The Home Buying Process€¦ · Mend and fix Enhanceand Beautify Prepare for an Open House 1. Scrub...

Deborah L. [email protected]

The Home Buying Process

TEAM REALTY

18 Ways To Prepare Your Home For Selling

Clean and Organize

Mend and fix

Enhance and Beautify

Prepare for an Open House

1. Scrub every nook and cranny2. Clear out the clutter.

3. Remove personal items.4. Organize your closets.

5. Tackle that honey-do list.6. Repaint the walls in neutral colors,

like grays, tans, and whites.7. Update kitchen and bathroom fixtures, faucets and hinges.8. Boost the curb appeal – make sure your home’s exterior looks excellent.

9. Banish bulky furniture.10. Make sure the purpose of each is

clear.11. Turn the bathroom into a spa with candles, flowers and matching towels.12. Group living room furnishings into conversation areas.13. Create focal points to highlight special features.

14.Eliminate strong, lingering smells.15.Bring nature inside with potted plants or

flowers in a vase. 16.Let in the natural light & illuminate dim

corners with lamps.17.Bake something yummy (or fake it with

a scented candle).18.Create vignettes to make your house

look lived in.

TEAM REALTYDeborah L. [email protected]

14 Sources of Down Payment Money

1. Your employerCheck to see If your company offers home- buying

or relocation services.

2. Friends and relativesAsk those near and dear to you for cash gifts.

3. Your local government, city or county Google your city, county and state for .gov sites that offer down payment assistance programs.

4. Tax refundForego the spending spree and bank your refund instead.

5. A second jobWork a few hours a week driving or making

deliveries; make use of specific skills by picking up freelance work online.

6. Reprioritized expensesRedirect unnecessary costs to your down payment fund: Bring lunch from home, cut back on your cable TV plan, quit the gym.

7. Garage salesGet a jumpstart on packing by offloading unwanted items.

8. Online sellingSell your more unique or collectable items on eBay, and use Craigslist or LetGo to sell other items more locally.

9. High-yield savings accountMove down payment funds from your no-interest checking account to an interest-bearing savings account.

10. Spend-to-save programsSign up for bank programs that automatically transfer funds from your checking account to your savings account when you make debit or check card purchases.

11. Cash rewards credit cardSwitch to a credit card that pays cash-back rewards instead of merchandise or service points.

12. Retirement accountsAsk your financial adviser if it’s possible to borrow some funds from your 401(k) or IRA.

13. Sale of stocks or other investmentsParse your investment portfolio for stocks, bonds, mutual funds or securities that you can liquidate.

14. Sale of previous home If you’ve already sold your existing home - or plan to – your built-up equity could make a sizeable contribution to your down payment.


The Mortgage and Loan Process

Funding Your Home Purchase1.Financial pre-qualification or pre-approvalApplication and interviewBuyer provides pertinent documentation, including verification of employmentCredit report is requestedAppraisal scheduled for current home owned, if any

2.UnderwritingLoan package is submitted to underwriter for approval

3.Loan approvalParties are notified of approvalLoan documents are completed and sent to title

4.Title companyTitle exam, insurance and title survey Borrowers come in for final signatures

5.FundingLender reviews the loan Funds are transferred by wire

Why pre-qualify?I recommend my clients to get pre-qualified before beginning their home search. Knowing exactly how much you can comfortably spend on a home reduces the potential frustration of looking at homes beyond your means.


Top Questions to Ask aMortgage Lender

o Are you licensed by the state?

o How long have you been originating loans?o Whom do you represent - a bank, broker,

finance company?o What types of loans do you offer?

o For a reve4rse mortgage, who will I work with after closing?

o What are the loan application/approval process fees?

o Are you going to hold this loan or sell it?o How do you keep my personal info secure?o Will you sell my information?o How can I reach someone after hours?

For the lender:

For the mortgage brokers:

About loan rates:

About loan costs:

o How do you get paid?

o How much will you make on this loan?o Whoa are the top lenders that purchase loan

applications from you?

o What interest rate are you offering, and

how did you arrive at it?o Is this the best rate you can give me?o What is the highest my ARM (adjustable

rate mortgage) rate can go?

o How long will you lock in my rate? What does the lock cost me?

o Can you explain an annual percentage rate (APR)? What is it for this loan?

o Will you give me a fee sheet or estimate of

funds to close?o Will you explain my good faith estimate

(GFE)?o What am I paying in points?

o What are my monthly payments?o Do I need to pay private mortgage

insurance (PMI)?o Are there any prepayment penalties on this

loan?o How long will the loan take to close?

For more answers to your home finance questions, please contact me or visit Zillow’s Mortgage Learning Center at zillow.com/mortgage-learning.


10 Things You Should Ignore While House Hunting

1. A Home’s AgeQuality materials, classic style, charm and inherent character can be hard to find in newer builds.

2. Paint ColorsRepainting is cheap, easy and fast. Focus on the structure of the room, window placement, and other permanent features.

3. Wonky WallpaperIt might take a little elbow grease, but wallpaper is easily replaced or covered.

4. Kitchen AppliancesIf you leave room in the budget for new features, that avocado-green fridge shouldn’t be a deal breaker.

5. HardwareDrawer pulls, doorknobs and sconces are simple to update, so don’t let ugly ones deter you from seeing an otherwise charming room.

6. Questionable carpetDon’t cross a home off your list because of ho-hum flooring. You have many options for replacing it that won’t break the bank.

7. Funky OdorsExcept for a serious mold problem, most smells can be eliminated with a powerful deep cleaning.

8. Curb AppealYour agent brought you to the home for a reason: find it! Envision different landscaping or a tidy porch and you just might see the home of your dreams.

9. Popcorn CeilingsRemoving that crud can be messy and pricey, but it’s worth doing.

10. Lack of privacyFences and hedges make great neighbors. Your agent might also have ideas about possible solutions.


First Time Home Buyers Checklist

1. Make sure you’re (really) ready❑You have a stable job.❑You can see yourself living in the same

town for the next 5 to 10 years.❑You’re prepared for the extra work that

comes with homeownership.

2. Create your home wish list❑Use the handy chart below to determine

what’s most important to have right now –e.g., location, number of bedrooms, a yard

❑Check out different neighborhoods, home styles and listing online to get a feel for what’s most important to you.

3. Figure out what you can afford❑Request your credit report from all three

credit bureaus (Equifax, Experian, and TransUnion). Fix any errors right away.

❑Determine a down payment amount (ideally 20% to avoid paying private mortgage insurance).

❑Calculate how much you’ll need in an emergency fund (for unexpected maintenance or repair costs).

4. Gather necessary documents❑Collect proof of employment, including

pay stubs and past tax returns.❑Print out bank and investment account

statements from the past 30 days.❑Compile your previous addresses and

current landlord’s contact information.

5. Research mortgages❑Request quotes from multiple lenders and

comparison shop for loans.❑Get pre-qualified for a loan (many sellers

won’t even consider a bid unless you’re pre-qualified).

❑Obtain a pre-approval letter (requires a credit and background check, but it can make you stronger candidate).

6. Assemble your team❑Find a real estate agent you trust and

communicate well with.❑Ask a friend or family member for second

opinions as you go through the buying process.

Must Have Nice to Have Someday


Planning Your Move

Get moving company recommendations and bids, then hire one 6-8 weeks before you move.

❑ Take inventory

❑ Get insured

❑ Cut Back

❑ Get Supplies

❑ Stay Organized

❑ Keep It CloseHand-carry valuables and important documents in a fire-safe box.

❑ Stop and Start Services

❑ Be Ready

❑ Notify People

▪ Water▪ Electricity▪ Gas▪ Trash▪ U.S. Postal Service▪ Cable▪ Telephone▪ Insurance companies▪ Educational facilities▪ Child care and pet care▪ Doctors, veterinarians,

lawyers, and other professional services

▪ Magazines, newspapers and other subscriptions

▪ Clubs and memberships▪ Financial institutions: bank

accounts, loans, credit cards, autopay services

▪ Auto finance company▪ Department of Motor

Vehicles▪ Social Security

Administration▪ The electoral roll▪ Tax assessor

TEAM REALTY

❑ Hire Help

Will your moves and homeowner’s insurance adequately cover your belongings during the move? If not, purchase additional insurance.

List the items that are going with you and inventory them with your camera phone.

Pare down your pile of possessions through yard sales, online selling or donations.

Collect clean, used boxes and newspapers. Don’t forget packing tape and markers.

Map out where items will go in your new place and pack them by room. Clearly mark what’s in each box, especially fragile breakables.

Separately pack toiletries, medicinesand clothing to easily find them after the move.

Share your change of address with friends and family, schools, your employer and landlord, if necessary.

Determine dates to stop utilities/servicesat your old place and start them at your new one.


1. How much will a second home cost?Besides sale price, you should factor in mortgage, property taxes, insurance, utilities, and maintenance fees – and some of those expenses are probably higher than you think – plus up to 1.25% of the purchase price to cover annual maintenance & unexpected repairs.

You’ll also need to budget 20% more for insurance than you pay for your primary residence. If you rent out your second home, you’ll also need medical and liability coverage

3. Are you buying it for the right reason?

4. How do you plan to use the home?

You should only buy a second home after the rest of your finances are in tip-top shape. All of your mortgage payments – including the second home – and remaining debt should consume no more than 36% of your monthly gross income, If you can’t make those numbers work, this probably isn’t the right time to spring for second home.

Some people view a vacation home as a way to save on the lodging fees they pay on their annual trip. But you can take pretty swanky vacations for what you’ll spend on a vacation home.

It might help to view Home #2 as an investment – either as your retirement home or a property you can sell later to boost your retirement income, Research median home prices over the last 20 years to see how a property has performed historically.

If you’re buying a second home for your own personal use, purchase one you love. But if you’re counting on rental income to cover the mortgage, be more conscious of the home’s location and appeal to renters.

Also remember that different tax rules apply according to whether your second home is for personal use if you rent it. Given the complexity of tax considerations and reporting rental income, it’s a good idea to consult with a tax professional before you decide to buy.

8 Questions to Ask Before Buying a Second

Home

2. Can you truly afford a second home?


5. If you rent the home, is it the right property?

First, think about how often you’ll want to rent, plus how long the potential rental season will be, then calculate how much you can make per year. Is it enough to cover the mortgage, taxes, insurance and marketing for the property you’re considering?

While you’re on vacation-home shopping, take a look at similar properties in your area to see how active the rental market is, how other places are priced on a nightly or weekly basis, and how attractive your home will be to potential renters. Make sure it will stand out.

7. Is the home located in a high-risk area?

8. Are you rushing into the decision?

Many people start out thinking they’re going to do all the work themselves – advertising, finding and screening tenants, cleaning, handling contracts and deposits, and regular maintenance and repairs – until they realize finding tenants and doing paperwork takes up a lot of time. Then the idea of paying a property manager 20-30% of the rental income isn’t so bad.

Homes located in designated flood zones or areas that are prone to other natural disasters such as earthquakes or tornadoes will cost more to insure. Waterfront homes might attract more renters, but you’ll pay more to cover them.

Only you can decide if extra insurance costs, plus restoring a damaged home is worth the hassle, if you buy in a riskier area, budget for higher and sometimes unexpected costs.

Don’t let the impulse or emotion pressure you into an unwise purchase. Do your research and sleep on any big decisions you face. Second homes are a luxury, so time is on your side when you’re ready to start looking.

8 Questions to Ask Before Buying a Second

Home

6. Will you need to hire a property manager?


Appraisal: An estimation of a home’s market value by a licensed appraiser based on comparable recent sales of nearby homes.

Backup offer: An offer on a home under contract that becomes active if the primary contract falls through.

Contingent offer: An offer that is accepted by the seller, but certain conditions must be met before the sale is final.

Down payment: The percentage of the home purchased price (usually between 5% and 20%) paid upfront in cash.

Escrow: A neutral third party that holds funds from the buyers and distributes them when all conditions have been met.

Federal Housing Administration (FHA): The government agency that insures loans designed for low to moderate income borrowers.

Good Faith Estimate (GFE): A form used by lenders to give to borrowers with an estimate of fees due at closing.

Homeowners Association: A management organization within a community, subdivision or neighborhood that creates and enforces rules for properties within its jurisdiction.

Inspection: An examination of a property and its system performed by a qualified professional.

Jumbo Mortgage: A mortgage that exceeds the conforming-loan limit, usually for luxury purchases.

Key Rate: An interest rate set by the government that determines the cost to borrow money

Loan-to-value (LTV): The risk assessment ratio used by lenders; mortgage divided by the appraised value.

The ABCs of Real EstateMultiple Listing Service (MLS): A database for real estate agents to list and market for-sale homes.

Net proceed: the amount received by the seller at closing after all other costs have been deducted.

Open house: An event hosted by a listing agent to showcase a home to potential buyers.

Pre-approval letter: A letter indicating that a lender is willing to loan a specific amount if money for a purchase; does NOT guarantee loan.

Quitclaim deed: A deed that transfers property rights without any validation of ownership; typically used between spouses and family.

Real estate owned (REO) property: A repossessed property owned by a lender after an unsuccessful sale at auction.

Seller disclosure: A document completed by the seller disclosing the property’s history and defects.

Title: The right to ownership of real property recognized and protected by the law.

Under contract: A buyer has submitted an offer and the seller has accepted but the closing is not final.

VA loan: A mortgage loan for veterans and their spouses, made by private lenders and guaranteed by the U.S. Government.

Walkthrough: The final inspection conducted before a home sale is final.

X marks the spot: Where you sign for your dream home?

Yield-spread premium (YSP): The amount a lender pays a mortgage officer for selling a loan with a higher interest rate than the par rate,

Zero lot lines: A residence built very close to, or directly on, the property line.

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Additional PropertyOften, the seller plans on leaving major appliances in the home; however, whichitems stay or go is often a matter of negotiation.

Typically, you will not be present at the offer presentation - we will present it tothe listing agent and/or seller. The seller will then do one of the following:

Making An Offer

The PriceWhat you offer on a property depends on a number of factors, including itscondition, length of time on the market, buyer activity, and the urgency of theseller. While some buyers want to make a low offer just to see if the selleraccepts, this often isn't a smart choice, because the seller may be insulted anddecide not to negotiate at all.

The Move-in DateIf you can be flexible on the possession date, the seller will be more apt tochoose your offer over others.

• Accept the offer• Reject the offer• Counter the offer with changes

By far the most common is the counteroffer. In these cases, my experience andnegotiating skills become powerful in representing your best interests.

When a counteroffer is presented, you and I will work together to review eachspecific area of it, making sure that we move forward with your goals in mindand ensuring that we negotiate the best possible price and terms on yourbehalf.


When you find the right house, here are four things I can help you learn about the community it's in:

A Great Time to Buy

1. Local Statistic – How are the local schools ranked? What are the local crime statistics?

2. Traffic and Commuting – See property details and photos, save searches, and add notes about what you liked3. Local Amenities – See property details and photos, save searches, and add notes about what you liked

4. New Developments – See property details and photos, save searches, and add notes about what you liked

I can also help you to understand how the house you wantcompares to others like it in the neighborhood. Now is agreat time to buy, and I have a wealth of local market andcommunity data to share with you.

Call me to discuss your needs and I can help you pinpoint the neighborhood that will fit you best.


Let’s Find Your New Home

When buying a new home, you want to feel confident that it has the potential to grow in value over time. We recognize that many factors must be carefully considered when choosing a home, and we can help you sort through all of the details in order for you

to feel more secure in your decision.

Choosing the right home and neighborhood that meet all of your needs will help you feel happier with your home for longer. This will allow for you to take advantage of any possible appreciation in your home's value. Our diligent research identifies which homes and neighborhoods meet your requirements and match your lifestyle.

Purchasing your new home at a fair price could increase the chance for a higher return on your investment when you decide to sell. By identifying motivated sellers, we'll negotiate the best price possible.

A home that needs significant repairs or updates may not be a wise investment. Walking you through the home inspection process and connecting you with our network of trusted professionals will help you understand the condition of potential homes.

My commitment to thorough research and in-depth market analysis is the key to finding your new home. Contact me today to begin your home search!


The Home Buying Process€¦ · Mend and fix Enhanceand Beautify Prepare for an Open House 1. Scrub...

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