Home Buying Steps

WHAT IS THE PROCESS OF BUYING A CHARLOTTESVILLE VIRGINIA HOME?

It’s not just first time buyers who can become overwhelmed with the process of buying a home. If you haven’t purchased a home recently, this might give you a refresher of exactly what steps will be necessary to purchase a Charlottesville Virginia home, and in what order they are likely to occur.

Here’s a Chart of Steps to Buy a Home

It may seem daunting but in fact it’s generally quite orderly, and you can relax knowing that I will carefully guide you through the whole process. You don’t need to memorize this information.

It’s my job to prepare you for each step of the way. But it also helps to have a roadmap of our journey together in advance. This lengthy article is meant to give you the details of what will happen on your way to buying a home in Central VA.

So How Do I Begin?

Our steps begin with an initial meeting between you and me. Ideally we may have already corresponded via text, phone, or email prior to our meeting. It’s not a long meeting, usually less than an hour.

Together we exchange information to put us on the same page as we begin your home search.

I Need to Learn Your Goals and Wish List

I will learn what your goals and preferences may be … your timing, Wish List property detail preferences, and needs. I will learn from you what I can do for you to facilitate your property searches in the future. Whether you’re being transferred to our Charlottesville area and you need a home immediately, or whether you are pre-planning for your Virginia retirement years in advance – – we still need to have a common understanding of your overall plan in order to move forward together.

During our meeting I will also give you some printed information that you can review at your leisure. It differs with each client’s needs, so I may have a list of suggested properties to visit or some area information or school information… whatever you want. And I’ll also take advantage of this initial meeting to share with you how I go about advocating on behalf of my buyer clients throughout the purchase process. You’ll know what to expect from me and you’ll also know what I will need from you to make our search most successful.

Why Do We Meet at Your Real Estate Office?

Most often this initial meeting will take place at our company office.  Meeting at the office has several advantages over meeting at a property for the first time. This allows us to have access to computers and large screens if we want review properties together.

It allows your kids to take a bathroom break before we head out to see homes in person.

It allows us to exchange information simply by using a copy machine. And it also provides an address that’s easily found by GPS if this is your first visit to the Central VA area.

What If I Need To Meet Somewhere Else?

Of course there are times when meeting at our Charlottesville real estate office is not expedient. It might make a lot more sense for us to meet at another public accommodation first (coffee shop, whatever) because our plans will take us to a different region than Charlottesville. And especially regarding farms, rural properties, and estates… we may need to “meet in the middle” as the best plan.

You need to be aware that if “meeting in the middle” involves meeting at a property that you intend to preview in person… usually those plans must be made well in advance of your arrival.  Many homeowners require advanced notice of visits, often 24 hour notice or even more. Those appointments are very important not only for you but also for the sellers, and it’s critical that we arrive on time and behave with courtesy.  Most often the owners will excuse themselves from the property while we have an opportunity to preview things together.

Why Would I Need An Appointment To See a Home?

Among the most disruptive things that can happen, is if a buyer does not arrive for a pre-planned appointment with the seller.  Think about it.  The seller wants you to see his/her property in the best possible condition.  They may freshly mow the grass or arrange flowers in a centerpiece… some sellers even bake cookies for you to enjoy during your visit!  In some cases the seller needs to pack up the kids, grandma, the dog, and other equipment to leave the property in order for you to have total privacy during your viewing.  You can imagine the language they use to describe the rudeness of a buyer who fails to show up at an appointment after the seller has gone to all that effort.   We don’t do that.   Bad dog.   No biscuit.

As you know, most people (over 90%) begin their property searches online.  By the time you contact a realtor, you are often very familiar with the real estate that’s available in the area. That’s great. It shortens the learning curve as we target properties together that will suit you. But the process of previewing homes in person can take on many different purposes depending on your timing and your needs and goals.

What If I Don’t Plan To Buy Right Away?

For instance, I work with many clients who are in the early stages of planning for a retirement that is still years in the future. If you think it seems odd to look for homes that far in advance… actually it’s quite reasonable. These folks (I affectionately refer to them as my “pre-tirees”) begin by comparing geographical regions of the country, and they need to know if Charlottesville and Central Virginia will be a good fit for their retirement. In those circumstances, our schedule of previewing may be a bit different.

Can You Help Me Learn About The Area First?

One main criteria that I’ve learned: if you don’t like the Charlottesville or Central VA region, it doesn’t matter what properties I show you.  You will choose a Charlottesville home only if you know enough about the area to determine that the Charlottesville region has value to you.  So my pre-tirees and I often do a quick tour around town before we see specific homes.  Then our subsequent interactions in future months will likely include me sending them alerts as new properties come on the market – or if there are price reductions – so they can update me on their possible plans.

I Need To Find A Charlottesville Home Fast!

The other end of the spectrum is an instance of a buyer who is being hired immediately by Charlottesville’s University of Virginia (UVa) and he needs to find a home and he needs it fast. We will likely begin immediately by previewing any favorites that he has selected, and we’ll devote a couple of days together with intensive touring and previews until he feels comfortable in making an offer on a property.

Do I Need To Do Anything Before I Look At Homes?

But if you refer to the chart at the top, you’ll see there is a step before our UVa guy is able to make any offers.  It’s the “pre-approval” step if he intends to get a mortgage for his purchase.  In order to be able to make timely offers when the right home is on the market, our clients will have already arranged for a local lending institution to provide them with a “pre-approval’ letter that we will then submit to a seller with any offer.  It is not a final loan approval.

Is A Pre-Approval A Commitment?

Instead, a lender pre=approval assures the seller that a credible lender deems the buyer potentially capable of making an offer on a property at that price point.  The lender checks the buyer’s credit scores, debts, and a quick view of the buyer’s overall financial state.  We keep that letter handy so we can make offers the same day we see the right property. Later on the lender investigates things more closely but at this stage, a pre-approval letter suffices.  If a buyer should happen to receive a pre-approval letter based on his financial abilities on a particular day… but that buyer goes out to purchase a boat and a motorcycle before the final loan approval… his financial status could change drastically and could prevent him from proceeding with the final loan. Moral: don’t get a loan on a boat right before you mortgage a home.

Why Do You Recommend A Local Lender?

Generally we recommend that you work with some kind of local lender.  It could be a branch of a large national bank like Bank of America, or small local bank.  I can supply you with a list of lenders that you can choose. There’s a reason why we recommend “local”.  There are times when clients prefer to use lenders with whom they have a previous relationship and of course that’s fine.  However, if there is any kind of snag in the process…. paperwork delayed, phone calls unreturned, misstatements, anything … I have no more leverage working with an out of town lender than you do.  If they won’t return your calls or if they won’t process your paperwork on time for you… they likely won’t do it for me either.  If you choose someone local there’s at least a chance that I can march into their office and get better service on your behalf. It shouldn’t be this way but unfortunately, occasionally it is.

Let’s Go. Show Me Some Homes.

Okay, let’s move along to the fun part. Let’s go see your favorite homes.  Not only can I show you homes that are listed by any realtor within our own Charlottesville Area Association of Realtors (CAAR) MLS … and we have thousands of realtors with listings… I can also make arrangements for you to preview homes that are For sale By Owner if any of those fit your criteria.   When you are my client I want you to have full service.

I Might Want To Build a New Home. Can You Still Help Me?

One of my specialties regarding full service is working with the Charlottesville area builders of new homes.  I’ve worked with many of our builders so I’m familiar with their inventory of floor plans and their products.  I mention this because although you will find to-be-built homes listed on our CAAR multiple listing service (those are the homes whose status is listed as “PRDET”) there are other new construction options available as well.  Most builders have a variety of floor plans that can be built in various neighborhoods and communities, so as a result they will list a sampling on the MLS but there are many more options available as well. And of course I also can guide you to appropriate architects who can design a custom home for you to your preferences on a property of your choice.  If you start the custom home process from scratch we will begin by finding a suitable lot or property, then we’ll engage the architect to make your ideas and dreams come true.  In any case I may be able to guide you to more “new” construction options available than what might be readily seen online.

Do You Know of Homes That Aren’t On The Market Yet?

In addition, I am often aware of additional properties that might suit you even if it’s not new construction that’s your goal. Very often realtors in our area share information to brief each other about estates, farms, or homes that are about to be listed but are not yet on the MLS. If another agent knows that I have a client (I might share that information by keeping my client’s identity anonymous) who is looking for a farm with more than 200 acres and they have a farm matching that description that’s about to come on the market, I may receive a little heads-up to let me know. It helps both buyer and seller to make every effort to connect them when the details match.

Are You Friendly With Other Realtors?

I should mention a side note on the manner in which I interact with my colleagues. Often the public perceives realtors as being fierce combative competitors, a perception that is unfortunately reinforced by the behaviors of a few agents. I see my colleagues as my allies in helping you to find your home. I make every effort to network with other realtors and to stay involved in the business of real estate at our local association, because it’s been proven to me that maintaining healthy working relationships and communication with my peers… is also in the best interest of my clients. Cooperation is the basis for allowing for-sale listings to be shared via the IDX system that’s the foundation of all real estate sites.

I Like This Home. How Do I Make An Offer?

So.  Now we’ve looked at your favorite homes and you’re ready to make an offer on one.  I will prepare a contract Offer To Purchase for you and together we will fill in the terms, price, dates etc that you want to have.  I will then present your offer to the seller’s own realtor agent.  Unless it’s a FSBO home, I deal with the other agent and not the seller.  That’s why the seller hired his own agent to represent him, thus the term ‘agent’.  It’s my duty to convey to you everything that I am told or that I learn about your upcoming transaction.  Our offer will have a rather quick response deadline for the seller to reply.  If we receive an acceptance, you’re on your way to the next step of inspections etc.  But very often what we receive instead is a counteroffer.

Do Sellers Want To Negotiate My Offer?

Without getting all legalese on you, a counteroffer can trigger a negotiation of the terms between you and the seller.  You might have offered $2X and the seller wants $2.5X.   You might want to move in by X month but the seller wants to close by Y month.  It’s a back and forth, conducted in writing to make it legally enforceable.  So let’s say that we’ve negotiated an agreement and now you officially have a contract with the seller.  The terms of that contract become the guiding light for subsequent actions and for that reason we are very careful to receive acceptable terms for you before the contract is finalized.  After everyone has signed the contract agreement, we can’t just say.. “oops I changed my mind.”

What is Earnest Money and What is Escrow?

You will also likely need to provide some “earnest money” to the sellers,  which is a partial pre-payment check that is held in an escrow account and then applied to your purchase price at closing.  It is the seller’s assurance that you are serious about your offer.  I will guide you about what is appropriate for the property you’ve chosen.  And in cases of multiple offers on the same property, sellers may judge the winner by the escrow amount (though there are likely more important considerations to a seller than escrow amount, in regards to the contract terms).

I’ve Got a Contract Agreement! Now What Do I Do?

The next steps begin to happen very quickly and some of them happen simultaneously.  It will be time for you to get a final approval letter from your lender.  Only after you have chosen a specific property can the lender give you a final loan approval.  At the same time we will need to follow the terms of your contract regarding the timing of any inspections you may have requested.  Inspections (or corresponding Study Periods) have an orchestrated procedure to them by terms of the contract, a sort of inspections dance, if you will.  We do this.  They do that.  Here’s a link to a thorough description of the Inspections and Study Period process as they affect transactions in our area of Charlottesville and Central Virginia.

What Will My Lender Need to Give Final Loan Approval?

The lender will be working to complete your final approval and you will likely need to provide the lender with requested evidence of your financial condition. Then the lender will arrange for the property to be appraised to verify that it is worth the amount of the loan you want.  So it’s a 2-part process: (1) you need to be able to purchase this particular home, and (2) this particular home has to be worth the price you want to pay.  In circumstances where a loan appraisal does not support the terms of the purchase price, we may be able to assist you with some workarounds that such as negotiate to have the seller reduce the price, or perhaps work through another lender to find better terms.

What Can Go Wrong?

It’s at approximately this point in the purchase process where nerves might begin to fray for both buyer and seller.  Moving companies are hired, boxes packed, lives disrupted.  We know that it’s possible for otherwise perfectly lovely people to begin arguing about the chandelier or the water bottles in the garage.

It happens.  Think: brides.

No one means to be on edge but the whole process is coming to a head and both sides want to make sure they’ve done everything right.

Sold! How Home Settlement Closings Are Unique in Charlottesville

And then almost before you know it, it’s time for you to have a settlement (closing) on your new home. Closings are handled differently in various regions of Virginia, but the most common closing on homes in the Charlottesville area is handled by an attorney or a title company. Unlike other parts of Virginia, buyers in Charlottesville most likely have their own closing attorney and the sellers have a different attorney for their closing. Both sides rarely sit around a big table and exchange keys as is done elsewhere. In fact, the seller may complete his closing paperwork on one day and the buyer may conduct his closing on a different day in a different town. The property is considered ‘sold’ and keys are exchanged after the last party has a closing settlement and the loan money is verified to be transferred and applied to the sale.

Do You Guide Me Through The Home Buying or Selling Process?

Along the way I will work closely with you at every step. My roles vary. Because I am a native of Charlottesville and Central VA, I can match my clientele’s needs with the nuances of our local neighborhoods… I can point out your advantages and maximize them when it’s time to sell your home.

In addition to providing ongoing market information so that you’ll know what’s going on around you, I can recommend professionals to assist with the necessary appraisals, inspections, etc. I am qualified to give you an independent opinion on ways to stage a for-sale property so that it shows its best when buyers visit.

My goal is to have a successful business relationship with you (a working relationship that often turns into a personal friendship with many of my clients). You can tell it’s important to me that you understand every aspect of buying your new property or home.

Hooray. That was easy, wasn’t it?