6 steps to buying your dream home
Step 1 – an overview
Our first visit is very important for several reasons.
1. I show you the many differences in the areas of Las Vegas…whether it is Summerlin in the northwest, Green Valley in the southwest, Alliante in North Las Vegas, or by Nellis Air Force Base in the Northeast, or somewhere in between. There are many differences in the areas that comprise Las Vegas and it helps to get a familiarity with them, their "look", their personality and where they are located in relation to your job.
2. I go over the role of a Buyer’s Agent, and the representation it entails.
3. If the research isn’t done beforehand of homes we’ll be viewing, then this is the time to do it together at my computer. Clients can see for themselves whether or not their wants and needs actually are available. If not, we can tweak it to come close!
4. After we’ve refined the search, the appointments get made! This is very easy to do. 90% of the homes have lockboxes, and most sellers are more than accommodating. We will also be looking at new homes since builders cooperate with REALTORS® (we sell 70% of their product). It’s important, though, that the REALTOR® be with the client at the initial visit.
5. I also go over what it takes to present an offer, such as having a pre-qualification letter to accompany it, what our contract consists of, and the other "steps to your Dream House". Even if a buyer is a seasoned one, having sold multiple properties in the past, if he/she is coming from another area, terminology and methods may be different here.
Usually, you will know (and so will I!) what you like and don’t like after just 3 houses. Should that change our research, I have a laptop with me with full Internet access and we can redo the search on the road.
Step 2 - Qualifying for the Mortgage
When we’re ready to make an offer on a property, a pre-qualification letter from the lender is necessary to accompany it. Therefore, it’s important to start this process first, sometimes even before looking at properties. A second benefit is that the buyer will know beforehand exactly what they’re qualified to buy, what issues might need to be addressed, or items might be needed to be ready when applying for the loan, etc. I insist that all buyers be pre-qualified for a loan before making an offer. Because the market is currently so “hot” many sellers today will not even look at an offer unless there is one.
On my website (www.MaryW.com), I have a calculator and some financing tips that would be helpful to peruse before coming. However, once here, I can put the buyer in the hands of a recommended local loan officer with access to many programs, who can counsel and guide a buyer as to the most advantageous and appropriate one for their needs.
The terms of the contract provide for a Conditional Loan Approval from the lender based on a loan application* within 5 days of Seller’s Acceptance. This means loan application would need to be made immediately after the offer is accepted.
The loan officer will give you a Good Faith Estimate of the closing costs involved with the financing. There are recurring costs that you pay that are included in the monthly payment, such as homeowner’s insurance and property taxes (the monthly payment consists of principal, interest, taxes and insurance and is referred to as PITI).
The one-time closing costs are the origination fee, usually one point (or 1% of the loan amount) and any other points, sometimes called discount points (the more points, the lower the interest rate). The appraisal fee, credit report, and other lender fees, such as document preparation, underwriting fee, are further one-time closing costs.
There are a number of tax advantages available for most American homeowners, but to benefit, you have to understand them, and report them properly to IRS. I strongly suggest you talk to your CPA or tax person regarding this.
*Loan approval documents needed upon application:
Two most recent pay stubs, W-2s for last 2 years (or if self-employed, 1040s for 2 years), federal tax returns for the last 2 years, last 2 months’ bank statements, long-term debt information (credit cards, child support, auto loans, installment debt, etc.), proof of funds for your down payment.
Step 3 - Making an Offer
Well, we’ve found just the right house (or close to it ... sometimes compromises have to be made), and are ready to make the offer. It shouldn’t be a scary thought because we will have done our homework.
The first thing we do is to check the comparable home sales in that subdivision to see if this home is priced fairly, and how it relates to others similar to it that have sold. This CMA (comparable market analysis) tells us the price range of sold properties in the area, what the average time on the market for them has been, and what the average sales price per square foot of the recent solds are.
In some cases there will not be enough that have sold. I find out how long the property has been on the market or if there have been any price reductions during the listing period, if there have been any other offers on the property, and what the motivation of the seller is.
One thing that buyers quickly find is that they themselves become mini-appraisers. After a day out, buyers know instinctively if a house is overpriced. Fortunately, since our areas are subdivisions and master planned communities, there are similarities to them. There is no point in overpricing since it won’t appraise! Therefore, there is a smaller margin of pricing over what an actual market price would bring.
When we’re comfortable with what we will be offering, we begin to fill in the blanks of the Nevada Residential Real Estate Purchase Contract. We go over this contract very carefully, so that each paragraph is understood. The first part talks about our offering price and which method of financing you will be getting, it also talks about the earnest money, which is held by the title company until closing and becomes part of the down payment or closing costs. Also included on this page is the closing date desired (closing date in NV is actually the day the property records at the county recorders office…this is usually a day or two after signing, as the paperwork needs to go back to the lender and then reviewed before the lender will release the funds. Once the funds are released to the Title company the property will go for recording).
The property description follows, and an extensive paragraph outlining what stays with the house. The majority of homes in the Valley are sold without the refrigerator, washer or dryer, but any other appliance that is attached stays, such as the stove, dishwasher and if built-in, the microwave. Window coverings, fountains, pool equipment, lighting, screens, etc. are also examples of what stays.
The title company chosen is stated, and what their role is, and lists the title insurance policy commitment, including the Conditions, Covenants and Restrictions (CC&Rs), and that they will make the pro-rations and what the title company provides.
Next addresses the disclosures. You will be pleased to know that Arizona has many provisions for disclosures! An important one is from the Seller, known as SPDS, Sellers Disclosure Statement, a 3-page disclosure provided to the buyer within 5 calendar days for approval. If the home was built before 1978, a lead-based paint disclosure is necessary. If the home has a pool, a pool-safety disclosure is necessary.
There are provisions for a Home Inspection, Home Warranty and any other inspections the buyer may elect. The Home Inspection company I recommend is a part of ASHI and certified, and very thorough!
If the home is on well, or septic, there are certain seller obligations. However, the highest percentage of homes is city sewer and city water.
The day before closing, there is a final walk-though to make sure all is as it was when inspected, or if any repairs that were requested have been completed.
There are warranties that survive the closing. Any information that was withheld which materially and adversely affect the sale will survive the closing. Remedies for Breach are addressed, whether by buyer or seller, what recourse, there is such as mediation, arbitration or if judicial action is warranted.
This is a synopsis of the terms of the contract. The legalese contained brings this contract to 8 pages! Fortunately, it is easily understood.
Okay, now what? As buyer’s agent, I present the contract to the seller’s agent, who in turn presents it to the seller. If feasible I will be negotiating with the seller and their agent at their residence. However, if the seller is out-of-area, negotiation is done from me to the seller’s agent, or in a conference call. May I say, that as a top producer, I have a successful career based on negotiating skills? I will definitely be working on the your behalf! You can count on it.
There may be multiple offers, there may be counter offers. Time is of the essence as the contract states. A fair offer usually generates a fair response. Having been in the business for 14+ years, and being a top producer, you can be assured there will be no stone left unturned to get you the best possible outcome.
Now, we have an accepted offer. What’s next? We have 10 days in which to do a Home Inspection. We both attend because you will learn much about the mechanisms of the home. Should you be out-of-area, I will attend. You will have a spiral-bound book listing every detail of the home, including the roof. Any repairs will be requested in writing immediately, and the seller has 5 days in which to respond. Any other inspections you would want would need to be done within this 10-day period also. If there is a Homeowners Association involved it is the seller and their agents responsibility to get us the HOA package (ccr’s, rules and regs, bylaws, etc) per NRS 116 within this 10-day timeframe. You then have ten days to review the package.
Step 4 - What Happens Before Closing?
This is the time to be in touch with the lender to provide whatever is necessary for the final loan documents, for the seller to take care of any requested repairs, and for the lender to go through the underwriting process.
As a buyer, you will want to arrange for the utilities to be turned on when the seller’s is turned off. Don’t forget to have the phone company ready to turn on your new service as well. Make sure all magazines, bills, and family and friends, have your new address! Anything related to school registration should also be done well in advance. Moving preparations should be made as soon as you know the offer is approved. I have information on my website (www.MaryW.com) regarding many of these items, most of which can be done online if you wish.
STEP 5 - At the Closing!
The closing is almost always done at the title company (an exception could be an out-of-state in which case documents are Fed-exed and need to be notarized). Buyer and seller close at the title company separately, and the keys are not given to the buyer until the recordation, which may be the next day. The recordation, which is the recording of the deed, is considered the actual "closing."
We will be given an audit sheet showing the closing costs beforehand, so there are no surprises, and you will know exactly how much funds for close should be brought to closing (this needs to be in the form of a cahiers check or money order).
Your loan officer will have gone over the final closing costs involved with the closing as well just prior to closing.
Other closing costs will consist of the title company’s processing fee (escrow settlement fee), recording of the deed, pre-paid interest*, homeowner’s insurance, homeowner’s insurance impounds, property tax impounds, and a recording fee.
Homeowner’s insurance premium is paid at closing. Since the mortgage company will be paying the continuing payments, it will divide the annual premium by twelve to get an estimated monthly amount and hold 2 months in your impound account.
The same is true of the property tax. Property taxes are prorated at closing. Taxes are divided by twelve and 2 months is held in your impound account.
*Pre-paid interest - Since mortgage loans are due on the first day of the month, and properties can close any day of the month, the interest will be prorated and paid at this time.
stEP 6 - Oh Happy Day! (The Moving Experience)
Everything will be done to make this a smooth transition for you. As your agent, I keep in touch with all the parties to make sure there are no last minute glitches.
Again, I urge you to check my Relocation page for helpful tips. (Tell me if there’s something that should be on it that isn’t!). If you need help with unloading once you’re here, or for referrals of decorators, landscapers, etc., this is the time to tell me.
I’ll be stopping by with a housewarming gift, to check to see how you’re doing, and if you need anything. I am here to help, so call on me!
One thing I suggest is that ALL the papers involved with your move be kept in one place. All receipts, important papers, and the settlement papers, etc. may be needed for your income tax preparation, or for reference.
If you have school children, you can feel comfortable knowing that Nevada is a place where everyone is from someplace else! Teachers are trained to welcome new children, and you’ll find children here friendlier because of their own transitions.
What I want to emphasize here is that "closing" is not the end of our relationship. I’m here at this point to be your friend, and ask that you consider me one. ENJOY YOUR NEW HOME - I would appreciate your telling your friends and family about me and my website. I’d love to help them, too!
Thank you so much for choosing me as your REALTOR®!