: Finalize the Financing and Close on Your Home
When you reach an agreement with the seller, you will need to open escrow at a title company. You will also need to make sure that all parties have a copy of the contract so that the lender can work on your loan. The title company will do the final paperwork in transferring the home into your ownership at time of close.
A lot of times people find all of this, a lot of headache and work since they do not buy and sell homes very often and do not know the current laws. Make sure you do your due diligence. Remember your home is usually the largest asset you have… you can always hire a real estate professional to do all of this for you. We are trained, licensed by the state and REALTOR’s are held to a higher ethical standard than Licensed agents.