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Issue #1 January/2008
Welcome to a new year of Lexi's Real Estate Report newsletters
Greetings! 

I am anxious to get this year started in full force with the launch of my first monthly newsletter of 2008! Each newsletter will address a different topic that is of relevence in the market today. Please let me know any comments or suggestions for future newsletters you may have. Happy New Year!
 
Best,
Lexi
Understanding the Home Buying Process
 

1)     It is crucial to have a clear understandign of the home buying process so that you can minimize your worries and be sure to have a pleasant home buying experience. Here is the most common process a person will go through:

 

1)      Obtain pre-approval for financing

2)      Select the right agent

3)      Understanding agency

4)      Decisions to make in determining right home

5)      The offer process

6)      The Purchase and Sale agreement (2 step process)

7)      Property inspections

8)      The closing process

It is crucial to you choose an agent that is right for you and your needs when buying a home. You want someone who has the experience, knowledge and expertise to guide you through the process. You want an agent that can commit the time and focus necessary to gather the information to help you make the right buying decision. Finally, you want an agent who will represent YOU, should you choose, as your "buyer" agent and negotiate skillfully with the seller on your behalf.

There are some many factors to look at when looking to purchase a new home. You want to consider things like the setting. Is it rural, urban, suburban and what is the size of the lot? Also the housing style and age of the home is important factors as well. Other things like schools, proximity to work, proximity to transportation, convenience of shopping, cultural activities, recreational activities, health services and house of worship are all additional features to look into when browsing for a home.

There are also a number of things to look out for when shopping for a home such as lack of curb appeal, structural defects, incomplete construction, nonfunctional floorplan, cosmetic improvements needed, costly improvements which could give little value and price variance.

Prior to making your offer to purchase make sure your objectively review the property's pluses and minuses. Make sure to also establish a comfortable range of value within which to negotiate before making any offer. Be sure to ask your buyer agent to research comparable homes sold in the past 6 months. Lastly, consider paying an attorney to review your offer and assist you throughout the purchase process.

Your offer is a written contract to buy and obligates you to purchase the property if the price, terms and contingencies are accepted by the seller. When you go to make the offer your written offer should include all of the terms and conditions you require such as specific closing date, repairs and items to be included in the purchase such as appliances and light fixtures. Your offer should include, at a minimum, a mortgage and home/pest inspection contingency, unless waiving will give you a competitive advantage in a multiple offer situation. Also, the initial offer should include earnest money deposit showing your good faith ($1,000).

There is a very detailed process of how the offer is submitted to the selling party. Your buyer agent will present you offer to the seller. Your offer is accepted, rejected or counter offered. If countered, the counter offer is presented to your buyer agent by the owner or his agent. Agreement of price and terms is reached by you and the seller. Time is always of the essence and until it is in writing, by both parties, buyer and seller, there is NO DEAL! If you are not pre-approved, you are not a "cash buyer". If you have not obtained a mortgage approval, the mortgage contingency will give you time to complete that process. You will have an inspection contingency that will allow you a window of time to hire inspection companies to inspect the property and may void the contract if the results are not favorable.

Property inspections are paid by you and can range from $350-$450 dollars. This includes a general home inspection (identifies repairs damages, soil and structural remarks), a well/septic inspection, Radon (an inspection of the soil for gas being emitted through the ground into the home) and finally a pest inspection. It is important to note that if any pest contamination is found that your contract should require the seller to pay for the treatment to rid the issue.

Next is the Purchase and Sale Agreement (P&S Agreement) which is typically signed within 10 days of the offer to purchase being signed and would include completion of satisfactory inspection or re-negotiation of inspection issues. The P&S may be drafted by the real estate agent or an attorney. At this time, additional money needs to be put down as a deposit (between 3%-10% of the purchase price). The mortgage contingency is generally all that remains and everything that you agreed upon must be put in writing in the Purchase and Sale Agreement. The timing of all this becomes very important.

When the day of closing arrives you should be sure to bring the following:

-          A certified check or bank check payable to yourself for the closing costs and purchase price less deposits and mortgage amount (the closing attorney will tell you the amount)

-          An insurance policy or binder on the property for one year's insurance. A paid receipt of this insurance will suffice (only if not escrowed as part of your mortgage).

-          A personal attorney is at your discretion and would be an additional expense.

You will be responsible for certain closing costs which may reach 1-5% of your purchase price. Your mortgage company will provide an estimate to you, and several days prior to the close you will receive the Housing Urban Development (HUD) settlement statement. Now you are all finished will the home purchase and the house can officially be called YOURS!

 

5 Biggest Home Buying Mistakes

 

1.    1. Choosing a poor location

If the home of your dreams is perfect in every way except that a bowling alley backs up to it, walk away. If it bothers you now, don't think you will learn to live with it.

2.    Overlooking an inferior floor plan for an attractive exterior

Curb appeal is important. It makes resale a lot easier. But if the romance doesn't continue when you open the door, then you've got an even greater problem on resale. Given a choice between a good-looking exterior or a knock-out interior, the better alternative is a great interior. After all, that's where you live.

3.    Not doing your homework

A home is the biggest purchase most people ever make. If you're buying something with a price tag that's three to four times your annual salary, shouldn't you consider all the angles? Think about all the factors that can affect a home's value. School district, deed restrictions, taxes, amenities, etc. are all important considerations. With an experienced Realtor at your side, there's really no excuse for entering the market ill-prepared.

4.    Waiting for a better time to buy based on the market and interest rates

Who can predict the future? The best we can do is to learn from the past. History shows that those who purchase homes and kept them, for at least three to five years, always did better than those who "waited for a better market".

5.    Not buying at all

No place to call your own. No control. No tax breaks. No appreciation. No equity. No kidding.

Thanks for being part of my network and please feel free to contact me with any questions you may have.
 
Sincerely,
 

Lexi Crivon, Real Estate Consultant, ABR, CNS,  CNAS, e-PRO


Coldwell Banker Residential Brokerage
617-796-2483 Bus. Voicemail / FAX
617-877 3748 Direct
[email protected]

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Understanding the Home Buying Process
5 Biggest Home Buying Mistakes
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