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Home Purchase 101
 
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This is a basic presentation about home purchase information related to Texas.

This is a basic presentation about home purchase information related to Texas.

Copyright Michel Chalambaga 2010

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Home Purchase 101 Home Purchase 101 Presentation Transcript

  • AGENT MICHAEL CHALAMBAGA HOME PURCHASING 101 THE PROCESS, ROLES, AND OBSERVATIONS CREDENTIALS LICENSED TEXAS REAL ESTATE BROKER & CERTIFIED HOME MARKETING PROFESSIONAL © Copyright 1997-2011 Michael Chalambaga All Rights Reserved
  • About Knowledge We are drowning in information but starved for knowledge. John Nabs A little learning is a dangerous thing. Alexander Pope Knowledge itself is power. Sir Francis Bacon The essence of knowledge is, having it, to apply it ... Confucius
  • Are you Ready to Buy? Whether you are a first-time home buyer or entering the marketplace as a repeat buyer, you need to ask why you want to buy ? What would you like in terms of real estate that you do not now have? Do you have a purchasing timeframe?
  • Issues to Investigate Do you have any equity in your current home ? Are you upgrading or avoiding a problem within the house, school, or are ready to upgrade? Do you have a down payment, usually 5 to 20 percent of the purchase price ? What are “costs” of buying your house ? Commissions, loan fees, inspections, title transfer, and taxes ...
  • Consider your options Upgrade to Move Improve your Home Stay Put Stash the Savings These are highly dependent on your personal needs, desires, and financial position.
  • Home Buyer Tax Credit Act First Time Buyers $8000 Credit Move up Buyers $6500 Credit Deadline April 30, 2010
  • Path to Buying a Home Clean your credit report Find a buyer's RE agent with whom you’re comfortable Determine how much house you can afford Secure financing and
  • Realtor or No Realtor ? Most would say “Yes”, as no two properties -- even two identical models on the same street -- are precisely and exactly alike. Another train of thought, would also recommend “Yes”, as contract terms, financing options, inspection requirements and closing costs. Also, no two transactions are alike. Buying and selling real estate can be a complex matter.
  • Types of Real Estate Agents Sellers Agent The Sellers Agent works solely for the seller. Buyers Agent The Buyers Agent works solely for the buyer.
  • Going Solo without a Realtor If you choose to deal with a seller, then you are working on sellers terms, sellers pricing, and their word as to the worthiness of the home. A discount of fee is an illusion as sellers pay the cost of the sale of real estate in Texas. Once the transaction is started you may need more advice as you move toward purchase. These items add cost, complicate transactions, and can be wieldy.
  • National Association of Realtors Timing of Sale 20 Season Off Season 15 10 5 0 March April May June July Aug Sept October Nov Dec Jan Feb
  • Local Real Estate Data Timing of Sale Season Off Season March April May June July Aug Sept October Nov Dec Jan Feb 0 3.75 7.5 11.25 15
  • Local MLS Numbers 2009 Date Sales Volume Avg. Price Median price Total Listing Mon. Inventory Jan 37 $5,985,000 $161,757 $135,700 366 3.4 Feb 53 $7,670,000 $144,717 $130,000 389 3.8 Mar 80 $11,971,850 $149,648 $136,400 406 4.1 Apr 63 $8,321,511 $132,087 $128,800 407 4.4 May 71 $12,500,000 $176,056 $144,300 432 4.8 June 70 $9,724,500 $138,921 $133,300 438 5.1 July 82 $11,762,650 $143,447 $137,800 477 5.8 Aug 64 $7,843,402 $122,553 $113,300 486 6.5 Sept 77 $10,661,256 $138,458 $127,800 448 6.3 Oct 88 $13,209,052 $150,103 $130,000 454 6.6 Nov 88 $12,226,635 $138,939 $118,500 472 6.8 Dec 74 $11,918,700 $161,064 $138,200 480 6.8 Yearly Averages 70.58333 $10,316,213 $146,479 $131,175 437.92 5.37 DATA SOURCE: Real Estate Center at Texas A&M University
  • Pre-Approved Home Loan What is it? "Pre-approval" means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Once pre-approved you will receive the upper limit range of how much home you can purchase. You will also receive an important document - a pre approval letter. A pre - approval letter shows financial strength, sincere ability to purchase, and can
  • Finding your Dream Home What do you want from your next home ? Have a list of desires. There are many 3 bedroom, 2 bath homes in any city; so you must refine your price, location and amenities to your situation. Will you home provide the flexibility for the years
  • Choosing your New Home An Important Decision - Is it THE House? A house is shelter, but a home is far more. It's where you live, relax, entertain friends, raise families, and work. A home is where you spend much of your life, and so choosing a house is an enormous decision. My working knowledge and advice is to set your criteria and then look as many homes as you can within your timeframe as this will produce personal knowledge as to what you don’t want; thus yielding a strong sense of the
  • Funding the Home Purchase Selection of your financing source Mortgage Lenders Federal Housing Administration Private Institutions Personal Lender CONSUMERS DISCLOSURE: THERE ARE SEVERAL HUNDREDS LENDERS IN TEXAS, SELECT A LENDER THAT YOU FEEL COMFORTABLE WITH AS THEY WILL BE IMPORTANT TO YOUR PURCHASE
  • Negotiating Points Sellers agent wants to convince you house is worth the price. You and your agent want to convince them otherwise
  • Making the Offer Back it up with $1,000 earnest money check Have your valid mortgage credit approval letter from your lender Put in some "outs":
  • Home Inspection The home inspection removes doubts about finding any significant defects, problems, or issues before the purchase or mortgage is executed for years. The average cost can be from $250 -$500 Most lending institutions will require a professional home inspection before approving the final loan. A sellers disclosure document also supplements your home inspection report.
  • The Other Agent Insurance Agents and various coverages in the home ownership process
  • Insurance Issues Title Insurance - Title Company Home Insurance - General Agent Flood Insurance - Federal Government Home Warranty Insurance - Private Companies
  • Title Insurance Title Insurance - Title Company A policy which insures a property owner should a prior claim arise against the property after the purchase has been completed. This also covers a lender should a question of ownership arise.
  • Home Insurance Home Insurance - Insurance Companies A standardized insurance policy package that covers a residential real estate owner against financial loss from fire, theft, liability for property damage, personal liability and other common risks.
  • Flood Insurance Flood Insurance - Federal Government Supplemental insurance which covers a homeowner for any loss due to water damage from a flood; often required by lenders for homes located in FEMA- designated flood zones.
  • Home Warranty Insurance Home Warranty Insurance - Private Home warranties for existing homes are typically one-year service agreements purchased by sellers. In the event of a covered defect or breakdown, the warranty firm will step in and make the repair or cover its cost.
  • The Closing What is it ? - Closing is a brief process where all of the necessary paperwork needed to complete the transaction is signed. Closing is typically held in an office setting, sometimes with both buyer and seller at the same table, sometimes with each party completing their papers separately.
  • The Closing What Happens ? - The result is that title to the property is transferred from seller to buyer. The buyer receives the keys and the seller receives payment for the home. From the amount credited to the seller, the closing agent subtracts money to pay off the existing mortgage and other transaction costs. Deeds, loan papers, and other documents are prepared, signed and filed with
  • The Closing Move Transfer Utilities Before Closing Final Inspection Pre- Cleaning Move In
  • Course: Home Purchasing Basics 101 Email: michaelchalambaga@gmail.com Author: Michael Chalambaga Credentials: Licensed Texas Real Estate Broker Member National Association of Realtors Member Texas Association of Realtors Certified Home Marketing Specialist © Copyright 1997-2011 Michael Chalambaga All Rights Reserved