Information for Buyers

Buying a home is both an exciting and scary time. It will most likely be the single largest investment you will make. At the same time, your home is your sanctuary from the world and not only do you need to be able to afford it; you need to feel good making the payments on it each month.

This information will help you to better understand the home buying process. I am committed to holding your hand until the keys are in them. Feel free to call or email me at anytime with questions or concerns.

Having a Realtor representing the buyer’s side of the transaction costs the buyer NOTHING as the seller pays commissions. In many cases even FOR SALE BY OWNERS (FSBOs) are happy to pay the commissions to the buyer’s agent to reduce their liability and guide the transaction toward a smooth close.

Step 1 – Get qualified for loan with pre-approval letter in hand:

In today’s market it is essential to get pre-qualified before one begins shopping for a home. This involves speaking with a mortgage broker or bank to obtain a realistic idea of how much home you can afford. This can be done over the phone or on-line and typically a “pre-qualification or pre-qual” letter can be provided in less than 24 hours. I have found it very beneficial to work with a local lender/bank whenever possible and I am happy to provide you with name(s) of people who can help you.

Step 2 – Identify the parameters of your home search:

Through a series of questions, school reports and other tools we will work together to better understand your wants vs. needs to best determine the right areas in which to search. Once complete, the fun begins and we can start shopping!

I’ll help you evaluate each home from an emotional perspective but more importantly from a resale perspective. While it would be great to think you will stay in your home forever, it is more likely you’ll live here somewhere between 5-7 years. Therefore, it is also important resale value is taken into consideration.

Step 3 – Make an offer and prepare for negotiations:

Once we have selected the home that best meets your needs, I will run a market analysis to give you all the tools needed to understand the market in the area you’ve selected.

Together we will write up the Purchase and Sales Contract carefully reviewing all components of the contract. Once complete, I will then present an offer to the sellers which will always include a copy of your pre-approval letter.

Once the offer is submitted I will then negotiate the offer with the other agent or the sellers directly depending on whether the home is listed or for sale by owner. Remember in a negotiation, the deal is not done until both parties have initialed all changes and the contract has been delivered.

Time is truly of the essence so it is important I am able to get in touch with you promptly when we are in the middle of negotiations.

Step 4 – Once offer is accepted, I will need to collect a binder deposit within 24-48 hours:

After the offer has been accepted, I will need to collect a binder deposit from you usually in the amount of 1% of the purchase price. Keep in mind this amount is a general number and might be higher. This binder will be deducted from the monies you will be required to bring to closing. In addition it is essential to be aware of all time deadlines, as we will be out of contract if we don’t adhere strictly to them. If we are out of contract, you could lose your binder – however, I will provide you a timeline and guide you to insure we don’t miss any important dates.

Step 5 – Make loan application within 5 days of contract acceptance:

Once your offer has been accepted, you will need to make application for loan approval within 5 days. Feel free to shop around but make sure you get a loan with no prepayment penalties. Ask anyone who quotes you for a good faith estimate and compare the estimates closely. Some lenders will deliberately leave numbers off to make their closing costs seem more appealing. Again, I can provide you with several names of reputable mortgage brokers.

When your purchase is a SHORT SALE - A short sale is when a lender agrees to accept less than is owed to satisfy the mortgage. Once you’ve made an offer and the seller has accepted it, the offer will be submitted to the lender.

Short sales occur for many reasons including a seller who needs to sell due to financial hardships like change of familial status or job loss. Other reasons could be job location and a home purchased before values declined. A seller may have paid $200K and now the home is only worth $150K.

You should expect to wait on a short sale. The process can take as long as a year and as little as 30 days to hear back from the bank as to whether they will accept an offer.

When a bank reviews a short sale, they’ll order something called a Broker’s Price Opinion (BPO), which is like an appraisal. It lets the lender know the approximate value of the home given current market conditions and taking into account the condition of the home. Most of the time the lender will try to recover around 90% of the homes value. There is almost always an investor involved who will also need to approve the sales price. If the lender doesn’t feel the offer is high enough, they will counter the offer. You can then counter accept or withdraw your offer and we will guide you on what we feel is the appropriate response.

Step 6 – Schedule home inspections within 10 days of contract acceptance:

Once a fully executed contract in place (all parties have signed), you have 10 CALENDAR days to do any home inspections. Inspections include a general home inspection and a WDO (Wood Destroying Organism) inspection. Additionally, you may opt to have a pool and septic tank inspection if applicable. As a result of the inspection, if additional inspections are required such as mold, water, etc., an extension for more time can be requested. If this occurs, more time is allotted and extension can be requested.

I will also provide you with a list of inspectors I’ve used but again, you should feel free to choose your own. Since inspectors’ licensing standards are very loose, you should find an inspector who a licensed contractor and is a member of ASHI (American Society of Home Inspectors).

Once you have decided on an inspector I will need to schedule, as I have to work coordinate my schedule as well as the seller’s. The size of the house will dictate the length of the inspection. As a buyer you are often eager to be at the home during the inspection. However, your presence and following around the inspector can be a hindrance and I encourage you to show up for the last 45 minutes of the inspection. If you are out of town…I will be there to meet with the inspector on your behalf.

Step 7 – Review inspection reports and request repairs in writing:

Once the inspections are complete and within the same 10 calendar-day period we must review the inspections and submit any repair requests to the seller. It is important to remember the contract is “as-is” but as the buyer you have a right to ask for repairs. The seller has 5 days after receiving your repair request to respond. Keep in mind, the seller has a right to decline your request. If this becomes a “deal breaker” for you, you can walk away and your binder will be refunded.

Step 8 – Apply for homeowner’s insurance:

While working on inspections, you will need to select your homeowner’s insurance. I can provide you with names of reputable insurance agents you can shop and ask questions about coverage. You will not be able to close without homeowners (also referred to as hazard) insurance. In our area, you definitely want to make sure you have wind damage as well as flood insurance.

Step 9 – Does your new home appraise?

The final step is the appraisal, which will be ordered by your lender and will give us an accurate value of your home. Lenders will not lend money if the home is overpriced. If your home appraises for less than the contract, we will then need to renegotiate the sales price. If we can’t come to a “meeting of the minds,” you will be able to cancel the purchase agreement and can expect to have your binder deposit returned. However, you will be out the cost of the inspection and appraisal. If the home appraises for more than the contract price, YEAH for you!!!

Step 10 – Scheduling the walk through:

Once the repairs are complete, I will ask for a copy of all receipts and will schedule the final walk through. If you would like to have the repairs re- inspected, there will be an additional cost charged by the inspector.

Step 11 – CLOSING!!!

You will need to bring a cashier’s check and driver’s license. It is essential to check with the closing office to confirm if a cashier’s check will be accepted or if your money has to be wired. I will work closely with your lender to confirm the amount the day before closing if not earlier.

Anyone who will be on the deed must be present at close unless we’ve previously arranged for and secured a POA (Power of Attorney).

Step 12 – WELCOME HOME!!!

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If you are ready to start the home buying process contact me now!!!

This mortgage calculator can be used to figure out monthly payments of a home mortgage loan, based on the home's sale price, the term of the loan desired, buyer's down payment percentage, and the loan's interest rate. This calculator factors in PMI (Private Mortgage Insurance) for loans where less than 20% is put as a down payment. Also taken into consideration are the town property taxes, and their effect on the total monthly mortgage payment.

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