Let's Prepare!
Knowledge and experience are the keys to successful real estate transactions.
One of the keys to making the homebuying process easier and more understandable is planning. In doing so, you'll be able to
anticipate requests from lenders, lawyers and a host of other professionals. Furthermore, planning will help you discover
valuable shortcuts in the homebuying process.
Deciding What You Want?
Whether you are a first-time homebuyer or entering the marketplace as a
repeat buyer, you need to ask why you want to buy. Are you planning to move to a new community due to a lifestyle change or
is buying an option and not a requirement? What would you like in terms of real estate that you do not now have? Do you have
a purchasing timeframe?
Whatever your answers, the more you know about the real estate marketplace,
the more likely you are to effectively define your goals. As an interesting exercise, it can be worthwhile to look at the
questions above and to then discuss them in detail when meeting with me.
What Money Do You Need To Get Started?
Homes and financing are closely intertwined. (Financing is the difference
between the purchase price and the downpayment, commonly referred to as debt or the mortgage.) The good news is that over
the years new and innovative loan programs have evolved which require a 5 percent downpayment or less. In fact, a number of
programs now allow purchasers to buy real estate with nothing down. A downpayment is the amount of money you
actually pay toward your new home. A downpayment plus your financed amount equal the purchase price of the home.
In addition to a down payment,if required, purchasers also need cash for
closing costs (the final costs charged to you to actually have the loan processed, also known as "settlement costs").
Several newly emerging loan programs not only allow the purchase of a home with no money down, but also underwrite (loan) closing
costs.
Not everyone, however, elects to purchase with little or no money down.
Less money down means higher monthly mortgage payments, so most homebuyers choose to buy with some cash up front.
As to closing costs, in markets where there are more homes for sale
than there are buyers, it may be possible to negotiate an offer for a home that requires the owner to pay some or all of your
settlement expenses. Speak with me for details.
Are Your Finances in Order?
Those great loans with little or nothing down are not available to everyone:
You need good credit. For at least one year prior to purchasing a home, you should assure that every credit card bill, rent
check, car payment and other debt is paid according to it's terms and it is VERY IMPORTANT they each be paid
on time. **It is CRITICAL that you do not buy any items that add additional debt while you are in the process of buying
your home. If you must buy a car or add debt to your credit card, first speak with your mortgage
lender to fully understand the impact this will have on your ability to purchase a home.
Buying and selling real estate is a complex matter. At first it might seem
that by checking local picture books or online sites you could quickly find the right home at the right price.
But a basic rule in real estate is that all properties are unique. No two
properties -- even two identical models on the same street -- are precisely and exactly alike. Homes differ and so do contract
terms, financing options, inspection requirements and closing costs. Also, no two transactions are alike.
In this maze of forms, financing, inspections, marketing, pricing and negotiating,
it makes sense to work with a professional who knows the community and understands the complete real estate process.
When beginning the search for your new home, it’s important to understand
your needs and preferences. Whether searching by price, features, or location, the more I know about what is important
to you, the easier it will be for me to find you your ideal home.
We can find the perfect homes quickly and efficiently using an array
of resources. I will take care of all the details of purchasing a home, including: scheduling showings to
fit your schedule, providing market information for price comparisons, negotiating the purchase contract, and working with
you every step of the way until the closing and possession of your new home.
Whether you have questions about the process or you’re ready to begin
your first step of buying a new home, I am ready to help!
The first step in buying a home is pre-qualification for financing. Pre-qualification
is not a full mortgage approval, but a basic estimate of what you can afford in a home loan. Along with the down payment available
to you, the loan amount will determine what price range will work for you. Pre-qualification is sometimes confused with pre-approval,
which is a more comprehensive analysis and commitment of a loan program for a buyer. Pre-qualifying helps you identify and
resolve any issues you may encounter in your application. Click here to simplify your loan process and get pre-qualified.
A mortgage is the loan a potential homebuyer needs in order to make up
the difference between the down payment and the purchase price of the home.
There are thousands of loans available out there from a variety of lenders,
but in general, the mortgage you choose will likely be determined by at least several key factors:
- How much down? Loans with 5 percent down or less
are now widely available -- in fact, loans from major lenders with no money down have appeared in recent years.
- If you place less than 20 percent down, lenders
will want the mortgage guaranteed by an outside third party such as the Veterans Administration (VA), the Federal Housing
Administration (FHA) or a private mortgage insurer (PMI, or private mortgage insurance, is required by lender to protect against
any mortgage defaults). More than 2.5 million VA, FHA and PMI loans are generated each year.
- How's your credit? The best rates and terms are
only available to those with solid credit. To get the best loans, make a point of paying all monthly credit cards, installment
payments, rent and mortgage bills according to their terms and on time.
- Are you a first-time buyer? It might seem that
"first-time buyer" means someone who has never owned property before, but under most state programs, the term refers to those
who have not owned property within the past three years. State-backed first-timer programs often feature smaller downpayments
and below-market interest rates.
It usually takes about 30 to 45 days to process a loan application. The
actual time depends on how promptly the lender can get an appraisal of the property, a credit report, and verification of
employment and bank accounts. Most loans will require a buyer to provide verification of income, assets, and long-term
debt.
Your mortgage lender makes the home buying process easier, faster,
and more convenient by pre-qualifying buyers. The primary focus of a mortgage broker is to provide superior
products and employ the latest in communication technology to ensure the very best financing experience. They guarantee their
service by offering the best response and best services. Have your own preferred lender? That's OK!
Let me know the name and contact information for your lender and we'll get the process started! If you would like
a referral please click here.
My website is a one-stop resource for finding your ideal home, featuring
unlimited search capabilities and complete property profiles on thousands of homes. If it’s on the market, it’s
on this website.
It’s a good idea to explain your goals and coordinate a plan with
me. Touring homes with and visiting open houses in the neighborhoods you are interested in is one way to familiarize
yourself with the market and develop a relationship with your realtor. **Alert** When you visit new home construction
sites without your chosen realtor, you may find that you no longer have the option to choose the
realtor who will represent your purchase in that development. Once you introduce yourself or sign in
at the model home many new home construction sites will assign you to a "buyers agent" in that development. No
longer may you work with an agent outside of the builders "network". I will be happy to escort you through any new constuction
sites to avoid this problem.
As a buyer, here's what actually happens. A home has been placed on the
market for which the seller has established an asking price as well as other terms. In effect, this is an offer. At this point,
you have three choices: accept the seller's offer and create a contract; reject it and withdraw your offer; or suggest
different terms and make a counter-offer. If you choose this last option, the seller may accept, reject or make his own counter-offer.
No aspect of the homebuying process is more complex, personal or variable
than bargaining between buyers and sellers. This is the point where the value of an experienced REALTOR® is clearly evident
because he or she knows the community, has seen numerous homes for sale, knows local values and has spent years negotiating
realty transactions.
Once you find a home that fits your needs, we will draw up a Contract
of Sale, or Purchase and Sale Agreement. This document defines the proposed purchase price, the terms, and the timing of the
closing on behalf of the buyer. The contract also serves as direction to the escrow company to close the transaction. With my
help, you and the seller can then negotiate and come to terms on a mutually acceptable contract. Of course, the seller is
free to accept or reject any offer, or to propose a counteroffer revising the original terms.
You sometimes hear that the amount of your offer should be X percent below
the seller's asking price or Y percent less than you're really willing to pay. In practice, the offer depends on the
basic laws of supply and demand: If many buyers are competing for homes, then sellers will likely get full-price offers and
sometimes even more. If demand is weak, then offers below the asking price may be in order.
In addition to the price you are willing to pay, the formal offer will
consist of specific deadlines, including an offer expiration date, a closing date, and possession date. When securing your
offer, you must also outline the earnest money deposit amount, which you place in an escrow account or client trust account
as a good faith intention to complete the transaction. Your offer is based on contingencies related to financing and inspections.
If you have a house to sell, your offer may also be contingent on its sale. If you have a home to sell click on the
following link: Help me Sell My House.
During the home buying process, I'll provide you with valuable negotiating
expertise. I offer you valuable market information by assessing current competition and past sales of similar homes.
By preparing a Competitive Market Analysis, together we will formulate an offer for your desired property. I will
also provide you with assistance in evaluating any counteroffers and contingencies that may arise in the process.
The Contract of Sale, or Purchase and Sale Agreement, is a legally binding
document whereby the homeowner and buyer agree to terms under which the buyer will acquire the seller’s property.
Who is paying the various expenses of the sale, including closing costs?
Both
buyers and sellers incur expenses during the transaction process. Buyers are typically responsible for costs associated with
the down payment placed on their new home, any home inspections, a portion of the escrow fees, the portion of the title insurance
policy that benefits the lender, and any loan costs. Sellers generally pay for a portion of the escrow fee as well as a standard
title insurance policy. The responsibility of the annual expenses of property taxes and homeowner association fees is typically
shared between buyers and sellers and prorated based on the closing date.
What is the actual closing date?
The closing date of a real estate transaction is the date in which proceeds
from the sale are available to the seller and the transfer of the title has been recorded by the county. The lender is responsible
for providing the buyer with a good faith estimate, which will provide a close approximation of the buyer’s financial
requirement to close the transaction.
When Do I Get To Move In?
The date of occupancy is agreed to between the buyer and seller during
the negotiation process. If the seller remains in possession after closing, there may be a "rent back" agreement in place
prior to closing.
To decrease the chances that you’ll have to pay for repairs on a
home during the first year of ownership, invest in a home warranty. A Home Protection Plan will cover many
of the costs of repairs or replacement systems to your new home. From water heaters to septic systems, to central air and
heating, a Home Protection Plan protects against the normal wear and tear of your new home's covered major mechanical systems
and built-in appliances for a specified period of time after the close of the sale.
To lessen the stress of buying a home, and for peace of mind that comes
with a home warranty, it makes perfect sense to call me today for more details.
The Importance of Home Inspections
It’s common for buyers to make an offer contingent upon one or more
home inspections, which the buyer arranges and pays for with the seller’s consent. If the inspection findings are acceptable
to you as the buyer, the closing process can begin. If the inspection uncovers problems, I can provide valuable suggestions
on how you might work with the seller toward a mutually acceptable resolution.
A home inspection should be conducted by a qualified professional. We recommend
that buyers be present when an inspection is performed so that the inspector can describe the process and findings to you
personally.
The Inspector Should:
- Look for any structural, mechanical, and/or other
defects in the property.
- Examine all systems, including heating, air conditioning,
electrical wiring, and plumbing.
- Spend time checking the exterior of the house,
including the roof, foundation, and chimney.
- Check the attic and interior for proper venting,
insulation, and electrical outlets.
- Test all appliances and plumbing fixtures to verify
working condition.
- Check all bathrooms to see if moisture has affected
the areas around the tub or shower.
- Inspect for other items such as insects, termites,
and other pests.
An appraisal is a professional evaluation of a property's monetary value,
usually completed at the request of the lender and for the lender's benefit. Appraisers consider numerous factors such as
square footage, construction quality, design, floor plan, amenities, energy efficiency, lot size, topography, view, and landscaping.
Other issues appraisers take into account are neighborhood quality and a property's proximity to transportation, shopping,
and schools.
The final stage of the transaction process occurs with the transfer of
title from seller to buyer. After closing has occurred, the policy is sent to you by your title and escrow professional (the
third party in a real estate transaction) who transfers the money and documents, including title and deed, from
the buying and selling parties. The escrow company prepares documents, draws up the closing statements, obtains necessary
signatures, records documents, and receives and disburses funds.
What you need to do.
One of the best parts of settlement is that buyers
and sellers need to do very little.
Before closing, buyers typically have a final opportunity to walk through
the property to assure that its condition has not materially changed since the sale agreement was signed. At closing itself,
all papers have been prepared by closing agents, title companies, lenders and lawyers. This paperwork reflects the sale agreement
and allows all parties to the transaction to verify their interests. For instance, buyers get the title to the property, lenders
have their loans recorded in the public records, and state governments collect their transfer taxes.
At the closing appointment, you will review and sign final paperwork, and
bring the balance of the funds required for the down payment. If either seller or buyer cannot attend, he or she can sign
papers in advance, and/or grant power of attorney to a representative. The buyer will be asked at closing to sign the mortgage
and any other papers that the lender, and/or other interested parties, may require. Upon conclusion of the closing process,
the deed and mortgage will be recorded and all previous obligations of the seller will be discharged. Once the closing papers
have been executed and the deed recorded, you can take legal ownership of your new home.
Once you’ve been handed the keys to your new home on the agreed possession
date, it’s helpful to keep in mind that some practical and cosmetic matters need attention. Before you take possession
of your new home, utilities will need to be changed to your name. And services such as electricity and phone may need to be
reactivated. Also, check in with the nearest post office to assure proper mail forwarding. Consider hiring a cleaning service
to thoroughly clean the home before you move in. And for security purposes, it may be prudent to change the locks and install
a theft deterrent system.
