The Home Buying Process

The following is an overview to assist you with the purchase of your new home.  I assure you that it is my goal to provide you with the most professional and informative service available.  I am always just a phone call away! You can also view the home buying process chart by clicking here (pdf file - adobe required).

The Ten Commandments When Applying for a Real Estate Loan

How to Buy a Great House

There are many factors to consider when selecting a neighborhood that is right for you.  Below are just a few of the many factors -- you may think of others that are important to you. Neighborhoods have characteristic personalities designed to best suit single people, growing families, two-career couples, or retirees. 

SCOUT THE NEIGHBORHOOD!

It is important that you scout the neighborhood in person.  You live in more than your house. 

• Talk to people who live there. 
• Drive through the entire area at different times of the day, during the week and on weekends. 
• Look carefully at how well other homes in the area are being maintained; are they painted, are the yards well cared for; are parked cars in good condition, etc.

NEIGHBORHOOD FACTORS TO CONSIDER --

• Look for things like access to major thoroughfares, highways, and shopping. 
• Listen for noise created by commerce, roads, railways, public areas, schools, etc. 
• Smell the air for adjacent commerce or agriculture. 
• Check with local civic, police, fire, and school officials to find information about the area. 
• Research things like soil and water. 
• Look at traffic patterns around the area during different times of the day and drive from the area to work. 
• Find out if the neighborhood is near parks, churches, recreation centers, shopping, theaters, restaurants, public transportation, schools, etc.
• Find out if the neighborhood belongs to a Homeowner’s Association.

The Home Tour

Making An Offer

Once you have found the home you wish to purchase, you will need to determine what offer you are willing to make for the home.  It is important to remember that the more competition there is for the home, the higher the offer should be – sometimes even exceeding the asking price.  Remember, be realistic.  Make offers you want the other party to sign!

To communicate your interest in purchasing a home, we will present the listing agent with a written offer.  When the seller accepts an offer it becomes a legal contract.  When you write an offer you should be prepared to pay an earnest money deposit.  This is to guarantee that your intention is to purchase the property. After we present your offer to the listing agent it will either be accepted, rejected, or the seller will make a counter-offer.  This is when we will negotiate terms of the contract if necessary. 

The step-by-step contract procedure for most single-family home purchases is standard.  The purchase agreement used is a standard document approved by our local real estate board. The purchase agreement or contract constitutes your offer to buy and, once accepted by the seller, becomes a valid, legal contract.  For this reason, it is important to understand what is written on the contract offer.  I have included a copy in this packet. 

Home Warranty Protection

NEWHOME WARRANTIES: When you purchase a newly built home, the builder usually offers some sort of full or limited warranty on things such as the quality of design, materials, and workmanship.  These warranties are usually for a period of one-year from the purchase of the home. At closing, the builder will assign to you the manufacturer’s warranties that were provided to the builder for materials, appliances, fixtures, etc.  For example, if your dishwasher were to become faulty within one year from the purchase of your newly built home, you would call the manufacturer of the dishwasher – not the builder.

If the homebuilder does not offer a warranty, BE SURE TO ASK WHY!

RESALE HOME WARRANTIES: When you purchase a resale home, you can purchase warranties that will protect you against most ordinary flaws and breakdowns for at least the first year of occupancy.  The warranty may be offered by either the Seller, as part of the overall package, or by the agent.  Even with a warranty, you should have the home carefully inspected before you purchase it.

A home warranty program will give you peace of mind, knowing that the major covered components in your home will be repaired if necessary.  Ask me for more details about home warranty packages .

Home Inspection

If you are purchasing a resale property, we highly recommend that you have a professional home inspector conduct a thorough inspection.  The inspection will include the following:

• Appliances
• Plumbing
• Electrical
• Air conditioning and heating
• Ventilation
• Roof and Attic
• Foundation
• General Structure

The inspection is not designed to criticize every minor problem or defect in the home.  It is intended to report on major damage or serious problems that require repair.  Should serious problems be indicated, the inspector will recommend that a structural engineer or other professional inspect it as well.

Your home cannot “pass or fail” an inspection, and your inspector will not tell you whether he/she thinks the home is worth the money you are offering.  The inspector’s job is to make you aware of repairs that are recommended or necessary.

The seller may be willing to negotiate completion of repairs or a credit for completion of repairs, or you may decide that the home will take too much work and money.  A professional inspection will help you make a clear-headed decision.  In addition to the overall inspection, you may wish to have separate tests conducted for termites or the presence of radon gas, or lead-based pain if the home is built in 1979 or earlier.

In choosing a home inspector, consider one that has been certified as a qualified and experienced member by a trade association.

I recommend being present at the inspection.  This is to your advantage.  You will be able to clearly understand the inspection report, and know exactly which areas need attention.  Plus, you can get answers to many questions, tips for maintenance, and a lot of general information that will help you once you move into your new home.  Most important, you will see the home through the eyes of an objective third party.

WHAT IS A REAL ESTATE CLOSING?

A “closing” is where you and I meet with some or all of the following individuals: the Seller, the Seller’s agent, a representative from the lending institution and a representative from the title company, in order to transfer the property title to you.  The purchase agreement or contract you signed describes the property, states the purchase price and terms, sets forth the method of payment, and usually names the date and place where the closing or actual transfer of the property title and keys will occur. 

If financing the property, your lender will require you to sign a document, usually a promissory note, as evidence that you are personally responsible for repaying the loan.  You will also sign a mortgage or deed of trust on the property as security to the lender for the loan.  The mortgage or deed of trust gives the lender the right to sell the property if you fail to make the payments.  Before you exchange these papers, the property may be surveyed, appraised, or inspected, and the ownership of title will be checked in county and court records.

At closing, you will be required to pay all fees and closing costs in the form of “guaranteed funds” such as a Cashier’s Check.  Your agent or escrow officer will notify you of the exact amount at closing.

WHAT IS AN ESCROW ACCOUNT?

An escrow account is a neutral depository held by your lender for funds that will be used to pay expenses incurred by the property, such as taxes, assessments, property insurance, or mortgage insurance premiums which fall due in the future.  You will pay one-twelfth of the annual amount of these bills each month with your regular mortgage payment.  When the bills fall due, the lender pays them from the special account.  At closing, it may be necessary to pay enough into the account to cover these amounts for several months so that funds will be available to pay the bills as they fall due. 

Moving

CONGRATULATIONS! You have closed on your new home and now you are ready to move!  The next few pages contain tips and checklists so that your move is as organized and effortless as possible.  Think about your move as a series of small projects that you can begin while your home is under contract.  Your move will progress as your contract and closing progress.  That way, when the day comes to physically move your belongings, most of the details will be taken care of.

Keep detailed records – some moving expenses are tax deductible! Keep detailed records of all moving expenses if your move is job related.  Many expenses, including house-hunting trips, are tax deductible.  If your move is 35 miles or more from your home, you can deduct your family’s travel expenses, including meals and lodging; the cost of transporting furniture, other household goods and personal belongings; food and hotel bills for up to 30 days in the new city if you have to wait to move into your new home; and the costs associated with selling your old home or leasing your new home.

Note:    There is a ceiling on deductions which is outlined in detail in the IRS’s Publication 521, “Tax Information on Moving Expenses,” available free from the IRS offices.

Helping Children Cope with the Move

Moving Checklist

Click here to view a detailed moving checklist that you will find extremely helpful during your moving process (pdf file,adobe required)

Packing Checklist

I have also compiled a detailed packing checklist to make it an easier and sensible moving process for you. Click here to view the checklist (pdf file, adobe required).

(add article: Which property is right for me?)