Q: What is the first thing I should do while considering purchasing a home?
Contact a lender. Talk to your local family or friends, check around at work. Does anyone you know have a lender they would recommend? Word of mouth referral is a great way to begin the process of purchasing a new home. If you come up empty then contact a Realtor for a reference to a lender. Often Realtors have direct experience with a host of lenders and can direct you to the better ones. A lender will be able to prequalify you, which is a critical first step.
Q: Do I have to be prequalified?
The simple answer is yes. Sellers require a prequalification letter with your offer to purchase. So you should have that readily available when it comes time to make an offer. In general it will be a prerequisite to making an offer.
Q: What is prequalification?
Prequalification is a process where a lender collects all of your financial data and can very accurately indicate your ability to obtain a loan. The lender will also be able to indicate the maximum amount of money you will be approved for and the monthly payment associated with that loan.
Q: Do you have the ability to show me a property of interest, even though you are not the listing agent?
Yes, I am able to show you just about any home, new or resale, no matter who the listing broker is. If you see a home advertised in the newspaper, or if you drive by a home that interests you, please call me! If you visit an Open House or a New Home Community, please tell the seller’s agent in the home that I am representing you. Remember, home information is always available to me, even if it is not a Cusick Group listing.
Q: When we find a house we like how do we buy it?
There are many steps involved once you decide to buy. You will need an earnest money check to accompany the Offer to Purchase. This may be in the form of a personal check, or in some cases a certified check. A minimum of 1% of the sales price is deemed adequate in most cases. When your written Offer to Purchase is presented to the seller, he has three choices: 1. accept your offer 2. reject your offer, or 3. make a counteroffer.
Negotiations after the initial written offer are conducted verbally until an agreement is reached. When the seller accepts your offer, or you accept his counteroffer in writing, you have a binding contract for sale on that property. Your earnest money will be deposited in the listing broker’s trust account to be held until closing.
Q: Is it best to make a really low offer at first?
It is important to remember that if you make a low offer on a home and the offer is rejected or countered, another prospective buyer may submit an offer that may be accepted by the seller before you have the opportunity to submit another offer or accept the seller’s counter to your offer. I have even heard of experiences where a buyer made a low offer to the seller, and the seller was insulted and refused to entertain any more offers from the client.