The home-buying process is multifaceted. Many different things will happen — some in a logical order; others will seem counter-intuitive. Each step is important and nothing can be overlooked. With that in mind, when we meet for the first time we will sit down and talk about the market, about your needs, your wants, and your wishes, and about the best strategy to get you into the perfect home for you.
In a nutshell, we will offer you an overview of the whole process, from start to finish. This consultation is also a chance for you to pepper us with any questions you may have. Over the years we’ve found that starting the process by sitting down and explaining each step, getting to know what you are thinking and answering all your questions helps set expectations and chart a smooth course for the entire process.
At the Buyer Consultation we will review a brief PowerPoint presentation that insures we hit all the important points of the process. Feel free to preview the slides for that presentation HERE.
After the Buyer Consultation and before we grab the road maps and hit the streets, you will need to speak with a lender. We call it “pre-qualifying”. Simply put, it’s determining how much house you can afford to buy. Knowing your affordable price range will bring your house-hunting into focus. Most lenders will send out all required verification and pre-approve you for a mortgage, allowing you the opportunity to shop and negotiate knowing what you can truly afford.
How much house you can afford to buy depends on two things: how much you can afford for the monthly housing payment, and how much you can invest in the down payment. Monthly payments include principal and interest on the mortgage loan, and property taxes and insurance against fire and other hazards. These four costs are often abbreviated “P.I.T.I.” For some buyers and lenders, monthly housing costs may also include homeowner association dues, condominium fees, and mortgage insurance.
In today’s market, an affordable home is often not so much determined by sales price as it is by the financing which translates that price into a monthly payment. A house hunter’s first step is to set a housing budget, then go shopping for the house (price) and payments (P.I.T.I.) that fit that budget.
Even though there are many ways to qualify to buy a home, make sure the monthly payment makes sense for you. How large a payment you qualify for will depend upon a variety of factors. These factors include credit history, size of down payment, and length of employment. Everyone’s circumstances are different. We want you to feel comfortable with your down payment and monthly payments. Nobody wants to be “house poor” after their purchase!
The key items are the size of the down payment, interest rate, any monthly property fees, and the amount of the mortgage. The down payment might be zero in the case of VA-backed mortgages. Some buyers may qualify for an FHA loan requiring just 3.5% down payment. A down payment of 20% or more on a conventional loan can eliminate the need for mortgage insurance. A good lender will be very helpful to you in determining just how much house you can afford and which type of loan fits you best.
The obvious source of money for your down payment is either your savings or the proceeds from the sale of a home you already own. But there are some other not so obvious sources. In recent years, for example “parent power” has taken some new twists for many of our first-time buyers. We suggest you speak with a financial planner who can guide you through the pros and cons of borrowing money from relatives, life insurance policies, IRAs and other sources of down payment funds.
To get preapproved for your mortgage, your loan officer may begin by asking you for information on your current financial situation. He or she may ask you to provide some (or all of the following items):
With this information in hand, here are the steps the lender will take to process your application:
Once you’ve ratified a contract to purchase a property, your loan officer will require the following items related to the property:
Once you let our team which lender you choose for your home loan we will provide your lender with the sales contract and copy of the earnest money check.
At closing, you may be required to provide the following:
An important aspect of your purchase is choosing a good lender. You need to check reputations and references. Comparing interest rates locks and loan packages is also advised. However, there is virtually no point in calling around simply to ask for interest rate quotes, for the following reasons:
A word of warning! There are a few things you should avoid at all costs during the time you’re working with a lender and buying a home:
Buyers are welcome to work with any lender they choose. Often buyers do not have a preexisting relationship with a lender and turn to our team for recommendations. With that in mind we have developed a list of lenders that we have successfully worked with in the past and recommend to our clients.
MetLife Home Loans
Prosperity Mortgage Company
An Affiliate of Wells Fargo Home Mortgage
3201 New Mexico Ave. NW
Washington, DC 20016
202.363.1800 x3753 Tel
866.359.7966 Private E-Fax
www.RyanDaileyLoans.com – apply online
Krista Ellis Team
Mortgage Loan Officer
Bank of America
3 Bethesda Metro Center Suite 950
Bethesda, MD 20814
David Lumb, Mortgage Loan Officer 301-634-4506
Liz Woolheater, Transaction Coordinator 301-634-4509
Angie Yuen, Transaction Coordinator 301-634-4508
Isabel Guayta, Mortgage Loan Assistant 301-634-4501
Senior Loan Consultant
First Heritage Mortgage, LLC
An affiliate of George Mason Mortgage and Cardinal Bank
At our Buyer Consultation meeting we will ask you to answer many of the questions posed here. The search can really begin in your present home. We’ve developed some questions to stimulate your thinking and help you identify your needs and preferences. Once you’ve clarified what you like in your present community, you will have a better idea of what you want to find. Plus, you will be able to express your preferences clearly to our team who will help you find the best fit for you.
We encourage you to build your buyer savvy by reading newspapers, blogs, REALTOR® web sites and visiting open houses. If there are neighborhoods you are considering but are not familiar with, just let us know and we can get you the resources you need to learn as much as you can about different communities. Often, simply getting in the car or riding the Metro to a particular community and looking around can give you a great initial feel for an area. We highly encourage our clients to visit the communities they are considering during the day, at night, on the weekend, and even during commuting hours. This type of research is invaluable as you consider the community where you will purchase your home.
Choosing a place to live can be one of the most exciting experiences of a lifetime. We’ve learned through the thousands of home seekers we have helped that the best approach is to be as prepared as possible. With that in mind, we will ask you to do some homework to help get us started. Below are some points to ponder as you begin the process.
We’ve saved the best for last. In many ways, home finding is easier than choosing a city and a neighborhood, because you are considering tangible details. Yet our experience suggests that many people “decide” with emotion and “justify” with facts. This section will help you find the right balance for you.
First, one should realize that thousands of houses are sold in the area every year. Inspecting the thousands of houses on the market is obviously impossible. But you can turn this overwhelming selection to your advantage. If you can narrow down the neighborhoods you are interested in and if you can clearly describe the features you require, our team is happy to make a preliminary screening for you. After you select the best houses, you can concentrate on viewing your top choices. The key is knowing what you need.
“The time to think about selling your home is when you’re buying it.” In other words, what appeals to you as a buyer today will probably also appeal (or what turns you off will be a turn off) to buyers tomorrow. A careful house hunter will benefit years from now when it’s time to sell to an equally value-conscious buyer.
Here are links to local public school districts that can help answer your questions:
District of Columbia Public Schools: www.k12.dc.us
A condominium, commonly called a condo, is a group of attached units where resident owns title to their individual living space while jointly owning public areas. Condominium fees often cover maintenance, amenities, master insurance policy, and sometimes utilities. Condos range from high rises to low rises or less ranging from converted garden apartments to ramblers and even two-story townhouses divided into two or more units.
A housing cooperative, commonly known as a co-op, is legal entity whose sole purpose is to provide homes to its stockholders/members. In the case of a housing co-operative, the corporation has title to the property in which the individual units are a part. Each stockholder or member has the right to own and occupy his/her unit along with owning a proportionate share of the corporation. As with all corporations, the Certificate of Incorporation and By-Laws describes how the co-op is organized and governed.
Fee Simple is the most common way real estate is owned in common law countries, and is ordinarily the most complete ownership interest that can be had in real property. Fee simple ownership represents absolute ownership of real property but it is limited by the four basic government powers of taxation, eminent domain, police power, and escheat and could also be limited by certain encumbrances or a condition in the deed. Nearly all of the single family homes in our area are held in fee simple ownership.
When a house is listed for sale by any area broker, the home’s vital statistics are fed into our local Multiple List Service (MLS), known as the Metropolitan Regional Information System (MRIS): the lot size; the age and kind of home (condo, co-op, fee simple); style (colonial, contemporary, Cape Cod, etc.): material (brick, stone, wood); the number, size, and use of rooms (4 bedrooms, 2 1/2 baths, kitchen, living and dining rooms, family room, finished basement and attic, foyer, utility room, garage).
Also included are features (fireplace, walkout deck, patio, wooded lot); equipment (stove, dishwasher, carpeting, etc.); the heating and/or cooling systems; the water and sewage systems; the annual taxes; and, finally, the price.
Once this data is fed into the MLS it is “pushed” by MRIS into literally thousands of cooperating websites. Those sites then disseminate the information how they see fit. For example, you may have already searched many of the well known real estate websites such as Zillow, Keller Williams, Redfin, Realtor.com and many many others. These sites all depend on the MLS data that is provided by MRIS. These sites are wonderful for buyers in the early stages of their search. They provide consumers with valuable information that helps them make informed decisions about their real estate purchase. However, these sites are rarely the most accurate. Because they rely on the “push” from MRIS they can often lack real-time data. Many times our clients will come to us with listing they found on these sites only to be disappointed when we find they have been under contract for days, sometimes weeks.
For the longest time the only people with “real time” MLS date from MRIS were Realtors. Recently that changed. MRIS has partnered with ListingBook to provide consumers who are working with Realtors access to virtually the same data we see in our “Realtor only” MLS website. To get a ListingBook account you must be working with a Realtor who can invite you to have an account. When we being the process of searching for your new home our team will invite you to create a ListingBook account.
With your Listingbook account, you gain in-depth details on all the properties that interest you.
Listingbook’s robust Property Detail page provides the most property data available. Comprehensive price history allows you to view reductions that have occurred since the property has been listed. Days on market gives you insight into the time that the property has been available for sale.
Search up-to-date area sales and sold data! With Listingbook you know the same day a property changes to sold status.
With you Listingbook account, you can organize and save your property searches in an easy-to-use online interface.
Listingbook’s integrated communication tools allow you to stay on track. The best tool is that ListingBook allows you to ask our team questions on a specific property or create private property notes for our reference. Every time you mark a favorite or comment on a listing our team will be able to see your activity. In fact, when we are both online and using ListingBook at the same time we can even use their instant messaging feature to discuss listings as you review them. Finally, ListingBook is updated by MRIS EVERY 30 MINUTES! This is the most up-to-date real estate date source you will find.
Buying a home can be confusing at times. There can be many different directions and options. But no matter where you find a home you may be interested in seeing; you need only contact us for help. Because we share a cooperating relationship with all real estate offices within our community, we can show you all properties that are listed in the MLS and ListingBook.
Hear about a property for sale from a friend or a co-worker? Let us know and we’ll search out the details for you!
See a sign? We can show you properties listed with us or any other broker in the area, including those homes being offered “For Sale by Owner.”
Read an ad? We can help with any house you read about in the paper, no matter what company or individual is marketing the home. In fact, just circle the ads, drop off your paper (or fax a copy of that section), and we’ll find out all the details!
Want to visit an open house? If a member of our team is not accompanying you, simply let the listing agent know you’re working with us!
Want to tour a new construction project? Someone on our team will need to accompany you to the property on the initial visit. By letting us help with builders, you get all the services offered by our team, as well as those offered by the builder!
You’ve found it—your “dream house”! You want to buy it. Now what?
Now it is time to make an offer by submitting a signed real estate offer to purchase with the type of contingencies you desire. This will be the sales contract once the seller accepts. When you and the seller sign, you are agreeing to the contract conditions. Before you sign it, read it carefully and make sure you understand every detail. Ask questions. Any verbal agreements must be written into the contract. This is where our team shines, giving you the assistance and guidance you need.
If possible, our team will take the offer we craft to a contract presentation with the home seller and the listing broker. In some areas, the three of them will discuss the offer, and the seller will accept it as written, or make “counter offers” on unacceptable aspects, or reject it. The selling broker will then bring back the offer to buy to the home buyer, who can accept it, counter-the-counter offer, or reject it.
When you sign the offer to buy, you also will have to submit a deposit to show that you are earnest about your desire to buy—appropriately called “earnest money”. In some parts of the country this money is also known as “escrow” because it is held in an escrow bank account. These funds will be collected at the time we write the offer, which means you will need to bring your personal checkbook to this meeting. We will craft an offer that protects these funds for a period of time while you inspect the property, get your finances completed. At settlement this money is credited to you and is often applied to settlement costs and/or down payment.
The offer to buy becomes a sales contract when all parties have agreed to all terms and initialed and signed the complete offer. This moment is known as ratification. At this point many people refer to the property as “under contract”. Once the contract is ratified/the house is under contract, our team begins the important task of getting you and your contract to a successful settlement!
When writing the contract the buyer has the right to select a title attorney/settlement company who will conduct the actual settlement. Besides conducting the settlement, title attorneys will reviewing the properties title to make sure it is clean and can be conveyed at settlement. They will also be providing the title insurance policy your lender will require you to purchase at settlement. Buyers are welcome to shop and compare prices before deciding what title attorney or settlement company will conduct their settlement. Buyers often do not have preexisting relationships with title attorneys and seek recommendations from our team.
Here are some title attorneys/settlement companies our clients have had success using:
1300 Rockville Pike
Rockville, MD 20852
MD: (301) 231-7250
DC: (202) 223-4185
(301) 770-9483 Fax
(800) 264-2814 Toll Free
(800) 264-2819 Toll Free Fax
Emily Karen Gumpert
Passport Title Company
2275 Research Blvd., Suite 500, Rockville, MD 20850
Tel: (301) 345-0868, Fax: (301) 345-0869
David Kanstoroom and Claudia Vitale
Kanstoroom, Vitale + Stanton, LLC
Adams Morgan / Dupont Circle Office
1918 18th Street, NW
Courtyard Suite #1
Washington, DC 20009
MBH Settlement Group, Old Town Alexandria
228 S. Washington Street, Ste. #100
Alexandria VA 22314
The contract is ratified and now you are moving toward settlement. We call this the “under contract” phase. During this phase there are several critical steps that must happen. While each sales contract will differ, depending on circumstances, there are several provisions we may want to include in a contract for the purchase of your home. Here are a few that we are likely to include and how you will be involved in each step:
The buyer has the right to select a title attorney/settlement company who will conduct the actual settlement. Besides conducting the settlement, title attorneys will reviewing the properties title to make sure it is clean and can be conveyed at settlement. They will also be providing the title insurance policy your lender will require you to purchase at settlement. If you are interested in reviewing the documents you will be signing at settlement please let us know so that we can have the title attorney/settlement company provide you with copies of the documents to review before settlement day.
You will meet with an attorney who will review with you a series of documents that have been prepared by your lender and provided to the settlement company the day of or before your closing. Many of the documents are boilerplate notices and disclosures, which can be quickly reviewed and signed. However, a few, like the promissory note, are key and legally binding. These documents will be presented to you by the attorney and carefully explained so that you understand the important terms.
Typically, we schedule one hour appointments for purchase settlements. This allows sufficient time to review the important terms regarding your purchase. However, a purchase closing usually takes less than an hour to complete.
You will need to bring:
The settlement company will provide you with the final closing cost figure when your lender sends your final loan documents to their office. If you would like an estimated amount before that time, you can refer to the Good Faith Estimate your loan officer gave you.
Yes, funds for closing may be wired to the settlement company’s escrow account. Let our team know and we will get wiring instructions for you.
Shortly after settlement we highly recommend that you change the locks on the home you just purchased. Often owners give keys to friends, neighbors, repair vendors, cleaning help and others. Let us know and we can arrange for the locks to be changed for you!
Just because the settlement has passed and you’ve moved into your new home our relationship doesn’t need to end! We will continue to work hard to remain your Realtor and a reliable resource for you in the future.
Whether you need the name of a good painter or lawn service or just want to find out what the neighbor’s house sold for – we want to remain an important resource for all of our clients. Hardly a day goes by when our team isn’t in touch with past clients to receive or give referrals or just to catch up about what you’ve don’t with the yard at your new home! We build strong relationships with our clients that we enjoy past the transaction and well into the future.
The greatest compliment we can receive from our past clients is a referral to work with their friends or family. Thank you in advance for your continued support.