Deciding To Purchase

Purchasing real estate may be one of the largest financial decisions you will make.

Why do you want to buy?

Are you a renter tired of paying someone else’s mortgage and building equity for someone else?

Perhaps you are working on growing your own investment portfolio and are looking for new investment opportunities?

Have you outgrown your current home? Perhaps you need more square feet, a larger yard, an RV bay, a home office? Maybe you are ready for an update and would rather purchase than remodel?

Are you looking to downsize? Has your current yard become more work than you desire? Are you looking to be a snowbird and a smaller home will be a better fit? Are there fewer people living in your home so you desire fewer square feet?

You simply want a change? Do you want a change of scenery, a new neighborhood, a change of floorplan?

The minute you begin thinking about buying do not: make any large purchases, increase your debts, make cash deposits that can’t be traced/explained, change the type of work you do; changing jobs in the same field typically does not impact qualifying but changing to a completely new career can. Do not close any credit accounts either; let the lender review with you the best actions to take. Any liens or judgments will most likely have to be removed from your credit before you can qualify (a lender can guide you here).

KNOW YOUR WHY – owning real estate is one of the least risky ways to build equity.

Reasons to own a home.

  • Tax Benefits – US Tax code may allow you to deduct costs involved in purchasing and owning a home
  • Appreciation – Historically, real estate has had a long-term, stable growth in value. In addition, the number of U.S households is expected to rise 10 t0 15 percent over the next decade, creating high demand for housing.
  • Equity – Building equity in your home is a ready-made savings plan.
  • Predictability – Unlike rent, your fixed-rate mortgage payments don’t rise over the years so your housing costs may actually decline as you own your home longer. However, keep in mind taxes and insurance costs will likely increase.
  • Freedom – The home is yours. You can decorate any way you want and choose the type of upgrades and new amenities that appeal to your lifestyle.
  • Stability – Remaining in one neighborhood for several years allows you and your family time to build long-lasting relationships within the community. It also offers children the benefit of educational and social continuity.

Preparing To Buy

First step is to choose a professional, ethical Realtor®.

Being prepared is one of the best ways to seize an opportunity. Real estate transactions can be complex. There is a lot of paperwork involved, important contractual deadlines, and expert advice needed throughout the transaction.

Selecting a Realtor® is an important step. You’ll want someone who is ethical, available and professional. Keep in mind the transaction begins the moment your Realtor® makes the first contact with a seller’s agent. This initial contact will leave a lasting impression on that agent and can impact a seller’s decision as to whether they want to entertain an offer from you.

Things to consider when selecting a Realtor®:

  • What are their credentials and education? A professional will pursue continuing education classes and designations.
  • Do they have time for you; are they available nights and weekends? Do they have someone available if they go on vacation?
  • Ask if they full-time or if they have another job and pursue real estate part-time. If they are part-time, know what their limitations on availability, their experience and commitment level. A full-time agent typically has more experience and greater availability
  • How promptly do they return calls? In a fast-paced market this can impact your ability to view properties quickly and submit offers in a timely fashion.
  • You will need an agent who listens attentively to your needs and your concerns.
  • Are they skilled communicators and negotiators?
  • Select the professional you feel most comfortable with.

Your Lender

A professional Realtor® typically knows top-notch lenders and is a great resource for referring you to one. A lender can make or break a real estate transaction, so it is imperative you select a good one. There are many factors to consider when selecting your lender:

  • Years of experience can make a big difference; lending products and laws are constantly changing. An experienced lender will have a full understanding of what products are best suited for a buyer. They are better equipped to assess any challenges along the way and will know how to anticipate what a processor or underwriter may ask for as the transaction moves along.
  • The experience of their processor and underwriter is also important. Are they local? What kind of relationship do they have with the loan officer? Are they in the same office as the loan office or close by?
  • Is your lender local? An internet-based lender or a “broker” can present some challenges, so I highly recommend you discuss this with your Realtor®.
  • Do they have knowledge of the various types of mortgage products available?
  • Do they attend the buyer’s document signing/closing?
  • A professional lender will be responsive, flexible and have great communication skills.
  • A superior lender will be available 7-days a week to send your Realtor® a pre-approval letter for an offer submission, answer questions and provide estimated payments based on certain criteria.
  • A superior lender will be a great partner with your Realtor® and you. They will be ready and willing to provide payment scenarios for a home you may have interest in. They will recommend buyer needs when submitting an offer.
  • Choose wisely when selecting a lender and use your Realtor® as a resource should you need guidance.

Time To Go Shopping

Preparations are complete; now it’s time to find the right property. You are now pre-approved and know your price range. You have selected your Realtor® of choice and hired them to represent you.

Deciding what features are requirements and which are extras will be very helpful. It’s easy to get caught up in the excitement of a beautiful home loaded with amenities. It’s important you select a home that truly meets all or most of your requirements first and foremost. Keep in mind the 85% rule; a buyer typically will find 85% of what they desire. Only you can decide what you are willing to place in that 15% category? Even buyers who build a home discover when it is complete, they have about 85% of what they desire. If you are fortunate enough to find 100% of what you desire than you will really have something to celebrate. Begin to make a list of home attributes and categorize them into three areas.


This category should be filled with those things that a home MUST have in order for you to be interested. For example, a good school district, space for a workshop, a two-car garage, and more. This list should be the most carefully compiled, as you do not want to purchase a house that does not have all of your "must-haves.  Location, basement, number of bedrooms, number of bathrooms, eating space, style, garage, etc… are examples.

“Wish List”

This category should be filled with attributes in a home that you would like to see but are not necessary. For example, a pool, air conditioning, location near a shopping mall, central vacuum, dishwasher, etc.  There are many different features in homes that range from necessary to luxury.  It is easy to get caught up in the excitement of a beautiful home loaded with amenities.  It is important that you select a home that truly meets all or most of your requirements first and foremost.

“Deal Breakers”

This category should be filled with a list of home attributes that make a house an absolute no-go. This will be different for each buyer. What is YOUR “deal-breaker?” For example, are the homes too close together, are there CCRs, is it near an airport, is the home in a natural disaster area, is it near a landfill or a feedlot?

Take a Drive

Drive around and get a feel for the neighborhoods and areas of town you like. What would it feel like to live there? Drive these areas of interest at different times of day. Neighborhoods have characteristic personalities designed to suit single people, growing families, two-career couples, or retirees. Make sure the neighborhood suits your lifestyle and personality. Look at the maintenance of the homes in the area, are the yards cared for, also look for major thoroughfares, highways, shopping, medical facilities, homeowner’s association rules and fees. Ask yourself is it close to my favorite spots/ does that matter? Would I feel safe here? Is it a good investment (your Realtor® can assist with market information)? Do I like what I see? If you are looking at a Condo there are special considerations for these developments, your Realtor® can assist you with these.

Viewing Properties

Let your Realtor® know what properties you’d like to view. They will then confirm showing instructions. Sellers will have different requirements for showing notice.

Keep a list of your top three favorites (no more)

When viewing homes keep in mind there may be video/audio recording

Take notes of the properties; your Realtor® can provide you with property information and note taking pages for the properties you are viewing.

Know the market you are purchasing in; is it a buyer’s or seller’s market?

Cream-Puff homes are those homes that when you walk in you say “This is it! This is the one!” Cream-puff homes are the ones that don’t last long on the market. If you walk into a “cream-puff” home are you the type of buyer who makes quick decisions or are you the type of buyer who needs time to process? There is no right or wrong answer you just need to know your personality type. If you are a processor be prepared to lose opportunities; especially in a seller’s market. With that said, it is important you understand your style and make decisions that fit YOUR needs.

The Process

You found “the one!”

Your Offer

Your Realtor® will assist you in writing and submitting your offer to purchase. You will need to have your earnest money ready. Earnest money is simply a deposit of monies representing to the seller your good faith intent to purchase their home. It is your “promise” to the seller that after inspections, appraisal and final steps needed for your financing that you intend to purchase their home for the amount stated in the contract. Earnest money is typically applied towards the purchase price of the home at closing.

You will receive signed copies of all transaction documents during the transaction process.

After your offer is submitted the seller can accept, counter offer or reject your offer.

Once both parties have agreed to terms and signed the purchase contract there will be a series of contractual deadlines. Your Realtor® will advise you along the way and make sure those deadlines are met.

The offer documents will be sent to your lender and the closing agent. (Agents for the buyer and seller will also maintain a file of signed documents). The closing agent is typically the title company but can also be an attorney. The closing agent will hold the earnest money in escrow and research the recorded history of the property to make sure the title is free and clear of any encumbrances by the date of closing. The closing agent will also make sure any new encumbrances are properly recorded at closing.  The closing agent will also check for any recorded easements, encroachments, or rights-of-way that will impact your use of the property.

In Idaho title is typically conveyed by a Warranty Deed.  You can consult an attorney or a tax advisor on other options. You may be someone who needs advice on the various legal, estate and tax issues when purchasing property.


When you write your offer with your Realtor® you have the option of choosing to have a home inspection. I highly recommend every buyer make their purchase contingent on having a home inspection. This is an opportunity to mitigate your risk when making a home purchase. It may not eliminate all risk, but it certainly does help reduce your risk.

Average cost for a home inspection range from $300 to $500; they are often based on square footage and/or age of home. Home inspections typically take about three hours to complete. Most inspectors welcome your attendance; your Realtor® must accompany you should you choose to do so. You will receive a full report and inspectors are available to discuss their findings. Your Realtor® can be a great resource for finding a home inspection company.

A seller may say they have had a home inspection and offer that to you in lieu of hiring your own inspector. Keep in mind, the inspector was hired by the seller and you simply don’t know what communication transpired between the seller and the inspector. Your best protection is to hire your own inspector.

Your contract will state what the deadline date is for completion of inspections. During this phase you will hire a professional home inspector to inspect the home. You can also hire professional inspectors who specialize in certain areas (E.g. Roof, HVAC, structural).

If you are purchasing land you can also elect to have inspections on the well and/or septic systems. You may desire to have a survey done or have property boundaries confirmed. Your Realtor® can assist with recommendations.

Understand that your inspection fee is non-refundable. Should you decide to terminate your purchase offer you will not get these monies returned. These fees are a part of the buyer process and the cost of insuring you are satisfied with the condition of the property you are purchasing.

It is important to understand the purpose of a professional home inspection. So please read the “The Purpose of the Home Inspection,” link below.

Once you receive your inspection report from the inspector/inspectors you will review with your Realtor®. You will have several response options:

  • Termination of the contract with no risk of losing your earnest money
  • Removal of the contingency; you will move forward with the transaction not requesting any action from the seller
  • Request for a credit at closing in lieu of repairs
  • Request a price change
  • Request for specific repairs

Once you submit your requests to the seller, he/she can accept, modify, reject, or terminate during this phase. Your Realtor® can assist you with your inspection response and any needed negotiations.

There are numerous home warranty programs available to buyers for existing home purchases. New construction home warranties are typically offered by the builder. Your Realtor® can assist you with this option. A home warranty does not replace the need for a home inspection, however, it can add an extra layer of protection once a buyer has moved into the home.

You have a contractual right to perform an inspection of requested repairs to confirm they meet with your satisfaction. This is not intended to be your final walk-thru which occurs approximately three days prior to closing.

You will also want to inquire about insurance on the property you are purchasing. You want to make sure, during the inspection contingency phase, that the property you are purchasing is insurable.

Appraisal & Final Underwriting

Once the inspection phase negotiations are complete and all parties have agreed to move forward your lender will request the appraisal. A home appraisal is an estimate of the property’s value based on location, condition and recent sales of similar homes in the surrounding area. It sets the amount that lenders will allow borrowed against a property.

The assignment of an appraiser is not controlled by the lender. The lender requests an appraiser through an appraisal management company (AMC). The AMC assigns an appraiser. Once the appraiser’s report is finished it will be sent to the lender. A report will also be provided to the buyer. The appraisal process can take as long as two weeks.

Appraisals provide a professional opinion of value; it is not an exact science. They can vary depending on who is performing the appraisal and when they are done. Changes in market conditions can also impact appraised values.

Appraisers will look at past sold comparables of similar properties to assist them with calculating value. A skilled Realtor® who is an expert at finding comparables and creating an analysis can be instrumental in assisting a buyer with value of a home they wish to purchase.

If the appraisal “meets value” the seller’s agent is notified, and the buyer enters the final underwriting stage of their loan. If the loan does not meet value, the buyer and seller will enter into a new negotiation phase.

Clear To Close

You are almost there! The appraisal contingency has been removed and you are ready to finalize your purchase.

Once the appraisal contingency is removed you will enter the final underwriting phase of your loan. During the final underwriting phase, it is critical you continue to follow all recommendations of your lender so no changes in your financial situation or credit score cause you to be unable to obtain your loan. You must be very responsive to your lender’s requests and submit them in a timely fashion. There may be many documents requested by the lender during the final underwriting phase; the loan application is being reviewed not only by your loan officer but by their underwriting department. It is important to be patient and flexible during this process keeping the end goal in mind.  

Your lender will have requested you shop for homeowner’s insurance and provide the quote so he/she can include this cost in your final numbers. You may have done this during the inspection phase to confirm the property is insurable; it depends on the type of property being purchased. 


Once the lender’s underwriting department has completed this final stage the lender will draw up your Closing Disclosure or CD. A closing disclosure is a document that provides final details about your mortgage loan. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs (closing costs) in order to finalize the purchase of your home. 

The lender is required to give you the CD at least three business days prior to closing on the loan. This three-day window allows you time to compare final terms and costs to those estimated on your Loan Estimate document. The three days also gives you plenty of time to ask questions and make sure you fully understand your loan.

The CD is usually emailed but can be mailed. The three-day period does not begin until you have confirmed receipt of the document.

Closing & Funding

Once the CD has been received the lender will send final figures to the title company. The title company will create the settlement statement (sometimes called a closing statement). This document is a summary of all fees and charges a borrower will face. The title company and lender will work together to make sure their figures match. It is basically a final reconciliation of the figures. Once they have verified all figures the title company will send the settlement statement to the agent for review. The agent will review to make sure no errors have been made based on the purchase contract terms. Once the agent reviews the document, he/she will send it to their client for final review. This document will show what, if any, funds the borrower must bring to their signing.

Final Walk Through

A second final walk-thru (first walk-thru is for confirming completed repairs are satisfactory) is available to the buyer approximately three days before closing. This is an opportunity to confirm the home is in the same condition it was at the time the buyer made the offer. Your Realtor® will set this up and must accompany you.


At signing all signers must bring current (cannot be expired) picture ID; typically, a driver’s license. You will also need to bring a cashier’s check (cannot be a personal check) for any funds due to finalize your purchase. The check should be made out to the title company handling the closing. Title companies can take checks for small amounts but not large sums. I recommend a buyer bring a personal checkbook in case there are any small adjustments at the time of signing (this shouldn’t happen but better to be prepared).  I attend my client’s signings as do the lenders I work with. I believe your Realtor® and your lender should be there to answer any questions that may arise, to support and to celebrate with you.

It is important you let your Realtor® know in advance if you must sign out-of-state so they can set this up in time to meet the closing date.

Be Aware Of Wire Fraud

Your Realtor® will schedule your signing at the title company. You want to sign by noon the day of closing in order to have enough time for the funding to take place. Funding is when the new warranty deed is recorded and ownership changes hands. You can typically sign a day or so in advance as well if same day signing doesn’t work in your schedule.

There is a great deal of wire fraud happening. DO NOT wire any funds unless you have confirmed with your Realtor®. Companies are very good at hacking emails and sending very authentic looking wire instructions. Wiring of funds should be handled by the title company and they will connect with your bank to set this up.


Title companies typically have a list of utility companies or you can ask your Realtor®. You can begin calling in advance to let them know you are purchasing the home. Cable/Internet companies can be booked out so you can call and set those appointments up in advance if you so choose. There are some utility companies who may require notification from the title company of the ownership change. They will let you know when you call.

 HOA (Home owner associations) will be notified as will most irrigation companies.

 If you purchased a home warranty you will receive information after closing on the policy since these are typically paid for at closing.

 The title company will notify your Realtor® when funding & recording have taken place. This is when actual ownership changes hands. Your Realtor® will then call you and congratulate you on your purchase. You will not be given access to the home; keys, remotes, codes etc. until funding & recording. Once you have taken ownership your Realtor® will instruct you as to how you obtain keys, remotes and codes to your new home.

 You will be instructed at your signing how to file your homeowner’s exemption. It is critical you complete this as instructed as it significantly reduces your property taxes. Idaho is a non-disclosure state which means you are not required to report the purchase price to the taxing entity. Your Realtor® and lender can assist you with how to complete the filing and with providing information so you can decide whether you want to report the price you paid for the property.


Here are some documents with other important information.


After The Close


My services do not end once you have closed. If, after closing, you have questions about anything related to your home or the transaction please don’t hesitate to reach out. If I can’t answer your question, I will do my best to find someone who can.