The following questions are links to articles on the answers to these questions. I hope these articles help you as you try to navigate the home buying process. Please contact me as you have questions. See our Chattanooga relocation information below as well. Provided by Accredited Buyer’s Representative (ABR), Nathan Walldorf.
Many home buyers start their home buying process by browsing the internet, looking through a real estate magazine, looking through the newspaper, or by simply driving around to see what homes are for sale. When that buyer finds a house that is of interest to him or her, they call the agent whose name is on the sign or in the ad. Here are 5 reasons that it is best for you to have your own Realtor helping you:
1. The first reason you need your own Realtor is that the real estate agent with the sign in the yard isn’t out to take care of your best interests, and, now more than ever, you need someone who will look out for your best interests as you buy a home.
2. The second reason you need your own Realtor is that your Realtor will make sure you are buying a home for what it is worth. Your Realtor will research comparable sold homes so you know what the home you are buying should be worth.
3. The third reason you need a Realtor is that you need someone to guide you through the lending and buying process to make your home purchase as smooth as possible. Realtors know what lender will give you the least problems, they know the best title companies, and they know the best home inspectors. They want to make your home purchase as easy for both of you as possible.
4. A Realtor will also guide you through negotiating a sales price on a home, which can be touchy and emotional with no buffers between the buying party and selling party. Hopefully both parties will get something of value to them at the end of negotiations.
5. The fifth & final reason you need a Realtor of your own is that your Realtor will make sure that you get the home you are purchasing in the condition that it should come in. I’ve seen too many home sellers who didn’t have their own agent when they purchased their homes, they have to fix things that should have been done when they were buying their home, and I don’t want that to happen to you. The sellers did things like taking light fixtures out of the home and not replacing them. They did repairs poorly. One buyer never did a home inspection, because they didn’t have an agent to tell them to do it. They simply trusted the seller, and they ended up doing many more repairs on the house over time than they had planned on. You don’t want to have a money pit, you want a home to live in. Find your own Realtor today to help you buy your home. You won’t regret it.
10 Things A Lender Needs From A Home Buyer
W-2 forms or business tax return forms if you’re self-employed for the last two or three years for every person signing the loan.
Copies of one or more months of pay stubs from every person signing the loan.
Copies of two to four months of bank or credit union statements for both checking and savings accounts.
Copies of personal tax forms for the last two to three years.
Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, e.g., a boat, RV, or stocks or bonds not held in a brokerage account.
Copies of your most recent 401(k) or other retirement account statement.
Documentation to verify additional income, such as child support, pension, etc.
Account numbers of all your credit cards and the amounts of any outstanding balances.
Lender, loan number, and amount owed on other installment loans – student loans, car loans, etc.
Addresses where you lived for the last five to seven years, with names of landlords, if appropriate.
Does It Matter Which Lender I Choose?
What Money You’ll Need to Buy a Home Loan Application.
1. Sometimes lenders charge you to make a loan application. $25 to $50.
2. Earnest Money Deposit. This amount of money can vary depending on the price of the home you are buying. Up to $200,000 you can get away with an earnest money deposit of $500 to $1000. As you get closer to $300,000, you will probably have to have an earnest money check for $3000 or more.
3. Home Inspection. The price of a home inspection will vary on the appraisal and on the size of the home, but the average home inspection will cost you $499.
4. Appraisal. The lender will ask you to pay for the appraisal before closing, so be prepared to pay $499 for an appraisal.
5. Down payment. Your lender can tell you exactly what your down payment will be. If your home purchase is under $271,000, you will need 3.5% of the loan value as a down payment for an FHA loan. VA & rural loans require no down payment if you apply for them. Conventional loans require 10% to 20% down.
Where can I get my down payment?
Your IRA. Some IRAs allow you to use the money in your IRA as a down payment without a penalty. Ask your CPA to be sure. DO NOT USE YOUR CREDIT CARD!
Your stocks. Sell your stocks, and you can use that money for a down payment. Ask your stock broker how long it will take to get the money from your stocks to be sure you have it by closing.
Mom & Dad. Some loans allow you to have a gift letter from mom & dad. Ask your lender if that applies to you. Life Insurance Policy. If you have a whole life insurance policy, you can borrow against that.
Selling another house. The lender will want your closing statement from the house you are selling in order to close on the house you are buying.
How is Chattanooga’s current economy?
Why It is so Important to Choose the Right Lender
The federal government is monitoring banks closely and is putting new regulations into existence. That has made banks be more paranoid about their lending process to the point that a few mortgage departments in some large banks have shut down. A few big banks are finding that their loans never make it out of underwriting and to the closing table. Some lenders (loan originators) have moved to different banks where they can get loans closed (not closing loans means no commission for many of these lenders). That is why you have to pick your lender well today.
Here are some of the things that can happen with the wrong lender:
1. The loan never leaves underwriting. All the paperwork can be in to underwriting, but you wait and wait with no results (that can happen for months).
2. Your appraiser comes from 50+ miles away – The federal government requires banks to use a rotating group of appraisers, so the bank won’t use the same reliable appraiser every time. Out of state lenders and even some mortgage brokers can send unqualified appraisers who are in these appraiser rotations to appraise your house. That could mean an appraisal that is unjustifiably too low and lost money or a wrecked sale.
3. Wastes your time by giving you a bad approval that the underwriter won’t approve. You lender needs to know his/her stuff or you could lose money paying for inspections and appraisals when you can’t even qualify for the loan. Sounds absurd, but I’ve seen it happen.
4. Just say no to a lender that you have to call out in CA or in another state far from where you are buying. There is nothing more frustrating than a lender in another state, who won’t communicate with you. That is what I see all of the time when people call lenders out of state, who never physically see their customers. You become one of many.
It’s not all doom and gloom with lending, so don’t fold your arms and think, “Buying a house sounds like a nightmare, so forget it.” If you use the right lender, things go smoothly. Listen to the lender recommendations of your agent. Let Nathan Walldorf at Herman Walldorf & Co Realtors in Chattanooga, TN guide you to the right lender and a smoother home purchase.
The 16 Steps From Shopping to Closing on a House
1. Find a Realtor who is an Accredited Buyer’s Representative (ABR) to look out for your best interests as you buy a home. The agent with the sign in the yard is trying to get the home sold and does not represent you. Get your own Realtor to represent you during your home purchase.
2. Get pre-approved. Ask your ABR Realtor which lenders he recommends. After you are pre-approved, you will know what you can spend on buying a home.
3. Make sure that your monthly payment is not more than 1/3 of what you earn per month.
4. Pick out an area where you would like to live and where you can afford a home. Does the area have good schools? Is the area safe? Is the house on a busy road? How large of a house do you want? How many bedrooms? How many bathrooms? What square footage are you looking for? Think about re-sale. 3 bedrooms sells better than 2 bedrooms.
5. Have your ABR Realtor send you homes via e-mail, pick some homes out that you want to see, and go look at homes. If you see homes that interest you and are for sale by owner, give the contact information to your Realtor BEFORE you call to inquire, they will call the home owners for you, to ensure you always have representation & don’t go into a transaction with only the sellers calling all the shots.
6. Once you’ve picked out a home, you will want to take your pre-approval letter from your lender and meet with your ABR Realtor to write up an offer on forms that your Realtor has.
7. Your next step after your offer is accepted is to have a home inspection. Your ABR Realtors should have a list of recommended home inspectors. Choose one of them. The home inspector will find out more than you want to know about the home. Some of the things that the home inspector will find will be small items that aren’t worth negotiating over. Look for big problems like foundation issues, heat and air problems, roof problems, plumbing & electrical problems, rot on the exterior of the house, etc. Your ABR Realtor will help you identify problems found during the inspection that should be fixed by the seller.
8. Right after your offer is accepted, your lender will ask you to approve the”Loan Estimate” (LE), so be sure that you approve
9. The buyer will have the termite inspection done. You will find out if there are termites, and that is usually only a major problem if the termites have eaten through a main support of the house. Your Realtor will help you identify a qualified termite inspector.
10. Your lender will send out the appraiser, so you don’t need to worry about that. You will have to pay your lender for the appraiser ahead of time. Some appraisers require repairs by the seller (FHA loans & VA loans). Mostly the appraiser is looking for the value of the home to be equal to -or greater than- what you are paying for it.
11. Your lender may ask for forms here and there, so get those to the lender quickly. You don’t want to delay the closing on your house over a bank statement that took you a while to deliver. Be sure to check with your lender periodically to see if they have everything they need from you and keep them on task.
12. Be sure to have the utilities changed into your name. Start the process with time, but be sure it’s not effective until the day of closing. You don’t want to pay for their water, electric, and gas usage.
13. 3 days before the closing, you should get a closing disclosure/closing statement. That document will tell you how much money you will have to bring to closing.
14. The day of or the day before closing on your home purchase, you will do a final inspection to make sure that the repairs that you asked for were completed, to make sure the home is in the same if not better condition, and to make sure that no new damage has occurred to the home. When the lender is done and the title checked by the title company to see if it is clear, you are ready to close.
15. You will go to a title company with a copy of your driver’s license, and close the loan. . You’ll have to get a cashier’s check from the bank to pay for your closing costs, so do that ahead of time. Soon, you’ll be a proud homeowner!
16. Enjoy your new home!
Written by Nathan Walldorf with Herman Walldorf & Co. Realtors, Inc. Chattanooga, TN. 423-544-7700 or [email protected]
How to Sign a Document with DocuSign
In order to make it easier and faster for you to receive and sign contract documents, we subscribe to DocuSign. This program keeps you from having to print the contract, sign the contract, scan the contract, save the contract on your computer, and finally send us an email with the contact attached. Instead, you sign digitally, and it gets to me and the other agent much more quickly. Below is how it works step by step.
1)Open the email that I sent you via DocuSign.
2) Click “Review Document.”
3) Click box by “I agree to use electronic records & signatures.”
4) Click “Continue.”
5) Click “Start” in the yellow tab arrow.
6) Click on yellow square that says, “Sign.”
7) Click “Adopt and Sign.”
8) Scroll down to bottom right hand corner and click, “Finish.”
9) You’ll see a box on the page that says, “You’re done signing!”