Boise, Idaho Homes for Sale – Our Boise Real Estate Specialists work with you from dream to reality.

With The Help Program Buying a home has never been easier! And right now is the time to buy, there is a large inventory of homes to choose from, and prices have never been better!

In this market you need experienced agents that understand today’s market. The Help Program has a team of “In House” professionals to handle every aspect involved in finding you the perfect home, getting the sale closed, and you moved in!

What The Help Program will do for you:

1. Help You find the right home
2. Help you shop for the best Mortgage
3. Initiate and close the sale

If you need Financial help to purchase a home we also:

• Provide Financial Counseling
• Help Repair damaged Credit
• Help you amass a $6000. In savings (for closing costs and reserves)
• Manage a one year lease to own contract

Invest in your Future:

Regardless of the slowdowns in the housing market, housing remains a good long-term investment. Buying smart is an investment in your future and long-term value. Just a few immediate benefits of owning a home are that your money is invested in your future instead of being thrown away in rent, you will have tax deductions that you don’t have with renting, and you have control over you monthly payments as opposed to being at the whim of a landlord.

BUYER RESOURCES:
Getting A Mortgage (Power Point)
Why Purchasing your Home is cheaper than Renting
Application Form
Budget Spreadsheet Download

Download THIS spreadsheet to help you figure out a budget.

At Eagle Rock Properties site you will get valuable information on Commercial, Residential, and Investment properties. Search homes with our MLS search, or check out our Hot deals, For sale by Owner homes, and new listings. Find helpful information about Idaho, relocation, market analysis, Community tours, virtual tours, SiteSeer 3D, Buyer and Seller tips and so much more!

What is Listing Book and How can it Help me find my Dream Home?

PLEASE SIGN UP for FREE

Listingbook is a FREE service that I am offering to you, so that you can enjoy being involved in the process of finding your dream home, as well as saving you valuable time in searching for the perfect home! Listingbook is a powerful tool that allows you to search all properties listed in the Multiple Listing Service, and so much more!

You have a client account that provides full access to all Listingbook features. This lets you search the MLS just like real estate agents! You can get all photos, virtual tours, schools, area sales and loan calculator, you can rate properties, and add notes. With Listingbook you can even allow your agent to view your ratings, and notes so that they are sure to know exactly what you like.

Finding your dream home has never been easier, or more fun!

Listingbook features:

• Home Finder — Monitors all MLS activity and displays up to date properties that match your criteria.
• Agent Picks — Displays properties your agent thinks you might like that may or may not match your criteria.
• My Favorites — Displays properties you rated as your favorites.
• Quick Search — You can search for properties using easily changed criteria
• Calendar — A reminder service for tasks and dates.
• Messages — Read, send, and manage your messages.

Listingbook’s Home Finder is an easy way to track properties that match your search criteria. The Home Finder works with your Morning Report to alert you of new or changed properties automatically.

The Property Detail page has many tools to help you determine if a property is right for your needs. The “Map It” tool displays the location of the property and surrounding area in an easy to read interactive map. Use the other links to print the property , send the property via Listingbook message , or email to a friend .
Also the Property Detail page has several other pages that have valuable information on them. The Area Sales report shows how this property compares to recently sold properties in the surrounding area.
Use the Loan Report to estimate down payments and monthly expenses for the property. You can adjust the loan rate and price to perform a “what if” analysis.

You may also add private notes to properties. These notes are for your eyes only and will not be shared with anyone.
Rate your Properties by giving them a thumbs-up or thumbs-down. Rating a property with a thumbs-up adds the property to your Favorites. Giving a property a thumbs-down indicates that you do not like this property and allows you to hide it.

Leave notes

1. Click on “Leave note for my agent.”
2. Click on the radio button next to the thumbs-up or thumbs-down to rate the property (optional)

Property Watches

Property Watch is a service that lets you set alerts on properties for sale and alerts you whenever a watched property has a price change. Alerts can be sent via email and/or indicated in a special section of the next day’s Morning Report. Any property for sale can be watched, even if it isn’t in your Home Finder or Favorites List.
Morning Reports

The Morning Report is a Listingbook service that provides a detailed summary of the activity that occurs during the previous day. This information is formatted in an easy-to-read report and emailed to you every morning there is new activity.

Your Morning Report can contain the following information:

• Home Finder Activity – Recently added or updated properties that match your Home Finder criteria.
• Unread Messages – Notifies you of unread Listingbook messages.
• Favorites Activity – Notifies you of updates to your favorite properties.
• Open Houses – Informs you of Open Houses that match your key criteria that you can visit this week.
• Agent Notes – Notifies you of new property notes from your agent.
• Calendar Activity – Alerts you of calendar items that are scheduled for today or tomorrow.
• Weather Report – A summary of today’s weather.

Step-By-Step to Buying a Home in Idaho Guide

1. Initial Consultation

2. More Information about buying a home

3. The Home Buying Process

4. First Time Home Buyers Blueprint

5. Types Of Mortgage Loans

Buying a home in not the same process in all states, and changes over time as well. Knowing what you will go through may make the experience more comfortable and may save you from making some costly mistakes.

Please review this initial overview. A more detailed summary follows at the end of this report.

1.INITIAL CONSULTATION

Eagle Rock Properties and The HELP Program offer a free presentation to explain the key issues to consider before purchasing a home. The presentation will be customized specifically to you based on your credit score and history, debt / income situation, and the amount you have available for a down payment. In this meeting we will:

• Explain the four criteria lenders will consider before approving you for a loan
• Analyze your credit report and, if necessary, a plan for restoring your credit
• Identify the home price for which you can qualify
• Show you homes that meet your criteria
• Create a budget and expense tracking system you can use to reduce debt and save for a down payment
• Identify loan opportunities and down payment options
• Outline a rent-to-own strategy if you cannot qualify for a loan

BEFORE THE OFFER

We will introduce you to a member of our lender team who will get prequalified for a loan so you know which price range of homes to shop for.

Based on our initial consultation and your prequalification, I will take you to look at homes.

When we find the right home, we will make an offer using the standard Purchase and Sale Agreement used by licensed Realtors in the State of Idaho. Depending on your situation, this offer will be either for a traditional purchase or a purchase on a rent-to-own contract.

Things to consider for making an offer:

• Earnest money amount. Although the amount varies based on the price of the home and the specific deal, the amount usually ranges from $500 to a few thousand. A check for the earnest money will need to be received by the agent writing the offer at the time you sign it.
• Closing date: when do you want to own the house. Usually, lenders ask for 30 days minimum for the loan.
• Down payment amount
• Loan: Are you prequalified? How much will you need to put down? What are the terms of the loan. (I rarely—if ever—recommend anything but a fixed interest rate. Although there is a place for adjustable rate mortgages, I’ve only had one time in hundreds of transactions that an adjustable rate mortage was a good idea
• Terms: what terms do you want in the offer (seller paid concessions, items included with the sale of the home, closing costs, contingencies.)

EARNEST MONEY

The earnest money (depending on how it is written in the contract) will remain in the brokerage office until the offer is accepted, then it will be deposited in a trust account. The Earnest money will apply to your amount at closing. Consider the earnest money like a deposit.

AFTER YOU SUBMIT THE OFFER

The sellers have now 3 options: they will accept, reject or send a counter offer to your offer.
They reject your offer: discuss with your agent if you want to resubmit an offer on the property or move on to a different property. Make sure you know the reason for the rejection (price, contingencies)
They counter offer. That means that they accept your offer if you are willing to change a few things. You can then decide to accept their counter, reject it, or send them another counter offer. You can go back and forth with the sellers as long as you want until you reach an agreement or one party decides to reject.

They accept your offer. Great, now a whole new set of deadlines are in place! You are one step closer to owning the property!

ACCEPTED OFFER

All the deadlines in the contract start at the time of acceptance

The first thing that will happen (unless otherwise written in contract) is that your earnest money will be deposited into my brokerages trust account.

-If you have an home inspection contingency, schedule it right away, or have me help you with that. There is no reason to wait until the last minute.
-If you have not yet sent it to the sellers, you will have to submit a prequalification letters as per contract deadline
-Once the offer is accepted, I will send all paperwork to your lender and to the title company to open title and start on the preliminary title commitment.

DEADLINES AND TIMEFRAMES ARE THE MOST IMPORTANT IN A CONTRACT

If you miss a deadline, there are consequences. You may accidentally give the sellers a reason to cancel the contract if you don’t submit information in time. All deadlines are measured in business days, and they are all defined in the contract. I will keep track of all the deadlines to make sure we don’t miss any. It will be important for you to get needed information to me on time.
I always recommend conducting a home inspection. If the home inspection reveals something you don’t like about the home (ie, a cracked foundation or water in the crawlspace) you can terminate the contract and receive your earnest money back.

LOAN AND OFFER PROCESS UNTIL CLOSING
Each offer is unique. There may be some addenda written by either you or the seller to change certain parts of the contract, or to add or delete certain things. For example, if you need to change the closing date, or the lender requires that your names appear differently on the contract, to add a spouse or significant other, to ask seller to fix certain things after the inspection. Most contracts have at least one addendum, and some have as many as six or seven. I will draft these up for you, and you will have to sign, date and return them after deciding to accept them.
-Be in constant communication with your lender. Most of the time, the lender needs docs from you (to prove income, address credit issues, or verify information you provided when you completed the application. It is in your best interest to make sure that you are in regular contact with your lender, your real estate agent, and the title company. These three entities really are a team at your service. The more we work together, the more efficient we are.
-Insurance. Your lender will require that you get Home Insurance. Talk to them early about it. If you don’t have an insurance company, I can recommend several I trust and have worked with in the past.
-A few business days after acceptance, you will receive a document called the Preliminary Title Commitment. This is a document drawn by the title company that ensures you that the sellers actually own the house and have the right to sell it (very important information!). It also shows you if there are any liens or judgments to cloud on the title. The best advice would be for you to review this document with your attorney. If you have any question, I or the title company may help you. You will have a timeframe as defined in the contract to review this document and communicate to the sellers if you have any problems with it.

PREPARING FOR CLOSING
-The Title Company, your lender and myself are each responsible to take care of certain aspects of the process. At the end, we all need to come together for you to sign and become an owner!
-The lender needs to submit their loan documents to underwriting—the entity responsible for loaning you the money. The underwriter will review everything, making sure that there are no issues. Once the lender receives the docs back, they will send them to the Title Company. As this point, your escrow officer will work the numbers, and prepare the settlement statement. This document will tell you if and how much you need to bring at closing. It also compiles all prorations (taxes, utilities and irrigation, if applicable). Early in the process, I can show you copies of this document from previous closings, so you can understand the various fees you will be paying at closing.
-Once the escrow officer has reviewed the package and prepared the settlement statement, you can go ahead and sign. Both you and the sellers will have to sign, and in Idaho, each party signs separately, so you will not actually meet the sellers.

SIGNING AND CLOSING
-When you sign the documents, you will need your ID (drivers license), and the down payment amount. The title company can give you the details of how to pay. Typically, you will need to bring in a cashier’s check.
-After you and the sellers sign, the documents will be sent back to the lender, and they will wire the funds to the title company. Sometimes, they require a certain amount of time for reviewing (24 to 48 hours usually) before they wire the money.
-Once the funds arrive at the Title Company, they will bring paperwork to the County Assessors office to record the transaction. Once the transaction is recorded, the closing take place. This is when you become a home owner.
-At this point, you can get the keys to the property, and move into your home!
Although the process is logical, it can be quite lengthy. My job as your realtor is to help you successfully manage each phase of the transaction and make sure each of the various entities working on the deal (the lender and underwriter, the title company, the inspector, the realtors, and the buyer / sellers) do their part at the appropriate times.

2. More Information about Buying Your Home

It will be Yours and Yours Alone – Owning your own home frees you from the restrictions that renters experience. You can paint the walls the color you like or hammer a nail where you want without hassle from the landlord!

Life Style – Homeowners are a different breed. When you live in a neighborhood or complex that is basically owner occupied your neighbors – like you, have invested in care about their property. They are willing to spend more time, effort and money to improve the property and the community, which in turn improves the value of your property.

Equity Build-Up – Once you have made them, rental payments are gone. But with each mortgage payment, you are buying something tangible and building up equity. The longer you own your own home, the greater will be your equity.

Keep up With Inflation – A home is an investment that helps you keep up with inflation. Not all homes appreciate in value at the same rate; some years are better than others, but real estate historically has kept pace, and usually exceeded, the rate of inflation.

Income Tax Benefits – All interest paid on a mortgage is deductible for state and federal income tax purposes. Moreover, state and locally property taxes also are deductible. Generally speaking, 90% to 95% of your house payment is income tax deductible during the early years of the mortgage.

Payback on Improvements – A renter who makes improvements on the home they occupy enjoys no financial benefits from them when they relocate. As a homeowner, you can recover all or part of the cost of the improvements when you sell the house.

Trade-Up Value – Even if your first purchase isn’t your “dream home”, you will be working your way up to that possibility when you buy a home. With appreciation you are building equity that, one day, will make your dreams a reality.

Security for Retirement – Unlike rent, which goes on forever, the mortgage on your home will someday be paid, providing you with “rent-free” living for your retirement.

Investment Property – For some homeowners, second houses or condominiums are proving to be good investments as income producers or tax shelters, or both. As the owner of investment property, you can enjoy not only extra income, but also additional tax benefits from the depreciation allowance that is provided under present tax laws.

Interest Rates may be Deceiving – Because the interest is tax deductible, the “effective” interest rate is lower than the note rate. For example, a mortgage interest rate of 12% becomes an “effective” rate of 8% after taking the tax benefits into account.

3. HOME BUYING PROCESS

PRE-PURCHASE CONSULTATION: PRE-LOAN AGREEMENT
BUYER REPRESENTATION AGREEMENT
MARKET EDUCATION – FINDING A HOME
SELECT A HOME TO BUY – WRITE THE OFFER
OFFER PRESENTED TO SELLER
NEGOTIATION OF TERMS
RATIFIED PURCHASE CONTRACT
EARNEST MONEY DEPOSIT
SCHEDULE INSPECTIONS RECEIVE DISCLOSURES
BEGIN SETTLEMENT PROCESS DEPOSIT EARNEST MONEY
FINAL LOAN PROCESS STARTS
REVIEW DISCLOSURES RECEIVE DISCLOSURES
TITLE SEARCH PRELIM TITLE REPORT
PROPERTY APPRAISAL
REMOVE INSPECTION & OTHER CONTINGENCIES
CREDIT REPORT
VERIFICATION
ARRANGE FOR HOMEOWNERS INSURANCE – ARRANGE FOR MOVERS –
ARRANGE FOR HOME WARRANTY
FINAL LOAN COMMITMENT – REMOVE FINAL CONTINGENCIES
SUBMIT BALANCE OF DOWN PAYMENT TO TITLE COMPANY
SIGN CLOSING AND LOAN PAPERS AT TITLE COMPANY
LOAN RECORDING-RECORD TITLE
CLOSE – GET THE KEYS
WELCOME HOME!

4. First Time Home Buyer’s Blueprint

Pre-Purchase Budgeting

Definitions:

Gross Monthly Income – This is your total stable and verifiable income before expenses, such as taxes, insurance premiums, etc., are deducted
Net Income – This is what is left of your gross income after taxes and insurance premiums. Essentially, this is your take home pay.
Monthly Installment Debt – This is an account which has a specific term (length of time to repay) and a set payment per month. Car loans and boat loans would be examples of installment debt.
Revolving Debt – Revolving debt included accounts where the balance may fluctuate each month and the monthly payment will also change. Charge cards would be examples of revolving debt.
Housing Debt Ratio – The Housing Debt Ratio is the percentage of gross monthly income that home buyers can allocate for principal, interest, taxes and insurance. Many lenders use percentages ranging from 25% to 28% as the maximum for the Housing Debt Ratio. Often referred to as the “front-end” ratio.
Total Debt Ratio – The Total Debt Ratio is the percentage of gross income that can be allocated to all monthly debts, including housing. This ratio would include things like car payments, finance company bills, credit card payments and any debt which has more than 11 payments left. The maximum percentages frequently used by lenders are 33% to 36%. Often referred to as the “back-end” ratio.
These are the fur parts of a mortgage payment commonly called “PITI”.
“P” – Principal
“I” – Interest
“T” – Taxes
“I” – Insurance (includes Hazard and Mortgage Insurance)

CATEGORY	CONVENTIONAL	FHA	VA	NON-CONFORMING
SALARY	Normal	Normal	Normal	Normal
OVERTIME	1-2 year history	2 year history	2 year history	1 year history
COMMISSION/ BONUS	Average over a 2 year history	Average over a 2 year history	Average over a 2 year history	-0- if going Stated Income
SELF EMPLOYED	Average 2 years tax returns	Average 2 years tax returns	Average 2 years tax returns	Can count any number that is reasonable w/ Stated
SECOND JOBS	1 year history required	1 year history required	1 year history required	1 year history required
RENTAL INCOME	Only off of tax returns if using as income. Can offset debt with lease agreements.	Same as conventional	Same as conventional	Can go Stated Income and use all of it
CAPITAL GAINS	2-3 year history and average tax returns	2-3 year history and average tax returns	2-3 year history and average tax returns	Can count only actual income
SOCIAL SECURITY	Can count all or even “Gross-Up” with verification from SS	Can count all or even “Gross-Up” with verification from SS	Yes. Can also count “Quarters” and Subsistence	Can count only actual income
STUDENT LOANS	Can’t Count	Can’t Count	Can’t Count	Can’t Count

Types of Mortgage Loans

Fixed Rate Mortgages
A fixed-rate mortgage is a mortgage in which the interest rate does not change during the entire term of the loan. These mortgages are offered in various terms, with the most common being for 15 years or 30 years. The only change in payments a borrower may incur would be an increase or decrease in the amounts the lender collects for mortgage insurance, real estate taxes, or property insurance (escrow payments).

Amortization
A Fixed-rate “amortizes” the money borrowed over the stated term by paying the interest due and reducing the principal a little each month. In the early years, most fo the monthly payment goes toward interest and very little goes toward the principal. In the later years, most of the payment goes toward principal and very little toward interest. For example:
$70,000 30-year mortgage, at 10%
First Payment Final Payment
Interest: $583.33 Interest: $5.08
Principal: $30.97 Principal: $609.22
Total Pmt: $614.30 Total Pmt: $614.30
A 15-year fixed rate mortgage reduces the total amount of interest paid over the life of the loan by accelerating the principal reduction. Compare the principal paid in the above example (first payment) with the principal paid in the example below:
$70,000 15-year mortgage, at 10%
First Payment
Interest: $583.33
Principal: $168.89
Total Pmt: $752.22
By choosing the 15-year term instead of the 30-year term, the borrower will payoff his loan in half the time and will save over $85,000 in total interest costs. Of course, the monthly payments will be higher than the 30-year fixed payments.
Pre-Pay Interest
Some borrowers may choose a 30-year fixed-rate mortgage and prefer to “pre-pay” additional principal to reduce the loan balance faster. In the above example, let’s assume the borrower wishes to increase his monthly payment by and extra $50 every month:
First Payment
Interest: $583.33
Principal: $80.97
Total Pmt: $644.30
This additional $50 each month will shorten the term of the loan to just over 21 years and reduce the total interest paid over the life of the loan by almost $53,000.
As a borrower’s income increases over the 30-year period, the mortgage payment remains the same on a fixed-rate loan. This means that the borrower’s housing expense will become a smaller percentage of higher gross income over time.
Adjustable Rate Mortgage (ARM)
An adjustable rate mortgage (ARM) is a mortgage in which the interest rate changes at predetermined intervals, usually every 12 months (1-year ARM). The interest rate will increase or decrease based upon an index which reflects the current money market rate. The most common ARM loans tie the interest rate to increases or decreases in the “One-Year Treasury” index. The change in the interest rate will also change the borrower’s monthly payment. The term of these loans is usually 30 years.
Rate CAP
To protect homeowners from “payment shock” (huge increases in payments) almost all ARMs have payment “caps”. These caps limit the rate increases to either 1% or 2% per year. In addition, lifetime caps of either 5% or 6% provide maximum increase limits. For example, an 8% ARM with 2/5 caps would mean that the interest rate could not increase by more than 2% in any one year, or 5% over the lifetime of the loan. In this case the interest would never exceed 13%. If the index decreases, the interest rate on an ARM will decrease, resulting in lower monthly payments for the borrower.
Lower Start Rate
ARMs are offered at a lower initial starting rate usually between 1% and 1.5% lower than a fixed-rate loan. This lower interest rate may help a borrower qualify for a mortgage, because the resulting monthly payment will also be lower. ARMs may be more economical if a borrower is planning on owning the home for only a few years, as they offer lower starting rates and lower monthly payments.
Mortgage Insurance
Large Down Payment – Thing of the Past, But May Be Coming Back
In the past, lenders typically required a 20% down payment on mortgage loans. The large down payment or borrower equity was required because it helped assure lenders that borrowers would make the monthly mortgage payments to protect the equity they had invested in the home.
Private Mortgage Insurance Opens Homeownership
Now, however, with private mortgage insurance (PMI), lenders are more willing to make loans with less than 20% down. This is because the mortgage insurance acts as a guarantor and shares some of the lending risk with the lender. If the borrower defaults on the mortgage loan and the lender takes title to the property, the mortgage insurance will reduce or eliminate loss to the lender. In other words, if the lender has to take the property back because the loan is not being repaid, the mortgage insurance company will absorb part of the lender’s financial loss.
More Buying Power
For instance, some first-time home buyers may thing a 20% down payment is required and as a result will postpone their decision to purchase. Or they may buy a smaller house with the intention of moving up to a larger home sometime in the future. However, in many cases they could purchase a larger, more suitable home, simply by selecting a lower down payment loan.
Other buyers may delay purchasing home furnishings or landscaping because they think that making a 20% down payment is a standard practice. Again, by putting less money down, they will have more cash available for the extra “touches” that make a house a home.
Tax Deductible Interest
The 1986 Tax Reform Act may also affect your home finance decision, as it began the phase out of the interest deduction on consumer loans. This means that the interest you pay on items such as your auto loan, education loans, etc., are no longer deductible. Because of this, you may choose to put less money down on your home and use the remaining cash to:

• Purchase large consumer items

• Save for future financial needs, like college expenses
• Make investments
• Purchase home furnishings
• Pay off all other debt

Mortgage Insurance Q & A
1.) Will mortgage insurance payoff my mortgage if I die?
No. Mortgage insurance absorbs part of the financial loss the lender would experience if they were forced to take the property back because the borrower defaulted on the loan.
2.) Why is this insurance required for me to get a loan?
If a borrower makes a large down payment, there is enough cushion there for a lender to recoup any financial loss they may have if they have to take the property back. With a low down payment loan, that cushion is not there and the lender needs mortgage insurance to take its place.
3.) Does mortgage insurance guarantee that I (the borrower) will make my payments?
No. But, by protecting the lender, mortgage insurance does make it possible for you to buy a house with less money down.
4.) What is the difference between private mortgage insurance and FHA?
FHA financing does the same thing for the lender as private mortgage insurance but private mortgage insurance generally costs less and is available for more types of loans.
5.) How much does mortgage insurance cost?
Here are some examples of approximate mortgage insurance costs:
With 5% Down
1^st year’s premium = 1% of Loan of 1 “point” paid at closing
Renewal premiums = .50% or ½ point per year
(Paid in 12 installments along with monthly mortgage payments.)
With 10% Down:
1^st year’s premium = .50% of ½ point
Renewal premiums = .25% of Loan or ¼ point
One-time Single Premium:
3% of the Loan or 3 points
(On a fixed-rate loan with a 10% down payment, a single premium may be financed as a part of the mortgage loan amount.)
Looking for Your Home
Step 1 – Determine Your Price Range
It is a good idea to pre-qualify for financing before you start to shop seriously for a home. In most cases, this means determining how much house you can afford so you can estimate how much of a monthly mortgage payment you can make. This figure, when considered with the prevailing interest rate and the amount you have to put toward your down payment, will help you determine your price range. Your lender can identify how much you should allocate to housing and how much you should allocate to total debt.
Step 2 – Decide What You Want
Once you have an accurate price range, it is time to think carefully about what you want in a home and where you would like to live. Use the Home Buyers Checklist to help you prioritize your needs.
Step 3 – Look at Homes
Finding the right home requires patience and determination. Many people start out looking through the local real estate ads and visiting a few open houses. Tis can help you “get a feel” for the condition of houses in your price range. At some point, however, you will want to consult a real estate agent.
Use a Realtor
Real estate agents can be helpful to buyers because they are knowledgeable about their markets and they have access to multiple listing services. In many cases, homes that are listed for sale are not continually advertised. Unless you were to drive by and notice a “For Sale” sign, you would have no way of knowing their property was available. Real estate agents, however, often know abut these properties through multiple listing services, so working with a real estate agent means you will have access to more homes than you would if you searched on your own. Real estate agents generally work on commission paid by the seller.
Realtor Has Information
Another advantage of working with a real estate agent familiar with the area you would like to live in, is that he or she will usually have information about such things as school systems, tax rates, water and sewer charges, public transportation and other concerns that might affect your decision to buy a particular home.
Finding and Agent
There are a variety of ways to find a real estate agent. You can seek the advice of a friend or relative who may be able to recommend a real estate agent. Or, you might meet agents by attending advertised open houses or contacting real estate firms that are advertising properties you are interested in. Usually, it is best to select one real estate agent and work with that particular person until you find the home you would like to buy.
Listings
Here is how real estate agents typically work: The sellers will “list” their home with an agent and agree to pay a commission (a percentage of the sales price) if the house is sold within a specified period of time. During the time the listing is in effect, the real estate agent will work hard to sell the property by exposing it to the buying public.
Multiple Listing Service (MLS)
Almost all real estate agents belong to multiple listing services which load all properties listed in a particular market in a computerized database available to all agents via the Internet. As a buyer, when you work with a real estate agent, he or she will consult the multiple listing directory and determine which properties are available that meet your specifications. The real estate agent will then arrange to show you these properties.
Step 4 – Make a Choice
Before you make and offer, it is a good idea to look at as many homes as practical. It is rare for a buyer to look at a single home, fall in love and purchase it immediately. As a first-time home buyer, make sure you do not buy too quickly just because you have waited a long time and you are eager to own a home. If you have identified one or more specific areas where you would like to live, look at enough homes there to get a feel for real estate values.
Investigate the Neighborhood
Before you make an offer, do your homework. Check out the taxes, the school system, the cost of utilities, the quality of community services (such as fire and police) and any other details that will affect your life once you own the home. If you are looking in a particular area, you can probably investigate these issues. Or, if you are working with a real estate agent, he or she may already have this information.
Make a Wise Decision
When you find a home you really like, take some time to think about it before making an offer. In some markets you may have to act quickly if there is a shortage of available real estate and an abundance of interested buyers. Still, consider your purchase carefully. You are making a big investment so it is important to make an informed decision to be sure you will be happy with the home you’ve chosen.
Making an Offer
Step 5 – Determine a Price
How much should you offer? This could depend on many factors. It is rare for buyers to offer the seller’s asking price, but in markets where there is a shortage of available property, it is not impossible for prospective buyers to try to outbid each other by offering more than the asking price. Most homes, however, sell at a price that is within 3-5% of the asking price. This may vary depending on the market conditions in your area.
Step 6 – Make an Offer
If the seller is not satisfied with the terms or price you offer, he or she may make a counter-offer. Or if there are other offers pending, the seller may accept on of them instead. If you receive a counter-offer you have the option of accepting or rejecting it – or making another counter-offer. This is the negotiation process that leads to a final offer that both parties agree on.
Earnest Money Deposit
When you submit your offer, you should be prepared to make a deposit. This deposit is often referred to as “earnest money” and it is given as a show of good faith on your part that you are sincere about your offer. If the sale goes through, the amount of earnest money you put down will be deducted from the amount you owe the seller at closing. If the seller rejects your offer, or the sale falls through because on e of your contingencies is not satisfied, your earnest money should be returned.
Preparing an Offer
Listed below are some factors that influence the amount you would offer for a home you wanted to buy. They are:

• How much you have available to spend
• How badly you want the house
• How many other buyers are interested
• How motivated you think the seller is
• How much work might need to be done on the house
• How the property compares with other comparable properties

Contingencies
Be Reasonable
If any contingencies specified in the Offer to Purchase are not met, the buyer has the option of not going through with the sale. However, keep in mind that too many contingencies may cause the seller to reject your offer in favor of one that might not be as complicated. When deciding which contingencies to put in your offer, make sure you are adequately protected, but at the same time, be realistic. Consider the situation in your market and make sure your terms and price are fair.
Contingencies
Contingencies are another important part of your Offer to Purchase. Contingencies are conditions that must be satisfied or you will not be required to go through with the purchase after your offer is accepted. For example, most buyers specify that their Offer to Purchase is contingent on their obtaining satisfactory mortgage financing. Without this contingency, buyers could be required to go through with the purchase even if they could not get a loan. This could result in the loss of your earnest money.
Other Common Contingencies Include:

• Conducting a favorable home inspection within a specified period of time
• Obtaining clear title to the property
• Selling an existing home within a specified period of time
• Requiring that the seller pay a portion of the buyer’s closing costs
• Obtaining a satisfactory well and septic test
• Requiring the sellers to make certain repairs prior to closing
• Appraised value of no less than the offered price

Loan Application
Applying for a Home Loan
Most buyers want the loan approval process to go as quickly as possible. The best way to ensure this happens is to be prepared when you meet with your lender to apply for your loan.
Application Checklist
The Mortgage Loan Application Checklist summarizes the documents and information commonly required by lenders. Study this checklist carefully and father the items and information indicated before you visit your lender to apply for your loan. If you have already met with a lender to pre-qualify for financing, you may have provided some of this documentation at that time. Even so, bring it with you again when you go back to apply for your mortgage.
Verifications
After you apply, your lender will need to verify all the information you provide. The lender will check with your employer to confirm your income and will request that your employer fill out a document called a Verification of Employment (VOE). The lender will also contact your financial institution to confirm that you have enough in savings to cover your down payment and closing costs. In addition, the lender may require you to have additional savings in reserve after you close to cover one or two months of mortgage payments. Your financial institution will be asked to confirm your savings balance by providing a document called a Verification of Deposit (VOD).
Credit History
The other information your lender will examine concerns your debts and liabilities. This includes installment and credit card payments. To verify your credit history, your lender will order a credit report. This document, provided by a credit reporting agency, lists your outstanding debts and contains information about your repayment history.
Good Faith Estimate
When you apply for your loan, your lender will give you a document called a “Good Faith Estimate”, which lists your anticipated closing costs. This document will reflect an estimate of the amount you will pay for “points” on your loan, as well as any other fees that your lender may charge to process or close your loan. Other estimated charges may include mortgage insurance, title insurance and recording fees.
Truth-in-Lending Disclosure
This is another document that you will receive from your lender, usually three or four days after you apply for your loan. This Truth-in-Lending Disclosure provides a summary of how your loan will be repaid. It indicates the finance charge, the annual percentage rate, the number of payments you will make, the amount of each payment and when it is due, any late payment charges that may apply, and the total amount you will pay in principal and finance charges over the life of the loan.
Appraisal
At the time of the loan application, the lender will also order an appraisal of the property from an appraiser to determine the property’s market value. The property’s appraised value will determine the size of the mortgage that the lender will make.
Commitment Letter
The Commitment Letter is a promise from the lender to make you a loan. The Commitment Letter will include all of the specifics of the loan, as well as any condition that must be met prior to or at the closing. For example, it will include the loan amount, the term of the loan, the loan origination fee, the interest rate, and the monthly payment.
Mortgage Loan Application Checklist
This basic checklist is to assure that you bring everything you need to your loan application. Originals are required unless otherwise stated.
Copy of Sales Contract(s) on the purchase of your new home and sale of present home.
Residence History – addresses and dates for last two years. Landlord’s name, phone number, address and cancelled checks for the past twelve months.
For real estate you currently own, bring addresses, loan information and leases (if applicable).
Income History – original pay stubs for the last 30 days, showing year-to-date earnings and social security number.
Most recent 2 years original W-2 forms, most recent 2 years tax returns (with all schedules).
Award letter and copy of most recent check (proof of Social Security, retirement or disability).
Debt History – Statements on ALL outstanding loans/credit cards (most recent).
Other consumer debt – such as car loans, furniture loans, student loans and other personal and co-signed installment loans with creditor addresses and phone numbers.
Asset History – Bank statements for ALL accounts – bring 3 months documentation to prove the source.
IRA/Keough/401K Profit Sharing statements for 3 months.
Legal History – legal matters which affect your finances. Divorce Papers / Legal Separation Agreement (if you pay/receive child support or alimony).
Bankruptcy Papers, including Schedule of Creditors and Discharge Papers (if applicable).
Self-Employment History if self employed at time of application. Year-to-date Profit and Loss Statement/Current Balance Sheet.
Home Inspections
Home Inspection Contingency
Although home inspections are optional, it’s recommended that you include a home inspection contingency in your Offer to Purchase. By making your offer contingent on an acceptable home inspection, you reserve the option to cancel the purchase if the inspection reveals significant problems that either you or the sellers are not willing to correct.
Buyer’s Expense
Usually, it is the buyer’s responsibility to pay for an independent home inspection and it is almost always money well spent. A professional home inspection takes approximately two hours and provides an assessment of the home’s structural and mechanical soundness.
Find a Qualified Home Inspector
It’s important that your home inspection be conducted by a qualified professional who has training and experience in a field such as engineering, architecture or construction. To find a qualified home inspector, ask your lender or real estate agent for names of reputable companies in your area.
ASHI
If you are unable to find a home inspector through a reliable recommendation, you may wish to look for someone who is a member of the American Society of Home Inspectors. This non-profit organization was formed in 1976 as a voluntary professional society. To qualify for ASHI membership, inspectors must pass a series of tests which measure their technical and professional knowledge. Before they can formally join ASHI, they must also perform at least 250 paid professional home inspections according to ASHI standards or practice, and they must undergo a one-year review and trial period. All ASHI members must subscribe to the society’s Code of Ethics and they must meet a yearly quota of continuing education credits.
Standards of Practice
The ASHI standards of practice require that inspectors assess the condition of a number of structural and mechanical components of a home and that a written report concerning these items be provided to the buyer. Examples include:

• Central heating and air conditioning distribution systems
• Interior electrical and plumbing systems
• Interior walls, ceilings, floors and stairs
• Visible insulation
• Ventilation systems
• Foundation, basement, attic and roof
• Exterior wall coverings, flashing and trim, gutters and downspouts
• Windows and doors
• Surface grading and drainage

Attend the Inspection
Try to accompany the home inspector when he or she conducts the inspection. This will give you an opportunity to ask questions about any of the conditions that may exist in the home you wish to purchase and ask for an estimate of the cost for repairing these items. It will also allow you an opportunity to ask questions about home maintenance.
1) Why is it important to get a home inspected?
The buyer will have an objective opinion of the condition of the major structural and mechanical components of the home he or she wishes to purchase.
2) What potential problems could there be that many home buyers might overlook without a professional home inspection?

• Age and condition of mechanical systems

(furnace, water heater, air conditioner, etc.)

• Problems with the foundation
• Rotting floor joists or roof trusses
• Problems with moisture in the basement
• Drainage problems caused by improper grading
• Energy inefficient mechanical systems
• Leaky doors/windows
• Condition of the roof
• Condition of the electrical system

Title Insurance

Title Insurance
When you buy a home it is essential that you also obtain title insurance. Title Insurance protects your legal ownership of the property you purchase. The insurance will be subject to certain exclusions and exceptions to coverage.
Exceptions to Coverage
Prior to issuing the insurance, the title company will conduct a thorough search of public records to determine the exceptions to coverage, such as any liens or restrictions tat effect ownership of the property. For example, if the seller failed to pay property taxes, the government would have a lien against the property. The property could be seized and land sold to pay off the seller’s back taxes. If you were to purchase the property without knowing about the unpaid taxes, you could end up having to pay the back taxes yourself or risk losing the property. When you purchase title insurance, the insurance company informs you of any outstanding liens so that you can require the seller to satisfy the liens before you close.
Commitment for Title Insurance
Prior to your closing, the title company will issue a commitment for title insurance.
This commitment will indicate:

• The parties to be insured and the amounts of coverage.
• The current owners of the property.
• The legal description of the property.
• Any requirements that must be met for the insurance to be issued (for example, recording of the deed to the property)

The Settlement Process

What is Settlement?
The settlement is the final step in the home buying process. At the settlement you will settle all the financial details associated with the purchase. The settlement officer’s job is to make sure that all necessary documents are signed and verified and that the money from the sale is properly distributed.
Who Attends
Those present at the settlement will include, at a minimum, the buyer(s), the agent and the settlement officer. It is not common, however; for buyers and sellers to complete their transactions in separate rooms and never see each other on the day of settlement.

What the Buyers Should Bring to the Settlement:

• Binder for Homeowner’s Insurance and Paid receipt. Before proceeding with the settlement, the settlement officer will confirm that you have your binder for homeowner’s insurance and your paid receipt for the first-year’s premium. Unless you can prove that you have adequate homeowner’s insurance for the home you are buying, the lender will not issue the mortgage loan.
• Certified or Cashier’s Check drawn on a bank
• Driver’s License(s)

What Happens at the Settlement?
Before the settlement begins, you and your agent should review all your settlement documents to be certain there are no errors or problems. These documents will include:

• The Promissory Note

The mortgage note is your promise to repay your loan. It indicates the terms and conditions of your loan and how it will be repaid. (the amount of your monthly payment, when it is due, the length of the mortgage, etc.)

• The Deed of Trust

The Deed of Trust is a separate document that you sign at settlement pledging your home as security for the loan

• The Settlement Statement

This document was created by the Federal Department of Housing and Urban Development (HUD) and is used in most residential real estate closings in the United States. It itemizes all the buyers’ and sellers’ closing costs and it summarizes both parties’ transactions by showing how funds are transferred among the buyer, seller, lender and any other parties involved in the sale. It also shows the net amount due from the buyers and the net amount that will be paid to the sellers.

The Settlement Process
Once the settlement gets under way and the closing officer has verified that you have your binder and your paid receipt for homeowner’s insurance, he or she will explain each closing document and ask you to sign them. Your agent can help answer any questions you have regarding the documents before you sign them.

The Settlement Documents
Typically, the closing officer will begin by reviewing the promissory note and the Trust Deed document and asking you to sign them. Then, he or she will proceed to the Settlement Statement. Beginning on the back of the form where each of the costs being paid by the sellers and the buyers is itemized. Here, you will review a breakdown of the costs including:

• Any lender’s charges made in connection with the loan, such as points and other fees.
• Items that the lender may require to be paid in advance, such as interest due from the date of the closing until the first mortgage payment.
• Amounts deposited in reserve to cover insurance and property taxes.
• Title charges for the title search required by the lender and title insurance policies for the lender and the buyer.
• Charges to cover recording the mortgage and deed at the county court house.
• Tax service fee to cover the lender’s cost of researching the tax rate for the property.

Balance the Statements
The closing officer will then cover the summary of each party’s transaction (on the front of the form). The left column summarizes the buyer’s transaction and the right side summarizes the seller’s. The sales price of the home is listed at the top of both columns. Then, amounts are added or subtracted in both columns to arrive at the net amounts due from the buyer and due to the seller.

Amounts Due
After the closing officer has covered the entire settlement statement, he or she will ask for a certified check for the down payment and closing costs.