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Elkins & Associates, Inc.
How do you find a house?
Some buyers like to search REALTOR.com® by looking at listings on the basis of
location or price; others prefer to have local REALTORS® suggest properties; and
many buyers prefer both approaches.
Regardless of your choice, it's important to target your search. By using basic
measures such as general location and affordability, you can refine your search and
focus on homes that offer the most desirable features.
As a guide, you should maintain a file with information on each of the homes you like.
You can print out listing pages from REALTOR.com® and then make notes for each
one -- what you like, questions, REALTOR® contact data, etc.
Choose a Home
There's no doubt that choosing a home is a big decision and you want to do it right.
As a buyer, here's what actually happens. A home has been placed on the market for
which the seller has established an asking price as well as other terms. In effect, this
is an offer. At this point, you have three choices: accept the seller's offer and create
a contract; reject it and not make an offer; or suggest different terms and make a
counter-offer. If you choose this last option, the seller may accept, reject or make a
counter-offer.
No aspect of the homebuying process is more complex, personal or variable than
bargaining between buyers and sellers. This is the point where the value of an
experienced REALTOR® is clearly evident because he or she knows the community,
has seen numerous homes for sale, knows local values and has spent years
negotiating realty transactions.
Is it THE house?
A house is shelter, but a home is far more. It's where you live, relax, entertain friends,
raise families, and work. A home is where you spend much of your life, and so
choosing a house is an enormous decision.
How do you know if a house is THE one? Probably the best approach is to look at as
many homes as possible, something made easy by Realtor.com, where you can
quickly and easily view huge numbers of homes, check prices, take video tours and
view extensive neighborhood information. Once your choices have been narrowed,
you can then contact a local REALTOR® to find specific information and options.
Can you really afford it?
Remember Step 2 - the preapproval process? Getting preapproved means you have
a very good idea of how much you can borrow, what loan programs will most likely
work best in your situation and how much home you can afford.
How reliable is a preapproval? While preapproval is not a loan commitment, it's still
necessary for lenders to check such items as appraisals and the latest credit reports.
Despite fluctuating interest rates, preapproval nonetheless provides a reasoned,
careful analysis of what you can afford. After all, loan officers are routinely paid only
when loans are originated. It doesn't make much sense for loan officers to suggest
high loan limits that later can't be delivered.
Get Funding
Often the cost of real estate financing is routinely greater than the original purchase
price of a home (after including interest and closing costs). Because financing is so
important, buyers should have as much information as possible regarding mortgage
options and costs.
Homestore ® provides consumers with extensive mortgage information as well as a
variety of loan calculators. Local REALTORS® can provide mortgage information,
discuss financing options and recommend loan sources. In addition, some
REALTORS® also originate loans.
What kind of loan?
There are thousands of loans available out there from a variety of lenders, but in
general, the mortgage you choose will likely be determined by at least several key
factors:
How do you get a loan?
To obtain a loan you must complete a written loan application and provide supporting
documentation. Specific documents include recent pay stubs, rental checks and tax
returns for the past two or three years if you are self-employed. During the
prequalification procedure, the loan officer will describe the type of paperwork
required.
Where do you get a loan?
Mortgage financing can be obtained from mortgage bankers, mortgage brokers,
savings and loan associations, mutual savings banks, commercial banks, credit
unions, and insurance companies. A growing number of REALTORS® can also
arrange financing.
Make an Offer
REALTOR® groups, working with legal counsel, have developed forms that are
appropriate for realty transactions in specific communities. Such documents include
numerous sale conditions and their wording should be carefully reviewed to assure
that they reflect the terms you want to offer. REALTORS® can explain the general
contracting process in your community as well as his or her role.
While much attention is spent on offering prices, a proposal to buy includes both the
price and terms. In some cases, terms can represent thousands of dollars in
additional value for buyers -- or additional costs. Terms are extremely important and
should be carefully reviewed.
How much?
You sometimes hear that the amount of your offer should be x percent below the
seller's asking price or y percent less than you're really willing to pay. In practice, the
offer depends on the basic laws of supply and demand: If many buyers are
competing for homes, then sellers will likely get full-price offers and sometimes even
more. If demand is weak, then offers below the asking price may be in order.
How do you make an offer?
The process of making offers varies around the country. In a typical situation, you will
complete an offer that the REALTOR® will present to the owner and the owner's
representative. The owner, in turn, may accept the offer, reject it or make a counter-
offer.
Because counter-offers are common (any change in an offer can be considered a
"counter-offer"), it's important for buyers to remain in close contact with REALTORS®
during the negotiation process so that any proposed changes can be quickly
reviewed.
How many inspections?
A number of inspections are common in residential realty transactions. They include
checks for termites, surveys to determine boundaries, appraisals to determine value
for lenders, title reviews and structural inspections.
Structural inspections are particularly important. During these examinations, an
inspector comes to the property to determine if there are material physical defects
and whether expensive repairs and replacements are likely to be required in the next
few years. Such inspections for a single-family home often require two or three
hours, and buyers should attend. This is an opportunity to examine the property's
mechanics and structure, ask questions and learn far more about the property than
is possible with an informal walk-through.
Get Insurance
No one would drive a car without insurance, so it figures that no homeowner should
be without insurance. The essential idea behind various forms of real estate
insurance is to protect owners in the event of catastrophe. If something goes wrong,
insurance can be the bargain of a lifetime.
What kind and how much?
There are various forms of insurance associated with home ownership, including
these major types:
Title insurance: Purchased with a one-time fee at closing, title insurance protects
owners in the event that title to the property is found to be invalid. Coverage includes
"lenders" policies, which protect buyers up to the mortgage value of the property,
and "owners" coverage, which protects owners up to the purchase price. In other
words, "owners" coverage protects both the mortgage amount and the value of the
down payment.
Homeowners' insurance provides fire, theft and liability coverage. Homeowners'
policies are required by lenders and often cover a surprising number of items,
including in some cases such property as wedding rings, furniture and home office
equipment.
Flood insurance: Generally required in high-risk flood-prone areas, this insurance
is issued by the federal government and provides as much as $250,000 in coverage
for a single-family home plus $100,000 for contents. Local REALTORS® can explain
which locations require such coverage.
Home warranties With new homes, buyers want assurance that if something goes
wrong after completion the builder will be there to make repairs. But what if the
builder refuses to do the work or goes out of business?
Home warranties bought from third parties by home builders are generally designed
to provide several forms of protection: workmanship for the first year, mechanical
problems such as plumbing and wiring for the first two years, and structural defects
for up to 10 years.
Home warranties for existing homes are typically one-year service agreements
purchased by sellers. In the event of a covered defect or breakdown, the warranty
firm will step in and make the repair or cover its cost.
Insurance policies and warranties have limitations and individual programs have
different levels of coverage, deductibles and costs. For details, speak with
REALTORS®, insurance brokers and home builders.
Where to look.
REALTORS® often provide home insurance and such policies are also available
from insurance brokers
How do you get insurance?
The time to obtain insurance and warranty coverage is at closing, so speak with a
REALTOR® or insurance broker prior to closing. Be sure to ask about limitations,
costs, deductibles and "endorsements" (additional forms of coverage that may be
available).
Closing
Go to any local courthouse and you can find property records detailing real estate
ownership in your community -- sometimes records that date back hundreds of years.
These records are important because they provide today's owners with proof that
they have good, marketable and insurable title to the property they are selling.
Equally important, such records enable buyers to provide proof of ownership when
they sell.
The closing process, which in different parts of the country is also known as
"settlement" or "escrow," is increasingly computerized and automated. In many cases,
buyers and sellers don't need to attend a specific event; signed paperwork can be
sent to the closing agent via overnight delivery.
In practice, closings bring together a variety of parties who are part of the
"transaction" process. For example, while the history of property ownership has been
checked, it's possible that the records contain errors, unrecorded claims or flaws in
the review itself, thus title insurance is necessary. At closing, transfer taxes must be
paid and other claims must also be settled (including closing costs, legal fees and
adjustments). In most transactions, the closing agent also completes the paperwork
needed to record the loan.
What to expect.
Settlement is a brief process where all of the necessary paperwork needed to
complete the transaction is signed. Closing is typically held in an office setting,
sometimes with both buyer and seller at the same table, sometimes with each party
completing their papers separately.
Whatever the case, the result is that title to the property is transferred from seller to
buyer. The buyer receives the keys and the seller receives payment for the home.
From the amount credited to the seller, the closing agent subtracts money to pay off
the existing mortgage and other transaction costs. Deeds, loan papers, and other
documents are prepared, signed and filed with local property record offices.
What you need to do.
One of the best parts of settlement is that buyers and sellers need to do very little.
Before closing, buyers typically have a final opportunity to walk through the property
to assure that its condition has not materially changed since the sale agreement was
signed. At closing itself, all papers have been prepared by closing agents, title
companies, lenders and lawyers. This paperwork reflects the sale agreement and
allows all parties to the transaction to verify their interests. For instance, buyers get
the title to the property, lenders have their loans recorded in the public records and
state governments collect their transfer taxes.
What's Next?
You've done it. You've looked at properties, made an offer, obtained financing and
gone to closing. The home is yours. Is there any more to the homebuying process?
Whether you're a first-time buyer or a repeat buyer, there are several more steps
you'll want to take.
Those papers you received at settlement are extremely valuable, so hold on to them!
In the short-term they can help establish tax deductions for the year in which the
property was purchased. In the future, such papers will be important for tax purposes
when the property is sold, and in some cases, for calculating estate taxes.
Also at closing, determine the status of the utilities required by the home, items such
as water, sewage, gas, electric and oil service. You want utility bills to be paid in full
by
provide contact numbers and related information.
About two weeks after closing, contact your local property records office and confirm
that your deed has been officially recorded. Such records are public notices that
show your interest in the property.
Moving in
It is generally understood that sellers will leave homes "broom clean" when moving
out. This expression does not mean "vacuumed" or "spotless." Broom clean makes
sense because it means the house is ready to be painted and cleaned.
Your home, your money
For most owners a home is the largest single asset they hold, so it makes sense to
protect that asset.
Many owners make a photo or video record of the home and their possessions for
insurance purposes and then keep the records in a safety deposit box. Your
insurance provider can recommend what to photograph and how to secure it.
You want to maintain fire, theft and liability insurance. As the value of your property
increases such coverage should also rise. Again, speak with your insurance
professional for details.
Lastly, enjoy your home. Owning real estate involves contracts, loans, and taxes, but
ultimately what's most important is that homeownership should be a wonderful
experience. Enjoy!
Some buyers like to search REALTOR.com® by looking at listings on the basis of
location or price; others prefer to have local REALTORS® suggest properties; and
many buyers prefer both approaches.
Regardless of your choice, it's important to target your search. By using basic
measures such as general location and affordability, you can refine your search and
focus on homes that offer the most desirable features.
As a guide, you should maintain a file with information on each of the homes you like.
You can print out listing pages from REALTOR.com® and then make notes for each
one -- what you like, questions, REALTOR® contact data, etc.
Choose a Home
There's no doubt that choosing a home is a big decision and you want to do it right.
As a buyer, here's what actually happens. A home has been placed on the market for
which the seller has established an asking price as well as other terms. In effect, this
is an offer. At this point, you have three choices: accept the seller's offer and create
a contract; reject it and not make an offer; or suggest different terms and make a
counter-offer. If you choose this last option, the seller may accept, reject or make a
counter-offer.
No aspect of the homebuying process is more complex, personal or variable than
bargaining between buyers and sellers. This is the point where the value of an
experienced REALTOR® is clearly evident because he or she knows the community,
has seen numerous homes for sale, knows local values and has spent years
negotiating realty transactions.
Is it THE house?
A house is shelter, but a home is far more. It's where you live, relax, entertain friends,
raise families, and work. A home is where you spend much of your life, and so
choosing a house is an enormous decision.
How do you know if a house is THE one? Probably the best approach is to look at as
many homes as possible, something made easy by Realtor.com, where you can
quickly and easily view huge numbers of homes, check prices, take video tours and
view extensive neighborhood information. Once your choices have been narrowed,
you can then contact a local REALTOR® to find specific information and options.
Can you really afford it?
Remember Step 2 - the preapproval process? Getting preapproved means you have
a very good idea of how much you can borrow, what loan programs will most likely
work best in your situation and how much home you can afford.
How reliable is a preapproval? While preapproval is not a loan commitment, it's still
necessary for lenders to check such items as appraisals and the latest credit reports.
Despite fluctuating interest rates, preapproval nonetheless provides a reasoned,
careful analysis of what you can afford. After all, loan officers are routinely paid only
when loans are originated. It doesn't make much sense for loan officers to suggest
high loan limits that later can't be delivered.
Get Funding
Often the cost of real estate financing is routinely greater than the original purchase
price of a home (after including interest and closing costs). Because financing is so
important, buyers should have as much information as possible regarding mortgage
options and costs.
Homestore ® provides consumers with extensive mortgage information as well as a
variety of loan calculators. Local REALTORS® can provide mortgage information,
discuss financing options and recommend loan sources. In addition, some
REALTORS® also originate loans.
What kind of loan?
There are thousands of loans available out there from a variety of lenders, but in
general, the mortgage you choose will likely be determined by at least several key
factors:
- How much down? Loans with 5 percent down or less are now widely available
-- in fact, loans from major lenders with no money down have appeared in
recent years. - If you place less than 20 percent down, lenders will want the mortgage
guaranteed by an outside third party such as the Veterans Administration
(VA), the Federal Housing Administration (FHA) or a private mortgage insurer
(PMI, or private mortgage insurance, is required by lender to protect against
any mortgage defaults). More than 2.5 million VA, FHA and PMI loans are
generated each year. - How's your credit? The best rates and terms are only available to those with
solid credit. To get the best loans, make a point of paying credit cards,
installment payments, rent and mortgage bills in full and on time. - Are you a first-time buyer? It might seem that "first-time buyer" means
someone who has never owned property before, but under most state
programs, the term refers to those who have not owned property within the
past three years. State-backed first-timer programs often feature smaller
downpayments and below-market interest rates. For details, speak with your
local REALTOR®.
How do you get a loan?
To obtain a loan you must complete a written loan application and provide supporting
documentation. Specific documents include recent pay stubs, rental checks and tax
returns for the past two or three years if you are self-employed. During the
prequalification procedure, the loan officer will describe the type of paperwork
required.
Where do you get a loan?
Mortgage financing can be obtained from mortgage bankers, mortgage brokers,
savings and loan associations, mutual savings banks, commercial banks, credit
unions, and insurance companies. A growing number of REALTORS® can also
arrange financing.
Make an Offer
REALTOR® groups, working with legal counsel, have developed forms that are
appropriate for realty transactions in specific communities. Such documents include
numerous sale conditions and their wording should be carefully reviewed to assure
that they reflect the terms you want to offer. REALTORS® can explain the general
contracting process in your community as well as his or her role.
While much attention is spent on offering prices, a proposal to buy includes both the
price and terms. In some cases, terms can represent thousands of dollars in
additional value for buyers -- or additional costs. Terms are extremely important and
should be carefully reviewed.
How much?
You sometimes hear that the amount of your offer should be x percent below the
seller's asking price or y percent less than you're really willing to pay. In practice, the
offer depends on the basic laws of supply and demand: If many buyers are
competing for homes, then sellers will likely get full-price offers and sometimes even
more. If demand is weak, then offers below the asking price may be in order.
How do you make an offer?
The process of making offers varies around the country. In a typical situation, you will
complete an offer that the REALTOR® will present to the owner and the owner's
representative. The owner, in turn, may accept the offer, reject it or make a counter-
offer.
Because counter-offers are common (any change in an offer can be considered a
"counter-offer"), it's important for buyers to remain in close contact with REALTORS®
during the negotiation process so that any proposed changes can be quickly
reviewed.
How many inspections?
A number of inspections are common in residential realty transactions. They include
checks for termites, surveys to determine boundaries, appraisals to determine value
for lenders, title reviews and structural inspections.
Structural inspections are particularly important. During these examinations, an
inspector comes to the property to determine if there are material physical defects
and whether expensive repairs and replacements are likely to be required in the next
few years. Such inspections for a single-family home often require two or three
hours, and buyers should attend. This is an opportunity to examine the property's
mechanics and structure, ask questions and learn far more about the property than
is possible with an informal walk-through.
Get Insurance
No one would drive a car without insurance, so it figures that no homeowner should
be without insurance. The essential idea behind various forms of real estate
insurance is to protect owners in the event of catastrophe. If something goes wrong,
insurance can be the bargain of a lifetime.
What kind and how much?
There are various forms of insurance associated with home ownership, including
these major types:
Title insurance: Purchased with a one-time fee at closing, title insurance protects
owners in the event that title to the property is found to be invalid. Coverage includes
"lenders" policies, which protect buyers up to the mortgage value of the property,
and "owners" coverage, which protects owners up to the purchase price. In other
words, "owners" coverage protects both the mortgage amount and the value of the
down payment.
Homeowners' insurance provides fire, theft and liability coverage. Homeowners'
policies are required by lenders and often cover a surprising number of items,
including in some cases such property as wedding rings, furniture and home office
equipment.
Flood insurance: Generally required in high-risk flood-prone areas, this insurance
is issued by the federal government and provides as much as $250,000 in coverage
for a single-family home plus $100,000 for contents. Local REALTORS® can explain
which locations require such coverage.
Home warranties With new homes, buyers want assurance that if something goes
wrong after completion the builder will be there to make repairs. But what if the
builder refuses to do the work or goes out of business?
Home warranties bought from third parties by home builders are generally designed
to provide several forms of protection: workmanship for the first year, mechanical
problems such as plumbing and wiring for the first two years, and structural defects
for up to 10 years.
Home warranties for existing homes are typically one-year service agreements
purchased by sellers. In the event of a covered defect or breakdown, the warranty
firm will step in and make the repair or cover its cost.
Insurance policies and warranties have limitations and individual programs have
different levels of coverage, deductibles and costs. For details, speak with
REALTORS®, insurance brokers and home builders.
Where to look.
REALTORS® often provide home insurance and such policies are also available
from insurance brokers
How do you get insurance?
The time to obtain insurance and warranty coverage is at closing, so speak with a
REALTOR® or insurance broker prior to closing. Be sure to ask about limitations,
costs, deductibles and "endorsements" (additional forms of coverage that may be
available).
Closing
Go to any local courthouse and you can find property records detailing real estate
ownership in your community -- sometimes records that date back hundreds of years.
These records are important because they provide today's owners with proof that
they have good, marketable and insurable title to the property they are selling.
Equally important, such records enable buyers to provide proof of ownership when
they sell.
The closing process, which in different parts of the country is also known as
"settlement" or "escrow," is increasingly computerized and automated. In many cases,
buyers and sellers don't need to attend a specific event; signed paperwork can be
sent to the closing agent via overnight delivery.
In practice, closings bring together a variety of parties who are part of the
"transaction" process. For example, while the history of property ownership has been
checked, it's possible that the records contain errors, unrecorded claims or flaws in
the review itself, thus title insurance is necessary. At closing, transfer taxes must be
paid and other claims must also be settled (including closing costs, legal fees and
adjustments). In most transactions, the closing agent also completes the paperwork
needed to record the loan.
What to expect.
Settlement is a brief process where all of the necessary paperwork needed to
complete the transaction is signed. Closing is typically held in an office setting,
sometimes with both buyer and seller at the same table, sometimes with each party
completing their papers separately.
Whatever the case, the result is that title to the property is transferred from seller to
buyer. The buyer receives the keys and the seller receives payment for the home.
From the amount credited to the seller, the closing agent subtracts money to pay off
the existing mortgage and other transaction costs. Deeds, loan papers, and other
documents are prepared, signed and filed with local property record offices.
What you need to do.
One of the best parts of settlement is that buyers and sellers need to do very little.
Before closing, buyers typically have a final opportunity to walk through the property
to assure that its condition has not materially changed since the sale agreement was
signed. At closing itself, all papers have been prepared by closing agents, title
companies, lenders and lawyers. This paperwork reflects the sale agreement and
allows all parties to the transaction to verify their interests. For instance, buyers get
the title to the property, lenders have their loans recorded in the public records and
state governments collect their transfer taxes.
What's Next?
You've done it. You've looked at properties, made an offer, obtained financing and
gone to closing. The home is yours. Is there any more to the homebuying process?
Whether you're a first-time buyer or a repeat buyer, there are several more steps
you'll want to take.
Those papers you received at settlement are extremely valuable, so hold on to them!
In the short-term they can help establish tax deductions for the year in which the
property was purchased. In the future, such papers will be important for tax purposes
when the property is sold, and in some cases, for calculating estate taxes.
Also at closing, determine the status of the utilities required by the home, items such
as water, sewage, gas, electric and oil service. You want utility bills to be paid in full
by
provide contact numbers and related information.
About two weeks after closing, contact your local property records office and confirm
that your deed has been officially recorded. Such records are public notices that
show your interest in the property.
Moving in
It is generally understood that sellers will leave homes "broom clean" when moving
out. This expression does not mean "vacuumed" or "spotless." Broom clean makes
sense because it means the house is ready to be painted and cleaned.
Your home, your money
For most owners a home is the largest single asset they hold, so it makes sense to
protect that asset.
Many owners make a photo or video record of the home and their possessions for
insurance purposes and then keep the records in a safety deposit box. Your
insurance provider can recommend what to photograph and how to secure it.
You want to maintain fire, theft and liability insurance. As the value of your property
increases such coverage should also rise. Again, speak with your insurance
professional for details.
Lastly, enjoy your home. Owning real estate involves contracts, loans, and taxes, but
ultimately what's most important is that homeownership should be a wonderful
experience. Enjoy!
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