Buying Process
     Purchasing a home is one of the most significant investments you are likely to make. Oftentimes, it is also the most confusing, so that, when it is time for you to buy, it is important to be prepared, know all the facts, and make well informed decisions.

Familiarize yourself with the Market Place
     Like everything else, you should spend some time studying the real estate market in the area where you want to buy. In addition to the more traditional sources of information like newspapers, you now have access to the real estate market via the internet, the most organized and efficient way to examine the market! Take advantage of it!

Define your Price Range
     Shopping for a home is easier when you know exactly how much you can afford to spend. Set your sights on the right price range according to your financial status: a good rule of thumb is that your monthly house expenses, including taxes and insurance payments, should not be more than approximately 1/3 of your gross monthly income. However, in today's complex and versatile financial world, and depending on your lifestyle or on the projected length of time you expect to be in the house, your situation may be substantially different, therefore you should talk with a lender and see which program is right for you!
     You will also need to think about your down payment: if you have less than 20% down you may be required to acquire Private Mortgage Insurance or Mortgage Insurance Premium, which will increase your monthly payments. Ask your lender for details.
     You will be responsible for closing costs - expenses associated with the transfer of property ownership.
     Your lender can help you establish your price range with the Pre-Qualification and/or Pre-Approval programs.

Choose a Real Estate Agent
     Working with a real estate professional can save you an endless amount of time, money and frustration. These are some of the issues you should consider and investigate when choosing a Real Estate agent:
          Experience
          Knowledge of the market and of the entire process
          Ability to understand your needs
          Quality of their service
          References
     Keep in mind that you are going to spend quite some time with your real estate agent, while searching for your perfect house, so make sure that you feel comfortable with him or her!

Home Selection
     Establish and prioritize your requirements before meeting with your real estate agent: price range, location, type and size of house, etc. Based on this information, he or she will start the search for the available properties that best meet your criteria, however, be open to compromise, as it is often impossible to find a perfect match!
     Your professional Real Estate agent will make all necessary arrangements for each house viewing.

Writing the Sales Contract
     Your real estate agent can provide you with facts and information you need to make the purchase decision, including the sale prices of comparable properties.
     In addition to the basic terms of the sales contract, there are a variety of contingencies which may be included in the contract. Some might already be present as optional clauses in the contract itself, while separate riders are available for the others. Your contract should be accompanied by earnest money.
     You and your agent should discuss the negotiation strategy: Remember that he or she is representing you, the client, unless the agent is acting as a duel agent, representing both the buyer and the seller. Take advantage of his or her expertise!

Contract Presentation
     Your agent will present your contract to the seller's agent and / or seller, along with the earnest money. He or she will relay to you the seller's counter contract and keep advising you during the entire negotiation, until an agreement is reached.
     Depend on your professional real estate agent for advice and assistance. Both of you are interested in the transaction's successful conclusion.

Terms of the Contract
     Once the agreement has been reached, the seller will sign and initial any changes on the sales contract and riders. You will be required to initial any of the changes also. There are certain contingencies that must be met by specific dates, e.g. attorney's approval, home inspection, financing approval, etc. These dates are specified in the sales contract.

Loan Contingency
     The lender will arrange to have the property appraised, a service for which you may be charged. A professional appraiser will estimate the market value of the property. This information is required because the lender will not loan you more than a given percentage of the value of the property.
     If the appraised value is less than the purchase price you have agreed on, the amount of your mortgage may be smaller than you anticipated, and you be required to provide a larger down payment. If any of the terms of the loan, as specified in the loan contingency rider cannot be met, you have the right to withdraw the contract, and the earnest money will be refunded.

BUYER'S EXPENSES
     The costs to buy a home are:
          >Down payment
          >Loan application fee (covers the appraisal and credit report)
          >Loan origination fee (or assumption fee if the loan is going to be assumed)
          >Loan discount fee or points
          >Recording fees for Deed & Mortgage
          >Mortgage policy of title insurance required by lender
          >1st year prepaid homeowner's insurance
          >1st year prepaid PMI (Private Mortgage Insurance) if applicable
          >Inspections, if applicable
          >Attorney, if applicable
          >Interest from the date of closing till the end of the month (unless FHA or VA loans, which have no payment the first month, interest is paid in arrears)
          >Escrow for real estate taxes (how much depends on the lender and on the month of closing), homeowner insurance and, if applicable, PMI
          >Closing fee to the title company
     There will be a tax credit from the seller for the unpaid real estate taxes, up to the closing date.

Attorney
     Even though an attorney is not required by law, it is advisable for your own peace of mind to hire one. He or she may review the sales contract and all riders, assuring you that everything is correct. The attorney's approval contingency must be made part of the sales contract: changes must be requested in writing and within the time limits of the sales contract.

Home Inspection
     If your contract has been made contingent upon a satisfactory home inspection, you must hire an inspector promptly. The inspection needs to be done within the specified number of days from the date of acceptance.
     The inspector may describe the home's condition, and, if he or she identifies any major problems, may explain how to address them. In the event of major problems, you would have the right to re-negotiate the terms of your contract.
     A radon test and/or termite inspection can also be performed, but must be explicitly made part of the contract. If you choose a FHA or VA loan, the home inspection and termite inspection are done by an FHA or VA approved inspector and must be part of your loan arrangement.
     Be sure to consult your professional real estate agent for advice.

Arrange for Home Inspection
     You make the appointment for the home inspection, and your real estate agent will handle the necessary arrangements. However, remember that failure to complete the inspection and submit any resulting requests, if any, by the date specified in the sales contract voids the inspection rider.

Loan Application
     So, you have found a home, offered a contract, agreed on price and terms. Now it is time to promptly apply for the loan. You must have final approval by the date specified in the sales contract.

Home Owner's Insurance
     Your mortgage lender requires you to have minimum insurance coverage. One year's prepaid homeowner's insurance must be obtained prior to closing. The original copy of the policy and the paid receipt must be presented at or before closing.
     Most people choose to buy broader coverage than the minimum. You should consider protecting against:
          >damage to your new house and other structures on your property
          >damage to or loss of your personal belongings
          >loss of use of your home because of damage to it
          >liability claims through lawsuits
          >other risks
     Call your insurance agent for additional information to insure proper coverage.

Flood Insurance
     The lender may require you to buy flood insurance if the property is located within a designated flood plain as determined by the Flood Plain Maps or the Department of Housing and Urban Development.

Arrange for Utilities
     About two weeks before closing you will need to call the utility companies to have the gas, electric, water and sewer, garbage and telephone services etc. turned on as of the closing date. The seller may have turned some utilities off by the closing date!

Arrange for Final Walk-Through
     A few days prior to closing your professional real estate agent will schedule a final "walk-through" of the property to make sure that everything is in working order and in the same condition as when the contract was signed.

Closing
     Closing is the act of transferring ownership of a property from the seller to the buyer. Depending on where you live, the lender, attorney, title company, or escrow agent will see to it that all terms and conditions of the transaction are met.
     Prior to closing you will be notified of the final dollar amount that you will need to bring to the closing. Either your attorney, your lender, or the title company will provide you with these figures, depending upon who is handling the final paperwork.
     The money must be in the form of a certified check, cashier's check, or money order. It may be easiest and safest to have the check made out to yourself and to sign it over to the appropriate party at closing.
     The Closing Agent will:
          >accept and coordinate the flow of documents
          >verify and collect closing costs and down payment funds
          >prepare a closing statement of the entire transaction
          >make sure all documents are signed correctly
          >pay all existing mortgages, liens & real estate taxes
          >arrange recording of the deed and mortgage
          >secure title insurance