BUYING A HOME

Buy a House vs Rent a House

Buying a home is a process that involves several key steps.  Understanding these steps can make this process go more smoothly.

When you take a road trip, you follow a map and familiarize yourself with important milestones. Buying a home is like a journey, too. If you become familiar with the travel plan, you’ll feel more comfortable knowing where you’ve been, where you are, and the final destination.
 
Let me be your guide through your real estate journey. 

BUYERS'S FREQUENTLY ASKED QUESTIONS

In order to make the home buying process a little bit smoother and less worrisome I have created this list of frequently asked question address common questions or misconceptions.

Not all lenders are equal.  Interest rates are not the only thing to consider when selecting a mortgage company.  Closing costs, professionalism, availability of the loan, ease of communication, types of loans or programs are all critical.  You can find a great interest rate, but if the closing costs are high and they can’t close for 90 days, then that lender may not be your best option.  I can provide lenders for you to choose from, if you so desire.

There are many fees that are a part of the loan process.  Loan fees are fees charged by banks/lenders for processing and funding a loan. They may include application fees, recording fees, appraisal fees, underwriting fees and more.  Lender fees are items payable in connection with a loan and contribute to the total amount of the borrower’s costs.  These fees are disclosed to you by the Lender at the beginning of the application process and prior to closing.  You will receive information about these fees and the cost to you from your Lender.

Closing costs are fees paid at the closing for the real estate transaction.  Closing costs include loan fees, as well as other fees (i.e. Title fees, recording fees, proration of Taxes and Insurance) associated with the purchase of the home.  We want to make sure you know all the fees associated with the transaction well before closing so there are no last-minute surprises. 

Here is a surprising fact…  My clients generally look at no more than 15 homes before we find that perfect match.  About 60% of the time, people find their home the first day and 20% on the second.  The reason for relatively short time, is our advance meetings prior to heading out to look at homes.  Taking time upfront to learn about you, your needs and expectations, allows us to spend less time looking, and more time for you to enjoy your new home.
I like to meet with my clients for the first time at my office. At this meeting we will discuss how the entire home search process works. There are many web-based sites available to search, but I only use the Multiple Listing Service, or MLS.  It is the primary source of data from which all other sites retrieve their information.  The MLS is the most complete and accurate source of homes, and I will create your personalized automated home search on it.  Zillow, Trulia and Realtor.com retrieve their data from the MLS.  In this modern technology driven world, our Multiple Listing Service website is in real time, and has the most up-to-date, and accurate information.  
This too is a process.  I will create a website geared specifically for you, with your home requirements, criteria, and needs in mind.  Once there are a few homes to see, we will set a time to view them. There are exceptions to every rule in real estate, so if “The One” pops up, we may need to see it right away.  However, please keep in mind that I must schedule an appointment to see any home.  This means the time/date you want to look must also work for the seller and they control all access to their home.  Advanced notice is critical to gaining access to view the home.  If you call and want to see a home in 5 minutes, and the seller has two dogs and three children to rally, they may not allow it.  Please give me as much notice as possible, so we can view this home as soon as possible.
If we arrive at the showing, and you don’t like the exterior of the home, we don’t need to view the inside of the home.  If you go inside and don’t like it, we can leave without looking any further.  If you love it, we stay as long as you like.  Most people can view 3 homes per hour, but no more than 10 in one day.  If we see more than 10 homes in one day, it could be too much to process, eliminate, or decide on. 
At our initial meeting, we will set the parameters for what the ideal home is for you.  Your personalized website will be created, and those homes that meet your specific criteria will be sent to you.  We will see all the homes that meet your needs and you are interested in viewing.  Here is a surprising fact…  I have been doing this for a long time, on average, no more than 15 homes need to be shown.  The advanced meeting, and my market knowledge, make this a much easier process.  We will make sure that all homes that meet your criteria are discussed, reviewed and if the right fit, viewed.
There is a common misconception, that if you have an offer on a home, no one else can submit one.  This could not be further from the truth.  Unless the sellers have signed your offer, or if there is a counter offer from the seller that you have signed, another buyer can jump into the process and submit an offer at any point.  There is no “First One In” rule, so the house is available until all parties have signed a contract.
Every real estate transaction is unique.  We have no control what a seller will do, or how long the response time will be.  The seller controls the timing and outcome.  Realistically speaking, we all like things to happen in a timely manner, unfortunately, you are not in the driver’s seat.  As difficult as it can be to wait, sometimes sellers will not respond in a timely manner, if at all.
At times there may be as many as 5 to 10 offers on one home.  There is only one winner in this scenario unfortunately.  With my experience in real estate since 1986, the only advice I can offer is, there will be another home that comes on the market, and it could be even better for you.  It will be disappointing for a short period, but rest assured, more will come on the market and the next home could be the new “One”.
Sellers can decide what parameters they want to use to determine which offer is the best fit for them.  Sometimes it’s price, but it could be closing date, type of loan, strength of your lender, etc.  In other words, the offer and all its pieces, will determine who they sell to. I always consult with the listing agent to see if I can get details on what is most important to the seller.  In certain price ranges, homes are selling well over asking price.
Lots of people do.  The decision is based on the type of loan, the amount of funds you have available, and if it makes financial sense.  We will discuss this in greater detail at the time of an offer.  One critical thing to consider… asking the seller to pay closing costs will impact the strength of your offer.  Offering full price on a home but requesting $5,000 in closing costs is not a full price offer.  It is $5,000 off the net to the seller.  (The seller will NOT receive full asking price; they will receive $5,000 less.)
Homes sell typically within 98% to 99% of the asking price.  This can change depending on the price range and scarcity.  Currently, homes less than $300,000 sell quick, often at or above asking price.  Homes over $1,000,000 will have a larger price movement due to lower demand.  I will prepare a market price analysis on any home you decide to make an offer on, so that you may determine the best course of action for you. 
When we find your dream home, it may also be someone else’s top choice.  The strategy we utilize differs with the number of players involved. If your offer is the only one on the table, we can make an offer as we discussed.  But when there are multiple offers, this changes the process.  You must decide how far you will go to get the home, and at what price.  Offering less than asking price may not be a wise option.  Going above asking price is a difficult thing to do but may be necessary to get the home.  Removing conditions such as, inspections, appraisal, and contingencies, making the contract specific performance, and more earnest money, are some ways of improving your odds.  There will be only one winner.  I have years of experience and know some creatives ways to give you that “edge” that may make the difference. 
In this market, you may want to consider a few other ways to make your offer look better.   Putting down more earnest money than they are asking, is one way to strengthen your offer. Also, since our contracts default to liquidated damages changing to specific performance can strengthen your offer. This option comes with risks that we will need to discuss in detail.  Finally, writing a letter to the owner on why you would be the best fit for their home is another option that we can pursue if necessary.  This can pull on the emotional side of the seller and could help sway them to your offer. 
30 to 40 people are typically involved in one real estate transaction, all with their own agenda and timing.  The home seller, lenders, home inspectors, title companies, insurance agents, VA, FHA or CHFA (if a government loan), real estate agents, PMI companies, moving companies, contractors, utility companies, attorneys, and local governments.  With so many parties to keep on track, one of my primary focuses (once a home is found), is to keep everyone on track.  I become the project manager of this rather fast-moving process.
This is the deposit required to make an offer.  This amount is determined by the seller and their agent and may be negotiable.  Because there are so many VA Loans in our region, the earnest money amounts tend to be quite low.   The funds will be deposited but will be credited towards the purchase price.  
This is a multi-tiered question.  The age of the home and location have a lot to do with what inspections should be completed on a home.  A newer home in Briargate for example, will most likely need a general home inspection and radon testing.  An older home in the Central part of town, may require much more, such as a sewer line scope, termite inspection, asbestos, lead paint, structural, and a general inspection.  Properties on well and septic will require additional inspections.  
Unfortunately, no home inspector has x-ray vision, so they can only report what they see.  A general home inspection covers roof to basement, foundation walls, all the mechanical operating systems such as, plumbing, electrical, heating, A/C, appliances that will remain with the home, and grading around the home.  They do not inspect the cosmetic condition of the carpet, paint, or walls, unless it is evidence of a larger issue.
 
Home Inspections are paid for by you but are optional.  Any additional inspection, such as radon or sewer line will be an additional cost to you. 
It is a good idea to order an O&E report.  An O&E Report, confirms that the property that you are making an offer on, has all the correct information, which includes the last recorded owner, legal description, recorded deed of trust and mortgages of a particular address.  This is a report we can request and is provided by a title company.  There is a fee associated with this that you would be responsible for – a basic O&E is $5.00; a more in-depth O&E is approximately $40.00.  The reason for obtaining this report is that it will identify any mistakes in ownership, title, legal description, etc. and therefore allow us time to rectify any issues that could arise before going too far into the transaction.
A home warranty is a service contract that covers the repair or replacement of important home system components (furnace, hot water tank, A/C, plumbing, electrical and appliances) that are in the home at time of purchase and are included in the purchase price. A home warranty can help save you both money and time.  They generally cost $350 to $600 and last for one year. Pre-existing conditions may not be covered.  Sometimes items you believe should be covered are not.  We can discuss this in greater detail at time of offer. 
There are many moving pieces in every transaction.  Each time someone interacts with the process, they may interrupt the flow of events.  95% of the time, things roll along relatively smooth.  However, if there is a hiccup, I will be there to get us back on track as quickly as possible.  The best way to approach home buying is to expect some surprises but remember… the end result is closing on the home you want. 
In Colorado, homes are sold “AS IS”.  The seller is not required to make any repairs.  I recommend that you have a general home inspection (at a minimum) performed on your prospective new home.  We may ask for repairs to be completed based off that inspection, but the sellers are not obligated by statute to make repairs.  Most sellers are cooperative and will work with you.  If it is a highly competitive marketplace, the sellers may opt to do anything.  If this is the case, you may terminate the contract and have all earnest money returned or accept the home without repairs. 
The purchase contract states that the home will be delivered in the same condition it was in at the time of the offer.  They are not required to have the home and carpets professionally cleaned, unless requested and agreed to in writing at some point during the contract negotiation.  They do need to remove all their personal belonging.  If your desire is a pristine home, then those items must be addressed during the contract period. 
Having a flexible closing date may be a benefit to getting your offer accepted.  I like to call the other agent or owner and ask them what would work best for them.  This may allow your offer to be a better choice for the sellers, especially when you may be competing against other offers.  We need to address your needs along with the sellers to find that perfect fit. 
There are a lot of contingencies in the home buying process.  The best way to understand this is with this simple analogy:  Buying a home is like walking down a hallway with a lot of open doors. At the end of the hallway is the closing table.  As we move forward, the doors may be used as escape routes.  Once you go past a doorway, it closes and locks.  Each one of the many contingencies represent a doorway.  Changing your mind at the end prior to closing, with no doorways left open, could result in the loss of your earnest money. 
Most properties in our marketplace are going to be conveyed without the need for an Improvement Location Certificate (ILC) or survey, but you may still want to order one.  The ILC shows you were you home sits on the lot as well as things like decks, patio, fences, retaining walls and other manmade structures.  It will also identify if there are any encroachments or rights of ways.  The cost can be anywhere from $300 to $1500 depending on the size of the lot and location and my take several weeks to complete.  We will talk about this at time of offer. 
At our initial meeting, we will set up the method and timing of how we will work with one another.  Everyone has different expectations as to how they want to keep the lines of communication open.  I text, email, call and meet in person depending on your needs.  We can also set up specific times to speak on the phone, text, or meet face-to-face on a regular basis.
My goal is to provide you with world class service that allows you to make decisions with clarity and confidence.  If you have any other questions, please do not hesitate to call, email or text.

BLOGS FOR BUYERS

Happy senior couple getting keys to new house from realtor

Closing the Transaction

Preparing for closing will save you time and inconvenience and smooth the way to move in to your new home. Once all the contingencies in the contract such as title,

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