Home Current Listings Sold Properties Selling Process Buying Process Buyers/Sellers Testimonials Personal Resume Home Buyers Tips Home Sellers Tips Helpful Links Contact Me Home Buyers Tips Information for Home Buyers These pages provide valuable information for homebuyers. 10 STEPS TO BUYING A HOME Work with a Real Estate Professional Purchasing real estate is a complex and major transaction that involves many details. An experienced real estate agent can guide you through the process and help you avoid costly mistakes. A Buyer's Agent is one who represents your needs in the transaction. Similarly, the seller will have a Seller's Agent representing them. As your Buyer's Agent, I am dedicated to providing you with the highest level of personal and professional service in the industry. With my experience, I can help ensure that your home buying experience is enjoyable and stress-free. Obtain Financial Pre-Approval One of the biggest mistakes a homebuyer can make is not getting pre-qualified or pre-approved for a loan. A pre-qualified loan means a lender takes information from you and has run an infile credit report. Based on your information and the credit report, they can issue you a pre-qualification letter. A pre-approved loan is one in which you and the lender have gone through all of the documentation, and a full credit report is ordered. You benefit by having your loan pre-approved in several ways: You eliminate any surprises about your ability to borrow by providing the lender with the information up front. If there are questions about income, credit, or down payment, you can address them and resolve them without the last minute panic that can occur if you have not been pre-approved. Many times, credit reports are showing wrong information. You are negotiating with the seller from a much stronger position. It shows the seller that you not only can afford the home, but also there will be no surprises in your loan process later. This can also be helpful if you find yourself in a situation where there are multiple buyers bidding on the same property. The seller will be most apt to pick the buyer who has confirmation that the loan will go through. One of the seller's biggest concerns is that a buyer will not qualify for the loan to buy their home and it will create the necessity to re-market the home and disrupt the plans the seller has made. Since this is one of the main reasons real estate transactions fall through, the sellers concerns are warranted. Pre-Qualification can be done by phone, e-mail, or fax, and there is no obligation or cost to you. Select and View Properties Once you have obtained pre-approval and have determined your affordable price range, you can begin to select and view available homes and new construction models. Having a set of guidelines based on requirement is essential to making decisions based on facts and not just emotions. It is recommended that you keep notes and photos of houses you have seen. If you write down the unique features, as well as the pros and cons of each home you are considering, you will not have to rely strictly on memory. Some important questions to ask when viewing a home include: how long the property has been for sale whether or not the price of the property has been reduced during the listing period whether there have been other offers to purchase The answers to these questions help determine how motivated the seller is and give you added leverage in negotiations, should you decide to make an offer. Offer to Purchase When you have identified a home that meets your needs, it is time to make an offer and negotiate. Your rights and obligations will be detailed in the Contract to Purchase Agreement. In addition to the offer, you will need to put up an earnest money deposit as a sign of Good Faith that you are seriously interested in buying the home. That deposit becomes a part of the purchase price and will be held in a trust account and credited back to you at closing toward your closing costs or down payment. The amount of earnest money varies. However, it is normally 1 - 2% of the sales price of the home. Your offer will then be presented to the seller with your pre-approval letter attached to ensure the seller you are a qualified buyer. The seller will either accept, reject, or counter the Contract to Purchase. Once a contract or counterproposal has been agreed upon, you will proceed with the property inspection and secure your mortgage as well. If your offer was rejected, or you were unable to come to a final agreement, your earnest money check will be returned to you. To help determine an offering price, I will prepare a comparative market analysis showing what similar homes have recently sold for, and the difference between their asking and selling prices. I will present your offer to the Selling Agent on your behalf and you can be assured that I have experience in negotiating home purchases. You can rely on me to utilize the best strategy for your situation. I will fully explain the Contract to Purchase Agreement to you and answer any questions that you may have throughout the process. We will discuss your options at each point along the way. Inspect the Property The Contract to Purchase will have a written provision that your contract is to be contingent upon a satisfactory home inspection report. The seller is required to provide you with a Property Disclosure, which states what is included, what is not included, what is working, and what is not working in the home. The Contract to Purchase will include an objection date by which this must be done. Any items that you may request the seller to repair or replace must be submitted in writing. The seller has a resolution deadline to respond to your request. At that time, if you and the seller do not agree on the inspection objections, you have the right to terminate the Contract to Purchase. I can recommend to you some licensed professionals for this crucial step. It is essential that the Property Inspector be someone hired by you, not the seller. In addition, I recommend that you be present during the inspection. You will learn a great deal about the general condition of the house and how the various systems operate. The written report will include information on the condition and remaining life span of the foundation, roof, walls, doors, floors, electrical and plumbing systems, heating and cooling systems, and much more. Title Insurance and Approval It is the seller's responsibility to provide you with Title Insurance. The title search is done by a Title Company, and a title commitment will be provided to you before the title deadline in the Contract to Purchase. If there are any judgments, liens, or recorded easements, they will show up on the title commitment. It is the seller's responsibility to take care of any problems with the title company and assure you clear title. Your lender will assign an appraiser to go out and appraise the property. The cost of the appraisal will either be paid by you up front when you apply for your pre-approval, or at closing. The property must appraise for the purchase price or above. If it does not, you have a few of choices. terminate the Contract to Purchase ask the seller to adjust the sales price pay the difference in cash and continue with the contract. We will review the title together so you are assured that you will be receiving a clear and clean title. Secure the Mortgage If you are pre-approved, the only tasks left for the lender to do are: get the appraisal get a survey of the property, if needed ask you to provide them with your current pay stubs and bank statement It is very important that you not go out and make any large purchases that might affect your credit score or rating. It is best to discuss anything questionable with your lender first so that it will not affect your mortgage. Final Walk Through Shortly before the date of closing, you will make a final inspection of the house you are buying. With a copy of the Contract to Purchase in hand, verify that all items that were supposed to be included in the house are indeed present, and similarly those that were not, have been removed. I will accompany you through the final inspection and if there are any problems that need to be addressed, we can deal with them before the closing. Closing The Closing is the process by which the title to your new home will be transferred to you, homeowners' insurance will be verified, the terms of the mortgage will be finalized, and the keys to the new house will be given to you. In the state of Illinois, the property belongs to the buyer as of the day of closing and Delivery of the Deed. Unless otherwise stated in the Contract to Purchase, the seller must be completely out of the property by the time and date of the closing. As your Buyer's Agent, I will attend the closing with you. This will take place either at the title company or at the Selling Agent's office. Beforehand, I will clarify any aspects of the closing that are not familiar to you. I will also inform you of the amount to bring to closing in the form of a cashier's check made out to the title company. Although there may be additional documents involved, the primary items that are handled at the Closing include: The Settlement Statement The Contract to Purchase The Loan Package from your lender Title Insurance Homeowners' Insurance The Title and the Deed Down Payment Closing Costs Taking Possession and Moving In This is the day everyone has been waiting for! It will be a busy day so be rested up! The weeks leading up to your moving day will be busy with many diverse tasks. It is a good idea to refer to a timetable to help keep you organized and to ensure that important activities are not inadvertently neglected. Congratulations on the purchase of your new home! FACTS EVERY BUYER SHOULD KNOW Here are some important facts that you should know before buying a home. These tips will help you avoid making costly mistakes. Rely On An Experienced Buyer's Agent. A Buyer's Agent can save you money by using years of successful negotiating experience on your behalf. Get Financially Pre-Approved. This will let you know how much you can comfortably afford to spend. Plus, you will have the opportunity to lock in a specific interest rate. Obtain a Comparative Market Analysis. Obtain a report showing what similar homes in the area have sold for, as well as the difference between their asking and selling prices. Armed with this knowledge, you can be sure your offer is reasonable. Understand Negotiating Styles. Insisting on the lowest possible offer is not always the best tactic because it tends to alienate the seller. Read The Details in the Offer To Purchase. Wrong assumptions about what is included and what is not included in your Offer can lead to increased costs. I will explain the agreement to you so there are no last minute surprises. Rely on Facts. Too often buyers rely strictly on their emotions rather than on facts when deciding to buy a home. I will help you keep your emotions in check while providing you with the facts you need to ensure a smart decision. WHAT IS A BUYER'S AGENT? The word fiduciary well describes the role a Buyer's Agent has relative to the buyer. The Buyer's Agent represents the buyer who is purchasing the property in the real estate transaction. This agent owes full fiduciary responsibilities, duties, and loyalty to the buyer. The Buyer's Agent works for the buyer and has the buyer's best interests in mind throughout the entire transaction process. Choosing an agent to represent you in a real estate transaction is an important decision. It is a good idea to interview several agents before making your selection. When selecting a real estate agent, keep in mind the following criteria: Service -- The buyer's agent should be willing to go the extra mile to support the buyer in finding the right home and throughout the transaction process. Experience -- A buyer's agent should keep up to date on all aspects of the real estate market and make it a point to know what is going on in the area. Reputation -- Always choose an agent that has built up a reputation in the area as someone who is dependable, committed and honest. TIPS FOR CHOOSING THE RIGHT HOME Selecting the right home is not an easy decision and often it is complicated by emotional issues. Buyers tend to "fall in love" with a home, and that is fine as long as it is the rational reasons for buying the home support their emotional decision. Evaluate the Neighborhood In choosing a neighborhood, take the following into consideration: If you have children, you will most likely want a neighborhood that is family-oriented, so that your children will have other children around to play with. Families will also want to look into the quality of the local school districts. While all the school districts are good, if your child has special needs, it is very important to evaluate the schools to determine which one best fits your requirements. We will provide you with the various test score results for the various school districts. If you like sports, you may want a neighborhood that features jogging paths, parks, tennis courts, etc. Determine the proximity to work or school and decide whether this is an important issue for you. Check out the proximity to shopping and recreation centers. Drive or walk around the neighborhood you are considering. Notice the condition of the houses in the area. Homes in good condition indicate a pride in ownership that has a positive impact on property values. Visit the neighborhood at different times of the day and pay attention to the amount of traffic and noise. Find out about crimes in the area. The local police department can provide you with statistics on how many and what types of crimes have been committed in each area. Do you need a location where you can keep horses or other animals? Do you want city or country living? We will take a look at all the neighborhoods that meet your needs and lifestyle. Each neighborhood has its own personality and we will help guide you through the process of choosing one. Evaluate the Home Decide ahead of time what features you want to have in a home. Some features you will absolutely need, and others may be an option. Here are some things to think about: Do you want a new home or a resale? How many bedrooms and bathrooms do you need? What style of home -- Contemporary, Traditional, Southwest? What type of floor plan - Two Story, Ranch, Tri-level? Do you need a basement - finished or unfinished? Do you want a large or small lot? Do you want acreage for animals? Do you want to live in the city or the country? Do you want views of the peak or front range? Make a list of the amenities you would like to have in your home. Here are a few to think about: Eat-in kitchen Greatroom or Familyroom Formal living and dining area Master suite with 5 piece bath Number of bedrooms on the same level Where do you want the laundry room Number of fireplaces Air conditioning As you view the different homes, write down the pros and cons of each one. Evaluate how each one measures up to the criteria you have established. Your efforts will go a long way toward assuring that the home you buy is the right choice for you! HOME INSPECTION WARNING SIGNS A home inspection is an essential step in the Buying Process. A Seller is obligated to disclose to the Buyer all known facts that affect the value of the home and that may not be readily noticed. But there are often defects that the Seller does not know about. A licensed and certified Inspector can uncover structural and system problems that may have significant bearing on the price you pay for your new home. It is a good idea to accompany the Inspector when he examines the home. As he works you can be on the lookout for the following warning signs that may indicate costly problems: The Roof: stained or sagging ceilings peeling plaster missing or cracked roof tiles The Heating System: abundance of repair stickers indicating multiple service calls lack of service history The Plumbing and Electrical Systems: bathtubs and sinks do not drain well extra-long extension cords in use appliances that don't appear to be functioning properly The Outside and Yard: cracks in the foundation pooling water from improper drainag soil instability indications such as warped doors, locks that don't engage properly, sloping floors indications of a possible easement on the property potential noise problems such as proximity to commercial businesses Pet Problems: noticeable odors or carpet stains proximity to homes containing barking dogs SPECIALTY MARKETS New Construction Relocation Buyer Representative Seller Representative First Time Buyers Copyright MorganSage.net, © 2004-07. 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