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Buying Your First Home


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A short tutorial on how to go about purchasing a home. The process includes choosing the right buyer's agent to represent you to closing costs, inspections and closing.

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Buying Your First Home

  2. 2. T HERE HAS NEVER BEEN A BETTER TIME TO BUY A H OME <ul><li>Why? </li></ul><ul><ul><li>Interest rates a low </li></ul></ul><ul><ul><li>Seller motivation is high </li></ul></ul><ul><ul><li>First time buyers can purchase cheaper than renting </li></ul></ul><ul><li>Wise investors purchase when the market is low. </li></ul><ul><li>Now has been called the &quot;perfect storm&quot; for </li></ul><ul><li>home buyers.  All conditions are right for  </li></ul><ul><li>obtaining an excellent investment. </li></ul>
  3. 3. S AME P RICE , M AJOR D IFFERENCE IN C OST *Freddie Mac 30 Year Rate ** Principal and Interest Month Price Rate* P&I** 2003 $200,000 5.84% 1,178.61 TODAY $200,000 4.01% $955.98 Monthly  Savings $222.63
  6. 6. I NTEREST RATES AREN ' T GOING TO STAY LOW <ul><li>At some point interest rates will once again climb </li></ul><ul><li>The higher they go, the less buying power you have </li></ul><ul><li>The longer you wait, the more risk you take in losing that buying power </li></ul>
  7. 7. D ENVER V ACANCY R ATES AT A LL T IME L OW <ul><li>2.3% for Detached Houses </li></ul><ul><li>3.7% for Condos </li></ul><ul><li>1.2% Duplexes </li></ul><ul><li>(the lower the number the more difficult it is to find a rental) </li></ul><ul><li>Average rent in Denver is $1,063 up 3.5% from previous quarter </li></ul>Source: Denver Post
  8. 8. S UMMARY <ul><li>Buying now will mean more value for less money </li></ul><ul><li>Waiting to buy will mean a higher interest rate and higher prices resulting in a cheaper, smaller house. </li></ul>
  9. 9. H OW TO GET STARTED <ul><ul><li>Find an experienced REALTOR*  </li></ul></ul><ul><ul><li>Set an appointment for a consultation </li></ul></ul><ul><ul><li>Discuss your wants & needs </li></ul></ul><ul><ul><li>Determine your financial ability to get a loan </li></ul></ul><ul><ul><li>Explore &quot;first-time buyer assistance programs&quot; </li></ul></ul><ul><ul><li>Look at homes that meet your criteria </li></ul></ul>* Visit Denver Real Estate & Relocation
  10. 10. N OTE THE SEQUENCE <ul><ul><li>Find REALTOR®  </li></ul></ul><ul><ul><li>Needs Assessment </li></ul></ul><ul><ul><li>Find Lender/Get Approved </li></ul></ul><ul><ul><li>Look For House </li></ul></ul><ul><li>Any other order will put you and your goals at risk. </li></ul>
  11. 11. A REALTOR® CAN HELP YOU : <ul><li>By guiding you through the process </li></ul><ul><ul><li>Needs Evaluation </li></ul></ul><ul><ul><li>Financials </li></ul></ul><ul><ul><li>Recommend a trustworthy lender </li></ul></ul><ul><ul><li>Finding a good properties to compare and analyze </li></ul></ul><ul><ul><li>Decide on the home and area that best suits you </li></ul></ul><ul><ul><li>Negotiate the transaction </li></ul></ul><ul><ul><li>Write & Present Contract </li></ul></ul><ul><ul><li>Inspection issues </li></ul></ul><ul><ul><li>Renegotiate inspection findings </li></ul></ul><ul><ul><li>Coordinate the Transaction </li></ul></ul><ul><ul><li>Close to the Contract </li></ul></ul>
  12. 12. B UYER ' S B ROKER     VS .   T RANSACTION B ROKER <ul><li>Represents you, as your advocate promoting your interests with utmost good faith, loyalty and fidelity, seeking a price acceptable to you and counseling you are to any material defects/risks of transaction that are actually known by broker. </li></ul><ul><li>Shows properties, write offer, negotiates and facilitates  the transaction. </li></ul>Ask for representation from a Buyer's Broker, it doesn't cost more for a higher level of service.
  13. 13. D O YOU HAVE WHAT IT TAKES TO PURCHASE ? <ul><ul><li>Steady income? </li></ul></ul><ul><ul><li>Good credit, pay bills on time, no judgments? </li></ul></ul><ul><ul><li>Are your debts low? </li></ul></ul><ul><ul><li>Have you saved money for a down-payment & closing costs? </li></ul></ul><ul><ul><li>Do you have additional cash on reserve after closing on a home? </li></ul></ul><ul><ul><li>Do you plan to stay in the area for 3-years or more? </li></ul></ul>
  14. 14. L OAN Q UALIFICATION - RULES OF THUMB <ul><ul><li>Housing cost should be less than 29% -36% of gross monthly income. </li></ul></ul><ul><ul><li>Housing costs include mortgage payment, taxes, homeowners insurance, condo fees, other association fees </li></ul></ul><ul><ul><li>Housing combined with long term debt must not exceed 40% to 50% of gross monthly income </li></ul></ul><ul><li>Long term debt would be: car payment, credit cards, student loans, and other loan payments. </li></ul>
  15. 16. G OOD F AITH E STIMATE - GFE <ul><li>Upon applying for a loan, the loan office is required by law to provide you with a GFE </li></ul><ul><li>The GFE will list your expenses and interest rate, so you can know what these expenses are before you close on your new home. </li></ul><ul><li>If the expenses increase by more than a certain % the lender must revise your GFE so you can  review them and agree to taking the loan. </li></ul><ul><li>The decision is yours to make. </li></ul>
  16. 17. G ET A PPROVED   <ul><li>Get your loan approved before you begin to look for a home, doing so puts  you in the driver's seat at negotiation! </li></ul><ul><li>Seller's prefer to deal with SERIOUS buyers. </li></ul><ul><li>Just do it. </li></ul>
  17. 18. T YPES OF LOANS <ul><li>There are many types of loan programs. </li></ul><ul><li>Working with an experienced professional, you will be given several options. </li></ul><ul><li>Pros and cons will be explained in detail to you, so you can choose. </li></ul><ul><li>Education is a good thing.   </li></ul><ul><li>The choice is yours, what would you like to do? </li></ul>
  18. 19. T HE H OME S EARCH <ul><li>We will look at homes & neighborhoods that meet your criteria. </li></ul><ul><li>You will learn the pros and cons of different home styles, construction techniques, and property values. </li></ul><ul><li>You will discover what you can afford and what is available to you. </li></ul><ul><li>Sometimes you don't know what you want until you know what you can have! </li></ul>
  19. 20. T HE PROCESS - S TEP O NE <ul><li>If you decide to work with me, here's our process: </li></ul><ul><ul><li>Consultation - we meet to discuss Your Needs </li></ul></ul><ul><ul><li>Provide you with our Buyer Orientation Book - At The Berkshire Group, REALTORS® we believe informed customers are happy customers.  We created a book that answers the questions of &quot;How to Purchase a Home in Colorado&quot;. </li></ul></ul>
  20. 21. T HE PROCESS - S TEP T WO <ul><li>Home Search </li></ul><ul><ul><li>We view homes that fit your needs in various areas </li></ul></ul><ul><ul><li>Narrow down search based on the areas you like </li></ul></ul><ul><ul><li>Compare homes you like until 1 or 2 stand out </li></ul></ul><ul><ul><li>You decide which one </li></ul></ul><ul><li>Negotiation </li></ul><ul><ul><li>Once we have The Home targeted, I provide you with a list of real estate activity in the area (active listings/solds/sold prices) </li></ul></ul><ul><ul><li>Together we review market values and create a negotiation strategy </li></ul></ul><ul><ul><li>I write the offer, you sign electronically </li></ul></ul>
  21. 22. T HE P ROCESS - S TEP T HREE <ul><li>Offer acceptance </li></ul><ul><ul><li>Inspections begin immediately </li></ul></ul><ul><ul><li>You have the right to inspect all aspects of the home </li></ul></ul><ul><ul><li>You must meet the deadline as stated in the contract to either accept property, reject property or request seller fix/repair unsatisfactory items. (more negotiations) </li></ul></ul><ul><ul><li>You will receive Title Commitment, HOA docs to review. </li></ul></ul><ul><ul><li>The appraisal will be ordered </li></ul></ul><ul><ul><li>Closing will be coordinated with seller  & agents. </li></ul></ul>
  22. 23. T HE P ROCESS - C LOSING <ul><li>The Closing </li></ul><ul><ul><li>In Colorado we close on the date specified in the Contract </li></ul></ul><ul><ul><li>Prior to closing you will receive a HUD Closing statement - we will review all the amounts on it. </li></ul></ul><ul><ul><li>At closing you will meet the sellers, if you and they are in town.  We sit at a closing table and sign documents to transfer the property to you. </li></ul></ul>
  23. 24. I G UIDE YOU THROUGH THE PROCESS <ul><li>From initial consultation, home search, negotiation and closing, I am there to answer questions and offer advice from my years of experience in selling Colorado Real Estate. </li></ul><ul><li>Put my experience to work for you. </li></ul><ul><li>Call Kristal Kraft   720-279-4599 </li></ul>Visit Denver Real Estate & Relocation