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Valuable Information for the First-Time or Seasoned Home Buyer
BUYER’S GUIDE
Vicki Venezia, REALTOROffice: 610-670-2770 · Cell [email protected]
Welcome!You are about to embark on the exciting journey of finding your ideal home. Whether it is your first home or your tenth home, I will make your home experience fun and satisfying. I can help you find the ideal home with the least amount of hassle.
Purchasing a home is a very important decision and a big undertaking in your life. I am going to make sure that you are well equipped and armed with up-to-date information for your big decision. This presentation will give you helpful information and act as an invaluable guide for your home-buying journey.
I look forward to meeting your real estate needs every step of the way!
Each Office Independently Owned and Operated
OF READING1290 BROADCASTING ROAD
WYOMISSING, PA 19610
What Happens and When?1. After you have your offer accepted, the listing agent will deposit your earnest check into escrow at their office. Title will be ordered from the title company.
2. After receiving the “order” for the examination of title, the title company will conduct a title search and order the house location surveys, if requested.
3. They will send written request for pay-off or assumption information on any outstanding liens secured by the property.
4. After obtaining all necessary title information, the data is reduced to typewritten documents referred to as the Title Insurance Binder. These documents are forwarded to the lender.
5. The title company will coordinate with the lender, prepare any other necessary documents, and finally prepare the settlement statement.
6. You are required to purchase and pre-pay one year of homeowner’s insurance and provide the lender with copies of the policy and paid receipts 3-5 days prior to settlement.
7. The day before settlement, closing costs will be confirmed. You will have to provide a certified or cashiers check for the amount given.
8. Settlement: Various documents will be presented for signature. All monetary prorations between you and the and seller will appear on the settlement statement
Settlement!
THE HOME BUYING PROCESS
Obtain Mortgage
Commitment
Find a Realtor that
You Trust
Analyze Your Needs in a
Consultation
Enter into a Buyer-Agency Relationship
Earnest Deposit
Negotiate and
Counter Offer
Offer Accepted!
Remove Contingencies
Contact Title Company for
Title Insurance
Secure Underwriting
Conditions
Select and View
Properties
Obtain a Pre-Approval
Write an Offer
Complete Mortgage
ApplicationInspectionsOrder
Appraisal
What is a Buyer-Agency Relationship Contract?A buyer-agency relationship is when you, the buyer, sign a contract with your realtor to work exclusively together. You agree not to enter into another buyer-agency contract. A buyer agent works exclusively for the buyer even if paid by the seller. The buyer agent acts in the buyer’s best interest including making a continuous and good faith effort to find a property for the buyer and she must keep all information, other than known defects about the property, confidential.
When you sign a buyer-agency contract, there is a Broker’s Fee of $495 (the only fee charged to the buyer) collected at settlement as part of your closing fees.
Pre-Qualification and Pre-ApprovalMany buyers apply for a loan and obtain approval before they find the home they want to buy. Why?
Pre-Qualifying will help you in the following ways:1. You will get an idea of your interest rate and monthly payments2. You won’t waste time considering a home you can’t afford.
A Pre-Approval will help you in the following ways:1. A seller likes to know your financing is secured.2. You can select the best loan package that suits you without being under pressure.
How much can you afford? There are 3 key factors to consider.1. The down payment2. Your ability to qualify for a mortgage3. Closing costs associated with your transaction
The Ten Mortgage CommandmentsOnce you have applied for a mortgage, do not...
1) ...change jobs, become self-employed or quit your job.2) ...buy a car, truck, or van.3) ...use charge cards excessively or let your accounts fall behind.4) ...spend money you have set aside for closing.5) ...omit debts or liabilities from your loan application.6) ...buy furniture.7) ...originate any inquiries into your credit.8) ...make any large deposits without first checking with your loan officer.9) ...change bank accounts.10) ...co-sign a loan for anyone.
Making an OfferOnce you have found the home you wish to purchase, you will need to determine the offer you are willing to make
for the home. Remember to be realistic. Low-balling a seller can cause the seller to be offended and not consider any further offers from you.
Your offer is the first step toward negotiating a sales contract with the seller. You should put yourself in the seller’s shoes and imagine his or her reaction to everything you include in your Agreement of Sale.
In an offer to purchase real estate, you include not only the price are willing to pay, but other details of the purchase including: how you intend to finance the home, your down payment, request for seller assist, what inspections are performed, timetables, whether personal property is included, terms of cancellation, any repairs you want performed, which professional services will be used, when you get physical possession of the property and how to settle disputes should they occur.
Remember, buying a home is a major event for both buyer and seller. This purchase will affect your finances more than any other previous
purchase or investment. The seller makes plans based on your offer that affects his finances too. With that said, the seller is going to review your offer carefully.
I will then present the listing agent with your written offer. When the seller accepts the offer it becomes a legal contract. You should be prepared to pay an earnest money deposit, that shows you are serious about the purchase.
What is Seller’s Assist?Seller’s assist is an amount that the seller pays towards closing costs and it is negotiated in the purchase agreement of sale. (This is NOT down payment money.) Sellers assist is usually 3% to 6% of the purchase price depending on the type of loan or it can be a dollar amount not to exceed those percentages. Verify with your lender what you can ask for.
Remember, when you ask for seller’s assist that it is the net price with which you are negotiating.
Another thing is to remember is that the buyer and the buyer agent don’t know the financial position of the seller. They may or may not be able to accept an offer with sellers assist.
ExampleIf you offer $100,000 with 3% sellers
assist, your offer is really $97,000
Home InspectionIf you are purchasing a resale property, you may want to consider a professional home inspection. You will pay for the inspection at the time it occurs and it usually takes place within 10 days of the acceptance of the agreement of sale.
The inspection is not designed to criticize every minor problem or defect in the home. Instead, it is intended to report on major damage or serious problems that require repair. Should serious problems be indicated, the inspector will recommend a professional to inspect it as well (an electrician, plumber, etc.). Your home cannot “pass or fail” an inspection. The inspector’s job is to make you aware of repairs that are recommended necessary.
The seller may be willing to negotiate the completion of repairs or a credit at settlement. After consideration you may decide that the home will take too much work and money.
Being present at the inspection is recommended and to your advantage. You will be able to clearly understand the inspection report and know exactly which areas need attention. Plus, you can get answers to many questions, maintenance tips, and a lot of general information that will help you when move into your new home. Most important, you will see the home through the eyes of an objective third party.
What Up Front Money Will I Need? Earnest Money Inspection Fees Appraisal fee (paid to the lender)
What is Earnest Money?Earnest money is a good faith deposit, not to be confused with a down payment. When buyers submit their offer, the contract specifies how much money the buyer is initially putting up to secure the contract to show “good faith” and how much money all together will be deposited as a down payment. The balance is generally financed as a mortgage. An earnest money deposit says to the seller “Yes, I am serious about buying your house.”
So How Much is Enough?There is no set amount, but typically deposits are 1 to 3 percent of the sales price. The deposit is used as a credit towards closing costs because the financing makes up the entire purchase price.
Is My Earnest Money Deposit Refundable upon Cancellation?Maybe. This is specific to your contract and we will discuss the options before submitting your written offer.
Down Payment RequirementsYour down payment depends on the type of loan you obtain. FHA requires a minimum of 3.5% down and conventional loans require a minimum of 5% down. Putting 20% of the selling price down eliminates the extra cost of PMI (Private Mortgage Insurance) which raises your total mortgage payment.
Closing CostsYou will be required to pay fees for loan processing and other closing costs. These fees must be paid in full at settlement.
Did You Know? Your monthly mortgage payment consists of:
PRINCIPAL • INTEREST • PROPERTY TAXES HOME OWNERS INSURANCE
MORTGAGE INSURANCE (if less than 20% down)
Did You Know? Other inspections that you may opt for:
TERMITE • RADON • WATER • SEPTIC
