AGENT
         MICHAEL CHALAMBAGA
HOME PURCHASING 101                   THE PROCESS, ROLES, AND OBSERVATIONS

CREDENTIALS
...
About Knowledge

We are drowning in information but starved for
knowledge. John Nabs
A little learning is a dangerous thin...
Are you Ready to Buy?

Whether you are a first-time home
buyer or entering the marketplace
as a repeat buyer, you need to ...
Issues to Investigate
Do you have any equity in your
current home ?

Are you upgrading or avoiding a
problem within the ho...
Consider your options

Upgrade to Move

Improve your Home

Stay Put Stash the Savings

These are highly dependent on
your ...
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 ...
Realtor or No Realtor ?
Most would say “Yes”, as no two properties
-- even two identical models on the same
street -- are ...
Types of Real Estate Agents
 Sellers Agent

 The Sellers Agent works solely for
 the seller.

 Buyers Agent

 The Buyers A...
Going Solo without a
Realtor
If you choose to deal with a seller, then you
are working on sellers terms, sellers pricing,
...
National Association of Realtors
                      Timing of Sale
20

                                                ...
Local Real Estate Data
                  Timing of Sale
                       Season         Off Season

 March
   April
...
Local MLS Numbers 2009
     Date          Sales       Volume                Avg. Price         Median price    Total Listi...
Pre-Approved Home Loan
  What is it?
"Pre-approval" means you have met with a
loan officer, your credit files have been
re...
Finding your Dream Home
What do you want from your next home ? Have a
list of desires.

There are many 3 bedroom, 2 bath h...
Choosing your New
  Home
  An Important Decision - Is it THE
  House?
A house is shelter, but a home is far more. It's
whe...
Funding the Home
    Purchase
    Selection of your financing source

         Mortgage Lenders

         Federal Housing A...
Negotiating Points

  Sellers agent wants
  to convince you
  house is worth the
  price.

  You and your agent
  want to ...
Making the Offer
  Back it up with
  $1,000 earnest
  money check

  Have your valid
  mortgage credit
  approval letter f...
Home Inspection
The home inspection removes doubts
about finding any significant defects,
problems, or issues before the pur...
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

H...
Title Insurance

Title Insurance - Title Company

A policy which insures a property owner
should a prior claim arise again...
Home Insurance

Home Insurance - Insurance
Companies

A standardized insurance policy
package that covers a residential re...
Flood Insurance

  Flood Insurance - Federal
  Government

Supplemental insurance which covers a
homeowner for any loss du...
Home Warranty
  Insurance
  Home Warranty Insurance - Private

Home warranties for existing homes are
typically one-year s...
The Closing
What is it ? - Closing is a brief
process where all of the necessary
paperwork needed to complete the
transact...
The Closing
What Happens ? - The result is
that title to the property is
transferred from seller to buyer.
The buyer recei...
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:

Licen...
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Home Purchase 101

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

Copyright Michel Chalambaga 2010

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  • Home Purchase 101

    1. 1. 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
    2. 2. 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
    3. 3. 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?
    4. 4. 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 ...
    5. 5. 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.
    6. 6. Home Buyer Tax Credit Act First Time Buyers $8000 Credit Move up Buyers $6500 Credit Deadline April 30, 2010
    7. 7. 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
    8. 8. 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.
    9. 9. 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.
    10. 10. 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.
    11. 11. 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
    12. 12. 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
    13. 13. 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
    14. 14. 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
    15. 15. 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
    16. 16. 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
    17. 17. 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
    18. 18. Negotiating Points Sellers agent wants to convince you house is worth the price. You and your agent want to convince them otherwise
    19. 19. 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":
    20. 20. 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.
    21. 21. The Other Agent Insurance Agents and various coverages in the home ownership process
    22. 22. Insurance Issues Title Insurance - Title Company Home Insurance - General Agent Flood Insurance - Federal Government Home Warranty Insurance - Private Companies
    23. 23. 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.
    24. 24. 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.
    25. 25. 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.
    26. 26. 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.
    27. 27. 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.
    28. 28. 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
    29. 29. The Closing Move Transfer Utilities Before Closing Final Inspection Pre- Cleaning Move In
    30. 30. 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

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