1. Hire a real estate professional.
The first step is to
help you find your dream home and fine-tune your
financial expectations. Working with a buyer’s agent
is worth consideration since he or she is legally
responsible for representing the buyer’s interest in
a real estate transaction. Before making a decision,
however, have a Realtor®
explain the pros
and cons of using a buyer agent versus a sales or
dual agent. Our office is a designate agency office,
meaning your Realtor®
can represent you
as a buyer’s agent.. Not all offices practice
2. Shop for mortgage rates and
A difference of even half a
percentage point can mean a huge savings over the
life of a loan. For example, the difference in the
monthly payment on a $100,000 mortgage at 8 percent
vs. 7.5 percent is about $35 per month. Over 30
years, that’s $12,600.
Competition among lenders is vigorous. Your search
for the best loan may include discussion with
representatives for mutual savings banks, savings
and loans, private lenders, mortgage bankers,
finance companies, credit unions and mortgage loan
brokers. For a list of mortgage institutions in our
area, click on our
It is important to take
accurate notes when speaking with each lender's
representative in order to effectively compare loan
availability, interest rates, terms, loan
origination fees, discount fees or points charged,
appraisal fees, down payment requirements, income
requirements, and other specific items that lenders
Can We Afford?
use established formulas for helping determine what
price home you can afford to purchase.
upon the lender and the type of loan, you will be
required to come up with 5 to 20 percent of the
purchase price as a down payment on your new home.
apply slightly different formulas for determining
your "total monthly housing costs" in order to
establish your qualifications for securing a home
loan. Some lenders figure in basic amounts for
maintenance and utilities in addition to your
Principal, Interest, Taxes and Insurance (P.I.T.I.)
plus association dues, and any other fixed costs.
lenders allow no more than 25 to 35 percent of your
gross monthly income for P.I.T.I. and as much as 45
percent for both your P.I.T.I and monthly debt
payments combined. (P.I.T.I. represents the
principle, interest, taxes and insurance that you
will pay on your mortgage loan.)
formulas used by a variety of lenders are:
3. Pre-qualify for a loan.
Your third step should be to get
pre-qualified, which determines how much you can
afford. It allows you to move swiftly when you find
the right home, especially when there are other
interested buyers. It also indicates to the seller
that you are serious and really can afford to buy
the property. The cost of receiving a
pre-qualification letter from the bank of your
choice varies and may be valid for a limited time.
4. Define what you want.
Create a realistic idea of the
property you’d like to buy. What features are most
important to you? Make two lists: one of the items
you can’t live without and one of the features you
would enjoy. Refine the list as you house hunt. It
is also helpful to search online to see what is
currently available on the market. Start your search
5. Where Do We Want To Live?
Selecting a neighborhood that is
compatible with your comfort and lifestyle is the
next consideration. A variety of concerns will play
into your decision about which neighborhood is right
for you and your family.
You may consider:
Proximity to schools, churches, shopping,
employment, friends, relatives, daycare, and
Availability of services, recreational and
exercise areas and equipment
Zoning and Building regulations
6. The Search.
If you desire, have your
RE/MAX Douglass Realtor
search for the
properties with the parameters you have defined and
around your price range. Your RE/MAX Douglass
is a member of the local
MLS (multiple listing service), which means they can
show you all the properties for sale in the local
area, from all offices that belong to the MLS. Drive
by the listings to select the properties you like.
7. Visit Properties.
Now you’re ready to visit houses.
Ask your RE/MAX Douglass Realtor®
showings, and keep track of the properties you’ve
8. Know the features that help or
In some areas, a swimming pool
actually detracts from a home’s value and makes it
harder to sell. In neighborhoods with two-car,
attached garage, a single -car or detached garage
may impact the home sale and future value. Your
RE/MAX Douglass Realtor®
can point out
features that hurt or help resale value.
9. Rate the houses you tour.
After touring each home, write down
what you liked and didn’t like. Develop a rating
system that will help narrow the field down. For
example, pick the house you like best on day one and
compare all other houses to it. When you find a
better one, use the new favorite as the standard.
10. Make an Offer.
Once you’ve pinpointed
your dream house, it’s time to get serious about the
financial and contractual side of the purchase. Your
RE/MAX Douglass Realtor®
will be a strong
advantage since you and the seller have different
you've made the decision to purchase a particular
property, your RE/MAX Douglass Real Estate Realtor®
will assist you
in presenting an offer to the seller. Your offer to
buy involves submitting a signed real estate
contract that specifically states the terms and
conditions upon which you would like to purchase the
property. Your offer will generally be accompanied
with a good faith deposit check.
may accept your offer as presented, or employ the
option to "counter" your offer with slightly
different terms, price, financing, or other
conditions. The seller has a third option, which is
to reject your offer. Once both you and the seller
have agreed to the terms of the purchase, you have
both signed the document, and you have been notified
of the acceptance (usually when you or your Realtor
receives an actual copy of the contract) the
document becomes a valid sale contract.
11. Finalizing your Mortgage
Your complete loan application may
include details about:
Total monthly income including alimony, child
support, bank retirement, interest, dividend or
trust income, etc.
Assets such as cash in banks, stocks, bonds,
other property owned, vested interest in
retirement plans, life insurance, automobiles,
Anticipated housing costs.
The lender will carefully review the
information provided by you in order to determine
the risk in lending you money to purchase a home.
12. If Agreed to in the Purchase
Agreement, Arrange for a Home Inspection.
After your offer is accepted, set up
a home inspection. Your Realtor®
can give you the
names several reputable Inspectors to interview.
13. Closing The Contract
At the closing or settlement, you
and the seller will each have completed the
conditions and met the terms pursuant to your
contractual agreement and title to the property will
be conveyed to you.
Your RE/MAX Real Estate Professional
will have helped you through the myriad of steps of
closing, including handling of the many details such
Inspection of the property
Securing free and clear title and title
Payment of all current taxes
Payoff of existing seller's loan
Payment of insurance
Document preparation and recording
Ultimate transfer of funds, title, keys and
Following the closing you will
receive a final settlement for your records that
clearly illustrates all the fees paid by you to
close the contract.