The Buying Process

 

The Buying Process: 

Finding the properties:

 

As you know, the best ways to locate properties is on the internet and below are a couple of my web sites to help in your search.  These web sites are updated from the local MLS every 2 hours.  The MLS is the way we market properties here.  Each realtor lists his or her properties on this central system so every other realtor can locate them and sell them to their prospective clients.  In most though not all cases one realtor lists the property for a selling client and another realtor will bring a buying client to purchase it.  The commission is usually paid by the seller and is split between the selling agent and the buying agent.  There are many web sites to locate property through the MLS and I recommend these two:

 

www.steveproperty.com  and www.mypropertysearch.net  

 

Making an offer:

 

The offer is made with an approved contract, a sample is included in this package.  The offer almost always will include your proof of funds which is a copy of your bank statement and a copy of your earnest money or escrow deposit check, samples of these are incosed.  Because we have so many different sellers, Banks, Short Sales and regular sellers, the process for negotiating can be quite different as well.  Banks don’t negotiate at all usually, they collect offers and then announce we have multiple offers so give us your highest and best offer by noon tomorrow. They may have multiple offers and they may not but we don’t get to see what the other offers are we just send in our best shot.  You may need to send in several offers on different properties before you get a bank owned house under contract.

 

The short sale is quite different in that you are sending an offer to the seller and the seller has to get the bank to agree to take less for the property then the seller owes the bank.  Here you are basically dealing with the bank to accept your offer and they look at  the market value of the property and what cost it is to foreclose on the home to determine if they should accept the offer.  On a short sale your offer needs to be close to market value in order to even be considered and the process could take 3-6 months or longer.  The short sale process is long but you can get some excellent deals because there is less competition on these properties because a lot investors do not want to wait for bank approval.

 

Every now and then you will actually run across a regular sale from an individual selling their own property.  These properties you can actually negotiate with a seller and maybe even get the property under market value.

 

Offer accepted:

 

Once your offer is accepted we have a contract and will want to do our due diligence in checking out the property.  We will have about 10 days to do an inspection on the property to determine if it is worth the price we offered and it is the period of time you can back out of the contract if you need to.  This period of time is very important to check out everything you have not done before making your offer, termite, repairs, construction problems and anything else. Once you’ve determined you want the property at the agreed price it, the contract goes to the title company for closing.  The title company facilitates the closing by arranging title insurance, checking there are no leans on the property and that you will receive a marketable title.  The cost for the title insurance and most of the closing costs are customarily paid for by the seller although this does change with some banks as the seller.  The title insurance is for your benefit and will protect you for some items that may have been missed while checking that you have a free and clear title on the property.  Once all the paperwork is done and the title is clear we can close.  Closing can take place by email in most cases and usually does not require a notary for your signature.  All paperwork and signatures and funds being wired need to be done by the closing date.

 

This was a short summery of a complex process and can vary with each sale depending on the title company used and the sellers condition of the sale.  Banks will always have an addendum that will go with the contract and it basically says that the seller never lived in the property and knows nothing about the property.  Some homes also will only look at owner occupied offers for a period of time when the listing comes out and after this period they will consider investor and second home buyers.

 

Once you’re closed on your property you move on to repairs and getting a tenant in place so the cash starts flowing in.