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Information on Buying A Home
WHATEVER YOUR REASONS FOR BUYING, finding the right home, in the perfect neighborhood, and at a cost that is within your budget, is no small task. That's why many buyers enlist the help of Windermere.
Our sales associates are licensed professionals with specialized skills. There are many benefits you receive from working with our professionals.
| When to Buy a Home |
Financing a Home |
| Owning a Home |
Home Inspections |
| Using Your Agent to Help You Find A Home |
The Buying/Selling Process of Escrow |
| Helping You Buy a Home |
Settlement - Who Pays What |
| Beginning the Process |
Frequently Asked Questions |
Owning A Home
Owning a home can help provide you with building future equity, a sound business decision. Benefits to owning a home:
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As prices rise, so does your home's value, giving you a check against inflation.
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When you own a home, you put down roots in the neighborhood and community in which you live. There is a sense of stability and of community that comes with owning a home.
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Pride of ownership and independence also comes with owning a home
Using a Megastar agent to help you find a home
THE AVERAGE PERSON ASSUMES THAT A REAL ESTATE AGENT'S JOB IS TO HELP FIND A PROPERTY. BUT THAT'S ONLY THE BEGINNING...
Whatever your reasons for buying, know that finding the right home, in the perfect neighborhood and at a cost that is within your budget, is no small task. That's why many buyers enlist the help of a Megastar agent.
Megastar Agents are licensed professionals with specialized skills. There are many benefits you receive from working with our professionals.
Your Megastar agent
- Knows the local market and can quickly narrow it down to a few areas where you are likely to fond your home at the price you want.
- Can save you time by doing a lot of the legwork. By knowing your needs, we can eliminate homes that do not meet your criteria.
- Will make appointments, preview homes with you and help you determine the pros and cons of each home.
- Can provide information and make appointments to see almost any property listed for sale. A home does not have to be listed by a Megastar agent in order to get detailed information or an appointment to view.
- Once you find the home you want to buy, we will guide you through the negotiation, legalities and details of purchasing a home.
Helping You Buy Any Home
BY WORKING WITH US, you will have access to information on all homes currently listed for sale in our area. We can help you buy a home, no matter how or where you find it:
- HOMES ADVERTISED IN THE NEWSPAPER
- HOMES THAT ARE "FOR SALE BY OWNER"
- HOMES FOUND DURING AN OPEN HOUSE TOUR
- HOMES LISTED FOR SALE BY ANOTHER AGENT OR REAL ESTATE COMPANY
- HOMES YOU'VE HEARD ABOUT FROM FRIENDS, FAMILY OR OTHER CONTACTS
- HOMES ADVERTISED ON THE INTERNET
Beginning The Process
Organization is the key to finding the home you want while spending the least amount of time and energy.
Find out how much house you can afford.
Do this before you go house-hunting. We can refer you to a loan officer who can help you determine how much of a down payment you can afford, along with a monthly payment you can handle.
Make a list of everything you want in a home.
Is a master bedroom important? How many bathrooms? What about closet space? Do you need a yard for the kids and pets to play in? How about a fireplace or a bay window? Are schools or access to transportation important?
Separate the essentials from the items you could do without...
and put them on the "A” list. Prioritize the rest of the items into a second and third list in order of importance. We'll then go over the lists so that we're very clear on what you want and need in your home.
Keep good notes as we look at homes.
After a while, it becomes difficult to remember which features belong to what home. We can provide you with a form and rating system to help you compare homes.
When selecting a home, look beyond cosmetics.
Make sure home is in good physical condition and you understand the cost of repairs.
Look at additional homes...
even if you love the first on you see. Many times, it takes looking at several homes before you find the one that is really right for you.
Home Financing
It's a good idea to find a target price range that you can afford before you begin your home search It will save you valuable time in selecting the right home. Interest rates and your personal finances will influence the amount of house you can afford.
PRE-QUALIFICATION VS. PRE-APPROVAL
Pre-qualifying for a mortgage is generally the best way to determine how much house you can afford. Most lenders require that your monthly mortgage payment, including principal, interest, taxes and insurance, range between 25 and 28 percent of your gross monthly income. Remember, becoming pre-qualified does not necessarily mean that you will be approved for a loan of that amount.
Pre-approval from your lender means that you have provided them with the necessary paperwork, and they have approved your actual loan amount. Having pre-approval for a home loan will put you in a much better negotiating position, because the seller knows that you are able to obtain your loan to purchase their home.
FINANCING: Selecting the best financing package available is as important as finding the right home. Most loans require a down payment of anywhere from 5 to 20 percent of the home price. 25 percent down payment or more may qualify you for special mortgage programs and lower interest rates. Information you will need for you loan application
- Proof of identity, including Social Security number
- Address for the past two years
- Employer's name and addresses for past two years
- Verification of income (current pay stub or W-2 forms from the past 2 years)
- Bank Accounts (names, addresses, account numbers, etc.)
- Loans (including monthly payments)
- Other monthly debt (credit card payments, child support, etc.)
- Amount of funds available for down payments and closing costs
Most lenders will require you to provide:
- Tax Returns
- Pay Stubs
- Checking and Savings Accounts Statement
- Billing statements from creditors, including charge cards, gas cards, auto loans, student loans, and other obligations
- Debt information, including names, account numbers, monthly payments
- Employers for past two years, including names and addresses
- Gross Monthly Salary
There are also specialized loan programs that allow as little as 3 percent down for those who qualify. A higher down payment often allows the lender to be more flexible with a loan package, including interest rates and closing costs. In addition to the down payment, you will need to have enough cash available to pay closing costs. Your lender will provide you with a good faith estimate of anticipated costs. Visit Mortgage Section for more information.
Home Inspections
When you're ready to complete a purchase and sale agreement on a home, your offer will generally be contingent on a professional inspection of the entire property—including improvements. The home inspector looks beyond the cosmetics to make sure that the home's general systems operate properly. The inspector will also look for large repairs that are needed and report on the condition of the home.
The standard home inspector's report will review the conditions of the home's heating and cooling system, interior plumbing and electrical systems; the roof, attic and visible insulation; walls, ceilings, floors, windows and doors; foundation, basement and visible structure. The inspector will also look for cracks in cement walls, water stains that indicate leakage and any indication of wood rot.
A home inspection also points out the positive aspects of home, as well as the maintenance that will be necessary to keep it in good shape.
Your Megastar agent is familiar with home inspection services and can provide you with a list of names from which to choose. Another good source for finding a home inspector is to ask a friend, or perhaps a business acquaintance, who has had a home inspection and can recommend a home inspector with whom they were satisfied.
Remember, no home is perfect. If problems are found, we will help you negotiate through the process.
Settlement ...Who Pays What
During the negotiation state of the transaction, a mutually agreed-upon date for closing is determined. "Closing” is when you and the seller sign all the paperwork and pay your share of the settlement fees, and the documents are recorded. Settlement obligations vary widely due to specific contract language, local laws and customs.
Prior to closing, the closing agent (usually an escrow or title company or attorney) will complete a detailed settlement statement for both buyer and seller. We can help you understand which of the following typical settlement fees apply to you.
The buyer will receive:
The buyer pays:
- One-half of escrow or legal fees paid to the attorney or escrow company for preparing the closing
- Document preparation fees
- Recording and notary fees
- Title search and title insurance (paid by either the seller or the buyer
- Local transfer taxes, if any
- Repairs or inspections the buyer has agreed to pay
- Loan fees
- Appraisal fees
- Credit report fees
Frequently Asked Questions
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What if I need to sell my home before I buy a new one?
To put yourself in the best negotiating position before you find the new home you want, hire a qualified real estate agent to help you put your home on the market.
Once you write an offer on a new home, your offer will be "contingent” on the sale of your home. A buyer in this position may not have the same negotiating power as one whose home has already sold (or at least has an accepted offer).
The seller may be hesitant to accept you offer because there are too many things that must happen before the sale can close.
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What happens if I offer less money than the asking price?
If you offer less money, the seller has three options. They can accept the lower offer, counter your offer or reject it completely.
Remember that there could be another buyer out there who is also interested in the home you've chosen. If they happen to write an offer at the same time you do, the seller will have two offers to compare. There are usually many aspects or each offer to consider, but ultimately the seller will want to accept the best and most complete offer.
In active markets, homes often sell for their listed price. In hot markets, there may be many buyers vying for the same house, which sometimes drives the selling price above the original listed price. A real estate professional can help you plan your strategy, based on your current real estate market.
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How does my offer get presented to the seller?
Your agent will call the agent who is the listing agent for the home you have chosen. They will make an appointment with the seller to present the offer. Your agent is there to explain the details of your offer and negotiate on your behalf.
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Will it cost me money to make an offer?
When you write the offer on the home you've chosen, you will be expected to include an earnest money deposit. This deposit is a sign of your good faith that you are seriously interested in buying the home.
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What is the difference between pre-qualified and pre-approved?
These terms refer to your status in the loan approval process. Pre-qualification is a determination of your probable ability to obtain a loan. To become pre-qualified, meet with a loan officer or mortgage company. They will help you determine the price you can afford, based on your monthly income and your current debts, as well as the cash you have for a down payment.
Pre-approval means that the mortgage lender has already verified and approved your credit and employment. Obtaining pre-approval early in the process will make your offer more attractive to the seller.
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What is earnest money?
Earnest money is a "good faith” deposit submitted with your offer to show the sellers that you are serious about purchasing their home. Earnest money is a required part of an offer. There is no set amount that is required, but the money eventually becomes part of the purchase, and will show as a credit to the buyers on the settlement statement drawn up by the escrow company.
Where does my earnest money go?
Once the buyer and seller have a mutually accepted offer, the earnest money is deposited into a trust account of the real estate company or the closing agent (often the escrow company)
That deposit becomes a credit to the buyer and becomes part of the purchase expense.
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| Can I lose my earnest money?
Real estate contracts are complicated legal transactions. This is another area where having a knowledgeable and professional agent is a necessity. Rarely does the buyer lose the earnest money. Most often, if the transaction falls apart, there are circumstances beyond the buyer's control that cause it to happen. However, if the buyer willfully decides that they no longer want to buy the house, and have no legal reason for rescinding their offer, then the seller has the right to retain the earnest money.
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Is that all the money that's involved?
Many lenders require the cost of the appraisal and credit report at the time of the loan application. However, these costs will be credited to your closing costs at closing.
What are closing costs?
Closing costs are charges paid to various entities during the real estate transaction. They can include escrow fees, document preparation fees, cost of an inspection and lender fees.
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| What is title insurance?
Title insurance protects against loss from any defects in the legal title, liens against the property or other adverse claims. The lender usually requires title insurance.
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What is a point?
A point is equal to one percent of the loan principal. Some lenders charge points, in addition to interest and fees, at closing.
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