Buying a new home is an exciting time! We would love to share in your
excitement by helping you through the process. Whether this is your first or
fiftieth home buying experience, we are here to answer your questions and
make each step of your journey as easy as possible. What are the steps you
will take? What should you do first?
The Buying Process - Do You Know What You Want?
Whether you are a first-time home-buyer 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 time frame?
Jot down the answers to these questions to get you started in your home search.
Choose a REALTOR®
It is very easy to get swept away in the emotion and excitement of purchasing a new home. It is essential to make sure both of your eyes are wide open. Our goal is to provide you with the information you need to protect you throughout the home buying process. We aim to be the resource that will save you time, stress, and money.
Get Pre-Approved
"Preapproval" means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a preapproval letter, which shows your borrowing power. You can visit as many lenders as you like and get several preapprovals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports. Pre-Approval by a lender is the smartest decision you can make before shopping for a home. It will speed up the process by weeks, and the lender's letter of approval combined with an offer tells sellers that you are an educated buyer with a lender at your back.
The search is ON!
Once we know what you can afford, we can search for homes that meet your needs and wants. We will create a customized search and keep searching for properties that match your needs (with as many of your "wants" as possible). A home is more than just a collection of bedrooms and bathrooms. Several properties -- each with four bedrooms, three baths, and the same price -- may well represent radically different designs, commuting distances, lot sizes, tax costs, interior dimensions, and exterior finishes. Each of us is different and so it's important to list the features and benefits you want in a home. Consider such things as pricing, location, size, amenities ( extras such as a pool or extra-large kitchen) and design (one floor or two, colonial or modern, etc.).
Next, it's important to consider your priorities. If you can't get a home at your price with all the features you want, then what features are most important? For instance, would you trade fewer bedrooms for a larger kitchen? A longer commute for a bigger lot and lower cost? Lastly, consider your needs in several years. If you'll need a larger home, maybe now is the time to buy a bigger house rather than moving or expanding in the future. If you expect your income to increase, perhaps you should consider a more expensive home financed with a loan program where monthly payments increase in the future.
To begin this process, fill out the HOME FINDER form and we will email you properties that meet your needs immediately as they are listed!
Let the House Shopping Begin!
Using the property emails you receive from us, you will be able to narrow down what you are interested in looking at. We will set appointments and take you shopping! Before you know it, you will have found your dream home.
Make an Offer on your Dream House
Once you've found your dream house, we will research similar houses to help you make a smart, educated offer. 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 not make an offer; or suggest different terms and make a counter-offer. If you choose this last option, the seller may accept, reject or make a counter-offer.
No aspect of the home-buying process is more complex, personal or variable than bargaining between buyers and sellers. This is the point where the value of our experience is clearly evident because we knows the community, have seen numerous homes for sale, know local values and have seen numerous realty transactions.
The Seller Accepts, Rejects or makes a Counteroffer
If the seller accepts your offer, they are agreeing to all the terms and conditions of the offer you submitted. If the seller makes a counteroffer, they are changing the terms and conditions of your offer and submitting it back to you for acceptance. Once all the terms are agreed upon and signed by you and the seller - you have a legally ratified offer!
Get Funding
To obtain a loan you must complete a written loan application and provide supporting documentation. Specific documents include recent pay stubs, rental checks and tax returns for the past two or three years if you are self-employed. During the pre-qualification procedure, the loan officer will describe the type of paperwork required.
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 credit cards, installment payments, rent and mortgage bills in full 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 down payments and below-market interest rates.
Inspections & Conditions
After your loan application has been approved, you have a time limit to complete any inspections. We want to make sure the home you are purchasing is safe and nothing is hiding behind the walls. A number of inspections are common in residential realty transactions. They include checks for termites, surveys to determine boundaries, appraisals to determine value for lenders, title reviews and structural inspections.
Structural inspections are particularly important. During these examinations, an inspector comes to the property to determine if there are material physical defects and whether expensive repairs and replacements are likely to be required in the next few years. Such inspections for a single-family home often require two or three hours, and buyers should attend. This is an opportunity to examine the property's mechanics and structure, ask questions and learn far more about the property than is possible with an informal walk-through. Any issues with the property discovered by these inspections will then be negotiated and resolved with the seller. Don't worry, we walk you through this as well.
Get Insurance!
There are various forms of insurance associated with home ownership, including these major types:
Title Insurance
Purchased with a one-time fee at closing, title insurance protects owners in the event that title to the property is found to be invalid. Coverage includes "lenders" policies, which protect buyers up to the mortgage value of the property, and "owners" coverage, which protects owners up to the purchase price. In other words, "owners" coverage protects both the mortgage amount and the value of the down payment.
Homeowner's Insurance
This provides fire, theft and liability coverage. Homeowners' policies are required by lenders and often cover a surprising number of items, including in some cases such property as wedding rings, furniture and home office equipment.
Flood Insurance
Generally required in high-risk flood-prone areas, this insurance is issued by the federal government and provides as much as $250,000 in coverage for a single-family home plus $100,000 for contents. Local REALTORS® can explain which locations require such coverage.
Home Warranties
With new homes, buyers want assurance that if something goes wrong after completion the builder will be there to make repairs. But what if the builder refuses to do the work or goes out of business?
Home warranties bought from third parties by home builders are generally designed to provide several forms of protection: workmanship for the first year, mechanical problems such as plumbing and wiring for the first two years, and structural defects for up to 10 years.
Home warranties for existing homes are typically one-year service agreements purchased by sellers. In the event of a covered defect or breakdown, the warranty firm will step in and make the repair or cover its cost.
Time to Start Packing!
We will provide you with a packet of information (utility companies, address change forms, moving companies, DMV forms, local school info for your kids) to make your move as stress-free as possible.
Closing
Settlement is a brief process where all of the necessary paperwork needed to complete the transaction is signed. Closing is typically held in an office setting, sometimes with both buyer and seller at the same table, sometimes with each party completing their papers separately.
Whatever the case, the result is that title to the property is transferred from seller to buyer. The buyer receives the keys and the seller receives payment for the home. From the amount credited to the seller, the closing agent subtracts money to pay off the existing mortgage and other transaction costs. Deeds, loan papers, and other documents are prepared, signed and filed with local property record offices. 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.
The KEY of Success
Now that you have the keys to your new home, don't forget about the resources you used to get those keys! Receiving referrals is the greatest compliment we can receive from you.
We would like to thank you again for giving us the privilege to work with you. Hopefully we have answered your questions and gained your trust in us to service you. If there is anything that you feel you need from us, PLEASE do not hesitate to ask. WE LOOK FORWARD TO WORKING WITH YOU .
Monthly Buyer's Pamphlet
5 Reasons You Need a REALTOR®
- A real estate transaction is complicated.
In most cases, buying or selling a home requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page government-mandated settlement statements. As knowledgeable REALTORS, we will guide you through this complexity and help you avoid delays or costly mistakes. - Selling or buying is time consuming.
Even in a strong market, homes in our area stay on the market for an average of 120+ days. And it usually takes another 60 days or so for the transaction to close after an offer is accepted. - Real estate has its own language.
If you don’t know a CMA from a PUD, you can understand why it’s important to work with someone who speaks that language. - REALTORS® have done it before.
Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. That’s why having an expert on your side is critical. - REALTORS® provide objectivity.
Since a home often symbolizes family, rest, and security, not just four walls and roof, home selling or buying is often a very emotional undertaking. And for most people, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you keep focused on both the business and emotional issues most important to you.