Patty Manzi’s Tri-Valley Real Estate Blog

When you start looking for a home you will find that there are many beautiful homes on the market.  There are a few things I suggest you do before you start looking at homes.  If you do these two simple things, it will make your home touring a more productive process.  You will not waste time looking at things you cannot afford, or that don’t suit your needs.

1. Meet with a lender and find out how much you qualify to spend on a home, and get a pre-approval!  It is very easy to get excited about features found in homes out of your price range.  Before you get your heart set on that big, tree shaded colonial on the hill, your need to pin down how much you can afford.
2. Make a list of “Required Features” vs. “Extra Features”.  For example:  Required features for you might be location, number of bedrooms, eating space, architectural style, garage, school district.  Extra features for you might be a fireplace, walk-in closet, wet bar, pool, siding, vaulted ceilings, deck, landscaping.  There are many different features in homes that range from necessary to luxury. It is easy to get caught up in the excitement of a beautiful home loaded with amenities.  It is important that you select a home that truly meets all of your requirements first and foremost!  Providing this list to your agent can help narrow down the prospective homes that you will tour.  If you are not interested in having a home with a pool, then dont waste time touring homes that do.

Some of the features to note when touring homes:

• Address
• Subdivision name (gated community, HOA)
• What is the home near? (mall, freeway, parks, schools)
• Garage (number of spaces, attached, detached)
• Lot (size, shape, slope, ease of access)
• Style of home
• Bedrooms & Bathrooms
• Living Room
• Fireplace (wood burning, gas, stove insert)
• Kitchen (size, condition, appliances)
• Dining Area
• Laundry area (garage, laundry room)
• Additional rooms (bonus rooms, theater rooms, sun rooms, office/den)
• Additional features (air conditioning, ceiling fans, pool, stairs, french doors, etc)
• Square footage

As you tour homes, check back to this list to make sure the home meets your requirements.  The extras should only come into play when you make your final decision between homes that meet all or most of your requirements.

Here is a brief explanation of the responsibilities of the Buyer’s Agent and Seller’s Agent in a transaction.

In California,Real Estate brokers and their sales persons are required to disclose the type of working relationship they have with the buyers and sellers in a real estate transaction.  There are several types of relationships that are available to you.  You should understand these at the time a broker provides specific assistance to you in buying or selling real estate.  Buyer’s Agent and Seller’s Agent relationships are commonly referred to as ‘agency’ relationships and carry with them legal duties and responsibilities for the broker as well as for the buyer and seller.

Buyers Agent.  A Buyer’s Agent acts solely on behalf of the buyer and owes a fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer.  The agent will negotiate on behalf of, and act as an advocate for the buyer.  The buyer is legally responsible for the actions of the agent when that agent is acting within the scope of the agency.  The agent must disclose to sellers all material facts concerning the buyer’s financial ability to perform the terms of the transaction and whether the buyer intends to occupy the property, but cannot disclose to another party that the Buyer will pay a price greater than the price offered.  A separate written buyer’s agreement is available which sets forth the duties and obligations of the parties.

Sellers Agent.  A Seller’s Agent acts solely on behalf of the Seller and owes a fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller.  The agent will negotiate on behalf of, and act as an advocate for the Seller.  The Seller is legally responsible for the actions of the Agent when that Agent is acting within the scope of the agency.  The Agent must disclose to Buyers or Tenants all adverse material facts about the property known by the Broker.  A separate written listing agreement is required which sets forth the duties and obligations of the parties.

I was asked the other day about why someone would need to get ‘pre-approved’ for a loan before looking for a home.  Here’s why:

If you are serious about buying a home, your next step is to get a ‘pre-approval’ from a reputable Lender.  By doing this before looking at homes, you’ll save yourself time, energy, and frustration. 

The pre-approval will:

• Determine how much home you can afford:  Helps you avoid buying less home than you can afford, or being disappointed if you don’t qualify for as much as you had hoped.
• Shows what your total investment will be: You’ll know approximately how much money you’ll need for your down payment and closing costs.
• Lets you know what your monthly payment will be: You’ll have a very close estimate of what your monthly principal, interest, taxes, and insurance (PITI) will be.
• Identifies the loan programs you can qualify for:  With a wide variety of loan programs available, it is important to know which types you qualify for and which will best suit your needs.
• Strengthens your offer: Sellers may be more inclined to accept realistic offers when they know that you are serious and have taken the time to be interviewed by a lender and are pre-approved for a loan.

When you are pre-approved by a Lender, you’ll receive a Pre-Approval letter to give to your Realtor®.  This letter should state that the Lender has checked your credit, your credit score, verified your income and employment history, and your monthly debts and obligations.

Choosing Your Lender

When you buy a home, one of your primary concerns will be finding a lender who can provide the financing YOU need.  So how should you shop for a Lender?  Most real estate agents have a network of reputable professionals they can refer you to.  Calling around and asking for interest rate quotes is NOT always the best way to select a Lender.

Competitive rates are important, but when you consider the fact that most Lenders get their money from the same sources (and therefore have essentially the same rates to offer), you must look at some other factors before choosing a Lender.  You need a Lender who works with you and your real estate agent as a team and has the same goal – to get your loan approved and closed in a timely and professional manner. 

Meeting With the Lender

When you meet with the Lender you choose, be prepared to provide the following information:

1. Your residence history
2. Your employment history & income
3. All outstanding debts, loans, credit cards
4. All bank accounts – savings, checking, and investment accounts
5. Real estate you currently own
6. Personal property you own

Remember finding a Lender you can trust is just as important as finding an experienced Realtor®.  You want to make sure that your needs are going to be met professionally and represented throughout the entire process of buying your home.  Ask for, and check references.

If you are a first-time home-buyer, or a buyer who hasn’t purchased a home in the last 10 years or more, here are some basic guidelines of what to expect during the buying process.

• Find a Realtor® you can trust.  The first step in the home buying process is to find an experienced Realtor® that you can trust, who has a team of professionals in place.  This will help to ensure  that your needs are met professionally and represented throughout the entire process of buying your home.  Ask for, and check references.
• Get Pre-Approved for a Loan.  This is a very important step.  By doing this before looking for a home, you’ll save time, energy, and frustration.  You will know exactly how much home you can afford.
• Look for your dream home.  The next step is to look a various homes.  A good rule of thumb is  to look at no more than 5 houses each time you go out to tour homes, more than that can be overwhelming.  Your agent can give you printouts from the Multiple Listing Service (MLS) with details on the homes you see.  Take notes on all the properties so you can remember later what features you liked or disliked about the homes.  Remember to take notes on the neighborhood as well.
• Your offer.  Be Careful ~ this is a BIG step!  When you find your dream home, you should be prepared to present a competitive offer immediately.  Your agent must  do thorough research and be able to back up your offer with solid data supporting the price and terms  that you choose.
• The Contract.  You’re starting to jog now….When the seller accepts your contract to purchase, you are ‘in escrow’. Your Realtor®, and you, will work as a team to make sure every detail is handled accurately and immediately so the escrow can close properly, and on-time.
• Inspections.  You’re on the “HOME” Stretch!  Inspections are performed to ensure you know everything you can about the home you are buying.  Contract details are further performed and negotiated, and when all tasks are complete – you head to closing!
• Signing the Loan Documents.  Finalizing the Lender’s commitment.  Prior to the closing, you, your lender, your agent, and your title representative will sit down with you to sign your loan documents at the title company.  At this time you will bring your down-payment/closing funds.  After the signing the  lender will send their funds to complete the transaction. 
• Now it’s YOURS!  Then next Step will be into your new home.  After the Deed is recorded, you can pick up your keys and move into your new ‘Home Sweet Home’!

Sound too easy?  Keep in mind that no two home purchases are identical, they all have their own unique set of circumstances and conditions that need to be addressed.  And, yes,  sometimes problems do arise.  Having a professional team in place can help to ensure that all the issues are dealt with in a professional and timely manner.  This experience should be exciting and enjoyable, as well as get you the perfect home with the least amount of hassle!

I sometimes  have people ask why they need a real estate agent to assist them with buying a home.  Here is my answer.

A REALTOR® brings a wealth of knowledge and experience to the business of buying a home.  In fact, a licensed real estate professional provides much more than the service of helping you find the home of your dreams.  Realtors® are not just sales agents, they are expert negotiators and superb navigators around the local neighborhood.  They are members of the National Association of Realtors® (NAR), and must abide by a Code of Ethics and Standards of Practice enforced by the NAR.  A professional Realtor® is your best resource when preparing to buy a home.

Here are just a few more reasons:

• Working with a Realtor® can save you endless amounts of time, money, and frustration
• An experienced Realtor® will know the housing market in the area and can help you avoid many a ’ wild goose chase’.
• A Realtor® can help you with ANY house, even if it is listed elsewhere, or is being sold by the owner directly.
• Realtors® often know the reputation of the best lenders in the area.  This is essential when helping you get pre-approved for a loan, discussing down payments, closing costs, and monthly payment options.
• A Realtor® is an excellent source for general information about the community, specific information about schools, churches, shopping, transportation, plus tips on house inspections and pricing.
• A Realtor® is experienced at presenting your offer to the homeowner and can help you through the process of negotiating the best deal.  They bring objectivity to the buying transaction, and can point out advantages and disadvantages of a particular property.

And the best thing is that all of  this help normally won’t cost you a cent!  Generally, the seller pays the commission to the Realtors®.  However, as a Realtor®, that doesn’t affect our dedication or the spirit of teamwork that is put into helping you find and buy the home of your dreams. 

This is just a first in a series of  blog’s about home buying, check back tomorrow for more….