Buying a Home

The advantages of working with an agent when buying a property include:

1. Access to Multiple Listing Service, in which every property that is listed with a Real Estate Company can be pulled up and reviewed.
2. Having a professional that is trained in negotiations, to help strengthen your position in the transaction.
3. Agents experience in knowing the market trends and understanding the investment potentials.
4. Referrals to other professionals, such as lenders, appraisers, inspectors, contractors, and insurers to name a few.
5. Legwork including preview areas and properties to save you from spending hours looking at properties you wouldn’t even consider buying.
6. Knowledge of and access to in-brokerage or “pocket listings” not yet on the market.
7. Using the resources of the agent such as their transportation and listing service access saving you spending your own money.
8. The ability to access homes at your convenience, that you normally wouldn’t be able to view without the approval of the owner or agent.
9. Agents will order up all title work and set up closings along with completion of all paperwork needed to complete the transaction.
10. Best of all the commission is usually paid by the seller, so there is no cost to you!

If you do not use an agent, you typically will not reduce the commission or the selling price on a property. The commission amount has already been set between the seller and their listing agent. The listing agent is not obliged to reduce their commission just because you don’t have an agent.

Generally, the commission is a percentage of the selling price paid to the agent representing the seller. The agent representing the seller (also known as the “listing” agent) will usually split the commission (known as the “cooperate”) with an agent representing the buyer (known as the “selling” agent).

Agents have a duty to be fair, honest, deal in good faith, and disclose material facts to both the buyer and seller. However they have an added duty of utmost care, integrity, honesty, and loyalty in dealings with either the buyer, seller or to both.

1. Integrity and honesty
2. Understanding of your taste and needs
3. Commitment to your happiness
4. Business savvy
5. Proven experience in the real estate industry
6. Knowledge of the area in which you want to buy
7. Ability to communicate your needs
8. Easy to get along with and spend time with
9. Professionalism
10. Referrals from past clients
11.  Flexibility to work around your schedule

• Prepare a individualized “Buyers Packet” complete with mortgage information, loan information, terminology and market analysis of the property that fits your criteria.
• Review, suggestions and representation of financing alternatives.
• Review and report the improvements or repairs needed on the property you are considering buying.
• List your name and home criteria on the Multiple Listing Service, which will alert me to new properties as they become available.
• Preview homes and areas that are in your buying criteria (if applicable).
• Set showings of the properties and maintain feedback to the listing agents.
• Organize the listings and maps in your buyer portfolio, deleting properties that don’t work, thus in turn cutting down countless hours of viewing homes you wouldn’t consider buying.
• Maintain constant contact with you either through email, text or phone, as to the status of homes that meet your requirements and the entire process as needed.
• Maintain A Fiduciary Responsibility to You
• Review and present all offers to the seller. Review with you all the contingencies, conditions, relevant to the offer, and make recommendations to these findings.
• Prepare all “Counter Proposals” when necessary.
• Monitor and insure the performance of both the buyer and seller of any conditions or dates described in the contract.
• Work in conjunction with all lenders, title companies, and real estate agencies to set a closing date that beneficial to your needs.
• Make sure that you understand everything that will happen at your closing.
• Secure all documentation for your files to be given to you at closing.
• Close and finalize the transaction.

If you have been pre-qualified, but not for the amount you would like, you may want to make some changes to increase your purchasing power. Below are three of the common obstacles to qualifying for a home and some possible solutions to each.

Excessive Long Term Debt

• Consolidate your debt into one loan.
• Pay off long term debt by using some of your cash and making a lower down payment.
• Sell one of your assets to pay off some debt.

Inadequate Income

• Income from alimony, child support, bonuses, overtime, or future raises might be considered in qualifying for a loan.
• Find a Co-Mortgager who is willing to go on the loan with you to help make qualifying easier.
• Make a higher down payment.
• Consider a financing option that will allow you to stretch your purchasing power, such as a FHA loan, adjustable rate mortgage or balloon financing.

Credit Problems

• Repair your credit file by contacting creditors and requesting that negative information be removed from your records.
• Pay off outstanding judgments, liens and collections.
• Re-establish good credit with a secured credit card.

The lender is going to require that you come up with some form of down payment, usually at least 5% of the value of the home. The amount that you put down effects the lender’s decision, the size of your monthly mortgage payments and the amount of cash you have available for other home buying cost. The larger the down payment you put down , the lower your monthly payment will be, as well as the amount of the total loan. Lenders will not require you to have mortgage insurance if you are able to put down a certain minimum percentage. This can be a substantial amount of savings toward your monthly payment.

Sources you may draw upon to come up with the down payment include savings, life insurance policies, mutual funds, stocks and bonds, pension funds,real estate holdings to name a few. Other ways to accumulate the money for a down payment are, listed below.

Gift from a family member – Notarized documentation is required to prove that the money is a gift, not a loan and must be signed by the giver.

Withdraw money from your IRA account – You may withdraw up to $10,000 without penalty, if used toward buying your first home.

Borrow against your 401K plan – Some 401K plans allow a withdrawal when you use the money to purchase a home.Check with your plan administrator.

Sell or borrow against an asset – The loan payment will be counted as a debt.

Use premium pricing to pay closing cost and/or prepaids – This will reduce the amount needed for closing , however, the interest rate will be a little higher.

Have the seller pay some of the closing cost and /or prepaids – This will reduce the amount needed for closing without raising the interest rate.

Down payment assistance programs – Ask your Loan Officer if there are any down payment assistance available in your area.

For Colorado Homeownership Assistance Programs information visit the HUD website.

Do Not Change Jobs

Changing jobs before or during the loan process can create problems in qualifying for a loan. If the new job is in a different line of work or pays lower, it may influence the outcome of your approval.

Do Not Switch Banks or Move Money Around

It is best to leave your money right where it is until your loan is closed. Moving your money to a new bank or even to a new account can make it difficult to the verification process.

Do Not Pay Off Random Bills

Your Loan Officer will advise you as to whether it is necessary to pay off bills in order to qualify. They will also show you the best way to pay off the bills, and to make sure there is evidence to prove that the bills have been paid in full.

Do Not Make Major Purchases

Many borrowers make the mistake of buying a new car, furniture or other major purchases without realizing the impact it can have on their ability to qualify. Contact your Loan Officer if you feel a major purchase needs to be made prior to the closing of your property.