Now what?

Ok, so you've found a REALTOR® to work with. You've been to the bank and find out everything is good there and you're ready to find your home. Now what? What can you expect when looking for a home? You can expect to look at several houses...the average being 12. But of course that all depends on the market you're looking in along with how much house you can afford. Your REALTOR® will be able to help you narrow down properties to look at depending on your needs. If you're in a bigger market you may have several dozen to look at. Smaller market? As few as one home may be available. Don't worry if that's the case...generally it's only a matter of time before something else comes up for sale.
Now the fun begins....house hunting!! You make the appointment to meet with your REALTOR®, view the list of homes to see and head out the door. Here's an important tip...bring a pen and a notebook. You're going to want to take notes on the houses you see. But, not every house you see. Only the ones you really are considering buying. And on that same note, use a process of elimination. With each house you see, determine if you can really picture yourself living there. If the answer is no, cross it off your list and don't think about that house again. Try and keep it to TWO houses on your list. With each new house you look at, if you can't say you like it more than the two already on your list, off the list it goes. This will help keep you better organized and not wondering throughout the day which house had what to offer and which one you liked the most.
Now you look at house after house and finally decide which one is for you. It's time to write an offer. What you offer and other details of your purchase agreement will be best advised by your REALTOR® as they know the local market. Once the offer is submitted to the listing agent, several things can happen. The seller can accept your offer "as is", but that's rare. In most circumstances there will be negotiations. This can happen rather quickly...as in a matter of minutes if there isn't a lot to negotiate. Or, it can happen over a matter of hours...even days. When it comes to trying to figure out a price that both you the buyer, and they the seller, are happy with, think about what the difference in price means over the long run. If you are (for example), three thousand dollars apart in price, think about two things...how much do you want this house? And what will three thousand dollars broken down over the course of my mortgage actually cost me a month?...basically a few dollars more per month.
So, your offer is accepted..again, now what? Now is when, if you're having one, you hire a home inspector. Many states require home inspectors to be licensed so choosing one will likely be a matter of personal choice and cost. You can always ask your REALTOR® whom they've worked with in the past that they've had a good experience with. Remember to be prepared for pay for the inspection the day it happens if that is what is required in your area. If you can be there when the inspection is happening it's a good idea to do so. Once the inspection is done it will be a few days until you get the report. When you get the report back, go over it with your REALTOR®. They have the experience to help you understand what the inspector has "flagged" and let you know if it's something you need to worry about. Bigger issues that come up on the home inspection can result in renegotiating your offer to purchase so long as the offer was contingent on the home inspection. Just remember not to get hung up on the details of the report.
Once the home inspection is over and everything is settled, it's time to wait. The process is now out of your (and your REALTOR'S®) hands, as other people now take over. The bank will send an appraiser to appraise the value of the property. There will be attorney reviews, title searches, underwriting...all kinds of things. The important part now, is to be patient. It's also important to note at this time, DON'T BUY ANYTHING! Now I'm not talking about a latte or something little. I'm talking about a new car, boat or pretty new furniture that will look great in your new living room. The reason? Any new debt at this point can change your borrowing power and you may need to be re-qualified for your loan.
Once, when what feels like an eternity has past, and everyone has given the O.K., it's time to close. Be sure and talk to your lender to make sure that all the numbers are what they should be on the settlement statement (your lender or REALTOR® can explain to you what that is) and that you have your money in order. Depending in what type of loan you have and terms of the purchase agreement, you will likely need to have "certified" funds ready to bring to the closing table. Your lender will let you know exactly how much that will be, but you should already have a pretty good idea of the amount before even starting your home search. Once you get to the closing table you may be overwhelmed by the amount of paperwork for you to sign. But before you know it, it will all be over and you will be a home owner!
Enjoy....and now you can go buy your furniture.

Your Next Step

Now that you've thought about your house and have looked for a REALTOR®, it's time to figure out how you're going to pay for your dream. It's important that before you start looking for a home and end up falling in love with something, that you make sure your finances are together and can afford to buy your home. It can save you a lot of heartache knowing ahead of time how much house you can buy...or if you can buy one at all. Often times your REALTOR® will be more than happy to go along with you when you talk to a lender. Sometimes it's nice to have someone on your side to help walk you through the "hard part" of buying your home. But, you can also find and talk with a lender before finding a REALTOR®. As important as it is to find a REALTOR® that you're comfortable with, it's just as important to work with a lender that you like. You're going to be sharing a lot of very personal information with your lender and you don't want to feel like you're sitting in judgement or in front of the principal being scolded for not having a perfect credit score. Finding the right lender for you may take a little work. I would suggest talking to several different banks and finding someone that you feel comfortable with. Another reason to "shop around" is because aside from the interest rates, banks charge what's known as an "origination" fee and that can very from lender to lender. So now that you've got your REALTOR® and you've found a lender, what will you need to do now? Depending on the bank and the type of loan you are getting you're going to have to make sure you saved money for the down payment. Even if you've found a place who will give you a "no down payment" loan that doesn't mean you will have no out of pocket expense. There are still things you will need to have money for. One thing you will need to pay for is the appraisal. There is no way of getting around having one unless you are paying for your house with cash...and if you are doing that, stop reading this post, call your REALTOR® and go find your house! But, if like the majority of the population you need help financing your home, the bank is going to require an appraisal. They need to make sure that the house they are going to lend you money to buy is worth the cost. There can also be fees for attorneys, filing fees, underwriting fees, taxes, title insurance, morgage insurance, home owners insurance and if you choose (and it's always a good idea) to have a home inspection.... It's best to talk to your lender to see exactly how much you will need to have. You will also need to be prepared for some paperwork. You will most likely need the following...
For salaried & hourly employees
W2’s for the past 2 years
Two most recent pay stubs
Commissioned, Bonus or 1099 Income
Complete Federal tax returns for the past 2 years (Including W2’s, 1099’s and all schedules)
If you are self employed
Two most recent tax returns (ALL SCHEDULES).
Information on all of your assets and about your bills.
Every lender will require certain things but this is a general guideline of what to expect. It also can be a very good idea to check your own credit score at www.myfico.com as your FICO score is what the bank will look at.

Start at the Beginning

So you're thinking about buying a home. That's great! I'm sure you've thought, daydreamed maybe, about what your new home will look like. You may have even picked out the neighborhood and paint colors already...but have you thought about where to begin? One of the smartest moves you can make is to start with finding a REALTOR® .

First of all, not everyone who sells Real Estate is a REALTOR®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and adheres to its strict Code of Ethics. Here are five reasons why it pays to work with a REALTOR®.

1. You’ll have an expert to guide you through the process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.

2. Get objective information and opinions. REALTORS® can provide local community information on utilities, zoning, schools, and more. They’ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

3. Find the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR® to find all available properties.

4. Benefit from their negotiating experience. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.

6. Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with a professional who is immersed in the industry and knows the real estate language.

7. REALTORS® have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.

8. Buying and selling is emotional. A home often symbolizes family, rest, and security — it’s not just four walls and a roof. Because of this, home buying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.

9. Ethical treatment. Every member of the NATIONAL ASSOCIATION of REALTORS® makes a commitment to adhere to a strict Code of Ethics, which is based on professionalism and protection of the public. As a customer of a REALTOR®, you can expect honest and ethical treatment in all transaction-related matters. It is mandatory for REALTORS® to take the Code of Ethics orientation and they are also required to complete a refresher course every four years.
(Reprinted from REALTOR® magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2008. All rights reserved.)



Like I stated earlier...it's important to start at the beginning. In the coming blogs I'll be lending more information to buyers, sellers, and current home owners so be sure to check in often, or feel free to contact me for more information or to set up an appointment and I can help you get started on your home buying/selling/owning adventure!