Coldwell Banker Ward Real Estate, Inc. Homebuyer Guide. Ward Real Estate, Inc.

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1 Coldwell Banker Ward Real Estate, Inc. Homebuyer Guide Ward Real Estate, Inc.

2 Why Should I use a Coldwell Banker Ward Agent? We will offer negotiation strategies that will ensure the best possible outcome. We will educate you during the process and help you make informed decisions. We will help you analyze the market using analysis of comparable properties. We will advise you on appropriate contract contingencies to minimize your risks. We will manage the transaction during the financing, appraisal, and inspections. We will attend the closing to oversee all contract contingencies have been fulfilled. We will remain available to you after the closing.

3 Let us take you through the steps to homeownership!! Agent Consultation Agency & Consumer Guide Getting Pre-Approved Viewing/Selecting the House Residential Property Disclosure Lead Based Paint Making an offer Multiple Offers Contingency Offers Applying for financing Appraisal Inspections Title work and survey The Closing

4 Let a CBW agent represent you no matter what you are buying MLS LISTINGS: We can show you every home available on the market that meets your specific needs. AUCTION PROPERTIES: Whether in person or on-line, we can help. We can show you the properties in advance and help you secure inspections and financing in advance. In most auctions, a non-refundable down payment is required. Don t put your down payment at risk or take a chance of over paying for the property. We can register you as a buyer. SHORT SALES: When a property is classified as a short sale, it means that there will not be enough funds to pay of the mortgage that is due to the bank. The bank must agree to accept a lower payoff and be SHORT the funds. We both hold a designation called SFR (short-sale and foreclosure representative) Let our experience and knowledge with these properties help you secure the home you want in the quickest time possible. Talk to one of our agents to see if the increased time and risk with these properties is a good fit for your specific needs. BANK OWNED OR FORECLOSURES: These are the homes that are now owned by the banks and investment companies after a recent foreclosure. Many of these are offered for exceptionally low prices. Many of these come with complicated addendums and additional required expenses. Some are not compatible to most loan types. Let us help you determine if the one that you are considering is truly a value. HUD: These are homes that have been foreclosed on by the Federal Housing Administration. These are some of the most complicated purchases due to the exact rules in place by HUD for these transactions. Additionally, these are extremely difficult to finance. We are knowledgeable to represent you in these transactions. LEASE PURCHASE/LAND CONTRACTS/DELAYED CLOSINGS: There are many options to consider depending on the specific needs of our clients. We have successfully negotiated many contracts for clients whose needs mandate some creative terms. FOR SALE BY OWNERS-Don t forget we can represent you here also.

5 Consumer Guide to Agency Split agency Dual agency Getting Pre-Approved vs. Pre-Qualified Pre-Approval is a more in depth look into your credit, income & assets. Pre-Qualified is only an estimate of what you can afford. Having a Pre-approval from a lender will: make certain that you are considering homes in a price range that best reflects your financial needs and homes that will qualify for your specific loan type. allow for early detection and solution of any credit income or asset issues. greatly improve your negotiating position. Working with Lenders We recommend that you stay away from Internet Lenders Contact your agent for a list of lender recommendations that best suits your needs. Be prompt with information requested by the mortgage officer. Any delay getting information to lender could delay your closing.

6 Tips for Securing A Mortgage A lender will check your credit to see if you re a good candidate for a loan. If your credit rating is poor, there are things you can do to improve it. Review your credit report for accuracy. Limit the number of times that you allow your credit report to be checked Pay your bills on time. Get current and stay current Pay rent & utilities on time. Pay off collections and debt. Don t just move it around Keep balances low on credit cards and revolving credit Do not open new accounts Don t close any accounts, even if they have no balances. Pay down revolving accounts to 30% or less of available balances. Have credit cards but manage them responsibly Use only 2-4 credit cards Keep a separate checking & savings account Don t incur any additional debt Don t make any major purchases on credit, buy the furniture or car later. Don t change jobs. Be current on Child Support or Student Loans. SAVE Don t spend your cash

7 Check out these websites You can also download the Coldwell Banker App on your Iphone or Ipad Foreclosures If you see something you would like to look at, just send the link, or give us the MLS NUMBER and we will schedule a private viewing for you. Open House Visits. Be sure to put the name of the agent you are working with on the registry when you sign in.

8 Residential Property Disclosure Ohio law, seller must disclose defects that they are aware of We encourage home inspections in order to find defects in which the seller is not aware of. Lead Based Paint Any home that is 1978 or older, most likely contains lead in the paint.

9 Home Warranty When you buy a new home, you re making a major investment in your family and your future. A home warranty can give you the reassurance of knowing you re helping to safeguard that investment. What is a home Warranty? A home warranty is a service contract that covers the repair or replacement of many of the most frequently occurring breakdowns of home system components and appliances. It puts you in control of your budget with an economical way to help protect against otherwise potentially costly situations. There are many reasons for you, as a home buyer, to include a Coldwell Banker Home Protection Plan, administered by American Home Shield, in your contract: A Coldwell Banker Home Warranty can help: Provide relief from unexpected, covered breakdowns Bring an expedited repair process on covered items Give access to the American Home Shield network of qualified contractors Make requesting service easy either online or over the phone-24 hours a day, 365 days a year

10 Writing the Offer Multiple Offers: We may not know if we are in a multiple offer situation Seller can tell other buyers your terms and offer information Seller can accept any offer they choose. For example, price higher versus lower, first offer presented versus second offer presented, etc. Seller does not have to reject offer in writing An offer must be accepted in writing and acceptance delivered to the other party to be a legal contract.

11 Writing the Offer Contingency Offers: Contingent upon the sale of purchaser s present home. No Day Contingency Vs. Days Contingency

12 Writing the Offer We will guide you through every step in writing the offer. We will work hard to get you the best possible outcome. Comparable Properties: We will be happy to provide you with a list of comparable properties and help you review and analyze them so that you make the best possible offer. Home Warranty: Home warranty policies are available for purchase on any home. Costs and coverage will vary from policy to policy. In general, covered items will include the furnace, water heater, central air, plumbing, electrical, etc. Typically coverage is for 1 year after the closing. Each time a service call is made a deductible will be collected from the homeowner. The deductible will vary by policy but generally ranges from $60- $100. In some cases, at time of listing, sellers will provide a warranty policy with the sale of the home. American Home Shield was awarded 2013 Best in Service by Home Warranty Reviews. They paid over $40,000 in 2013 claims to our policy holders alone. Earnest Money: Earnest money is the portion of the down payment delivered to the seller or escrow agent by the purchaser with a written offer as evidence of good faith. In some cases, the earnest money may be collected as a promissory note. Earnest money is typically $500 in homes less than $50,000 and $1000 on homes more than $50,000. This money can be returned to the purchaser only after the seller agrees in writing. If the deal goes to closing, the money will typically be applied to the funds needed by the purchaser at closing.

13 Contract Pending (cont d) Location Print: A location print will be ordered by the title company to look for property encroachments from the neighboring properties onto the subject property and vice versa. There will be a sketch of the buildings and drives. It is a general look at the property and not precise. Pins may be marked if they are located but are not set if they are missing. Boundary Survey: Is a precise and accurate determination of property lines and can be used to set property pins and to settle property disputes. It is much more expensive and usually only done when new parcels are being created, a new description of the parcel is required, or if there is a need to accurately know the exact location of a property line. Closing: This is the meeting where the transaction is finalized. It should take less than an hour to execute and sign the paperwork that will make the home officially yours.

14 Contract Pending (cont d) Owner s Title Policy: The owner s policy insures buyers that the title to the real estate is free from all defects, liens and encumbrances except those which are listed as exceptions in the policy or are excluded from the policy s coverage. It also covers losses and damages suffered if the title is unmarketable. The policy provides coverage for loss if there is no right of access to the land. The liability limit to the coverage is typically the purchase price paid for the property and coverage lasts as long as the buyer retains an interest in the property. This coverage is highly recommended. Home Owner s Insurance: Buyers will need to shop for homeowners insurance. In most cases the best rates will be available if you have a multi-policy with the company that issued your car insurance. Plan to pay your first year of homeowner s insurance prior to closing. Certified Funds: Certified funds or money orders are required for all money collected at the closing. Personal checks and cash will not be accepted by the closing agent. HUD Statement: A day or so prior to the closing, the title company will prepare the HUD Statement and get it approved by the lender and the realtors. This form is the official accounting of all money and fees that were a part of the real estate transaction. This will show the final amount that will need to be collected from the buyer at closing. This form should be kept in a safe place as it may be needed for your income taxes or even to get utilities on with some companies. Preparing this form is the final step in the transaction. Flood Insurance: You may be required to have flood insurance if the home you are buying is in a flood plain. Flood zone is determined by FEMA and may be subject to change.

15 Documents Needed to Apply for All Loan Applications 1. Photocopy of driver s license 2. Name, address & phone number of landlord for past two years 3. Purchase contract and addendums 4. Names & addresses of each employer for past two years 5. Two years of federal tax returns with any W2 s and other attachments 6. Pay stubs for most recent full month including year-todate earnings 7. All pages of most recent two months bank statements for savings and checking accounts; computer printouts are acceptable if they display the name of the account owner, bank name, and full 60-day transaction history and balances 8. Most recent 401k, IRA, or other investment account statements; include all pages even if blank 9. Addresses & loan information for all other real estate owned 10.Application fee 11.Bankruptcy paperwork, if applicable 12.Divorce paperwork, if applicable 13.Self employed, if applicable, plus any additional requirements per your loan officer

16 Additional Items You Will Need: ADDITIONAL ITEMS FOR FHA LOANS: 1. Photocopy of driver s license or state-issued photo ID and social security card ADDITIONAL ITEMS FOR VA LOANS: 1. VA Certificate of Eligibility 2. Form DD-214 or Statement of Service, if in-service veteran 3. Most recent leave and earnings statement, if in-service veteran 4. Name and address of child-care provider, if applicable ADDITIONAL ITEMS IF YOU ARE SELF-EMPLOYED OR HAVE COMMISSION INCOME: 1. Copies of last two years personal and business signed federal tax returns including any W2 s, 1099 s and attachments 2. Year-to-date profit and loss statement and balance sheet, if self-employed ADDITIONAL ITEMS IF YOU HAVE BEEN DIVORCED: 1. Complete recorded copy of divorce decree or dissolution, including any stipulations or modifications, and separation agreement 2. Proof of child support payments for the last 12 months, if you intend to use this income to qualify for mortgage loan OR if you are required to pay child support ADDITIONAL ITEMS IF YOU HAVE DECLARED BANKRUPTCY IN THE PAST SEVEN YEARS: 1. Copy of Petition/Decree, Schedule of Creditors and Discharge 2. Letter explaining reasons for filing bankruptcy

17 Miscellaneous Items 1. If you have graduated from high school or college in the past two years, provide copy of your diploma and transcripts. 2. If, during the past two years, you have had a gap in your employment of 30 days or more, provide letter explaining the reason 3. If you are selling your present home, provide your signed HUD-1 Settlement Statement showing the amount of proceeds; if the sale of your home is not yet complete, provide your realtor s estimate of proceeds 4. If you have rental property, provide copy of current leases and copies of last two years signed federal tax returns including any W2 s, 1099 s and attachments 5. If you are receiving a gift for part of your down payment, do not deposit the gift funds until you consult your loan officer 6. If you are being relocated by your employer, provide a copy of your company s relocation policy 7. If you have limited credit or no credit, provide alternative manual credit references paid as agreed for past 12 months; these may include utility payment history, landlord letter, auto insurance agent letter, cell phone payments, rent to own, etc.; generally two additional references are needed for limited credit and four references for no credit 8. If you are buying a new home BEFORE you sell your current home, you must provide a current mortgage statement to prove your existing mortgage payment including taxes and insurance. Additional payment reserves may be required in cases where the current home will not sell and close prior to the closing of the purchase loan of the new home.

18 Miscellaneous Items Per Loan Type Conventional Minimum credit scores apply Seller can pay 3% towards buyers closing costs, escrows, insurance, etc. FHA Minimum credit scores apply Seller may pay up to 6% for buyer Additional FHA appraisal may be required Home must meet minimum condition requirements Buyer may qualify with no credit as long as buyer has paid rent for last 12 months buyer has two other types of established credit for last 12 months USDA Minimum credit scores apply Must be in an approved USDA geographic area (Does not include Ashland City) Approximately 60 days to close Home must meet minimum condition requirements Seller may pay up to 4% for buyer Property with in-ground pool is unacceptable unless appraiser states pool has no value to property VA Minimum credit scores apply Seller may pay up to 4% for buyer Home must meet minimum condition requirements Buyer cannot pay for pest inspection, treatment or repairs Every building on property must have a pest inspection (for example, detached garage, storage building, outbuilding, etc.) Your loan officer may require additional information Could be subject to change. Your loan officer will have more specific details regarding each loan type.

19 Contract Pending The Appraisal: An appraisal is ordered by your lender to determine an opinion of the real value (market value) of the property. This serves as a check and balance to make sure that you are not over paying for the property. With some loan types, the appraiser will also determine if there are any repairs required so that the house meets the requirements of the loan. Areas of concern include a minimum life remaining with the roof, furnace and water heater, no peeling paint, no leaking plumbing, and a safe electric system. This should not be confused with an inspection. Inspections: In most cases it is better to have the inspections after the home is under contract. Some common inspections are: General home inspection Well Termite Septic Radon Mold The purchase contract will specify the amount of time allowed to have the inspections. Any concerns must be addressed during the inspection period. Title Search: The title company will search court house documents to ensure that when the property transfers to the new buyer that no liens transfer with it. They will make sure that the required signatures and releases are obtained before the closing. The title search will also identify any easements on the property. An easement is the right to use real property without actually owning it. The most common easements are for utilities.

20 Closing Utilities: It is the buyers responsibility to call to have utilities transferred to their name prior to the possession date to ensure that they do not get turned off. American Electric Power Columbia Gas Firelands Electric Co-op Lorain/Medina Rural Electric Ohio Edison Rural Loraine Water Rumpke Trash Water Dept. City of Ashland Possession: Check with me to determine when you will be given keys to the house. In some cases, especially on bank owned properties, the keys will not be available until the deed has been recorded. This can be several days after the closing.