Six Steps To Purchasing A San Juans Home

Posted January 10, 2021 at 5:30 am by

Merri Ann Simonson - Contributed photo

By Mer­ri Ann Simon­son, Man­ag­ing Bro­ker, Cold­well Banker San Juan Islands Inc

1. Select an Agent to Represent You

As you may be aware, all of the bro­ker­age firms on San Juan Island are mem­bers of the North­west Mul­ti­ple List­ing Ser­vice; there­fore, any of the agents can assist you with any of the prop­er­ties list­ed with Cold­well Banker San Juan Islands or oth­er bro­ker­age firms.

One of the first steps in pur­chas­ing real estate on San Juan is to select an agent to rep­re­sent you. Ide­al­ly, you should select ONE agent that you feel will pro­vide you with the lev­el of cus­tomer ser­vice that you require. 

It is impor­tant for you to under­stand the Law of Real Estate Agency. The State law allows for three types of agency representation:

  • Buyer’s rep­re­sen­ta­tion is when the agent is rep­re­sent­ing the buy­er and intends to obtain prop­er­ty at the low­est pos­si­ble sales price for the buyer.
  • Seller’s rep­re­sen­ta­tion is when the agent has a list­ing with the sell­er and is attempt­ing to obtain the high­est pos­si­ble sales price for the seller.
  • Dual agency is when the agent shows a buy­er one of their own list­ings and the buy­er decides to pur­chase it. In the case of dual agency, the agent rep­re­sents the sell­er as well as the buy­er and nego­ti­ates the best pos­si­ble out­come for both.

2. Determine Your Source of Funds

  • Cash at Closing
  • Insti­tu­tion­al Financing
  • Sell­er Financing
  • 1031 Tax Exchange

If you intend to finance your pur­chase, it is pru­dent to meet with your lender and deter­mine the max­i­mum loan amount you are qual­i­fied for. This amount, cou­pled with the cash you have allo­cat­ed, will deter­mine the max­i­mum sales price. 

You also need to deter­mine your clos­ing cost for the pur­chase as that fits into the equa­tion as well.  We have numer­ous lenders that are active with financ­ing in the islands if you are interested.

3. Closing Costs for a Purchase Transaction

Nor­mal buyer’s clos­ing costs on a cash trans­ac­tion include 1% Con­ser­va­tion Area Real Estate Excise Tax or com­mon­ly known as the Land Bank Tax. 

Fur­ther, approx­i­mate­ly 0.5% for the Afford­able Hous­ing Excise Tax, half of the escrow fee, pro­ra­tions of real estate tax­es, util­i­ties and HOA dues, record­ing fees, notary charges and your haz­ard insur­ance for the home. 

If you are using a lender, you will receive a Good Faith Esti­mate from them after you make loan appli­ca­tion.  Their fees are abun­dant and too numer­ous to list in this article. 

These clos­ing costs add up and are notable so be sure to be prepared.

Con­tin­ue reading…

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Categories: Real Estate

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