purchasing your new home

Buying YOUR New HomeBrian Moran, REALTOR®

Coldwell BankerSchmidt Family of Companies

30400 Detroit Road #100Westlake, Ohio 44145

(440) [email protected]

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mailto:[email protected]

Steps to Home Ownership

1. Get Pre-Approved

2. Hire a REALTOR® (ME!)

3. Hire a Home Inspector

4. Make a Formal Application

5. Get Ready to Close

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Step 1: Get Pre-Approved

• The first step when buying a home is to get pre-approved for a mortgage!

• The terms pre-approval and pre-qualificationare OFTEN misunderstood

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• A pre-qualification is usually an approximation of the price for which a borrower might qualify. More often than not, information is exchanged verbally regarding debt, income and assets. A credit report is usually not pulled.

• A pre-approval is more powerful: a credit report is pulled (ideally from all three credit bureaus); income, employment and assets are disclosed and documentation to support the income, employment and assets is provided.

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• General Rules of Thumb:

– You can afford a home 3x your annual income

– Taxes: 31% of your income goes towards taxes

– Total Debts: 40% goes to pay debts• Including mortgage payment, car loans,

student loans

– Expenses: 29% goes towards everything else• Food, clothing, entertainment,

vacations, etc.

Taxes, 31%

Total Debt, 40%

Expenses, 29%

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Step 2: Hire a REALTOR®

• Why Hire a REALTOR®?

– They have Education & Experience

– Knowledgeable about the area

– Can provide Market Condition Information

– Negotiation Skills

– Handling of Paperwork

– Answers Questions

– Establish a Relationship for Future Business

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• A REALTOR® will assist you with the following functions:– Finding a mortgage lender– Getting pre-approved– Establishing needs, wants and goals for your new home

• Wants– In-Ground Pool– 3 Acres– Marble Tile in foyer– Stainless Steel Appliances

• Needs– 3 bedrooms– 2 Bathrooms– Garage– Good School District

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• A REALTOR® will assist you with the following functions:– Looking at homes– Researching the area and amenities for the homes you like– Submitting a purchase agreement– Submitting counteroffer(s)– Setting up inspection (home and other inspections as needed)– Submitting an inspection response to the seller(s)– If necessary, renegotiating details in the contract as a response

to the inspection– Getting documentation to the lender and sign lender’s

disclosures

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• A REALTOR® will assist you with the following functions:– Setting up homeowner’s insurance– Receiving final approval for the loan– Arranging closing with title company, lender, buyers, sellers and

agents– Reviewing title work and survey– Getting loan documents to title company– Preparation of closing statement by title company– Obtaining final closing numbers– Contacting your bank to arrange for the money needed for

closing– Signing documents

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Step 3: Hire a Home Inspector

• After you have an accepted offer on your prospective home, in most cases, the next step is to get the home inspected by a professional inspector. You want to find a person who is qualified and licensed to inspecting homes, so that you end up with a thorough report detailing the condition of your new home.– One source to use when looking for a licensed home inspector is the

National Association of Home Inspectors Inc. (NAHI).• The NAHI website contains important and helpful information about the home

inspection process• Visit NAHI (www.nahi.org) to locate an inspector in your area

– There are other ways to find a licensed inspector:• Obtain a referral from your REALTOR®• Obtain a referral from a friend, family member or co-worker• Obtain a referral from your Mortgage Advisor

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http://www.nahi.org

Step 5: Get Ready to Close

• Congratulations! You have successfully made it through the initial stages of the home buying process.– Your home inspection was satisfactory

– Your appraisal supports the price you agreed to pay for the home

– Your title work is complete

– You have your homeowner's insurance policy declaration page and invoice for your first year premium

– You have clear final loan approval

– Your closing has been set

– You know the time, date and location for the title company for your closing

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• Your lender and/or REALTOR® will provide you with the amount of money needed for closing

• You will be advised to either obtain a cashier’s or certified check for the amount of money needed to the title company

• Your lender and/or REALTOR® will tell you the location of your closing and provide you with directions

• You will need to bring a current driver’s license with you to closing

• You will sign your name on multiple documents

• The closer will make copies of the documents

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• Before closing, buyers typically have a final opportunity to walk through the property to assure that the nothing has changed since the purchase agreement was signed.

• After closing, the buyer receives the keys and the seller receives payment for the home.

• Deeds, loan papers and other documents are prepared, signed and filed with local property record offices.

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Congrats! You are now a Home Owner!

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purchasing your new home

Real Estate