PortlandCreativeRealtors.com

Buying Your Home Links

Buying Your Home- How We Help Buyers.... and other things you should know

Things to think about. Why do you want to buy a home? Analyzing now will help you in the process!

• First, really think about why you want to buy a home. Is it your first home and you want to start building equity? Do you want a fixer that you can work on to build equity? Are you going to start a family? Are you getting married? Do you want to stay in this house for a long time, or is it just a first home that will be a step in your path to your dream home. Think about what your goals are and what you want to get out of the house. This will help you figure out what type of home you want and what type of neighborhood you want to live in. Second, figure out a time frame for buying your home. How soon do you want to be living in it? And third, make a list of the things that are most important to you. You can make 2 lists- one is your wants- the other is your needs. You probably won't get all of your wants- but you should make sure you get all of your needs.
• Get your preapproval- learn about all the different options for loans- and get all your paperwork in so you really know what you can afford! Check out the Acorn Home Program- it's awesome!
• Figure out what kind of neighborhood you want. You can read my Neighborhood Guide and check out all the links for parks, schools, demographics etc. Figure out what is important to you- do you want a big yard, privacy, good schools? OR do you want to be in the city, able to walk to public transportation, shops, cafes and parks? Do you want an older neighborhood, or a new neighborhood? Are sidewalks important? There are so many things to think about that all add up to the feel of the house.
• Start looking. You can sign up for my Auto Search Send feature and have houses in certain neighborhoods emailed to you each day. You can drive around neighborhoods and see what houses are for sale. I can send you listings that fit your price range and needs- and then you can pick which ones you want to go see.

Why do I need a Buyer's Agent to help me look for a home?

Having someone work with you to help you find your home can really help you a lot- We can help you search for houses, weed out the bad ones or the ones in bad neighborhoods- I like to do searches and send my clients the full listings of houses I think he/she will like-that way they can look at all the photos and information on the homes - and then let me know which ones they want to see. I'll call all the realtors to make sure it is still active, then call all the homeowners and set up appointments to come and see the house- and then we can get together and you can either follow me in your car, or I can take you in my car- or if you have a GPS (ha ha!) I can ride with you! I'll give you the listings so you can keep track of all the ones we look at- you can take notes right on the sheets. That will help you remember what we looked at..sometimes they start looking all the same and its hard to remember which is which!

Why not call the listing agent to show me the house? Doesn't he know more about it?

The listing agent is representing the seller! He has a contract with the seller to put the seller's interests first! How can he represent you? He will be paid for representing you- because when a seller lists a house, they always write in the contract how much they will pay the Buyer's Agent. If the Listing agent finds the buyer, he gets all that money- both sides! But he is really representing the seller. According to Oregon Common Law, you can only represent one person in a transaction. It is impossible to represent both sides. So since the seller is paying for you to have an agent, why not use an agent that will really take care of you, put your needs and interests first, and do all the work!

What Qualities do I have that are extra special for helping buyers find a good house?

I know the whole Portland Metro area really well! I've sold houses all over, and when I first got my real estate license, I was determined to become a neighborhood expert! I started on the west side and worked my way over to the east side. That can help a lot, because sometimes you don't know which neighborhood would be best. I can help guide you through the different areas - and also help you be aware of which areas and houses would be a good investment, and which wouldn't. A lot of that has to do with the style, the condition, how it compares to the neighbors around it, and what condition the house is really in! Just check out my neighborhood guide and you will see that I do have a good sense of the neighborhoods

1. I have remodeled and sold houses for most of my life- worked at the Tigard Home Depot for 5 years... in electrical for 3. I taught classes on electrical, plumbing, and all kinds of remodeling- even writing and teaching the 2 hour electrical class for Home Depot University . I have lots of experience in remodeling homes- have a good eye for problems- and am very good at seeing potential in a home. I know the market, and can help you choose a home that will be a great investment!
2. I really do like people- and I have a lot of empathy..can put myself in other peoples place. This is an extremely important quality, because if I can't see houses through your eyes, how can I ever expect to be able to help you find a house? Each house is new and exciting to me, and I try to look at each one through the eyes of my client. It is really fun and challenging- makes real estate exciting- it never gets stale or old for me.
3. I know the market and what would be well priced, what is a good deal, and what is too high. I will do a CMA for you when you decide on a house to make sure it is the right price, and to have some ammunition if we are going to put in a low offer.
4. I'm a negotiator- you have to be when it comes down to repairs. Because I have a good understanding of what needs to be done and why- so I can explain it to the other realtor and make him understand why it needs to be done!
5. We have a family company so we all work together to help you with your buying needs. We each try to only take on as much as we can handle well. But if for some reason you want to see a house today..and I already have an appointment, or am out of town (which is really rare), one of my team- my daughters- will jump in and take over for me. And we will all do the same for each other.
6. I am always there to work with my daughters when they have a transaction. So you get the benefit of their personality, enthusiasm and knowledge- plus my experience- to help you through the buying process.
7. I had a wonderful trainer- I worked for Oregon First for 3 years before I started my own company. They are so into the laws and the legal aspects of real estate- they drilled it into us at each office meeting and at each transaction. Many times I had to hear what "could have" happened if I did such and such- which scared us and turned us all into very diligent and careful realtors!

What else is important about having a Buyer's Agent?

Quite simply, a Buyer's Agent works for you in your best interest, not the seller's. And having your own representation doesn't have to cost you a penny more...don't let anyone tell you otherwise! When it comes down to writing the offer, it is really important to have someone who will take care of you and protect you. Also who will stay on the loan officer to make sure the loan gets done in time, keep checking with the Title officer to make sure everything is ok there, and help you analyze the inspection report and write up a repair addendum..and get the seller to agree to the things that are important to you. There is a lot to know- and the list gets longer each year.. Sewer Scopes, Oil Tanks, Egress windows, foundations, structure changes and other things can all be a potential problem or liability. It's important to have someone who has experience with these things that can help you plow your way through them. Real estate transactions are extremely com plicated, and if you're like most home buyers, all your assets are on the line.

What qualities are important for your realtor to have?

Experience, commitment and the fact that they are full time realtors and don't just work part time- are new. How can you trust them to know all there is to know, protect you from all the liabilities that are out there waiting to attack, be there when you need them..sometimes at very inconvenient times- or be able to spend the time you need. You have to have a devoted full time professional realtor who is just representing you- This is the only way you will have the support, protection and guidance that you need in such an important investment as buying a home.

Also, it's important that the realtor is not only working full time, but they are willing to spend the time you need to find the house you will be happy with. And be willing to take the time to not only help you understand the whole process, but be able to help you understand the exact legal terminology of any contracts you have to sign, and give you guidance in paper work formalities, proper documentation, and in deciding the closing costs. Without proper advice, the first time homebuyer could be absolutely lost and probably commit huge errors .

What about First Time Homebuyers?

Loans: When you are a first time home buyer there is so much to know and learn. One super important thing that most first time buyers don't think too much about is the loan. All they care about is "How much can I borrow," and "Can I get a preapproval letter". But there is so much more that you need to know. It can cost you thousands of dollars not to know these things- and it could make it so that you qualify for less house because you don't know these things! There are so many loan programs out there- and they all sound good when they are going sold by the loan person. But which ones really are good? A lot of people got into loans over the past few years that have turned out to be nightmares! Like the variable rate interest only, or the negative amortization loan that just helped you qualify for more house, but ends up making it so that you cannot afford to keep the house you qualified for!

One of the main problems first time home buyers have is that they do not have much cash for a down payment. So they have to get an 80-20 loan. What is an 80-20 loan? It's extremely important to understand this! The old rules were that you have to put down 20% before a bank loaned you the money to buy a house. When I bought my first house for $28,000 we had to put down $6000. That wasn't too hard. But now, it comes out to $60,000 on a $300,000 home! Where is a first time home buyer going to get $60,000? There is a solution. It is called the 80-20 loan. Which means you get to borrow 80% of your loan at the great hot going rate of 6% or whatever it is. They forget to tell you that you have to borrow the other 20% at a high interest rate of 8.5% or more! There is a way out, though. One way is an awesome loan program called the Acorn Home Loan- and it's a hidden loan through Bank of America ..in other words, they don't advertise it because they don't make much money using it. You can find more information about it on my website under Awesome Loans. It can save you thousands of dollars, because it lets you borrow the full 100% at the going rate of 6% or whatever it is- and you don't even have to buy mortgage insurance- which is called pmi.

Why should you buy a home? How does it help you financially?

1. It's yours! You can paint the walls any color you want, remodel the kitchen, landscape the yard.and all this work that you do will add up to equity when you sell it.
2. Even if you don't do extra things, your house will gain in value- giving you equity. It makes a good hedge against inflation- and will give you money for when you either want to buy up into a bigger house, or buy down and retire- and use your equity to help our in your retirement!
3. You can get a big tax deduction- all that mortgage interest. It really adds up. You can also deduct the property taxes. And as long as you live in your house for at least 2 out of 5 years, you don't have to pay capitol gaines when you sell it and make a bunch of money!
4. Instead of using credit cards, you can get equity loans- which are a much lower interest rate and are tax deductible! You can use this money for home improvement, college, medical or even to start a new business.

How does the whole process of buying a home work?

•  The first thing you do is get preapproved for a loan. That way you will know how much house you can afford, and you will be ready to make an offer if you find the house you want. If you are a first time home buyer, try the Acorn Housing Program.

•  Then you search through listings and find homes that meet your likes and needs. You look at them with your realtor-(hopefully me or one of my daughters!), and keep careful notes on each one. It helps a lot if you have a realtor that can work with you. They can make the appointments and help you analyze each house- they are representing you..but you don't have to pay them a penny! When you finally make an offer on a house, the seller has already contracted to pay a buyers agent, whether you use one or not! So you might as well take advantage of it and use one. It can really help you a lot.

•  Once you have narrowed it down and decided which house you like - and which one you want to make an offer on, I will help you write up an offer. There are a lot of things to think about- what price do you want to pay, how will the financing work, how much earnest money you want to put down, how much down payment, do you want the seller to contribute to closing costs, what appliances or personal property do you want to ask for, do you want them to provide a Home Warranty, when do you want to close, when do you want to move in and how long will you have for the inspection period. Once we write it up, I will contact the other realtor and ask if I can present the offer in person. That can really help in the negotiating and also, if there are multiple offers, it can help you win out. The seller will either accept your offer, reject your offer, or write you a counter offer. Unless you offer full price - they will probably write up a counter offer. This is ok in a buyer's market- but if it is a hot market, or the house is priced really well and is a good deal, it's better to write it for full price. You don't want someone coming in and buying it out from under you.

•  Once you get your offer accepted, the seller will give me the Property Disclosures, which I will go over with you. The seller has to answer alot of questions about his house- some of the most important ones are whether there has been any remodeling, whether there is an underground tank, whether any chemical test have been done, how the sewer is, how the roof is. It's important to go over all these, because something may turn up that could cause concern and make you want to back out of the deal.

•  Something you should be aware of too, is the time limits you have. You can get your earnest money back for several reasons- and they all have to do with this time frame. You have 5 business days after receiving the Preliminary Title report to back out. You have 10 business days,(or whatever time we put in the contract) to back out for the inspection period. You have 5 business days after receiving the Property Disclosures to back out. You can back out if your loan doesn't go through, and you can back out if the house does not appraise for the price you are paying for it. In all these cases you will get your earnest money back if you decide not to go through with the deal. But if you back out just because you decide not to buy the house- after these time periods are over- then you will lose your earnest money.

•  Once you get your offer negotiated, you will set up the property inspection. I will go to it with you- I have several inspectors that I work with, or you can choose your own. We will go over everything he brings up and decide which things you feel the seller should fix. We write up the Repair Addendum- submit it to the other realtor- and wait for an answer. This is where my negotiating and knowledge of remodeling and repairs comes in handy. If I don't understand the problems with the house, how can I explain it with forcefulness to the other realtor?

•  Once the repairs are figured out and agreed upon, we go on to closing! It usually takes about 30 days from start to finish. During this time, Escrow will send you some paperwork that you have to fill out and get back to them. They need it before they can get on with the close. Also, make sure that you get our loan person all the documents he asks for- PRONTO! This can hold up your loan if he doesn't get them in time. And if it doesn't close in time, and the seller gets a better back up offer- he can actually back out of the transaction! Scary! Also, don't forget to set up the insurance- if you don't have that in place, that could put off the closing date too. And make sure you know how much money you need to bring to the signing- and understand what it is for. Also, don't forget to set up the electricity and other utilities to be transfered into your name on the closing date. If you forget, they may be shut off.

•  Finally the day comes where you go into Escrow and sign all the papers. Make sure to bring your check book and your drivers license...and anything else the Title Officer tells you to bring. When you are signing, don't hesitate to ask questions if you don't understand something. The Escrow officer is usually really good at explaining everything to you. I'll be there with you too, if you want me to. It takes about 24 hours after you all sign before it actually funds. The day it funds is called the closing date. And that is the day you get the key and can move in- unless we have negotiated a different date.

What about buying your second, third or more home?

Unlike the experience of buying a first home, when you're looking to move up, and already own a home, there are certain factors that can complicate the situation. It's very important for you to consider these issues before you list your home for sale. Not only is there the issue of financing to consider, but you also have to sell your present home at exactly the right time in order to avoid either the financial burden of owning two homes or, just as bad, the dilemma of having no place to live during the gap between closings. Here are some things you should be aware of:

• Most of us dream of moving up to a bigger, nicer home in a better neighborhood. The problem is that there's sometimes a discrepancy between our what our hearts tell us we should have and what our bank account says we should have. It's really important to be sure of what you can afford before you go out looking, or you may fall in love with something you really can't afford.
• When we decide to move, or maybe start looking at houses before we have even put ours up for sale-and then we decide we are ready to put our house on the market- sometimes we want it to happen too fast- and aren't willing to do the work it takes to get top dollar from our house. If you want to get the best price for the home you're selling, there will certainly be things you can do to enhance it in a prospective buyer's eyes. These fix-ups don't necessarily have to be expensive. But even if you do have to make a minor investment, it will often come back to you ten-fold in the price you are able to get when you sell. It's very important that these improvements be made before you put your home on the market. If cash is tight, investigate an equity loan that you can repay on closing. Your house will sell a lot faster, and you will get a lot more money for it than you will if you don't fix the things that need to be fixed. Sometimes it is just little cosmetic things- sometimes it is a new roof or something big. Whatever it is, it will come up in an inspection- and it's a lot better to have it done before than get stuck doing it in the middle of a sale.
• It's always better to get your house on the market before you start looking at houses. Most sellers are not willing to take a contingency offer on their house- unless it is an extreme buyers market.or unless you are willing to pay a little more than market value for their house. So the first thing you should do is make sure your house is ready to be put out on the market- then start looking at houses. Once you get an offer on your house you are in a better position to make an offer on another house. Sometimes it is hard coordinating this- but it's just part of the game. Sometimes you can get a bridge loan- but that is kind of scary in the market we are in right now- you could get stuck with two houses and two payments for longer than you can afford.

• If you do get an offer on your house, you can sometimes ask for a 60 day or longer close time so that you have time to find another house. If you do find another house, and there will be a simultaneous close, make sure your realtor coordinates both of them. It's a little tricky, but that is part of our job!

Scary things to watch out for when you are looking at houses- just click on the link to learn more about it.

Mold This talks about the different kinds of mold, and what you need to be aware of

Oil Tanks are a big issue in Portland. They need to be emptied, decommissioned and the soil needs to be clean

LP Siding can be a problem if it is not cared for carefully

EIFS or Synthetic Stucco what are the dangers and problems with it here in Oregon

Lead Based Paint You should know the dangers

Radon Gas Is it a problem? How do you know if it is?

Asbestos How to protect yourself from it? How do you know if it is there?

Carbon Monoxide How can it hurt me and what can I do to protect myself?

Wells What do you need to know?

Oregon State Property Advisory A good thing to read

A few more things to think about- like loans...

Getting your loan- what documentation do you need when you talk to your loan person?

Employment:
Addresses for two full years.
Gross monthly income and pay stubs
W-2's, if available.
Proof of pensions, retirement, disability, Social Security and any other income
like rental income, investment income or child support or alimony paid or received

Creditors:
Each creditor's name, address and type of account and account number
-Monthly payments and approximate balances.
Amount of childcare expenses.

Banking:
Names and address of banks, account numbers, balances institutions.

Other things
Stocks, bonds, land.
Life insurance cash value
Copy of sales contracts if you are selling your home.
Social Security numbers
If you are a Veteran you need your Certificate of Eligibility & DD-214.
Cash or check to pay for application fee.

Questions to ask your loan person.

If you need private mortgage insurance, how long will you have to have it? When can it be dropped?
Get a good faith estimate of all costs involved and have them explain it to you.
Find out how many months worth of property taxes and insurance you will need for the reserve account?
If you are getting an adjustable rate mortgage, find out how and when the loan can be converted to a fixed rate mortgage and how much it will cost. Will another appraisal be ordered?
If you are getting an adjustable rate mortgage, what is the margin, index, and anniversary date for adjusting the payments?
When is the house payment due and when is the late fee incurred? How much is the late fee?
What is the up-front charge for private mortgage insurance and it's renewal?

Is there a prepayment penalty? This is really important. Alot of people have refinanced or sold early and had to pay thousands of dollars.