We Are a Team Devoted to Using Our Expertise to Make Your Transaction Successful!

HOMEBUYING GUIDE

Congratulations!The decision to buy your own home is an exciting one. The experience should be enjoyable as well as get you the perfect home with the least amount of hassle.

We are a team devoted to using our expertise to make your transaction successful!

Purchasing a home is a very important decision. I would like to help you with honest, accurate information so you can make well-informed decisions regarding the purchase of your home. This booklet will give you an idea of what to expect during each phase of your transaction. It also contains reference pages, note pages, deadline information, etc., and is useful as a reference guide even after the transaction is closed.

Table of Contents

1.Owner occupied purchases

2. HUD properties

3.Short Sale and Bank Owned Properties

4.Important terms and information for you!

5.Your Real Estate Team

There are 3 types of homes available for purchase in today’s Real Estate market.

1.Owner sold properties

2.HUD properties

3.Short Sales or Bank Owned Properties

Each type of property has its plusses and minuses.

We’ll start with “owner sold,” properties to give a general idea of timelines and expectations in a real estate transaction......

Owner sold properties

An owner sold property is a “normal” sale. 80% of home sales are “owner sold,” properties.

An owner hires a Real Estate agent and has him/her determine what the home is worth, enter it into the Multiple Listing Service, and market it for sale.

In today’s market, home sales are so slow that homeowners who need to sell are willing to sell there homes for much less just to get their home sold, so don’t count these traditional home sales out. There are bargains galore right now!

When purchasing an owner sold property, the following is the normal course of events:

1.You make an offer on a home. The owner may accept the offer, or send you a Counteroffer. In a normal real estate transaction you can ask for closing costs to be paid at any amount. Each offer usually has 24 hours before the other party must give you a response. You always send your loan prequalification letter with your offer. Once an offer is agreed upon, your timelines that are built into the contract go into effect.

2.You give your Realtor your “earnest money” to be deposited with his/her broker. You may pay your earnest money in any form.

3.You schedule your inspections as soon as possible. You always pay for your inspections at the time of inspection, directly to the inspector.

4.If you find any significant issues during the inspections, you submit a “request to remedy.” A “request to remedy,” is a formal request for them to make repairs. Generally you only ask a homeowner to fix major problems. Sometimes the homeowner will fix the issues, but many times they just offer you a monetary credit to be deducted from the price

of the house. If you can’t come to an agreement by the end of the “request to remedy” period designated in the contract, the contract is null and void and you get your earnest money back from the brokerage.

5.You call the utility companies and have them put the utilities in your name effective the day of closing.

5.You do a walk through the day before you close, to make sure the property is in the same condition as when you made the offer.

6.You go to your closing where you sign all the legal papers for your home and mortgage, and you get your keys. You get your earnest money returned from your real estate agent at the closing.

7. You are a homeowner.

Short Sales/Bank Owned Properties

Short sales and “bank owned,” properties are another type home available for purchase.

In a “short sale,” an owner can no longer make his/her payments and alerts the bank that he/she has his the home listed for sale at least 90 days and is unable to sell at an asking price that gets them out of the house without making any money. The owner is generally not able to afford his/her home payments any longer and either stops paying the mortgage, or is only able to send in a portion. The owner or his/her Real Estate agent then petitions the bank to allow a “short sale.” A “short sale” is where the bank will take less money for the house than is owed, to avoid the home going into foreclosure. Banks will sometimes do this because going into foreclosure is a very lengthy and expensive process that potentially holds a good deal of liability for the bank. An example of this is:

A homeowner stops paying the mortgage, and moves out. The bank must wait until the person is 4-6 months behind to even start eviction proceedings. They must offer counseling the homeowner etc.. If the person isn’t paying his/her mortgage, he/she definitely isn’t paying the homeowners insurance. What if the home burns down during this time? The bank would be stuck with a defaulted mortgage and no asset to sell to regain any of the money they lent the homeowner.

The bank would rather get part of the money back than none of the money back; so many times they will approve a “short sale.”

A ‘Bank owned,” property means the owner can’t make the payments and has turned his deed in to the bank. When an owner does this, the bank does not have to initiate foreclosure proceeding, but doesn’t want to pay the insurance, mortgage, and utilities for long, so they will offer the home for sale at a reduced price to get rid of it quickly.

When bidding on a short sale or “bank owned,” property you generally get a home in much better shape than a HUD home, but “bank owned,” and” short sale’s” do have their own special

When you submit a bid on a “short sale” or “bank owned” property it may take anywhere from 2-45 days to get an answer on your offer. It depends on who the mortgage holder (or bank,) is. A local lender may get back to you in 2-3 business days. A national lender may take up to 45 days to give you an answer. You will need your Realtor to call the listing broker and get specifics on that particular banks’ response time. To buy a short sale you must be prepared for anything in the “time” arena. You may be able to get in to the home in 30 days, but it may take up to 120 days, so you need to be prepared for the fact that your move may be several months out.

When you bid on “short sales” the bank is motivated by the amount of money they receive after everything is paid, so they may turn your offer down, but send you a counteroffer. A counteroffer is the bank saying ‘no, we won’t take that, but we will take this amount.” You are not obligated to purchase the home for the amount they send back, but you can choose to.

The bank will not always be willing to pay any of your “closing costs.” It depends on the bank. Some banks will pay some closing costs, some won’t.

When bidding on “short sales” you do not pay your “earnest money,” until the contract is accepted. The amount of “earnest money” you deposit on a “short sale” is from $500-$1,000. The bank will specify the amount. Earnest money on a bank owned property can be cash, check, cashiers check, etc...

Most banks will buy you a home warranty, but some refuse.

When doing inspections on a “short sale,” you do a regular home inspection. A bank will not make any repairs suggested during the inspection. You still always do an inspection.You always pay for your inspections at the time of inspection, directly to the inspector.

If repairs are much greater than you anticipated, you can break your contract based on the results of the home inspection, and your earnest money will be returned to you.

Most banks also write in a clause, that if you don’t close on time, because of the buyer there is a $ penalty. Generally it will be from $50-$100 a day penalty for every day you go past the contract deadline.

Bank owned homes generally won’t make you pay to turn on the utilities, or be responsible if any damage is incurred by turning the utilities on.

HUD HOMES

HUD homes are homes owned by the U.S. Department of Housing and Urban Development. These homes have been foreclosed on already. The owners failed to pay their mortgage and either left or were evicted from their home. HUD homes are always vacant, so can be seen anytime.

When you make the decision to look at HUD homes, you must be available to go look at the homes on Friday, because that’s when they hit the Columbus Multiple Listing Service. HUD homes that are in moderate to good shape, always sell the first day, so you must go see them the day they are listed and submit your bid by 11:59 PM that day. HUD homes require a contract plus 22 pages of ancillary paperwork that the government requires, so be prepared for a lot of signing. The signature of the Broker from your Real Estate agent’s office must also sign your bid, so you’ll need to complete the majority of the paperwork out before four, so the broker is still in to sign it.

HUD homes are “AS IS,” so they will make no repairs, and you cannot get your “earnest money” returned if you decide not to buy the home after you get an inspection. You will still need to get an inspection. You always pay for your inspections at the time of inspection, directly to the inspector.

HUD homes require a $1,000 “earnest money” deposit to be submitted prior to bidding. Earnest money deposits can only be accepted in the forms of certified check, cashiers check, or money order. Earnest money is only returned to you if you break the contract due to the death of an immediate family member, or a job loss. If you fail to obtain financing, you forfeit your “earnest money.”

HUD also requires you, as the buyer, to pay any utility fees incurred to turn utilities on, and off again, for your inspections.

HUD will pay up to 3% of your closing costs. HUD is willing to pay up to 3% of your closing costs on a conventional purchase. This greatly reduces your out of pocket expenses when buying a home. You will want to go with a reputable bank to keep your closing costs as low as possible. HUD will only pay up to 1% in origination fees, so don’t pick a loan program with an origination fee over 1%.

The origination fee at National City, who is our “preferred mortgage company”, is 1%.

When bidding on a HUD home, you generally get a response on your offer with 2 business days. Most of the time, it’s the next day after 4PM.

HUD does not do any counter offering. You submit your bid, and they either say “yes, or no.” They will always go with the person who submits the highest offer.

After an offer is accepted you have 45 days to close the transaction. After 45 days you must file extensions and there is a $25 per day fee for every day over the contract deadline that you don’t close the transaction.

For more information on purchasing a HUD home in Ohio, go to:

Why Do You Need a Realtor?

A Realtor brings a wealth of knowledge and experience to the business of buying a home. In fact, a licensed real estate professional provides much more than the service of helping you find the home of your dreams. Realtors are not just sales agents. They are expert negotiators, seasoned financial advisors, and superb navigators around the local neighborhood. They are members of the National Association of Realtors (NAR) and must abide by a Code of Ethics and Standards of Practice enforced by the NAR. A professional Realtor is your best resource when approaching to buy a home.

Let Me Be Your Guide —

• Working with me can save you endless amounts of time, money and frustration.
• I know the housing market inside and out and can help you avoid many a “wild goose chase.”
• I can help you with any house even if it is listed elsewhere, or is being sold by the owner directly.
• I know the best lenders in the area; I can help you get pre-qualified for a mortgage; and discuss down payments, closing costs, and monthly payment options.
• I am an excellent source for general information about the community, specific information about schools, churches, shopping, transportation, plus tips on house inspections and pricing.
• I am experienced at presenting your offer to the homeowner and can help you through the process of negotiating the best deal. I bring objectivity to the buying transaction, and can point out advantages and disadvantages of a particular property.

And the BEST thing is that all this help doesn’t cost you a cent. Generally, the seller pays the commission to Realtors®. However, that doesn’t affect my dedication or the spirit of teamwork that I will put into helping you find and buy the home of your dreams.

Note:

Some Buyer Representative Realtors do charge a fee, paid at closing, for his/her services. I do not.

Step by Step…

The Buying Process

Find a Realtor you can trust… / The First Step…
In the home buying process is to find an experienced Realtor that you can trust and sign a Buyer’s Agent Agreement. This guarantees, by the laws of the state, that your needs are met professionally and represented throughout the entire process of buying your home.
Looking for a home… / The Next Step…
Is to look at various homes. I am available at anytime to help you find your dream HOME.
Your
Offer / Be Careful – This is a BIG Step…
When you find your dream home, you should present a competitive offer immediately. I have extensive experience in contract negotiations. I will ensure you get just what you want for a fair price – a transaction in your best interest.
The
Contract / We’re Starting to Jog Now …
When the seller accepts your offer, you “go under contract.” You want to make sure every detail is handled accurately and immediately. I will ensure your home closes properly and on time. When you go into contract, you will be expected to provide “earnest money.” Ernest money is a payment to the brokerage representing you that you will be refunded when you close. Ernest money is basically like a down payment. It shows the buyer that you are serious about buying the property that you are bidding on. In ColumbusOhio, typical Ernest Money amounts are as follows:
Properties under $150,000.00 = $500.00
Properties over $150,000 = $1,000.00
Inspections / Final details are handled and inspections are performed to ensure the property is “perfect” for you. Contract details are further negotiated, and we head to closing! I like to do inspections as soon as possible. Inspections are on “out of pocket” expense for you. Expect to pay between $300.00-$500.00, dependng on the inspections you request. You are able to choose any inspector you wish. I do have inspectors that I work with regularily, because they do excellent inspections and deliver results within 24 hours.
Now
it is
YOURS! / The Next Step Will Be Into Your New Home…
Be prepared to bring your checkbook to the closing procedure – the next steps you will take will be over the threshold of your new home!
If you are paying under $1,000 at closing you can pay by check. If it is over $1,000 you will need a cashiers check.
Please keep in mind there may be a $20.00-$50.00 fee for your loan application.
Summary of fees needed to buy your home:
1. Earnest money deposit. It is $500-$1,000 due at contract acceptance. You get your earnest money back when you close.
2. Loan application fee. Usually $20-$50.
3. Inspections:
I will schedule your inspection as soon as we have a contract signed by both sides. You pay your inspector at the inspection. A personal check is fine.
Home Inspection $299 and up(my inspector gives my clients $75.00 off.)
Termite $75
Radon $ 150
4. Money for closing. Your loan officer will estimate this for you. You will get the exact amount 24 hours before closing.

Glossary of Real Estate

Brokerage Relationships

In Our State,

Real Estate brokers and their salespersons are required to disclose the type of working relationship they have with the buyers in a real estate transaction. There are several types of relationships that are available to you. You should understand these at the time a broker provides specific assistance to you in buying real estate. Buyer’s Agent and Seller’s Agent relationships are commonly referred to as “agency” relationships and carry with them legal duties and responsibilities for the broker as well as for the buyer and seller.