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What are the Basics of Buying a House?

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I have been a real estate agent and investor for over 15 years, and I have seen many real estate deals killed because of silly mistakes. Many times the deal could have been saved if the buyer or seller knew the basic concepts of buying or selling a house. In some cases the buyer had no idea a simple purchase could cause them not to qualify for a loan. In other cases the buyer and seller let their egos get in the way of the deal. There are some simple guidelines that buyers and sellers can use to prevent a deal from going south. Real estate agents and lenders should inform their clients about what to and not to do, but that does not always happen. The more proactive a buyer or seller can be, the better chance they have of selling their home for the most money or getting the best deal on a house they are buying.

Below is a snippet of the full article from our site InvestFourMore.com. You can read the full article here.

What are the main components of a real estate deal?

A real estate transaction may seem pretty simple: buyer pays money for a house and the seller takes money for a house. However, the buyer has to get a loan, make sure the home is in the condition they think it is in, and avoid significantly changing their ability to qualify for a loan. The seller has to make sure they negotiate in good faith, are not trying to hide anything, and are willing to work through any issues with the inspection or appraisal. Here are the basic steps that occur in most real estate transactions:

  • The seller lists their home with a real estate agent so that they can sell it quickly and for the most money
  • The seller makes sure their home looks great and they price it well
  • The seller discloses any problems with their home that they know about
  • The buyer finds a real estate agent to help them find homes for sale
  • The buyer qualifies with a lender to see how much they can afford
  • The buyer looks at homes with their agent until they find one they like
  • The buyer makes an offer on the home they want to buy
  • The seller reviews the offer and decides if they want to accept it, or counter it (change price or terms)
  • The seller and buyer come to an agreement and sign the contract (when the contract is signed by both parties, it is call going under contract)
  • The buyer pays earnest money to secure the contract (usually this is refundable under certain conditions)
  • The buyer completes an inspection on the home to see what condition it is in
  • The buyer and seller negotiate any items to be fixed or price changes after the inspection
  • The buyer’s lender completes an appraisal on the home to determine the value
  • The buyer and seller negotiate or try to fix any problems with the appraisal
  • The buyer waits for their loan to be approved
  • The buyer and seller go to closing where the house deed is transferred from the seller to the buyer

Continue Reading on our site InvestFourMore.com »

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