Buyer's Guide

Purchasing a property is most likely the biggest financial decision you will ever make. Whether this is your first purchase or you are an experienced buyer, this decision must be made carefully

Why Do You Want To Buy?
Have you outgrown your current home or are downscaling? Are you tired of paying rent and have decided to pay your own mortgage and not your landlord’s? Are you looking for an investment portfolio or a rental property? Would you like a larger yard? Would you rather live in a different neighborhood? Do you want to shorten your commute? Having a clear sense of your reasons for buying will help you choose the right property.

Has Your Income Grown?
Property ownership is an excellent investment; whether you are looking for your dream home, a rental property, or to expand your investment portfolio. Owning real estate is one of the least risky ways to build equity or to obtain a greater return on your initial investment.

Before you start shopping for your property, it is a good idea to make some preparations.

Build Your Financial Documents File
This file contains all your important financial documents you will need it to secure financing for your property. The typical green file should contain:

• Financial statements
• Bank accounts
• Investments
• Credit cards statements
• Auto loans
• Recent pay stubs
• Tax returns for two years
• Copies of leases for investment properties
• 401K statements, life insurance, stocks, bonds, and mutual account information.

Check Your Credit Rating
Your credit score will have a huge impact on what type of property you can buy, and at what price. It is first recommended to check your credit rating with an experienced lending institution so you can determine what you can afford. The lender will research your credit ratings from the three credit reporting agencies Equifax, Experian and Trans Union. We will be happy to recommend experienced, knowledgeable lenders we work with regularly, in the residential, construction, and commercial and investment real estate fields.

Be Careful With Your Finances
Now is not a good time to make sudden career changes or large purchases. You should approach your property purchase from a position of financial stability.

Buying a property requires making many important financial decisions, understanding real estate issues and completing contract and paperwork. It helps to have an expert working on your behalf when undertaking such a large purchase. We will guide you through this process every step of the way.

Here are some factors to consider when choosing your real estate professional:

• Look for a full-time agent – one who has experience completing transactions similar to yours.
• Interview a few agents: Are they familiar with the area in which you are interested?
• Ask how much time the agent will have for you, and if they are available on weekends.
• Ask about their credentials, education and certifications: A good agent will continually strive to improve and gain knowledge of the latest real estate trends and hold the highest designations in their respective fields of expertise.
• Ask for a list of properties they have sold and a list of references.
• Choose an agent who listens attentively to your needs and concerns. Pick an agent, with whom you feel comfortable – and one you can trust.

Once those preparations are out of the way, it is time to find the right property for you.

Take a Drive
Get to know the neighborhoods, complexes, or subdivisions, which interest you. Drive around and get a feel for what it would be like to own a property in the area. Start getting a sense of the properties available in those areas.

Narrow Your Search
Select a few properties that interest you the most and have your real estate agent make appointments to visit them. Ask your real estate agent about the potential long term resale value of the properties you are considering.

Time to Buy
Once you have picked out the property you want to purchase, your real estate agent can help you make an offer that the seller will accept. A good agent will investigate the potential costs and expenses associated with the new property. An agent can also help you draft your offer in a way that gives you the advantage over another competing offer.

The Process, Step-by-Step

The Initial Agreement and Deposit
The sales contract is a legal arrangement between a potential purchaser and the property’s seller.

Some important tips to keep in mind to streamline the process:

• Keep written records of everything. For the sake of clarity, all agreements including counter-offers and addendums will be in writing, signed by both parties. We will assist you in drafting all the contracts and paperwork for your purchase and will make sure that you have copies of everything.
• Now that you have a ratified offer, you and the seller will be given a timeline to mark every stage in the process of closing the real estate contract. Meeting the requirements on time ensures a smoother flow of negotiations so that each party meets the stipulated deadlines in the contract. During the process, we will keep you constantly updated, so you will always be prepared for the next step.

The Title Company/Closing Agent
A title company will be selected as a closing agent. The elected title company will hold your deposit (known as Earnest Money Deposit) in escrow and will research the full recorded history of the property, to ensure that the title is free and clear of encumbrances by the date of closing.

How to Hold Title
You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications.

Inspections
Once your offer is accepted by the seller, you will have a licensed property inspector inspect the property within the time frame that was agreed upon in the contract.

Appraisal and Lending
It is important that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. Most lenders require the property to be appraised by a licensed appraiser to determine the value. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time.

Association Approval
If the property that you are purchasing is conditional upon an association approval, request the rules, regulations, and other important documents from the seller as soon as you have an effective agreement to purchase. Make sure that the application documents and processing fees are submitted to the appropriate person at the association by the required time. Fill out all of the information completely and legibly so there is no delay in processing the application. If you are required to meet with the association for your approval, make an appointment as soon as possible for the interview. Most associations require a certificate of approval before move-in. Your closing agent will request that the original copy of this approval letter be brought to the closing, so that it can be recorded with the deed in the county public records.

Property Insurance
If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around for insurance. You can also save money with these tips.

• Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
• Ask your insurance agent about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, a security system, storm shutters or fire-retardant roofing materials.
• Insure your house/condo NOT the land under it. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.

Closing Day
If you have come this far, then this means that it is almost time for a congratulations, but not yet. Do not forget to tie up these loose ends:

Final Walk-Through Inspection
More of a formality than anything else, the final inspection takes place a day before, or the day of the closing. You will visit the property to verify that all is in working order, everything is the same as when you last viewed the property, that there are no extra items left behind, and that everything included in your purchase is still at the property.

Home Services and Utilities
We will provide a list of useful numbers for the activation of home services and utilities after the closing occurs.

Be Prepared
We are ready to assist you should an unforeseen glitch pop up, even at this last stage. Something at the property breaks down, or some other minor detail – no need to worry. We have encountered these problems before so we know how to handle them efficiently and in a stress-free manor.

Closing
The closing agent will furnish all parties involved with a settlement statement, which summarizes and details the financial transactions enacted in the process. You and the seller(s) will sign this statement, as well as the closing agent, certifying its accuracy. If you are obtaining financing, you will have to sign all pertinent documentation required by the lending institution. If you are unable to attend the scheduled closing, arrangements can be made depending on the circumstances and the notice that we receive. If you are bringing funds to the transaction, you can elect to either have the funds wired electronically into the closing agent’s escrow account, or bring a certified bank check to the closing in the amount specified on the settlement statement. The seller should arrange to have all property keys and any other important information for you at the closing so that you may receive these items at this time.