Start

The process starts with your phone call, Email or walking through the door at our Port Orchard offices.  Our goal is to make the purchase of real property as simple and trouble free as we can.

Initial Interview

The first thing we'll do is sit down and discuss your objectives.  It's important for me to understand your goals, needs, wants, resources and schedule.  At the same time you will become familiar with the current market, including an initial look at what's available in your price range, and the availability of financing and at what cost.

Get Pre-Approval

The first, and possibly the most important, action you will need to take is to contact the lender of your choice and provide financial information to determine the limits of your borrowing power.  I can provide you with a list of lenders that have provided excellent service to other customers, and a list of information you'll need to give them.  Generally, written evidence of income, assets, and liabilities will be required.

Show Property

At this point we'll be ready to head out to tour the area and look in more detail:  inside and out, at the houses you've picked out from the Multiple Listing System.  These days, homebuyers have much more access to information about homes for sale via the Internet.  At first you may have dozens of homes to look at using photos, maps and Virtual Tours.  Then as time goes by there will be new listings that come up periodically.  As you become familiar with the market, you may want to adjust your goals to meet the realities of the market.  We can adjust the MLS search as often and as much as you wish.

Write Offer

When you find the house that will become your next home, it's time to write an offer.  We will use NWMLS Forms to structure a Purchase and Sale Agreement that will give you the best chance of getting the house at the price, terms and conditions you want.  The agreement will be prepared carefully and shouldn't be rushed, but in this market we must make decisions in a timely manner and move quickly towards getting a "Mutually Accepted" agreement.

Negotiate Offer

The offer has no effect until both Buyer and Seller agree to it.  The Seller may agree to the offer or enter into a negotiation process that can involve any aspect of the agreement.

Contract Acceptance

If both parties agree, the Purchase and Sale Agreement is said to be "Signed Around."  At that point the agreement becomes an enforceable contract.

Earnest Money

On contract acceptance the agreed to Earnest Money becomes due, and is processed in accordance with the agreement.  This money is held in Escrow until closing, at which time it is returned to the Buyer.  If the Buyer withdraws from the agreement without "legal excuse" the Earnest Money is paid to the Seller.  We will discuss in detail what constitutes a "legal excuse" to prevent any possibility of forfeiture.

Refer to point B on the graphic.  At this point, two branches of the flow chart are initiated simultaneously.

Inspection

When the Purchase and Sale Agreement is "signed around" one of your first actions will be to arrange an inspection.  Many professional home inspectors are available.  I can provide you with a list, or you can simply find one in the phonebook or online.  During the inspection, the status of the Purchase and Sale Agreement as shown on the MLS becomes STI (Subject To Inspection), and remains in that status until all discrepancies are resolved.  Schedule your inspection a soon as possible and plan to be there for the inspection.  The inspector will provide valuable information about your house and identify any problems that you need to be aware of, or that require corrective action.

Negotiate Work Orders

Discrepancies that are identified during the inspection as requiring corrective action become “work orders” that must be completed to the satisfaction of both parties.  Who does the work and who pays become items of negotiation between Buyer and Seller.  In some cases, the lender may have input into this process because they may require certain repairs to be made.  NWMLS Form 35A or 35B is used for this purpose.

Work Completed

Work should be monitored to insure completion prior to signing.

Re-inspect

In some cases the work will need to be inspected again by the inspector to insure proper completion.  In other cases, the Buyer may inspect to insure satisfaction, or the Licensed Contractor may certify the work.  After the re-inspection, the Inspection Contingency is waived and the status of the sale becomes “Pending”.

Mortgage

Immediately after a “signed around” agreement is reached, the Borrower must initiate action to get the loan to fund the purchase, if not already done.  In most cases, Buyers will have done this in advance and become pre-qualified (talk to a lender and tell them your income, expenses, and total assets) or pre-approved (provide documents to the lender to show your financial condition).  Taking these steps in advance facilitate the purchase and improve your chances of being successful.  While the mortgage is being applied for and processed, you are under a Financing Contingency.  This contingency provides that if you fail (after a good faith effort) to obtain a loan, you may withdraw from the agreement without penalty.  If you get loan approval, the contingency is waived and you can proceed to closing.  This contingency also provides for you to get Homeowners Insurance.

Credit Report

During the mortgage application/approval the lender will run a credit report on the Buyer(s).  Credit history is a big factor in determining the amount you can borrow, the type of loan, and the costs associated with the loan including the interest rate.

Verifications

Prior to final loan approval the lender will verify all information used to substantiate the loan including employment, account balances, and asset ownership.

Appraisal

An important part of the loan approval process is validation of the house value.  The lender will hire a professional appraiser, of their choosing, to conduct a formal appraisal of the property.  A low appraisal can cause adjustments to be made in the agreement, or a second appraisal may be warranted.

Underwriting

The “underwriter” is the person or agency that will fund the loan and have ultimate approval.  In some mortgage companies and banks underwriting can be done “in house”, but in many other cases there are layers of approval such as with FHA, VA, or with FNMA “conforming” loans.

Loan Approval

The process may vary, but ultimately the lender will approve the loan, forward the loan documents, and issue instructions to the Escrow Company to proceed to closing.

Title Search

The loan approval also encompasses verification of Title to insure that the property is not encumbered.  The listing office will provide “Preliminary Title”, but the buyer will share in the cost of hiring a Title Company, obtaining an appropriate title search, and paying for the title insurance.

Title Company

The Title Company is typically a Buyers option; although, it’s not unusual for the Seller to ask a title company for preliminary title and then request that Buyers use the same company.  The title company may also serve as the Escrow Agent, because it’s often easier than using a separate company.

Assemble Papers

The Escrow Agent assembles the documents related to the agreement and manages the signing, closing and recording of the sale.

Closing

In Washington, signing takes place 24 to 48 hours prior to closing.  Following signing of documents by both parties, the documents are recorded, the lender grants final approval, and the deal is closed.

Possession

Once the deal is closed, the new owner may take possession unless some other arrangement has been made.  Possession usually entails the transfer of the keys and the arrival of moving vans.  In every case there is a degree of relief that the process has been successfully concluded.  Hopefully, there is also great happiness and hugs all around.