7 Reasons to Buy a Home

Pride of ownership is a key reason for wanting your own home.  Decorate it to your own taste and enjoy all of the benefits while making a great investment.

1. Pride of ownership is a key reason for wanting your own home. Decorate it to your own taste and enjoy all of the benefits while making a great investment.
2. Real estate over time has been considered a good investment because most of it has appreciated.  The effects of leverage can multiply the increase when borrowed funds are used to purchase the home. Many times, the largest investment a person owns is their home.  Homes have been a good hedge against inflation. Homeowners build equity and can borrow against that equity for a variety of reasons that could include college, medical, or to start a business.
3. Qualified mortgage interest and home equity loans are deductible for Income Tax purposes.*
4. Property taxes on a first or second home are deductible on/for Income Tax purposes. *
5. A homeowner can exclude up to $500,000 of capital gain if married, filing jointly or up to $250,000 if single or filing separately for homes that have been the taxpayer's principal residence for the previous two years.  There is no age requirement for taking the capital gains exclusion like the “over 55” rule in the past.  It is not necessary to purchase a replacement home more expensive than the one sold.  Homeowners can buy a more or less expensive home with no tax consequences assuming their gain is less than the allowable amounts.*
6. Preferential tax treatment on gains that have been made from capital assets held more than one year is permitted by IRS.  This is especially important for homeowners with gains in excess of the allowable exclusion.*
7. Mortgage payments include the interest for the time that the money has been used and principal to retire the debt over a period of time.  Each month part of the payment is for principal accumulation.

*Consult your Accountant or Tax Advisor

Initial Interview

During the initial interview, you’ll share your expectations and learn about the process of buying a home.  I will provide valuable market knowledge about areas, prices, financing, your qualifications, and normal procedures. 

Qualification includes your wants, abilities, and needs, price, size, style, and area.  At this point, we will begin the search to find your new home.

These are some of the things I need to know:

• What do you want in a home?
• Where do you want to live?
• How many bedrooms?
• How many baths?
• How many living areas?
• What size garage?
• What area do you want to live in?
• What style home do you prefer?
• When do you want to move in?
• What is most important to you in a home? 
• Are schools important?   Which ones and why?
• Where do you work?
• When is the best time to look?
• If we found the right home for you today, is there any reason that would keep you from buying it? 
• Does anyone else have to approve of your purchase?
• What things are most important to you in a home?

Financing

In today’s market, seller’s and listing agents expect a preapproval letter to accompany your offer.

There are specific items necessary to make a loan application and assembling them can take some time.  I recommend you use the following list.

Most people use financing of one type or another to buy a house since they do not have the full cash amount for the purchase price.  The amount of financing you will need depends upon how much cash you have for the initial investment, or down payment, plus the amount of mortgage you can carry according to your income and debt levels.  I will review the financing process in detail shortly.

You should choose a mortgage representative that you are comfortable with. I have a network of Mortgage Representatives that I can recommend to you.   Interest rates change daily until you apply and lock your rate.  A quote you get today may not be available at the same price tomorrow.

As your buyer agent, I can help you understand the following:

• ­ Buyer’s Closing Costs
• ­ Alternate Financing Plans
• ­ ARM  vs.  FRM
• ­ Mortgage Comparison

Preparation for a Mortgage Application

Employment

• Names and addresses for two full years
• Gross monthly income
• W-2s for two years, if available
• Year to date pay stub
• Proof of income from rentals, investments, etc
• Proof of retirement, disability or Social Security
• Proof of child support or alimony paid/received
• If self-employed:
• Two years Federal Income Tax Returns
• Current year profit and loss statement

Creditors

• Each creditor's name, addresses and type of account
• Account numbers for each
• Monthly payments and approximate balances
• Amounts of child care expenses

Banking

• Names and addresses of banking institutions
• Account numbers for all accounts
• Type of accounts and present balances

Miscellaneous

• List of assets in stocks, bonds, and property
• Life insurance cash value (documented if used as cash down payment)
• If applicant is selling a home, a copy of sales contracts
• Social Security numbers for all parties
• Veterans - Certificate of Eligibility & DD-214
• Cash or check to pay for application fee

Property

• Copy of sales agreement
• Copy of listing on property
• Instructions on how appraiser is to gain entrance

Good Financial Information Leads to Good Decisions

Better decisions are made when they are based on good financial information.  Knowing there are alternatives helps to determine the right choices.

Estimated Purchase Costs – It is important to know how much you’ll need to buy a home not only for the down payment but for all of the fees that are charged in connection with getting the loan and conveying title.  Your lender will prepare a Good Faith Estimate which will let you know approximately what you will need on the day of settlement.

Alternate Financing Plans – Choices will help you to make a better decision as to how to finance your new home.  You deserve to know what options are available and that is exactly what you’ll get.  The lender you choose will go over the options best suited to your financial situation.

Mortgage Accelerator – Discover the advantage of adding an additional amount of principal to your fixed rate mortgage on a regular basis to shorten the term and save tens of thousands of dollars in interest.

Every buyer needs basic financial information to make a good buying decision.  You’ll know that you qualify for the home, what the payments and the closing costs will be. 

 

Pre-Approval Is an Advantage For You

Applying for a loan and obtaining approval before a buyer finds a home they want to buy can be a distinct advantage.  Making a loan application is going to need to be necessary eventually anyway unless they are going to pay cash for the home.

Pre-qualification is a procedure where you get an opinion from a mortgage officer about how much you qualify for.   This is usually a phone call.

Pre-approval requires a complete application with credit reports and verifications.  The Mortgage Company will issue a commitment subject to a specific interest rate and points and a satisfactory appraisal when the property is identified.  Time limits are usually placed on pre-approval commitments.  It is recommended to be ready to look at homes and make a decision after you receive your pre-approval commitment.

Benefits to you of being pre-approved:

• Looking at the right-priced homes saving you time, effort and disappointment
• Saving money with a seller who is confident about taking their home off the market with buyers who have a definite loan commitment. 
• One less contingency that the seller will be concerned with to get their home sold.
• Closing more quickly
• Minimizing the anxiety of not knowing whether or not you qualify.

Viewing Available Homes

• MLS Member - As a member of the Multiple Listing Service, I can show you any property. If you should see an ad in the paper or a sign in a yard, call me to find out the information. If you want to see it, I'll show it to you.
•  For Sale by Owner - Many times a homeowner will work with an agent, even though the home is not listed with a real estate broker.  If you want to see a home offered by an owner but want to retain representation, I must contact the owner and set the appointment.  A homeowner trying to sell the home himself is usually doing so in hopes of saving the commission. Coincidentally, this is the reason a buyer wants to deal directly with a homeowner.  Statistics show buyers save money though if they purchase a for sale by owner with their agent.
• Builder’s Homes - Most builders want to and are more than willing to work with agents who accompany the buyer to the property on the initial visit and we can get all the information you need to make any decisions, by working through me with builders, you get all the services offered by me in addition to those offered by the builder.  You'll get more, but you won't pay more for it.

Determining Value

The seller sets the price of the home, but ultimately YOU, the buyer determine the value.  Once you have narrowed your search to THE HOME, I will supply you with factual data regarding recently sold properties in addition to what is currently on the market in order for you to make an educated decision about value. 

This factual analysis is often referred to as a Comparative Market Analysis (CMA).  Similar properties to the one you have selected will be evaluated for features, improvements and overall condition.  This process will be repeated by a bank appraisal.  Your lender will require this estimate of value to ensure that the property value is sufficient to lend you the loan amount stipulated in the contract.

Occasionally it is also useful to evaluate the information provided in the tax records to assist in determining value.  Such information would include the finished square footage in the subject property, the recent assessment and even a seller’s original purchase price might be helpful, if the seller has lived in the property just a short period of time.  The original purchase price plus an adjustment for any valued improvements, plus or minus any appreciation or depreciation would help to determine value.

Making an Offer

When we find the right home, you will want to make an offer to purchase it.  This is done in writing specifying every detail that is part of the agreement.  We use standard forms in Northern Virginia that I will provide you ahead of time for your review.

Home Protection Plan

Some sellers provide a Home Protection Plan for the buyer that covers certain items for a one-year period like:

• Mechanical – heating, air-conditioning, appliances.
• Plumbing – fixtures, lines, water heaters, sewers.
• Electrical – wiring, out of date systems.
• Structural – doors, windows, roof, foundation, drainage, ventilation, and environmental hazards.

If a Home Protection Plan is not provided on the home you contract for, you can acquire the coverage yourself.  The price of programs will vary in price and coverage and among carriers.  We can ask for this during our negotiations.

Home/Radon/Termite Inspections

In Virginia, the seller must provide a property disclosure for interested buyers prior to writing a contract.  A disclaimer states that the seller makes no warranties or representations about the property.

The property disclosure does not and should not take the place of a buyer’s inspection that is usually made after a contract is completed.  A provision for a home inspection can be added to the sales contract identifying the areas to be inspected by a professional inspector. The purpose of the inspection is to find major defects in the home. 

I will be happy to supply a list of inspectors that have been thorough for my past clients.  You are encouraged to accompany the inspector to ask questions and receive a written report itemizing any areas of concern.

Settlement

The last step is to assemble all of the loan papers at the settlement.  You will need to pay the balance of your down payment and your closing costs at this time.  A cashier’s or certified check is equired for these funds.  You may also wire funds with the proper notification. 

Who Pays the Commission?

In many cases, the Seller has signed a listing agreement with his agent specifying a certain fee to be paid for selling the home.  It can include provisions for splitting that fee with the selling agent, regardless of agency representation.  This is typical in Virginia.

Though this is not typical in Virginai, in some cases, the Buyer pays his agent a commission as set out in their written agreement.  If the buyer pays his agent from his separate funds, it would not be appropriate for the buyer's agent to also accept part of the fee paid by the seller.

Why Hire Me?

My Unique Selling Position

There are a lot of agents available and willing to help you with your home purchase.  To make a solid case for letting me help you, I have to provide more services and higher-level services both before the sale and after the sale.  I am not just looking for one sale to you.  I want you to consider me as your real estate professional for life.

The reasons for doing business with me must be so compelling that not only will you not consider doing business with anyone else, you will refer me to your friends who are looking to buy or sell a home.

Neighborhood Knowledge

I’m familiar with Northern Virginia.  I will identify comparable sales, and information on the schools, shopping, and other things you feel are important.  Due to discrimination laws I can point you to crime and demographics websites so you can gather the information you need but I cannot discuss this with you.

Appropriate Houses to Consider

I’ll look for what you want and can afford in an area you want to live.  I’ll show you all the homes that are available not just the ones that I have listed.

Work Diligently to Find Your Home

I’ll work hard to find your new home.  I understand that finding a home is a priority and will consider it the same.  If you prefer I can preview homes so we use your time wisely and when I find one that meets your needs, I’ll show it to you as quickly as possible.

Benefits I offer my Buyer-Clients

I Pay full attention to my Buyer’s needs-I listen!

My Buyers can talk freely – my duty of confidentiality enables  my client to provide information without fear of harming their negotiating position-we have the rapport necessary to communicate clearly and comfortably-I come to understand your particular needs 

I Give advice accompanied by facts – I assist my client in making an objective evaluation of a property, including both positive and negative aspects-I tell you what you want to hear but also what you DON’T want to hear and you become familiar with how I work 

I Educate my buyers – knowledge of areas, plan a negotiating strategy, active effort to find you the “right” home 

Procedures for the client – suggest procedures that will strengthen the buyer’s negotiating position 

Price – provide price counseling for a buyer client
a. information on similar properties which have sold recently
b. information on similar properties which are currently on the market 

Contract – suggest approved protective clauses for the purchase agreement to protect the buyer.   

Financing – suggest alternative financing that may be in the buyer’s best interest 

I Negotiate on behalf of my buyers - You can place confidence in me because we have a mutual commitment to one another 

I provide continuous services to client during negotiations – during the term of a negotiation, continue to search for other appropriate properties for the buyer to enhance their negotiating position 

I share all available information about the seller

I follow through after the purchase contract has been negotiated – attempt to solve problems to the buyer’s satisfaction.  Buyer-client is kept informed of all progress in preparing for closing 

I represent the buyer at closing – ensure that all aspects of the closing are accurate and that the buyer’s interests are protected 

Disclosure of All Material Facts

Some examples

• Relationships between agent and other parties
• Existence of other offers
• Status of earnest money
• Seller's financial condition
• Property's true worth
• Commission split with other brokers
• Legal effect of important contract provisions

It is my goal to display professionalism, integrity, knowledge and a willingness to get the job done.  The blending of my experience and knowledge with the sophisticated marketing tools and strength of RE/MAX Allegiance assures you the competitive edge in today's real estate market.  I utilize the latest technology, the internet extensively and an e-signature platform called Authentisign.

I look forward to serving you and counting you among my valued clients. Thank you for taking the time to review this guide on buying a home.  I feel confident the search for your new home will be smoother from start to finish with the informa­tion I have provided you.

CRS

To fill the specific residential needs of homebuyers and sellers, the Residential Sales Council of the National Association of Realtors^® instituted a class of expert real estate professionals: The Certified Residential Specialist (CRS^®).
Buying or selling a home is one of the most crucial financial transactions of your life.  In what can be a confusing and sometimes difficult process, it pays to leave as little to chance as you can.  But with the help of a professional, you can navigate unknown territory with ease.

Only 2% of all Realtors have earned the right to be called a CRS^®.  Only 2% have developed special residential sales skills and enhanced their residential sales knowledge through study, dedication and experiences.  Every CRS^® has undergone rigorous, specialized courses of detailed training, aimed at making residential transactions smooth and worry-free as possible.  A CRS^® can help you optimize your transaction by identifying better prospects, clarifying investment potential, and helping you understand tax ramifications.  

ABR

A real estate buyer's representative represents the buyer who is purchasing property in a real estate transaction.  Research by the National Association of REALTORS has shown that when a buyer's representative is used, the prospective buyer found a home one week faster and examined three more properties than consumers who did not use a buyer's representative.  The buyer's representative works for, and owes fiduciary responsibilities to, the real estate buyer and has buyer's best interests in mind throughout the entire real estate process.  These three letters after a REALTOR's name tell you that you will be working with buyer representative who is committed to your best interests.  The ABR Designation is awarded by REBAC to those REALTORS who have met the specific educational and experiential criteria needed to provide the high level quality service required by REBAC (Real Estate BUYER'S AGENT Council)

GRI designees:

• Have pursued a course of study that represents the minimum common body of knowledge for progressive real estate professionals.
• Have developed a solid foundation of knowledge and skills to navigate the current real estate climate—no matter what its condition.
• Are recognized nationally.
• Act with professionalism and are committed to serving their clients and customers with the highest ethical standards.

CLHMS

Recognized as the mark of accomplishment in luxury markets around the world, the Certified Luxury Home Marketing Specialist (CLHMS) designation assures affluent buyers and sellers that the agents who have earned it have the knowledge, experience, competence, and confidence they require.  Members of The Institute who hold the CLHMS designation have documented performance in the TOP 10% of their markets, and have successfully demonstrated their expertise in the luxury home and estate market.

The CLHMS designation is the official designation of The RE/MAX Collection.  A RE/MAX study in 2010 found that among their agents, those with the Certified Luxury Home Marketing Specialist® (CLHMS) designation were the highest earners in RE/MAX and earned more than those with every other designation.

ePRO

An e-PRO is a REALTOR® who has successfully completed the e-PRO training program for real estate professionals. Endorsed by the National Association of REALTORS®, the e-PRO course teaches professionals the nuts and bolts of working with real estate on-line: Web sites, e-mail, on-line tools, and most of all, what today's consumer really wants.