Buying a homeI can help you find the perfect home, make sure you get the best price, and monitor the transaction so it runs smoothly from start to finish.
Buying a Home
Purchasing a home is an exciting experience whether it’s your first time or your fourteenth: many questions arise that require answers and, as your Realtor, I will shepherd you through the process.
As your partner and ally in the buying process, I preview properties, show you selected homes or condos, write an offer, and negotiate on your behalf. Once you are under contract, I’ll continue to assist you from inspection to appraisal until we meet at the closing table and you receive the keys to your new place!
First, we dialogue — you talk, I listen. Second, we select properties that fit your criteria and budget — from the multi-lists, the Internet, and other sources. Third, we tour — you look, I listen and observe. Fourth, we dialogue some more — your impressions and feedback are crucial in narrowing the field. Fifth, we tour more properties — we tour until we find just the right place.
“Nina found the perfect oasis in the city for us, and she’s a joy to work with. We recommend her to everyone.” ~ Lydia, writer
The Purchasing Process
Become familiar with the overall steps involved with purchasing a home. I provide links to helpful websites and encourage you to peruse them. For experienced buyers, these resources are a refresher; for first timers, they’re invaluable.
Get a Loan
An important first step in finding a home is to know your price range. There are many wonderful neighborhoods and different price points in all the areas I focus on. Assuming you want a loan, talking to a Lender early is the process is helpful. You can get a better picture of your financial leverage and gain a better understanding of the criteria for loan approval.
Here are some of the things your Lender will do:
- Run a credit report to make sure there are no surprises in your credit history and see what your credit rating is.
- Analyze your current financial situation: where the money comes from and where it goes to.
- Assess how the home purchase will affect your budget.
Aspects of the Process:
“Pre-Qual” Letter or “Lender letter”
Your lender will write a pre-qual letter stating that based on what you have told him/her over the phone, you are pre-qualified for “x” dollars. This letter is sufficient to accompany an offer to buy a property, but it is not a loan approval or loan commitment.
After you’ve gauged your financial situation and spoken with a Lender for a “pre-qual letter”, it’s time to shop around for a mortgage that suits your needs. A mortgage is a loan which will be secured by the property you are purchasing. There are also many different types of mortgages, such as an “ARM”, 15- and 30-year fixed, second mortgages etc.
The mortgage company or bank will help you determine the most suitable financial arrangement for you: perhaps buying a house with no money down, or obtaining the lowest interest rate, or finding the right time-frame in which to pay off this loan. I suggest that you review online resources for more information. Use this mortgage calculator to help estimate your monthly payment.
TO HELP PREPARE:
- Gather items such as: tax returns for the last three years, current pay stubs, records of paid off credit history, and any supplemental income. If self-employed you will need business records and tax returns for the last three years.
- Do not incur any new debts. Mortgages are based on debt-to-income ratios (the amount you pay monthly versus the amount you bring in) and a new debt can lower your chances of obtaining the mortgage.
“Loan Approval” or “ Loan Commitment”
After an evaluation of your credit history, work history, assets and liabilities (debts), your lender will approve you for a specified loan amount. One of the stipulations will be that the property appraises at a level high enough to justify the loan, so the lender will hire an appraiser to ascertain the fair market value of the home you hope to buy. Once the appraisal is complete, the loan request goes to under-writing. Final approval and loan commitment can take ten days to a month. In making the loan commitment the financial institution states that it is willing to lend you the funds necessary to purchase the property.
Write an Offer
After finding the right property, we’ll put together an offer — a document that includes your offer price, your terms and conditions, and mortgage information about your loan. Along with this offer, you will supply a “Lender Letter” from your lender stating you are pre-qualified for the purchase price plus an Earnest Money Check. This check is proof of your “earnestness” — or seriousness in purchasing the home.
After the offer has been accepted, we begin our “due diligence” in buying the home.
- APPRAISAL: Having the house, condo or loft appraised: An appraisal is an opinion of the dollar value of the home you want to purchase. Virtually every lender requires an appraisal before the loan is approved. The Lender hires the appraiser. (No appraisal is necessary for a cash transaction.)
- INSPECTION: Having the property inspected: An inspection evaluates the structural and mechanical condition of a property. You hire an inspector. I can recommend ones that buyers have used.
- TITLE: Reviewing the title work and Public Records
- HOA RULES: Reading and accepting any Home Owners Association (HOA) Rules and Regulations and other non-public records.
- CLOSING COSTS: Reviewing your closing costs: These are charges paid to different entities associated with your home purchase. They are usually 2 – 2.5% of the total sales price of a property. Closing costs may include: application fees, appraisal fee, county taxes, credit report, discount points, documentation fee, escrow fees, homeowners’ association fees, loan fees, mortgage insurance, original fees, tax registration and title insurance premium. Your Lender can specify in advance all the closing fees.
After all the above has been accomplished, you and the Seller are ready to close. Your lender has approved the loan. You have agreed to the terms of the purchase. You have completed your due diligence. Closing typically is a time to celebrate the change of ownership. At the end of the closing, you will receive the keys to your new home.
Sometimes, not all parties can be present at the closing. In that case, the absent person can have someone sign as his/her proxy with a notarized Power of Attorney. Other times, the title company will mail out all the documents ahead of time and the other party will sign them elsewhere. These closings are known as a “mail-out” closing. You will then sign the seller-signed documents at the closing table and take possession of the home.
Here are some ways I can help you buy your perfect home
Understanding Your Needs
Frequently our first communication is a phone call. I take notes and keep your wants and needs in mind. Then, I send listings that fit your criteria – price range, size of home/loft/condo, style, age and condition, number of bedrooms and baths, other features, and desired location. We narrow down what you are looking for and make the best use of your time in seeing select properties.
Once we view some prospects, I do a market analysis. This enables us to determine the best price to offer for the property. Having knowledge of the area and the current market is important in determining fair market value. I research the “active” properties, “under contract” ones, and “sold” homes. Having knowledge of the area is important in making an offer to a seller.
Once we find the right property, I draw up a contract. We include the offer price, terms, dates, deadlines, inclusions, exclusions, and financial terms (cash or a loan). First, I contact the Seller’s Broker to inquire about the seller—they may like to sell quickly or may need more time. This helps me craft an attractive offer. I include a cover letter introducing you, so the Seller has a personal connection.
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