1
The insider’s guide for homebuyers
1. Doing your preparation .............................................................................. 3
2. Find out how much you can afford ............................................................. 5
3. Advice for smart searching on the go ....................................................... 7
4. Find the best REALTOR® ............................................................................... 8
5. Touring homes and making an offer ....................................................... . 9
6. Preparing for your move . ........................................................................ . 11
Home search worksheet ......................................................................... 12-13
Loan checklist ................................................................................................ 14
Contents
REALTOR® and the realtor.com® name and logo are trademarks of the NATIONAL ASSOCIATION OF REALTORS® and are used with its permission. These and all other trademarks used in this work are the property of their respective owners. The information in this work is believed reliable but is not warranted or guaranteed, is general in nature and not based on knowledge of your specific circumstances, and should be independently verified in concert with your tax, technical, legal, real estate, investment, accounting and/or other profes-sional advisors prior to use. Individual results may vary from testimonials.
2
The insider’s guide for homebuyers
If you’re like most people, buying a home represents your single biggest investment.
As such, the home buying process can be
one of the most exciting - but sometimes
also stressful - experiences you ever go
through. This may be true whether you’ve bought many homes or
you’re looking to buy your first and whether you’re in the market
for a new primary residence, an investment property or that perfect
vacation getaway. The end goal is to find a property that fits both
your emotional and financial requirements.
Right now the real estate market offers plenty of great opportunities
and there are many factors to consider and choices to make.
When buying, it’s crucial for you to have all the available resources
necessary to make a well-informed decision.
3
The insider’s guide for homebuyers
Start with your list of must-have’s. What do you need and what can you not live without?
The planning stage is very important to the
process of buying a home, especially for first-
time homebuyers. Some people start searching
immediately, find a home they want and then
scramble to get their affairs in order. Such
urgency can sometimes lead to poor decision
making. Given that buying a home is such a
big step, it’s important for you to educate and
prepare yourself in advance. This means clearly
determining why you’re buying, what your long
term plans are, and what kind of home you’re
looking for.
Because buying and financing a home are so
closely related, it also means examining your
current financial situation and projecting how
much you can afford. Although you can buy
a home with a low down payment, the more
you put down, the lower your mortgage will
be. Also there are other costs, including home
inspections and taxes. Plan to budget around
2-4% of the total value of your home to be
able to handle these expenses with ease. Also
you will need to make sure you have enough
in your savings to pay for any repairs and
necessary upkeep.
Some people make the mistake of using all
their savings to fund their home purchase but
this can leave homeowners unprepared in case
of a sudden illness, unemployment, or other
emergency. It is best to have enough money
readily available that you could survive for at
least six months without your regular paycheck.
Are you planning a family, getting married, or
going back to school? All of these changes will
impact both your lifestyle and your financial
future. It’s important that the home you choose
be the right size for you not just now but over
the next few years.
Choose the location of your new home carefully
Many studies have said that having a short
commute is a key to happiness. When choosing
between more space and a longer commute or
a smaller home and a shorter commute, many
people choose to endure the long commute.
While this may be bearable in the short term
it can add stress to your life and diminish the
amount of time you actually get to enjoy your
home. Another consideration is employment
1. Doing your preparation
4
The insider’s guide for homebuyers
prospects in the area. Even if your job is very
secure, it’s always a good idea to be aware of
what other opportunities in your industry are
available nearby. In order get the most out of
your investment you will likely want to make
sure that you are going to stay put for a few
years. If you have plans to move within a year
or so you may want to wait until then. You don’t
want to be in the position of needing to move
and having to sell your home quickly.
This guide includes a Home search worksheet
on page 12. If you are making this purchase
with another person it may make sense to
each fill out your lists separately and then
come together to compare notes. That way
you each get to see each other’s true feelings.
Make sure that your wishes are aligned with
reality. Also remember that the house that you
are imagining while filling out this worksheet
may not match with what is available in the
area. Location is still the most important factor
when choosing the home that is both right
for you and has good resale potential. Be
ready to factor in the proximity to major roads,
school districting, crime levels, and other
considerations once you are out shopping.
1. Doing your preparation
5
The insider’s guide for homebuyers
2. Find out how much you can afford
It is recommended that you get pre-qualified for a loan before you start viewing homes with the serious intention of buying.
If you don’t have this in place you may end up losing out on a home if you are in a multiple offer situation. Home sellers give precedence to those who demonstrate that they are able to pay for the home.
The benefits of pre-qualification include:
• You’ll have information about what you can
afford and be able to plan accordingly
• As a qualified, motivated buyer you’ll be taken
more seriously when you make an offer on a
home
• Lenders can tell you whether you qualify for any
special programs that will enable you to afford
a better home (particularly if you’re a first-time
buyer)
The pre-approval process can sometimes involve
meeting with a lender and authorizing them to
examine your current financial situation and credit
history. On the basis of this examination the lender
will provide you with a document that details how
much you can borrow to buy a home. Before you
begin this process it is important to have all of your
financial information readily available.
6
The insider’s guide for homebuyers
2. Find out how much you can afford
Gather your information regarding your income and
savings. This guide includes a Loan checklist on
page 14 that should help you get your documents
in order. Also you may want to run your credit score
ahead of time just to make sure your potential lenders
don’t uncover any surprises you aren’t aware of.
Lenders are more cautious than they were a few years
ago and are making sure that all potential mortgage
holders are very carefully screened.
Interest rates remain low so it is a great time to get a
mortgage and it is very important to make sure that all
your financial affairs are in order. If you previously sold
a short sale you may need to wait at least two years
before being able to get another mortgage.
Just as many people these days begin their home
search online, they also head to the internet to see
what different lenders offer. We recommend that home
buyers shop around for mortgage quotes. You can
get free, updated mortgage quotes from hundreds of
lenders at www.realtor.com/home-finance
Another way to prepare for what you will face is to go
through a blank purchase contract ahead of time so
you’ll know what decisions you’ll face when you make
an offer.
Check local market rateswww.realtor.com/home-finance
7
The insider’s guide for homebuyers
3. Advice for smart searching on the go
Download the realtor.com® app for your iPhone®, iPad® or AndroidTM and get ready to search like a pro while driving around the neighborhood you love.
Realtor.com® has the largest and most accurate database of homes for sale from hundreds of MLS organizations nationwide, with most listings updated every 15 minutes. Keep it on your home screen for easy access at all times.
Explore the area you are interested in.
You can draw your search on the screen
or put in your parameters to see what’s
available in your price range. The app will
make sure you see all the homes on the
market. Zoom in on the map results to see
the most accurate status of the listings,
such as just taken off the market, recently
sold or price-reduced.
Save your search.
As you begin to zero in on that perfect
home that has everything you are looking
for, save your search so that you are
always kept up to date on everything
going on with the home.
Set up alerts to go right to your device.
You can set up price change notifications
for your saved listings right on your
mobile device so you can act quickly on
the latest information.
Stay up-to-date with real time price change alerts on the realtor.com® mobile appwww.realtor.com/mobile
Search homes by schools.
Schools are a top consideration for
many home buyers. You can search for
homes based on school and district
assignment boundaries.
Keep good notes.
Touring multiple homes is a confusing
experience for most people. Rather
than relying on memory, you can rate
and make notes about the home you
are interested in right in the app - that
way they are always with you.
8
The insider’s guide for homebuyers
4. Find the best REALTOR®
In addition, you should ideally view homes with the help of an experienced and eagle-eyed REALTOR® who’ll notice things you might miss, provide expert analysis, and act as an impartial sounding board.
Buying real estate is a complex matter at the best of times, given that there are so many factors to consider, and no two homes are transactions alike.
Given that there are so many factors to
consider, and no two homes or transactions
are alike. However, with all the unique
opportunities and potential pitfalls of the
current market, it’s even more important
for you to contact a REALTOR® once you’ve
definitely decided to buy.
In choosing a REALTOR® to guide you through
the property search, financing, negotiation
and transaction processes, you should
consider their local market knowledge,
experience and track record.
In making your decision to work with an
agent, there are certain questions you should
ask when evaluating a potential agent.
• Ask whether the agent is a REALTOR®. You will
also want to make sure the agent has an active
real estate license in good standing. To find
this information, you can check with your
state’s governing agency.
• You may also want to ask if real estate is
their full-time career and what real estate
designations they hold. With realtor.com®
HyperSocial™ tools you can login with
Facebook and see which agents you are
connected to through friends or mutual
interests. You can also read recommendations
and see badges which denote designations
and specific trainings.
Search more than 1 Million REALTORS® nationwide. www.realtor.com/realestateagents
9
The insider’s guide for homebuyers
5. Touring homes and making an offer
As you narrow down your home search, excitement begins to build. Don’t make a hasty decision, especially if you feel yourself becoming guided by emotion.
Selecting a home takes time, thought and analysis. You should carefully weigh the pros and cons of each house you like. Things to keep in mind include:
• Ask about other monthly expenses including
utilities and condo or home owner association
fees.
• Inspect bathrooms and kitchens carefully
as these are the most expensive rooms
to renovate. Calculate your budget for
renovations before deciding whether this
house is the right one for you.
Consider the integrity of the structure. Are
there cracks in the walls, improperly hanging
doors or mold? These may indicate serious
flaws in the structure of the home. Check all
the systems in the house, including plumbing,
heating and air conditioning.
Look at the electrical outlets for clues to
the condition of the house’s wiring. Old
fashioned outlets indicate old wiring that
may need to be updated. Modern homes,
with televisions, computers and a plethora
of kitchen appliances, require much more
electricity than older homes.
Make sure to have sufficient closet space
for your clothes, kitchen cabinets for your
dishes and a shed or garage big enough to
house your vehicles and other items.
Think about the windows. Do you enjoy the
sun streaming in the wide windows or do
you prefer your privacy? Is there sufficient
lighting?
Drive around your selected neighborhood
at different times of the day to get a feel
for the area. Also consider transportation
factors.
Does this neighborhood have convenient
access to public transportation? How far
will you need to commute to work and what
does rush hour look like?
• The general location of the neighborhood
is also an important thing to look for
when buying a house. Take a drive in the
neighboring areas. Is the neighborhood
close to an airport? Does the quality of the
neighborhood drastically drop a few blocks
over?
10
The insider’s guide for homebuyers
Remain in close contact with your agent.
This is extremely important if you’re in a
strong seller’s market. Many markets are
experiencing low inventory, especially at the
starter home level, and homes that are priced
right go fast. You want a good agent who will
alert you of new listings and who will show
you houses as soon as they’re listed.
If you find a house you like, be ready to offer
a competitive bid.
You may be competing against other offers.
Your REALTOR® can advise you on what to
offer and can also help you present your offer
in the most appealing light. Make the offer
contingent upon the findings of a professional
home inspection because if the inspector
finds anything major you will want to be able
to renegotiate or reconsider the purchase.
A buyer’s agent will negotiate on your behalf.
Some compromise may be necessary. Rather
than approaching negotiations from an
adversarial winner-take-all perspective,
focus on your top priorities and don’t
let your emotions overrule your better
judgment. Successful REALTORS® tend to be
experienced negotiators. They’ve seen what
works and what doesn’t in countless real
estate transactions, and they’ve established
a track record of bringing buyers and sellers
together.
5. Touring homes and making an offer
11
The insider’s guide for homebuyers
6. Preparing for your move
Moving can be stressful but careful planning makes it easier.
Make sure to plan your move in advance rather than leaving it to the last minute. Here are some tips for making the move to your new home as smooth as possible:
• Use moving as an opportunity to go
through your belongings and cull out
what you may not have used in a long
time. The lighter the load the more money
you will save on your move and the less
clutter you will bring to your new home.
• Label boxes with both the details of what
they contain and the room they belong
in. Pack rooms individually.
• Pack heavy items in smaller boxes and
lighter items in larger boxes.
• Personal financial information and
important papers such as birth
certificates, wills, and passports should
be taken with you or shipped to you
by family or a friend after your move-
in. Identity theft is one reason, but so
is the difficulty in replacing important
documents, recreating bank statements
or losing passports.
• Use plastic storage bins for items you
think will be stored in the attic, garage
or closet at your next home. This will
save you on buying extra boxes and
unpacking them when you get to your new
home. For stuffed animals, towels and other
soft items, consider using large trash bags,
they are much cheaper than moving boxes.
• Pack essentials such as sheets, utensils and
plates, and personal care items for the first
few nights separately so you aren’t digging
through boxes to find them. Make sure this
box is packed last so it will be unloaded first.
You can download a move planner at Moving.com
12
The insider’s guide for homebuyers
Home search worksheet
Main RequirementsPrice range: _____________________ Lot size: _______________________Area: ____________________________ Square footage: ________________Detached/Attached: ______________ Number of bedrooms: __________House style(s): ___________________ Number of bathrooms: _________Age of property: _________________ Garage: _______________________
Specific Features(e.g., waterfront, view, large lot, pool, fireplace, basement, garage size, built-in vacuum, distance to school, additional room preferences, etc.):
_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Additional Comments_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
13
The insider’s guide for homebuyers
Home search worksheet
Main RequirementsPrice range: _____________________ Lot size: _______________________Area: ____________________________ Square footage: ________________Detached/Attached: ______________ Number of bedrooms: __________House style(s): ___________________ Number of bathrooms: _________Age of property: _________________ Garage: _______________________
Specific Features(e.g., waterfront, view, large lot, pool, fireplace, basement, garage size, built-in vacuum, distance to school, additional room preferences, etc.):
_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Additional Comments_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
14
The insider’s guide for homebuyers
Loan checklist
Here are some, but not all, of the documents your lender will ask for when you start the loan
process. Your lender should provide the exact list of documents needed but to ensure a
smooth loan application, it pays to get your documentation in order before you apply:
___ 1. W-2 forms for each person on the loan. You will also want to provide contact
information to the person within your company who can verify your income.
___ 2. Copy of the fully executed sales contract. Include contact information of both the buyer
and seller’s agent.
___ 3. Copy of one month’s worth of pay stubs. If you are self-employed, you’ll need to show
profit and loss statements for the current year.
___ 4. Copy of the last 2 bank statements for every bank account, including retirement
accounts. Lenders may require up to 6 months of history if you are using gift money for
the down payment.
___ 5. Copy of complete federal tax forms for the last 2 or 3 years. Primarily required of self-
employed individuals or those who are claiming rental income.
___ 6. If a gift is involved, such as funds from family members, the lender will need proof the
gift giver has the funds and a gift letter affidavit indicating the funds are a gift and do
not have to be repaid. Also needed is a copy of the check, the deposit receipt and a
bank statement to verify the transaction.
___ 7. List of your addresses in the last two years.
___ 8. Proof of identity. Picture ID and a copy of your social security card.
© 2013 Move Sales, Inc. All rights reserved. 2633CA