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Overview
of the Buying and Selling Process
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The Buyer...
1. Considers the purchase of a home.
2. Selects a real estate agent.
3. Determines needs and wants.
4. Discusses financial issues.
5. Views & researches target homes.
6. Makes an offer to buy.
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The Seller...
1. Decides to sell property.
2. Selects a real estate agent.
3. Determines needs.
4. Prepares home for marketing.
5. Agent markets the home.
6. Accepts, rejects or counters offer.
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8. Loan Application
9. Inspections
10. Title Search
11. Appraisal
12. Loan Approval
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13. Closing Papers Signed
14. Documents Recorded
15. Funds Available To Seller
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17. Buyer Moves In
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16. Seller Moves Out
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Benefits
of Home Ownership
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- 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.
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Finding
the Right Home...
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- 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 (MLS)
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.
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Home
Shopping Tips...
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- Check For Properly Working Appliances/Fixtures:
- Bathroom
- Sinks
- Showers/tubs
- Toilets
- Vent fan
- Heating fan
- Appliances
- Dishwasher
- Stove
- Oven
- Ice maker
- Garbage disposal
- Range hood
- Refrigerator
- Freezer
- Microwave
- Trash compactor Kitchen
- Kitchen cabinet doors
- Drawers
- Sinks
- General
- Lights (interior & exterior)
- Windows
- Heating system
- Ceiling fans
- Hot water system
- Air conditioning system
- Electrical outlets
- Door bells
- Doors
- Water purifier
- Fireplace damper
- Garage door
- Ensure House Is Well-Built & Systems
Are In Working Condition:
- Exterior
- Brick bulging or cracking
- Shingles missing or broken
- Siding rotted or missing
- Gutters damaged or need to be cleaned
- Concrete cracked in sidewalks/driveway
- Basement
- Water seepage in basement
- Cracks in foundation
- Poor ventilation Interior
- Sub-flooring damaged or loose
- Cracked walls or ceiling
- Cracked tiles
- Loose plaster
- Flooring damaged
- Soft, springy floors
- Water stains near windows
- Water stains on ceiling below bathroom
- Water stains in attic
- Pipe insulation missing
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Home
Inspections...
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- 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
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Property
Evaluation
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Property Evaluation Form - Print this form and
use it to rate different features of each property
you view.
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Answers
to frequently asked questions...
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- 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.
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