Buyers Kit



Interviewing Agents Checklist

 

 


What to look for in an agent

 

   Someone who is dedicated to their profession

 

   Someone who takes the time to determine your needs

 

   Someone who listens ? and responds to your requests

 

   Is familiar with the area in which you have an interest

 

   Is knowledgeable about the properties in your price range

 

   Is willing to work with you until your needs are fulfilled

 

   Professional designations ? ABR, GRI, CRS

 

   Strong references from previous buyers

 

 

Questions to ask a prospective agent

 

   How long have you been in real estate?

 

   Are you a full time agent?

 

   Are you familiar with this area?

 

   How many homes did you sell last year?  How many were in this area?

 

   What was the average price?

 

   How many buyers are you currently working with?  How many sellers?

 

   Where do you feel your strengths lie?

 

   Will you handle all aspects of my transaction or do you have assistants?

 

   Can you give me the names of three buyers with whom I can check your references?

 

   Do you have full access to the Multiple Listing Service?

 

 

Evaluating A Neighborhood

 

 

 

?         Drive Around

          Does it look like a place you?d like to live?

          Is it near places you?d like to go?

          Is it too near places you?d rather avoid?

          What will it look like during commuting time?

          What?s it like at night?

 


?         Quality of Schools

          What is the school performance?

          Average test scores?

          College bound percentages?

          National merit finalists?

          Spending per student?

          State rankings?

 

?         Education/Income Profile

          What is the household income?

          The education level?

          Occupation?

          Family type?

 

?         Crime Rate

Compare neighborhoods on a per-capita basis for homicide, rape, robbery, aggravated assault, burglary, larceny and auto theft.

 

?         Cultural Amenities

Proximity to museums, galleries, universities, seasonal entertainment, theaters, orchestras, etc. Even if you don?t frequent them, they help set the tone for the area.

 

?         Property Values

Steady or increasing values generally mean a sound investment.  It is almost always best to buy the smallest, least expensive home in the best neighborhood you can afford.

 

?         Future growth

If you are not planning on staying in your new home for a number of years, an abundance of new construction being planned could affect your resale.  Equally true, however, is the existence of higher end properties could increase the value of yours.

 

 

Your REALTOR is your best source of information on property and neighborhood information.  There are also numerous Internet sites, such as REALTOR.com, Homes.com, Homeadvisor.com, schoolmatch.com and others, that can assist you in your research. 

 

 


 


Home Buying Guidelines

 

 

 


?          If you have to resell soon, don?t buy an unusual house.

 

?          Even if the quality of the school district doesn?t matter to you now, remember it might someday to another buyer.

 

?          Brand new homes may be lower in maintenance costs, but can be higher in out of pocket expenses.

 

?          There are no perfect homes.  Be ready to make compromises and concessions.  Know what?s most important to you and ?give? on those things that aren?t.

 

?          Location, location, location ? Do not buy on busy roads or backing up to apartment buildings, shopping centers or railroad tracks.

 

?          Supply and demand is a critical issue.  Be ready to move quick when you find what you want.

 

?          Pay attention to floor plans.  Changing layouts of rooms can be costly.

 

?          Get preapproved for your mortgage prior to making an offer.

 

?          Be an educated buyer.  Learn as much as you can about the market before you buy.

 

?          Always make your offer to the seller contingent on having a home inspection ? it?s money well spent.

 

?          Compare mortgages ? an artificially low interest rate could have enormous hidden costs.

 

?          When interest rates are low ? go for a fixed rate mortgage.

 

?          Redoing kitchens and baths can be very expensive ? check these out carefully.

 

?          Imagine the home vacant.  Do not be swayed by decorating ? the furnishings will leave with the seller.

 

?          Vacant homes appear larger than they are.  It may be a good idea to measure to make sure your furnishings are going to fit.

 

?          Landscaping is there not just to make the home look good ? it can save thousands of dollars over the years in utility bills.

 

?          Buy the best home you can afford in the best neighborhood you can afford.  You are almost always better off with the least expensive home in the area rather than the most expensive.

 

?          Pay attention to the original listing date of the properties you look at; sellers tend to be more flexible the longer the home is on the market.

 

?          Be honest and open with your agent; he or she works for you and can best help you if they have a good understanding of your needs.

 

?          You?ll know the right home for you when you see it and it will have very little to do with logic ? don?t ask us how that works ? it just does! 

 

?          Do not wait to save more money to buy. The appreciation of homes is growing faster than your income.

 

?         When buying new construction use a realtor to represent you. Make sure you ask the builder if they have any special incentives such as free insurance, free up grades, etc.


 

 

It?s Time to Make an Offer

 

 

 


?         Put yourself in the sellers shoes and imagine how they will react to everything you?re about to put in your offer.

 

?         Oral promises are not legally enforceable when it comes to the sale of real estate.  Please be sure you have communicated everything you want in the offer to your agent.

 

?         Price

Have your REALTOR do a comparative market analysis for you.  That will show you the fair market value of the property.  The following factors could affect your offer price:

          Property condition

          New home improvements

          Market conditions (that old supply and demand again)

          Seller?s motivation

          Seller concessions ? do you want them to give you a carpet allowance or are you asking them to help you with closing costs?  If you are ? expect to pay a little more!           

 

?         Earnest Money

You will be putting up some money to show the seller you are sincere about purchasing his home. Your agent can give you guidelines for how much this should be. 

 

?         Financing Contingency

You will probably need to get a mortgage.  Even if you have been preapproved the lender will still need time to have the appraisal done, order title, etc.  Your agent can advise you as to how much time you need.

 

?         Home Inspection

Don?t skip this,  whether it?s because you think you can check out the house yourself or you want to save the money a professional inspector charges ? it?s money well spent in the long run.  But remember, no home is perfect and small maintenance-type things found by the home inspector should not be part of any renegotiations with the seller.  And don?t skip your final walk-through just because you had a home inspection.

 

?         Disclosures

Make sure you received all the proper seller disclosures.  Federal law requires the seller give you a lead based paint disclosure if the property was built prior to 1978 and most states or local areas require the seller to disclose any material defects of which they have knowledge.  Look over these documents carefully ? your recourse once you signed them is limited by the laws that govern them.

 

?         Multiple Offers

It doesn?t have to be a ?hot? market for a seller to have the luxury of choosing between multiple offers on their property.  If you find yourself in a multiple offer situation don?t panic and don?t withdraw your offer ? you may be the highest bidder and won?t even know it if you pull out.  Go through at least one round of negotiations before you decide to withdraw.  Have a price in your mind of where you want to go and stay in the game until that price has been reached.  Too many buyers lose the property by pulling out too soon.

 


 

From Offer to Closing

 

 

 

 


Once your offer has been presented to the seller the negotiating process begins.  There are liable to be numerous counter-offers going back and forth between you and the seller.  There are a few important things to remember:

 

?         Your offer is just that ? an offer ? until it has been accepted and agreed to by both you and the seller.  At any time during the negotiating process another offer could come in and cause you to be in a multiple offer ? or worse ? lose the house completely.  A wise buyer will try to come to an agreement with the seller in a reasonably short period of time.

 

?         Many contracts have stipulations on when the buyer must make his mortgage application.  Please be sure to check your contract and abide by its requirements.

 

?         If your contract calls for a home inspection and attorney review, please choose both of these as quickly as possible and let your agent know who they are.  Your service providers have a limited amount of time to protect your interest.

 

?         Be sure to comply with all requests of your lender after the mortgage application has been done.  Not producing the documents or information they need can jeopardize your getting your mortgage on time.

 

?         Generally, the buyer accompanies the home inspector at the inspection.  Please allow at least 2 to 3 hours for an average inspection.  More time may be necessary for a large home.

 

?         Your agent will act as coordinator for all activities from this point and will keep everyone in the loop as far as what is going on.  The lender, home inspector, both attorneys, the other REALTOR, the title company (or escrow agent) will all be performing necessary duties during this time.

 

?         If necessary your agent and your attorney will work together to negotiate any repairs that were noted during the home inspection.  Remember, routine maintenance items are not the type of thing that should be noted and negotiated.

 

?         Your walk thru will be scheduled as per your sales contract.  Your agent will schedule this with you, the seller and the listing agent.  It should happen just prior to the closing.

 

?         If all of this sounds a little overwhelming ? don?t worry ? you?re in good hands.  Your agent has been through this many times and will be there for you during the entire process.  Relax and enjoy the experience.

 


 

       

Mortgage Application Checklist

 

 

All lenders differ on what they need from their borrowers.  This list is intended to give you a general idea of what will be required at the time of mortgage application.  Please check with your lender for a complete list of necessary information.

?         Social Security Number and Birth Date  -  Required of you and any co-borrowers

 

?         Paycheck  -  Your most recent pay stub showing year-to-date earnings

 

?         W-2 Tax Forms  -  The lender will require 2 years W-2?s and accompanying tax forms

 

?         Employers  -  The names, addresses, and telephone numbers of your employers for the past two years

 

?         Accounts  -  You will need the account numbers and current balances of your checking account, savings account, money market account or any other accounts you may have

 

?         Current Assets  -  Current assets such as IRA?s, CD?s, stocks, bonds or securities.  Your lender may require a current brokerage statement with name of the stock, amount per share and number of shares owned.

 

?         Personal Property  -  Value of personal property including life insurance face value, employee retirement accounts, furniture, cars, jewelry, coins, and other valuable property

 

?         Liabilities  -  For each loan, provide the lender with the name and address of each creditor and include both the monthly payment and total amount due.  Liabilities will include auto loans, student loans, credit cards and other installment debt.

 

?         Current and Previous Addresses  -  If you own a home you will need the property address, current market value, mortgage lender name, account number, current monthly mortgage payment and outstanding balance.  If you rent, you will need the property address, name and address of the landlord, the current monthly rent, and previous address/landlord.  You will need information about your former addresses if you?ve lived in your current address for less that two years.

 

?         Sales Contract  -  Bring along a signed copy of that agreement and any amendments to it, a copy of the listing form for the property you wish to purchase and the legal description of the property.

 

Special Situations

 

?         Self employed or commissioned   -  bring federal tax forms for the past two years along with a current year-to-date profit and loss statement

 

?         Separated or divorced  -  Bring a copy of your divorce decree and separation agreement.  If you are receiving alimony or child support and you want it to be considered as income, you?ll need proof of this income (cancelled checks for the past 12 months, for example).

 

?         Applying for a VA loan  -  Bring your DD214


 

Interest Rate Factor Chart

 

 

This chart will help you calculate your monthly payment.  As we look at properties at various prices, by consulting this chart you will be able to determine how much your payment would differ depending on the price of the home.

 

Once you find the appropriate interest rate, look across the page to the appropriate term of the mortgage, 15 or 30 years.  There you will find the factor which is applied per $1,000 of the mortgage amount.

 

For example:  A 7.5%, 30 year mortgage has a factor of 6.99.  If you were mortgaging $150,000 you would multiply  6.99 x 150  which equals 1048.5.  Your monthly principal and interest payment would be $1,048.50.  Remember, this is principal and interest only, it does not include property taxes, insurance, association dues or any other charges.

 

 

Interest          15-year              30-year                           Interest                 15-year              30-year

Rate                 Term                 Term                              Rate                     Term                  Term

6                       8.44                  6.0                                8                           9.56                  7.34

61/8                          8.51                  6.08                              81/8                        9.63                  7.42

61/4                    8.57                  6.16                              81/4                        9.70                  7.51

63/8                    8.64                  6.24                              83/8                            9.77                  7.60

61/2                    8.71                  6.32                              81/2                            9.85                  7.69

65/8                    8.78                  6.40                              85/8                            9.92                  7.78

63/4                    8.85                  6.48                              83/4                            9.99                  7.87

67/8                    8.92                  6.57                              87/8                            10.07                7.96

7                        8.99                  6.65                              9                           10.14                8.05

71/8                    9.06                  6.74                              91/8                            10.22                8.14

71/4                    9.13                  6.82                              91/4                            10.29                8.23

73/8                    9.20                  6.91                              93/8                            10.37                8.32

71/2                    9.27                  6.99                              91/2                        10.44                8.41

75/8                    9.34                  7.08                              95/8                            10.52                8.50

73/4                    9.41                  7.16                              93/4                            10.59                8.59

77/8                    9.48                  7.25                              97/8                        10.67                8.68

                                                                                      10                          10.73                8.77