❱❱ Explain real estate principles, contracts and documents
❱❱ Refer you to a reputable lender that can help you assess your financial situation and pre-approve you for a loan
❱❱ Help you determine the types of homes and neighborhoods that most fit your needs
❱❱ Arrange tours of homes that meet your criteria
❱❱ Provide you with detailed information about homes you’re interested in
❱❱ Determine the market value of homes you’re interested in
❱❱ Assist you in writing and negotiating a mutually-accepted purchase and sale agreement
❱❱ Accompany you to the inspection
❱❱ Coordinate necessary steps after inspection
❱❱ Work with the escrow company to ensure all needed documents are in order and completed in a timely manner
❱❱ Be more likely to find the home that meets all your criteria
❱❱ Decrease the amount of time it takes to find your home
❱❱ Understand all the terms, processes and documents involved
❱❱ Have current market information to make informed decisions
❱❱ Have a skilled negotiator on your side
❱❱ Have peace of mind that all the details are being handled
It’s important to check your credit report before you see your lender because:
❱❱ Lenders check this to determine the amount of loan you qualify for
❱❱ It allows you to correct any mistakes in the report before lenders see it
❱❱ If there are any blemishes in your report that are not errors, you should be prepared to explain them to your lender
You are entitled to one free request each year from each of the three credit bureaus. The best way to do this is to go online to AnnualCreditReport.com.
You may want to check your credit score at the same time you check your credit report (usually for a fee). This score influences how much lenders are willing to loan to you and at what interest rate.
Most lenders will give better financing terms to borrowers that can put a 20 percent down payment on the purchase. If you are unable to do so, you will likely be required to purchase Private Mortgage Insurance (PMI) and perhaps pay a higher interest rate.
A letter of pre approval from a lender shows that they have checked all your documentation and are prepared to make you a loan. Getting pre approved prior to starting your home search saves you time by:
❱❱ Keeping you focused on viewing only the homes that are within your budget
❱❱ Helping you obtain your financing more quickly once you find a house you want to buy
How does my offer get presented to the seller?
In today's electronic world, offers are sent via email to the seller's agent. I will call the agent to let them know it's coming and tell them a little bit about you and the details of your offer. Then I will follow up with the agent again to confirm receipt of your offer.
Does 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. The deposit is a sign of your good faith that you are seriously interested in buying the home.
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. That deposit becomes a credit to the buyer and becomes part of the purchase expense.
Is that all the money that’s involved?
Some lenders require the cost of the appraisal and credit report at the time of the loan application.
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. If the buyer willfully decides, however, that they no longer want to buy the house and has no legal reason for rescinding their offer, then the seller has the right to retain the earnest money.
What happens if I offer less 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 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 of each offer to consider, but ultimately the seller will want to accept the best and most complete offer. In active real estate 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 final sale price above the original listing price.
As a real estate professional, I can help you plan your strategy, based on the current real estate market in our area.
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” upon 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 your offer because there are too many things that must happen before the sale can close.
The amount of the mortgage based on the purchase price, minus the down payment.
Cash that the buyer provides the lender as their portion of the purchase price. The down payment is considered the buyer’s equity (or cash investment) in their home.
Fees charged by the lender to offset their interest rate, if it’s below the prevailing market rate. One point equals one percentage point—so one point on a $100,000 loan would be $1,000.
The amount paid for the lender’s appraisal of the property.
CREDIT REPORT FEE
The fee charged by the lender to obtain a credit report on the buyer.
TITLE INSURANCE FEE
A one-time premium that a buyer pays for protection against loss or damage in the event of an incorrect search of public records or misinterpretation of title. The title insurance policy also shows what the property is subject to in terms of liens, taxes, encumbrances, deed restrictions and easements.
TOTAL CASH REQUIRED
The total amount of cash the buyer will need, including down payment and closing costs.
The amount a buyer pays the escrow company or closing agent for preparing papers, accounting for all funds and coordinating the information between all parties involved in the transaction.
A general term for all the estimated charges associated with the transfer of ownership of the property.
The amount of interest due on the loan during the time period between closing of escrow and the first mortgage payment, due at the time of closing.
The estimated house payment, including principal, interest, taxes and insurance.
PRINCIPAL AND INTEREST
The loan payment, consisting of the amount to be applied against the balance of the loan, and the interest payment, which is charged for interest on the loan.
PREMIUM MORTGAGE INSURANCE (PMI)
Insurance for the lender, to cover potential losses if the borrower defaults on the loan.