At the Rule Team, our focus is getting our clients the right home at the best possible price. Buying a home is a complicated process and that’s why it is important for you to be represented by an experienced REALTOR®. As your agent, we will use our expertise to walk you through each step of the process and ensure that all of your questions are answered, your interests are protected, and that we negotiate the best price and terms for you.
Whether you are purchasing an existing home or Looking to work with a Builder, choose the Rule Team to work for you!
The Home Buying Process
Finding a Home
Selecting a Home
Writing an Offer
Final Loan Approval
Closing / Possession
This is an important step in the process of buying your home for several reasons. First, by sitting down and discussing your needs, we can help guide you to a home that will meet your criteria. Second, the overview of the process of purchasing should help make you comfortable with the steps and provide a reference throughout the process.
We will start off by discussing in detail what you can expect when buying a home. Buying a home is a large investment of both money and time… knowing what you expect and what is expected of you will save you both.
Before we begin searching and viewing homes, we need to identify your needs so we can focus on what is most important to you, such as:
- Lifestyle (Single Family, Condo)
- Community (Neighborhoods, Schools, Amenities, Places of Worship)
- Job (Commute)
- Value/Investment (Appreciation, Growth)
- Style (Architecture, Design, Old vs New)
- AND Anything else that will help us to find you the perfect home.
The buying process is one of compromise. By sitting down and talking through all of these factors we can help you find the balance between the features that are absolutely necessary and those features that aren’t deal breakers.
Our role and responsibility to you as your REALTOR®: We will explain how REALTORS® are compensated in the state of Indiana. We will inform you about taxes, association fees, area appreciation values, schools and anything else that could potentially impact your decision. We will ensure you don’t overpay by researching area sales and negotiating price for you, including closing costs and other concessions. We will order a home inspection and negotiate major repairs. We will order title work and make sure the home you are purchasing has clear title. And we will ensure a smooth walk through, closing, and possession.
Nothing is more frustrating in the buying process than falling in love with a home only to later find that it is not in your price range or you cannot get financed for it. We recommend meeting with a lender as soon as possible. There are lots of mortgage ‘products’ available in today’s market and knowing which one will work best for you, will help us shape the best possible offer. Additionally, when we submit an offer, sellers will want to see a letter of pre-approval so they know that you are capable of buying their home.
When it comes to finding and viewing homes, some people love pouring through web searches, driving through neighborhoods, and visiting open houses… others cannot stand it! Our goal is to do whatever we can to help you find the house that is perfect for you. If you are the kind of person who doesn’t want to pull up a single website, we will hand pick those select homes that meet your criteria. We will also use our network of real estate professionals and clients to let you know of any homes that may possibly be coming on the market (pocket listings). If you are the type of person who just loves shopping for a house, we will be there when you need us to answer questions, help you narrow your search, and visit each and every home you come across until you find the right one.
Most people start their home search on the internet. There are lots of great internet sites that can help you get a jump on looking. Keep in mind that some sites may not include all of the available information for each listing (price, availability, photos, room details, neighborhood, etc.). Correct Price and true availability (Active vs. Pending or Active/Contingency) has always been an issue with national sites such as Zillow and Trulia. We will make sure you are seeing the correct info for homes in real time.
As a licensed REALTOR®, we have access to non-public tools that can help you in finding your dream home. We can print or email listings for you from the Broker Listing Cooperative (BLC) that meets very specific and detailed conditions (price range, square footage, neighborhoods, specific acreage, bank-owned homes, pools, lakefront, homes with eight car garages, etc.). We can even setup the system to ‘push’ listings to you regularly (daily, weekly or monthly) so that you don’t have to repeat the same searches every day looking for new listings.
When you are ready we can schedule times to see homes. We can do this at about any time of the day or week. We will make appointments at each of the homes so that we have a window of time to privately view the home. You will receive a bound copy of the BLC sheets and pictures for each home for you to make notes on. People often ask how many homes we usually show to a client before they choose one. The answer is that it differs widely and we do not measure our success on how few homes we show a client before they buy.
Selecting a Home
This stage of the process can vary from person to person and family to family. For some, it’s as easy as walking into a home and knowing it’s the right one. For others, it’s a much longer process involving many possibilities with long lists of the pros and cons of each. At The Rule Team, we understand that the home you purchase is one of the biggest decisions you will make and we are here to support you in your journey and not to push our agenda.
As you begin to narrow down the options, we will present you with all of the necessary information you need to make a fully educated decision. This information will include comparable sales information for specific neighborhoods and homes, any property specific information such as utility history, the details of the mechanicals in a home, the seller’s level of interest, and any other information we can gather to help you decide.
At the end of this step, it is often best if there are two or three homes that you are very interested in so that we can move forward and make an offer on one. This allows us to be more aggressive in our offer knowing that there are other options available if we can’t negotiate a good price and terms with the seller. We do understand though that this isn’t always possible… many times the market doesn’t afford this luxury.
Writing an Offer
Once you’ve selected a home, it’s time to consider the offer process. In Indiana (unless you are working with a builder), we use a standard, state purchase agreement that was written to equally reflect the interests of the buyer and the seller. While purchase price is one consideration, it is also important that we consider your desired closing date, closing cost assistance, a home warranty and other details as we draft your offer. You will need to provide a personal check for 1% of the purchase price (called earnest money deposit) in order to make an offer on a home. This check will be deposited upon final acceptance of the offer, and will be held in the escrow account of the listing broker. This amount will be credited back to you on your final settlement statement.
Offers will normally go back and forth several times between the buyer and the seller, being revised a little more each time. This part of the process can be very stressful and many people make mistakes here that they don’t realize until later because of this. The Rule Team has negotiated hundreds of deals for both buyers and sellers… we know the process and we know the areas… and because we take the time to know you are your family’s needs before entering into negotiations, we are able to leverage our experience and knowledge to help secure the best possible contract on your new home.
It’s easy to make sure the home you’ve chosen is a smart buy. No deal is done until the home is inspected by a qualified inspector, and approved by you. By having a home inspection, the homes vital systems are checked. This allows you to purchase your home with confidence. We will recommend qualified companies, and schedule the inspection immediately after your offer has been accepted. There is a licensing process for Indiana inspectors so you should insure that any inspector you choose is licensed. You will be provided a written report within a day of the inspection.
Common Inspection Items:
- Foundations: Crawl, slab, Basement floor and walls, proper drainage and ventilation, evidence of water seepage.
- Exterior: Exterior siding, windows, doors, porches, decks, balconies, and attached/detached garages.
- Roof: Roof type and material, condition of gutters and downspouts, flashing, chimneys, and skylights
- Plumbing System: Hot and cold water system; the waste system and sewage disposal, water pressure and flow, and hot water equipment.
- Electrical System: Type of service, the number of circuits, type of protection, outlet grounding, and load balance.
- HVAC System: Energy source, type of cooling equipment, capacity, and distribution.
- Interior: Interior Walls, Ceilings, Floors, Windows, Doors, stairways, cabinets, and countertops.
- Attic: Structural, Insulation, and Ventilation Information.
- Garage: Doors, walls, floor, opener.
- Appliances: Kitchen/Bar appliances, smoke detectors.
- Lot and Landscaping: Ground slope away from foundation, sidewalks, steps, and driveway.
The inspection company that you select will make the appointment for access to your new home through the listing real estate office. You are encouraged to meet the inspector and to accompany the inspector during the 2 to 3 hour inspection process to gain maximum benefit and understanding of your new home. Fees are normally due at the time of the inspection unless otherwise arranged.
If there is a home inspection contingency in the purchase agreement, the actual inspection needs to be scheduled within the time stated or it is assumed the right to have an inspection is waived. It is very important to make arrangements as soon as possible.
The inspection is a time for you to learn about your new home and what maintenance issues will need to be handled regularly. It is also a time to determine if any major defects exist. We always try to be present during the inspection.
We will discuss the inspection and report to complete the ‘Buyer’s Independent Inspection Response’ form. This form allows you to negotiate for the seller to make repairs and correct major defects. The Seller will then respond to the inspection response by agreeing to make the requested repairs, a portion of the repairs, providing an allowance in lieu of making repairs or to make no repairs. Just like the initial negotiation there can be a couple of iterations here. It is important to remember that this serves the purpose of correcting “major defects” and we can help you identify and separate major issues from maintenance issues.
Final Loan Approval
Outside of the home inspection, getting a “clear to close” is the most critical part of a real estate transaction. It is also the one step in the buying process that has the most pitfalls and places where things can go wrong. Without going into too much detail here, it is safe to say that choosing the right lender as well as the right loan product can make or break a deal in the end.
The appraisal of the home generally happens around this time in the transaction. Making sure we did our homework upfront regarding value will help you and the seller save a lot of time and heartache.
Walkthrough / Re-Inspection
Final walkthrough: Once the inspection issues have been taken care of and the closing has been scheduled, we will take the opportunity to go back to the home one more time (usually a few days before closing) to make sure that you are satisfied with everything. You are welcome to hire your inspector to come back and re-inspect the main issues. There are a few things that we need to check on during this time:
- The Sellers have properly vacated and cleaned the home.
- The Sellers have made all repairs noted on the inspection response.
- All utilities are still on and working properly.
- Last minute measurements that need to be taken.
Pre-Closing: After the appraised value has been confirmed and the inspection repairs are completed, there are a number of very important last minute steps that need to be taken to ensure that the closing experience is smooth and without surprise.
- Settlement Statement: Your lender will send the loan package with the final closing instructions to the title company immediately prior to closing. Hopefully this is at least a day before closing so that the title company can complete the Settlement Statement and give us the exact amount of funds needed for closing. Unfortunately, the loan package often arrives the day of closing.
- Examining final figures: Your lender and a team member will get a copy of the final Settlement Statement about a day or so in advance of the closing. The Settlement Statement will be a breakdown of all the fees, credits, and mortgage information in regards to the purchase of your new home. This statement will also give you a final dollar figure of what you will need for closing or what dollar figure you will receive at closing. (Note: If you owe money at closing, you will need to bring a certified check from your bank or if the amount is over $10k, you will need to wire funds). Either your lender or we will explain these figures to you in detail and let you know if there are any issues to be concerned with. Once we are good on the numbers, we should be ready to close!
- Homeowner’s Insurance: Most of the time, the bank owns the majority of your home. They want to make sure that if anything were to happen to the home (a fire, etc.), that their interests would be protected by insurance. So, they require that you have insurance on your home at all times. In fact, they go so far as to have you prepay for one year of insurance upfront, pay a couple of extra months at closing, and pay a month of insurance with each monthly mortgage payment. That makes sure that when the policy is due again a year after closing, there is enough money in your escrow account to make the payment. This portion of the transaction does take a little coordination. You will want to work with your lender to either send a paid receipt (for the first year) to them prior to closing or arrange for the first year of homeowner’s insurance to be paid on the Settlement Statement.
- Utility Transfer: The Seller should keep the utilities on in their name until closing or possession is delivered. The final date will be discussed at closing unless the property is already vacant or if you are to receive possession at closing. You should contact the utility companies to begin your services simultaneously with the date the Seller obtains the final meter readings. Don’t forget to consider phone, cable, and security providers as these services sometimes have large lead times. We will help by getting you the correct utility companies and contact info.
In Indiana, closing takes place at a title company. The title company is the party who researched the title of the home and verified that the Seller has no outstanding liens against the home and is the lawful owner. The title company also oversees closing of the mortgage documents for the lender. The title company receives documents from the lender and then prepares the Settlement Statement. The Settlement Statement shows all the charges (closing costs, cost of home, prepaid items, homeowner’s insurance, etc.) and all of the credits (loan, earnest money, property tax credit, etc.). It condenses all of these charges down into the final “Settlement Statement” and that statement will show the final amount you will need to pay at closing.
Things you need to bring to closing:
- Original Homeowner insurance Policy
- Paid receipt for 1st year insurance premium
- Bank check for funds needed to close (or wire transfer made)
- Driver’s license
- Endurance to sign lots of documents
Keys: The key transfer for your access when the seller vacates will be discussed at closing. The seller may give you the key(s) at closing, or they may have negotiated a later possession in which case we will arrange getting you the key when you take possession.
Property tax exemptions: In Indiana, we pay property taxes in arrears… meaning we pay this year for last year’s taxes. The tax bill is sent in the spring and fall to either you or your lender (escrows). The amount of that tax is calculated by multiplying the ‘assessed value’ of your home times the tax rate for the home’s specific area. The assessed value of your home is not the appraised value or the purchase price. It should reflect market value but in many cases does not. A homestead credit and mortgage exemption credit are available for owner-occupied homes and there is a 1% cap on property taxes for these residents. 2% for investor owned.
Your first mortgage payment: In normal situations, your first mortgage payment is due on the first day of the month in the month two months after closing. In other words, if you close in January, your first monthly payment will be due in March or if you close in October your first monthly payment will be due in December. You will likely receive a payment ‘coupon’ at closing for your first payment. You may or may not receive a coupon booklet from your lender for subsequent payments. Regardless of this it is important to add your monthly payment to your routine.
Why you need The Rule Team when building a home:
- Cost: Nothing! Any compensation given to REALTORS® is recognized by the builder as a marketing fee and has no impact on the final cost of the home. Builders desire, expect and encourage REALTOR® participation.
- Savings: Are you getting what you’re entitled to in regards to both quality and value? The Rule Team knows what you should expect and what “extras” might be available.
- Resale: Give your investment the best opportunity for appreciation at resale. Questions concerning site location, builder, design and lifestyle are important. We know you are building not only for today… but for tomorrow.
- Representation: With The Rule Team you are represented! Our experience, knowledge and reputation represent strength and leverage on your behalf.
- Builder Insight: There is more to a builder than good advertising or the sales staff in the beautiful model home. What is the reputation of the builder? Does the builder allow customized changes and at what cost? The Rule Team has insight into these and many more concerns.
- Time & Stress: Throughout the entire building process, The Rule Team will monitor the progress with you and for you. You are never alone.
- Contracts / Paperwork: Builders have “standard” contracts and many addendums designed by a legal staff representing the builder. The Rule Team will know certain details and conditions that should be discussed, added, deleted or modified for your protection.
- Builder Incentives: Do the incentives, discounts and special financing of the builder work the best for you? The Rule Team will suggest alternatives for comparison.
- Builder Obligations, Inspections & Warranties: REALTORS® know what the builder should, could and must do. The Rule Team will be there with you throughout the entire building and financing process and will guide you through the inspections, the closing procedures and be with you long after you move into your new home.