World-Class Buying Experience
Buyers Need Their Own Real Estate Agent
Buying a home is a complex process, and it’s particularly challenging in a seller’s market when homes sell quickly and often over list price. In this type of market, it’s common to lose out on a home as others outbid you. Your Berkshire Hathaway Home Services network professional can set you up for success by sharing what’s working and not working for buyers navigating a seller’s market.
Many first-time buyers don’t realize how important getting representation is, whether they hire their own agent or use the seller’s agent. Hiring an agent affords buyers a fiduciary duty on the part of the real estate professional to protect interests of his or her client. When buyers purchase a home using the seller’s agent, the seller’s agent owes a fiduciary duty to the seller but also has a duty to be fair to the buyer.
The first thing an agent will do is get you financially prepared to make a successful offer. He or she will give you the names of some good mortgage bankers so you can get prequalified for a mortgage. In fast markets, you may need at least 10 percent down to be competitive.
Your agent will help you find the best value, neighborhood, and quality for your budget and requirements, as well as assist you through the search process, comparable homes sold, making an offer, inspection, repair, and appraisal processes.
“A home is one of the most important assets that most people will ever buy. Homes are also where memories are made and you want to work with someone you can trust.” -Warren Buffett
Renting Vs. Buying
With every rent check you write, you're helping to build equity in your landlord's property. That money could be going toward building equity in a home of your own.
Rent prices usually go up over time. So do home prices. While you cannot control what you pay for rent, you can control what you pay to live in your own home. The point is, life gets more expensive over time, and the only way to secure your housing future is to own a home.
Most everyone knows the advantages of buying over renting: Equity that builds over time. A safeguard against inflation. Tax-deductible mortgage payments. The satisfaction of living in a home that you can improve or modify to your liking without worrying about a landlord.
But coming up with a down payment, qualifying for a loan, and finding a suitable home in the neighborhood of your choice can be setbacks to ownership. So here are few things to consider when weighing one option against the other:
- How long you plan to stay: Buying usually is better the longer you stay, since your upfront fees are spread out over many years.
- Tax liabilities: Property taxes and mortgage/interest costs are important, and probably tax-deductible. Be sure to consult your tax adviser to understand all the tax advantages of homeownership.
- Closing costs can add up: Fees for home inspection, title search, and mortgage insurance are part of the home-buying process. Plus, you’ll have moving expenses when you buy or sell. Talk to your agent and let him or her help you develop a strategy that will keep these fees to a minimum.
- Maintenance and upkeep: Owning a home means paying for things that renters typically do not. They can range from painting and carpeting to water bills and trash pickup. Setting up a “Home” savings account will help keep “Murphy’s Law” at a comfortable distance.
Deciding between the flexibility of renting and the potential long-term reward of homeowning is on the minds of many would-be buyers. Want to take a stab at crunching the numbers yourself?
How Much Can I Afford?
The journey to homeownership starts by understanding how much you can afford. One major thing to consider is your down payment if any. Many consumers believe it's impossible to buy a home without at least 20 percent down. But thanks to various government-sponsored programs, many people can now buy a house with as little as 3.5 percent toward a down payment. Veterans of the U.S. military have zero-down programs available.
PRE-QUALIFICATION VS. PRE-APPROVAL
Pre-qualification and pre-approval are two terms you'll hear frequently when preparing to buy a home; however, they are not interchangeable. Pre-qualification is a simple estimate of how much you could afford, whereas pre-approval is when you get your mortgage loan amount approved. You don't need to be pre-qualified to start looking for a home, but you will need to be pre-approved before you begin negotiating. So it’s best to get this part out of the way early.
Once you've been pre-approved, the real fun begins and it's time to find your dream home. When looking for homes, keep in mind your current income. Although you might be pre-approved for a certain amount, are the payments on that loan feasible for you to make every month? Ensure that the price range you're looking at is sustainable for your current lifestyle and budget.
When buying a home, you'll also be required to pay closing costs. These are essentially fees charged by lenders and other third parties involved in the purchase of your new home. Closing costs can range between 2 and 5 percent of the home price, and payment is required before you close on your new home. In addition to your down payment, be sure you have money set aside to cover closing costs.
As a homeowner, you'll begin to pay property taxes. The amount of tax you pay depends on where the property is located. Rates vary, but thanks to California's Proposition 13, your annual property tax liability will remain mostly predictable year after year.
Historically Low Rates!
Why Work With a Real Estate Agent
You could search for your next home all by yourself. But why? With an experienced Berkshire Hathaway HomeServices California Properties sales professional at your side, finding the perfect home is easier, faster, and a lot more fun.
A great agent can offer valuable advice and coach you through the entire home-buying process. Yet many buyers still spend endless hours poring through classified ads, driving all over town, and viewing dozens of unsuitable properties – simply because they haven't connected with a licensed real estate agent. In today’s information world, having an experienced agent working to decode and guide you through the chaos is invaluable.
FINDING THE RIGHT AGENT FOR YOU
Chemistry is important. So are professional credentials. Above all, you'll want an experienced agent who has the resources of a leading real estate firm behind him or her – a firm such as Berkshire Hathaway HomeServices California Properties.
ADVICE ON FINDING AND WORKING WITH AN AGENT
- Ask friends, neighbors, and co-workers for local referrals.
- Talk to your family members and trust those who have your best interest in mind.
- Interview more than one agent before hiring.
- Share with your potential agent as much as possible about your expectations such as price range, neighborhoods, flexibility, and time frame.
- Trust your intuition.
ASKING THE RIGHT QUESTIONS
Before you commit to working with one agent, be sure to ask plenty of questions. A good agent will welcome your questions to better understand your goals to help strategically search the properties that best fit your needs and lifestyle. Some typical questions to ask a potential agent:
“How will you help me find a home?”
Buying a home takes more than visiting open houses and making appointments to see homes for sale. Your agent should not only be up to date on the latest social media and marketing practices, but also belong to a strong network of fellow professionals, local organizations, and civic groups. Memberships in Rotary, Toastmasters, and similar associations can lead to knowledge about homes that meet your criteria.
“How well do you know the area(s) that interest(s) me?”
An agent who knows the area or neighborhood you are interested in is extremely beneficial to you. While licensed agents are allowed to represent buyers and sellers anywhere in their state, it helps to select one who is familiar with your desired region.
“How do I know you will provide me with personalized attention?”
Even the busiest agents can provide great service because they know how to keep the process moving for their clients. They have put in place procedures and partnered with other professionals to keep you informed every step of the way.
“Will you handle all aspects of my transaction or delegate some tasks to an administrative assistant?”
If you choose to work with a busy agent, a knowledgeable assistant can be very helpful when you have questions or need immediate attention. Every agent has a unique structure for his or her business; find one that best suits you.
“What is your negotiating strategy and how will it help me maximize opportunities?”
Negotiating contracts is one of the most important aspects of buying the right home. Having a plan and understanding market conditions will prepare you to prepare for the negotiating process.
Commitment of Service
I understand that buying a home is a major decision for you that can be filled with apprehension and concern. I understand that the process can be exciting yet complicated and overwhelming for you. My job is to help you find the home that meets your needs and to make the home buying process efficient, stress-free and successful. I am committed to communicating with you in a timely and efficient manner, plan a home search based on your needs, introduce you to properties and neighborhoods that meet your requirements based upon our plan, help you obtain the financing you may need for a home purchase, assist in preparing a purchase offer on the property of your choice, represent you in the transaction with the seller, and work to protect your interests during the completion of the transaction.
What Do You Want in a Home?
While definitely important, “location, location, location” isn’t the only consideration for your home purchase.
Before you start searching online or in person, make a list of the features you would like to have in a home. They can include, but certainly are not limited to:
- Number of bedrooms and bathrooms
- Open floor plan, multi- or single-story
- Fenced or open yard
- Granite countertops in kitchen
- Storage space, number of closets
- Wood flooring or carpetingcon
- Air conditioning
- Swimming pool/hot tub
- Multicar garage
Being clear on what you are looking for will help your real estate agent find that perfect home.
Finding Your Home
Whether you're buying your first home, fifth home, a vacation property, or an investment property, its location will often determine its future value and even certain aspects of your everyday life. To help you narrow down the areas that are right for you, begin by making a list of the most important factors.
Once you have a list compiled, do more in-depth research on each potential neighborhood. A good amount of information is available online, but the Internet doesn't have the full story. To get a true understanding of each neighborhood, take the time to visit at least once, consult your agent, and review the list of considerations below.
- Current employment and future opportunities
- Commute and transportation
- Real estate value
- Crime rates
- Proximity to family, friends, and activities
- School districts
- Town/city population size
- Healthcare facilities
- Proximity to airports
Be sure to choose the location that's right for you: Do you want to be downtown, in the suburbs, near work? Are schools an important factor? Do you want a community with plenty of outdoor recreational amenities; one with shops, restaurants, and nightlife; or one with plenty of activities for children? Choosing the right location will ensure long-term happiness in your home.
Think about whether the house or the community matter more to you, and whether it’s worth it to make a longer commute in order to live in the suburbs, where your purchasing power could go a little further.
Next, take a closer look at the community you have in mind. Try to talk to your potential neighbors, and ask them lots of questions. These people could become your babysitters, your carpool buddies, and your closest friends over the years. If community matters to you, this is an important step you don’t want to overlook.
VISIT MORE THAN ONCE
Some good advice from the National Association of REALTORS®: Visit communities at different times of day and night, and on weekends and weekdays, to get a feel for who lives there and what the activity level is like.
Fair-housing laws prevent sales associates from telling clients about crime statistics or talking about “good” or “bad” schools. However, an agent can direct you to websites that provide information about those topics. Even if you don’t have or don't plan to have children, buying a home in a well-regarded school district can help the property’s long-term value.
Submitting an Offer
When you're ready to make an offer on a home, anticipation is high. For many, this can be a stressful time. But it's important to trust your expert real estate sales associate and rely on your negotiating strategy to help you get the best deal possible. Your offer, once accepted, will ultimately become a binding sales contract. When compiling the offer, make sure every pertinent piece of information is included. Your offer should include:
- The address and a description of the property
- Your name, seller's name, and names of brokers
- Sale price, transaction terms, and closing date
- Any tax and fee adjustments between both parties
- Who will pay for title, survey, inspections, and other fees
- A timeline of next steps and time limits
- Contingencies that allow you to cancel if necessary
NEGOTIATING THE BUY
Once you've made your offer and submitted it to the seller, be prepared for counteroffers. The support your real estate agent provides during the negotiation process is priceless. Remember to remain patient, and let your sales professional act as a liaison between you and the seller or the seller's agent. Common counteroffers include flexibility on pricing, closing date, and appliances.
Contingencies can be a powerful tool in protecting your interests, but they also can weaken your negotiating position. If you currently own a home, your offer might need to be contingent on selling it. If you're uncertain about the structural integrity of the home, you might want to have a home-inspection contingency. Work with your agent to design a plan that will strategically help you compete in any situation
After the Offer Is Accepted
You've found the home you want, made an offer and it has been accepted. Now what?
Once your offer is accepted, be prepared to seal the deal with a deposit. This is usually a percentage of the home's purchase price that indicates you're serious about buying and indicates your good faith. A deposit is generally applied to the purchase price when you complete the transaction but may be forfeited to the seller if you fail to satisfy the purchase. Your sales associate can help determine the deposit amount you should be prepared to pay, based on your target home price.
Many first-time buyers are taken by surprise when it comes to the deposit, especially if they have to make a fast offer. You should have funds available in your checking account so you can wire funds to escrow the day your offer is accepted. This item could be very important, and the deciding factor in your offer being accepted or not. Be sure to focus on your deposit when developing your negotiating strategy.
This is the phase of the home-buying process when all the i’s are dotted and the t’s are crossed. It’s when due diligence is performed to make sure your home loan has been approved, the property is in the condition you expect, and all legal documents pertaining to homeownership are prepared and officially recorded.
Escrow can be an anxious time for all parties. But knowing in advance what to expect can help you get through the process.
WHAT IS AN ESCROW?
An escrow is an arrangement on which a neutral third party, called an escrow holder, holds legal documentation and funds on behalf of a buyer and seller. The escrow agent works closely with you, your realtor and lender to assure that the sale conditions are complied within the time period called for in the Residential Purchase Agreement and Joint Escrow Instructions.
After all parties have executed these documents, escrow prepares an Addendum to the Residential Purchase Agreement and Joint Escrow Instructions. Escrow then distributes them according to the buyers and sellers instructions. Both the buyer and the seller rely on the escrow holder to carry out faithfully their mutually consistent instructions relating to the transaction.
Escrow holder is bound by law to notify both parties if the instructions given are not mutually consistent or cannot be carried out. These instructions are drawn by the Escrow Officer, and signed by the buyer and seller. Since the escrow instructions are not as detailed as the Purchase Contract, the information contained in the instructions is intended to direct the Escrow Officer in the specific steps that are to be completed through the escrow instruction.
Our partners create a streamlined escrow, title, mortgage, and insurance experience for you. Together we have a vested interest in expediting your home buying process. Our unified efforts assure a positive closing.
The purchase of a home is probably the single largest investment you'll make in your lifetime. It is only prudent that you want to safeguard your rights and investment. Title insurance assures that your rights and interests to the property are as expected, that the transfer of ownership is smoothly completed and that you receive protection from future claims against the property. It is the most effective, most accepted and least expensive way to protect your ownership rights.
Because land endures over generations, many people may develop rights and claims to a particular property. The current owner's rights - which often involve family and heirs - may be obscure. There may be other parties (such as government agencies, public utilities, lenders or private contractors) who also have 'rights' to the property. These interests limit the 'title' of any buyer.
Before your real estate transaction closes, the title company performs an extensive search of all recorded documents related to the property. These records are then examined by experienced title officers to determine their effect on the current status of ownership and a report is issued to you or your agents for review. This through examination generally allows any pending title problems to be identified and cleared prior to your purchase of the property.
If title insurance companies work to eliminate risks and prevent losses caused by defects in the title before the closings, why do you need a title insurance policy?
Because even after the most careful research, some title flaws may go undetected. Among the more common flaws to title which are not of record are forgery, invalid court proceedings, mistaken legal interpretations, defective deeds, confusion due to similarity of names, previously unrecognized rights of spouses and undisclosed heirs. These problems may surface at any time in the future.
Protection against these flaws and other claims is provided by the title insurance policy which is issued after your transaction is complete. Two types of policies are routinely issued at this time: an 'owners policy' which covers you, the homebuyer for the full amount you paid for the property; and a lender's policy which covers the lending institution over the life of the loan. When purchased at the same time, you can obtain a substantial discount in the combined cost of an owner's and a lender's policy. Unlike other forms of insurance, your title insurance policy requires only one moderate premium for a policy to protect you and your heirs for as long as you own the property. There are no renewal premiums or expiration date.
Each policy is a contract of 'indemnity'. It agrees to assume the responsibility for legal defense of your title for any defect covered under the policy's terms and to reimburse you for actual financial losses up to the policy limits.
You've made it through closing, bought your dream home, and now it's time to move! Many people dread moving, but don't let it get the best of you. Instead, follow these simple steps to have a seamless, stress-free move.
Preparing is the best thing you can do to set yourself up for moving success. Prior to your move, set up your postal mail forwarding, start utility service at your new location, and stop service at your current location. Head to the store and gather all your moving supplies. This should include boxes, markers, tape, labels, sandwich bags, plastic wrap, and any other packing equipment you might need. Well in advance of relocating, consider how you will conduct the move. Will you be doing it all yourself or hiring a moving company? Don't forget to reserve a truck if needed.
When you're ready to start packing, be sure to pack smart. Start by filling up an overnight bag that includes all the essentials you'll want as soon as you arrive at your new place. This might include your laptop and toiletries. Place all items you'll need first in a box or container you can easily identify from the rest. A clear or colored plastic bin works well. Next, move on to packing up the rest of your goods.
As you're packing, don't forget to label. Knowing what is in each box can save you lots of time in your new space. You can label using tape and a marker, or a label maker. On each label, include a description of the contents, which room of the house it's all for, whether the box contains anything breakable, and an estimate of the weight (light, medium, heavy).
While actually moving into your new space, put each clearly labeled box in its corresponding room. Once you've unloaded, start by cleaning. Dust, vacuum, sweep and wipe down surfaces before you begin unpacking. As you unload, start with the most critical rooms first and take time to organize your belongings.
Now that you're in your new home, relax and enjoy!
“A home is one of the most important assets that most people will ever buy. Homes are also where memories are made and you want to work with someone you can trust.” -Warren Buffett