Home Buyers Guide

Your Home Buying Guide 979-476-2499 jairscholze.com (979) 476-2499

Welcome to Your Home Buyer’s Guide from Jair Scholze!You are about to embark on the exciting journey of finding your ideal home. Whetherit is your first home or your tenth home, a retirement home, or an investment property,I will work hard to make your home buying experience a positive one. I can help youfind the ideal home with the least amount of hassle; and I am devoted to using myexpertise and the full resources of my office to achieve these results!This guide gives you helpful information for to consider before, during, and afteryour transaction. Use its reference pages, note pages and agency explanations as aninvaluable guide on your home-buying journey. Please keep this guide with youduring your home-buying process. There are pages that contain important phonenumbers and dates and areas for notes to help you stay organized.My Contact Info: So let’s take an exciting journey together! I look forward to meeting your real estate needs every step of the way! 979-476-2499 Your Personal REALTOR®,[email protected] www.jairscholze.com (979) 476-2499

TABLE OF CONTENTSAbout Jair .........................................................................................................................................................4Why You Need a REALTOR®.................................................................................................................... 5-6Understanding Agency .....................................................................................................................................7An Experienced Real Estate Agent Can Help Guide You Home.....................................................................88 Things Every Buyer Should Know ...............................................................................................................9The Road Map to Your Home ........................................................................................................................10Preparing Your Finances ................................................................................................................................11The Home Buying Process .............................................................................................................................12Get Pre-Approved...........................................................................................................................................13How Much Home Can You Afford? ..............................................................................................................14The Home Buying Process Flow Chart ..........................................................................................................15Are You Currently Renting? ..........................................................................................................................16Home Search Factors................................................................................................................................ 17-18The Neighborhood..........................................................................................................................................19Newly Constructed or Renovated Homes ......................................................................................................20Worksheet: Home Search Criteria..................................................................................................................21Worksheet: Home Comparison ......................................................................................................................22Offer and Closing ...........................................................................................................................................23Making an Offer .............................................................................................................................................24Getting the Best Home Inspection............................................................................................................ 25-26What Your Team is Doing for You.......................................................................................................... 27-28It’s Closing Time...................................................................................................................................... 29-30Sample Closing Costs.....................................................................................................................................31Congrats! You’re A Homeowner! ..................................................................................................................32Handle the Logistics & Moving Checklist .....................................................................................................33After the Closing ............................................................................................................................................34Crash Course in Mortgage Speak ............................................................................................................. 35-36Common Real Estate Abbreviations ..............................................................................................................37For More Information.....................................................................................................................................38 (979) 476-2499

A LITTLE ABOUT MERather than just selling real estate, I take the personal approach. I facilitate thehome-buying process by providing the information, expertise, opinion and supportmy clients need to make the best real estate decisions possible. This means thatwhile I am there to give you expert guidance, you still get to make decisions thatyou will be comfortable with. What’s more, I remain a resource for my clients toturn to for their real estate related needs long after the sale.It’s all part of my commitment to provide a level of real estate service well aboveand beyond expectations. I am available to my clients 24/7 and my clients sharetheir positive experience with friends and associates who then seek me out. This hasallowed me to build a successful real estate practice based on referrals. As a result, Ican devote more of my time to helping clients and less time looking for new oneswhich means I can focus on your needs throughout the entire process. A win-win allaround! DID YOU KNOW? Real estate agents were considered useful to 98% of homebuyers in 2014. Data: The National Association of REALTORS 2014 Profile of Home Buyers and Sellers (979) 476-2499

WHY YOU NEED A REALTOR®As a licensed real estate professional, I provide LET ME BE YOURmuch more than the service of helping you find GUIDE!your ideal home. REALTORS® are expertnegotiators with other agents, seasoned financial As a licensed REALTOR®advisors with clients, and superb navigators inthe geographic areas they service. We are  I can save you significantmembers of the National Association of amounts of time, money andRealtors (NAR). A professional REALTOR® is frustration.your best resource when buying your home.  I know the housing marketWHY WORK WITH AN AGENT? inside and out and can help you avoid the wild goose chase. 1) Market Expertise 2) Negotiation Skills  I can help you with any home, 3) Legal Knowledge whether it is listed with another 4) Referral Networks agency or it is being sold directly by the owner.MARKET EXPERTISE:  I know the best lenders in theEverything from where home values are rising area and can help youthe most to the best ice cream shops and concert understand the importance ofvenues: That’s the kind of intricate knowledge being pre-approved versus pre-real agents have about the markets in which they qualified for a mortgage. I canwork. also discuss down payments, closing costs, and monthlySure, anyone can Google housing statistics and payment options that suit you.local community information, but agents areconstantly in the know and building their  I am experienced at presentingnetworks so they can provide buyers with every your offer to the homeownerlast detail they need to know about their market. and can help you through the process of negotiating the best price and terms. I bring objectivity to the buying transaction, and can point out the advantages and the disadvantages of a particular property.(979) 476-2499

NEGOTIATION SKILLS:With a veteran real estate agent comes veteran sales techniques. Put your trust in anexperienced buyer’s agent who has proven to get great prices and the best termspossible for their past clients.Where’s the best place to find out about the local agents? Head online to examinereal estate agent websites and their social media presence. This is where you’ll findreviews and testimonials that can guide your decision-making.LEGAL KNOWLEDGE:Legalese is not something the average home buyer knows a great deal about – butthen again, they don’t have to, so long as they employ a real estate agent like me.Agents are well-versed in the language of home purchase agreements and otherlegal documents, meaning you don’t have to study up on real estate law and, in turn,avoid headaches during the home buying process.REFERRAL NETWORKS:Buying a home entails a lot more than attending listing showings and making bids.It involves dealing with lenders, title insurers, appraisers, and other real estateprofessionals who have a necessary hand in sale agreements.Real estate agents work tirelessly to grow their vendor networks and buildrelationships with reputable pros and firms who know how to conduct businesscorrectly and efficiently.I invite you to discuss how these services are usually FREE to my buyer clients.Additionally, I would be happy to refer you to a list of trusted vendors that my teamhas developed relationships with over the years. (979) 476-2499

UNDERSTANDING AGENCY Who Works for Whom? SELLER AGENCY (SINGLE AGENCY)  Agent will represent best interests of the seller  Agent will owe the seller fiduciary duties  Agent must give the buyer all material facts so that the buyer can make an educated decision BUYER AGENCY (SINGLE AGENCY)  Agent will represent best interests of the buyer  Agent will owe the buyer fiduciary duties  Agent must give the seller all material facts so that the seller can make an educated decision TRANSACTION BROKER (DUAL AGENCY)  Agent will represents both the buyer and the seller equally  Agent’s objective is to get a mutually satisfactory agreement among all parties  Agent gives all options to the buyer and the seller  Depending on the local market, all parties may be present at contract presentation to negotiate on their own behalf  All parties have confidentiality. Agent may do nothing to the detriment of either the buyer or the seller  Both the buyer and the seller have a right to counsel. Before making any decisions, both parties have the right to seek family, religious, legal or financial counsel. (979) 476-2499

AN EXPERIENCED REAL ESTATE AGENT CAN HELP GUIDE YOU HOMEYOUR INTERESTS ARE PROFESSIONALLY REPRESENTEDEnlisting the services of a professional Buyer’s Agent is similar to using an accountant to helpyou with your taxes, a doctor to help you with your health care, or a mechanic to help you withyour car. If you had the time to devote to learning about accounting, medicine, and automotivemechanics, you could perform these services yourself. But who has the time? This is why youallow other professionals to help you in their specific areas of expertise.When I become your REALTOR® I work for you! I will take care of the hassles of everydayreal estate transactions for you. I let you concentrate on your full-time job, while I do my job. Iwill guide you through the home-buying process and exclusively represent your interests as Ihelp you find a home, present your contract offer, negotiate, and close on your home!YOU GET ALL THIS AT NO COST TO YOUEntering into a Buyer’s Agency Relationshiphas countless advantages. You are simplyagreeing to hire a personal representativewho, by law, must represent your bestinterests to the best of his/her ability. All ofthis personal service is available at NOCOST TO YOU! The Seller’s Broker isresponsible for paying your Buyer’s Agentfee. With me, you get a professionalexperienced agent devoted to protecting yourneeds and to helping you make one of themost important decisions of your life. (979) 476-2499

8 THINGS EVERY BUYER SHOULD KNOW BEFORE PURCHASINGProperty taxes and qualified interest are deductible on an individual’s federalincome tax return.Often, a home is the largest asset an individual has and is considered one ofthe most valuable investments available.Depending on your loan, a portion of each amortized mortgage payment goesto principle, which is an investment.A home is one of the few investments that you can enjoy by living in it.A REALTOR® can usually show you any home whether it is listed with anagency, a builder, or even a For Sale By Owner.Working through a REALTOR® to purchase a For Sale By Owner home canbe very advantageous because someone is looking out for your best interest.In most situations the seller is willing to pay a fee to a buyer’s agent.A homeowner can exclude up to $500,000 of taxable capital gain if marriedand filing jointly, or up to $250,000 if single or filing separately. The homemust have been the taxpayer’s principle residence for two of the previous fiveyears.As of May 7, 1997, there is no longer a requirement to purchase anotherprimary residence more expensive than the one sold. Homeowners are free tobuy up or down with no tax consequences assuming their gain is less than theallowable amounts (see #7). (979) 476-2499

THE ROAD MAP TO YOUR HOMEIf you plan to buy a home soon, you will need to know “where you are going.” For a mostenjoyable home-buying experience, first build a road map to your new home, a list of prioritiesthat will lead you to your objective – a new home!The first priority is time frame. Write down the date by whichyou would like to move in to your new home now. I’d like to move in to my newKeep in mind that it may take 30-90 days (or more) to locate home by:the right home, secure financing, and complete the home-buying process. ______________The next priority is to develop a detailed description of thehome you hope to find. The following page contains a homesearch criteria form to help you distinguish between “Need-To-Have” features and “Nice-To-Have” features. Be specific and number your preferences in order of greatest importance to you.This form, along with the information you share during our initial consultation, will enable meto narrow the home search. I will take this information and enter your requirements into theMultiple Listing Service (MLS). I will use my personal market knowledge to come up with alist of those homes that best meet your needs and wants.During the home search, I will. . . Discuss benefits and drawbacks of each home in relation to your specific needs. Keep you informed on a regular basis. Check the MLS and other relevant databases and with other brokers regularly for new listings. Prepare a list of all homes that best meet your needs and wants. Keep you up to date on changing financial conditions that may affect the housing market. Discuss market trends and values relative to properties that may be of interest to you. (979) 476-2499

PREPARING YOUR FINANCESBUILD UP IMPROVE GET PRE- BEGIN YOUR YOUR YOUR CREDIT APPROVAL HOMESAVINGS SCORE SEARCHPrior to hitting the market and checking out listings, you need to take care of some necessarytasks, including saving up plenty of money for a new home, enhancing your credit score, andgetting pre-approved for a home loan.BUILD UP YOUR SAVINGS: Though America’s financial crisis is now in the rearviewmirror, lenders nationwide continue to have stringent lending standards, meaning it takessignificant amounts of capital for prospective borrowers to secure home loans. Focus onbuilding wealth before even considering your home purchase to ensure you have more thanenough to convince lenders you’re ready to become a homeowner and handle the subsequentmortgage payments with ease.IMPROVE YOUR CREDIT SCORE: Another factor lenders strongly take into considerationis the strength of potential borrowers’ credit scores. The math here is simple: the higher yourscore, the better you look in the eyes of lenders. Doing things like paying all of your bills ontime and in full, eliminating outstanding debts, and avoiding taking on new lines of credit canbolster your credit score and enhance your odds of securing not only a home loan, but alsofavorable loan terms.GET MORTGAGE PRE-APPROVAL: After getting all your finances in order, it’s time tohead to lenders to get preapproved for a home loan. Whereas prequalification is an estimate ofhow much house you can afford, pre-approval is getting lenders to deem you worthy ofreceiving a mortgage. Once you’ve been pre-approved, you can search online to find the mostfavorable mortgage rates and terms from various lenders and, ultimately, choose the one that’sbest for you and your finances in the long term.BEGIN THE HOME SEARCH: You’ve completed all of the dirty work, and now, it’s yourturn to actually begin the home search in earnest. Having said that, it’s in your best interest tofind a buyer’s agent who knows the local real estate market well and has a proven track recordof getting their clients in the right home that fits their budget and preferences. (979) 476-2499

THE HOME BUYING PROCESSI have designed this packet to assist you with the purchase of your new home. I assureyou that it is my goal to provide you with the most professional and informative serviceavailable. I am always just a phone call away!On the following page is a typical outline of the home-buying process. Most transactionsclose within 45-60 days of the accepted offer. However, this may vary depending on thetwo party’s situations and lender programs available.Warning! Let your REALTOR® initiate contact with For Sale By Owner(FSBO) Properties. They have the skills and tools necessary for the transaction to go inyour favor. Failure to heed this warning may mean you end up paying more for yourhome or losing it altogether! (979) 476-2499

GET PRE-APPROVEDA mortgage pre-qualification can be useful as an estimate of how much you can afford to spend on your home,but a pre-approval is much more valuable because this means the lender has actually checked your credit andverified your documentation to approve a specific loan amount (usually for a particular time period such as 90days). Final loan approval occurs when you have an appraisal done and the loan is applied to a particularproperty.1. Proof of Income\"No verification\" or \"no documentation\" loans are a thing of the past, so all borrowers need to be preparedwith W-2 statements from the past two years, recent pay stubs that show income as well as year-to-date income,proof of any additional income such as alimony or bonuses and your two most recent years of tax returns.2. Proof of AssetsYou will need to present bank statements and investment account statements to prove that you have funds forthe down payment and closing costs, as well as cash reserves. An FHA loan requires a down payment of as lowas 3.5% of the cost of the home, while conventional home loans require 10 to 20%, depending on the loanprogram. If you receive money from a friend or relative to assist with the down payment, you will need a giftletter to prove that this is not a loan.3. Good CreditMost lenders today reserve the lowest interest rates for customers with a credit score of 740 or above. Belowthat, borrowers may have to pay a little more in interest or pay additional discount points to lower the rate. FHAloan guidelines have tightened in recent months, too, so that borrowers with a credit score below 580 arerequired to make a larger down payment. Most lenders require a credit score of 620 or above in order toapprove an FHA loan. Lenders will often work with borrowers with a low or moderately low credit score andsuggest ways they can improve their score.4. Employment VerificationYour lender will not only want to see your pay stubs, but is also likely to call your employer to verify that youare still employed and to check on your salary. If you have recently changed jobs, a lender may want to contactyour previous employer. Lenders today want to make sure they are loaning only to borrowers with a stableemployment. Self-employed borrowers will need to provide significant additional paperwork concerning theirbusiness and income.5. DocumentationYour lender will need to copy your driver's license and will need your Social Security number and yoursignature allowing the lender to pull a credit report. Be prepared at the pre-approval session and later to provide(as quickly as possible) any additional paperwork requested by the lender. The more cooperative you are, thesmoother the mortgage process will be. (979) 476-2499

HOW MUCH HOME CAN YOU AFFORD?Ultimately, only you can answer this important question, but my interactive calculators can helpon www.jairscholze.com. It’s important to know how much you’re comfortable paying everymonth for your mortgage. Take the time to calculate your nonmortgage expenses fortransportation, utilities, insurance, groceries and other living expenses.Don’t forget to leave room in your monthly budget for home maintenance, taxes, associationfees (if they apply) and emergencies. Again, talking with my preferred Home Loan Experts canhelp you decide what price range your idea home should be in – and what amount of moneyyou’d like to borrow (your mortgage) to purchase your first home.Your credit report determines your three-digit credit score, used by lenders to determine whichtype of loan you’ll qualify for. Check over your credit report carefully for discrepancies anderrors, and be sure to clear up any errors by calling the creditor or the credit bureau. (979) 476-2499

HOME BUYING PROCESS FLOW CHART (979) 476-2499

ARE YOU CURRENTLY RENTING?Leaving your rental to buy your own home is a big step.Your landlord currently has the responsibility of all repairs and upkeep. And depending on yourlease, you may not even be paying for your electricity or water. But on the other hand, if yourcurrent residence is growing in value, then your landlord is building equity through yourmonthly payments. Home ownership can have financial benefits that renting does not. Whileyou’ll want to consult a tax advisor, you should find that the interest you pay on your mortgageis tax deductible, as are some closing and moving costs. If you pay points on your loan toreduce the interest rate on your mortgage, that amount is also tax deductible for that year. Whenyou decide to buy a home, you’re making a decision to invest in your future.Ace your transition!Many renters wait until they’re nearing the end of a lease period, or paying month by month tobegin house hunting so they don’t pay fines for breaking their lease. This is a good idea whenpossible, but every situation is different. You may buy a house with immediate occupancy andbe able to move within a few weeks. On the flip side – you may fall in love with a house whoseoccupants aren’t quite ready to vacate.Are you open to a fixer-upper? You might be glad to live in your rental for a short period oftime while working on your new home. It’s much quicker to update a house while it’s emptyand not filled with boxes! Whenshopping for a home, be as flexible asyour finances will allow so you’re notlocked into any one situation, whichcould limit the homes you can consider.I have the knowledge and expertiseabout the current market to help youchoose the best option for you.Call me to discuss these different possibilities. (979) 476-2499

HOME SEARCH FACTORSCONDITION SIZE AND PRICE LOCATION TYPEIt’s vital to discover which Determining size and style Narrow down your search Identify specific regions,homes for sale are in prime preferences is essential towns or evencondition and which will when hitting the market to by price point first so you neighborhoods where yourequire some investment to check out real estate would be happy to layfix. listings. only view homes for sale down a foundation. you can actually afford and don’t waste your time.CONDITION: Whether you’re interested in properties built in the last couple of years or residences constructed at theturn of the 20th century, changes are there are some blemishes – and perhaps even some major issues – that requireattention and action. Here are the main home problems to look for. . .  Foundation: Any cracks, breaks, mold and pests discovered near a home’s foundation are big red flags that indicate you may want to head to the next listing on your list.  Power and Heat: Faulty switches, poor wiring and insulation, low-performing air and heating systems, and window leaks are telltale signs of a residence that’s in dire need of some serious updates.  Exterior: Closely inspect panel siding, roofing, widow shutters, and holes and cracks in walls and take a close look around the yard, like driveways, pools, sheds, and other outdoor areas for any potential defects.  Odors: Smell doesn’t lie. If something in or around a real estate listing causes a physical reaction – whether it’s general air quality or a specific problem area with mold – it may not be an ideal choice.SIZE AND TYPE: It doesn’t matter if you’re a growing family in need of an upgrade or a couple looking for a cozyretirement property, it’s imperative to consider what residence size and type is both acceptable and desired. Each listingyour real estate agent shows you will have its own unique shape, size, and style, so it’s important to know what you wantin your home, what you can live with, and how much space you actually need.The type of residence you want to buy likely isn’t available in every community. For instance, townhomes are moreprevalent in cities, whereas ranches are more common in suburban and rural areas. Regardless of your home stylepreference, each one comes with its own benefits. Living in a condo in an urban area, for example, means you have justabout everything you need within walking distance: grocery store, gyms, theaters, etc. Conversely, if you plan to purchasea standalone, single-family property in the ‘burbs, you’ll have more privacy and space for your kids to enjoy the outdoors.Another consideration for home type is how many previous owners a specific home has had. Pre-owned listings tend tosell for far cheaper than newly built properties, so if you have your heart set on a brand new home, realize that it willlikely mean a larger down payment than previously owned residences. (979) 476-2499

PRICE: Now that you have a specific budget for your property purchase, you now have a crystal clear idea about how toconduct your home search. Having said that, there are still other financial considerations to take into account with anylisting you plan to bid on.Prior to touring a single property your agent wants to show you, figure out what the maximum monthly mortgage paymentis that you can easily handle paying off in full. There are countless mortgage calculators online, so find one, enter in thefigures representing your financial situation – current income, projected income, savings, etc.- to help you determine whata feasible monthly home loan payment would look like.Aside from your finances, also factor in payments for things like home insurance, property taxes, and, depending onwhere you buy, homeowners/condo association fees or flood insurance. The silver lining to taking on these payments isyou may be eligible for some tax deductions for items like mortgage interest, so consider that extra money coming back toyou as well.LOCATION: What kind of businesses are nearby? What’s the quality of the area’s school system? Where’s the closestpublic transportation? It’s these questions – and seemingly innumerable ones just like them – that prospectivehomeowners such as yourself need to ask during the home search. Though you may fall in love with a home’s living area,backyard, or roof deck, you also need to take into account what the community can offer you and your family – not onlyto ensure you live near great and useful amenities, but also to make certain you’re paying the appropriate price for alisting.Location factors to consider include:  Work Commute: Make sure you consider whether it’s easy for you and any other adults you intent to live with to get to and from work when touring listings. Ask about local bus and train schedules and the nearest highways.  Child Care Services: Are there any reputable day care centers nearby? It’s important for parents with young children to find quality care for their kids.  School System: It doesn’t matter if you have kids or not – the quality of a school system greatly impacts home values and how a community evolves.  Public Services: Discover all you can about nearby hospitals, local police and fire departments, and general municipal services to get a feel for the community in which the listings you check out reside.  Crime: The rate and total number of crimes committed in an area can have a drastic impact on home values in the long run.  Shopping and Attractions: Where are the best clothing stores? Are there great nightlife spots around? Knowing you have plenty to do and enjoy near your new home is just as important as finding a suitable residence.  Water and Power: Knowing that all of the plumbing and electrical work done in a home and its surrounding neighborhood is essential. Also, ensure there’s no history of pipe breaks and power outages in your area, as that could spell trouble.  Ownership Situation: What are the most common types of properties in the area? Mostly real-estate owned residences? Newly built homes? This, too, can impact home values and neighborhood growth. (979) 476-2499

THE NEIGHBORHOODMake sure you fall in love with the right house. Together, we can determine what your specificneeds are, and schedule appointments to only those homes that meet these needs. You’ll still seea wide variety of homes, but your house hunting will be more focused.House hunting really begins with a town or neighborhood. Consider the  Proximity to work  Distance to shopping or restaurants  Medical care availability  Traffic flow, especially during high volume hours  Quality of neighborhood schools  Distance to schools, parks and libraries  Desirability of the area – are homes holding their value?Lifestyle considerationsYour lifestyle specifications can help you remain focused on finding the right home. You mayneed office space or room to entertain in your new home. Are you looking for a home to growinto?Look down the roadFor instance, buying a home with a nearby school-of-choice may not be a benefit to you now ifyou don’t have children in your home, but could be great for resale. Key Point: STAY FLEXIBLE! Prioritize what you’d love in your homeand accept that you may not find every feature, but can perhaps add them later! (979) 476-2499

NEWLY CONSTRUCTED VS. RENOVATED HOMESWHY USE AN AGENT TO PURCHASE A NEW HOME?The advantages of having an agent help you purchase a new home are the same as those forpurchasing a resale home:  Knowledge of the market  Help in finding the perfect home quickly  Expertise in contract writing/negotiation  Closing assistance  The builder has a professional representative watching out for his/her interests, and you need the same expert representation.Buying a new home or newly renovated property is a little more difficult and time consumingthan buying a resale. I can professionally guide you through this process.It is very important that your interests be professionally represented when you are entering intoa contract for a semi-custom or a build-to-suit home. These transactions are complex and thecontract details must be exact in order to protect you and to ensure you get exactly the homeyou want. (979) 476-2499

Home Search CriteriaName: ____________________________________________________________Current Address: ____________________________________________________City/State/Zip: _____________________________________________________Home Phone:________ Biz Phone: __________ Cell Phone: ___________Email: ____________________________________________________________Deadline for Locating a Home: ________________________________________Required Move-in Date: ______________________________________________Sq. Ft: _____________ # Beds: _____________ # Baths: _______________Neighborhood: ______________________________________________________Age of Property: _____________ (Unrenovated, Renovated or New Construction)Property Style: Single Family, Modular Home, Condo, Townhouse, Other _______Lot size/description: _____________________________________________________ Study/Optional Rm ___ Fireplace (Gas/Wood) ___ Hardwood Floors ___ Patio/Deck___ Central A/C ___ Swimming Pool ___ Separate Dining Room ___ Pet Friendly___ Gas Cooking ___ Eat-in-Kitchen___ Laundry/Mud Room ___ Separate Storage“Need-to-Have” Features (ex. granite counter tops, near bus route)“Nice-to-Have” Features (ex: large back yard, trees)“Would-Not-Consider” (ex: two story) (979) 476-2499

Home Comparison Features Property 1 Property 2 Property 3 Property 4 Property 5 Address Price Living Room Family Room Kitchen Bedrooms Baths Floor Plan Yard Garage Lot Location Does it meet your needs? Rate 1-5Additional Notes: (979) 476-2499

OFFER AND CLOSING DETERMINE GET A HOME IT’S CLOSING HANDLE THETHE RIGHT BID INSPECTION TIME LOGISTICS& MAKE OFFERAfter you’ve completed a comprehensive search across the local market and zeroed in on thehome you want, it’s time to get the purchase process in full gear. Of course, bidding on a listingis just one step in the buying of a home. There’s plenty to do once the paperwork gets going andafter all of the t’s have been crossed and the i’s have been dotted.DETERMINE THE RIGHT BID:While those selling the listing you bidon have a specific list price, thatdoesn’t necessarily mean your first(or second or third) bid needs to meettheir pricing requirement. Rather, wewill work together to develop a pricepoint that you’re comfortable withand leaves room for negotiation withthe sellers. One major factor in yourbid should be what other homes nearthe listing have sold for in recent months and years, what types of residences those that sold are,how long they sat on the market, and any other relevant details you and your agent can secure. Iwill complete a Comparative Market Analysis (CMA) that will provide you with anunderstanding of all this information. From there, you can figure out what you’re willing tooffer for a home for sale. Just remember that there may be one or more other buyers willing tomake a better offer than yours.DID YOU KNOW: Once an offer is accepted, everyone isbound to complete certain tasks within specific timeframes. (979) 476-2499

MAKING AN OFFEROnce you have found the home you wish to purchase, you will need to determine what offeryou are willing to make for the home. It is important to remember that the more competitionthere is for the home, the higher the offer should be . . .sometimes even exceeding the askingprice. Remember, be realistic! Make offers you want the other party to sign!To communicate your interest in purchasing a home, we will present the listing agent with awritten offer. When the seller accepts an offer it becomes a legal contract. When you write anoffer you should be prepared to pay an earnest money deposit, typically $1,000. This is todemonstrate that your intention is to purchase the property. The offer forms used are standarddocuments approved by our local Board of REALTORS ®.After we present your offer to the listing agent it will either be accepted, rejected, or the sellerwill make a counter offer. This is when we will negotiate terms of the contract if necessary.Once an offer has been successfully negotiated and executed by both parties, it is customary forthe seller’s agent to draft a Purchase and Sale Agreement. Ask yourself, “What’s the most I’m willing to offer on this house to keep from losing it?” (979) 476-2499

GETTING THE BEST HOME INSPECTIONOnce a seller has tentatively accepted your offer to purchase their property, it’s time to bring ina home inspector to comb over the residence and surrounding yard to ensure everything is up tosnuff. Any serious issues that pop up – whether it’s old wiring or fragile roofing – should bebrought to the attention of the seller so you two can determine who should take care of fixingthem.Consult with your agent to figure out how to negotiate who should take care of problems in andaround the home. After the inspector has confirmed everything else looks in order and you andthe seller are still intent on moving forward, it’s time to start signing the paperwork and movingthe deal along.If you are purchasing a resale property, I highly recommend that you have a professional homeinspector conduct a thorough inspection.A thorough inspection should include:Heating, cooling, septic systems, plumbing and electrical systems, walls, floors, ceilings,foundation, roof, gutters, downspouts, insulation and ventilation, major appliances and thegarage. You may opt to pay extra for tests such as radon or carbon monoxide levels, and this issmart. Your home inspection professional is equipped to administer these tests and give youinformation regarding the results.The inspection is not designed to criticize every minor problem or defect in the home. It isintended to report on major damage or serious problems that require repair. Should seriousproblems be indicated, the inspectorwill recommend that a structuralengineer or some other professionalinspect it as well. Key Point:A home cannot “pass or fail” an Be ready to get a general home inspectioninspection, and your inspector immediately after the offer is accepted. If youshould not tell you whether he/she need any specialists (roofer, plumber, electrician)thinks the home is worth the money you must have it all completed within the agreedyou are offering. upon timeframe (typically 7-10 days). (979) 476-2499

The inspector’s job is to make you aware of repairs that are recommended or necessary so thatyou can continue to make an informed decision.The seller may be willing to negotiate completion of repairs or a credit for completion ofrepairs, or you may decide that the home will take too much work and money.To find an inspector:I only work with the best inspectors with years backed in the industry, and I would be morethan happy to share the connections from my network. The cost will vary, but can range from$250 - $600, depending on the location, property and optional tests added. I recommend beingpresent at the inspection. You’ll learn not only about the condition of the house, but also howeverything works, and you can ask questions as you go along. Most homeowners will honestlysay that a thorough home inspection is worth every penny spent. Key Point: Inspections are a cost you have to pay for even if you lawfully back out of the contract. (979) 476-2499

WHAT YOUR REAL ESTATE TEAM IS DOING FOR YOU WHILE YOU’RE WAITINGThe following is an overview of what is happening behind the scenes from the time you contract tobuy your property until the day it closes. My job is to coordinate all of these activities with therelevant players and make sure the lines of communication are open and working smoothly.Earnest Money – Typically, the listing agent will deposit your earnest money in an escrow(neutral) account. The disposition of any earned interest will be negotiated and the agreed uponterms will be included in the “Deposits” paragraph of your Purchase and Sale Agreement (P&S).Document Review – IF you are purchasing a condominium, we will review relevant documentsand information such as the Master Deed, Declaration of Trust, condominium by-laws, operatingbudget, financial statements, and meeting minutes (when available). For single and multi-unitbuildings, we will review documents available in order to verify the legal use and occupancy of theproperty as it has been represented by the listing agent.Mortgage Approval – There are two components of this process that will require facilitation bythe participating agents. The first is the appraisal. Your lender will hire an approved appraiser whothey consider to be a neutral third party. This appraiser will visit the property and prepare a detailedreport determining its fair market value. The listing agent will provide access to the property, yethas no input or influence into the final outcome. In the case of a condominium, there is often aquestionnaire to be completed by the Management Company or a trustee of the condominiumassociation. I will track this process so that there are no delays in obtaining a timely mortgageapproval. We will be mindful of the mortgage commitment date as spelled out in your P&S.Title Exam – A title company will be hired to ensure that the seller will be able to convey a “clearand marketable” title to the property as stipulated in the Offer to Purchase and reiterated in theP&S. This becomes the basis by which the title company is able to certify title, thereby making itpossible for title insurance to be purchased. Your lender will require that you purchase titleinsurance which will be arranged for you and appear as a closing cost on your settlement sheet(HUD1 Statement). I would be happy to discuss the importance and benefits of purchasing anowner’s policy as well. (979) 476-2499

WHAT YOUR REAL ESTATE TEAM IS DOING FOR YOU WHILE YOU’RE WAITINGSmoke and Carbon Monoxide Detector Certification – In order to comply with state law asreferenced in the P&S, the seller must provide a certificate of compliance at closing stating that theproperty has properly installed smoke and carbon monoxide detectors. I will be in communicationwith the listing agent to arrange for the local municipality to inspect the premises in order to obtainthe necessary documentation, which will be delivered to the title company.Certificate of Non-Assessment (6D Certificate) – If you are purchasing a condominium, you willneed legal documentation that the current owner has no financial obligation to the association as ofthe closing date. To this end, and per the terms of your P&S, the seller will provide at closing, anotarized statement that has been signed by a trustee of the condominium association reflecting azero balance.Insurance – If you are purchasing a condominium, the title company and lender may require proofthat the association carries adequate insurance (the premium for which is included in thecondominium fee). This proof comes in the form of a certificate of insurance, which names you and(when applicable) your lender as loss payees. I will either coordinate this process or verify thatyour lender is ordering it directly. If you are purchasing a building you will be responsible forpurchasing your own hazard insurance, and if a lender is involved, proof of that policy must beprovided to the lender or lender’s attorney prior to the closing.Municipal Lien Certificate – The title company will order an MLC from the appropriatemunicipality. This certificate will reflect any outstanding taxes or taxes that have already been paidso that the proper adjustment can be included on the settlement statement at closing.Final Water Reading – In the case of a single or multi-unit building, a certificate from the CityWater and Sewer Commission, stating the account balance, is required at closing. I help facilitatethe final reading and provide the information as soon as it is available.Pre-Closing Walk-Through – The final walk through is usually scheduled within 24 hours of theclosing. This gives the buyer a change to ensure that the sellers have moved out and left theproperty “broom clean” and in substantially the same condition it was at the time the offer wasmade. If any repairs were to be done prior to closing, this gives the buyer an opportunity to confirmthat they were completed before the property changes hands. In the case of new construction, theremay be an additional inspection in order to generate a “punch list” which will usually result in afinal walk-through just before closing. (979) 476-2499

IT’S CLOSING TIMEYou’re on the cusp of closing the deal and owning your very own home . . . but it’s important topay attention to all of the minor details that need to be handled in order to make the purchaseofficial. Thankfully, your real estate agent can help you with these tasks, like facilitating paperworkbetween your mortgage lender and signing the requisite forms. Of all times during the home searchprocess, this is the one when it’s absolutely vital to double check every document and agreement tomake sure you and the seller are on the same page. Many deals fall through at the last minute due tomiscommunication, so work with your agent diligently to get the deal past the finish line in a timelyand efficient manner.What is a Real Estate Closing?A “closing” is where we meet with some or all of the following individuals: the Seller, the Seller’sAgent, a representative from the lending institution and a representative from the title company, inorder to transfer the property title to you. The P&S you signed describes the property, states thepurchase price and terms, sets forth the method of payment, and usually names the date and placewhere the closing or actual transfer of the property title and keys will occur.If financing the property, your lender will require you to sign a document, usually a promissorynote, as evidence that you are personally responsible for repaying the loan. You will also sign amortgage or deed of truston the property as securityto the lender for the loan.The mortgage or deed oftrust gives the lender theright to sell the property ifyou fail to make thepayments. At closing, youwill be required to pay allfees and closing costs inthe form of “guaranteedfunds” such as a Cashier’sCheck. Your agent orescrow officer will notifyyou of the exact amount atclosing. (979) 476-2499

What is an Escrow Account?An escrow account is a neutral depository held by your lender for funds that will be used to payexpenses incurred buy the property, such as taxes, assessments, property insurance, or mortgageinsurance premiums that fall due in the future. You will pay one-twelfth of the annual amount ofthese bills each month with your regular mortgage payment. When the bills fall due the lender paysthem from the special account. At closing, it is usually necessary to pay enough into the account tocover these amounts for several months so that funds will be available to pay the bills as they falldue. (979) 476-2499

SAMPLE CLOSING COSTSAppraisal.................................................................................................... $225 - $500Credit Report ....................................................................................................$0 - $30Processing Fee ........................................................................................ $575 - $1,000Escrow Deposit for Taxes and Insurance...............................................Varies WidelyTransfer of Taxes....................................................................................Varies WidelyLoan Discount Points .............................................................. Generally 0-2% of loanTitle Company Closing Fee....................................................................... $150 - $400Lenders Attorney Fee ................................................................................ $150 - $500Title Insurance (Lender’s Policy)................................................................ $175-$875Homeowner’s Insurance............................................................................ $300 and upUnderwriting Fee....................................................................................... $195 - $795Survey Fee ................................................................................................. $150 - $400Home Inspection........................................................................................ $225 - $600Pest Inspection.........................................................................................................$75Down Payment .......................................................................................Varies WidelyFlood Determination/Life of Loan Coverage.....................................................$19.50Recording Fees ............................................................................................ $50 - $150Courier Fee ..............................................................................................................$30Prepaid Interest .............................. Varies on loan amount, interest rate, closing timeApplication Fee.........................................$0 - $500 Fee applied toward closing costs (979) 476-2499

CONGRATS! YOU’RE A HOMEOWNER!Right now you’re probably making plans to move and decorate, and maybe even remodel yourhome.Here are a few things to remember:  Keep your paperwork safe and available  Also, keep in mind that your home will most likely be your biggest investment  I’m here to help you manage your mortgage as a hard-working part of your portfolio, just as you manage your stocks and bonds, IRAs and 401ks. I’ll help you do this through our ongoing housing market education and communication.It’s my privilege to help you realize your dream of owning your first home. That’s why myHome Buying Expert partners and I are always here to talk with you about your financial goals– we’re here to make buying a home easier than any other company. (979) 476-2499

HANDLE THE LOGISTICSThe deal is done. You’ve started moving your things into your new residence. The one final hurdleto leap? Setting up all of your utilities, getting your mail sent to your new address, and moregenerally speaking, settling in to your new abode. As with the closing process, though, this isn’tsomething you have to (or should) go through alone. A top-notch real estate agent sticks around fortheir clients to make sure the transition to their new properties is a smooth, headache-free one.Moreover, a quality agent keeps in touch with you to see how you are doing. Moving Checklist  Transfer Utilities to new address  Transfer Internet & cable to new address  Go to USPS.com and file change of address  Update new address with bank, credit card companies, magazine subscriptions  Update new address with employer, doctor’s and insurance  Update voter registration  Transfer home/renter’s insurance  Schedule movers and/or moving truck  Map out your driving route  Drop off keys  Change locks on new home MOVING STATES?  Transfer all medical records for family members and pets  Transfer car insurance and get new driver’s license and vehicle registration OTHER:       (979) 476-2499

AFTER THE CLOSINGAN ONGOING RELATIONSHIP WITH MY CLIENTSWhile the Closing may mark the end of the purchase process, I hope it will mark the beginningof our ongoing relationship. I make a concerted effort to keep in touch with my clients and tocontinue to be a resource for their real estate and neighborhood needs. As a client, you can lookforward to receiving a monthly newsletter from, www.AggielandListing.com, as well asperiodic updates on neighborhood eventsand quarterly real estate market analysisreports. And of course, if you needreferrals for plumbers, electricians, andother service professionals. I am alwayshappy to provide you with a list of trustedvendors.YOUR REFERRALS ARE KEY!Maintaining ongoing client relationshipsis part of my commitment to provide alevel of real estate service well above andbeyond expectations. My clients sharetheir positive experience with friends andassociates who then seek me out. This hasallowed me to build a successful realestate practice based on referrals. As aresult, I can devote more of my time tohelping clients and less looking for newones. If you are happy with my service, Ihope you will spread the work and sendpeople my way so I can help them thesame way I helped you. That’s a win-winall around! (979) 476-2499

YOUR CRASH COURSE IN MORTGAGE SPEAKMortgage: A loan you take out to finance the purchase of your home. It’s also a legal contractstating that you promise to pay back the loan on a monthly basis. Your monthly paymenttypically goes toward paying back the principle (which is the basic loan amount) and interest.Your monthly payment may also include money for your taxes and insurance.Adjustable Rate Mortgages (ARM): Loans with an initial fixed-rate period (usually 5, 7, or10 years). After the fixed-rate period, your interest rate may change once per year – either up ordown depending on market conditions. ARMs are almost always lower in rate than fixed loansand can offer huge savings to first-time home buyers, especially those who don’t plan onstaying in their first home for more than 10 years.Amortization: The gradual reduction of debt over the term of the loan. Amortization occursthrough repayment of principal.Annual Percentage Rate (APR): The yearly cost of a mortgage including interest and otherexpenses or charges such as private mortgage insurance and points expressed as a percentage.Appraisal: A written estimate of a property’s current market value.Closing: The conclusion of your real estate transaction when legal documents are signed andfunds are disbursed.Closing Costs: Expenses over and above the cost of the property, which can include items suchas title insurance, appraisal, processing, underwriting and surveying fees.Credit Report: A report from an independent agency detailing credit history and previous andcurrent debt to help determine creditworthiness.Credit Score: A mathematical formula that predicts an applicant’s credit worthiness based oncredit card history, outstanding debt, type of credit, bankruptcies, late payments, collectionjudgements, too little credit history and too many credit lines.Deed: The legal document that transfers property from one owner to another.Down Payment: The amount of your home’s purchase price you pay upfront.Earnest Money: Deposit made by a buyer toward the down payment to show good faith whenthe purchase agreement is signed. (979) 476-2499

Equity: The monetary difference between your mortgage balance and the actual market valueof your home.FHA Loan: Fixed or adjustable rate loan insured by the Federal Housing Administration. FHAloans are designed to make housing more affordable, particularly for first-time home buyers.Fixed-Rate Mortgages: Mortgage with an interest rate and a payment that doesn’t change overthe term of the loan. Should the current market interest rate fall below your fixed rate, contactyour mortgage expert right away to discuss the benefits of refinancing.Good Faith Estimate: Written estimate of the closing costs the borrower will likely have topay to obtain the loan.Interest-Only Loan: Mortgage that gives you the option of paying just the interest, or theinterest and as much principal as you want in any given month during the initial period of time.Interest Rate: The percentage rate that a lender charges to borrow moneyLock or Lock-In: A lender’s guarantee of an interest rate for a set period of time. The lock-inprotects you against rate increases during that time.Points or Discount Points: Points are upfront fees paid to the lender at closing. Typically, onepoint equals one percent of your total loan amount. Points and interest rates are inherentlyconnected. The more points you pay, the lower your interest rate.Principal: The balance (not counting interest) owned on a loan.Private Mortgage Insurance (PMI): Insurance to protect the lender in case the borrowerdefaults on the loan. With conventional loans, PMI is typically not required with a downpayment of 20% or more of the home’s purchase price.Term: Number of years you have to pay back the loan.Title: Document that shows ownership of a property.Title Search: Examination of municipal records to ensure that the seller is the legal owner of aproperty and that there are no liens or other claims against the property.Underwriting: In mortgage lending, the process of determining the risks involved in aparticular loan and establishing suitable terms and conditions for the loan. (979) 476-2499

COMMON REAL ESTATE ABBREVIATIONSReal estate agents have a language all their own. The following is a key to help you interpret someof the common abbreviations you’ll see in the real estate advertising listings.A/C Air conditioningAppl AppliancesBA or Bth BathroomBR or Bdrm BedroomBSMT BasementCH/A or CHA Central heat and airDR Dining RoomDW DishwasherEIK Eat-in Kitchenf-bmt Finished basementFncd yd Fenced YardFP FireplaceGA or Gar GarageLR Living RoomPL Swimming PoolSF or sq ft Square FeetWBFP Wood-burning fireplaceW/D Washer and dryerWW Wall-to-wall carpeting (979) 476-2499

FOR MORE INFORMATIONI greatly enjoy working with buyers and helping them purchase theirdream homes. If you’re looking to conduct your home search soon andfind a new residence, please get in touch with me via email or phonetoday! My Contact Info: 979-476-2499 [email protected] www.jairscholze.com (979) 476-2499

(979) 476-2499