Home Buyers Seminar 4/2/11
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Home Buyers Seminar 4/2/11

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Home Buyers Seminar 4/2/11 Home Buyers Seminar 4/2/11 Presentation Transcript

  • Eastern Connecticut Association of REALTORS ® Home Buyers Seminar
  • The Home Buying Process
    • 2010 NAR Profile of Home Buyers
    • CHARACTERISTICS OF HOMEBUVER S
    • Fifty percent of recent home buyers were first-time buyers.
    • The typical first-time home buyer was 30 years old, while the typical repeat buyer was 49 years old.
    • Twenty percent of recent home buyers were single females, and 12 percent were single males.
  • The Home Buying Process
    • CHARACTERISTICS OF HOMES PURCHASED
    • New home purchases were at the lowest level in nine years—down to 15 percent of all recent home purchases.
    • The typical home purchased was 1,780 square feet in size,was built in 1990, and had 3 bedrooms and 2 baths.
    • Seventy-seven percent of home buyers purchased a detached single family home.
    • The median price of home purchased was $212,000 in the Northeast.
  • The Home Buying Process
    • THE HOME SEARCH PROCESS
    • For more than one-third of home buyers, the first step in the home-buying process was looking online for properties.
    • Nine in ten home buyers used the Internet to search for homes.
    • The typical home buyer searched for 12 weeks and viewed 12 homes.
  • The Home Buying Process HOME BUYING AND REAL ESTATE PROFESSIONALS  Eighty-three percent of buyers purchased their home through a real estate agent or broker.  Ten percent of buyers purchased a home in foreclosure, 6 percent purchased a short sale.  Forty-four percent of buyers found their agent through a referral from a friend or family member.
  • The Home Buying Process
    • Choosing a REALTOR®
  • The Home Buying Process
    • Why Use a REALTOR®?
    • There are at least 8 reasons…
  • The Home Buying Process
    • 1. Your REALTOR® can help you determine your buying power.
    • 2. Your REALTOR® has many resources to assist you in your home search. The MLS is only one.
    • 3. Your REALTOR® can assist you in the home selection process.
  • The Home Buying Process
    • 4. Your REALTOR® can help you negotiate.
    • 5. Your REALTOR® provides due diligence during the evaluation of the property.
    • 6. Your REALTOR® can help you in understanding different financing options.
  • The Home Buying Process
    • 7. Your REALTOR® can guide you through the closing process.
    • 8. Your REALTOR® is required to adhere to a strict Code of Ethics.
  • The Home Buying Process
    • Which REALTOR®?
    • Friends, neighbor or relative – 48%
    • Previously used agent – 9%
    • Internet web site – 9%
    • Visited an open house – 7%
    • Make sure that the REALTOR® is familiar with the area that you are looking in.
  • The Home Buying Process
    • The Paperwork
    • Right to Represent Buyer Agreement
    • Dual Agency Agreement
    • Designated Agency Agreement
    • Purchase & Sale Agreement
  • The Home Buying Process
    • Resources Available to You
    • www.easternctrealtors.com
    • www.ctreal.com
    • REALTOR® web sites
    • Information for Home Buyers –
    • provided by the Connecticut Association of REALTORS®
    • ECAR Affiliate Services Directory
  • The Role of the Lender
    • The basics of understanding mortgage
    • financing are in these 4 questions:
    • How much house can you afford?
    • How much do you qualify for?
    • How do you choose the right mortgage?
    • How do you find the right lender?
    Understanding Mortgage Financing
  • Pre-Qualification, Pre-Approval or Loan Commitment?
    • Most home buyers will hear these terms during their search for a home:
            • Pre-Qualification
            • Pre-Approval
            • Loan Commitment
    • Although related, the three terms each signify a different level of approval from a lender.
    • Ask your lender to explain all of the terms associated with their mortgage approval process.
  • 1. How much house can you afford?
    • Traditionally, the amount that you can borrow -thus what you can afford to buy-
    • is based on how much you can afford to pay up front and on two qualifying ratios.
  • Specifically, most lenders will consider 5 key factors to determine your ability to qualify for a home loan:
    • Income
    Employment Credit History and Monthly Debt Assets Property
    • When you're looking for mortgage financing, you might work with an officer at a bank, a mortgage banker, a mortgage broker or a credit union. All four types of lending institutions are different and each has strengths and weaknesses.
    • Ask for referrals from trusted professionals, but remember that there is no overall "best" solution, every buyer's loan needs are different.
    • Make your choice of a lender based on the best loan terms you can find, but ask important questions.
    • Quality within each branch or office can vary, depending on the loan officer, the support staff, and a variety of other factors.   
    • Very often, the loan officer is a more important choice than the institution. 
    • You want someone who has proven to be dependable and ethical in the past -- someone you feel will take good care of both you and your money.
    4. How do you find the right lender?
  • The Role of the Attorney
  • The Role of the Attorney
    • Contract issues
    • Title Searching
    • Closing Coordination
    • The Closing
  • Title Searching
    • Purpose of title searching
    • Conducting a title search
    • Title insurance
    • Title problems
  • Types of Title Insurance
    • Loan Policy
      • Must have
    • Owners’ Policy
      • “ Must have”
    • Enhanced Benefits Policy
      • Should have
  • Closing Coordination (Contract to Closing)
    • Client intake
      • Contract review
      • Contract preparation
        • Attorney – minimal role in Eastern Connecticut
    • Closing coordination
      • Closing date / contract dates
        • Time is of the essence
        • Reasonable time / extension of contract dates
  • The Closing
    • Multi-party representation
      • Sellers’
      • Lender’s
      • Title
      • Buyers’
  • Closing Documents
    • Settlement statement (HUD)
    • Warranty deed
    • Note
    • Mortgage deed(s)
    • Truth in Lending (TIL)
  • The Role of the Home Inspector
  • Home Inspection What it is? How it is done? Who should be there?
  • Attention Buyers!
    • Be an informed buyer and don’t assume that the house is safe sound and secure. (Just because it looks ok to you doesn’t mean that it is ok.)
    • An inspection is your best opportunity to identify potential problems.
  • Not all inspectors are created equal!
    • Make sure that the inspector is Licensed in the State of CT.
    • Make sure that the inspector is covered by at least $500,000 worth of E&O insurance.
    • Check references, ask around.
  • What is a Home Inspection?
    • A visual examination of the physical structure and systems of accessible areas of the home.
    • Diagnostic evaluation.
    • Optional tests are also available.
    Purpose: Make sure that the home is sound, safe and secure !
  • Who Attends the inspection?
    • THE BUYER’S AGENT
    • THE BUYER(S)
    • THE INSPECTOR
  • Scope of Inspection
    • The inspection will objectively analyze the structure and systems and present findings based on the VISUAL EXAMINATION of accessible areas of the property at the time of the inspection.
    Home inspectors can not do any destructive testing!!!
  • THE REPORT
    • The inspection should result in a verbal and written report.
    • The inspector will summarize the findings with you and your REALTOR®.
    • Be sure to carefully review this report.
  • What inspectors don’t do.
    • Inspectors will not usually remove ceiling tiles, enter unsafe crawl spaces, disturb insulation, move personal items, uplift carpets, remove roof shingles or perform similarly intrusive tasks.
  • What inspectors do look for.
    • Wood destroying insects.(Termites, carpenter ants, etc.)
    • This test may be required by some banks and mortgage companies
    • Termite colonies nest in moist soil.
  • Items checked!
    • Inspectors will check:
    • Chimney, roof, gutters.
    • Windows, doors, floors, walls ceilings and stairs
    • Plumbing, heating and cooling systems, hot water system, electrical systems, and kitchen appliances.
    • Garage
  • Other Tests Available
    • Water Quality, Quantity, radon in water and lead in water.
    • Radon in air.
    • Lead Paint
    • Asbestos
    • Septic Inspections
  • Home Inspection vs. Home Warranty
    • NOT THE SAME THING !!!!!!!!!!!
    • Most Inspectors will give a warranty on their inspection only!
    • Home Warranties are different and offered through insurance companies.
    Most companies have guarantees on their inspection reports
  • Summary
    • A home inspection is important.
    • Objective review of the home’s structure and mechanical/electrical systems.
    • Review references and choose a qualified home inspector.
  • The Role of the Insurance Agent
  • Insuring Your Largest Investment – Your Home
  • Homeowners Insurance Policy
    • Dwelling – Coverage A
    • Determining value-based on age, square footage and additional features
    • Replacement cost on dwelling versus Actual Cash Value
    • Other Structures – Coverage B
    • Anything not attached to dwelling-detached garage, shed, above ground-in ground pool
    • Personal Property/Contents - Coverage C
    • 50-70% of Dwelling coverage
    • Replacement cost versus actual cash value
    • Loss of Use – Coverage D
    • Additional Living Expense if you had a covered loss and the house was unfit for your family to live in due to claim
  • Homeowners Insurance Policy
    • Personal Liability – Coverage E
    • Protects your assets if you were ever sued due to negligence
    • Medical Payments – Coverage F
    • Provision in policy – optional limit
    • Scheduled Personal Property
    • Jewelry
    • Furs
    • Collectibles
  • Homeowners Insurance Policy
    • Policy Credits:
    • Deductible Savings
    • Security System-monitored 24hrs
    • Account Credit-Packaging Policies
    • Newer Home Credit
    • Non-smokers
  • Homeowners Insurance Policy
    • Underwriting Concerns:
    • Insurance Scoring
    • Coastal Properties
    • Dogs – Ineligible Dog List
    • Underground Oil Tanks-Environmental Hazard
    • Above Ground-In Ground Pools – slides, diving boards
    • Fuses-Circuit Breakers required
    • Age of Roof – 25 years or new
    • Prior Claims and Frequency
    • Trampolines
  • The Homeowner Closing
    • Closing-Binder and Paid Receipt-Issued Prior to Closing
    • Additional Coverage's:
    • Personal Umbrella Policy
    • Flood Insurance Policy
    • Life Insurance – Provides for your family in the event of your death
    • Disability Insurance – 59% of homeowners will lose work over a 30 year period of time and not get paid for their lost time. Can you afford to pay your bills without a paycheck?
  • Thank you for attending! Enjoy benefits of using a REALTOR® & ECAR Affiliate Members