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Buyers

First Order of Business

REGARDLESS OF WHETHER YOU ARE LOOKING FOR YOUR FIRST PURCHASE OR HAVE BOUGHT HOMES IN THE PAST, YOU NEED TO DOUBLE CHECK YOUR CREDIT REPORT FOR ERRORS AND KNOW YOUR CURRENT FICO SCORE.

You need to know what your ability to purchase is; and, if you haven't seen your credit report in awhile make sure the information in it is current and correct. The following may help:

FICO SCORES: Lenders look to your ability to pay a loan back (do you have enough stable income?), and what is your credit rating (FICO score). FICO scores run from a low of 300 to a high of 850 (best score). The rates quoted by most lenders are normally for the highest FICO score applicants (760-850 range). If you are anywhere under this score your mortgage interest rate could be up to three percent HIGHER than the premium rate.

WHAT'S IN YOUR FICO SCORE: This is the breakdown for your total score:

WHAT DO YOU DO FIRST:  Have us order your credit report and credit score. We do not charge to pull your credit. Of, you can purchase a three agency credit report with a FICO score from any of the three major agencies listed below.

HOW DOES YOUR FICO SCORE RATE WITH LENDERS?

620 and lower will usually be in a "sub-prime" loan rate category with a higher interest rate and fees.

(The number rating categories can vary slightly from lender to lender).

Get Organized

NOW THAT YOU HAVE DECIDED TO BUY MORE REAL ESTATE YOU CAN SAVE YOURSELF A GREAT AMOUNT OF TIME BY DOING A FEW THINGS FIRST PRIOR TO "TOURING THE COUNTRYSIDE" LOOKING FOR THAT IDEAL PROPERTY.

Check your credit rating and FICO score: See " Finance Center " "Getting Started" for FICO scores, and where to call to get a current credit report and "score".

Get the boring, difficult tasks out of the way first: Start gathering financial information your lender will want from you: Your last two years tax returns, last two pay stubs, assets list (savings, checking accounts, real property, vehicles, etc.) and verification of "other income" such as rentals, trusts, pension, child support.

Get your lender to give you a "pre-approval letter" for a loan (see Finance Center for why you want pre-approval and not pre-qualification). This will help you be first in line at the bargaining table for that property you want to purchase.

Caution: DON'T BUY THAT NEW CAR OR FURNITURE: When you're applying for a new property loan or refinancing a loan do not add any additional debt to your credit report. In most cases this will lower the overall amount to credit (dollars) a lender will lend you. The amount you can borrow before can drop and after adding extra debt! So, if you're planning on financing a new car, furniture for your home or a vacation, hold off until after your loan "closes".

Sell or Buy First

THIS IS THE "CHICKEN OR THE EGG" QUESTION DILEMMA! SHOULD I FIND THE NEW HOME FIRST THEN SELL MY CURRENT HOME OR VICE VERSA?

The answer is relatively simple: Unless you have considerable financial resources, it could be risky to put an offer on a new home before your current home has a firm offer on it. In fact, you could lose your opportunity to buy your new home if you cannot sell your current home in time. You might end up owning two homes, with two payments, at the same time.

When you make an offer to purchase a new home you can always make an offer contingent on selling your house. Would you want to accept an offer to sell your home on the contingency that the purchaser sells their house? No, you wouldn't. So don't waste your time asking for it. Sell your home first. Or, at least have a firm, non-contingent offer on it.

When purchasing your next home it's always advisable to come from a position of strength: You have a purchaser for your home, so you know the exact amount of equity you have to work with; you have your lenders "pre-approval" letter. You know exactly how much home you can buy, and the seller feels comfortable with your position.

Timing is everything: As you begin your search for your new home keep in mind that the sale of your current home could take considerable time. Regardless, if your home is "priced right" real estate markets can slow down quickly by rises in interest rates and National events. Allocate time for the unknown.

Shop For A Home

IF YOU HAVE FOLLOWED OUR ADVICE IN THE SECTIONS "FIRST ORDER OF BUSINESS" AND "GET ORGANIZED" THEN THIS IS THE EASY PART. YOU KNOW IF YOU'RE QUALIFIED FOR THE BEST RATES ADVERTISED OR AT A SOMEWHAT HIGHER RATE. AND, YOU KNOW HOW MANY DOLLARS YOUR LENDER IS GOING TO LEND YOU ON YOUR NEW PURCHASE.

Make your search and our job easier: Before you start looking, sit down with a pen and paper. Write down EVERYTHING reasonable you would like in your new home. Write everything you currently like in your home, and the items you wish you had. Write ALL of the things you do NOT want in your next home. Keep this list in a location where all parties can look at it each day and make changes as needed. When you finally have a mutually agreed upon list of what you want, start looking. This process will save you an incredible amount of time in your search for your new home.

Inspections/Appraisal

Inspections and Appraisal.  You want to have a professional inspection of the home to make sure there are no major problems with the home and warranted repairs may be negotiated between the two parties. Also, any financed home will require an appraisal to make sure the loan amount coincides with the amount of the offer.

  Closing Your Purchase

THIS IS THE CULMINATION OF ALL YOUR EFFORTS. THERE ARE A FEW LAST THINGS TO DO.

Final Walk Through Inspection: Do a "walk-through" prior to signing the final loan and purchase documents. The property should be in a condition similar to when you first looked at the home. Check for broken windows and anything else the seller needs to fix prior to the close of escrow.

Home Services and Utilities: A few days prior to the close of escrow call all the utility companies and tell them you're moving in.

Close of Escrow: This is the last step in the buying process. The title company will prepare a closing statement detailing your closing costs. Title companies will NOT close an escrow with a personal check. We will get the exact amount for funds needed to close just prior to the closing.  You will need to get a cashier's check from your bank or have them wire transfer funds directly to the title company.

Remember, you will need to forms of identification to close. One should be a photo identification, (i.e. a Drivers' License). The other can be a Social Security Card or some other form of office identification.

Congratulations!

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