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…

You can support the San Juan Update by doing business with our loyal advertisers, and by making a one-time contribution or a recurring donation.


Categories: Real Estate

No comments yet. Be the first!

Leave a Reply

Your email address will not be published.

By submitting a comment you grant the San Juan Update a perpetual license to reproduce your words and name/web site in attribution. Inappropriate, irrelevant and contentious comments may not be published at an admin's discretion. Your email is used for verification purposes only, it will never be shared.

Receive new post updates: Entries (RSS)
Receive followup comments updates: RSS 2.0