Home Buying Information

Congratulations! You have decided to purchase a home, or are thinking about buying one.  You'll be joining the ranks of those who realize that home ownership offers a number of benefits including building equity, saving for the future, and creating an environment for your family.  When you own your own home, your hard-earned dollars contribute to your mortgage. The equity you earn is yours.

Writing the Offer to Buy a House
House Inspections
Insurance Closing Costs
First Time Buyers
Buyer's Toolkit

Writing the Offer to Buy a House

Buyers make offers to sellers in writing on standard contracts that are developed by local Realtors and their Contract and Clause Committees and reviewed by the Realtors’ attorneys. In our area, the Realtor’s contract is relatively balanced and does not overly lean to the benefit of either buyers or sellers.  Most of the contract is made up of required disclosures and standard contract legalese. The legalese is not insignificant and buyers should read and understand it.

Buyers fill in the blanks on the contracts with the details of their offers. In the blank spaces include, among other things:

• The price being offered,
• The amount of the earnest money deposit,
• The dates buyers wish to close on the sale,
• The amount of the down payment,
• The amount of the mortgages buyer intends to obtain,
• The types and terms of these mortgages and the date they are expected to be committed,
• Structural and environmental inspections.

The above items are the basic items. Buyers can add anything to their offers that fits their needs. Unless offers are exactly what sellers ask for, anything offered is negotiable.

As soon as possible offers are taken to sellers who can accept, reject, or counter them. Most offers are countered on one or more issues. An issue can be as minor as changing the settlement date by a day or two. Or, it can be major such as significantly changing buyers’ offering prices to a higher figure. Then offers come back to the buyers who must decide whether to accept, reject, or counter the counter offers.

The standard Realtor association contract is written so that buyers do not loose their good faith deposits if they are turned down for loans, or if inspections turn out to be unsatisfactory.

Once buyers and sellers agree to everything, the offers become binding contracts - and there is no turning back. There is no 3-day grace period as with some consumer purchases. The only “out” is if the contingencies, such as loan and inspection contingencies, are not satisfied.

At this point, buyers are on their way to buying a new home!

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House Inspections

Wise buyers have houses inspected as a condition of completing the purchases.  There are several common types of inspections:

The general inspection is the most common. Occasionally it is desired to have certain features re-inspected, such as roof, furnace and air conditioning, by people who work specifically in those areas.

Termite and other wood-boring insect inspections are common in the parts of the country where termites and wood-boring insects flourish.

Environmental hazards inspections are recommended where appropriate. These may be inspections for radon, lead paint, asbestos, mold, and other conditions that are currently recognized as problems in human habitation.

Buyers want to know what is broken and then ask sellers to repair/replace whatever does not work.

Big ticket ($) items in houses can be repairs/replacements to:

• Structure, foundation,
• Roof and gutters,
• Windows and siding,
• Fixtures, such as Heating and air conditioning systems,
• Kitchen appliances and water heater

Some fixtures can be old but still work. Sellers hope buyers will accept these. Buyers may or may not agree and negotiations begin on what to repair and what not to repair. It is wise in negotiating to focus on the more costly issues and ignore the little problems. A crack in the pane in the attic window is far less important than the need for a new element in the water heater.

It is recommended that buyers accompany their inspectors through the entire inspection. They learn a lot about the house, have a better understanding of how to maintain it, and are advised on serious issues that need attention.

There are many qualified home inspectors, and some not so qualified. The home inspector you select should:
1. Be a full time professional
Not a handyman, your uncle, or someone doing it on the side. It should be omeone who has performed many inspections.
2. Have a current license if your state requires one.
Ask to see it.  Most states require some level of insurance.
3. Be a member of a reputable Professional association such as:
The National Association of Home Inspectors
The American Society of Home Inspectors
4. Have real construction or home repair experience.
Not just internet home inspectors school.
5. Take the time to do a good job.
Quality home inspections take time; 2-3 1/2 hours or more. Less than that may not be sufficient.
6. Provide a comprehensive written report.
Written reports document problems and issues, and provide a good summary for the home buyer.

Qualifications list above courtesy of Scott Madison - www.MadisonHomeInspection.com
See his full article - How to Find and Select a Home Inspector

Check out the preferred home inspector list.

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Insurance Closing Costs

Homeowners Insurance
This insurance covers replacement costs for damages caused by fire, wind or other disaster that might affect the value of the property. Typically, the insurance also includes personal liability and theft coverage.

Flood or Quake Insurance
Additional hazard insurance coverage that is required for homes located in a designated hazard zone as established by the Federal Emergency Management Agency (FEMA). As we tour houses, I will let you know if the property resides in a hazard zone {realtor name}

Private Mortgage Insurance (PMI)
Insurance required for conventional mortgage loans when the borrower's down payment on the house is less than 20 percent of the loan value.

Title Insurance
This policy protects both the buyer and lender by insuring a clear chain of title. (In other words, it insures that that the person who sells the house has the legal right to do so.)

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First-Time Homebuyers

Good for you! Home ownership is part of The American Dream.
• You can be more challenging to work with because you take more time, but we get special satisfaction from passing on the keys to your first home. 
• You are welcome to ask as many questions that come to mind because we know you need the answers.  We are patient.
• We respect that you want input from family members and friends.  We will talk to them, too, to let them know the reasons for our advice to you.
• You receive the same attention as our million dollar buyers.  You are all clients.

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