Adventures in 1st Time Home Buying :: SoundBiteBlog.com

This is the tenth and final installment in an on-going series of posts dedicated to helping 1st Time Home Buyers successfully achieve their home purchasing goals.

We have been identifying and discussing, in chronological order, key events in the home buying process. In our last discussion, we indentified several last minute obstacles/difficulties that Buyers may experience in a post entitled, “Potential Pitfalls in the 11th hour.”

This time, we’ll talk about what Buyers can expect in the final days leading up to their closing and what to aniticpate beyond, in an article called, “Are We There Yet?”

Remember back when you were just a kid, and your family took that unbearably long cross-country vacation, all smashed together in an old beat-up the station wagon? And getting to your destination seemed to take FOREVER?

Well, that’s kind of the way it is in the final days leading up to your closing! Well, just be patient, you’re almost there!

Once your loan documents arrive at the escrow company, it’s normally just a matter of the Escrow Officer ensuring that all necessary documentation is prepared and ready for signing. Based on all of their input, they will draft a HUD-1 Statement. This is a projected detailed estimate of both parties (Buyers and Sellers) closing costs. You will receive a copy of this estimate prior to your signing, and so will your Agent. Now is the time to review these numbers carefully, with both your Agent and your Loan Officer, to verify that all the numbers are correct and correspond to what you had anticipated.

The Escrow Officer will contact you to schedule a time for you to come into their office to sign all the closing documents. For most standard residential transactions, you can plan on the signing to take at least an hour, depending on how in-depth you wish to read and review all the documents. The Escrow Officer will instruct you on what you will need to bring to the signing (typically your Driver’s License and any funds necessary to close the transaction),

In some instances, you may have negotiated with the Sellers for them to contribute to your closing costs. In addition, any Earnest Money that you deposited into escrow when you first went under contract will either be applied to your closing costs, or credited back to you at closing. Reviewing your HUD-1 statement will help you to aniticpate whether or not you will need to bring money to your signing. The escrow company usually requires the funds to be in the form of a certified cashier’s check.

One thing many people forget in the final stage of the home buying process is to contact all of the local utility companies and have them switch the billing over to your name. Your agent should be able to provide you with a list of utility companies that serve the property, along with their contact numbers. There are few things more frustrating than moving into your new home and discovering you have no power, water, or gas!

And, depending on the type of property, it might be beneficial for you and your agent to conduct a final walk-thru, prior to closing, just to ensure that everything is as specified per contract.

Now realize that closings can vary significantly from State to State. When we bought our house in Chicago, everyone was there for the signing – our agent, our attorney, the Sellers, their agent, and their attorney. We all sat around the table and passed the documents around for signatures. At the end of the signing, we got the keys to our new home!

Here in Washington State, Buyers typically come in to sign a day or two before the actual closing takes place. The Sellers come in separately, many times on different day altogether. This tends to make the process less intimidating and more comfortable for both parties.

Once you have signed all your documents, they are normally sent overnight to the Lender for final review. In most instances, the following day your loan is funded. Later that same day, the escrow company sends documents by courier to the County courthouse where the new deed is legally recorded. The recording numbers are furnished to the escrow company, and the transaction is officially closed, and the house is YOURS!

Your Real Estate Agent will have made prior arrangements with the Seller’s Agent to obtain the keys. Once escrow has informed them that your loan has been funded and they have recording numbers, the transaction has closed and you can take possession.

Before you begin moving your household goods inside, take time to tour the entire home and premises:

• Verify that you have adequate power, water, and gas servicing the property.
• Are there instruction manuals for all the appliances and primary systems (furnace, water heater)?
• Did the Sellers remember to leave the garage door openers?
• Does your neighborhood have locked mailboxes, and did the Sellers provide you a key?
• Is there a trash can, or will you need to purchase one? Check with your Disposal company to determine acceptable containers.
• As a safety precaution, have all the locks changed as soon as possible.

A good real estate professional never disappears after you’ve closed. There is always something that inevitably comes up after the fact. So don’t hesitate to contact your agent if there are any issues or concerns. Your complete satisfaction and future referral/recommendations are very important!

Enjoy this day! It is truly a momentous occasion! You’ve now joined the ranks of being a ’Homeowner!’ Take some time at the end of your busy day to journal your thoughts and impressions. This is an event you will want to capture for many years to come!

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Tags: 1st time buyers, buying a home, home buying, Real Estate Bites

This is the ninth installment in an on-going series of posts dedicated to helping 1st Time Home Buyers successfully achieve their home purchasing goals.

We have been identifying and discussing, in chronological order, key events in the home buying process. In our last time together, we talked about the importance and value of conducting a home inspection in a post entitled, “Home Inspection or Home Alone?”

Today’s topic is: “Potential Pitfalls in the 11th Hour”

Okay, so we’ve conducted our home inspection and have successfully negotiated with the Sellers for those items which need to be corrected/repaired prior to closing. We now enter into the “Pending” phase of the home buying process. Typically, there isn’t too much more drama left, but it is helpful to understand that there are still some additional steps in the transaction that may lead to unforeseen challenges or delays.

The Lender’s Appraisal

Immediately following the inspection, your mortgage specialist will order up the appraisal. The underwriter for your loan will need to know if the house you are purchasing is worth the value/price you have agreed to pay.

There are several possibilities that may occur as the result of an appraisal:

1. The property appraises at the full value of your agreed purchase price and with no conditions for funding. This is the most preferred result, and typically ensures a timely closing.

2. The property appraises at the full value, but there are some conditions for funding that need to be remedied prior to closing. Even though you may have conducted a thorough home inspection and negotiated the corrections with the Sellers, the Lender may still require for other issues to be resolved before they can provide funding. This is especially prevalent in VA or FHA transactions. Both VA and FHA loans typically employ more stringent standards, focusing primarily on safety and structural concerns, when conducting their appraisals. Shortly after the appraisal has been done, your Mortgage specialist will receive notification of value and the called-out conditions for funding. These additional conditions or issues will need to be negotiated with the Sellers for correction and hopefully can be resolved in a timely manner.

3. The property appraisal comes in under value. In this instance, the appraiser has determined through their analysis that the current market value of the property is below the agreed purchase price. In most cases, the financing contingency of your contract provides language which protects you as the Buyers, and offers you some options to address this discrepancy:

A. Depending on the variance amount, you may be able to ask the Seller to lower the sales price to match the appraised value.

B. As the Buyer, if you have the resources, you can bring in cash to make up the difference.

C. In some instances, depending on the type of loan, you can request that the Sellers pay for a reappraisal by another company that is acceptable to the Buyer’s lender.

D. If any of these options are not feasible, most financing contingencies allow the Buyers to back out of the contract and retain their earnest money deposit.

Homeowner’s Insurance

Since I haven’t covered this point yet, now is as good a time as any. Typically, once you’re under contract, as a Buyer, you will want to make contact with your insurance agent to determine if the property can be reasonably insured. There may be instances where the current owners have submitted significant claims against the property, thereby making homeowner’s insurance very costly or difficult to obtain. Once again, your contract should contain language that protects you in this event, and allows you to terminate the contract, if necessary.

Seller’s Remorse

This rarely occurs, but it needs to be mentioned. Every once in a great while, a Seller may have second thoughts about letting go of their precious home and treasured memories. If you’ve ever seen the Steve Martin movie “Father of the Bride” you’ll understand exactly what I’m talking about.

As a professional agent, I always counsel my Buyers not to worry or be overly anxious about these kinds of issues and the potential for challenges to occur. If and when they happen, we’ll deal with them head-on, and work with the Sellers to achieve a mutual resolution agreeable to both parties.

Hopefully, with a capable, professional agent working hard to represent Your Best Interests, the 1st Time Home Buying process will be a smooth and enjoyable adventure!

For the final installment, go to Are We There Yet?

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Tags: bremerton real estate, first time homebuyers, ftb, kitsap real estate blog, port orchard real estate, poulsbo real estate, real estate blog, seattle real estate blog, silverdale real estate

This is the eighth installment in an on-going series of posts dedicated to helping 1st Time Home Buyers successfully achieve their home purchasing goals.

We have been identifying and discussing, in chronological order, key events in the home buying process. In our last time together, we talked about the key ingredients to making a well-drafted offer in a post entitled, “Make Them an Offer They Can’t Refuse!”

Today’s topic is: “Home Inspection” or “Home Alone?”

  So, by this point, your offer has been accepted and you’re under contract with the Sellers. The next major step in the home buying process is the Home Inspection. We had touched briefly on this subject previously in the series (“Do I need $$$ to Buy a House?”), but now, we will deal with it at length.

Here are some commonly asked questions & answers regarding Home Inspections:

• Why do we need a home inspection? Regardless of how new or well maintained a house might be, you owe it to yourself to have a qualified professional inspect the home thoroughly. The old adage definitely applies here: “An ounce of prevention is worth a pound of cure.” Meaning that it is better to pay for a complete inspection up front, than to discover some more costly problem after the house is yours!
• My Uncle is a handyman/contractor. He says he can do our inspection for free! You may have a relative or friend that is handy, or has construction experience, but you really need to use the services of an experienced, certified professional. Ask your Agent to recommend several inspectors. Interview each one. Shawn Martin, of Martin Home Inspection Services in Vancouver, WA suggests you ask the following questions: What is their experience and qualifications. Are they licensed or certified? Do they belong to an association? Do they have insurance? What specifically does their inspection cover? What kind of documentation or final report will they provide upon completion of the inspection? What happens if something major is discovered AFTER closing that that inspection missed?
• How much does a Home Inspection cost and how long will it take? Most inspections typically run about $300 to $500, depending on the size of the home and the extent of the inspection. In some states, this cost includes a full pest inspection as well. You can figure approximately 2 to 3 hours for the inspection, again varying on the size of the house.
• What is normally involved in a Home Inspection? Most Home Inspections involve a complete evaluation and assessment of all structural, mechanical, electrical, and plumbing systems and their primary components. Your inspector will want to make sure that the home is safe, structurally sound, and that all primary systems are operating properly.
• Should we be present during the Inspection? I always advise my Buyers to attend the Home Inspection. You can learn a lot about a house during this time. A good inspector will take additional time with the Buyers to point out the features and functions of various systems in the home. Moreover, if any problem items are identified, you can see them first hand.
• What happens if the Inspector finds something major wrong with the house? Once again, Shawn Martin also advises, “Don’t get too excited and worked up. 1^st Time Buyers have a tendency to over react when a negative inspection issue is identified. Almost every house is going to have something come up on the inspection report.” However, if there is a huge defect that is uncovered, you will usually have the opportunity to request the Sellers to remedy or repair the problem. It is a negotiation process. The Sellers may agree to your request, or simply offer a credit at closing. In most instances, if the Seller’s response is not to your liking, you can elect to back out of the contract and retain your earnest money. Consult your Real Estate Agent for specific rules and regulations that are applicable to your particular region.
• Are there other inspections we might need to have done? As I have mentioned before, in some States, a full pest inspection is included in with the cost of the Home Inspection. If not, one should be conducted by a licensed pest inspector. Additional inspections may be required, depending on the property, such as septic or well. Sometimes these additional inspections are required by contract to be paid for by the Sellers or can be negotiated, as such, into the contract. In addition, your Home Inspector may determine that further inspections be performed by more advanced and trained specialists – i.e. roofing contractors, heating & cooling technicians, etc..

Once the inspection is completed and all relevant issues are resolved to the satisfaction of both parties, the transaction moves forward into a “Pending” status, and you’re the next step closer to successfully achieving your 1^st Time Home Buying Adventure!

For the next installment, go to Potential Pitfalls in the 11th Hour

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Tags: bremerton real estate, first time homebuyers, ftb, home inspection, kitsap real estate blog, port orchard real estate, poulsbo real estate, real estate blog, seattle real estate blog, silverdale real estate

This is the seventh installment in an on-going series of posts dedicated to helping 1st Time Home Buyers successfully achieve their home purchasing goals. We have been identifying and discussing, in chronological order, key events in the home buying process.

In our last discussion, we offered some practical advice on what to do when going out to look at potential homes in a post entitled, Tips for Home Tourists.

This time we’ll talk about the key ingredients to a well-drafted offer in a article entitled, “Make Them an Offer They Can’t Refuse!”

Okay, so you’ve found just the right home that is perfect for your needs. Now, you’re heading back to your Agent’s office to write up an offer. Drafting a good, reasonable offer is crucial to achieving your home-buying success. Since there are so many variables, rely heavily upon your Agent’s knowledge and expertise to best counsel you during this stage of the process.

Here are a few basic points when putting together your offer

Current market conditions. In most areas, the market has recently slowed significantly. For several years, it has been a Seller’s market. Properties have been selling relatively quick and usually for full price. In many instances, there were multiple bids. In a slowing market, there are more homes available, prices start to drop slightly, and Sellers become more motivated and willing to negotiate. Your Agent will know the dynamics of your particular market intimately, and will be able to explain the best strategies.

Days on market. How long has the house been on the market? Was it just recently listed? Again, your Agent will know the average “Days-On-Market” (the average amount of days a home is on the market until it goes under contract) for a specific area. Obviously, if a house has been on the market for an excessive amount of time, the Sellers might be more willing to negotiate.

Fair market value. Is the house worth what they are asking? Is the house priced according to current market value? Your Agent can do a quick analysis of recent sales in the immediate area to determine if the asking price is reasonable and warranted.

Low price offers. The first thing you need to ask yourself is, “Why do we want to offer less?” Is it because you don’t think the house is worth what the Sellers are asking? (refer to your Agent’s price analysis). Perhaps you simply want to save money. The key to writing a lower offer is to do so without greatly insulting the Seller. Remember, in most instances, this has been their home and they may have some very strong attachments to it. At the very least, your offer should be enough to attract their attention, encourage reasonable consideration, and evoke a counter. Before submitting your offer, find out if there are any additional considerations that are important to the Sellers – when would they prefer to close? Where should you direct title and escrow? Try to accommodate the Sellers preferences in other areas.

Multiple bid situations. In some instances, you may find yourself competing with other parties for the same house. This is especially true in a fast, Seller’s market. Some Buyer’s do not want to get caught up in a bidding war, and will simply bow out. Others may really like the house and are motivated to jump into the fray. Once again, rely on your Agent’s knowledge and expertise. In some cases, you may want to include an Escalation Clause or Addendum along with your offer. Think bidding on eBay. You determine your ‘ceiling’ high dollar offer, and specify an incremental bid amount. Your incremental bid amount keeps going up until you pass your closest bidder by that amount, or you reach your ceiling. The key in this process is to simply identify the maximum amount you’re willing to pay for the house. If you’re the successful bidder, the Listing Agent is normally required to provide a copy of the competing offer. Added concern may be warranted for the subsequent appraisal coming in at value when sales prices are exceeded.

Strengthening your position. Do everything you can to convey yourself as a strong, viable Buyer. Have a loan pre-approval letter from your lender that is specific to the property address. If you know that this is the house for you, put down as much earnest money as you can. Remember, earnest money is one of those elements that you can control and it communicates the seriousness of your intent to purchase. The more money, the more solid your offer. Your Agent can also draft an effective cover letter to accompany your offer that introduces you to the Sellers. It helps to make things more personal, and puts “flesh” on your offer.

Keeping it clean. Try to make your offer as neat, simple, and straightforward as possible. Avoid using too many contingencies, handwritten changes or modifications to the standard forms.

Accomodating the Sellers. This is especially important in multiple bid situations. Prior to drafting an offer, a good agent will ask the Listing Agent if there are any aspects to the offer that might be in the Seller’s best interests. Some Sellers may want a quick closing, or an extended closing with a rent back. Drafting an offer that takes into account the Sellers needs and wishes will have a better chance of acceptance.

Items conveyed with the property. Your Agent should have an MLS printout of the home that states which items (washer, dryer, refrigerator, etc.) are being conveyed along with the property. Make sure these items are included and specified in your offer.

Legal description. Ensure that a full, complete legal description is included as part of your offer (attached as an “exhibit”) and that it requires both Buyer’s and Seller’s signatures. The address is simply a means of identifying where the Post Office delivers your mail. A title company or county records should be able to provide you with the full legal description.

Equipped with this information, and the expert counsel of a professional real estate agent, you’ll be better positioned to successfully achieve “Your 1st Time Home Buying Adventure!”

For the next installment, go to Home Inspection or Home Alone?

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Tags: Kitsap County WA real estate, making an offer, Poulsbo Real Estate, purchase and sales agreement, real estate contracts, Silverdale WA Real Estate

This is the sixth installment in an on-going series of posts dedicated to helping 1st Time Home Buyers successfully achieve their home purchasing goals. We have been identifying and discussing, in chronological order, key events in the home buying process.

In our last discussion, we talked about the actual ‘out-of-pocket’ expenses associated with buying a home. In this article, we’re heading out to look at homes in a post entitled, “Tips for Home Tourists.”

Your knowledgeable, professional Real Estate Agent has taken your list of expressed needs and wants, and has scoured the Multiple Listing Service, identifying a number of potential properties for you to tour. Here are just a few practical suggestions to keep in mind as you venture out:

• Bring some water and granola/energy bars along with you.
• Realize that the first time out, you may or may not find “the” house, depending on your relocation timeframe. Your Agent is going to show you what is currently available on the market in your particular price range.
•  Have a good map of the area so you can see where the homes are in relation to where you will be working; to schools; shopping; hospitals, etc.
• Your agent will have MLS print-outs for each of the houses. Don’t be distracted by looking at these datasheets while you are actually touring the home. Experience the home fully. Wait until after you are done to read them.
• After each showing, take a few minutes to share your “likes” and “dislikes” about each home with your Agent. Don’t make your Agent pull teeth. The more openly and honestly you share your thoughts, the better equipped your Agent will be in finding you just the right home. Rate the homes on a scale of 1 to 5.
• Unless the house is vacant, remember that people live there, and to treat their home with care and respect. It might be rather difficult to successfully negotiate an offer on a home if your precious little Bobby has knocked over a priceless family heirloom.
• At the end of your tour, ask yourself the question “Did any of the homes your toured satisfy all or most of your needs and wants?” If so, would you feel ready to put in an offer? If not, then why not?”
• And lastly, remember to Have Fun!

 In our next time together, we’ll discuss what is involved in writing up an offer, one of the many key steps in “Adventures in 1st Time Home Buying!”

For the next installment, go to Make Them an Offer They Can’t Refuse!

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Tags: Bremerton WA Real Estate, house hunting tips, Kitsap County WA real estate, seabeck wa real estate, searching for homes, touring homes