Step 1: BE PREPARED FOR BUYING
Whether you are a first-time homebuyer, moving up to a larger home or downsizing, you need to clarify your objectives. Are you planning to move to a new community due to relocation or a lifestyle change? What do you like and dislike about your current residence? What would you like in a home that you do not have now? What type of neighborhood do you prefer? Do you have a purchasing timeframe? Discussing your goals in detail with The Joyce Fox Team will help us find the best property for you.
Homes and financing are also closely intertwined. Newer, innovative loan programs have evolved that require little or nothing down. On the other hand, more money down means lower monthly mortgage payments, so many homebuyers choose a larger down payment. It may even be possible to negotiate an offer for a home that requires the seller to pay some or all of your closing costs. With 15 years experience in the mortgage lending business, Joyce Fox can be invaluable in arranging financing for your home purchase.
Step 2: SELECT A QUALITY REALTOR®
More than two million people in the United States have earned a real estate license. But only a select few sell the vast majority of real estate. Why? Buying and selling real estate is a complex matter. The top REALTORS® have invested the time, money and knowledge to become experts. A basic rule in real estate is that every property is unique. Homes vary in size, style, location, design, curb appeal, resale potential, quality and many other factors. Selecting a trusted REALTORS® may be the most important decision you make in buying a home.
Interview several REALTORS® before selecting one to help you through the buying process. The interviews represent a good opportunity to consider such issues as training, experience, and professional certifications, such as ABR (Accredited Buyers Representative), CRS (Certified Residential Specialist), and GRI (Graduate, REALTORS® Institute). Your REALTORS® should be your partner to guide you through the buying process. Agents with The Joyce Fox Team will be more than happy to review their qualifications and record of success with you.
Step 3: ARRANGE FOR A LOAN PRE-APPROVAL
The real issue with real estate financing is not getting a loan--virtually anyone willing to pay lofty interest rates can find a mortgage. Instead, the idea is to get the loan that's right for you--the mortgage with the lowest cost and best terms.
We recommend that you start the mortgage "pre-approval" process well before making an offer on a home. By meeting with several lenders and looking at loan options, you will find the program that best meets your needs and fits your budget. Contracts often require buyers to apply for financing within a short time period, usually 3-5 days. By meeting with a loan officer in advance, you can avoid a hasty search for a lender and rushing into a financing decision that may not be your best option.
Pre-approval is also an advantage when negotiating the price on a home, because it shows the seller you are serious about buying and have the financial ability to do so. "Pre-approval" means you have met with a loan officer, your credit has been reviewed and the loan officer believes you can qualify for a given loan amount. Based on this information, the lender will provide a pre-approval letter, which shows your borrowing power. Although not a final loan commitment, the pre-approval letter can be shown to listing brokers when making an offer on a home.
Based on her 15 years of mortgage lending experience, Joyce Fox may suggest one or more lenders with a history of offering competitive programs and delivering promised rates and terms.
Step 4: START LOOKING AT HOMES
Some six million new and existing homes are sold each year. The housing market is complicated because the stock of homes for sale is always in flux. Even if you had a complete list of every home for sale, it would become obsolete within seconds as new homes become available and properties now for sale are put under contract. In effect, buyers are looking at a moving target in a marketplace that is never static.
We can help you simplify the process with our unique Personal Buyer Profile. We will help you complete a description of your ideal home and neighborhood. As you define each important feature, we can begin to zero in on those homes that best fit your profile. You can also check this website, JoyceFoxSells.com, for a complete listing of homes for sale in the Charlotte region. We will provide you with a print out of listings so you can keep notes on each one--what features you liked, areas of concern and questions to be answered.
By carefully listening to your description of your ideal home, we can make the home-buying process easy and hassle free by doing the searching for you.
Step 5: CHOOSE A HOME
How do you know if a house is THE one? The best approach is to look at as many homes as possible, something made easy when we do the research for you. We can quickly and easily sift through large numbers of homes to identify a target list of likely candidates, with prices and neighborhoods appropriate to your needs. Once your choices have been narrowed, we'll view the homes you have chosen.
If you've already been pre-approved for a loan, then you'll have a good idea of what you can afford. When you've found the right home for you, we'll then begin the process of negotiation. The seller-established asking price and other terms are essentially the initial offer. The buyer then has 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.
You can trust The Joyce Fox Team to provide unbiased and valuable advice in selecting the right home, in the right neighborhood, at the right price.
Step 6: CONFIRM YOUR FINANCING
There are hundreds of loan programs available from a variety of lenders, but in general, the mortgage program you choose will likely be determined by several key factors:
- How much will your down payment be?
- How much payment can you afford?
- Has your past credit history been clear?
- Do you prefer a fixed or floating rate loan?
- Do you prefer to deal with a local lender or a mortgage broker?
- Do you require any special financing arrangements?
Since you have already received a pre-approval for a loan, all you need to do now is update your written loan application and provide supporting documentation. Specific documents may include recent pay stubs, tax returns for the past two or three years if you are self-employed, appraisals, inspections and an updated credit report. During the pre-qualification procedure, the loan officer will have previously described the type of paperwork required.
We will assist you as needed during the process and provide guidance in selecting the best financing program for you.
Step 7: MAKE A PURCHASE OFFER
The Charlotte Regional REALTORS® Association, The North Carolina REALTORS® Association, and the National Association of REALTORS®, working together with legal counsel, have developed forms that are appropriate for realty transactions. These documents include numerous sale conditions and should be carefully reviewed to assure that they reflect the terms you want to offer. We can explain the overall contract process as well as our 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.
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 often more. If demand is weak, then offers below the asking price may be in order.
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. During these examinations, an inspector determines 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.
Step 8: ARRANGE FOR 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.
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 may protect owners in the event that title to the property is found to be invalid. Coverage can include "lenders" policies, which protect the lender, and/or "owners" coverage, which protects owners up to the purchase price. "Owners" coverage may be optional but it is a wise investment.
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. The federal government determines which locations require such coverage.
Home warranties: With any home, buyers want assurances that if something is defective, the seller or designated party will be there to make repairs. Home warranties bought from third parties by home builders are generally designed to provide several forms of protection such as 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. The time to obtain insurance and warranty coverage is well before closing, so speak to The Joyce Fox Team or your insurance agent prior to closing. Be sure to ask about limitations, costs, deductibles and "endorsements" (additional forms of coverage that may be available).
We will review our Pre-Closing Checklist with you prior to the closing to ensure that required insurance and warranty coverage are in place.
Step 9: CLOSE THE TRANSACTION
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 known as "settlement" or "escrow," is when all the preceding work comes together. 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.
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 portion. 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.
One of the best parts of settlement is that the buyers and sellers need to do very little. Before closing, you typically have a final opportunity to walk through the property to assure that its condition has not materially changed since the sales agreement was signed. At closing itself, all papers have been prepared by closing agents, title companies, lenders and lawyers. This paperwork reflects the sales agreement and allows all parties to the transaction to verify their interests.
Buying a home is the largest investment many of us will ever make and The Joyce Fox Team will be there from the beginning to closing to help you.
Step 10: FOLLOW UP
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 home-buying process?
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 owners as of closing and you also want services transferred to your name for billing. Usually such transfers can be done without turning off utilities. The Joyce Fox Team can arrange for the utility changeover.
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.
