How to Become a Buyer
You are about to embark on one of the most important and exciting decisions in your lifetime, the selection and purchase of your home. It is a decision that will bring you years of comfort and joy. Yet, the idea of spending your free time evaluating homes and neighborhoods, figuring your down payment and monthly costs, applying for a loan, and finalizing the purchase can be an overwhelming process. For some buyers, the process is tedious and confusing. This is why consulting a professional realtor is a smart decision.
As a Licensed Real Estate Broker Associate, Katrina Nguyen can help you find a house, efficiently and quickly. Discuss with Katrina Nguyen the type of home you believe will be right for your needs, Is your family growing? Do you entertain a lot? Garden? Barbecue? Work at home? Are you a chef? A wardrobe buff? Are you a fixer-upper or a total couch potato?
Katrina Nguyens’ expertise and experience will be crucial in helping you find the right home of your dreams. She has access to the Multiple Listing Services (MLS), which provides information on virtually every home for sale in the market. This is a useful tool because it provides the most current comparative information available for more informed shopping.
In addition, Katrina Nguyen will show you homes that you can comfortably afford. She will have the resources to help you understand how much a lender will let you borrow and on what basis it is calculated. Once you have calculated a price range, she will work with you to establish criteria that will lead you to the right home.
When you are ready to make an offer, Katrina Nguyen can assist you. She cannot suggest a lower price than what is listed, but she can tell you what comparable homes are selling for in the same neighborhood. Katrina Nguyen will act as the intermediary between you and the seller who is likely to also be represented by an agent. If there are negotiations over price, closing dates, contingencies, and items - such as appliances - to be left or taken, Katrina will be your representative.
Once your offer is accepted, you will have a lot to do in a short period of time. Katrina will direct you to a lender, inspection and insurance professionals and a licensed and bonded Escrow company for your escrow and title needs. She will keep you on track and organized.
Shop Smarter… Not Harder
Fine tune those dreams of your nest home by working on the answers to two questions:
How Much House Can You Afford? Though you may be willing to spend until it hurts, the name of the game is how much you can afford based on the lender’s calculations/requirements. Katrina will put you in touch with a lender that she trusts to help you through the financial process of pre-qualifying (targeting the amount that a financial institution will lend you.)
In general, lenders allow your total monthly housing costs to go as high as but not more than 30 percent of your gross monthly income. The second requirement is that not more than 36 percent of your gross monthly income can be tied up in monthly house payment and any payment(s) on outstanding long term debt.
Lenders use slightly different formulas for arriving at “total monthly house payment.” These costs generally include your mortgage principal and interest payment, property taxes as a monthly figure, and hazard insurance as a monthly figure. These four terms are referred to as PTIT (principal, interest, taxes and insurance). If you’re required to pay private mortgage insurance (PMI) because your down payment is less than 20%, this PMI payment will also be included. If you decide to buy a condominium or town house, the monthly homeowner’s association fees will also be included. Keep in mind, these formulas aren’t cut and dry and things change from lender to lender, so your best bet is to do your research and make the comparisons for yourself.
What Type of House Do You Want? Perhaps you know exactly what you want: 2,200 square foot ranch style home on a wooded lot. If so, Katrina can look immediately for only that type of house. On the other hand, if you don’t know what you want, but “you’ll know when you see it,” you need to complete a “Needs and Wants Checklist” It will help you define what you really “have to have” and really “want to have” in a house and neighborhood. This will help your realtor considerably when searching for the right homes to show you. When you look at homes, bring this checklist with you so you can keep a record of your notes on each of the homes you will be touring.
Get Your Financing In Order You can get together with a lender to get your loan application completed and the financing process started. Be prepared to provide the lender with copies of any important and necessary information.
Making Decisions About Your Purchases
Below are some of the items you’ll need to consider and how the process works:
How Much Should You Offer to Pay? Should you offer to pay the seller’s asking price or a lower one? Consider such factors as: How long has the house been on the market? Is its price reasonable? Katrina can show you comparable sales (comps) for similar properties in the neighborhood to help you. How competitive is the area’s home buying market? If the seller is offering an assumable mortgage or financing, how much is it worth to you?
Making Decisions About Your Purchase Once you have found the perfect house, Katrina will take you through the purchasing process: Submit your offer to buy the house. The seller may accept your first offer, or you may go through one or several counter-offers before you and the seller agree on the terms of the sale. Once you both agree, you have a contract of sale which spells out the details and responsibilities of all parties involved in the transaction.
What Conditions Do You Want To Place On Buying The House? When you commit to buy the house through your offer, you may make that commitment contingent upon certain things happening, such as you securing financing for the home. In a similar vein, you may purchase contingent upon the sale of your present home by a certain time and under certain terms.
You will also want to make sure the house is in good shape. You may make the contract subject to your being satisfied with a building inspector’s report and/or an inspection for termites. The purchase should also be subject to your being satisfied with your own inspection of the house just prior to closing.
What Special Provisions Should Be Included? Most contracts for sale include some standard provisions, such as one for property taxes, insurance costs, utility bills, and special assessments to be prorated at closing between buyer and seller. Others outline particulars about what happens if the property is damaged before closing or if the seller or buyer fails to go through with the sale. You may want to add your own special provisions. For example, you may want a new home builder to provide you with home warranty insurance at no cost to you.
What Are You Buying? The contract should spell out everything that is part of the purchase that may not be clearly part of the real estate. Common items that could cause questions include appliances, light fixtures (such as chandelier in the dining room), shades, blinds, curtains and rods, screens and storm windows, shelving or cabinets, potted flowers, shrubs and trees, or perhaps a swing set that is cemented down.
What Happens to the Earnest Money? A “deposit” is made, in part, to show the seller your seriousness about buying. Katrina will inform you of the amount that is usually given in your area. The seller doesn’t actually receive the earnest money. A third party, - holds the amount in a special trust - or escrow account until the sale is closed or the contract is broken.
If you go through with the sale, the money is applied to your down payment or other closing costs. If you fail to buy the house, the seller has the right to keep the earnest money. However, you can get your money back until the point at which you are notified that the seller has accepted your offer. And if the seller fails to fulfill his/her obligations, the money is yours.
The Loan Process
Step 1. The Application- The key to the loan process going smoothly is the initial application interview. At this time, the lender obtains all pertinent documentation so unnecessary problems and delays may be avoided. Katrina opens escrow at this time as well.
Step 2. Requesting Documentation- Within 24 hours of application, the lender requests a credit report, an appraisal on the property, verifications of employment, mortgage or landlord ratings, a preliminary title report, picture ID, W2s (2 years) Certificate of Eligibility and DD214 (VA only), and any other necessary supporting documentation.
Step 3. Loan Submission- Once all the necessary documentation is in, your loan processor will put the loan package together and submit it to the underwriter for approval.
Step 4. Loan Approval- Loan approval generally takes anywhere from 24 to 72 hours. All parties are notified of the approval and any loan conditions must be received before the loan can close.
Step 5. Documents- Documents are Drawn Within 1 to 3 days after the loan approval, the loan documents (including the note and deed of trust) are completed and sent. Your Escrow Officer will either call you directly or have Katrina make the appointment with you to come in and sign all the documents. At this time, you will be informed as to how much money, if any, you will need to bring in to close the escrow.
Step 6. Funding- Once you, the buyer, have signed the loan documents, they will be returned to the lender, who then reviews the package. If all the forms have been properly executed, the funds will be transferred by wire.
Step 7. Recordation- When escrow receives the funds from your lender, your Escrow Officer will authorize recordation of your signed documents with the County Recorder. He/She will then prepare a final settlement statement, disburse the proceeds to the seller, pay off the existing encumbrances and other obligations.
Step 8. You are on record!- Congratulations, you have your dream home!
Planning and preparing down to the last few details will make your move easier. The following schedule will help keep you on track.
8 Weeks Before The Move- If you are using a professional mover, get estimates from different moving companies and choose the one that best suits your needs. If you are moving yourself, get estimates from the truck rental companies. Be sure to reserve in advance. Draw a floor plan of your new house. This will help you decide what furniture stays ad what furniture will go. Use up things that can’t be moved -- such as food in your freezer and flammable household aerosol cleaning products. Ask your agent for a relocation package for your new location or contact the Chamber of Commerce in your new location and start gathering information about your new hometown.
6 Weeks Before The Move- Discuss costs, insurance, packing, loading, delivery, and the claims procedure with your mover. Inventory all of your possessions now. Determine what can be sold and what can be donated for a tax reduction to charity. Get copies of your records from doctors, dentists, lawyers, accountants, and veterinarians, etc. Make arrangements to transfer your children’s schools’ records. Find out from your accountant or the IRS about tax-deductible moving expenses. Make sure you keep accurate records.
4 Weeks Before The Move- If you have contracted to have the mover to do all the packing for you, arrange to have the task completed a day or two before loading the truck. If you need it, arrange for storage. Clean or repair furniture, curtains or carpets that need it. Hold a garage sale. Use the extra cash to splurge a little on your new place. If you are moving yourself, figure out how many boxes you’ll need. Many truck rental companies will provide this service.
3 Weeks Before The Move- Assemble packing materials Furniture pads Hand truck Dolly Packing tape Bubble wrap Crumpled newspapers Scissors Utility knife Large self-stick labels Felt-tipped markers Boxes, boxes, and more boxes Arrange to cancel utilities and services at your old home and have them installed at your new home. Make travel and hotel reservations. Begin packing items you don’t need. Don’t pack too much weight in an unreinforced box. Make sure your cell phone works in your new neighborhood. Get car license, registration, and insurance in order, as necessary.
2 Weeks Before The Move- Arrange to transfer all your bank accounts to new branch locations. Make any special arrangements to move pets, such as purchasing airlines’ reservations and traveling containers. Consult your veterinarian about how to make moving easier on your pet. Have your car checked and serviced for the trip. Make sure tires are in good shape and all fluids are at adequate levels. Cancel any direct deposit or automatic payments arrangements on bank accounts that you are closing. Cancel delivery services.
1 Week Before The Move- Transfer all medical prescriptions to pharmacy in your new location. If you will need a babysitter, arrange for moving day service. Return library books, videotapes, and DVD’s.
2 or 3 Days Before The Move- Defrost your refrigerator and freezer. Have the movers pack your shipment. Arrange to have cash, a certified check, or money order ready to pay the driver on delivery day. Set aside valuables and legal documents to go with you, not on the moving van. Pack clothes and toiletries to go with you; take a day or two of extra clothes in case of delay. Pack your first day handy items tool box (see delivery day) to go with you.
Moving Day- Assemble first day handy items. Scissors Utility knife Coffee cups Tea kettle/coffee maker Paper plates Toilet paper Instant coffee/tea/soft drinks Shelf liner Check off all boxes and items as they come off the truck Install new locks Make sure the utilities are hooked up Unpack the kids’ toys and pets’ toys Soap Pencils & paper Local phone book Masking tape Bath towels Trash bags Toiletries kit
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