We are here to help you with your most important purchase!
This pamphlet is a resource to help you understand the buying process. It is put together in the sequence of events from our initial meeting to the finalized process of signing documents and receiving keys to your new home!!!
John L Scott
Questions & Answers
Does it cost a buyer to have an agent represent them?
*No, all commissions are paid for by the seller. A buyer’s agent is there to represent, assist and help the buyer through the purchasing process at no cost.
Can an agent show buyers listings from other companies?
*Yes, all agents have access and can show any property listed by any company.
Can an agent show buyers for sale by owner homes?
*Yes, your agent can coordinate showings of “For Sale by Owner” homes.
Where do we start?
*We like to meet with prospective clients in hopes that they feel comfortable in working with us and feel as though we are a good fit for them. After choosing to work with us, the first thing I typically have my clients do is get a pre-approved for a loan.
Before we initiate the process of finding you a house, we need to establish the amount of money that you are pre-approved for on your loan. This is done to determine your “buying power,” along with the different loan options available to you. A loan officer will educate you on various loan programs to optimize your purchase ability. A pre-approval letter is obtained during this process and is a very important factor in writing an offer.
Because of their excellent reputation, great communication skills, and their like-minded desire to build life long relationships, we have chosen to partner with the following lenders:
Pacific Residential Mortgage
Senior Mortgage Broker
Senior Mortgage Banker
Senior Mortgage Broker
When setting up an appointment with a loan officer, be prepared to bring the following….
1) Most current paystubs covering the last 30 day period;
2) Last 2 years’ W-2s or 1099s;
3) Last 2 years’ federal tax returns (personal and corporate, if applicable); all pages, all schedules. Please sign page 2 of the return;
4) Last years Award letters for Social Security, Pensions, Annuity, etc. (if applicable);
5) Most recent statements for all assets (bank, brokerage, mutual funds, retirement accounts such as IRAs/401ks etc.). Please include all pages, even if blank;
a. Note – lenders will require us to document / source any large deposits (BTW – large is a relative term - $250+) so if it isn’t obvious where a deposit comes from be prepared to provide documentation as to the source of the funds.
6) Gift Letter (if applicable); we will provide you a template, which must be completed by a direct relative (aka – giftor) & we will need a statement from your giftor’s account showing the source of the funds.
a. The note above regarding the source of deposits also applies for your giftor as well.
7) Legible copy of your Driver’s License, both front and back;
8) Divorce Decree, Child Support or Bankruptcy Documentation (if applicable);
9) Certificate of eligibly and DD214 (for VA; if applicable);
10) Copy of your last Mortgage Loan statement if applicable.
It is crucial to understand that you should not purchase a new car, apply for a new credit card, quit your job or do anything that would change your work history or financial history from the time you are pre-approved to the closing of your new home. If any changes do occur, please discuss those pertinent issues with your lender right away.
Searching for your home
After meeting with a loan officer and determining your pre- approval amount, we like to sit down and discuss the price range that you feel comfortable spending on your new home. As your agent, we are here to help you to find the house that you want. We have access to all homes on the market that are listed by all Real Estate Agencies in the area. Our goal is to help you find the right home and make your move as smooth as possible. Since there are several different types of sales out on the market, here is a brief review to help you understand a little bit about each one;
Different types of sales…..
Bank Owned/REO: A bank-owned property has gone through a foreclosure process and an unsuccessful auction sale. After an unsuccessful sale, the bank retains ownership. This type of property is also called an REO property; a bank-owned property which is no longer the property of an individual. Purchasing a bank-owned property carries the benefit of a low purchase price and the possibility to purchase a home with equity. However, most bank owned properties are sold as-is, without any repairs, and closing costs paid for by the bank are generally limited to 3% of the sales price.
Short Sale: A Short Sale property has not gone through foreclosure and is still owned by the owner. A Short Sale is selling for less than the home owner owes and has to be approved by the property’s lender before being able to move forward. Short Sales generally take 3-9 months to obtain bank approval, repairs are not common, and banks only pay up to 3% of sales price towards a buyer’s pre-paids or closing costs. Purchasing a Short Sale property carries the benefit of a low purchase price and the possibility to purchase a home with equity. However, the key to Short Sales is allowing A LOT of time!
Regular Sale: A regular sale has a private owner who desires to sell their home. Most items are negotiable and closing typically occurs 30-60 days after an accepted offer.
Finding Your house!!!
Now the fun begins! This is often the most exciting and enjoyable part of the buying process. After we determine the price range you are looking for, We like to sit down and discuss what exactly you are looking for…What area? Square footage? Number of bedrooms/bathrooms? Etc…
After we get a good idea of what you are looking for, we will search diligently through the RMLS database to see what is currently available on the market that may fit your needs. Any and all properties that we find will be sent over to you. If you see something that you would want to go and look through, we will schedule a showing to view the home and/or homes.
Making an Offer: When we have found the right house for you, we will pull comparable pending and sold homes information to see what the fair market value of the home is. Next, we will discuss if we need to ask for closing costs, appliances, a home warranty or any other item in the house you may want. A pre-approval letter is necessary to make an offer.
Counter Offers: Often times (not ALWAYS), the seller will make a counter offer to your first initial offer. If this happens, you have the option of accepting their offer, countering back, or walking away from that particular deal.
An Accepted Offer: When the offer has been accepted by both the buyer and seller, all time lines will begin (except with short sales). We will need to collect your earnest money check, which will be deposited in escrow, and credit towards your down payment.
Home Inspection: Once the offer is accepted we will have 10 business days, unless otherwise negotiated, to perform a home inspection and negotiate any repairs. Although a home inspection is not required if you are obtaining a loan, we STRONGLY feel that it is a necessity and urge all of our clients to get one. Having an inspector look through the house with a fine tooth comb reveals any problems the house may have, along with required maintenance, upkeep, or deadlines on when something may need to be replaced. The home inspection generally takes 3-4 hours. It is very important that you are present for the entire inspection. The cost generally will range from $300-$500, depending on the size of the home. Optional inspections are a sewer scope and a radon test, which we can talk more about at this particular time.
Receiving a GFE and Disclosures:
HUD states that a “Good Faith Estimate” (GFE) be issued once all following items have been provided to your lender:
*Social Security number
Once a home is secured and your loan application is complete, your lender will provide you with your GFE. At this time your lender will go over the loan disclosures with you and have you sign them after reviewing.
Appraising the Property: After the home inspection contingency has been removed your lender will order the appraisal. This is something that the buyer is responsible for paying, and is usually around $500. An appraisal is done to determine if the house is worth the amount of money that you are borrowing from the bank. After the appraisal is complete you and your lender will both receive a copy.
Submission for underwriting: Once we have received an appraisal at or above value of the purchase price with no outstanding conditions, your lender will submit the transaction to underwriting. The underwriters will likely want some additional information aside from the documents that you already provided during the initial pre-approval process. It is important that you gather all information and documents that are requested in a timely manner.
Gathering Conditions: Most likely, there will be conditions that must be met prior to ordering documents. It is important that we get the requested items ASAP to ensure a timely funding.
Ordering Documents: Once the underwriter has signed off on all the conditions, your lender will order documents to be worked up and sent to escrow. This generally will take a couple of days.
Documents Arriving at Escrow: When documents arrive at escrow, the escrow officer will process them and add information such as payoff, taxes, prepaid interest due. This will allow them to calculate the exact amount of funds you will need to bring to closing.
Funding Your Loan: Once all the loan documents have been signed by both the buyer and seller, they will be sent back to the lender’s funding department. This will take at least 24 hours. Once the loan has been funded and title has been recorded, your agent will receive a phone call letting them know it is now okay to present you with keys to your new home!!!!
Buying a home is a very important life decision. We take great pride and are honored in helping our clients with finding a home. This booklet is a very generalized brief overview to help you to better understand the process and steps it takes to purchasing a home. If you have any questions, please, please, please ASK!!! As your realtor, we want to be available to answer any and all questions that may arise. Again, we take great pride in this process and want to make it a great experience for you. If there is anything that we can do to help, please let us know. We look forward to working for you, and am excited to help you find a place to call home!!!