The Buying Process in Greenwich, CT
The following is intended as a guide to help you determine the steps that you might need to consider during the process of buying a home in Greenwich, CT. All items mentioned are not necessarily required for all home purchases (e.g. a well inspection would not be necessary on a home which is serviced by the public utility water company).
Selecting a Real Estate Agent
The most important decision you make. You need to select an agent who is experienced and has intimate knowledge about the local area, inventory of properties - both active and sold, has experienced negotiation skills and is respected by their peers. The only way for you to obtain this type of information is to interview an agent. Just like you would for any professional you would hire to represent you. Don’t just take a friend or family’s recommendation, do you own due diligence. You are making an investment in one of the biggest asset you might ever buy. Just as you would do if you were going to list your home for sale, you want to speak with several agents to understand their level of training, education and experience and see if you have matching philosophies. When you do select the right agent, they will request that you sign a Buyer Representation Agreement. Connecticut state agency laws requires that this document be signed by a buyer prior to a real estate agent showing a property. This document can specify any period of time (even one day), for one house or to identify the market area they will show you. Review this document with the agent prior to signing it.
Do Your Homework
Get a solid understanding of the price range and areas you want to see, not simply in terms of real estate, but also the quality of life issues. Determine what a community has of importance to you, not only from an initial purchase perspective but also from a re-sale standpoint. There is nothing worse than finding your dream home then spending the rest of your life wishing you had bought somewhere else. If your agent isn’t telling you why this home might not be the right choice for you there are many others that will. If you find you know more than the agent you are working with – find a new agent to work with. There are some great Realtors® out there - keep questioning them until you find the right one for you. By focusing on these types of items early in your search you will make the rest of the process that much more enjoyable and satisfying.
One of the most important things you can do when looking for a home. Early contact with a mortgage lender or banking institution can set the groundwork for a successful purchase process. Initial dialogue will identify the financial parameters within which you will need to stay. Further understanding of your financial situation will allow the lender to issue you a pre-approval letter, not a pre-qualification letter, which stipulates that you have been approved for a mortgage up to a specific dollar value. This is an invaluable asset during the negotiation process. Your real estate agent should be able to provide you with names of lenders (banks, mortgage brokers and mortgage bankers) should you need them. It is important to speak to a number of lenders to make sure you are getting the best mortgage product for you.
Finding the Right Property
The search portion of the process is a joint effort between you and your real estate agent. You must communicate clearly to your agent what it is that you like and what it is that you do not like in the home you wish to buy. Between your input and your agents professional skills, the search will narrow until are ultimately presented with the right property. The only comment that can be made here is that, all too often, a person's desires do not always equate to what it is that they purchase. Focus on your needs not your wants. Remember that it is through the efforts of both you and your agent that the right property will be found. A seasoned agent should not only make you think about how a property suits you now, but also challenge you to think about how you might use it in the future. Is this a home something you can stay in as your family expands or contracts or will you need to move from this property to meet your future needs? Don’t get caught up in the emotions of the transaction – THINK before you ACT.
Preparing to Make an Offer
Once you have narrowed your search, or started to focus on one or two properties, your agent will be able to provide you with historical market data and recently sold properties. This information will assist you in being better prepared and more knowledgeable when it comes time to formulate your offer strategy. By working with your agent, you will be able to determine where you would initially like to start with your initial offer. You should then develop a set of strategies, each dependent upon how the seller responds to your offer. In this way you are prepared to respond to the counter offer by the seller. It is very important to remember an offer is not only about the price, the other terms are equally as important.
It may include, but it not limited to, the following:
The offering price (including mortgage contingency requirements, amount of your mortgage and date by which you will receive a written commitment from a lender – the loan to value.
The closing date upon which you will take title and ownership of the property.
Inspection contingencies (building, radon, termite, lead paint, well, septic, survey, pool, tennis court,
electronics in the home, etc), each must have a completion date associated with it.
Other contingencies that should be included in the offer and dates, if appropriate.
Identification of the inclusions and/or exclusions of any items that may be included or excluded in the
The date you will sign the contract and give a down payment, customarily 10% of the purchase price.
Once you and the seller reach agreement on the terms and conditions for the purchase, or an accepted offer, an Offer to Purchase is prepared, outlining the terms agreed to by the buyer and the seller. This documented is then transmitted to the seller’s attorney to draft a sales contract.
The seller will instruct their attorney to draw the contract of sale to include the terms agreed upon and outlined in the Offer to Purchase. Your agent will ensure that, at the same time, your attorney receives the necessary information to commence their work and be prepared to receive and review the forthcoming sales contract. Your attorney will review the sales contract from the seller’s attorney and insure that your interests are protected (such as including stipulations for delays, quality of title to be conveyed, and cleanliness of the premises at the time of closing, etc.). The timing of this is dependent upon the complexity of the terms. This usually takes seven to ten business days from the accepted offer to signed contracts. Prior to execution of the contract, your attorney will commence the title search and any other necessary activities to ensure that the closing or passing of title occurs on schedule. Once the sales contract has been reviewed by your attorney and you have agreed to the terms in the contract you will sign the contact and submit a down payment in the amount of 10% of the purchase price. The down payment is a check usually made out to the seller’s attorney as trustee. The contract signed by you and the down payment check are then delivered to the seller’s attorney for review and execution by the seller.
Your agent will work closely with you to ensure that the specified contingencies which are part of the contract are removed by the dates stipulated. This means that inspections must be arranged and completed by the agreed upon dates. If any of the dates appear to be in jeopardy, notify your attorney immediately. There is always the possibility that extensions, if reasonable, can be accommodated. One of the most often jeopardized dates is the one by which you will have completed arrangements for your financing/mortgage. This, unfortunately, is one date where you are at the mercy of the mortgage person you have chosen to work with to get your financing. Therefore, when selecting your mortgage provider, you need to seek one with a solid record for performance and level of service. This is another area in which your agent can provide valuable assistance. An experienced agent is also there to assist you with any other tasks that you need to do to start your life at the property you have chosen to purchase. Things like – proper documents for school enrollment, parking pass for the train station, beach card, ...etc.
A week or two before the closing, your agent will remind you to notify the appropriate utility companies to have the accounts transferred into your name on the date of the closing. During the same period, the seller will be contracting the same providers to discontinue service. This transaction needs to go smoothly to avoid having to pay a connection or hook-up fee because the service was completely terminated. Your real estate agent can assist you with this, but the companies require the new owner to initiate the request for these service.
On the day of your closing, you and your real estate agent need to perform one last walk-through of the premises. Together you will look to insure that the property is in the condition that it was when you signed the contract of sale. You will verify that the items which were to be included are present. You want to make sure that the house and grounds are "broom clean". It is important that there are no defects visible now which were previously hidden (as a damaged floor which was previously hidden by carpeting or a hole in a wall that was hidden by an entertainment center).
Lastly, you close on the property. You (or in your absence, your power-of-attorney) will attend the closing to sign appropriate documents and deliver certified checks for the appropriate amounts. If your situation dictates, you may actually meet with your lender or their representative immediately prior to the time of the closing to sign your mortgage papers. Between your real estate agent, your attorney and your lender, you will be advised ahead of time of all the costs and fees associated with your closing, recording fees, homeowner's insurance, adjustment costs, tax escrow, and any other costs associated with the transaction.
We at Houlihan Lawrence trust that the above information proves helpful to you and that it makes the entire process less confusing and more enjoyable.