Buyers Resource

• Overview of the Buying & Selling Process
• Benefits of Home Ownership
• Finding the Right Home
• Home Shopping Tips
• Home Inspections
• Answers to Frequently Asked Questions

Overview of the Buying & Selling Process

Benefits of Home Ownership

Owning a home helps you establish financial credibility.

Independence:

Owning your own home provides you with independence and more privacy
than renting. You are free to paint walls, plant flowers, keep pets and
anything else within legal bounds.

Investment:

As you make more payments and own more of your home, you add to
its investment value. Most improvements you make will also add to its value.

Pride:

A home reflects its owner’s values and lifestyle. Owning a home can provide
you with a source of pride, enjoyment and satisfaction.

Security:

A home can provide security against inflation because the value of your
home increases as prices go up.

Stability:

Being established in a community provides a sense of belonging, stability
and security.

Tax Advantages:

Interest on your mortgage loan is deductible on your yearly personal
income tax return. Many of the closing costs associated with purchasing
your home are deductible, as are your property taxes.

Finding the Right Home

You can sit down with a real estate agent and discuss your needs, type
of area, style of home, amenities and everything you really want in your
next home. Real estate agents can help you by accessing a Listing Service
which covers all properties listed for sale within a specific area. Together,
you can select the homes you would like to see, set appointments and preview
homes in a short period of time. An agent can guide you through the entire
process.

Newspaper Ads/Internet

Many people go through the real estate classified section or browse the
Internet to find a home that appeals to them. However, your real estate
agent will have many listings available that may not appear in the newspaper
or Internet on a continuous basis. New listings come on the market daily.

Multiple Listing Service

Your real estate agent should have access to the multiple listing service
if it is available in your area. It usually includes the following details
about homes and properties for sale:

• Location
• Price
• Photograph
• Utilities
• Amenities
• Annual property tax
• Current financing (when assumable)
• Listing company

When Previewing A Home

• Write notes when previewing a home so you will be able to discuss the
  details later with your real estate agent.
• Ask questions about the home and discuss any objections or concerns
  you may have.
• Ask about the community – schools, shopping and transportation.
• Ask specific questions about the construction of the home; electrical,
  plumbing, heating, cooling systems, etc.

Have Fun

Relax. Finding your new home can be a rewarding experience. Have a good
time and enjoy the process.

Home Shopping Tips

• Bathroom
  • Sinks
  • Showers/tubs
  • Toilets
  • Vent fan
  • Heating fan
• Appliances
  • Dishwasher
  • Stove
  • Oven
  • Ice maker
  • Garbage disposal
  • Range hood
  • Refrigerator
  • Freezer
  • Microwave
  • Trash compactor

• Kitchen
  • Kitchen cabinet doors
  • Drawers
  • Sinks
• General
  • Lights (interior & exterior)
  • Windows
  • Heating system
  • Ceiling fans
  • Hot water system
  • Air conditioning system
  • Electrical outlets
  • Door bells
  • Doors
  • Water purifier
  • Fireplace damper
  • Garage door

• Exterior
  • Brick bulging or cracking
  • Shingles missing or broken
  • Siding rotted or missing
  • Gutters damaged or need to be cleaned
  • Concrete cracked in sidewalks/driveway
• Basement
  • Water seepage in basement
  • Cracks in foundation
  • Poor ventilation

• Interior
  • Sub-flooring damaged
    or loose
  • Cracked walls or ceiling
  • Cracked tiles
  • Loose plaster
  • Flooring damaged
  • Soft, springy floors
  • Water stains near windows
  • Water stains on ceiling
    below bathroom
  • Water stains in attic
  • Pipe insulation missing

Home Inspections

There are numerous types of inspections. An inspection is meant to evaluate,
at minimum, the structural and mechanical condition of a property. It is
not the same as an appraisal which evaluates the market value of a property.
Persons involved in real estate transactions need unbiased information about
the physical condition of property they plan to buy or sell and your contract
should include a contingency that you obtain a satisfactory inspection report.
Talk with your agent about the types of inspections available.

Home Inspectors vs. Engineers

Home Inspector: A person who examines any component of a building, through
visual means and through normal user controls, without the use of mathematical
sciences.

Engineering: Analysis or design work requiring extensive preparation
and experience in the use of mathematics, physics, chemistry and the engineering
sciences.

Finding a qualified Inspector

• Referrals from satisfied customers
• Referral from a local real estate agent or mortgage company
• Local consumer affairs office
• Yellow Pages under “Building Inspection Services”

Ask if she/he is a member of the American Society of Home Inspectors
(ASHI). The ASHI has established standards of practice which include the
specific services, limitations and exclusions that can be expected from
private home inspectors.

What the inspection, at minimum, includes

Every inspection should include, but not be limited to, an evaluation
of at least the following:

• Foundations
• Plumbing and electrical systems
• Doors
• Ceiling, walls and floors
• Roof
• Hazardous materials concerns
• Heating and air conditioning systems
• Common areas (in condominiums)
• Insulation
• Ventilation

Answers to Frequently Asked Questions

If you are “pre-qualified” you have determined, with a loan
officer, what price you can afford based on the down payment, your debts
and the amount the mortgage company will approve for your mortgage. Being
“pre-qualified” is only a determination of your probable credit.
If you are “pre-approved”, your credit, employment and funds have
been approved by the lender.

What are closing costs?

Closing costs are an accumulation of charges paid to different entities
associated with the buying and selling of real estate. For buyers, they
are usually about 4-6% of the total sales price of a property. Some of the
closing costs you might encounter are: application fees, appraisal fee,
county taxes, credit report, discount points, documentation fee, escrow
fees, homeowners’ association fees, loan fees, mortgage insurance, origination
fees, tax registration and title insurance premium.

What is a point?

One point is equal to 1% of the new loan amount. Whenever government
regulation, state usury laws and/or competitive practices prohibit the lender
from charging a rate of interest that would make the real estate loan competitive
with other fields of investments, the lender must seek some method of increasing
the yield for the investors. By charging “points”, the lender
can bring the real estate loan up to those other investments.

What is earnest money?

When you make an offer, you will need to put up an earnest money deposit
as a sign of good faith that you are seriously interested in buying a home.
That deposit becomes a part of the purchase price and is held in a trust
account until there is full acceptance of the offer. Typically, an earnest
money is 3-5% of the offer amount.

What is title insurance?

Title insurance protects the named insured against loss because of defects,
liens, encumbrances, adverse claims or other matters not shown or disclosed
to the new owner that attach before date of policy.

Is VA or FHA financing unfair to sellers?

FHA and VA loans provide purchasers the opportunity to buy homes with
minimal cash investment and at lower interest rates. The result is a larger
market for sellers, who also benefit by receiving all cash for their equity.