Buying a home is probably the largest buying decision you’ve ever made in your life. And it can be an exciting and rewarding process, if you get the right information and advice. Your first step in the process is to arm yourself with the right knowledge. You should know in advance how much you can afford, your financing options, and the locations within your budget—where you desire to live.
That’s why I’m glad you are taking the time to read this special booklet. You’ll learn all of the most important issues relating to buying a home and how to save yourself from possibly making a costly mistake. So let me guide you through the process and be sure to jot down any more questions that you might like to ask me about later. Everyone’s situation has special needs and desires and that’s great because that’s my specialty…personalized service! I will tailor my services to your particular needs and bend over backwards to deliver prompt attention to your requests and desires.
OK…let’s move on to “The 7 most important things you need to know before buying a home…”
IMPORTANT POINT #1: Deciding to buy (the right time to buy)
Here are some facts to consider about homeownership;
*Owning a home can be a good investment opportunity. A house offers leverage and the possibility for appreciation in value. And, you can use this investment while it’s working for you.
*You can’t afford to overlook the tax breaks of homeownership since mortgage interest and property taxes are deductible, owning your own home can save you money each year on your taxes.
*Renting is no place to hide. Rental units are just as susceptible as houses to increases in taxes, insurance, utilities, and other costs and landlords will just pass these along to the tenants.
*The waiting game is a losing game. If you’re waiting for prices to come down, the wait is over.
IMPORTANT POINT #2: Defining your price range
Know how much house you can afford;
*The first step is not shopping for a home but shopping for a mortgage. Get preapproved by a lender, (not just pre-qualified, which means “we think you can
get a mortgage”.) It’s real comforting to know a head of time exactly what you can afford.
*This will tell you what the maximum a lender is willing to loan you based on many factors including your joint or individual earnings, debt ratios and your credit report. Lenders will also consider the home’s sale price and your down payment in determining how much to loan you.
*You must also consider property taxes and insurance in addition to your monthly mortgage payments, when determining what you can afford. As a general rule, your monthly housing cost should not exceed 28% of your gross income.
*You can also send me a request for a sample mortgage chart to give you an idea of how much house you can afford at any given interest rate. To use it, simply find the monthly payment you think you can afford and read across to the interest rate and where they intersect shows you how much mortgage you can afford.
*I can help you find a mortgage lender or recommend a very competent and specialized lender with the most competitive prices in the market. Feel free to ask me for a list of lenders that can help you.
IMPORTANT POINT #3: Decide what type of house you want
Use this check list to help define your needs and wants;
*Identify the home styles you like the best…Spanish, traditional, colonial, ranch, Contemporary, Tudor, and Victorian to name a few.
*Maybe a townhouse or a condo would be better if gardening or yard work are not your preference.
*What features do you need or want in your home…maids quarters or a guest house for your mother -in-law, family room or den, maybe you have to have a pool or a place to keep your horse. These are all details that can help save you time in shopping for a home.
*Think about the neighborhood in which you’d like to live. Inspect at least 10 homes within your price range in various neighborhoods throughout your town. Sunday afternoon open houses are a great opportunity to quickly inspect many houses…or just give me a call and I would be happy to give you a quick overview of homes in the different areas in the town of your choice.
*When choosing a neighborhood look for evidence of good zoning practices. Businesses or industries should not be mixed in with residences. Other regulations, such as on-street parking may also be in force.
*If your daily commutes to work, school or shopping will be very long; you may have greater automobile expenses, such as gas, insurance and repairs.
*Even if you don’t have children, check the school quality where you are considering buying. Good schools help home value appreciation.
IMPORTANT POINT #4 Finding your new home
Working with your sales agent;
*There are many benefits to working with a sales agent. I have access to the entire real estate community, and I get the information first. An agent can save you time and money in your home search.
*As your sales agent, I will make arrangements to show you only those homes that match your requirements, so your time is well spent.
*Remember to record your impressions of the homes you visit. Take notes so that when you get home, you’ll be able to reevaluate what you saw.
*You’ll need to balance fact with emotion. Your new home needs to feel right and serve your needs at the same time.
*And because no house is perfect, you’ll have to decide what you can live with or afford to repair.
IMPORTANT POINT #5 The buying process
You’ve found The Home and now it’s time to start the buying process;
*Decide how much you want to pay for the home you’ve chosen to buy. Consider how long the house has been on the market and how reasonable the asking price is. You should also decide the top amount you’d be willing to pay. As your sales agent, I will also work closely with you through this important stage of the home buying process. Together, we will make sure you feel comfortable, protected, and at the same time, getting the best your money can buy.
*Be sure to include in your purchase offer contingencies (special conditions) such as:
1. Your ability to obtain financing
2. Mortgage financing (just in case the house doesn’t get appraised at your offer price)
3. Your approval of a professional inspection report so you don’t get stuck with a “lemon” house. (I can recommend several home inspection companies for you to choose from)
4. Read your Title Report carefully to be sure there are no liens on the property that would stop you from having a clean deed.
*Your offer is made in the form of a contract to buy and sell property. This contract lists the items to be included in the sale, including such items as appliances, window treatments, etc. It also includes the dates for closing and occupancy. As your agent, I will help you write the offer.
*Your offer is submitted with a financial commitment, often called earnest money or a deposit, to be applied to the purchase price upon acceptance of the offer. However, if after your offer has been accepted, and you don’t buy the house, the seller has the right to keep the money if all the contingencies have been removed and you change your mind at the last minute. Remember to have contingencies to help protect you.
*The seller will then either accept or reject your offer. The seller may then send a counter offer for you to negotiate from.
*It’s also important to protect yourself in two more ways to help assure peace of mind when entering the final stages of home buying.
1. A professional inspection of a home prior to closing can lessen the chances of surprises and is highly recommended. And even after the inspection, be sure to have a final “walk through” before closing escrow.
2. A home warranty program protects buyers against the failure of major home systems during the warranty period. Ask me, your sales agent, to recommend the right plan for you.
IMPORTANT POINT #6 Financing and closing the deal
Simple steps to take to obtaining the right financing for you;
(I can help find a lender, identify the financing method that works for you, and prepare you for the next step).
*Even if you prequalified for a loan, you’ll still need to shop for the best type of financing to obtain.
*Finding the right financing package that best suits your needs is the first step.
*When you apply for the loan, your lender will ask a number of questions.
Have this information ready:
1. Account numbers or identification numbers for checking and savings accounts, stocks and bonds, life insurance net cash value, automobiles and other personal property possibly.
2. Provide documentation of loans, terms of loans and balances for installment loans, including charge accounts, auto loans, alimony, child support,
maintenance payments, etc.
3. Income information about base pay, commissions, bonuses, tips, overtime, part-time work, savings interest, dividends, rental from real estate, alimony,
child support, etc.
4. Anticipated costs of home ownership like property taxes, hazard insurance, mortgage insurance, utilities, etc.
5. Credit references and job histories (including names addresses, types of business, positions, dates of employment and monthly income.
*There are several questions you should ask a lender:
1. Do you have fixed-rate loans and adjustable-rate loans available?
2. Will mortgage insurance be required for loans other than FHA or VA mortgages?
3. What reserves, such as those for property taxes or hazard insurance are required?
4. What fees will be charges at closing, including such things as points, loan origination fees, appraisal, termite inspection reports, credit reports, etc.
*Go over all the options with your lender. There are many types of loans, such as conventional financing, adjustable-rate loans, and standard fixed-rate loans. There are also government loans, new teachers programs, and loans for veterans available. I can help you understand which is best for you.
*Know what to expect in closings costs. Within three days after you apply for your loan, your lender should issue you a good faith estimate that spells out the fees to be charges at closing. Here are some of them:
1. Loan fees such as an origination fee is a percentage of the loan that covers the lender’s administrative costs. Loan discounts or points are the amount withheld from the loan proceeds by the lender. The amount is used to adjust the interest rate of the loan to the required yield.
2. Fee charges cover the charges associated with the title/abstract search and recording, as well as the transfer charges.
3. Other charges could be a home inspection, survey, appraisal, commissions, such as for document preparation and notary service, as well as additional
*Before closing escrow, take one last walk-through, just to be sure that everything is as it should be. If there are any problems or unresolved issues, take care of them before closing.
*Closing escrow is the final step to closing the deal. Here’s how to prepare for an easy closing:
1. Allow for one to one and 1/2 hours for signing all the papers, usually scheduled one week to three days prior to close of escrow.
2. Call ahead with the name and phone number of the home owner’s insurance provider, if required by the lender.
3. Review all the papers ahead of time, carefully, and be sure that they reflect the agreements between you, the buyer and the seller.
4. Bring a photo ID, such as a driver’s license, to the closing appointment for signing and notarization of the loan documents.
5. Any required funds must be brought in the form of a cashier’s check or wired directly to escrow (unless the escrow agent will accept other types of funds) and should be brought to the escrow agent when the loan documents are to be signed.
6. Look carefully over the numbers in the closing or settlement statement–especially the last one to appear!–before signing.
IMPORTANT POINT #7 It’s never too early to plan your move-in
Check list and countdown to a smooth move;
*Locate a moving service and make arrangements for the moving day. Ask for estimates from several companies, and base your decision on the costs and reputation of the mover.
*You can move yourself or save on expenses if you pack your possessions and move them in a rented truck, but the amount of work and worry will increase.
Always review your homeowners’ policy to see if it covers your possessions during a move.
*Check with your account or the IRS to see what moving expenses may be tax-deductible.
*It’s time for a garage sale to lighten the inventory you’ll have to move.
*Contact schools, doctors, etc. to obtain copies of your personal records if moving out of town, and ask for referrals where possible.
*Obtain a moving kit from your post office.
*Contact utility companies for service disconnect/connect at your old and new addresses.
*Two to three days before you move, defrost the refrigerator and freezer, and pack all the items you will need immediately at your new home in a separate box and carry with you. Remember to label boxes for each room and especially the kitchen boxes for easy reassembling.
*It helps to make a floor plan ahead of time to help you decide where to put furniture before you lug it around.
*Moving day…have someone available to answer the van foreman’s questions. And ENJOY YOUR NEW HOME!
Buying a home is an exciting and rewarding process if you get the right information and advice. That’s why I authored this special booklet–to make this information available to people like you…who want to be informed and intelligent buyers.
Once you have read the report completely, make a list of areas you would like to discuss or ask questions about, and contact me via email or give me a call at 818-241-8375. I’ll set up an appointment to meet with you, with no obligations whatsoever, and go over your list and help evaluate your needs and desires. I would truly enjoy meeting you and demonstrating personally why my services are “Only the best, without the stress”. I am committed to whatever it takes to serve a client beyond their expectations.
Thank you for allowing me the opportunity to share this valuable information with you. If you know someone else who might also benefit from this information, please call my office at 818-557-8593, to order and I will immediately send one of these booklets out to them.
Al the best to you in your home buying process.
P.S. And please remember, I work mostly from referrals. This way I am able to devote more of my time to providing the highest quality service to my clients.