You are a buyer and found the ONE, now what

Happiness Heart

You can hardly believe it. Truth be told, it is not exactly what you thought it would be and then again “upon further review”, it is exactly what you hoped to find.

Sure, you started out with some general ideas. Maybe, things started coming into focus when you traveled around the area. At first, those “For Sale” signs were just multi-colored blurs on the periphery. The subliminal message was taking root in that tiny corner of your mind where dreams are born. Life changes doesn’t it. One day the apartment you’re in is sufficient, the banner flying high declaring your independence. It is the place where you learn the lessons of housekeeping, privacy and style.

No one can really pinpoint that moment when the walls began closing in. Maybe it was the morning you stubbed your toe, navigating through the apparently diminishing space between the bed and your dresser. It could have been that night you had friends over and the once spacious living room felt like phone booth. Then again, it could have been that moment, sharing a drink with someone special and suddenly two addresses just didn’t make sense anymore.

Today, you have been through the gauntlet and have found the place.  After what must feel like an impossible journey, you know where you want to call home. Your home. You have told your agent, this is IT!

Now what?

I can’t speak for every agent. I can only share a broad overview of the next steps taken if I were your agent. (note:that statement is tweetable)

While you have been visiting homes and tweaking your list (moving “must haves” to “like to haves” and adding new “must haves” to cover things you had not considered), your agent has been quietly keeping track of the market that includes for sale, sold, off the market, etc. Behind the scenes, data has been sorted, dissected and reviewed. Now that you are ready to move forward with an offer, the pieces will come together. While you share the good news with family and friends, the framework of the next step is being put together by your agent.

The first conversation will take place between your agent and the listing agent. On the surface, it may appear that the only thing being accomplished is gathering the necessary disclosures. Appearances are deceiving. Your agent is already beginning the negotiation process. Reviewing the listing agent’s history before the call has offered some insight but the conversation will season the statistical data and offer hints as to which direction the negotiation should take.

Your lender will also be contacted. A letter validating your ability to actually buy the home must be included with your offer to purchase. This is another conversation in which your agent will develop more information necessary for the ongoing negotiation. A discussion of how your offer will be prepared and what may be necessary for responding to any counter offer will take place.

Once all the necessary information has been gathered, your agent will go over the offer process with you. You will be asked to fill out a financial information sheet that will accompany your offer. This is basic information given to the seller so they will have a certain comfort level that you actually do have enough cash on hand to cover the amount of money you will have to bring to closing. The letter from the lender is but one piece of the puzzle. A seller will want to see the probable source of down payment, closing costs, etc. This is well within their rights. Money is not a “protected class” and if a seller is not comfortable with all the issues surrounding your financial ability to purchase the home, they can refuse to accept your offer.

Your actual offer will be prepared with the help of your agent. Forms that have been developed by the local real estate commission will be used. They include the basic contract of sale which outlines the terms necessary to make a legal purchase. In addition to the basic offer/contract, you will have addendum’s specific to the jurisdiction, others defining contingencies of the offer and even more that narrow the terms of the offer. You will also have disclosures about the property prepared by the seller that cover the condition of the home.

It may seem a bit overwhelming, but remember if it is not in writing, it does not exist. Your offer, once counter signed by the seller becomes the final contract of sale. It will provide the framework for the transaction.

Your agent will submit your offer.

You will discover that there are 60 long seconds in every minute. You will become aware that every passing hour has 60 plodding minutes. You will wait, and wait and probably wait some more. After all, the ball is in the seller’s court.

Attempting to determine the outcome based on the length of time you have to wait for a response is pure folly. Your agent can not possibly know all of the factors the seller is sorting through. You have come this far, now is not the time to bristle. You have done all that you can do. Until you receive a response, patience will be your sweetest ally.

what have i doneOf course, it is only natural for you to be filled with a little doubt.  Angst is doubts pain filled bedfellow. Cup of coffee or latte, maybe you do that every day. This is a major step. For most people, the biggest expense they have dealt with (other than college loans) has been an exotic vacation. This is all about the long term.  This is home.  Sure, it is not forever, but, it is today and this is a lot of tomorrows.

Anybody in your situation would be spending a few minutes here and there wondering about the decision.  Trust yourself, you have come this far based on desire and practical application.  You have followed the necessary steps to reach this point. The seller will respond and you will have the support and counsel of your agent to deal with any counter offer that might be made. If the offer is accepted, you will be shepherded through all the following steps in the process.

You have found the ONE. With the guidance of your agent, you can now proceed to see if the ONE is the ONE.

Just beginning? Fill out the form and get the support of a “REAL” Realtor

Buying a home and overwhelmed with the process, make a list

checklist

Buying a home can be overwhelming. You have moved past the dream and are now ready for reality. There is nothing that could have prepared you for what you are feeling.  First-time home buyers have shared the experienced with us.  The doubts range from not knowing what you think you should know to not being sure what you know is really what you should know.  Couples face the challenge together and single folks face it alone, but they both feel the uneasiness.  How could you feel any other way?  Just the basics are daunting. You are preparing to spend anywhere from a quarter of a million dollars to more than a million dollars.  You have been saving, and it has taken forever to accumulate that nest egg. Suddenly, all the sacrifices you have made are staring back at you.

You have done your part.  You may have spoken with a lender already or you may have just begun searching on-line looking at homes.  What next?  Well, before I go any further, let me share the list of things you need to have accomplished before looking at one more pretty picture of a home for sale on line.

This is your initial checklist. Taken one step at a time, it will be less overwhelming. For now, the long term goal is purchasing a home but you are going to focus on a series of short term goals, one at a time. Clear everything off your plate and follow these easy steps in order they are presented. The title by the number is the goal. The subtitles under the goal are steps taken to accomplish the goal.

  1. Establish your financial position.
  • Make contact with your personal banker, a rival local bank and a local Federal Credit Union.
  • Sit with each one and inquire about their loan programs. Share only what is necessary for them to give you a general idea of what they have to offer.
  • Once comfortable (you truly understand what is being shared, if not, go back a step) ask them to give you a general idea of what you can afford based on a payment that you are comfortable with making. Do not allow them to pull a credit report at this time. It is not needed and you want to keep the number of inquiries to a minimum so your FICO score will not be impacted.
  • Thank them for their time and give the information at least 24 hours to sink in.
  • Make a follow up appointment to discuss anything questions you have. Unless your personal bank is an online bank, you can have them prepare a pre-approval letter for you. The only caveat I will offer is that sometimes market conditions are such that Federal Credit Unions have better products. If that is the case, have the FCU prepare the pre-approval letter. Whomever you choose, they can pull your credit reports.
  • Understand, this is just the beginning of the financial process. You are not bound to any lender. As long as there is time for the loan to be processed prior to closing, you can switch lenders.

2.  Determine where you want to live

  • Stop the wide focus searching on the internet. Narrow your choices down to specific areas.
  • In urban areas, you will find neighborhoods and in the suburbs you will find developments.
  • Your focus should be on where the area is in relation to your job and what are the various ways you can commute between home and work from each area.
  • Once you have some areas in mind, go spend time in them. Visit on a weekend afternoon, Drive by in the evening. If possible, park you car (if you have one) and walk around. Get a real feel for the area. You will be able to tell more about the area by actually spending time there than any website will be able to relate.
  • If neighbors are out and about and you are up to approaching them in congenial fashion, stop and ask “what’s the neighborhood like?”
  • You will find that your visits factored with your commute will create a pecking order of preferences for you to use as an outline for your actual home search.

3. Select a Realtor

  • At this point, you really do need a guide, caretaker, interpreter and adviser. As you can see, if done properly, the process has already been quite extensive.
  • The Realtor will be the person that assists you in your search. Of course, you will spend hours in front of computer screens, dreaming and hoping. Your agent will be the one charged with providing you facts.
  • Your Realtor should have a deeper knowledge of the area than what you have gleaned in your visits.
  • The most important thing your Realtor can do initially is listen to you. It is your home search. There is no way it can be accomplished successfully unless the agent is on the same page as you.
  • Communication is vital. Keep in mind all you have put together to reach this point, You have to understand what is going on and how the process is proceeding.
  • The Realtor has the tools to fine tune your criteria and match it with available properties. Keep in mind, every listing presented or suggested is only a maybe. You will turn away more than you will choose to visit and you will visit more than you will opt to purchase. Don’t be afraid to speak up and ignore a suggestion. Again, it is your home search.

4. The Search

  • You are ready to begin the search in earnest. You have your financial base, your target areas and your Realtor. Now you can begin to separate the pretenders from the contenders.
  • A solid search can be done based on area, price, amenities (number of bedrooms, bathrooms, parking, etc.), and style of home (single family, town home, condominium) Note: price may narrow choices regarding location and some amenities).
  • It is important that you truly understand, your Realtor has access to every home that is listed in the MLS in your area. The same can not be said for the national search sites. National sites (Zillow, Trulia, etc) do not have contractual agreements with all multiple listing services and in some cases they are missing homes that are for sale or show homes for sale that have already been sold. That is just reality.
  • Your Realtor should be monitoring the MLS to make sure you are notified of every home on the market that meets your general criteria as soon as it is available.
  • Viewings must be scheduled. In some cases, visits have to be scheduled a day or two ahead of time. Your agent is at the mercy of the seller’s showing instructions. You should be able to give your Realtor the times that you are available to view homes and set up viewings at your convenience. It is your home search. Just remember, in many cases, it is not possible to call and set up an appointment for later in the same day.
  • Re-visit any home that you are considering to purchase. The first visit was just that, the first visit. The second visit should be a bit longer and you should take the time to visualize living in the home.
  • Do not be discouraged if it seems like the process is plodding along. When you walk through the doors of the right home for you, you will know it.

Now, you know you are financially ready, you know where you want to live, your agent has taken you through homes and you have found the one!

Sit down with your agent, he will help you prepare an offer that will present you in the most favorable position to the seller. You have gotten this far. The rest will be nerves. It may help you to make a list of all the reasons you have to be proud of yourself for reaching this point. Never discount the pride in accomplishment every new home owner feels when the receive the keys at closing.

Of course, if you reach step 3 and figure I might be a good choice, fill out the form. I would be delighted to assist you in your journey.

Let’s talk about loans …

bookcover

O.K. maybe not loans, but I think everyone should have a short primer regarding how folks pay for a house.  It really doesn’t matter if it is a co-op, a condo, a town home or a single family home.  One of the basic rules of contract law includes the need for consideration. Consideration is just a fancy legal term for money. If you want to buy a house, you have to be able to produce the funds at settlement.

Now, if you happen to be loaded and can pay cash for the house, well you can either read through this for information, or you can check out another one of the articles I have written. For those of you that want to buy a home and don’t have cash on hand, this is for you.

For purposes of example, I will use a $500,000 purchase price. You and the seller have agreed on the price. Well now, wait a minute, let’s back up. You really should have an idea about all of this before you begin looking for a home.  The very first question you have to ask yourself after deciding you want to own a home of your own is how much can I pay for a home (keeping mindful that your comfort level should be dictated by what you can afford and not what you would like).

I am not a lender. I can only give you general advice in this area. Let’s make that specific advice. After reading this primer, talk to a bonafide lender! Then talk to another. Keep talking until you find one that you are comfortable with. They will provide the rock that your dreams of owning a home will be built upon. The lender will gather information about you and tell you what you can borrow.

The most basic loan is a conventional loan.  Lenders like this sort of loan because it requires that the borrower (you) contribute at least a 20% down payment.  In the example of a $500.000 purchase, you will be putting at least $100,000 down and the lender will provide the rest of the money. Each month you will make a payment that includes principal and interest.  If you do not have 20% down, you can receive a gift from parents or grandparents or anyone to make up the difference. You will need to provide the lender with proof that it is in fact a gift and not a loan. If you just don’t have the 20% down, you have other options.

The FHA guarantees loans. That just means that your lender will have insurance that some of the money you borrowed is guaranteed to be paid back. If you default, the insurance involved steps in. This guarantee allows lenders to loan money to people that don’t have the 20% down payment available. You still have to have at least 3.5% of the purchase price available, and there are limits on how much money you can borrow. The credit demands are a bit less restrictive. Oh, and you still go through the underwriting process. The FHA has rules about who can qualify and their criteria must be met. Every month you will have a payment that includes principal and interest and the mortgage insurance premium (yep, you have to pay the insurance. if you don’t like that, put 20% down).

Veterans have loan guarantees available to them as well. They can get a VA loan. This type of loan is from lenders but it is guaranteed by the Veteran’s Administration. Another feature of the VA loan is that you don’t have to have any money down. This sounds great, but the flip side is that you will have a higher mortgage and you will have  VA fee as well. The VA doesn’t lend the money. Just like the FHA, they guarantee a portion of the loan. That’s right, you pay the premium for the protection.

In some areas, the USDA guarantees loans. It is very similar to the VA in that, you don’t have to put any money down. Again, remember your loan amount will be higher and your payments will be higher as well. This is a great program if you are purchasing a home in an area where these loans are available.

Of course there are all sorts of hybrid loan types out there. There are terms that vary with lenders.

Things to know.  An ARM is an adjustable rate mortgage.  Simply put, the interest rate is fixed for a short term and then it can go up or down depending on the market. Usually, there is a cap on the interest rate (i.e. the highest amount the interest can be).  Lenders offer these loans at attractive rates. You should always consider what you can afford at the market rate today, that means the size mortgage you are comfortable paying at market rates.  Use the lower rate as a saving not a method to qualify for more home  (if variable rates are lower, borrow less and invest the saved money). NOTE: that is just my opinion. I really believe borrowing money, hoping that your income will go up when the rates go up is a fast track to foreclosure.

An interest only loan is another product some lenders offer. Not a bad deal for the lender. You move in. You pay interest on the loan until the interest only term runs out and then your payment shoots up like a rocket ship on rails. Oops. You can’t pay and the home goes into foreclosure. Interest only loans only have the interest of the lender at heart.

So it is not really confusing. There is a conventional loan and then there are other products available to those that do not have sufficient money saved to buy a home. Lots of people have used the FHA guaranteed loans and VA guaranteed loans and USDA supported loans. They are good loans. As a matter of fact, all loan products are good products if they are used by the right borrower.

Buying a home is a major step. I think it is wise to have some money set aside to invest in your purchase.  Of course, you may use a loan product that does not require that you put that money into the purchase of the home. Home ownership is not cheap. The money should be set aside for maintenance and upkeep. It will be your home after all.

If you have any questions, talk to your lender. If you are in the DC area and do not have a lender, I will provide you with a list of three names. You can call them all.

Once you have been pre-approved and are ready to begin the search, well, that”s my area of expertise. Once you are in my hands, I will review where you are with the lender, offer some advice about fine tuning the financing and then I will listen to you tell me a tale of your dreams and set out to assist you in making those dreams come true.

As always, I am only a phone call away…. 301-509-5111

The DC housing market … why is it so hot

Every recent market report seems to add the caveat that DC is an anomaly. Most markets are still attempting to recover from the 2006 crash. DC took a bit of a dip, but is roaring back. How can this be happening?  The economy is certainly not much better today than it has been for several years. Federal workers haven’t seen a raise in pay for a few years. If all economic indicators remain uncertain, why are homes in DC costing more every month?

The answer is as plain as day.  DC has jobs.  Very few places across the country can make the same claim. DC is a small 10 square mile area. There are only so many homes that will fit. Engineers and builders and architects can do a lot of things …. they can not create more dirt. Space is limited in DC. Put those two factors together and you have recipe for rising home prices (regardless of the economy).

This little chart covers the phenomena.  At the top, the various places new residents come from are depicted.  People moving to DC come from Universities (college dorms or off campus shared housing), their parent’s home, homes they own in other parts of the country or homes they rent elsewhere.  They want to live in or near DC and begin a search. Almost every last one of them jumps on the internet and begins their search there.  After all, there are hundreds of thousands of websites that share available homes in DC.  The majority of the people searching do not understand that the accuracy of the data is often outdated or limited at best.  For every single home/town home/row home/condo listed there is just one property. How that property is displayed has more to do with syndication by agents and brokers than it has to do with the actual property. (A word to the wise: If you want to be more successful in your search, contact an agent in the area. Talk to someone that knows more about the area than can be revealed in wikipedia or some local towns site. Boots on the ground, an ability to listen and then share information is the best way to discover DC (or any other area for that matter).

housing flow chart

As always, DC has more people wanting to live here than there are places to live.  More buyers than available homes creates an imbalance and that old supply and demand process takes over.  Multiple bids appear, prices continue to rise and the market remains “hot”.  Regardless of promises that might be made by some, the truth is you may not find a home you are seeking for the price you are willing or able to pay.  I certainly would never guarantee that home prices will continue to rise, but I promise you that I can see nothing in the marketplace that will slow down the DC market in the near or distant future.

If you are considering a move to DC, you need factually based assistance.  You need to begin the process now, rather than later. You need to begin putting together a comprehensive home buying plan today.  Remember, a comprehensive plan begins with a discussion with a lender. Know what you can comfortably afford. Then, and only then, take the next step. Contact an agent that knows DC. Speak with someone that knows the difference between Adams Morgan and Madame’s Organ. Have a conversation with some one that understands the difference between Petworth and what is a pet worth, the difference between NOMA and no mas or the difference between the Capitol and Capitol Hill.  Subtle differences of a few blocks can add 30 minutes to an hour or more to your commute each day. A map of the subway (Metorail Line) does not include information regarding ease of use or ease of transfer.  A google map of DC will not reveal the walking score of a neighborhood.

DC is my town. I was born here. I know the neighborhoods. I know the Metro stops. I know the nightlife. This is a great place to live. Before you move here and decide on an address, don’t you think we might need to talk.  My phone number is 301-509-5111.

For More Information

Excellence Comes Standard!

          Real estate is a strange profession.  Ideally, real estate agents are supposed to focus on helping consumers in a buying or selling transaction. There is money to be made, no doubt.  When the market was soaring, everybody wanted to get into real estate.  Why not?  It certainly was easy to get in. In this area, you had to take a 60 hour course and pass a couple of exams and voila…you too were a real estate agent.

         Actually, it takes less training and time to be a real estate agent than it does to become the barber or hair stylist that cuts your hair.  Of course a lousy hair cut is visible to everyone and bad barbers or bad hair stylists are soon out of work.  Real estate agents have the benefit of working in the shadows.  Most of the people they serve don’t know what should be done and evaluate the agent based on personal bench marks.  If no one is the wiser, bad agents just keep on turning up with the regularity of a bad penny.  Don’t get me wrong, bad agents aren’t for the most part bad people.  They just seem to be less experienced.  Eventually, they may figure it out.

          How can you tell the difference between the good and the bad?  Lots of articles are written about reviewing a few agents before selecting one.  Now that sounds like a good plan, but what criteria should you be considering?  No offense to your nephew or your co-workers cousin.  They might be wonderful people, but a family relationship should not be your only benchmark.  Your first question should be “Have you done this before?” or ” How many transactions have you been experienced?”  It is not always wise to have your experience be the training ground for someone.  Experience does make a difference.  You will fare much better when situations arise if your agent is cool, calm and collected because they have “been there” and “done that”.  Your results will be more favorable when you are represented by someone that is focused on a plan rather than someone that is hoping they guessed right.  An experienced agent will put you in the strongest position during negotiations.  Lessons learned through hundreds of transactions create a sense of confidence that should not be over looked. ( Back in the wild wild west, the experienced gunfighters knew – never draw when facing the sun.)

         We certainly hope that if you are in the market to buy or sell, you take the time to at least contact us.  We have done this before. You have a choice in representation. Choose wisely.  Give us a call or text us at 301-509-5111.

Buying a home in Washington, DC

Buying a home in Washington, DC?  There are a few things you should know before beginning the process of buying a home in Washington, DC.  As with a home purchase anywhere, you need to know how much home you can afford to purchase.  If you have not had a conversation with a mortgage lender, now is the time to do so.

The mortgage lender will evaluate your financial situation.  Your credit score will be pulled and analyzed. Your credit report will be reviewed.  Your employment, salary records and available cash on hand will be part of the mix as well.  Lenders have specific guidelines to follow when determining how much money you can borrow.  When buying a home in Washington, DC the lender’s decision is just one piece in the puzzle.  While it is important, it is only a guideline for you.  You have to decide how much money you are comfortable spending for housing on a monthly basis.  It is quite possible that your lender will be ready to offer you a loan that is more expensive each month than you are prepared to pay. You don’t have to take out a loan for the lender’s maximum.

A word of advice when tallying up your monthly housing costs.  Be sure to factor in the amount you will have to pay for insurance, taxes, home owner’s association and/ or condo fees. Buying a home in Washington, DC may seem challenging, but I have helped many homeowners and I would love to help you.

Once you have a clear understanding of how much money you can spend on a new home, it is time to sit down and determine what type of home you want.  When buying a home in Washington, DC, you have many choices.  Your choices will be narrowed down by a combination of your “ must have list “and your “wish list”.

The “must have” list will include the things that you deem absolutely necessary in your new home. This list begins with the number of bedrooms and bathroom in the home.  It may also include parking,  distance from public transportation, a certain school district, the type of home (condo, town home or single family detached), a first floor bedroom and anything else that you “must have” in your new home.

The “wish list” may include just about anything your heart desires. Some people would prefer a brand new home while others really would like to have that “man cave” possibility. You are buying a home in Washington, DC. Let your imagination be free to dream.

The next step in buying a home in Washington, DC is to select a real estate agent.  The agent does not have to be the first one you meet, nor do you have to interview several. Choose an agent that is experienced and gives you a comfort level that they are more concerned with helping you than earning a commission on a sale.  Of course the agent will earn a commission, but that should occur because you’re needs are being fulfilled and not because they happen to be the one that writes your offer.

The agent you select should be familiar with the steps that must be taken when you are buying a home in Washington, DC.  They should always listen first and continue to streamline your search as your desires come into greater focus.  They should be able to communicate with you in a timely fashion using whatever means you are most comfortable.  Today, that might include texting, email or phone calls.

The agent has to be accessible for you.  This is the one person that will be involved with every facet of your purchase.  Agents have to fill the role of dream weaver, hand holder, reality checker and negotiator.  When buying a home in Washington, DC the agent is your key player.  Choose wisely.

Once you have found the home you wish to purchase, the process of making it yours begins.  An offer must be prepared and submitted.  The final terms of your contract to purchase must be negotiated. Once you have an offer and acceptance, the road to settlement is undertaken.  Clearing the conditions of your contract will begin.  Buying a home in Washington, DC may include an appraisal, a home inspection, a termite inspection or a survey to name a few items that must be dealt with before settlement can take place. Your agent will play a large role in coordinating each of these steps.  There is no substitute for experience here.  A smooth transaction is not always possible, but your agent has to know the lay of the land and what steps are necessary to guide you home.

Buying a home in Washington, DC may not be as easy as ordering dinner or planning a vacation. It can be the next step you take in your personal journey to fulfillment. If the time is right and you are in position to make the move, buying a home in Washington, DC can easily become a reality. No essay can answer every question. No short article can put you at ease.  Most people prefer a little give and take in the form of a conversation. Blogs don’t reveal body language or tone.  I know that buying a home in Washington, DC may seem challenging.  I would welcome the opportunity to discuss your dreams with you. You can call me at 301-509-5111 or text me at the same number.  I will make the time to sit down with you at your convenience a priority.  Take the next step in making your dreams come true.

If you are just beginning the process of buying a home in Washington, DC and just want to see what might be available, click on this highlighted link and search the available listings from the comfort of your computer …HOME SEARCH NOW

Home buying sealed with a KISS

K (eep) I (t) S (imple) S (weetheart)

          There are so many times that I can recall that a kiss was just what the doctor ordered.  A kiss for good luck, a kiss that bridges fantasy to reality, a kiss when wed, a New Year’s kiss and the infamous call when a ball is hit out of the park “kiss it goodbye” are kisses.  The right kiss can remove the stress of home buying.  K(eep) I(t) S(imple) S(weetheart).  Sure, the process can seem overwhelming.  Most people are not involved in the home buying process on a daily basis. I am. I know it may appear like a mystery to you, but I do this all of the time and I have to tell you, it is far less complicated for an experienced agent.  There is an orderly process to follow that will keep  you on track.

         To begin with, you don’t need any other people for your first step.  You have to move from the “I want to buy a house” status to the “I know I can buy a house” position. Now that sounds simple enough and actually it is. You want to be armed with information from the very beginning.  The most important pieces of information are your credit reports and  your FICO score. (Your FICO score stands for the Fair Issac Corp., which is the company that uses proprietary algorithms to reduce your financial history to three digit number that ranges between 450 and 850. The higher the number, the better your history and the better your chances are at getting a loan at favorable terms. If you number is too low, you won’t be able to qualify for a loan without an extraordinary amount of money down.) There are three major credit reporting agencies. They are pretty much the same, but not always exactly the same. I would avoid the free credit report sites. They have a lot of small print and tend to end up costing you an ongoing fee. Your best bet is to go to www.annualcreditreport.com. Follow the instructions and gather all three of your reports. You will notice they do not include your FICO score. You can purchase your FICO score online at www.myfico.com. Now, before you ask “Why do I need this if the lender will get it?”, let me just share that it is better to know how you look going in than it is to be blindsided sitting in a lenders office. You should be in control and getting the facts will give you that control.

         Once you have you credit reports and FICO score in hand, you are ready for the next step. Before you go looking on line, before you start wandering into open houses, before you even begin the home search, you have to KNOW how much home you can comfortably afford. You are now ready to sit down with a lender. My advice is to get in touch with an experienced, local mortgage lender. It is best to focus on a loan officer that is well know in the community. As alluring as the on site lenders may appear, they are often located quite some distance away and that fact may hinder you as the time to close the loan draws near. The lenders job will to be to provide you with a dollar amount for the home you can afford. One word of caution, make sure that the lender is working with today’s interest rate and a clear picture of what your monthly payment will be throughout the length of your loan.  With rare exception, you are a fool if you agree to a loan that has low payments today and the caveat that the payments will increase in the future. MAKE SURE YOUR LOAN QUALIFICATION IS BASED ON TODAY’S INCOME AND TODAY’S INTEREST RATES. The goal of this meeting is to get a informal commitment from the lender. The lender should be willing to provide you with a “pre-qualification” letter that will state that the lender has reviewed your credit, has verified you income and the cash you have available for a down payment. The letter should state that the only information needed for the loan is a contract on a home and a satisfactory appraisal of that home.

         It would be in your best interest not to get caught up in the slight variations in interest rates and fees.  The lenders job is to make sure your loan is funded within the time constraints outlined in the contract. The lender will have to provide you with a good faith estimate. You can use the good faith estimate to compare what is offered against other lenders. If you do not have a lender, check with your bank or credit union for a recommendation. If you have an accountant, they may know of a lender. You can also ask a real estate professional for the name of a good mortgage broker. (If the agent refers you to a lender that is tied to their broker BEWARE. A good mortgage lender does not have to affiliate with any real estate brokerage. Once an affiliation exists, the possibility (real or imagined) for violations of RESPA come into play.)

        I know you hear the NAR commercials suggesting that you need a Realtor. In Maryland, almost 10   Your next step is to select ONE full-time experienced real estate agent.0% of the practicing agents are Realtors. (You see, in Maryland, every agent has to work for a broker. If a broker wants to be a member of the Maryland Association of Realtors, something they have to do to be a member of the NAR, they must agree that all agents working for them will be members as well…ergo…almost 100% of the agents working in Maryland are Realtors).   Now, how do you find a good agent (hint: if you have read this far, you are already pretty close to a dog gone good agent, but I digress)? Some would say, ask a friend, ask a co-worker, ask a family member…ask somebody.  I would suggest that you can do your homework. Go on-line and find an agent that shares more than listings. Find an agent that has experience in the market and the area. Talk to the agent. Discern their style. Beyond knowledge, you will have to be comfortable and believe that the agent knows what they are doing.  I am not the only one that believes experience is a difference. Dave Stevens, the former head of the FHA agrees with me. Why full-time? Representing you is their job and you deserve the full-time attention of the agent. There is no reason you should receive part-time representation from a part-time agent that will be earning full time pay!

          Of course, you might think that you can go it alone. Every home worth considering is on-line. The listing agent can unlock the door for you. Why go through the hassle of working with one agent? Well, you are right. A monkey can find homes for sale randomly plunking a keyboard.  Beyond that, you enter murky waters when you choose to swim alone. Finding the right home is but the tip of the iceberg.  Doing it on your own will always leave that nagging doubt “would a real estate agent have found a better home?”  Once the home is discovered, do you really want to go on line and print out a contract and sign it? In Maryland there are over 50 pages in a real estate contract to purchase. The body of the document is 11 pages of terms and conditions. In addition to that there are local addendum’s, jurisdictional addendum’s, disclosures about the home, about lead paint, etc., and then you have to add various contingencies for inspections, appraisals and dozens of other potential requirements. You are done yet. If the home is governed by a home owner’s association, you will need to request and review their documentation. There is a sea of paperwork that flows between the front door of your dream and the settlement table where you will close the transaction.  The real estate agent is the captain of your ship of dreams and you better be sure he is sea worthy and able to get you into a safe harbor and closed on time.

         There is a lot to consider when you first begin to believe, “I want to buy a home”.  Rather than be intimidated by the challenge, keep it simple sweetheart, follow the easy steps. You don’t have to be a wall flower, the band is playing.  Is it your time to dance?

         I’d love to go over any of this with you. If you are seeking a captain, I’d welcome the opportunity to take the helm! Contact me.