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The Home Buying Process in Maryland

Step 1 - Select a Buyer's Agent

As a Home Buyer you should choose a Realtor to represent you. That means you should have a signed

"Exclusive Buyer Agency Agreement". The agreement specifies the duties owed by your Realtor and ensures Buyer's representation throughout the home buying process. The agreement also establishes fiduciary and confidential information responsibilities of the Realtor to the Buyer and identifies the terms under which the Realtor works for the Buyer. There usually is NO fee paid to the Realtor by the Buyer except if the Buyer should default in the contract of sale or partial payment of a fee should the Buyer decide not to purchase a home. The agreement should state that the Buyer's Agent accepts the fee published in the Multiple Listing as the Buyer's Agent Fee. This also means the Buyer agrees to use Only the Realtor they have and Agency relationship with in their home buying process.

  • Be able to explain the different sources of homes for sale (i.e. VA and HUD homes, Multiple List Service (MLS), For Sale By Owner (FSBO) and how the Buyer may be able to purchase a home from the different sources.
  • Have detailed knowledge of all programs offered in your geographic area of interest (including First Time Homebuyer and foreclosed home specific programs) that may benefit Buyer.
  • Be a full time real estate agent or broker.
  • Have an Internet website presence.
  • Utilize some contract of sale form generating software.


Step 2 - Mortgage Pre-Approval

The Buyer shall select a Lender and should coordinate with the Buyer's Agent to obtain a pre-approval status. The Lender shall inform the Home Buyer of all of the documentation the Home Buyer shall provide to the Lender. The Lender should discuss with the Home Buyer the source and amount of funds necessary for closing.

The Lender should educate the Home Buyer on the varying types of mortgages, down payment, earnest money requirements, interest rates, etc. for the different loan programs and special programs available for First Time Home Buyers. The lender should also educate the consumer on how their credit scores effect their choice of loan products.

Step 3 - Start Searching for Your Home     

Whether it be listings you find on the internet, from your Realtor, from your friends or if you are driving by a listing for sale when you find a house that you are interested in it is a good idea to first drive by the home to check out the neighborhood, talk to the neighbors, consider commute time to work, school systems, location of the nearest hospitals and sports complexes to name but a few.

After you have driven by the home if you would like to take a tour of the inside you should contact your Buyer's Agent . They will make the appointment to take you for a tour inside the home and provide you with any additional information about the home that you may not have seen.

Step 4 - Make an Offer for Your Dream Home     

The Buyer's Agent and the Buyer formulate a contract game plan as the basis of constructing an "Offer to Purchase"; specifically, Your Realtor will contact the lender to go over the different possible financing programs available to the Buyer to purchase the selected home. The lender will estimate the closing cost the buyer will need for the transaction.

The Realtor discusses the different types of inspections that are required to be performed and those the Buyer might want to consider if potentially beneficial in purchasing the selected home. Review different types of inspections;

The Realtor suggests contingencies for financing, finding your home of choice, the settlement date, selling your current home, home owner warranty options and Seller paid closing cost help that could be negotiated as part of the offer;

The Realtor drafts the "Offer to Purchase" for the Home Buyer's signature. Here is a sample contract to view: Downloadable Contract PDF Format

The Home Buyer signs the Offer to Purchase and the Realtor provides documentation for the Home Buyer's earnest money deposit. The earnest money deposit usually ranges between $500.00 to 1% of the Sales Price depending upon the source and type of home. Your Realtor will advise you.

Your Realtor delivers the Offer to Purchase to the Seller's real estate agent and coordinates the negotiation with and on behalf of the Buyer. Counter-offers are sometimes made by the Seller and may be returned to you if your offer was not exactly what the Seller wanted. Negotiations will then start again.


Step 5 - Your Offer has been Accepted      

Your Realtor will deliver copies of the ratified contract to you and the fun begins. Within the first few days there are many task the homebuyer must take care of to stay in the time frame of the contract.

If you have decided to have inspections appointments have to be set up. Home Inspections, Radon, Well, Septic are an example of the types you may choose to have. The Buyer's Agent will meet with the Home Buyer at the property to conduct the inspections.

The Home Buyer makes loan application with their selected lender, ensuring that the lender understands their financial game plan, the contingency(ies) used in the contract and pays the lender's fees for an appraisal and full mortgage credit report.

A title company that will do the buyers settlement will be chosen and the Realtor will send them a copy of the contract.


Step 6 - Prepare to Move   

The Home Buyer will coordinate with the selected insurance agent to obtain a home owner's home insurance policy for coverage required by the Home Buyer's lender no later than 10 days prior to closing.

  • A termite inspection should be ordered two weeks prior to settlement.
  • Get your utilities schedule to move to the new location. Such are electric, phone, cable.
  • Put in for a change of address at the post office.
  • Any repairs that the seller had agreed upon should at this time be checked that they were completed.
  • Set up a moving company or in the case where you are moving yourself a moving van.
  • Pack a separate box just for moving day. In it should be items such as paper towels, toilet tissue, rubber gloves, shower curtain, cleaning solutions, paper plates, disposable cups and silver ware, washcloths and towels, soap, etc.


Step 7 - Settlement  

The Realtor shall conduct a walkthrough of the home with the Buyer on the day before or the day of settlement ensuring that the home is in the same condition as when originally contracted. Any damage in the home sustained in the moving process by the Seller or from other causes can be an issue requiring further negotiation. Ensure that all the appliances are still working and that everything is in order as expected.

The Home Buyer will be required to obtain a check of certified funds or cashier's check for the balance of funds required for closing. A personal check for any funds owed by the Home Buyer at settlement will not usually be accepted by the settlement agent.

The title company shall refund any monies due the Home Buyer should the Home Buyer provides an amount greater than that owed.

inal Thought: Always remember that the Contract of Sale is the written document which expresses the "meeting of the minds" between the Home Buyer and the Seller. If you are not sure about any phase of the process ask your Realtor. Your Realtor is your guide, source of knowledge and expertise whose sole purpose is to make your home buying experience as comfortable, knowledgeable and enriching as possible as you progress through what should be a wonderful experience in your life. GOOD LUCK!!




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