13. Closing Papers Signed
14. Documents Recorded
15. Funds Available To Seller
17. Buyer Moves In
16. Seller Moves Out
Benefits
of Home Ownership
Credit: Owning a home helps you establish financial credibility.
Independence: Owning your own home provides you with independence and more privacy than renting. You
are free to paint walls, plant flowers, keep pets and anything else within legal bounds.
Investment: As you make more payments and own more of your home, you add to its investment value.
Most improvements you make will also add to its value.
Pride: A home reflects its owner's values and lifestyle. Owning a home can provide you with a
source of pride, enjoyment and satisfaction.
Security: A home can provide security against inflation because the value of your home increases
as prices go up.
Stability: Being established in a community provides a sense of belonging, stability and
security.
Tax Advantages: Interest on your mortgage loan is deductible on your yearly personal income tax
return. Many of the closing costs associated with purchasing your home are deductible, as
are your property taxes.
Finding
the Right Home...
Real Estate Agents
You can sit down with a real
estate agent and discuss your needs, type of area, style of home, amenities and everything
you really want in your next home. Real estate agents can help you by accessing a Listing
Service which covers all properties listed for sale within a specific area. Together, you
can select the homes you would like to see, set appointments and preview homes in a short
period of time. An agent can guide you through the entire process.
Newspaper Ads/Internet
Many people go through the real estate classified section or browse the Internet to
find a home that appeals to them. However, your real estate agent will have many listings
available that may not appear in the newspaper or Internet on a continuous basis. New
listings come on the market daily.
Multiple Listing Service
Your real estate agent should have access to the multiple listing service if it is
available in your area. It usually includes the following details about homes and
properties for sale:
Location
Price
Photograph
Utilities
Amenities
Annual property tax
Current financing (when assumable)
Listing company
When Previewing A Home...
Write notes when previewing a home so you will be able to discuss the details later with
your real estate agent.
Ask questions about the home and discuss any objections or concerns you may have.
Ask about the community - schools, shopping and transportation.
Ask specific questions about the construction of the home; electrical, plumbing,
heating, cooling systems, etc.
Have Fun
Relax. Finding your new home can be a rewarding experience. Have a good time and enjoy
the process.
Home
Inspections...
What is an inspection?
There are numerous types of
inspections. An inspection is meant to evaluate, at minimum, the structural and mechanical
condition of a property. It is not the same as an appraisal which evaluates the market
value of a property. Persons involved in real estate transactions need unbiased
information about the physical condition of property they plan to buy or sell and your
contract should include a contingency that you obtain a satisfactory inspection report.
Talk with your agent about the types of inspections available.
Home Inspectors vs. Engineers
Home Inspector: A person who examines any component of a building, through visual means
and through normal user controls, without the use of mathematical sciences.
Engineering: Analysis or design work requiring extensive preparation and experience in
the use of mathematics, physics, chemistry and the engineering sciences.
Finding a qualified Inspector
Referrals from satisfied customers
Referral from a local real estate agent or mortgage company
Local consumer affairs office
Yellow Pages under "Building Inspection Services"
Ask if she/he is a member of the American Society of Home Inspectors (ASHI). The ASHI
has established standards of practice which include the specific services, limitations and
exclusions that can be expected from private home inspectors.
What the inspection, at minimum, includes
Every inspection should include, but not be limited to, an evaluation of at least the
following:
Foundations
Plumbing and electrical systems
Doors
Ceiling, walls and floors
Roof
Hazardous materials concerns
Heating and air conditioning systems
Common areas (in condominiums)
Insulation
Ventilation
Answers
to frequently asked questions...
What is the difference between "pre-qualified"
and "pre-approved"?
If you are "pre-qualified" you have
determined, with a loan officer, what price you can afford based on the down payment, your
debts and the amount the mortgage company will approve for your mortgage. Being
"pre-qualified" is only a determination of your probable credit. If you are
"pre-approved", your credit, employment and funds have been approved by the
lender.
What are closing costs?
Closing costs are an accumulation of charges paid to different entities associated with
the buying and selling of real estate. For buyers, they are usually about 4-6% of the
total sales price of a property. Some of the closing costs you might encounter are:
application fees, appraisal fee, county taxes, credit report, discount points,
documentation fee, escrow fees, homeowners' association fees, loan fees, mortgage
insurance, origination fees, tax registration and title insurance premium.
What is a point?
One point is equal to 1% of the new loan amount. Whenever government regulation, state
usury laws and/or competitive practices prohibit the lender from charging a rate of
interest that would make the real estate loan competitive with other fields of
investments, the lender must seek some method of increasing the yield for the investors.
By charging "points", the lender can bring the real estate loan up to those
other investments.
What is earnest money?
When you make an offer, you will need to put up an earnest money deposit as a sign of
good faith that you are seriously interested in buying a home. That deposit becomes a part
of the purchase price and is held in a trust account until there is full acceptance of the
offer. Typically, an earnest money is 3-5% of the offer amount.
What is title insurance?
Title insurance protects the named insured against loss because of defects, liens,
encumbrances, adverse claims or other matters not shown or disclosed to the new owner that
attach before date of policy.
Is VA or FHA financing unfair to sellers?
FHA and VA loans provide purchasers the opportunity to buy homes with minimal cash
investment and at lower interest rates. The result is a larger market for sellers, who
also benefit by receiving all cash for their equity.
