Purchasing your Future Home

You probably have multiple questions and we hope the following information guides you through the process of purchasing your future home.

Personal Counseling

The personal counseling provided by Roy can assist you in meeting your objectives on the purchase of your home. Your future home selection process is all about listening to your needs. We explain the importance of making the right choices today for the future resale of your home. The small difference in your not making the right decisions could mean a significant difference on resale value in the future.  

Each client’s needs vary depending on your personal purchasing wishes and desires. We tailor our service to assist you in meeting those wishes and desires. It’s our wish to satisfy your needs and have you learn and enjoy the process.  

You have a choice of the type of property desired depending on your personal needs and financial objectives and goals. There are typically three types of properties available for purchase. Those experienced purchasers know this is elementary but we wanted to cover the basics. They are: Single family property; Multi family (townhome or condominium) or attached property; and Cluster or Patio homes (detached but small yard). The primary difference between a condominium and a townhome or cluster home is that you are not owner of the land. Owning a condominium, you own a proportionate ownership percentile of the common grounds. If the legal description does call for a Lot and Block number then most likely it is not a Condominium.  

What are your objectives in purchasing the property besides becoming your home? Is it for long term investment purposes, asset accumulation, homeownership enjoyment, and etc? We can help you decide on the type of property to purchase and determine the time frame best suited for you in which to complete the purchase.  

Depending when you last purchased, Lenders today are back to basics. They will process all of your documentation in detail and ask questions. The process now takes about 4-6 weeks to get the formal loan approval once a property has been selected. You can then finance with a Conventional loan and minimum 10% down payment, or FHA financing with only 3.5% down payment using the FHA 203B loan. No down payment programs are still available depending if you are a Doctor, or Professional. Notify Roy and we can connect you with the proper financing.  

Carefully review the funds needed to purchase a property needing repairs. Consider not only the fix up cost but the holding cost until the property becomes habitable for your taste. After completing the repairs list, increase it by 30% for the unknowns. The majority of REO, or Bank owned properties are sold AS IS without the banks providing assistance for repairs. Inspecting the REO gives you a comprehensive plan of items needing immediate attention and those that can wait until after closing.  

All financed properties need an appraisal, and depending on the condition of that property, your finance company may clear you to close or have a condition to repair the property before closing. Some sellers will negotiate those items needing repair in order to close. If the property is bank owned or the seller is a “short sale” (current debt on property exceeds the sales price), there’s a good possibility repairs will not be remediated and you purchase the property as is. Ask your lender about financing specifically for properties needing extensive repairs before writing the offer.  

The best compliment we can receive is for your complete satisfaction in purchasing your home, and reselling your home in the future regardless of the market conditions. It’s all about guiding you to make the right choices today when selecting your future home.

The Offer to Purchase Contract

You’ve identified the right property and now it’s time to write the offer, and communicate it to the Listing Company representing to the seller. Once the seller accepts the offer, we then have a ratified contract to purchase the property. Verbal offers or responses are none binding until all signatures are obtained from all parties to the transaction.  

The "Residential Contract to Buy and Sell Real Estate" is complex and has multiple paragraphs and subparagraphs that all parties comply with to successfully close. Additionally, if the property is bank owned, the Banks will have their own Addendums and Disclosures stating the AS IS clause plus other pertinent information. If Bank or Corporate Relocation owned, the Contract to Purchase is normally modified to incorporate the Bank’s Addendum with its applicable dates and paragraphs. Carefully follow those dates whether normal owner of bank owned in order to comply with the complete Contract. As with any contract, you are advised to seek legal counsel or any other type of counsel before signing the offer. The Colorado Real Estate Commission has promulgated contracts which in most situations are approved by them. None of the Bank Addendums are approved by the CREC, so please use caution. 

Besides discussing the PRICE AND TERMS offered on the contract, let’s review some of the most common questions that I will be asking you.

In completing the contract to purchase, we need your LEGAL NAME as you want it to appear on the title. If purchasing jointly, you will need to decide if you want title as JOINT TENANTS or as TENANTS IN COMMON. Are you purchasing as an LLC, LLP? According to the State of Colorado Real Estate Manual, the following definitions apply for most common types of ownership. Consult your legal counsel before deciding on any type of ownership. 

JOINT TENANCY- is a type of co-ownership of real property, held by two or more persons with all co-owners being equally entitled to the use, enjoyment, control, and possession of the land and right of survivorship. 

TENANTS IN COMMON - is a type of co-ownership of real property; a holding of an estate in land by two or more persons, each being entitled to possession of the property according to his or her proportionate share; distinct from a joint tenancy in that there is no right of survivorship in a tenancy in common. 

Let's discuss the EARNEST MONEY DEPOSIT. The earnest deposit is a consideration of your interest in purchasing the property. Normally the earnest deposit is held in the Listing Brokers' escrow account or Title Company designated by the seller, Bank or Listing Broker until closing. It is then credited to the Purchaser on the closing Settlement forms. If you do not qualify for your loan, or if any of the inspection contingencies are not acceptable to you and you are within the contract dates, then the earnest deposit is refundable. Other purchase contingencies within the body of the contract are there for your benefit, but you need to perform your due diligence on the contract in order to complete the purchase of any property. It is important to also follow the Bank’s Addendums (if applicable) paragraphs and comply with their contingencies.  

The INCLUSIONS that stay with the property are normally noted in the MLS. You can negotiate for items not mentioned in the MLS as included. The seller can obviously decline the additional inclusions not mentioned in the MLS. 

The DATE OF DELIVERY OF DEED is normally the date of closing. Typically, you may close as written on the original offer but it’s not guaranteed. Closing takes place as noted within the contract and or amended or if Bank owned, as per Bank’s Addendum. The type of deed is normally a General Warranty deed or a “Special Warranty” deed if the purchasing a Bank owned or Corporate owned property. We recommend discussing with your attorney the ramifications of the deed received at closing.  

After reviewing the offer, then it’s communicated to the Listing Broker who will then present the offer to the Seller. The response time on the offer varies but normally the sellers respond within 48 hours after submitting the offer, and Banks take from 2-7 days. Please note that the property will still be marketed until the seller responds. You may be countered, acceptance of your offer or rejected. If the property is a good opportunity, don’t be alarmed by multiple offers.

Once the offer is accepted in writing, the property status is changed in the MLS to under contract taking backup contracts.  

There are many more paragraphs and contingencies than those mentioned above that are legally binding on the purchase of your property. Please follow the dates carefully and we can assist you with any questions you may have. If you would like an electronic copy of the Residential Contract to Buy and Sell Real Estate please contact Roy.

 

 

After the Offer is accepted

 

Congratulations, we are half way through the process! Each property and contract specifics vary depending on the circumstances. Please visit my web site, www.roylopez.com and under the “Buyer” tab, please check the “Buyer Closing Guide” for questions you may have after your offer is accepted.

 

We want to thank you for selecting us to assist you

with the purchase of your home!

Your Realtor for Life

Roy Lopez