Selling Your Home

• Do you know what you want?

Whether you are a first-time home buyer or entering the marketplace as a repeat buyer, you need to ask why you want to buy.  What would you like in terms of real estate that you do not now have?  Do you have a purchasing time frame?   The more you know about the real estate marketplace, the more likely you are to effectively define your goals.

• Do you have the money?

Most loans today require a down payment of between 2 - 5% depending on the type and terms of the loan.  Some require more.  In addition to a down payment, buyers also need cash for closing costs (the final costs associated with the loan).  Most lenders require that your monthly payment not exceed 25 - 30% of your gross monthly income.  Your mortgage payment usually includes four items. . . the PITI (principal, interest, taxes, and insurance).

• Is Your Financial House in Order?

You also need good credit.  For at least one year prior to purchasing a home, you should assure that every credit card bill, rent check, car payment and other debt is paid in full and on time.

• Benefits of Having a Realtor

Buying and selling real estate can be a complex matter.  Homes differ and so do contract terms, financing options, inspection requirements and closing costs.  No two transactions are alike.  In this maze of forms, financing, inspections, marketing, pricing and negotiation, it makes sense to work with professionals who know the community and much more.

• Get Loan Pre-approval

It's a good idea to start the mortgage process well before putting an offer on a home.  By meeting with loan officers in advance, it won't be necessary to quickly find a lender and rush into a financing decision that may not be the best option.  "Preapproval" means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily quality for a given loan amount with one or more specific mortgage programs.  Based on this information, the lender will provide a preapproval letter, which shows your borrowing power.  The preapproval letter can be shown to listing brokers when putting an offer in on a home.  It demonstrates your financial strength and shows that you have the ability to go through with a purchase.  This information is important to owners since they do not want to accept an offer that is likely to fail because financing cannot be obtained.

• Looking At Homes

The housing market is complicated because the stock of homes for sale is always changing.  It is important to list the features and benefits you want in a home.  Consider such things as pricing, location, size, amenities, and design (one floor or two, etc.).  Next, consider your priorities.  If you can't get a home at your price with all the features you want, then what features are most important?  It's important to target your search.  By using basic measures such as general location and affordability, you can refine your search and focus on homes that offer the most desirable features.

• Making An Offer

As a buyer, here is what typically happens.  A home has been placed on the market for which the seller has established an asking price as well as other terms.  At this point, you can accept the seller's offer and create a contract, not make any offer, or suggest different terms and make a counter-offer.  If you choose this last option, the seller may accept, reject or make a counter-offer.  The homebuying process can be complex.  I know the community, have seen numerous homes for sale, know the local values, and have spent years negotiating real estate transactions.

• Get Funding

Because financing is so important, buyers should have as much information as possible regarding mortgage options and costs.  To obtain a loan, you will complete a written loan application and provide supporting documentation.  Specific documents include recent pay stubs, rental checks, and tax returns for the past two or three years if you are self-employed.  During the prequalification procedure, your loan officer will describe the type of paperwork required.

• Closing

The closing process is also known as "settlement" or "escrow."  Settlement is a process where all of the necessary paperwork needed to complete the transaction is signed.  The result - title to the property is transferred from seller to buyer.  The buyer receives the keys and the seller receives payment for the home.  From the amount credited to the seller, the closing agent subtracts money to pay off the existing mortgage and other transaction costs.  Deeds, loan papers, and other documents are prepared, signed and filed with local property record offices.  The transaction is final when the deed is recorded.