Here are the most common steps in a home purchase. Remember these are just rules
of thumb. Your sales associate will help you negotiate the offer that is most appropriate for your situation. It is important to
keep in mind that not every transaction will require each one of the steps below.
Home inspection - A licensed, independent home inspector conducts a home
inspection. The inspector's job is to find any visible defects in the house or on the property. The home inspector reviews the
home for major structural, mechanical or other defects.
Pest Inspection - While a home inspector will generally look for evidence of
wood boring insects, they are usually not experts, and thus, if you are concerned there may be a history or you want to ensure
there hasn't been past activity, you would hire a Pest Inspector.
Radon Inspection - Radon is an invisible, carcinogenic gas that is emitted
from the ground. A radon inspection will test for radon levels above the safe, allowable amount.
Lead Paint Inspection - You have the option to inspect for the presence of
lead based paint. For properties built prior to 1978, a lead paint test would be advised if a child under the age of 6 will be
Environment Inspection (21E) - There may be reason, due to history, to test
the soil the home is built on for any hazardous contaminants.
Title V - Septic Tank Certification - This is performed when purchasing a
single family or multifamily home that has a septic system on the property.
Review Leases (if applicable) - When buying investment property for income
purposes, you should review the leases that are in place.
Review Cash Receipts (if applicable) - Also for an investment property, you
want to ensure that not only are there valid leases in place, but that the tenants have paid rent on time.
Satisfactory Review of Condominium Documents - When buying a condominium, you
always want to review the condominium documents including the master deed and declaration of trust, any rules and regulations,
financial statements, minutes to condo association meetings (if available) and any accountant audits or reports (if available).
Execute a Purchase and Sale Agreement - After the buyer has performed due
diligence and inspections, you will sign a second, more detailed contract called the Purchase and Sale Agreement. The buyer
usually makes an additional deposit upon the execution of this agreement. The additional deposit is a confidence booster to the
seller because it indicates that the buyer remains committed to purchasing the property assuming they are approved for a
mortgage, and the there is a clean title to the property. The total deposits represent the buyers risk in the event they breach
Appraisal - Because the mortgage lender is usually taking the vast
majority of the risk, they will perform an appraisal of value to protect against overpaying. Appraisal laws have changed
dramatically and there are constantly many new wrinkles added. Your sales associate and mortgage lender should be up to date with
these changes and able to guide you through this maze.
Mortgage Contingency/Commitment from Lender - A pre-approval letter is
not a formal commitment from a bank. After verifying all of the buyer's information including income, employment, assets,
liabilities, the value of the property, etc., the bank will issue the buyer a formal commitment letter. In the event the lender
rejects their application for a mortgage, the buyer, on or before the date indicated in the Offer to Purchase and later in the
Purchase and Sale Agreement, may withdraw from the transaction and have all deposits returned. There are many more details that
need to be followed to ensure the buyer receives either a timely commitment letter or a rejection letter on or before the
mortgage contingency date. Your sales associate can advise you on the proper steps to take.
Title Search - A search of the property’s title history will be run to
ensure that there are no encumbrances or liens on the property that may prevent the seller from selling the property with a clean
title. The mortgage lender, before loaning the money, wants to ensure that title insurance can be taken out on the property.
Final Walk Through - Before the walk through, the buyer may want to
perform a final walk through of the property to inspect it one last time and make sure that any items that were supposed to be
fixed or removed have been. The buyer will want to test the systems one final time to make sure nothing has changed since the
home inspection and the last time the buyer has been in the home.
Closing - You're finally there. The buyer signs the majority of the
documentation, and the sale needs to be recorded at the Registry of Deeds in the county in which the property is located.
Ask your Unlimited Sotheby’s International Realty sales associate to explain the entire home buying process to