Real Estate may seem complicated and confusing. My job is to simplify the process.
• The process of buying a home
• Discuss agency relationships
• Walk you through the purchase and sale agreement
• Help you determine the types of homes and neighborhoods that most fit your needs
• Provide detailed information on those homes
• Arrange access to the homes that meet your criteria
• Assist in determining the market value of the homes you are interested in
• Provide you with the necessary legal documents and disclosures on the home
• Assist you in structuring, writing and negotiating a mutually accepted purchase and sale agreement
• Schedule and attend your property inspection.
• Review the inspection with you to make sure you understand the findings.
• Coordinate necessary steps after inspection
• Assist in the required time lines stated in the Purchase & Sale agreement.
• Work closely with the escrow company to make certain all the documents needed are in order and completed in a timely manner.
My job is to simplify the home buying process and protect your interests. Here are a few of the many steps involved:
Before you start your home search, it’s important to assess your financial situation and, when possible, seek a preapproval from a lender. I can refer you to numerous financial institutions that will help you review a plan that fits your needs. If you currently have a good relationship with a bank or credit union, that`s a great place to start!
Once you’ve found the perfect home, I’ll compile the appropriate legal forms, contracts and addendums to make a solid offer on the property.
I’ll help you put together an attractive offer package that takes into account the market value and condition of the house, your financing terms and earnest money deposit. In our local Palm Springs market, the deposit is typically 3% of the purchase price and will be due 3 days after contract acceptance.
Once the offer is accepted and a closing date is agreed upon, I’ll assist in coordinating the completion of the purchase and submission of all necessary forms to your selected escrow company. I will monitor the escrow process until the transaction is complete. Escrow fees vary but you will receive a good-faith estimate of closing costs shortly after escrow is opened.
Loan amount: This is the amount of mortgage based on the final purchase price of the home, minus the down payment.
Down payment: Money that the buyer provides to the lender as their portion of the purchase price. This is considered the buyer’s equity, or cash investment, in their home.
Points: Fees charged by the lender to offset the interest rate – if below the prevailing market rate. One point equals one percentage point. For example, one point on a $100,000 loan would be $1,000.
Appraisal fee: This is the amount paid for the lender’s appraisal of a property.
Credit report fee: A fee charged by the lender to obtain a credit report on the buyer.
Title insurance fee: A one-time premium the buyer pays for protection against loss or damage in the event of an incorrect search of public records or misinterpretation of title. The title insurance policy also shows if the property is subject to taxes, liens, deed restrictions, encumbrances, or easements.
Escrow fee: The amount the buyer pays to the escrow company or closing agent for preparing paperwork, accounting for all funds, and coordinating information between all parties involved in the sale of the property.
Closing costs: A general term for all of the estimated charges and fees associated with the transfer of property ownership.
Prepaid interest: The amount of interest due on the loan during the time period between escrow closing and the first mortgage payment. This is due at the time of closing.
PITI: An acronym for Principal, Interest, Taxes, and Insurance. This is the estimated monthly house payment.
Principal & interest: Principal is the amount to be applied toward the balance of the loan, and interest is the amount charged to finance the loan.
Total cash required: The total amount of cash the buyer needs, including down payment and closing costs.
Premium mortgage insurance (PMI): Insurance for the lender to cover potential losses if the borrower defaults on the loan.
Determining how much you can afford before you begin your home search will save you valuable time.
• Prequalifying for a mortgage generally helps you determine how much house you can afford.
• Most lenders require that your monthly mortgage payment, including principal, interest, taxes and insurance, range between 25 and 28 percent of your gross monthly income.
• Becoming prequalified DOES NOT necessarily mean that you will be approved for a loan of that amount.
• While preQUALIFYING is great, getting preAPPROVED is highly recommended. Preapproval from your lender means that you have provided them with the necessary paperwork, and they have approved your actual loan amount.
• Having preapproval for a home loan will put you in a much better negotiating position, because the seller knows that you are able to obtain your loan to purchase their home. Your preapproval letter will be presented to the seller when you submit your offer for consideration.
• Most lenders require a 5 to 20 percent down payment; 25 percent or higher down payment may qualify you for a lower percentage rate on your loan.
• I can help you locate lenders who will assist you in finding a financing package that best meets your needs.
What if I need to sell my home before I buy a new one?
Once you find the perfect new home and have placed an offer, that offer will be “contingent” on the sale of your current home. Buyers who are in this position may not have as much negotiating power as another buyer whose home has sold, or at least has accepted an offer. Sellers may hesitate to accept an offer on a contingent buyer because there are too many things that need to happen prior to finalizing the sale, however, these are all dependent upon the situation and the buyer. Having said that, I`ve closed many "contingent on sale" transactions. You just need to be prepared to act quicky if a competing offer is submitted to the seller. If you`re unable to meet the requirements of an "escalation" of the contingency clause, there`s the possibility you`ll lose the property to the incoming competing offer.
How is my offer presented to the seller?
I will call the listing agent on your behalf and present your offer to the seller. I will negotiate in your best interest and explain the details of your offer.
What happens if my offer is less than the asking price of the home?
If you make an offer below the asking price, the seller has three options. They can accept your offer, counter your offer, or reject your offer outright. If you`re rejected outright, it`s likely the seller believes you`re not serious. Keep in mind, "low-ball" offers can have a very negative effect on a seller. I can`t tell you how many stories I`ve heard of a seller being offended by a buyer`s low-ball offer, rejecting it, and telling the buyer to move on. It`s o.k. to underbid, but if you`re serious about aquiring property, the best strategy is to always make a reasonable offer based on current market conditions.
It`s also important to keep in mind that there may be other buyers who are interested in the same home. If those buyers happen to write an offer at the same time you do, the seller will have multiple offers to compare. Usually, there are many aspects to consider for each offer, but ultimately, the seller will accept the offer that is the best and most complete. In an active real estate market, homes typically sell at or near the list price. In hot markets, there are usually multiple buyers competing for the same home, which can sometimes drive up the final sales price beyond the original listing price. My job as your agent is to help you plan a strategy based on current real estate market conditions in our local Palm Springs area.
Currently, for example, an average, single-family, detached home in Palm Springs will sell for approximately 3% under the asking price. However, in the case of a highly desirable mid-century home with historic provenance, excellent siting, view, and renovations, the property may receive multiple competing offers and settle ABOVE the asking price. All these factors should be considered when forming a strategy.
Does making an offer cost me money?
When you make an offer on a home, you will be expected to show good faith by including an earnest money deposit. The deposit is a sign that you are serious about the offer on the home. In our Palm Springs market, an earnest money deposit is typically 3% of the purchase price and is due 3 days after "ratification", or acceptance, of your offer.
Where does my earnest money go?
Upon a mutually accepted offer between the buyer and seller, the earnest money is deposited into a trust account of an independent escrow company. The deposit is a credit to the buyer and becomes part of the purchase expense.
Is it possible to lose my earnest money?
Real estate contracts are intricate, legal instruments and the process can be very complicated. It is rare for the buyer to lose their earnest money deposit. If a transaction falls apart, it is most often associated with circumstances beyond the buyer’s control. HOWEVER, if the buyer willfully decides to rescind their offer and has no legal reasoning to do so, then the seller has a right to retain the earnest money. Offers to purchase real estate are legally binding contracts with serious financial penalties if breached.
What other financial commitments are involved?
Most lenders require the cost of the appraisal and the credit report at the time of your loan application. Those costs, however, are credited to your closing costs at the time of closing.