Buying
Living your dream
Few things are as exciting as buying a home. Whether it is your first home, or time to trade to a different home that better meet your needs. Sadly, this could also turn into a life changing disaster if you are not careful. Buying a home is a very rewarding yet complex adventure. It can also be a very time consuming and costly one if you’re not familiar with all aspects of the process, and don’t have all the best information and resources at hand.
Buyer’s Road Map
My comprehensive, “Nothing but the Best!” service can save you time and money, as well as make the experience more enjoyable and less stressful.
If you’re like most people, buying a home is the biggest investment you will ever make. Why not take advantage of my experience as a local market expert to make the most informed decisions you can, every step of the way?
Please see the Top 5 Mistakes Buyers Make
Let the fun begin!
Owning your own home is a very exciting prospect. Whether this is your first purchase or time to trade to a different home that better meets your needs, this decision deserves careful consideration.
Why Do You Want To Buy A Home? Are you tired of paying rent? Have you outgrown your current home – do you need more bedrooms or a home office? Would you like a larger yard, or are you tired of yard work? Would you rather live in a different neighborhood? Do you want to be closer to work, school, recreation, or family? Relocating for a job? Having a clear plan will help you choose the home that best fits your needs.
Can You Afford To Buy A Home? Experts recommend spending between 33-40% of your income on housing. Make sure you “want” to afford the new payments – being “house poor” is no fun! If you’re renting, you might be shocked when you add up what you’ve spent on rent over the years. Many people find the tax advantages of home ownership make it less expensive than renting!
Now that you’ve decided to buy real estate, you may be getting excited about looking at properties. But before you go shopping, I highly recommend that you do some additional homework to help avoid disappointment and frustration later.
Start a HOME FILE: A Home File should contain all of your important financial documents. Start by making copies of all your financial statements; bank accounts, investments, credit cards, auto loans, recent pay stubs and the last two year’s tax returns. If you haven’t already, start saving for a down payment, earnest money (see the Q & A section) and extra funds for incidental home buying and closing costs such as inspections, appraisals, title insurance, etc.
Check Your Credit Rating: Credit scores range between 350 and 800. 620+ is considered “good”. 720+ is considered “premium” and may possibly help get you a lower interest rate.
Below you will find the contact information for the 3 major credit reporting agencies to help you determine your credit rating. Ask your lender how to improve your credit score if you need to. Going forward, treat your credit like gold!
Equifax: www.equifax.com
Experian: www.experian.com
Trans Union: www.transunion.com
Get Pre-Approved By A Lender: There are two key benefits to getting pre-approved. First, you will know how much house you can afford. Second, when you find a property you want to buy, your offer will be better positioned than someone less prepared. Most sellers will not even consider your offer to purchase without a pre-approval letter!
Your lender may want to know some of the following information:
Job and career status
Income statements (W-2’s, pay stubs, tax returns etc.)
Monthly debt payments
Cash available
Total assets and debts
Financing options and rates can vary widely, so it is important to do your research well. Find a reputable, local lender who you can trust to do the job right, on time and for a fair price. I can surely assist you with finding such a person!
Toe The Line: Now is not a good time to change careers, move your money around, or buy big ticket items. No new shiny wheels! Lenders like stability. So if you are considering any major changes, it pays to meet with your trusty lender and ask them how to proceed before you make ANY changes!
An Important Decision: While it is possible to find and buy a home without an agent, this is one of the largest purchases and most important decisions you will ever make. A home may account for a third of your monthly spending and a large part of your assets. The home purchase transaction will require making many important financial decisions, understanding complex issues and completing a lot of paperwork. This is what professional Realtors do, day in and day out. It is not only comforting but extremely efficient to have an expert help you go through the whole process. Besides, in Oregon, the Seller pays the agents, so why wouldn’t you want someone working for you?
Your Own Personal Expert: Think of a Realtor as your expert advocate. I will share my experience, represent your best interests during negotiations with sellers, and help you understand all the decisions you need to make.
Ensure the agent is a CRS: What is a CRS, and why should I even care? In today’s complex world of real estate, CRS (Certified Real Estate Specialist) stands for education, expertise, and enhanced value to the client, directly focused on making your residential transaction as smooth and worry-free as possible. This highest designation for residential Realtors is conferred by the Residential Sales Council of the National Association of Realtors® upon completion of detailed coursework in listing, selling, investment, tax aspects, and transaction management, and a documented history of a high level of real estate sales performance. Nationwide, only 3% of Realtors and only 2% of all real estate licensees have earned this distinction.
With this qualification, I bring you a higher level of knowledge, experience, and dedication in your sale or purchase.
You may have already started shopping and dreaming about your next home. Surely you can just put your current home on the market once the offer on your dream home gets accepted, right? Actually the opposite is true!
When to Buy – When to Sell: Unless you have considerable financial resources, it could be risky to put an offer on a new home before your first home sells. In fact, you might lose your chance to buy your new home if you cannot sell your current home in time or if you do not get the sales price you expected. You might even have to make payments on both homes until the first home sells.
Selling a Home Takes Time: It might take longer than you expect to sell your current home. It can take several weeks just to get a home listed for sale. It might take some time to find a Buyer. Then, depending on the lending market and the results of the inspections it might take another month or more for the Buyer to close the transaction. Remember; Sellers don’t want to wait for you to get your home sold! In this market, very few Sellers will even consider your offer if it is contingent on the sale of your current home.
Expert Advice Will Help Negotiations: My goal is to get you into the strongest negotiating position possible. Sellers will choose qualified Buyers who are ready to close the transaction quickly and easily, over Buyers who are less prepared. If you are serious about buying, let me help you prepare so you can make the strongest offer possible and be protected in case things don’t go as planned.
Worried Where You Will Live? This is a common concern when juggling a purchase with a sale. I have many ideas to help you! For example, I can possibly negotiate a rent-back period from the Buyer so that you stay on in your current home while we find your new dream. Let me help you find the most convenient and affordable solution to minimize the moving impact on your lifestyle.
Perhaps one of the most enjoyable stages in the process, shopping for a home is filled with dreams and possibilities. Now to just find he “right” one!
Time to Go Shopping: Now that you’ve done your homework, it’s time to go shopping. Your checklist of the reasons why you want to buy a home will keep you focused on homes that will meet your needs. Your lender’s pre-approval letter will keep you focused on homes you can afford.
Take a Drive: Get to know the neighborhoods, complexes, or subdivisions, which interest you. Drive around and get a feel for what it would be like to own a property in the area. Start getting a sense of the properties available in those areas and get an idea of what will fit into your budget. If you’d like, I can take you on a guided tour of homes in several areas. This gives me a chance to really understand what you like and don’t like. Or, if you’re the adventurous sort and already know the areas well, I can give you a list of suitable homes to drive by along with a map.
Selecting Homes & Making Appointments: Select the top few homes that interest you most and I will make the necessary arrangements and set appointments to tour them. I look at numerous homes each year, so I can help you weigh the features and strengths, as well as point out the drawbacks or weaknesses of each home. Typically I will provide you with a printed fact sheet for each home, including pictures; this will help you keep track of the homes you’ve seen, what you liked and didn’t like. After a short while, the features of different homes seem to start flowing into each other! While looking, think about potential long term livability and ultimate re-sale value.
Make an Offer: Use my knowledge of the market to guide your offering price and I will help you write an offer that is likely to be accepted by the Seller – even if there is a likelihood of competing offers. Some homes are listed at a price that may be lower or higher than the price at which it will ultimately sell. Consider deferred maintenance and repairs before you decide to make an offer. I’ll help you put in safeguards to your purchase offer, such as physical inspection contingencies. Since this can be an emotional situation, it is especially important to have your agent negotiate on your behalf with the Seller.
During this stage of the home buying process, you will have the opportunity to learn a lot more about the property.
What Is Escrow? In a nutshell, escrow begins when your purchase is accepted by the Seller and the earnest money is deposited. Escrow ends when you become the official new owner, registered in the county records.
Title Company and Escrow Holder: The Title Company and escrow holder (often the same), acts as a neutral third party which holds all instruments necessary to the sale, including funds and deed with instructions as to their use. The title company will research the complete recorded history of this property, to insure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. You will receive a “Preliminary Title Report” that will show current encumbrances and easements. For example, some properties are subject to CC&Rs (Covenants, Conditions and Restrictions) which may regulate various aspects and activities from the color of your home to parking restrictions. There may be recorded easements and encroachments, where others have limited rights to use your property.
How to Hold Title: You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of one of the owning parties.
Inspections: Once your offer is accepted by the Seller, I will recommend professional inspectors to evaluate your home’s major systems. I will even set the appointments for you. Plan on attending all of your inspections and feel free to ask any question that comes to mind of either the inspector or me. During these inspections, you can learn a lot about how your new home functions as well as anything that may be wrong with it. The inspector or I may recommend other inspections such as; roof, structure, HVAC, soil, oil tank, well, septic, sewer system, radon, lead, mold, boundary survey, etc. Knowledge is gold!
Depending on the outcome of these inspections, one of the following may happen: If the Buyer is satisfied with inspection results, the process can move forward towards closing. If the results are not favorable, requests for repairs can be made to the Seller or the terms of contract are renegotiated between the parties. If all of this fails and if allowable within to the terms of the contract – the transaction may be cancelled and the buying process started over.
Appraisal and the Loan Process: Keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. Make sure to furnish all these documents in a timely manner, otherwise it could possibly delay the closing. The lender will send an appraiser out to the property. Buyers typically pay for this service. Appraisers are specialists in evaluating properties, based on a combination of square footage measurements, building costs, and recent sales of comparable properties, all to make sure you are not paying too much for the property. Remember to ask for a copy of your appraisal.
Property Insurance: If you are obtaining a mortgage loan, you will be required by your lender to purchase and carry a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around for insurance but you should never forget the service aspect. You can also save money with these tips.
Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
Ask your insurance agent about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, fire sprinklers, an alarm system, or fire-retardant roofing materials. Persons over 55 years of age, long-term customers, and holders of multiple policies such as car and/or life insurance may also be offered discounts.
Insure your house not the land under it. After a disaster, the land is usually still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should. This is obviously not applicable where your property is at any risk of flooding or any kind of slide. Consult your insurance agent when making these decisions.
Remember the old saying – “Nothing sells fire insurance like a fire”. If your property could at all be prone to flooding, sliding or earth quakes, buying the applicable insurance before catastrophe strikes is a smart move. I will be happy to recommend experienced knowledgeable insurance agents for every property type.
This is the culmination of the buying process. You’ve already started packing, the movers are scheduled… You are almost done!
Final Walk-Through Inspection: A few days before you take possession of the property, we will visit the property together one last time. This final visit ensures that the property’s condition meets your expectations compared to its condition when you made your offer.
Home Services and Utilities: You will need to change the services and utilities into your name: I can provide you with a list of local utilities and services providers, to put everything under your name as of the date escrow will close.
If Things Get Complicated: Sometimes everything doesn’t go according to plan. This is when you really need an experienced real estate agent. Maybe something doesn’t work in the new house, or the Seller can’t move to their next home as scheduled; there are a lot of variables. I’ve been through this countless times and have a number of strategies and options to smooth out this transition as much as possible for you.
Close of Escrow: When your transaction is nearly completed, the Title Company will provide you with a “Closing Statement” that details all of the financial details of your home purchase (i.e. pro-rations on property taxes and all the transaction-related costs.) Your Title Representative will go over this with you to be sure it is accurate. At the last step in the buying process, the Title Company will have you sign the final documents. When everything is complete, the Title Company will record the transaction for you at the County Assessor’s Office, and you will become the official new owner!
Congratulations!! Here are the keys to your castle!
You receive the keys to your new home right after the deed’s recording at the County Assessor’s Office.
