Buyer Tips

Simplify Your Search
What features would you require in a home to satisfy your lifestyle now and in the future? Once you know what you can afford, we'll help you explore your possibilities, from design preferences to neighborhood choices.

Moving Forward
Once you have found the home that is right for you, it's time to present an offer. This will consist of earnest money to be held in an escrow account, a loan pre-approval letter if you will be financing the purchase, and a written purchase agreement. This agreement will set forth your terms of the purchase and a schedule of events in order to own the property. This extremely important document is a legally binding agreement and should be carefully prepared by knowledgeable REALTORS® who are qualified to cover all of your interests.

Final Steps
Upon your complete satisfaction, you will attend a final walk-through, and arrangements will be made to attend a closing. The closing is usually facilitated by a title or escrow company that holds your earnest money in escrow. After furnishing the down payment and all other applicable fees have been agreed upon prior to closing; the final papers will be signed. The deed and mortgage will need to be recorded in the state Registry of Deeds, and you will be a homeowner.

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It is highly rewarding to buy, own, and maintain your own home. Whether this is your first home or you have experience with the home buying process, we can help. When you have right professional on your team, you can be confident in your ability to adequately search for and finance your home, negotiate the best terms possible, and be prepared at closing.

Purchasing a new home can be overwhelming. Without the right resources and information the buying process can be stressful and frustrating. With the services of an experienced and well respected professional, you can avoid the pitfalls. I'll be there to help every step of the way.

Money Matters
The most important part of financing is your knowledge of the options available. Consider the following questions as a basis for determining your financing needs.

• How much mortgage can I afford?
• What down payment is needed?
• What is the difference between pre-qualification, pre-approval and approval?
• What interest rates are available?
• What is mortgage insurance and is it required?
• What type of documentation will I need?
• How do 15- vs. 30-year terms compare?
• What are points and do I pay them?
• What is the difference between a fixed rate mortgage and an adjustable rate mortgage?
• What closing costs will I incur?
• What is being "locked-in?"
• How long will the mortgage process take?
• What is included in a mortgage payment?
• What would the payments be?
• When would the payments begin?

Make Your Mortgage The Right Fit!
Mortgages to meet everyone's needs. These summaries will help you narrow your search.

Adjustable Rate Mortgage (ARM)
A mortgage that allows the lender to adjust the mortgage's interest rate periodically on the basis of changes in a specified index. Interest rates may move up or down as market conditions change. The change in interest rate will result in a change in the periodic payments due under the mortgage. ARMs are attractive when short-term interest rates are trending lower.

Balloon Mortgage
Usually a short-term fixed-rate loan that involves small payments for a certain period of time with the balance due in a single large payment at a time specified in the contract. Whenever the balloon mortgage becomes due, the entire unpaid balance is due. Generally, the homeowner must either refinance or sell the property.

Buy-Down
The payment of extra money on a loan now so as to provide a lower interest rate over either: a given period, or over the life of the loan. To buy-down a mortgage, the buyer pays additional points to the lender, which will decrease the interest rate for a specific period.

Conforming Loan
These are conventional home mortgages: First mortgages up to loan amounts mandated by Congressional directive, which meet the qualifications for sale or delivery to either the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC).

Construction Loan
A structured, short-term loan to provide funds necessary to begin construction on buildings or homes.

Conventional Mortgage
A mortgage loan that is made by an institutional lender without the inclusion of government guarantees such as VA or FHA loans.

Convertible ARM
The convertible ARM is a combination of both fixed-rate and adjustable rate mortgages, allowing the best of both options in one package.

Deferred Interest Mortgage
A mortgage in which the payment is not sufficient to cover both the principal and the interest, and the payment portion of the interest is postponed until a certain date at which time the interest postponed is added to the principle owing.

Federal Home Loan Mortgage Corporation (FHLMC)
The Federal National Mortgage Association is a congressionally chartered and shareholder-owned company that is the largest national supplier of home mortgage funds. It is commonly known as Freddie Mac. The company buys mortgages from lending institutions, pools them with other loans, and sells shares to investors. Detailed information may be found at http://www.freddiemac.com.

Federal Housing Administration (FHA)
An agency of the federal government, the Division of the Department of Housing and Urban Development, that sets standards for the underwriting of private mortgages and insures residential mortgages made by private lenders.

Federal Housing Administration (FHA) Loans
Federal Housing Administration (FHA) low-rate loans are available to Americans with smaller incomes who are interested in modestly priced homes. Down payment requirements are usually lower than the prevailing ones.

Federal National Mortgage Association (FNMA)
The U.S.'s largest supplier of mortgages to home buyers and owners, a corporation established by Congress and owned by stockholders. It is commonly referred to as 'Fannie Mae,' and this government-sponsored enterprise is chartered by Congress. This federally chartered agency buys mortgages from lending institutions, pools them with other loans, and sells shares to investors. Detailed information may be found at http://www.fanniemae.com

Fixed-Rate Mortgage
The interest rate you pay and the monthly principal and interest payments are agreed upon from the outset and will not change throughout the entire term of the mortgage.

Government National Mortgage Association (GNMA)
A government-owned corporation within the U.S. Department of Housing and Urban Development, it is also referred to as 'Ginnie Mae,'. This government agency guarantees the payment of principal and interest on all of its pass-through securities, and its guarantee is backed in turn by the full faith and credit of the U.S. Government.

Graduated Payment Mortgage (GPM)
A mortgage that usually starts the borrower with low payments that are gradually increased over five to ten years, before leveling off for the remainder of the term of the loan until the loan is fully amortized. Negative amortization usually occurs until the payment reaches the level payment stage. Usually government insured loans (VA or FHA)

Growing Equity Mortgage (GEM)
This is a long-term mortgage whereby the borrower agrees to increase his payment each year by an agreed amount. The added money per payment is applied directly to the outstanding principal on the mortgage. The mortgage thereby is paid off in a shorter number of years.

Renegotiable Rate Mortgage (RRM)
Similar to an Adjustable Rate Mortgage, this type of mortgage allows the interest rates and payments to be adjusted periodically according to an index.

Reverse Annuity Mortgage (RAM)
A type of mortgage where the property's equity serves as security for periodic payments made by the lender to the borrower. Mortgage is generally paid out upon the sale of the property.

Rollover Mortgage (ROM)
A mortgage where the payments are only guaranteed for three, four, or five years. The borrower is allowed to refinance at the end of the term at the interest rate then applicable.

Shared Appreciation Mortgage (SAM)
It is a loan arrangement where two or more parties participate in the purchase of real estate and share the appreciation and tax deduction. Similar to shared equity mortgages.

Veterans' Administration Loans
Mortgage loans made to veterans by banks, savings and loans, or other lenders that are guaranteed by the Veterans' Administration. These enable veterans to buy a residence with little or no money down.

Wraparound Mortgage
A secondary financing option in which a new larger mortgage is created to encompass the first mortgage. This large second mortgage is used to preserve the low interest rate on the first mortgage for a potential buyer.

Drive To Learn
Evaluate as you drive though a community. Consider the following questions as a basis for determining your location needs:

• Where is the nearest shopping center, bus line, police station and library?
• What schools are available and what school district are you in?
• What types of homes (single family, apartments, condominiums) are in the neighborhood?
• How far apart are the homes?
• How far is it to your work?
• What community resources are available?
• Generally, where are the cars parked (driveways, garages, street)?
• Do you notice a lot of noise, traffic or pollution?
• Are the homes in good repair and the landscaping well kept?

Finding The Right Home
Keep your eyes open and your notebook in hand as you walk through a potential home. Consider the following questions as a basis for determining your needs as a homeowner:

• How long has the home been on the market?
• Why is the home being sold?
• What is the asking price of the home?
• Has the price been lowered?
• Is the price comparable to other homes in the neighborhood?
• What is the down payment required?
• Is the house structurally sound?
• Is there room enough for the present and the future?
• Do you like the floor plan of the home?
• What condition is the yard in?
• What improvements must be made?
• Will the seller repair or replace any items that need repair or replacement?

Think carefully about each house you see and don't be in a hurry. Your REALTOR® can point out the pros and cons of each home from a professional standpoint.

Making an offer to buy a home entails many factors. You and your REALTOR® will discuss the following factors prior to putting the offer on the table:

• Amount of earnest money
• Down payment
• Price you are offering
• Details of financing
• Proposed move in date
• Proposed closing date
• Details of the sale
• How long the offer is valid

The seller will either accept the offer as presented, or make a counter offer and either you will agree to the terms in counter offer or you will submit another proposal. When all the parties involved have agreed upon the details, initialed any revisions, and signed the final agreement, then an offer becomes a contract.

Sales contracts may differ significantly yet all should clearly set forth the responsibilities and privileges of all the parties involved. It is a legally binding document that protects each party. Carefully review the terms of the contract.

The sales contract should include the following:

• An attorney's approval period whereby both parties can have the contract approved by their respective attorneys.
• Legal description of the property and/or the exact street address
• Selling price of the property
• Amount of earnest money and who is holding it - Often it is held in an escrow account by a third neutral party. . Generally, this is the listing Real Estate agent's company.
• Amount due at settlement
• Specifics of the mortgage (amount, rate and terms)
• Title or Escrow company - Either a title company, escrow company, or attorney must be agreed upon by buyer and seller
• Details of the closing - when and where
• Home inspection - Recommended to ensure against structural and unknown defects, and must be completed by a specific date set forth in the contract and completed by a certified home inspector
• Inclusions and exclusions - Of building or personal property. Examples would include washers, dryers, window treatments, etc.
• Pest Inspection - Who is responsible if there is damage or an infestation?
• Warranties - Get the description of any that are included with the house
• Repairs - Unless you are accepting as-is, state who is responsible for repairs, with a date for a professional inspection
• The right to a final walk-through 48 hours prior to the closing to be sure the property is in the same condition it was at the time of contract.
• Well and septic - They must pass a test, if applicable
• Date of possession - When you take possession of the property
• Acceptance date - Either an acceptance or counter offer must occur by a specified date
  

Once the contract is signed, your REALTOR® will continue to be your advocate and ensure that your best interests are served. Some of the details they will be available to handle are:

• Assist with scheduling all necessary pre-closing inspections
• Check finances are deposited according the contract specifications
• Keep you informed of any unseen problems that may arise and offer solutions
• Present a list of utility companies available for service
• Schedule and attend-the pre-closing walk through
• Prepare for and attend the closing
  

There are two main purposes of the final walk-through. First, you want to make sure that everything that was agreed upon with the seller has been taken care of. Second you want to check that the home is in the same condition it was when you signed the contract for purchase of the home. During the process of moving out or completing necessary repairs prior to moving, it is possible that damage has occurred or that appliances are no longer working properly. All appliances should be functioning. The below checklist should aide you in assuring that your final walk-through is as productive as possible.

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If Home Was Previously Occupied:

• Carefully check areas that were previously concealed by rugs, drapes, and furniture for damages that could have been covered.
• Obtain copies of warranties.
• Inquire about utility bills to ensure that they have been paid, or service has been transferred.

Lights

• Check all overhead lights and fans to make sure they are working.
• Check lights under or over the kitchen cabinets if any.
• Check lights in all closets.
• Check lights in refrigerator/freezer.

Walls/Painting

• If any rooms were agreed to be repainted check paintjob carefully, especially in new construction. Look for smudges, drips, and other carelessness.
• Make sure you have extra paint on hand or you know the specific colors used should you need more paint in the future.
• Check woodwork carefully around windows to make sure glass is free of paint splatter.

Floors

• Check for any nicks, gauges, or scratches in flooring.

Doors

• Make sure all open and close properly.
• If the unit was previously occupied, check door frames for any damage that may have occurred during the move out process.

Windows

• Check to see that they open and close properly and that the seals are not broken.

Bathroom

• Check all doors and drawers to see that they open and close completely.
• Check for nicks/markings on all cabinets and drawers.
• Check to see that shower door opens and shuts.
• Check faucets and jets in Jacuzzi, sinks, and shower, and make sure that both hot and cold water are working.
• Check under sink for leaks.
• Test floors; if they are heated.
• Flush toilet (actually put something in it to be sure it works), and make sure it doesn't run.
• Check backsplash, countertops, and floor for any nicks/gauges.

Kitchen

• Test hot and cold water to make sure faucet is working, and check under sink for leaks.
• Check all kitchen cabinets, drawers, and island cabinets to make sure they open and close properly. Also be sure that nothing has been left by the previous owner.
• Check refrigerator: see that it's working, and that water/ice dispenser works (if applicable).
• Check burners on stove to see that they all function.
• Check countertops/backsplash for nicks/gauges.
• Check dishwasher. Run to check for any leaks/problems.
• Run garbage disposal.
• Make sure microwave door opens and closes properly and that it functions.

Miscellaneous

• Check all locks and garage door openers.
• Open and close any balcony/patio doors.
• Check washer/dryer hookups, and make sure both units are functioning.
• Make sure fireplace is working and you know how to use it.
• Check to make sure both heating and air-conditioning are working.
• If seller agreed to include any furnishings or other items, make sure they are present and in the condition agreed upon.
• Check doorbell.
• Make sure intercom works and you know how to use it.

Remember to Make Sure You Receive All of the Following on Closing Day:

1. Keys, padlock combinations, garage door openers, remote switches.
2. Codes to security system.
3. Owner's manuals for all appliances.

This is the actual transfer of property title and keys. On the day of the closing your REALTOR® will accompany you to the agreed upon location (usually specified in the contract) where you will generally meet the seller, the seller's agent, and a representative of the title company. You will be required to pay all fees and closing costs with a method of "guaranteed funds", such as a cashier's check.

It doesn't matter if you have moved once or several times, it is never an easy task. There is a lot of emotion associated with selling a home. So on to a new adventure. The following are some tips you may find helpful.

Print This Checklist

Send Change of Address to:

• Post office: give forwarding address.
• Credit card companies.
• Magazine/newspaper subscriptions.
• Friends and family.
• Doctors
• It's always a good idea to leave several large, pre-addressed, stamped envelopes with the new owners for mail that is still delivered to your previous address.

Remember to:

• Cancel subscriptions that would not be forwarded.
• Arrange for new checks for your bank account if needed.
• Close accounts for all utilities and services at your old address as of date of closing.
• Be sure the new owner has assumed responsibility of utilities as of closing date so there is no lapse or turning off of service.
• Arrange for utilities: Water, electricity, gas, cable, internet, and telephone service at your new location.
• Empty freezer and refrigerator.
• Defrost and clean refrigerator and freezer.
• Check insurance coverage and labor costs; confirm moving day, and payment costs and method with your mover.
• Transfer your child's school records if changing schools.

Packing Guidelines:

• Once you are reasonably sure you will be proceeding with the sale, begin weeding out your possessions.
• Pack one room at a time, and be sure to label all boxes.
• Keep the weight of your boxes reasonable.
• Start packing and marking every box according to its contents and the room it will go in.
• If bubble wrap is not available, use towels and blankets to wrap fragile items.
• If possible, pack audio-video and computer equipment in their original boxes.

On Moving Day:

• Plan for needs of children and pets during the move
• Plan for sufficient cash/travelers checks during the move.
• Do not pack valuables, carry them with you.
• Be sure to leave all of the following for new tenant or homeowner:
  1. Keys, padlock combinations, garage door openers, remote switches.
  2. Codes to security system.
  3. Owner's manuals for all appliances.
  
  

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