Home Buying 101
Are you an A, B or C buyer?
An “A” buyer has an urgency in buying. Have you sold your home and you are homeless until we find you another? Are you moving here from out of town? Is your lease up in the next month? If you need to close on a home in the next 4-6 weeks you are an “A” buyer and are top priority. A “B” buyer is one who is looking to buy in the next 3-6 months. “C” buyer is someone who wants to buy within 6-12 months. Examples include someone working on their credit, or in a lease for more than 6 months. A “C” buyer might also be a homeowner that has their home on the market, but as soon as it sells, they would become an “A”.
Below are the steps in buying YOUR home!
- CHOOSE AN AGENT
- PRE-APPROVAL (10-15 mins)
- PREVIEW HOMES
- WRITE OFFER
- HOME INSPECTION (within 10 days)
- ORDER APPRAISAL (10 days)
- HOMEOWNERS INSURANCE
- TRANSFER UTILITIES
- FINAL WALK THRU
#1 CHOOSE AN AGENT
When choosing an agent, you want someone to help you and represent you every step of the way. 100% of our clients choose to sign Agency Agreements with us. Whether we represent you in a Dual or Single Agent capacity, we will help you 'investigate' the property you have selected, searching for previous tax records, what it has sold for in the past and look at comparable sold homes in the last year. We will then negotiate the best price on your behalf. We are an extra set of ears and eyes throughout the process, working for you. We listen. We are honest, hardworking, and put our client’s best interest first. Your trust and future referrals are most important to us.
Your Pre-Approval letter is the first step to home ownership. This allows you to buy within your means, and not look at homes more expensive than you can afford. It also makes your offer stronger by including it up front with your offer. If you will, it makes you a CASH customer, because the bank has already approved you. Some foreclosure and relocation companies require it with your offer. NO buying or ADD ing to your credit prior to pre-approval and closing! Here are a few credit DO's and DON'Ts before closing:
Don't – Allow multiple credit checks
Don't – Apply for new credit within 45 days of closing
Don't - “shop” for new credit before closing (Furniture, cars, etc....)
Don't – Go on a shopping Spree (using your credit limits) to buy things for your new home!
Do – File tax returns and/or extensions
Do – Explain or document all inquiries on your credit report
Do – Disclose all Debt – even if it did not show up on your credit report
Do – Work with a knowledgeable Lender!
TYPES OF LOANS – Loans are like dresses on a rack, there are different colors, styles and sizes to fit your needs......so depending on what house you are trying to buy and your credit and financing needs, the right product is out there for you. There are even no down payment programs thru some banks and the Alabama Housing Finance Authority, and USDA, however there are income restrictions
#3 PREVIEW HOMES
When you are comfortable with your pre-approval, monthly payment and price range, you are ready to search for homes. You can do a lot of preliminary work by searching on line at www.SladeandKim.com . Check out neighborhoods by driving through them in late afternoon or weekends. Narrow down what you want to see and you are ready to walk inside your new home possibilities. We will also look into building a new home, foreclosures, and For Sale By Owners.
#4 WRITE OFFER
So you've found the best home match for you. We will first research “your choice” by looking up any history in our MLS system, pull our own sold comparable homes, and pull current tax records. Then we will make an educated offer on the home of “your choice”. We will also look at asking for any “non” cosmetic items needed. You will need to be prepared to write a check for $500-1000 at the time we write an offer – this is your 'earnest' money, and it will go towards what you owe at closing. This is where we will ask for home warranty, survey, cosmetic fixes and cleaning, and any personal items like refrigerator, washer, dryer, etc you would want to stay.
#5 HOME INSPECTION
Within the next 15days you will need home inspection money, approx. $300, to be paid directly to the home inspector at the inspection. He is working for YOU, so you pay! He will give you a written report and let you know what he finds that needs attention. I like to recommend the inspectors that use an infrared camera. Once the inspection is complete, we will ask the seller to make any major repairs needed and address any health and safety issues.
#6 ORDER APPRAISAL
After you and the seller have negotiated repairs, he is willing to do at the price you agreed upon, your mortgage company is ready to order the appraisal. They will ask you to pay for this up front, usually approx. $450. The appraiser has up to 10 days to complete after he gets the order. An appraisal is where the mortgage company hires an OUTSIDE source to prove value and QUALIFY the home's condition for the loan.
#7 SECURE HOMEOWNERS INSURANCE
You are now ready to choose your insurance carrier, and when choosing you should think about your monthly budget, any relationships you already have with an insurance company (or any you want to start?) and how much insurance you want on your new home. For instance, if you buy a foreclosure for $50,000 but you think it is worth $75000, then you would want more insurance than the sales price.
#8 TRANSFER UTILITIES
Alabama Power www.alabamapower.com or 800-245-2244
WOW www.mywowway.net or 334-356-1000
Spire Gas www.spireenergy.com or 800-292-4008
Spectrum www.Spectrum.com or 887-860-1173
Dixie Electric www.dixie.coop or 334-262-2946
Montgomery Water www.wwssb.com or 334-206-1600
(The water company usually wants the closing settlement statement before transferring into your name.)
#9 FINAL WALK THRU
We will do this either the afternoon before of morning of closing. We will check to see that all repairs are complete, and no material changes have occurred prior to you signing the closing paperwork. You can have the home inspector return to check repairs for a fee.
Besides your down payment, you will need to pay for your prepaid items and maybe a little closing cost. We will ask the seller to pay for closing cost and pre-paids up to 3% -6% of the sales price. (This depends on the loan product guidelines.) Pre-paids will be approx $1000 and include approx 15 months of home owners insurance ( 1 yr premium plus approx 3 months to start your escrow acct), 3 months of taxes to start your escrow, and any interest on the loan for the remaining part of the month when we close. What you need to bring to closing is the sum of all these items (down payment, pre-paids and any closing cost the seller doesn't cover) minus your earnest money.
Prior to the closing, the attorney will check for clear title, and follow your mortgage companies instructions for a smooth closing. You will sign a stack of papers, and most closings take about an hour. In today's economy, it is not unusual for a closing date to be postponed a few days or weeks. Prepare to be flexible if this happens.
Cross Country Mortgage-Shelly Nickles 399-3732
Fairwinds Mortgage-Vicki Williams 233-5626
CMG Financials-Donna Young 590-6399
Bay Equity Home Loans-Jennifer Johnston 549-2445
Real Estate Funding-Matt Manning 799-5395
HomeCheckConsultants Dwight Leary 300-1035
Hal F Leary Inspections Hal Leary 221-1035
PLEASE REFER US TO CO-WORKERS, FAMILY AND FRIENDS!
MOST IMPORTANT IS YOUR TRUST AND REFFERALS!
Slade & Kim McElroy
Keller Williams Realty
334-221-1759 or 334-318-2866
*ALL MORTGAGE TERMS ARE APPROX AND SUBJECT TO CHANGE DAILY!