Important Note: If you have difficulty answering these questions, you’re not alone. Sometimes the future is just too uncertain and buying may not be the right move for you...just yet. Projecting where you will be in 5-7 years is difficult for everyone, but it is important to establish references for decisions in the future so try your best.
Why do I need a REALTOR? Purchasing a home involves some of the most complicated decisions you will ever make. You need to do it right; homes in Southern California are too expensive to try to do this yourself and risk making a mistake!
How is a REALTOR compensated? Normally a REALTOR works entirely on commission, which is received only if the transaction is successfully completed for you. Real estate commissions are traditionally paid out of the seller’s proceeds. In other words, no cost to you, the buyer.
How do I find the best REALTOR? Simple… call Purdy Homes and put us to work!
Specifically, as your real estate expert, Purdy Homes is a licensed Broker by the State of California. And as a member of the San Diego, California, and National Association of Realtors, we take pride in abiding by a strict Code of Ethics to provide you with the highest level of service. We are committed to real estate as a long-term career and focused on becoming your real estate resource year after year.
We will invest substantial time and effort in locating your home and will represent you with unequaled integrity throughout the purchase of that home. In return, we request your loyalty - a commitment that you will work with your assigned agent exclusively in selecting and purchasing your home.
If you see any home that interests you, visit our website and search the MLS (Multiple Listing Service) at www.PurdyHomes.com or simply ask and we will provide you with the detailed information about it. Whether a sign advertises it, in a newspaper, a “For Sale by Owner,” on the internet, listed with another REALTOR, or not even on the market – we can best represent you in the pursuit of the property.
Once we have established your needs from the previous steps, we will refer you to John ???, our financial expert where you can obtain some of the best financing available.
A short telephone conversation with Julie can provide information on your current buying power plus give you the initial knowledge and confidence to choose the right home loan program.
John will need some basic information from you to start the process:
1. Name and address of employer
2. Length of employment
3. Annual income
4. Other assets or income
5. Maximum down payment available
6. List of monthly debt payments (car, credit cards, personal loans, alimony, etc.)
7. A credit report will be run to verify good credit
John will then do some preliminary calculations to show you the maximum home loan you can afford under different available loan programs. He will also calculate the monthly housing payment you can afford and are comfortable with (which is sometimes not the same thing). Knowing that there is a limit to cash available to most buyers for their down payment, the monthly housing payment will most directly affect your maximum purchase price.
Normally there are two costs to buying a home: (1) the down payment and (2) the closing costs.
The down payment will vary based on the cash you have available, your loan program, and your financial goals. (When interest rates are low, consider less down payment and more home loan. Lower interest means your loan payments will be relatively lower.)
The closing costs are fees charged by various organizations involved in the transaction. Most are required by government regulation or lending institution requirements. Typically the closing costs total approximately 2-3 percent of the purchase price and include but are not limited to:
*Note: VA loans require a 2-3% funding fee which is added to your loan amount and not to the price of the house.
Once you own the home you will be making a monthly housing payment, which usually includes:
(a) the loan payment (b) county property taxes (c) fire insurance (d) a homeowner association fee (if applicable)
At our initial meeting we will show you our procedure for identifying and setting up the homes that you will visit in the communities you are interested in. You will find it to be a very efficient process. Instead of you driving all over town to see open houses that are not what you’re looking for, you will view just those properties that match your requirements.
Be very direct with us as you view properties so that we can learn what is important to you.
Also, ask questions as they come up. We want you to be knowledgeable and confident when you make decisions.
The homes that you will see come from a variety of sources:
Multiple Listing Service
For Sale By Owners
Finding the right home requires a search of all sources available.
When you have found the home you wish to purchase, we will draft the purchase agreement for you and advise you on protective contingencies, time limits, customary practices, and local regulations. At this point in time you will need to provide an “earnest money” deposit, usually from 1-3 percent of the purchase price. The deposit is not cashed until the seller has accepted your offer and the deposit will be placed with an escrow company/officer and applied towards your down payment.
We will also discuss aspects of negotiating with the seller which include:
Inspection and Performance periods
We will then present your offer to the seller agent who will in turn present it to their seller. The seller has three options: (1) they can accept your offer, (2) counter your offer, or (3) reject your offer. In each case your agent will carefully review the seller’s response with you and will discuss the best course to a final agreement and/or action.
Escrow is the busiest part of the purchase process. Many important procedures must be performed in predetermined time periods and in an organized manner:
Review of purchase contract and counter offers
Deposit to escrow
Escrow instructions created and approved
Title searched and preliminary title report reviewed
Home warranty ordered
Preliminary change of ownership completed
Payoff demands ordered
Grant deed notarized
Loan documents ordered
Loan documents signed
Closing funds deposited
Recording and transfer of possession
Closing statements prepared and mailed
This may seem overwhelming, but part of our job is to successfully guide you through these important steps.
When you make an offer on a home, the purchase contract allows for various inspections of the property. The inspections educate you on the condition of the property and provide valuable information to make you confident that this property will continue to serve its value. It is important to remember that your purchase agreement may allow you to withdraw if inspections reveal unsatisfactory conditions.
Physical Inspection. We strongly recommend that a licensed contractor with experience in home construction and inspection procedures be brought in to thoroughly inspect all systems of the home including: foundation, electrical, mechanical, plumbing, roofing, heating, air conditioning, grounds, drainage, landscaping, insulation, kitchen appliances, bathrooms, pool, spa, etc. The inspection should help verify that the condition of the home and systems are in working order in accordance with the purchase contract. In addition, this inspection is a living classroom for you to learn all aspects of your home for future maintenance and remodeling ideas.
Structural Pest Control Inspection. Often referred to as a “Termite Report”, the Structural Pest Control Inspection is conducted by a licensed inspector. In addition to actual termite damage, the pest control report will indicate any type of wood destroying organisms that may be present, including Fungi (sometimes called “dry rot”), which typically results from excessive moisture. Generally if any of these conditions are found to exist, they will need to be corrected before a lender will make a loan on the home. Who pays? The purchase contract will specify who is responsible for the cost of the inspection and corrective work. This is a negotiable item and I will advise you as to what is customary and prudent.
Sellers Transfer Disclosure Statement. The State of California requires all sellers of single- family homes to provide this disclosure of known conditions. Your assigned agent will review this with you carefully and compare it to what is found at the physical inspection. Note: REO/Bank Owned properties are exempt from this requirement.
Appraisal. The lender will require that an independent and licensed appraiser verify that the value of the property supports the purchase price. An appraiser will compare the property to similar properties in the neighborhood including those that are currently on the market, pending in escrow, and sold in the past six months. If the appraisal for some reason is less then the contract sales price, the buyer and seller have the option to re-negotiate or since the contract is contingent upon a satisfactory appraisal the buyer may choose to cancel the escrow.
Seismic Safety and Environmental Hazards. Your agent will ensure that you receive the latest information regarding seismic or earthquake and environmental hazards (such as asbestos, lead paint, radon gas, etc.) and how they may affect your new home.
Smoke Detector Compliance Disclosure. All living dwellings must have operating smoke detectors and at optimum locations.
Water Conservation Retrofit. Certain communities require water conservation fixtures on a home. We will advise you on the latest requirements and who is required to pay for required work.