Buying a Home 101

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Keys to Smart Home Buying
Buying a home is one of life's most important investments and exciting adventures. Even experienced buyers, however, can find this complex process a bit overwhelming. We will guide you every step of the way. In addition to the crucial step of locating and presenting properties that match your search criteria, we will help you along the path between "I want this house!" and "I own this house!"

 Getting Your Mortgage Application Started
Being pre-approved by a lender can put you in a much stronger negotiating position, because it shows the seller that you are a committed buyer, financially capable of buying the property, and more likely to close on the property. Keep in mind that pre-approval is different from pre-qualification . Pre-qualification is merely an estimate of what you may be able to afford. Pre-approval occurs when the lender has reviewed your credit and believes that you can finance a home up to a specific amount. However, neither pre-approval nor pre-qualification represents or implies a commitment on the part of a lender to actually fund a loan.

Here are some of the current documents you'll need to get started:

• INCOME
  • Current pay stubs
  • W-2s or 1099s
  • Tax returns, usually for two years
• ASSETS
  • Bank statements
  • Investments/brokerage firm statements
  • Net worth of businesses owned (if applicable)
• DEBTS
  • Credit card statements
  • Loan statements
  • Alimony/child support payments (if applicable)

The Search Begins
You should start your search by determining your price range, and how much can you afford.Your first step should be to meet with a reputable lender to determine just how much you qualify for.  There is nothing more upsetting than to look at homes and find you cannot qualify for them.  If you do not know a lender we have several with excellent reputations and that have been in area for many years.  We recommend you take this step before going out looking for your new home. Being pre-qualified for a loan makes you a much stronger buyer and gives you the ability to negotiate from a stronger position.



Understanding the Asking Price
Many factors influence the price that a seller expects to get for their home. While only you can decide how much you feel comfortable offering for a property, We can gather critical information for you regarding the factors that impact how much you should consider paying for the home. These factors include:

• How long the home has been on the market
• If the price has been reduced
• The prices for other comparable homes in the area
• If there are multiple offers
• Other items that might be included in the sale - furniture, hot tub, etc.
• The "list to sale price ratio," an indication of how competitive the market is for homes in this area.
• Why the seller is selling
• Whether the seller is offering an aFinancing Your New Home

The financing process can take anywhere from 10 to 90 days, but typically runs 30 to 45 days. I'll be involved throughout the process to help it run smoothly. The basic timeline for what will happen along the way is as follows:

• You submit the completed application and any required supporting documentation to the lender
• The lender orders an appraisal of the property, a credit report, and begins verifying your employment and assets
• The lender provides a good faith estimate of closing and related costs, plus initial Truth in Lending disclosures
• The lender evaluates the application and your supporting documents, approves the loan, and issues a letter of commitment
• You sign the closing loan documents and the loan is funded
• The lender sends their funds to escrow
• All appropriate documents are recorded at the County Recorder's Office, the seller is paid, and the title to the home is yours

Negotiating the Offer and the Contract
You may make your offer subject to certain terms or contingencies, including securing of financing or perhaps the sale of your current home. You may also make the contract subject to various inspections by both you and professional inspectors. Most contracts include some standard provisions, such as property taxes, insurance costs, utility bills, and special assessments, which will be prorated between buyer and seller. Others outline what happens if the property is damaged before closing, or either party fails to go through with the sale. I will review with you every aspect of your offer. Together, we will plan a strategy for getting the most advantageous terms for you - the buyer - at the price you are willing to pay for the property.

Inspections
Colorado Real estate contracts contain a contingency clause that allows buyers to inspect the property. Every home should be inspected to minimize the possiblilty of problems in the future.


Title Search Process
A title search spells out who has the right of ownership for a property. It is considered "clear" if there are no claims or liens against it. In order to make sure nothing will prevent transfer of the property to you, a title company will conduct a title search and prepare a preliminary title report that indicates what recorded matters affect the title to the property and if the title insurance company is willing to insure the title. At the close of escrow, the title company will issue an Owner's Policy of Title Insurance to protect you against losses that might arise from covered claims on the title. For more information, click here.

Preparing For The Closing Costs
A home purchase is a complex transaction involving many parties and associated fees. In addition to your deposit and down payment, there are a variety of other costs involved in the close of escrow, including:

• Loan origination fees, appraisals, and reports
• Surveys and inspections
• Mortgage insurance
• Hazard insurance
• Taxes
• Assessments
• Title Insurance, notary, and escrow fees
• Recording fees and stamps

The lender will provide a good faith estimate of these costs prior to the close of escrow, so that you will know in advance what to expect. Some of these costs may be negotiable items with the seller. Naturally, I'll walk you through each item in your good faith estimate.