Your step by step guide to purchasing a home! (updated to reflect current market conditions)

As a first time home buyer (or a home buyer buying again for the first time in many years), I'm sure you have many questions involving the home buying process. Where do I start? What costs are associated with buying a home, besides the mortgage? Do you have lenders, home inspectors, etc. that you can recommend? Who pays your fee? If you find yourself asking these questions, read on! This will give you a general idea of what to expect, and will most likely answer most of the questions you may have!

The first step in the process is to contact a Realtor in your area (such as myself) if you're in central Ohio (realtor4columbus@yahoo.com)! As a buyer, enlisting the help of a Realtor is of no cost to you. The seller will always pay the Realtor's fees. There are some extenuating circumstances to this, but 99% of the time, the seller pays me! I basically work for free until the closing! At your first or second meeting with your Realtor, you will be presented with an "agency disclosure" form, which just states who is representing who in the transaction. In compliance with federal laws, this form must be presented to you by your Realtor before you discuss financing in any way. By signing this form, you are acknowledging that you understand who you're being represented by, but does not bind you to this Realtor. Another form that will be presented to you is the "exclusive buyer's agency" form. It is important for you to sign this document. Your Realtor will then know that you're a serious buyer, and will work diligently to find you the perfect house.

The second step you take do is meet with a lender to discuss different financing options, and review your credit. Be aware up front that you will need at least a 3% downpayment, if not 5%, 10% or more. A good place to start is by going to the institution that you have your checking and/or savings accounts with. Ask your friends and family who they've used in the past, and have been satisfied with. Your Realtor can offer suggestions too! You are encouraged to shop around to find the best interest rate, and to find the financing program that will work best for you. If you have your credit pulled for the same purpose multiple times in a 30 day period, your credit will only be "dinged" for it once. Some standard documents that your lender will need from you are bank statements, paystubs & tax returns. Your lender will offer you a variety of financing options, (conventional, FHA, VA, 30 yr. fixed, etc.). After you meet with your lender, you will have an idea of how much you qualify for. This will most likely be more than you're comfortable spending, so just because you qualify for "x" amount doesn't mean you have to spend that amount! Make sure you're including taxes and PMI (if applicable) in your monthly payments! If you can get a pre-approval letter (with a credit pull) from your lender at this point, do so. More and more sellers (especially banks) are requiring you to show "proof of funds" along with any offers, so be as prepared for this as you can be!

Once you know how much you're comfortable spending, I will begin e-mailing you listings that meet your criteria: price, # of bedrooms, # of bathrooms, square footage, neighborhood, basement, garage, school district, etc... Once we actually start looking at homes (usually 5-8 properties per trip) you may decide you don't like certain floorplans or characteristics, (bi-level, split level, ranch, two-story, first floor master, traditional, open), so we'll alter your search criteria accordingly! You may want to drive around neighborhoods you're interested in at different times of the day, as well as on different days (weekday vs. weekend) to get a good feel for the neighborhood. When we find a house you're really interested in, I will send you a list of comps (similar homes in that or a similar neighborhood) that have sold in the past 3 months (up to 6 months if necessary). This will give you an idea of what price you should start with when you begin thinking about submitting an offer. A few other things need to be considered before you submit an offer: do you want to ask the seller to pay for a 1 year home warranty? do you want to ask the seller to pay for a gas line warranty, if applicable? do you want to ask the seller to pay any of your closing costs? how much money will you have for an earnest monies deposit (a deposit held by your Realtor's broker that you will get back at the closing table, but shows the seller that you're serious about purchasing the property, and prevents you from just deciding to walk away from the deal, in which case the deposit would be turned over to the seller). Be prepared for several counter-offers (negotiations between buyer & seller) before all the terms are agree upon. This is very typical, and can take up to a week or longer!

Once you're in contract on a home, I will get the contract to your lender so they can begin their process. Your earnest money deposit will be due as soon as we come to an agreement on all the terms of the contract. We will need to schedule your home & termite inspections right away. It's important to have a home inspection, and for you, as the buyer, to be present for it. The home inspector will show you various things about your house that you may not otherwise know, such as the location of the main water shut-off. I can give you referrals of inspectors that past clients have used and liked. The cost of the home inspection will vary, depending on the age & size of the home, but be prepared to spend at least $275 for this, and will be due the day of the inspection. If you use myself or another Realtor who works for Larry Coolige Realtors, we will pay for your home inspection -- ask me for specific details. A termite inspection is usually around $75, but will vary as well. If at all possible, these should be done at the same time, so we're not troubling the sellers more than necessary! After the inspections are complete, another round of negotiations may begin, which is the "request for remedy" period. If you're not satisfied with the findings from the inspection, you can request that the seller remedy some of the items. This is not generally for cosmetic items, but more for structural/code violations/safety issues, etc. The seller may decide that they will remedy all, remedy some, or remedy none and just reduce the purchase price. The seller will have until 48 hours before closing to have the agreed upon items remedied, unless previously agreed upon otherwise. We will do a final walk-through of the house within 48 hours of the set closing date, which is usually 30-45 days from the date that we actually go into contract. After the home inspection is complete, you will need to pay for an appraisal, which is usually around $400. Your lender will set it up for you, but you will need to be prepared to pay for this at the time it's done.

At this point, you will probably need to get additional documents to your lender, such as proof of homeowner's insurance policy (start checking into this with the company you have your auto insurance with; most will give multi-policy discounts), most recent paystubs, bank statements, etc., but other than that, your part is pretty much done until the closing! 4-5 days prior to your scheduled closing date, you should contact the utility companies that service your new place of residence. Don't have them turned on or switched to your name until the day of closing. Some of the companies will need you present, so make sure you clarify this with them when you're scheduling (there is a thorough list of utility companies along the right hand side of this blog). I will get a HUD-1/settlement statement a day or so before the closing date, which I'll review to make sure everything looks correct, and this will also show the exact amount you'll need to bring to the closing table. The money you bring to the closing table will need to be in the form of a cashiers or certified check.

The last step is the actual closing! You'll want to allow at least an hour for this; sometimes they don't take this long, but you don't want to feel rushed. I will accompany you to the closing, and the seller & their Realtor will most likely be there as well. If you have questions about any of the documents you're being asked to sign, please ask! The representative doing the closing is there for that purpose, and would rather know that you're comfortable with the docs that you're signing. In most situations, you will get possession at closing, which means you'll get the keys/garage door openers/etc. at the closing, and as soon as everything is signed, it's yours! Congratulations, you're now a proud new homeowner!

Happy house hunting!


Sellers updating?

Ok, so I've recently had a few different sellers tell me they never understood why people who were getting ready to sell their home fixed it up only to move out, and not get to enjoy the updates. I get that, but on the flip side, it makes sense. When comparing properties with buyers, a home that has been updated and is in near move in condition is worth an extra couple thousand dollars (which equates to just $20 - $30 more a month), and will almost always win out, unless the buyer is looking for a "fixer upper", in which case they would expect to purchase the property for substantially less. Sellers, just a little something to think about! It really does make sense, if you look at it as a buyer.

It's sometimes difficult to persuade buyers and sellers to put on the opposite hat, but when they do/can, it's like an "aha" moment!


Not good news for condo owners


I wonder if the new rules that are set to go into effect in a few short weeks can be changed before 11/2! If not, it's going to be incredibly tough for first time home buyers to purchase a condo using FHA financing, which is the majority of first time home buyers!!


Do you smoke in your home?

If you do, and you're thinking of selling anytime in the next few years, I would strongly encourage you take it outside. I walked into a home with some buyers a few weeks ago, and it smelled like the sellers had just smoked, moments before our scheduled showing. Unfortunately for the sellers, we weren't in the house for more than 30 seconds before we turned around and walked out. I couldn't even tell you what the house looked like, the odor was so distracting. The remnants of smoke odor can be detected for many years; that smell isn't easy to get out, even with new flooring & paint. With the current market situation, do yourself a favor, and at least give buyers a chance to fall in love with your home!


Even MORE good news for first time home buyers!

Details were just announced today that FHA will allow buyers to utilize their $8,000 tax credit at closing, to put down more than the required 3.5%, reduce closing costs or buy down their interest rate. Click below to read the full story! Contact me today to see how you can benefit from this!


Conditions really couldn't get any better for first time home buyers, so happy house hunting!


Local housing market vs. National housing market

Just a little rant about something's that been bothering me for some time now! Why, oh why, does the majority of our local media give the national housing market so much attention, with very little focus on our local housing market? Yes, the national housing market is, and should be, of interest to many, but I think that you'd also like to know what's going on in your area of Columbus, maybe even more so, right? There are many local resources these media outlets could be utilizing to gain insight to our local market, including CBR (the Columbus Board of Realtors), and local industry professionals, such as myself, yet it seems like most of what you hear is the doom & gloom of the national housing market. I've seen first hand that our market isn't all bad here in Columbus and the surrounding areas. Yes, there are some areas that are still reporting decreasing property values, but on the flip side, some areas are showing increasing property values, and homes (taking into consideration price, location & condition) can and are, still selling, sometimes in under 30 days. I think the $8,000 tax credit currently offered may be partially responsible for this, and perhaps made some buyers seek out housing, when they may have previously planned on waiting another year or so before purchasing.

Contact me if you'd like more information on your specific area!


Super Sunday tomorrow from 1-4!

The CBR (Columbus Board of Realtors) is sponsoring an event tomorrow featuring 250 + open houses on properties all listed under $125K in the central Ohio area and the surrounding counties! Look for the "Super Sunday" Open House signs. Check The Dispatch tomorrow for a listing of the featured properties! Take advantage of the $8K tax credit!


See how the tax levies on the May 5 ballot may affect you!

The Franklin County Auditor's office can give you an estimate as to how these levies, if passed, will affect your real estate taxes. Check it out!



BIA's Parade of Homes 2009

This year's Parade of Homes will take place July 11 - 26 at Tartan Ridge in Dublin, Ohio.

http://www.biaparade.com/ for more info.!


Record low interest rates

As of late last week, 30 year fixed mortgages hit another all time low (since tracking began in 1971 anyway) at 4.85%! Still a great time to buy, if you're in the position to do so! I anticipate seeing lower interest rates for a good part of 2009!


How long should it last?

The NAHB (National Association of Home Builders) recently did a study regarding how long the components of a house should last. "The true longevity of any household material depends on maintenance, use, quality of installation & climate conditions." Keep in mind you should only use these averages as a general guideline! Here are just a few of the items that the study reported on:

100 Years or More
Brick exterior - lifetime of the home
All wooden floors - lifetime of the home

50 - 100 Years
Slate roofs - 50+ years
Kitchen cabinets - up to 50 years
Vinyl floors - 50 years

30 - 50 Years
Thermostats - 35 years
Wood windows - 30 years

10 - 20 Years
Aluminum windows - 15 - 20 years
Asphalt shingle roofs - 20 years
Faucets & kitchen sinks - 15 years
Gas ranges - 15 years
Dryers & refrigerators - 13 years
A/C Units - 10 - 15 years
Electric or gas hot water heaters - 10 years
Furnaces - 15 - 20 years

5 - 10 Years
Heat & smoke detectors - 5 - 10 years
Dishwashers - 9 years
Microwaves - 9 years
Carpet 8 - 10 years

Information courtesy of Realtor magazine, February 2009.


Want to take advantage of the great deals the current market has to offer?

I've talked to so many people lately who are afraid of losing a little money on the sale of their home, in order to take advantage of the great deals out there, and buying a new one. I completely understand that point of view, but here's some food for thought. Ok, so you may not make much of anything (or even have to bring some cash to the closing table), but what you may lose on the sale end, you will most likely make up, and maybe then some, on the purchase! Interest rates are still low, so there is still plenty of time to take advantage of the great buyer's market that we currently find ourselves in. If you've thought about selling your current home in order to buy a new one, contact me so I can go over the options available to you that will best fit your needs!

Thanks Jan!!

Here's a shout out to a wonderful woman who's re-designed my blog for me! I think you'll agree that it's much more contemporary and user friendly! I'm still working on getting my links added back in, but should have that completed in the next few days.

Visit Jan's website to see what other awesome things she can do!



Undergoing a huge remodel!

I apologize for not having any posts on here within the past few weeks, but I'm in the process of having my blog design updated! Check back in a week or so, and it should be up and running again! I still have to re-add all my links. Thanks for stopping by!


Selling your home soon?

Here's a list of repairs that will help you get the most for your home! I think you'll find it useful!


$5K - $8K in repairs can potentially net you $10K - $15K or more when you go to sell!

Happy Selling!


Year End Sales Stats

According to the lastest figures posted from the CBR (Columbus Board of Realtors), "central Ohio fared far better than Ohio and the nation." Columbus real estate statistics aren't nearly as doom and gloom as the national statistics might have you believe. The average sales price in Central Ohio in 2008 was just under $164K, down only 5% from the 2007 average. It has been predicted that 2009 will actually bring property value increases, which is great news for all of you looking to sell and take advantage of historically low interest rates. Happy house hunting!


New listing -- $199,900 Dublin schools/Columbus taxes


Contact me directly to schedule your private showing today! You won't want to miss this one!

Sorry, this one was in contract within 10 days, after having 26 showings, and closed shortly thereafter!


Thinking of refinancing?

Check out this article that I just recently came across! I thought it had some good info!


The perfect opportunity to finish a house to your specifications!

I came across this property and walked through it today. It will be a great house for someone who has the time, energy & financial ability to finish it! It was started by a builder that is no longer in business, and is about 65% complete. It's in a great location, and has a wonderful, open floorplan. With a little time & imagination, this house would make someone a great home! If you're interested in seeing it, contact me and we'll set up a time! I'm also fairly certain that this home may be sold for much less than the asking price.



Looking for a "deal" in an affluent neighborhood?

If so, make sure you pay attention to the taxes on the property. I've come across so many properties that have a low asking price, but the taxes are still what they were when the property sold for much more, making an affordable home, no longer affordable! You may be able to have the tax rate adjusted after the sale, but don't count on if or when that might happen. Taxes in some areas can add another $1,000 a month or more to your mortgage payment!