1. Find a lender, and get pre-approved

2. Find a property with your agent that fits your needs/wants, hopes/dreams! And we write up a Real Estate Purchase Contract; we frequently refer to it as the "REPC" 

• The Real Estate Purchase Contract (REPC) is where we state the conditions for your purchase of the property/home. Decisions to be made in the REPC are: 
  • Purchase Price (total amount you're offering) this includes:

1. • • Earnest Money - you can think of this as a sort of "downpayment" it's held in a Trust account, and this amount is applied to the purchase price at closing. This becomes non-refundable once your Due Diligence Deadline*  and Financing & Appraisal Deadline* pass (explained below) 
     • Cash to Close- how much cash you'll pay at closing, outside of your loan. 
     • Loan Amount. This is the amount coming from your lender. 
   • For homes, will you ask for the seller to purchase a Home Warranty Plan? (For one year, the home warranty plan will cover the cost if appliances need repair, etc.)
   • DEADLINES;  YOU select the dates for each of the following four deadlines to work around your plans and schedule. 
     • (A) Seller Disclosures Deadline where the seller tells you every known defect, and the Title Co. does a "Preliminary Title Report" which will show a lot of of info on the property such as (but not limited to): if there are any liens against the property, if the seller is the true owner of the property and can therefor convey/sell it to you, and if there are any easements through the property (roads to other properties, generally). The Title Co. will run a final report prior to closing to make sure there are no changes nor liens, etc. There are some fees paid to the Title Co. at closing for their services. 
     • (B) *Due Diligence Deadline* This is where you do any and all investigation into the home/property to make sure it's what you want. You as the buyer are responsible for paying for inspections and other reports during this time period. We encourage people that it's worth spending the money to investigate the property thoroughly. 
       • If it's a home, you would want to have a home inspection done to check for any defects in the property. The inspector checks items such as roof, foundation, improvements, appliances, termites.... etc. 
       • For land, check with the governing office (either city or county) to verify the cost for impact fees. You will also be checking on the cost for utilities. We always recommend you doing a Percolation Test as well as Soils Analysis. (This tests for water run-off, the leach field for your septic system, and making sure there's no expansive soils under your future home site. This is an important step.) Percolation Test is required for a septic system installation. We can provide you with references for engineering contacts.
       • Finally, if the results are not satisfactory, this is the time period for you to cancel and get your earnest money returned to you. So, you can think of Due Diligence as an escape route if needed. 
     • (C) *Financing and Appraisal Deadline* The lender will order an appraisal (paid for by you). Essentially, the lender is making sure the home/property is being sold at market value.
       • The appraiser compares the purchase price in your REPC with similar properties that have closed recently. (Square footage of the home, lot size, year built, construction type, etc.) 
       • If the appraisal comes in under purchase price, the lender will ONLY loan on the appraised value of the home. If the appraisal comes in OVER purchase price, then there's already built-in equity in the home. 
       • The appraisal is confidential and the seller will not see it. If the Appraisal is lower than purchase price, you are not obligated to buy a home you cannot get an adequate loan for. 
     • (D) Settlement Deadline This is the deadline when the loan is released to the Title Co. The buyer and seller sign documents transferring ownership, and once it's formally recorded, you get the keys to your new place! (Oftentimes there could be a delay between settlement and recording. This hinges on the funds being received by title before a cutoff time for recording at the recorder's office).