The Typical Real Estate Purchase Cycle From The Buyers Side

Dated: October 29 2018

Views: 1869

Hello and thanks for being here. Most of the buyers I work with ask me sooner or later how the process works. It's different in every real estate market so it's never a bad idea to prepare yourself. This is the typical cycle in my area of New Jersey. Let me know what questions come up. 

** Scroll down to the bottom to see it laid out in 7 Stages rather than a flow chart**


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Pre-Purchase Stage(s). Searching, showings and pre-approval. *The most important stage*

·   This is the beginning for most buyers in normal circumstances. 2 aspects are equally important in this stage: the search and the pre-approval. Both of these can and should be done at the same time. 

·   We will work together as agent and buyer(s) to search for the properties that match your criteria and tour properties to get a feel for the area, price and identify the best options.

·   At the same time, you should partner with a local lender to secure your pre-approval so that we have a tangible idea of your budget and you are comfortable with what that means in terms of monthly payments.  

STAGE 1  Offer submitted with pre-approval, price and terms to begin negotiation  -->  Offer negotiated and agreed  -->  Offer accepted! 

Stage 1 is the most critical and longest Stage  of the loan.  This is where  your lender asks all the necessary  questions to get your loan application complete and out to you for review.

STAGE 2  Purchase agreement/contract is sent to buyer's and seller's attorneys for the "attorney review period." Anything and everything can be changed or altered during this time. Either party can cancel the contract for any reason including the seller accepting another offer. 

During this stage  you should also:

·    Check in with your lender often.

·    Provide them with a copy of your contract.

·     Review and sign the loan packet so that the lender can submit to underwriting and start the mortgage commitment process.

STAGE 3 Inspection and appraisal and Initial deposit. Typically the initial deposit is due within 10 days after the completion of attorney review. Please check with your attorney for the specific due date and where to send the check. 

The inspection typically happens within 2 weeks of the completion of attorney review. The report and all repair requests are due within the timeframe specified in the contract. Please ask me for a Home Inspector recommendation if you need one and I will coordinate access to the property.

STAGE 4  Inspection items are negotiated and agreed upon if necessary.  Agents and attorneys work together on this. Once the inspection items are agreed upon and this stage is complete, the lender will order the appraisal. The appraiser usually comes within a week and the report is complete within about 48-72 hours. As long as the property appraises for the contract amount we are clear to proceed. If not, then we can cancel the deal or negotiation the difference with the seller. 

STAGE 5  Mortgage commitment is received and title is ordered by the attorney. Title insurance covers you as a new owner in case an unforeseen person or entity comes forth with a claim to the property. It is required by the lender and makes the property marketable when you go to sell it in the future. 

STAGE 6 Loan application is Clear to Close: Once all outstanding conditions are cleared and  the lender's closing department reviews title documentation, an approval to close will be issued and a closing date for your loan will be determined. (Allow 3-4 days after conditions are cleared for closing date)

STAGE 7  Final walk-through and closing . We will schedule a walk-through for the same day as the showing to make sure the property is in the condition agreed to after the inspection. Typically the closing takes place at the office of the buyer's attorney and takes anywhere from 1-3 hours. 

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Brian McCarthy

I specialize in residential sales, purchases, luxury homes, rentals and investment properties. I am an 11 year resident of Hoboken, New Jersey and the Gold Coast, with the local knowledge needed to pr....

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