We had a great class last week. The students were fun and we had lots of good questions.
Here are the slides from the class:
And here is a peak at the current foreclosures available in Snohomish County:
and in King County:
Tellus Realty
We had a great class last week. The students were fun and we had lots of good questions.
Here are the slides from the class:
And here is a peak at the current foreclosures available in Snohomish County:
and in King County:
When buying a new home, there is usually not a large amount of time between mutual acceptance and closing. Typically its 30-45 days. You should start getting ready for the move as soon as possible. Here are some tips for getting ready for a successful move:
Don’t commit too early: If you have several contingencies, like an inspection, you may want to hold off on putting deposits down on moving trucks, for example, until after the contingencies are satisfied. This is going to depend a lot on timing, so just avoid committing to big expenses where you can’t get your money back if the sale is delayed or does not close.
Start packing early: Begin packing early and take your time. It’s much less stressful if you are not in a rush. Start with items that you use infrequently or won’t use for a while: seasonal clothing, holiday decorations, your fine china, etc. Starting early will also help you stay organized and give you time to acquire extra packing materials if you run out. Keep out your coffeemaker and other daily use items as long as possible. Pack them up at the last minute and mark the boxes clearly. Then you can unpack them first thing in your new place.
Time for a yard or garage sale: This is a good time to have a go at getting rid of ‘stuff’. The less stuff you have to move, the less it will cost to move it. Depending on your new place, your current furniture may not fit or may not be the right style. Have a garage sale or take unwanted items to a charity.
Have a party: Don’t forget to say good-bye to your neighbors and friends that you are leaving. This is especially important if you are moving far away. Take a day for a barbeque or an evening for a final open house.
Reserve movers/moving equipment: Reserve moving equipment or schedule the movers. Arrange things early to avoid last minute stress.
Schedule post closing work: Get bids and schedule any work such as painting and repairs at your new house for immediately after closing. Arrange to have all of the locks changed and to have the utilities put in your name.
Check out the viewpoints and tips from other experts:
Probably the most important step you can take when buying a home is to do a good job of performing “due diligence”. What do we mean by due diligence? These are the steps that help you make sure that the home your are buying is what you expect it to be, and to help make sure unexpected problems don’t show up later. It is virtually impossible to remove all risk, but performing common due diligence steps can greatly reduce any future problems. Although there are other due diligence steps, depending on your individual concerns and the specific property, here are the most common steps a home buyer should perform (if working with a broker such as Tellus Real Estate Solutions, ask them for advice):
Home inspection: The single most important due diligence step is to hire a home inspector and have them do a thorough job of checking the home and its components. In Washington State, paid home inspectors must be licensed. A home inspector will check the basics: roof, siding, attic, basement/crawlspace, plumbing, electrical and HVAC (the furnace). The focus will typically be on safety issues more than cosmetic issues. A good inspector can tell you what is wrong and tell you what is typical for a house of that age and location. Many inspectors will provide rough estimates for repair costs, though that is uncommon. The inspector may recommend more inspections by experts such as engineers, electricians, or plumbers to provide you with a more detailed evaluation of specific repairs required.
Sellers’ Disclosure Review: Washington State law requires that home seller’s provide a disclosure of all known ‘material’ defects in the property. Buyers can waive the right to receive the disclosure, and may be required to do so by some sellers such as banks. Review the disclosure form and ask questions about any issues mentioned. If there is little information provided or no disclosure is provided, pay special attention to the home inspection.
Neighborhood review: In many ways, this step is as important as the physical property inspection. Introduce yourself to your new neighbors and get a feel for the neighborhood. Drive by at different times of the day, on weekends and in the evening so you that you are aware of the types of activities that are typical in the immediate area of your new home. Check with the police and fire department to find out if there are any known issues with criminal activity or vandalism. Do some research on the internet to find out everything from ratings of local schools to the location of registered sex offenders in the area.
Title review: As part of the sales process, the seller will have a title insurance policy issued that benefits you as the buyer. If you have a lender, you will issue a title insurance policy to them. The title insurance policy guarantees your ownership rights. As part of issuing the policy, the title insurance company will conduct a title search and then issue a report of their findings that lists any issues against which they don’t insure. These items are ones that somehow limit your ownership rights or indicate claims by other people on the property.
Common items are existing liens against the property for home loans, judgements, utilities or mechanics liens (liens from contractors or other service providers put on the property to guarantee payment). You will want to verify that these will be cleared up at closing and that the escrow company will take funds from the sale proceeds to pay all of these debts. You or your agent can do some rough calculations to make sure there will be enough money to do this.
Other issues are more difficult to clear up, or impossible. There may be an easement on the property for public utilities crossing the property. There could even be an easement that allows neighbors to walk across the property to access a lake or stream on the far side of your property. Some properties come with restrictions on how the property can be used due to zoning or other rules.
HOA Rules and CCR Review: Many properties are part of a Home Owners Association (HOA) or are located in an area with Conditions, Covenants, and Restrictions (CCRs). CCRs will show up during a title search and might limit your ability to use the land. They may say all lots must be of a minimum size or that any homes built must be a certain style or architecture. Previous owners may have sold mineral, water or development rights to other parties.
HOAs are neighborhood organizations with a legal right to set rules of conduct for a neighborhood. They may provide services, such as a public pool or maintaining common mailboxes. They can also set rules that limit parking of RVs/boats in front of your home. Some require committee approval for external remodeling or painting.
Appraisal: If you will be taking out a home loan or a line of credit on the property during the purchase, your lender will require an appraisal. For cash sales, getting an appraisal is up to you. The appraisal provides an objective opinion of the market value of the property. Your lender will want to know that the property is worth enough money to make their investment in you and the property a safe one. For you, the issue is wanting to know that you are not going into the purchase transaction buying a property that is worth less than what you are paying for it An appraiser must have a specific license in Washington state. A real estate agent is not an appraiser (usually, at least) and can only provide a Comparative Market Analysis (CMA) or a Broker Price Opinion (BPO), which is not as detailed or formal as an appraisal.
Home owners insurability review: Be sure to share details about your prospective home with your insurer. Insurance companies track claims on all properties. There are some types of claims which could make your property non-insurable or which might raise your rates. Also, other factors such as proximity to police and fire stations can affect your insurance rates. You will want to verify that your home can be insured, and for how much, early in the due diligence process.
Septic inspection: A septic inspection is a specialized type of inspection. It only applies when the property has an on-site septic system instead of a connection to a public sewer. In Washington State, the seller will usually pay for the septic tank to be pumped and inspected. The inspector will verify, to the extent possible, that the system appears to be functioning properly. There are many types of septic systems; some are simple and others are quite complex. During the inspection, the inspector can usually help explain how the system works to a new buyer . Always show up for the inspection or make sure you have a representative there. There have been cases when the septic pumping service never even showed up to inspect the system, but provided a bill for pumping and inspection.
Well water testing: If the home has a well, or is on a well shared with other owners, you will want to verify that the system pumps enough water and that the water quality is acceptable. County health departments provide guidance and instructions on how to properly sample water and have it tested. Testing water flow can be more challenging. If in doubt, hire a well drilling company to come and verify that the system works appropriately and identify any steps that need taken if it does not. For shared wells, identify who is responsible for maintenance and be sure to obtain any reports that have been made available.
Congratulations! You’ve found a home you want to purchase! Now, its time to make an offer and have it accepted. These are some tips and suggestions for how to form your offer and to negotiate terms that the seller will accept. We are not talking about making an offer that is accepted immediately with no negotiation. That is easy; you just offer the seller cash equal to the amount they ask. Rather, our goal at Tellus Real Estate Solutions is to negotiate terms that meet your goals in buying a home.
Some of these tips are for the initial offer, but most apply to the entire negotiation process:
Once you have a list of the features and requirements for the home you want to purchase, you can begin your search in earnest. Don’t be surprised as you go through the search process to find that you will modify your requirements. You may decide that some features are more, or less important than you thought. You may also find that a certain area in which you would like to live is more expensive (or less expensive) than you thought, requiring you to compromise or change your other criteria. Use the Tellus Real Estate Solutions search tools and My Listing Manager to conduct your web search.
Brokers such as those with Tellus Real Estate Solutions have back-end access to the MLS databases. We are able to search on more data points and with more accuracy by working with the MLS backend because we have access to data the MLS does not allow to be published on public websites. We can also set up automated searches for you and have emails sent from the MLS system with updates. Because these searches are done directly in the MLS system you will be notified much more quickly than you would from local or national agent websites.
Once you’ve made a list of properties from your internet search that look good, its time to look at them in person. There are several approaches to doing this. If your list is long, we recommend using this list, in order:
When viewing homes, you should note aspects of the homes that you liked or didn’t like. Use a spreadsheet or a notepad to track comparisons of different properties. It can also be helpful to rate homes against each other, making a ‘stack ranking’ so you can decide what property you like the best. As you look at homes, review your requirements list and see if you need to make any changes. Add items or remove items as appropriate.
Below is a list of some of the major websites that offer search tools along with a brief description of how they compile their information:
Use the tools on the Tellus Real Estate Solutions website Once you’ve narrowed down the location and property type, you’ll want to start thinking about your limits with regard to your loan amount, down payment and estimated monthly payments. Use the Mortgage Calculator tool on the Tellus Real Estate Solutions website to estimate payments for the most common loan types.
Begin checking with lenders for the latest interest rates Check with lenders for the latest interest rates for the type of loan you are considering. You will also want to verify what the requirements are for your credit score, the amount of down payment needed, income requirements, etc. Be sure to check with several lenders, as no one lender has the best rates for all loan types and borrowers.
Check your credit score It’s a good idea to check your credit score before starting the process of securing a loan. This way you can take care of any inaccuracies right away, or have time to clean up your credit if you’ve had some problems in recent history. The website www.annualcreditreport.com is the government mandated site for requesting a free copy of your credit report from the credit reporting agencies.
Create a budget Don’t just settle with the amount of loan, down payment or estimated monthly payments that the lender says you can afford. Think about your budget. Better yet, create a budget. Decide what kind of payment you are actually comfortable with paying. Download the Tellus Real Estate Solutions Home Buyer Budget spreadsheet to get started.
Obtain a pre-approval from your lender At the end of this process, you will want to obtain a pre-approval from the lender with whom you decide to work. Make sure the lender provides a pre-approval, not a pre-qualification. The former requires they run a credit check and has more validity than the latter, which is based only on your statements to the loan officer. With a pre-approval you will be able to provide specifics with regard to your home buying requirements including:
Items included in a pre-approval will educate you or your real estate agent on the total price you are able to pay for a property from a lender perspective (down payment + loan amount), how much you are able to afford based on money needed for closing (down payment + closing costs) and the location and type of property based on loan type. As an example of the latter, FHA loans require homes to meet specific standards. Condominiums must have a special approval. USDA zero-down loans only apply in certain areas. Fixer-uppers likely require rehab loans.
Your search for a new home will be more successful if you form a good idea of what kind of home you would like to buy ahead of time. Here at Tellus Real Estate Solutions, we believe that you should start by looking at your personal requirements and then look at the numbers.
To educate first time home buyers on the buyer process, Tellus Real Estate Solutions regularly conducts a “Home Buyer 101” class at various locations throughout Puget Sound. Informative slides and handouts from one of our classes are available as downloads on our website here:
Here are some of the most common factors that a buyer should consider when deciding what kind of home to purchase:
Location, location, location The old adage about real estate being about “location, location, location” is true for many reasons, including the following:
Physical features What size and style of home will work for you? What features should it have on the inside and outside? Some obvious and not-so-obvious items to consider are:
Personal finances
Sooner or later you will have to figure out how much you are able to spend and how much you are comfortable spending on a new home. Its important to think about this after listing out the requirements for location and the physical aspects so that you can consider the type of loan you will need (assuming you need one). For example, if your dream is to find a fixer-upper and remodel it, you will want to look at a rehab loan instead of a traditional loan. Location can also affect your financing options. Homes in some areas qualify for low-down or zero-down payment programs. Some communities may offer financing for low-income home buyers or for buyers considering buying a home in an economically depressed area. If you are targeting new construction homes, builders often work with lenders to provide special financing. Use our Home Buyer Budget spreadsheet to help you determine how much you are able to spend on your new home.
Your requirements list
Make a list of your requirements for your new home on a sheet of paper or download and complete our free Home Buyer Questionnaire and keep it handy. It will help you set up a search for your new home. It will also help you keep an objective viewpoint on that cute place you fall in love with as you drive up to the entrance. Don’t forget to list the things or places you don’t desire as well.
Another good idea is to prioritize. Its not often you find a home that will match your requirements 100%. Prioritizing will help you decide when the perfect floor plan outweighs the small yard, for example.
Check out what others have to say on this topic
Don’t take just our word for it. Take a look at these articles from other trusted sources for their point of view:
Motley Fool: Pick Your Home Type
Digerati Life: How Much House Can You Afford? 10 Steps to Determine Your Home Buying Budget
Trulia.com: 2010 Most Popular Home Features
Realtor.com: How to Choose a Home
If you are a first time home buyer or if you have been out of the real estate market for a while, then you have come to the right place. Here you will find a step-by-step overview of the home buying process. Take a look at the home buying topics below and click the links for more detailed information on each subject.
Your search for a new home will be more successful if you form a good idea of the type of home you would like to buy ahead of time. It is also important to know what your limits are for a down payment, monthly payments and the loan amount. Here at Tellus Real Estate Solutions, we believe that you should start by looking at your personal requirements and then look at the numbers. Find out more.
Once you have a list of the features and requirements for the home you want to purchase, you can begin your search in earnest. Don’t be surprised as you go through the search process to find that you will modify your requirements. You may decide that some features are more, or less important than you thought. You may also find that a certain area in which you would like to live is more expensive (or less expensive) than you thought, requiring you to compromise or change your other criteria. Find out more.
Congratulations! You’ve found a home you want to purchase! Now, its time to make an offer and have it accepted. These are some tips and suggestions for how to form your offer and to negotiate terms that the seller will accept. We are not talking about making an offer that is accepted right off with no negotiation. That is easy; you just offer the seller cash equal to the amount they ask. Find out more.
Probably the most important step you can take when buying a home is to do a good job of performing “due diligence”. What do we mean by due diligence? These are the steps that help you make sure that the home your are buying is what you expect it to be, and to help make sure unexpected problems don’t show up later. It is virtually impossible to remove all risk, but performing common due diligence steps can greatly reduce any future problems. Find out more.
When buying a new home, there is usually not a large amount of time between mutual acceptance and closing. Typically its 30-45 days. You should start getting ready for the move as soon as possible. Find out more.
The final step in the sales process is closing and taking possession of your new home. The actual closing process will be managed by an escrow officer or real estate attorney. Their role is to ensure that the appropriate funds change hands between all parties (buyer, seller, buyer’s lender and seller’s lender) and to make sure that title to the property is properly transferred. They act as a neutral third party to the transaction. Find out more.
The final step in the sales process is closing the sale and giving the new owner possession of the home. The actual closing process is managed either by an escrow officer or real estate attorney. The role of the escrow officer is to make sure that the appropriate funds change hands between all parties (buyer, seller, buyer’s lender, and seller’s lender) and to make sure that title to the property is properly transferred. They act as a neutral third party to the transaction.
A week or two before closing, depending on the exact schedule and how busy the escrow officer is, you will receive an email or letter requesting information from you before closing. The escrow company will require information about your mortgage lenders, utility company and anyone else who needs paid out of the funds you will receive. They will also need to know how you would like to be paid. The quickest way to receive funds is to have the escrow company wire funds directly to your bank account.
The exact date you need to come in to close on the sale won’t be set until a few days before the actual closing date. That is because the paperwork from the buyer’s side tends to drive the end-game. In particular, there is almost always a last minute rush to get final paperwork from the buyer’s lender. If they have you, the seller, come in too soon, you may have signed all your paperwork for nothing. Its generally considered best to make sure the buyer has completed all of their paperwork. Escrow will prepare an estimated HUD-1 statement that lists out the exact costs owed by everyone, and lists exactly how much money you will receive (within a few dollars). Review this before the closing date in case there are any errors.
Fortunately for you, the actual closing appointment will not last long. You have far less paperwork to sign than the buyer because they are required to sign a wide array of loan documents.
Once everyone has signed the paperwork, then the escrow officer will send copies to the buyer’s lender. Assuming all of the paperwork has been completed correctly, the lender will then fund the loan, meaning they will wire the money to escrow.
Once escrow actually receives the money, they will release documents for recording to the county. After escrow receives recording numbers confirming that the property legally transferred hands, they will distribute the funds to all appropriate parties.
At some point during this last phase, you or your real estate agent will arrange to get the keys and after the recording numbers are received, the buyer can have them. The property has now officially changed hands. Congratulations on selling your home!
Congratulations! You’ve put your home up for sale and received an offer that meets your requirements. Now what? The buyer has started their due diligence. Along with following up on that buyer due diligence you have another important task: preparing to move you and your family out of the house.
This can be both a very stressful and very joyful time. If you have already purchased a new home or have signed a rental lease, things will be a bit less stressful. If you have been unsuccessful in finding a new place to live, it’s time to get serious with the search. If you are considering buying, but can’t find the right place, consider a short term rental. You might even find a seller who has already moved out that is willing to rent their home while it is for sale, if you are willing to be flexible with showings and are able to keep the house in top showing condition.
Assuming you do have another place, then here are some tips for getting ready for moving day:
Don’t jump the gun: If your buyer has several contingencies you may want to hold off on putting deposits down on moving trucks, for example, until after the initial inspection. This is going to depend a lot on timing, so your best bet is to avoid committing to large expenses where you can’t get your money back if the sale is delayed or does not close.
Host a yard or garage sale: Depending on how much de-cluttering you did before putting your home up for sale, it may be time for another attempt to get rid of ‘stuff’. The less stuff you have to move, the less it will cost to move it. Depending on your new place, your current furniture may not fit or may not be the right style. Host a garage sale or donate unwanted items to a charity.
Start packing early: Start packing early and take your time. This process will prove much less stressful if you are not in a rush. Start with items that you use infrequently or won’t be using for a while, such as seasonal clothing, holiday decorations, the fine china, etc. Starting early will also help keep you organized and give you time to acquire extra packing materials should you run out. Leave out your coffeemaker and other daily use items as long as possible. Pack them up at the last minute and mark the boxes clearly. Then you can unpack them first when you get to your new place.
Keep up the maintenance: Don’t forget that you are expected to keep your home in the same condition as when the buyer put in their offer. Be sure to keep the lawn mowed and to repair any damage that might occur during your move. Pay the premium to keep your home insurance active until closing in case of an unexpected major catastrophe.
Don’t take the curtains: Be aware of what is considered a fixture in the home and is expected to remain. Outdoor plants, built in furniture and even curtains and blinds are all expected to remain with the home when you leave, unless you specifically outlined your plan to take these items as part of the sales contract.
Host a party: Don’t forget to say good-bye to your neighbors and friends who live nearby. This is especially important if you are moving further away. Plan a barbeque or an evening out for a final open house. If things are going smoothly with the sales transaction and all contingencies are satisfied, you might even consider inviting the new owners.
Welcome to Tellus Realty! We’re is committed to helping you make informed and rewarding decisions whether your or looking to buy and sell real estate, or in search of a new home for your license. Tellus Realty provided a more personal, one-on-one experience. We are not affiliated with a big-box or franchise where agents and clients are viewed as a statistic or number. Our team focuses on service and quality.