First things first. You should write down what you're looking for in your new home. For example, are you currently renting and would like to have a home where you can begin to build equity? Maybe you have recently outgrown your current residence, or are downsizing due to family changes. Or, maybe you have just received that promotion, which allows you to move to your dream home. There are many factors that will have a bearing on how you approach your home search.

Second, establish a time frame that you would like to stay within for buying your home. Depending upon your reasons for wanting a new home and the current state of the market here in the area, you will be able to come up with a rough guideline, which you can finalize as you gather more information.

Lastly, you most likely have a mental picture of what you would like your new home to look like and what features it should have. It's very important to write these ideas down to avoid any ambiguity later in your home search. You should make at least two lists: one should be a list describing your dream home and the other should list the features of the home that you feel are an absolute must have in order to buy the home. In a perfect world, your new home would fulfill both lists 100 percent. It is more likely that you will end up blending the two lists into a schedule of prioritized items as you progress through the buying process. This is a natural and evolutionary process that will become much clearer as you find out what is available here in our market.

Prequalification

Now that you have your list of features you want in your new home, you're ready to start looking! Not so fast. You're going to need to know in what price range to look. It's now time to go get pre-approved or pre-qualified for a mortgage. You will need to contact a mortgage company. I would be happy to refer a company or loan officer that I have worked with in the past who has the ability to make your dream home become a reality.

There are some key differences between pre-qualification and pre-approval for a loan that you need to be aware of. Loan pre-qualification is a simple process. It takes into account very basic information regarding your financial status and gives you an amount for which you may qualify. This can be done strictly on a verbal level, electronically over the internet, or by phone. The pre-qualified amount is based solely on the information you provide. In most markets, pre-approved buyers usually hold more clout compared to pre-qualified buyers due to the fact that the information given during the pre-qualification process is not thoroughly investigated and therefore may be unreliable.

Where a pre-approved buyer is actually approved for a loan in a certain amount, a pre-qualified buyer is only told that they might be approved for a certain amount. Pre-approval is a much more involved process. The lender will take all pertinent information regarding your finances and perform an extensive check on your current financial status. This will ultimately give you the exact amount that you will be eligible for (depending on what type of loan you decide to go with). Being pre-approved lets the seller know that you have gone through an extensive financial background check and there should be no unexpected obstacles to buying the home. You can see how being pre-approved would be more attractive to a seller.

Choosing An Area

Now that you have your list of needs and wants and you know how much you can afford to spend, it's time to look at some houses! Not quite yet. Step back for a moment and consider the larger picture. You will not just be just buying a house you are buying the neighborhood the home is in. When you find your dream home you want it to be in a neighborhood that is to your liking with the amenities that you need. So, you will want to choose what type of neighborhood you want to live in. You will most likely want to consider things like how living in the neighborhood will affect your drive time to and from work, what amenities are offered (swimming pool, tennis courts, park, etc.), and, if you have children who are attending school or soon will be, what school district you will be in and how close the schools are going to be.

I will be able to help you consolidate the information from your list of wants and needs for your home, your pre-approval, and the type of neighborhood you desire. From this information, I can create a search profile which will allow you to narrow down to specific areas dictated by the market in which you will be looking. My experience with local markets will be a valuable resource during this step.
 

Choosing a Home

Some 6 million new and existing homes are sold each year. There's no shortage of housing options, but with so many choices the challenge becomes finding the property which best meets your needs.

What are you looking for?

A home is more than just a collection of bedrooms and bathrooms. Several properties -- each with four bedrooms, three baths, and the same price -- may well represent radically different designs, commuting distances, lot sizes, tax costs, interior dimensions, and exterior finishes.

Each of us is different and so it's important to list the features and benefits you want in a home. Consider such things as pricing, location, size, amenities (extras such as a pool or extra-large kitchen) and design (one floor or two, colonial or modern, etc.).

Next, it's important to consider your priorities. If you can't get a home at your price with all the features you want, then what features are most important? For instance, would you trade fewer bedrooms for a larger kitchen? A longer commute for a bigger lot at a lower cost?

Lastly, consider your needs in several years. If you'll need a larger home, maybe now is the time to buy a bigger house rather than moving or expanding in the future. If you expect your income to increase, perhaps you should consider a more expensive home financed with a loan program where monthly payments increase in the future.

Where should you look?

All neighborhoods and communities have a special nature that gives them identity and value. One community may be well known for historic homes while another offers both suburban living as well as easy access to downtown office areas. You may already have a general idea of the area that best suits your needs, or you can ask your agent for more information.

How do you find a house?

Some buyers like to search REALTOR.com by looking at listings on the basis of location or price. Others prefer to have a local realtor suggest properties, which provides a more personal touch. Many buyers prefer both approaches. Regardless of your choice, it's important to target your search. By using basic measures such as general location and affordability, you can refine your search and focus on homes that offer the most desirable features.

In any case it’s important to remember that as a buyer, you don’t need to pay for the expertise of the real estate agent. The seller covers whatever commission is due. That makes it much easier and more affordable to home hunt. Agents will typically want you to sign a Buyer Representation Agreement to protect both you and the agent. Your real estate agent can provide you with the specific details of this agreement, but it’s always a good idea to have a mutual commitment to one another.


Inspections & Disclosures

When you walk through the house, if there are significant problems, these will often present themselves if you pay attention. For example, if the floors seem uneven, you should suspect that there might be foundational issues. If you see rust stains in the sink, there may be deteriorated galvanized piping. If you notice 2-prong outlets, you can be pretty sure that the electrical system is antiquated.

I don’t suggest that the prospective homebuyer needs to develop the trained eye of a professional property inspector. But the more carefully you look, the more likely you are to see issues to which you can direct your attention when reading the disclosure reports provided by the seller. In a complete set of disclosures you will typically find reports that give you a good general picture of the condition of the house. These would include: general structural inspection (most important), structural pest inspection (termite report), and where warranted, roof, chimney, soils, septic system, water quality (for wells) and other specialized reports. Read these reports carefully.

The inspection reports, coupled with what the seller discloses about the defects of the house in the property disclosure form are very valuable information. The seller is required by law to disclose to you what they know about any material defects the property may have. Carefully note any faults that are indicated, and consider the potential implications. If you learn to interpret the information from the seller and the inspectors, you can often gain a pretty clear understanding of the physical condition of the property. I believe in full disclosure, and expect my seller clients to provide thorough reports. Where full disclosures are not available, I strongly suggest that buyers either enlist the help of their own inspectors or take extreme care when bidding on such properties in overheated markets. You could be acquiring problems that are not explicitly known to the seller (who therefore cannot be held at fault for not telling you). Whatever it takes, in most situations you need to have a clear sense of the magnitude of the defects in the house you are buying and what it will cost to fix them.

Based on the findings in the general structural inspection, for example, it may be clear that the foundation is not performing adequately. Depending on the specifics, you might get a bid from a foundation contractor or consult with a structural engineer. An indication that the roof was near the end of its life would warrant getting a roof report, or if the contractor is willing to do so, a bid for repair/replacement (which is usually free).

The condition of the property is, of course, only one of the variables that you need to consider. The location-related issues are critical to determining a reasonable offer price.


Making An Offer

Now that we've found your Dream Home, let's start the purchasing process. It's time to make an offer. Taking into account all of the recent sales of homes in that neighborhood which are similar in size, quality, conveniences, and amenities, is the asking price fair for the home? I will consult with you and give you my best advice. Then I'll create an offer that will have the greatest chance of being accepted.

I'll ensure that you have everything in writing...no verbal agreements. Your offer will be put into a written agreement that meets all of the legal requirements according to our local and national guidelines. I'll then present the written document to the seller detailing what needs to be done by both parties to execute the transaction. The agreement should protect the best interests of all parties involved and should be comprehensive in nature. I'll also ensure your financial position as the buyer, by including any necessary contingencies, which will protect you if a particular requirement is not met, otherwise, once the seller accepts your offer it may be too late to make changes.

The agreement, though not limited to this list, should include the following:

• A legal description of the property
• The offering price
• The down payment
• Financing arrangements
• A list of fees and who will pay them
• Amount of the deposit (Earnest Money) 
• Inspection rights and possible repair allowances
• The method of conveying the title and who will handle the closing
• A list of appliances and furnishings which will stay with the home
• The settlement date
• Any relevant contingencies

Remember that the legalities of this phase are very important. If you have any questions or concerns, they need to be addressed right away. After all, you don't want to be in your closing saying, "I wish I had asked more questions."


Negotiations

Once your offer is made, I may need to enter into some negotiations in order to reach an agreement. Keep in mind that almost everything is negotiable when you are buying a house. This can give you a great deal of leverage in the buying process, as long as you have adequate information used in an appropriate manner. I have the market knowledge and negotiating expertise necessary to make sure that your offer will be accepted at the best price and terms possible for you.

Some of the things that you may have to negotiate are:

• The price
• Financing
• Closing costs
• Repairs that need to be done (who will pay)
• Appliances and fixtures
• Landscaping
• Painting
• Occupancy time frame

The key to successful negotiating is keeping in mind that the end result must make both you and the seller happy. Otherwise, negative feelings will persist throughout the remainder of the process and you don't want to walk away feeling that you were not treated fairly.


Pre-close

After your offer has been accepted, I will supervise the coordination of all necessary vendors, serving as your advocate when working with each vendor. I will make sure that the vendors have access to the property at the appropriate times to perform their procedures and oversee the execution of those procedures on your behalf. For instance, the property will need a thorough examination. Working with your lender, you may need to have a formal appraisal and possibly a survey done on the property. A property inspection, a foundation inspection, and an environmental inspection may also be needed to make sure that the property is up to all standards as set forth in your written agreement.

If there are issues or inconsistencies brought to light during this time, it may delay or even nullify the agreement, depending on the contingencies set forth in the agreement.

Homeowner insurance is another very important item that will need to be taken care of at this point. Insurance experts recommend that you obtain insurance equal to the full replacement value of the home. Unless you have insurance coverage on the home, the closing cannot proceed. Having these procedures done in a timely and professional manner is a must. Investigate each vendor to make sure that they are reputable and have a clean operational history. My experience in this area will be valuable in making sure that everything is completed on time and in a professional and legal manner.

Insurance

You wouldn’t drive a car without insurance, so it figures that no homeowner should be without insurance. The essential idea behind various forms of real estate insurance is to protect owners in the event of catastrophe. If something goes wrong, insurance can be the bargain of a lifetime.

What kind and how much?

There are various forms of insurance associated with home ownership, including these major types:

Title Insurance

Purchased with a one-time fee at closing, title insurance protects owners in the event that title to the property is found to be invalid. Coverage includes "lenders" policies, which protect buyers up to the mortgage value of the property, and "owners" coverage, which protects owners up to the purchase price. In other words, "owners" coverage protects both the mortgage amount and the value of the down payment.

Homeowner’s Insurance

Provides fire, theft and liability coverage. Homeowner’s policies are required by lenders and often cover a surprising number of items, including in some cases such property as wedding rings, furniture and home office equipment.

Flood Insurance

Generally required in high-risk flood-prone areas, this insurance is issued by the federal government and provides as much as $250,000 in coverage for a single-family home plus $100,000 for contents.

Home Warranties

With new homes, buyers want assurance that if something goes wrong after completion the builder will be there to make repairs. But what if the builder refuses to do the work or goes out of business?

Home warranties bought from third parties by home builders are generally designed to provide several forms of protection: workmanship for the first year, mechanical problems such as plumbing and wiring for the first two years, and structural defects for up to 10 years.

Home warranties for existing homes are typically one-year service agreements purchased by sellers. In the event of a covered defect or breakdown, the warranty firm will step in and make the repair or cover its cost.

How do you get insurance?

The time to obtain insurance and warranty coverage is prior to closing, so speak with a realtor or insurance broker before you get there, and have things ready. Be sure to ask about limitations, costs, deductibles and "endorsements" (additional forms of coverage that may be available)


Final Preparations

As the closing date draws near, I will contact the title escrow company and your lender to make sure that all the necessary documents are prepared, and that they are complete, accurate, and delivered on time. I will also confirm that the documents will be delivered to the correct location so they can be reviewed and that they will be ready for you on the appropriate closing date. At this point you will find out the amount and form of payment you will need to bring to the closing table for any unpaid fees (closing costs), and make sure that your payment is made out to the appropriate party. I will ensure that each closing document is accurate and available to enable you to have a quick, easy closing.


Closing

Closing refers to the meeting where ownership of the property is legally transferred to you, the buyer. Closing procedures are usually held at the title company's office. Your closing officer coordinates the document signing and the collection and disbursement of funds. I will be present at your closing to read the documents on your behalf, answer any questions, or help to resolve any last minute details that may come up.

In order for the closing to go smoothly, each party involved should bring the necessary documentation and be prepared to pay any related fees (closing costs). There may be more than one form of acceptable payment for your closing costs, so ask the closing officer which form of payment will be required and to whom it should be made out. Closing costs will generally total an amount equal to 2 to 3 percent of the total loan value not including down payment. Sellers sometimes pay for a portion or all of the closing costs, depending on local market conditions and the terms of the purchase agreement. Any such concessions should be acknowledged in writing. Most lenders will allow a credit from the seller to the buyer for the non-recurring closing costs. However, they usually won't allow a credit that reduces the amount of the buyer's down payment or any of the buyer's recurring costs, such as expenses for fire insurance premiums, PMI (Private Mortgage Insurance), or property taxes.