Deciding To Purchase
Purchasing a property is one of the biggest financial decision you will ever make! Whether this is your first purchase or you are an experienced buyer, this decision must be made carefully and with expert guidance.
Why Do You Want To Buy?
Are you tired of paying rent? Have you decided to pay your own mortgage and not your landlord’s? Have you outgrown your current home? Are you looking for an investment portfolio? Are you looking for a rental property? Would you like to buy on Lake Oswego or the river? Would you rather live in a different area? Do you want to shorten your commute? Having a clear sense of your “WHY” for buying, and our team can help you choose the right property.
Has Your Income Grown?
Property ownership is an excellent investment; whether you are looking for your dream home, a rental property, or to expand your investment portfolio. Owning real estate is one of the least risky ways to build equity and obtain a greater return on your initial investment.
Preparing To Buy
Before you start shopping for your property, it is a good idea to make some preparations.
Build Your Purchase File
A purchase file contains all important financial documents if you will need it to secure financing for your property. The typical file should contain some of the following items:
- Financial statements
- Bank accounts
- Credit cards
- Auto loans
- Recent pay stubs
- Tax returns for two years
- Copies of leases for investment properties
- 401K statements, life insurance, stocks, bonds, and mutual account information
- Check Your Credit Rating
Your credit score will have a huge impact on what type of property you can buy, and what interest rate you will pay. We recommended to check your credit rating with an experienced lender so that we can determine what you can afford. The lender will research your credit ratings from the three credit reporting agencies Equifax, Experian and Trans Union. We will be happy to recommend experienced, knowledgeable lenders in the residential, construction, and commercial and investment real estate fields.
Be Careful With Your Finances
This is not a good time to make sudden career changes or large purchases such as cars, boats or RV’s. You want to approach your property purchase from a position of financial stability. Do not brake any large purchases or move monies to new or “unseasoned” (less then 2 months) accounts.
Choosing The Right Real Estate Professional
Buying a property requires making many important financial decisions, understanding complex issues and completing a lots of paperwork. It helps to have an expert real estate agent in your corner when undertaking such a large complex purchase. Our team can help navigate you through this process. An additional benefit of utilizing our Lake Oswego focused team is we have access to property listings before they hit the market, and in low-inventory climates like today’s market this can be the difference between securing a great home and not.
Here are some factors to consider when choosing your real estate professional
- Look for a full-time agent – one who has experience completing transactions similar to yours.
- Interview a few agents: Are they familiar with the area in which you are interested?
- Ask how much time the agent will have for you, and if they are available at night and on weekends.
- Ask about their credentials and education: A good agent will continually strive to improve and gain knowledge of the latest real estate trends and hold the highest designations in their respective fields of expertise.
- Does the agent return your calls or text messages promptly? Time is money when attempting to buy a property.
- Ask for a list of properties they have sold or a list of references.
- Choose an agent who listens attentively to your needs and concerns. Pick an agent, with whom you feel comfortable.
Time To Go Shopping
Once those preparations are out of the way, it is time to find the right property for you.
Take a Drive
Get to know the Lake Oswego neighborhoods and subdivisions, which interest you. Drive around get a feel for what it would be like to own a property in the area. Start getting a sense of the properties available in those areas.
Drive areas of interest at different times of day to see if there are any factors that will affect your enjoyment like traffic and schools.
Narrow Your Search
Select a few properties that interest you the most and contact us to make appointments to visit them. Ask your real estate agent about the potential long-term resale value of the properties you are considering.
Time to Make an Offer
Once you have picked out the property you want to purchase, we are here to help you make an offer that the seller will accept. A good Broker will investigate the potential costs and expenses associated with the new property. Our goal is to help you draft your offer in a way that gives you the advantage over another offer.
Inspections and Appraisals
Keep written records of everything. For the sake of clarity, it will be extremely useful to transcribe all verbal agreements including counter-offers and addendums and to convert them into written agreements to be signed by both parties. We will assist you in drafting all the paperwork for your purchase and make sure that you have copies of everything.
Stick to the schedule
Now that you have chosen your offer, you and the seller will be given a timeline to mark every stage in the process of closing the real estate contract. Meeting the requirements on time ensures a smoother flow of negotiations so that each party involved is not in breach of their agreements. During the process, we will keep you constantly updated, so you will always be prepared for the next step.
The Closing Agent
A title company will be selected as a closing agent. The closing agent is a neutral third party that will hold the deposit in escrow and will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to restrictions which limit various activities such as a building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use your property.
How to Hold Title?
You may wish to consult an attorney or tax advisor on the best way to hold the title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon the death of the title holder.
Once your offer is accepted by the seller, you will need to have a licensed property inspector inspect the property within the time frame that was agreed upon in the effective contract to purchase. You may elect to have different inspectors inspect the property if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). We can recommend several fantastic inspectors.
Depending on the outcome of these inspections, one of two things may happen:
1. Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the close, or
2. The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of the contract (usually the price or repairs).
Appraisal and Lending
It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time.
If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around for insurance. You can also save money with these tips.
We will be happy to recommend experienced knowledgeable insurance agents for every property type.
If you have come this far, then this means that it is almost time for congratulations, but not yet. Do not forget to tie up these loose ends.
Home Services and Utilities
We will provide a list of useful numbers for the activation of home services and utilities after the closing occurs.
We are ready to assist you should an unforeseen glitch pop up, even at this last stage. Something at the property breaks down, or some other minor detail – no need to worry. We have encountered these problems before so we know how to handle them efficiently and in a stress-free manor.
The closing agent will furnish all parties involved with a settlement statement, which summarizes and details the financial transactions enacted in the process. You and the seller(s) will sign this statement, as well as the closing agent, certifying its accuracy. If you are obtaining financing, you will have to sign all pertinent documentation required by the lending institution. If you are unable to attend the scheduled closing, arrangements can be made depending on the circumstances and the notice that we receive. If you are bringing funds to the transaction, you can elect to either have the funds wired electronically into the closing agent’s escrow account, or bring a certified bank check to the closing in the amount specified on the settlement statement.