Buyer's Tips

• Pre-Qualification: Meet with a mortgage broker and find out how much you can afford to pay for a home.
• Pre-Approval: While knowing how much you can afford is the first step, sellers will be much more receptive to potential buyers who have been pre-approved. You’ll also avoid being disappointed when going after homes that are out of your price range. With Pre-Approval, the buyer actually applies for a mortgage and receives a commitment in writing from a lender. This way, assuming the home you’re interested in is at or under the amount you are pre-qualified for, the seller knows immediately that you are a serious buyer for that property. Costs for pre-approval are generally nominal and lenders will usually permit you to pay them when you close your loan.
• List of Needs & Wants: Make 2 lists. The first should include items you must have (i.e., the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.). The second list is your wishes, things you would like to have (pool, den, etc.) but that are not absolutely necessary. Realistically for first-time buyers, you probably will not get everything on your wish list, but it will keep you on track for what you are looking for.
• Representation by a Professional: Consider hiring your own real estate agent, one who is working for you, the buyer, not the seller.
• Focus & Organization: In a convenient location, keep handy the items that will assist you in maximizing your home search efforts. Such items may include:
  • One or more detailed maps with your areas of interest highlighted.
  • A file of the properties that your agent has shown to you, along with ads you have cut out from the newspaper.
  • Paper and pen, for taking notes as you search.
  • Instant or video camera to help refresh your memory on individual properties, especially if you are attending a series of showings.
  • Location: Look at a potential property as if you are the seller. Would a prospective buyer find it attractive based on school district, crime rate, proximity to positive (shopping, parks, freeway access) and negative (abandoned properties, garbage dump, source of noise) features of the area?
• Visualize the house empty & with your decor: Are the rooms laid out to fit your needs? Is there enough light?
• Be Objective: Instead of thinking with your heart when you find a home, think with your head. Does this home really meet your needs? There are many houses on the market, so don’t make a hurried decision that you may regret later.
• Be Thorough: A few extra dollars well spent now may save you big expenses in the long run. Don’t forget such essentials as:
  • Include inspection & mortgage contingencies in your written offer.
  • Have the property inspected by a professional inspector.
  • Request a second walk-through to take place within 24 hours of closing.
  • You want to check to see that no changes have been made that were not agreed on (i.e., a nice chandelier that you assumed came with the sale having been replaced by a cheap ceiling light).
• All the above may seem rather overwhelming. That is why having a professional represent you and keep track of all the details for you is highly recommended. Please email me or call me directly to discuss any of these matters in further detail.

Buying a home is one of the most important purchases most people will make. In order to make the right decision the first time, potential buyers need to be prepared. Consider the following before starting negotiations:

• Be prepared Research the housing market in the target area. Once you have information about the general area, focus on the particular property and seller. Look for answers to questions such as:
  • Why is the homeowner selling? (If they’re moving because they find the area undesirable, you might want to consider this issue.)
  • How long has the home been on the market? (If it has been on the market for a long time, perhaps there are negative facts about the property that you need to know.)
  • How much did the seller pay for the home compared to the current asking price? (If the seller paid more, find out why. Was it a general real estate trend, or did property values in that particular neighborhood go down?)
  • What is the seller’s time frame for selling and moving? Does it fit within your needs?
  • Are there any defects in the home or problems with the surrounding neighborhood? (For example, is the roof so old that it will likely leak during the next storm? Is there a new construction project in the area that will lead to major traffic congestion?)

As the potential buyer, you want the advantage. While you want answers to all your questions to the seller, reveal very little about your circumstances. Do not give the seller personal information such as your income, the maximum you are able to pay for a down payment or the home, or when you want to move. Make sure that your agent knows not to reveal any such information to the seller or his/her agent.

Also, do not let the seller see how much you want the property. If you appear desperate or overly enthusiastic, the seller then has the stronger bargaining position. When meeting with the seller or listing agent, keep your emotions in check.

• Establish a Timeline Find out if the seller needs to have the sale closed sooner rather than later. If the seller is feeling pressured to sell, use that to your advantage in negotiating. Even if you, the buyer, are the one with the deadline for purchasing a home, don’t let yourself be rushed into making concessions or a purchase you may regret later.

Congratulations, you are on your way to owning your very own home! Follow these suggestions (and your realtor’s advice) so that the closing and settlement will go as smooth as possible.

You will be asked for earnest money on the home you are purchasing, which is the consideration or item of value that makes the sales contract valid. This earnest money is typically in the form of a personal or cashiers check, or can also be a wire transfer. When it comes to a loan, you can choose to put down as much or as little as you want (depending on your mortgage), but remember, the more you put down toward the total price of your home, the less your mortgage payments will be every month. The earnest money check will be cashed, so make sure that there are sufficient funds in your account to cover this check.

During this period of purchasing your home, you are going to need a title company to act as an independent third party so that you know when and whom to give your money to get the deed to your new home. The title company or real estate brokerage firm will hold your earnest money and along with your real estate broker will coordinate much of the activity that goes on during the contract period.

Assuming the sale goes through, this earnest money will be applied towards the down payment of the home. If for any reason the sale is not consummated, you may be entitled to receive all of your deposit back. In certain instances, the seller may be able to retain this money as liquidated damages. Prior to executing a purchase contract, it would be wise to speak with your real estate agent regarding whether or not it is your best interest to have a liquidated damages clause as part of the contract.

The period that you are under contract is often 30 days, but may be longer or shorter. During this time, each item specified in the contract must be completed satisfactorily. Each contract is different, but most include the following:

• Inspection contingency: This should be completed as soon as possible after the contract to purchase is signed as unsatisfactory results of the inspection may mean that you will want to cancel the contract.
• Financing contingency: Once the contract is signed and earnest money delivered, you have a period of time to secure and get funding approved by a lender. If for any reason you are unable to secure funding during the period of time granted to you by the contract (and the seller will not provide a written extension of time), you must decide whether you want to remove the contingency and take your chances on getting a loan, or you may choose to cancel the purchase contract.

A requirement that the seller must provide to a buyer is a marketable title to the property. With your real estate agent, attorney, or title officer you will review the title report. The title must be “clear” to ensure that the seller does not have legal issues regarding their ability to sell and provide clear title to the new owner.

Secure homeowner’s insurance as the lender will require proof of coverage before you can close the sale. It would be in your best interest to apply for insurance as soon as possible after the contract is signed.

Water is transfered by the title company at closing, but you will be responsible to contact local utility companies to schedule to have service switched over when you close on the property.

Schedule the final walk-through inspection. At this time, you should make sure that the property is exactly as the contract says it should be. What you thought to be a “permanently attached” chandelier that would come with the property might have been removed by the seller and replaced with a different fixture entirely.

You’ve made it! Once the sale has closed, you’re the proud owner of a new home. Congratulations!