Buying a New Home?

A home often symbolizes family, rest, and security – it's not just four walls and a roof. Because of this, home buying can be an emotional undertaking. For most people, a home is the largest purchase they will ever make. Anyone can search/find a home on the internet. As a Real Estate Professional, I will make sure it is the right home, the best investment, and you receive the best terms possible. I will help you stay focused on both the emotional and financial issues most important to you. Together, we will navigate the process of finding a home that provides the environment you want and the assurance of resale value if you choose to relocate in the future.

First-Time Home Buyers

One of the most exciting times in my life was when I purchased my first home. Being a first-time home buyer can be quite overwhelming. There are so many things to consider and the whole process, from establishing your credit to moving in your new home, will go so much smoother if you rely on an experienced real estate professional for guidance. The following information is to help you start your journey to owning your first home. Please feel free to contact me directly to discuss any questions you may have.

The first step in the home buying process is to establish good credit. The most basic way to get started will be to visit a local bank and deposit a small amount of money. You should then apply for a loan, using this money as security for the loan.

Make payments for the first few months and then pay the entire loan off. Repeat the process with larger and larger amounts and finally you will progress to the point where you do not need to deposit money as security. At the same time, you should also be using credit cards responsibly and paying off the entire balance every month.

Along with establishing credit, a high credit score is one of the most important elements to the first-time home buyer. High credit scores will allow you to get the lowest interest rates available on your home mortgage. Always pay your bills on time, keep your credit card balances at zero or at least very low, and make more than the minimum monthly payments. For more information about improving credit, look in the "Services" tab and select the "Finance" drop-down.

When buying your first home, you will need to save money for a down payment (a percentage of the cost of the home that you must pay when you go to settlement), earnest money (the deposit you make on the home when you submit your offer), and closing costs (the costs associated with processing the paperwork to buy a house). Now is the time to become disciplined to save a certain amount of money each and every week. This habit will not only be beneficial for purchasing your new home but will give you security for the future as well. Creating a budget and knowing where your money is going will make it much easier to set a goal and help make sure you always live within your means.

The more money you can put into your down payment, the lower your mortgage payments will be. There are still a few 100% financing options available (VA loans, Rural Development, etc.), but usually FHA loans are requiring a 3.5% down payment and conventional loans need a minimum of 5%. In addition to a lower monthly payment, one of the biggest advantages to putting at least 20% down is being exempt from paying an additional charge each month for mortgage insurance. PMI or Private Mortgage Insurance can add additional costs to your monthly payment.

Most loans have 4 parts: the principal (the repayment of the amount you actually borrowed), the interest (payment to the lender for the money you've borrowed), homeowner's insurance (a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders), and property taxes (the annual city/county taxes assessed on the property, divided by the number of mortgage payments you make in a year). Most loans are for either 30 or 15 years and there are many different kinds. With the interest rate seeing record lows, the fixed-rate mortgage offers the advantage of you always knowing exactly how much your mortgage payment will be. During the life of the loan, you will pay more interest than you will pay principal. The loans are structured so you will be paying mostly interest at the beginning of the loan and paying off the principal in the final years.

Investment Property

Financial Planning starts with anticipating your future needs and then preparing to meet those needs. Determining how much in net assets or income producing assets you may need is essential to realize the retirement objectives you want for the future.

Investments come in a wide variety, each with its own unique characteristics that appeal differently to each individual. Investments are usually evaluated by their Rate of Return or Yield, Liquidity, Risk, Cash Flows, Marketability, Taxation, and Management Requirements. Each investment will have many different peaks and valleys and investing in residential real estate is no different. However, as the population continues to increase, the need for housing will continue to rise and real estate will continue to be a solid investment. This sounds easy enough, but without experience or a background in real estate it is easy to get in over your head.

Investment Property

Step-by-Step Home Buying Process

One of the first steps in the home buying process should be meeting with a lender to get a letter of pre-approval. The lender will discuss the best type of financing for your needs and will give you a Good Faith Estimate. This will show the breakdown of the total cost (including down payment, closing costs, and prepaid items) you will need to invest in a home. This estimate will also show you the interest rate and total monthly investment including taxes and insurance. You will get a letter from the lender stating you have been pre-approved for a certain amount. You can then decide if this meets your level of comfort.
We will discuss the type of home that fits your needs and the preferred location. I will create a search for you that meets your criteria and set up an account on Valley MLS for you to view and save any properties you would like to consider. E-mails will be sent to you on a regular basis showing homes that fall into our category.
We will set a time to view properties that you have selected. This is a great opportunity to compare properties and ask questions about the home, the sales in the neighborhood and anything that might be of importance should that be the home you choose.
Keep in mind that if you see a home that is a "For Sale By Owner" we can contact them to set up a showing, as most cooperate with agents. (It is in the buyer's best interest to have a representative throughout the buying process). Also, if you attend an "Open House" just let the agent on duty know that you are working with me and if you desire a second look, I will set that up for you.
When we find a home that you are interested in, I will provide a market analysis of that neighborhood to compare what other similar homes have sold for. I will also pull a copy of the tax record showing the assessed value of the home, what the present owner paid for it, and the date of their purchase.
We draw up a contract to purchase. We make an offer which you will decide after we have discussed our options. We ask for a certain settlement date that will give us time to get your loan processed and closed. This date is also negotiable. We ask for any appliances offered, window treatments that convey and any cosmetic items we would like fixed. We will put a deposit down with the offer. The amount of the earnest money is negotiable and usually depends on the price of the home. Remember, the seller has the option to accept, reject, counter or accept a competing offer. All parts of our offer are important especially in multiple offer situations.
There will be contingencies in the contract. They would include: Subject to the purchasers obtaining financing, getting a home inspection or anything that might be a condition of the sale.
If your present home has not sold, and you will be using the funds from the sale of that home to purchase, we would write a contract subject to the sale of your current home. This contract will have a separate addendum called a "First Right of Refusal." This addendum will state that the seller's home will remain on the market while we are trying to sell yours. It will be very specific as to the terms. It will state that if the sellers receive another contract on their home during the time yours is on the market, but not sold, you will have (usually 24 hours) to remove the contingency on selling your home. If yours has not sold, we would have to let the listing agent know, and the other party would move forward. Your earnest money deposit would be refunded, and the contract would become void. If your home sells before they receive another offer on their home, we would remove the contingency on the sale of your home (by addendum) and the contract would then be contingent on the successful closing of your home.
We have a legally binding contract if ours is selected and signed by the seller. The deposit check will be cashed and held in an escrow account until settlement. This will be given to you as a credit at closing.
Our next step is to make formal application for the loan. We will provide your lender with a copy of the contract and you will pay for the appraisal and credit report. This money is part of the estimated closing costs or good faith estimate. This is usually within 5 days of an accepted contract.
We will contact a licensed home inspector chosen by you, to do the home inspection. This is usually done within 10-12 business days of a fully ratified contract.
We meet with the inspector and he discusses the process of the home inspection. The cost is usually between $350-$600 depending on the size of the home and the minimum cost of the inspection company. This inspection of the property is to detect any major defects and/or hazardous conditions.
Within 3 working days of completion of the inspection, we will provide the seller a "Request for Repairs" form stating those major defects and/or hazardous conditions (if any) that need to be corrected, along with a complete copy of all inspection reports. The seller will then have 3 working days to notify us, in writing, of those corrections the seller is willing to make.
Once the lender has fully approved the loan, we will set a time to close with an attorney. This will be the date agreed on in the contract. You will need to contact your insurance company to get a home owner's policy.
The attorney's office will call you with the total amount you will need to bring to closing. This amount will need to be a certified check for the amount specified on the HUD1. The attorney will disperse funds to the seller, etc. All persons to be included on the title, deed, or mortgage need to present their driver's license at closing. Prior to closing, you will need to contact the utility company to have your utilities transferred into your name starting with the day of closing.
The attorney will give you keys to your home at closing. The deed will be recorded and mailed to you within a week or two. The title insurance policy will be mailed within 60-90 days of closing. You will receive a title binder at closing for proof of the title policy.
The seller has to provide proof of a clear termite inspection to us at closing.
A survey is optional for you to purchase.
Now it is time to enjoy your beautiful new home!!
Don't forget to file your HOMESTEAD EXEMPTION! This will reduce your Property Taxes!

Thank you so much for giving me the opportunity to be of service to you.

FREE Guide to Buying a New Home