Home Buying Process

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    Buying A Home

    In 7 Steps

    S T E P S TO S U C C E S S

    For Buying A Home

  • Buying a home can be one of the most exciting adventures in your life.

    It can also be one of the most overwhelming if you try to go at it alone.

    You should also have an experienced Realtor working for you, guiding you and

    looking out for your best interests. And the best part is that hiring a Realtor as a

    buyer, it is basically at no cost to you. In most circumstances, the Buyers agent is

    paid by the Seller from the proceeds of the sale.

    Introduction

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    Buying A Home

    In 7 Steps

    Affiliate Broker

    Accredited Realtor and Senior Real Estate Specialist

    Full-time Real Estate Professional since 2014

    Knoxville Board of REALTORS - Member

    Originally from North Carolina

    Tellico Village Resident for over 3 years

    Loves Boating, Hiking, Reading and History

    Extensive B2B Sales and New Business Development Experience

    Peggy Warren

    Real Estate Agent

    IntroductionA Little About Who I Am

    Peggy WarrenAffiliate Broker

    Accredited Realtor and Senior Real Estate Specialist

    Full-time Real Estate Professional since 2014

    Knoxville Board of REALTORS - Member

    Originally from North Carolina

    Tellico Village Resident for over 3 years

    Loves Reading, History, Boating, and Hiking

    Extensive B2B Sales and New Business Development Experience

  • Buying A Home in 7 Steps

    Step 1 - Buying Consultation

    Step 2 - Loan Pre-Approval

    Step 3 - Searching for a Home

    Step 4 - Viewing Homes

    Step 5 - Develop a Pricing Strategy

    Step 6 - Writing and Negotiating an Offer

    Step 7 - Managing the Transaction Through Closing

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    Buying A Home

    In 7 Steps

    There are 3 types of Agency Relationships between parties in a real estate transaction:

    Sellers Agent - An agent who represents the Seller

    Buyers Agent - An agent who represents the Buyer

    Dual Agency (Limited Agent) - An agent who represents both the Seller and Buyer

    When you select Your Realtor to assist you in finding and purchasing a home, they

    become your Buyers Agent. Typically the seller already has an agent representing

    them, who is working hard for their best interests, not yours. You too should also be

    represented with an agent who will be working on your behalf and looking out for your

    best interests. I will help you to find a home, evaluate pricing, negotiate offers, and

    guide you throughout the entire transaction to ensure a successful closing.

    The greatest part of hiring a Buyers Agent is that in most cases there is no cost

    to you!

    I am compensated for my services only when I successfully close on a home for you.

    When a seller lists their home with a Sellers Agent, a commission amount for the

    Sellers Agent and for the Buyers Agent is pre-determined and paid for by the Seller

    upon the closing of the sale.

    Working for You as Your Buyers Agent

    Step 1Buying Consultation

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    Buying A Home

    In 7 Steps

    Motivation - Why have you decided to buy a home?

    Timing - Are you flexible in timing or are we working towards closing before a certain date?

    Pricing - What is your price range? Have you begun talking with a mortgage professional?

    Decision Making - Will anyone else (family member, financial advisor) be involved in the

    transaction?

    Location - What areas of town do you prefer, or are you not yet sure?

    Home Type - Are you looking for a condominium, townhome, single family residence or land?

    Home Size - What size of home are you looking for? How many bedrooms, bathrooms, etc.?

    Lot Size - What size of property are you looking for?

    Floorplan - What is important to you in the layout of a home?

    Architectural Style - Is there any particular style you prefer - rustic, traditional or contemporary?

    Amenities - What additional features will you be looking for? (pool, hot tub, clubhouse, golf, etc.)

    What Exactly Are You Looking For?

    Determine Your Needs

    What is Most Important to You?

    Step 1Buying Consultation

  • Buying A Home in 7 Steps

    Step 1 - Buying Consultation

    Step 2 - Loan Pre-Approval

    Step 3 - Searching for a Home

    Step 4 - Viewing Homes

    Step 5 - Develop a Pricing Strategy

    Step 6 - Writing and Negotiating an Offer

    Step 7 - Managing the Transaction Through Closing

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    Buying A Home

    In 7 StepsHow Much Can You Afford?

    It can be discouraging to find that your salary won't stretch as far as the home you want to own.

    However, sacrificing a huge part of your income just to pay the mortgage can very quickly make

    home ownership a burden rather than a point of pride. It may be better to buy a modest home

    now and look at purchasing your "dream home" in a few years.

    A Pre-Approval Adds Strength to Your Offer

    Once you have been successfully pre-approved for a mortgage with a local lender, you will

    appear to be a stronger buyer to sellers. When I submit an offer, I will include a written letter of

    your pre-approval. This demonstrates to the seller that you are indeed a serious and capable

    buyer.

    Securing a Pre-Approval for Your Home Loan

    Step 2Loan Pre-Approval

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    Buying A Home

    In 7 Steps

    There are many variables to consider when choosing a mortgage loan. Your income, job

    history, and credit rating can determine what programs are available to you. Also other

    considerations such as how long you plan to be in the home can also be an important factor.

    As a real estate agent, I cannot answer these important mortgage questions, but I will be sure

    to help you get to the right mortgage provider to help you with this very important part of the

    process. Below is a list of mortgage programs and definitions to be familiar with.

    Interest Rate - What are current interest rates? What rates are you being quoted?

    Fixed Rate Mortgage - A mortgage where the rate remains the same through the life of the

    loan.

    Adjustable Rate Mortgage (ARM) - A mortgage where the rate changes based on a financial

    index.

    Down Payment - What amount do you have for a down payment? How much will you really

    need?

    Origination Fee - A charge levied by a lender for underwriting a loan. Typically 1% of the loan

    amount.

    Points - A point equals 1% of a mortgage. Should you pay "discount points" to reduce the

    loan's interest rate?

    Mortgage Term - 15, 20, 30 year loan terms. What is best for you?

    Conventional Mortgage - A fixed-rate, 30-year mortgage that is within the limits set by FNMA

    & FDMC.

    Jumbo Mortgage - Exceeds the limits set by FNMA & FDMC. Usually has a slightly higher

    interest rate.

    FHA Mortgage - Usually requires less money down, but has tighter guidelines. Can you

    qualify?

    Balloon Mortgage - Can be a great option for short term situations, but will you be ready to

    pay it off at the end?

    Interest-Only Mortgage - This will give you a lower monthly payment, but is it the best route

    to go?

    Pre-Payment Penalty - If you pay the loan off early, or refinance, will there be a penalty or

    fee?

    Mortgage Industry Conditions - Any issues with the current mortgage industry that could

    affect your financing?

    What Type of Loan is Best?

    Step 2Loan Pre-Approval

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    Buying A Home

    In 7 Steps

    Just like any major purchase, it is usually worthwhile to shop around

    for the best deal. It is also important to choose a local lender with

    long term experience.

    Obtaining A Mortgage Lender

    Step 2Loan Pre-Approval

    What is your debt-to-income ratio?

    This is something that lenders take very seriously. Your overall debt

    should not be more than 40% of your income, and your housing debt

    should not be more than 32%. What 32% of your income will buy

    depends on where you want to live. In rural or downtrodden areas for

    example, it can buy a very comfortable residence and ample

    acreage. In highly sought-after urban areas however, it may not even

    buy a 400 square foot bachelor suite.

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    Buying A Home

    In 7 Steps

    Do NOT change jobs, become self-employed or quit your current job!

    Do NOT buy a car, truck, boat or RV!

    Do NOT use your credit cards excessively or miss payments!

    Do NOT transfer balances or open new credit cards!

    Do NOT pay off any credit cards or other revolving debts!

    Do NOT spend money set aside for closing costs!

    Do NOT withhold debts or liabilities from your loan application!

    Do NOT open new credit accounts to buy new furniture, appliances, etc.!

    Do NOT make any inquiries into your credit!

    Do NOT make large deposits or withdrawals from your bank accounts!

    Do NOT change banking accounts!

    Do NOT co-sign any loans for anyone!

    Inquire with your lender before considering any of the above.

    Until You Close on a Mortgage Loan...

    Step 2Loan Pre-Approval

  • Buying A Home in 7 Steps

    Step 1 - Buying Consultation

    Step 2 - Loan Pre-Approval

    Step 3 - Searching for a Home

    Step 4 - Viewing Homes

    Step 5 - Develop a Pricing Strategy

    Step 6 - Writing and Negotiating an Offer