Buying a Home
Why do you need me, a buyer’s agent to represent you when buying a new home?
I will help you determine what kind of property you would like, what area you would like to be in, what you want in a property – your must-haves vs. your desires.
I will help you determine your price range, provide you with financial calculations, and provide information to you on getting pre-qualified for financing,
I will research the MLS and find you homes that meet your criteria and arrange showings for you.
I will accompany you to see the properties, evaluating and comparing the ones you see and helping you eliminate ones you don’t like and compare the ones you do.
I will instruct you on how to fill out forms and explain documents when placing an offer.
I will negotiate with the seller’s agents until the purchase contract is agreed upon and signed.
I will coordinate with the seller’s agent, banks, lawyers, title companies, inspectors, etc to ensure everything is completed in a timely manner and prepared to the best of my ability in time for closing.
I will attend the closing with you.
I will follow up to ensure all documents and funds are sent to appropriate offices and copies distributed to appropriate parties.
I will make this process easy, fun and stress free!
FAQs for Buying a Home
1. How long does the buying process take? - That depends on several factors. Preapproval can take as little as a few hours. It also depends on whether or not you already picked a REALTOR to assist you, how long it takes you to pick out a new home, how long the negotiations go on, the type of financing you get, etc. From the time you get an accepted offer, closing usually will happen in about 30-45 days. Short sales or foreclosures could take longer but that is on a case by case basis.
2. Will I get my earnest money back if the contract is not accepted? - Yes, the earnest money is not deposited into an account until there is an accepted offer. The money will be returned to you when negotiations are stopped without an agreement.
3. What is the process to get my earnest money back if the contract is accepted and the home inspection finds an issue? - If you, as the buyer, choose to back out of a contract because of an issue found during home inspection, the Seller's agency will return the check to the Buyer's agent to be given to you.
4. Should I lock in my interest or should I float? - Your mortgage broker can help you with that question. It will depend on the market and the flexibility of the rates at the time you are purchasing your home.
5. When will I get the keys? - In most cases, you will get the keys at closing. The seller's agent will typically turn them over to the buyer or the buyer's agent at closing. There are times when possession is given at the time other than closing. It will be negotiated when keys are turned over and stated in the purchase agreement.
6. What happens at the closing? - Typically a closing can happen at the buyer's bank, an attorney's office, a title office or a real estate agency. The lender, attorneys for both sides, and possibly both agents will attend along with the buyer. Sometimes a seller will attend but not often. The closing agent will go over the terms of the contract and the buyer will sign all necessary paperwork required by law. The closing agent or the mortgage lender will go over the mortgage paperwork and the buyer will sign as required. The keys are typically given to the buyer and the buyer will take possession at that time.
7. Is the closing date on my contract guaranteed? - No. The closing date is an estimated time for closing. From the time of the offer acceptance, it is necessary to perform any required inspections, the mortgage lender will process financial paperwork to underwriting for final accceptance, title work will be reviewed by attorneys for any liens, judgements, etc. Once all that is completed, a HUD Settlement Statement is prepared and all parties will be notified on a closing date, time and place.
8. What monies will I need to come in with? - That will depend on your down payment, closing costs, fees and invoices. Your bank will give you an estimated amount in the Truth in Lending statement that you receive early on in the process. The HUD Settlement Statement will be the document that will tell you how much to bring to closing. Your mortgage lender will also be in touch with you regarding the amount.
9. How long does the home inspection take? - The home inspection itself takes about an hour and a hald to perform. If a radon test is also performed, it will be in the residence for 48 hours reading the radon levels. Radon is a radioactive gas that comes up through the ground. It can not be seen or tasted and is odorless. It is believed to cause cancer. The inspector will then go back and retrieve the reading device and forward the report to whoever ordered it. Typically the buyer will go to the home inspection and the inspector will explain his findings and show what he is looking for, how to shut off the utilities in case of emergency, etc. Home inspections are usually paid for at the time of the inspection.
10. Do I really need a home inspector? - A home inspection is always recommeneded. Home Inspectors are trained/licensed to look for things that could be a health or safety hazard in the home. The inspector will not be able to inspect everything at all times, i.e. hidden defects, testing air conditioner in the winter months, electrical covered in finished walls, etc.
11. Can you recommend an attorney, home inspector or lender? - As a REALTOR®, we have worked with many professionals. If you need one, we can certainly recommend some for you to call to determine if you would like to work with them or not.
12. How much should I offer? - Your offer should be based on the comps from neighboring homes in the area, the condition of the home, the "extras" that the home may have or may not have, how much competition you may have in the purchase. An offer could be considerably less than asking price and could possibly be more then the asking price should there be a bidding war where more than one party is submitting an offer on the home.
13. How many homes does the average buyer look at? - From our personal experience, typical buyers will look at 15-20 properties. We've had experiences where a buyer found what they wanted in the first home they were shown and bought it two days later. That doesn't happen every time. With the electronic age where everything is on the Internet, most buyers will shop from their computers. If a buyer is looking for a home for themselves or their family to live in, they take a little more time to find what they are looking for. An investor wating to pick up a rental property or a cheap foreclosure, may only look at the one property. Availability in the market and the timeframe a buyer has to look for a home also has a big factor in how many homes a buyer will look at.
14. How often do you find the perfect property on the first day? - That does not happen often but more than you may think. Even if a buyer found something they really liked, they may want to still look at more properties, just to make sure! However, don't wait too long. If you like it, someone else is going to as well. No property is going to be absolutely perfect. There is going to be a give and take relationship in everything you look at. Follow the 80/10/10 rule! If you find a house that has 80% of what you are looking for, 10% of things that you can change and 10% of things you can live with - it's a keeper!
15. What is the likelihood of a multiple offer situation? - That depends on the market and availability of homes within a certain search criteria, the competitive price of a home and the time of year. Spring and Summer are typically the busy time because families want to move when kids are out of school if they can.
16. What are my fees? - The seller will typically pay the real estate broker's commission, unless the agent assists the buyer in finding a FSBO. The other fees could be for inspections, earnest money, attorney's fees, title fees, appraisal fees, application fee, etc. Most fees will be shown on the Truth in Lending or the HUD Settlement Statement.
17. Who pays your commission? - The seller pays the commission to the list broker. The listing broker agency typically offers a selling broker a percentage or dollar amount of that commission to the selling broker agency.
18. Should I get a Home Warranty or Home Inspection? - You should always take advantage of a home warranty when it is offered. A home inspection is always recommended.
19. Can you show me FSBOs? - Yes, I can show FSBOs. Some sellers will agree upfront to pay a commission and sometimes it can be written in the offer. The buyer can also pay the commission to their agent.
20. Do you do open houses? - I do open houses if the Seller is in agreement to do so. I usually try to keep them to no longer than 1 hour.
21. What is radon? - Radon is a radioactive gas that comes up through the ground. It cannot be seen or tasted and is odorless. It is believed to cause cancer. For more information go to: http://www.epa.gov/oncampus/pdf/radonfactsheet.pdf
Is there anything I should NOT do during the house hunting process?
- Do not co-sign on another loan, do not go out and purchase anything that will require a pull on your credit report, i.e. new car/truck, new appliances, jewelry, motorcycle, RV, etc. Yes, that also include cable, satellite dish service, telephone, utilities and even some insurance companies pull credit reports now.
- Do not schedule a vacation to go out of town. Unfortunately, the closing date is just an estimate and you need to be there!
- Do not go to open houses or showings without your agent. If you do stop by an open house, take your agent's business card with you and let the hosting agent know that you are already working with an agent. Don't call the listing agent, call your agent!
- Do not sleep on it too long, especially if it is a hot market. The house you choose could be gone by the time you come back if it's a good one.
- Do not get a divorce, do not change your name. If you are in the process of getting a divorce or separated, get divorced first.
- Do not change or quit your job. If you do lose your job, be sure to tell your lender immediately.
- Do not forget to tell your agent if you are allergic to specific animals so we can eliminate those houses right away.
- Do not forget to tell your agent if you hae a house to sell first.
- Do not hide information from your lender or your agent.
- Do not turn down a home warranty if one is offered.
- Do not talk directly to sellers.
- Do not igive up confidential information about your situation unless it is someone working for you.
- Do not give away negotiating power by talking to too many people or saying too much while in the house (always assume you are being recorded). Do not post about houses you're seen on social media sites, good or bad.
- Do not forget to tell your agent what is most important to you.
- Do not call at the last minute to cancel appointments.
- Do not use an attorney that does not specialize in real estate.
- Do not look at short-sale properties if you need to move immediately. Short- sales can take longer than the average sale.
- Do not start looking at a certain price range until you are pre-approved and know you can afford it.
- Do not believe what you see on HGTV or other real estate reality shows! The majority of those shows are scripted.
- Do not keep too many on the "yes" list when looking at new houses. At the most, keep a Top 3 List, when you find a 4th you like, get rid of one of the Top 3.
- Do not delay paperwork or requests for information from your agent or lender, etc. If they are asking for it, they need it for a reason and a delay will only cause further delay in closing.
- Do not forget the 80/10/10 rule! If you find a house that has 80% of what you are looking for, 10% of things you can change and 10% of things you can live with, then it's a keeper!
- Do not hesitate to ask your agent any questions or what you can or can not do!
10 Common Home Buying Myths (information courtesy of http://blogs.forbes.com/people/lizdavidson/)1.) Buying is always better than renting - Depending on the price of the home, how long you stay in it and also how the market is in your area, buying a home can generally take 5-7 years just to break even with the cost of buying, owning, and selling a home. When buying a home, keep in mind the time frame and any job opportunities that might come your way.
2.) Real estate is a good growth investment - According to the Case-Schiller home price indices, American homes have only appreciated at less than 1% above inflation and much of that was during a period of falling interest rates which tend to boost home prices. This makes sense since homes don't produce anything, they can only rise with the ability of people to purchase them. All the growth you see in home prices is due to inflation. As we all saw during the financial crisis, home prices don't always go up. What makes a home a good investment is the ability to lock in your housing cost, or rent it out for additional income (rent tends to go up with inflation.)
3.) A 30-year fixed mortgage is always the best deal - This may be true if you are intending on staying in the home that long, but if you are not intending on staying, a fixed rate for 7-10 years may be more appropriate. The longer you fix the rate, the higher your interest rate will be so you could be paying a higher rate for nothing.
4.) Always choose the mortgage lender with the lowest interest rate - In a competitive buying market like many housing markets are, the reliability of your lender could mean the difference between getting your dream home and losing to another offer so you'll want a lender with a good reputation, and will also work well with your real estate agent.
5.) You can afford a mortgage payment as long as total debt payments are less than 36% of your income - Only you know how much you can really afford. Your best bet is to track your actual spending and then see how much more you can really afford to pay. You should be saving at least that much towards your down payment to see if you can really do without that income.
6.) Everyone can write off all the mortgage interest from their taxes - It's true most taxpayers can write off the interest they pay on their mortgage loan as a tax deduction, but the value of this tax write off may be less than you think. The average mortgage interest rate is 4.5% and the average loan balance is just under $150,000.
7.) You need a 20% down payment - While putting down 20% is ideal, not everyone can realistically afford that. A smaller down payment in exchange for paying PMI can work until you have enough equity in the home to have it removed. FHA and VA loans programs require down payments as low as 3.5% and 0% respectively if you and the property qualify. Some lenders have started offering piggy-back loans, where borrowers with strong credit and low debt-to-income ratios can get a second loan to cover part of the down payment, however the interest rate will be higher.
8.) All you need upfront is the down payment - The down payment is just the beginning. Closing costs can be another 2-5% of your home's purchase price. How about any repairs, improvements aor furnishings you'd like to add to your new home. Remember, it's a good idea to have at least 3-6 months reserved cash for any expenses, including your new mortgage payment.
9.) You need to save for your full down payment - While this would be ideal, it may not be affordable for everyone. There are several government and private programs that offer assistance, such as the first time home buyer program. You may be able to take out a loan from your retirement plan, but you'll lose earnings on the amount you borrow. Another option would be taking money from your IRA, however, this may come with a penalty.
10.) The only additional ongoing cost will be PITI (Principal, Interest, Taxes and Insurance) - Be sure to leave room in your budget for any incidental costs when figuring out how much of a mortgage payment you can afford. Don't forget any homeowner's association fees, utitilies may run higher if the purchased home is bigger than what you are leaving and any maintenance costs.