Buyers Checklist

1. Put your finances in order and check your credit report.

 

2. Get familiar with the mortgage industry.

 

3. Determine your wants and needs for a home.

 

4. Select a real estate agent.

 

5. Discuss financial aspects.

 

6. Start searching for a home.

 

7. Verify information regarding legal dimensions and condition of property.

 

8. Make an offer.
9. Negotiate, then finalize contract.

 

10. Coordinate with real estate agent, mortgage lender and title company.

 

11. Apply for mortgage.

 

12. Order Inspections: Structural, Mechanical, Electrical, Plumbing, Environmental, Pest

 

13. Schedule movers (if needed.)

 

14. Change utilities.

 

15. Purchase funded, contract closed.

 

16. Enjoy your new home!

Contract to Close

Option Period- A contractual right that obligates the seller to sell but gives the buyer the unrestricted right to proceed or terminate within a defined time frame and at an agreed upon price. To be valid in Texas, the buyer must deliver valuable consideration (money) to the seller and time is of the essence.

Earnest Money- The initial and additional cash deposits tendered by the prospective buyer of real property to show good faith.

Seller’s Disclosure- Documents completed by the seller of a home listing any known issues with the property, as well as any remodel projects completed during the time they owned the home. Sellers disclosure forms usually include information about the title A legal document listing the history of ownership of the home. A title report lists all parties with a legal claim to the property, what items need to be cleared from title before the new buyer can take possession, and if there are any easements or encroachments on the property of the home, the water/sewage system, the roof and the electrical system. This information is useful, but don’t use it as a substitute for an inspection.  A thorough investigation of a home by a licensed inspector to discover any issues or repairs that need to be made before buying the home. by a licensed inspector.

Inspection-  An inspection of a prospective home done by a professional, soon after an offer is made, to establish the structural and mechanical integrity of the house.

Walk through- A final inspection of a property before it changes ownership.

What you’ll need to submit a contract

Full names with middle initials if applicable

Terms—How much down payment, and how much borrowed. The terms can change later, but an idea to start. (We’ll need a pre-qualifying letter from lender.)

Option period-average is 7 days for new properties.
This is a negotiable period of time in the contract with a nominal amount of consideration.

Closing— When would you like to close?

Residential is approx. 30 days to close

At the time of submitting a contract,
I’ll need two checks:

One is made out to the seller for usually $100-$500 (depending on sales price)-The money is for the “UNRESTRICTED” right to terminate the contract within the Option period.

One is made out to the title co. for usually 1% of sales price. This is earnest money-this and the option money are credited back to you when you close.

Costs before you close:

Inspection fee-This happens during the Option period, and is necessary to determine the condition of the house. Cost (depending on size of the house) is approx. between $400-$600, which includes a termite inspection.

Appraisal fee-After one exits the Option period and proceeds with the house, the lender will order an appraisal. Cost is approx. $350 to be paid at time of appraisal. Sometimes the lenders will not collect until closing.

Closing Cost-Buyer

On closing day, the majority of your costs will be your lender’s fees.This can range from 1.5-3% of the loan amount depending on origination fee, discount points, recording fees, underwriting fees, etc… The lender will give you a good faith estimate in the beginning, to give you some idea of costs. A couple of days before closing, you will receive a settlement statement of exactly what your costs will be.

You will incur some title fees as well, however this cost is minimal.($300-$600) The Title Premium is more often than not a Seller’s expense. However, it is a negotiable item in the contract.
Taxes-(Buyer) You will be charged for prorated taxes for the purchase year. (Date of Closing until the end of the year)

****Negotiable costs-a new survey ($400-$800) I will always try to get the Seller to pay for this first, or use an existing survey. However, sometimes the lender requires a new one and this can become a Buyer’s expense…

**** FYI Seller’s Closing Costs include commissions, title premium, and misc. recording fees.

Moving Checklist

Two Months Prior to Moving Day:

  1. If you are using a mover, get a few estimates from moving companies.
  2. If you are moving yourself, get costs from at least two truck rental companies.
  3. Create a floor plan of your new home for furniture and appliance placement.
  4. Make an inventory of your household goods and begin to remove clutter (start with basement, attic, garage, and other storage areas).
  5. Start a file for all of your moving paperwork (estimates, receipts, etc.).
  6. Arrange to transfer school records.
  7. Choose a mover (or truck rental company).
  8. Get your new home ready- contact painters, carpenters, plumbers, roofers, etc., so your home is ready when you arrive. Remember to change the locks on all the doors in your new home.
  9. Visit www.smoothmoves.com for tips on moving with children.

Six Weeks Prior to Moving Day:

  1. Obtain and fill out post office change-of-address cards.
  2. Make arrangements for storage if necessary.
  3. Clean all closets and drawers.
  4. Start using foods and cleaning supplies that can’t be moved.

Four Weeks Prior to Moving Day:

  1. Schedule disconnection of all utility services at your old home and connection of them at your new home. Be sure to disconnect the day after you leave and connect the day before you arrive. If you have “last month” deposits with services, such as the telephone company, request your refund.
  2.  If you are moving yourself, reserve a rental truck.
  3. If you are packing yourself, obtain packing materials and start packing items you won’t need after you arrive at your new house.
  4.  Arrange for cleaning and repair of furniture, drapes and carpeting.
  5. Check with your insurance company to see how your possessions are covered during transit.
  6. Collect your important records–Gather personal and family records, including medical and dental, veterinary and school records, legal and financial documents, birth certificates, passports and insurance documents.

Three Weeks Prior to Moving Day:

  1. Properly dispose of items that cannot be moved, such as flammable liquids.
  2. Prepare auto registration for transfer (if moving to another state).
  3. If you are moving in or out of an apartment, arrange for use of the elevator.
  4. Make child-care arrangements for moving day.
  5. Hold your moving sale.

Two Weeks Prior to Moving Day:

  1. Arrange for disposal of anything not sold at your moving sale.
  2. Return any borrowed items (including library books) and retrieve any loaned items.
  3. Cancel newspaper delivery.
  4.  Notify any creditors of your move.
  5.  Assemble a file folder of information to leave for the new owner of your home.
  6. Change your address–One week before your move, send change-of-address cards to everyone who will need to contact you.

  7. Pick up laundry–Laundry tickets are easy to misplace, so ask for your things by name and not just by the receipts you have.

  8. Pack a travel kit: Put aside critical items like a checkbook, credit cards, personal phone book, ID, flashlight, keys, toiletries, tools, paper plates, cups, towels, travel alarm clock, aspirin, bandages and games for the kids. Also, pack a suitcase with clothing and other personal items.

One Day Prior to Moving Day:

  1. Disconnect and prepare major appliances for the move.
  2.  Set aside anything that will travel in your car so it will not be loaded on the truck.
  3. Pack a box of items that will be needed first at the new house. Clearly mark this box “Load Last”.
  4. Obtain cash or traveler’s checks for the trip and to pay the movers.
  5. Confirm arrival time of your moving van/truck.
  6. If moving yourself, dismantle beds and other large furniture.

Moving Day:

  1. If using a mover, be sure someone is at the old house to answer questions.
  2. Note all utility meter readings.
  3. Read your bill of loading and inventory carefully before signing. Keep this paperwork in a safe place.

Delivery Day:

  1. Check your belongings carefully and note on the inventory paperwork any damaged items.
  2. On an interstate move, be prepared to pay the driver before your possessions are unloaded.
  3. Supervise unloading and unpacking.
  4. Be prepared to pay your mover with cash, certified check, or traveler’s checks unless other arrangements have been made in advance.

What you’ll need to submit a contract

Full names with middle initials if applicable

Terms—How much down payment, and how much borrowed. The terms can change later, but an idea to start. (We’ll need a pre-qualifying letter from lender.)

Option period-average is 7 days for new properties.
This is a negotiable period of time in the contract with a nominal amount of consideration.

Closing— When would you like to close?

Residential is approx. 30 days to close

At the time of submitting a contract,
I’ll need two checks:

One is made out to the seller for usually $100-$500 (depending on sales price)-The money is for the “UNRESTRICTED” right to terminate the contract within the Option period.

One is made out to the title co. for usually 1% of sales price. This is earnest money-this and the option money are credited back to you when you close.

Costs before you close:

Inspection fee-This happens during the Option period, and is necessary to determine the condition of the house. Cost (depending on size of the house) is approx. between $400-$600, which includes a termite inspection.

Appraisal fee-After one exits the Option period and proceeds with the house, the lender will order an appraisal. Cost is approx. $350 to be paid at time of appraisal. Sometimes the lenders will not collect until closing.

Closing Cost-Buyer

On closing day, the majority of your costs will be your lender’s fees.This can range from 1.5-3% of the loan amount depending on origination fee, discount points, recording fees, underwriting fees, etc… The lender will give you a good faith estimate in the beginning, to give you some idea of costs. A couple of days before closing, you will receive a settlement statement of exactly what your costs will be.

You will incur some title fees as well, however this cost is minimal.($300-$600) The Title Premium is more often than not a Seller’s expense. However, it is a negotiable item in the contract.
Taxes-(Buyer) You will be charged for prorated taxes for the purchase year. (Date of Closing until the end of the year)

****Negotiable costs-a new survey ($400-$800) I will always try to get the Seller to pay for this first, or use an existing survey. However, sometimes the lender requires a new one and this can become a Buyer’s expense…

**** FYI Seller’s Closing Costs include commissions, title premium, and misc. recording fees.

Glossary of Terms

Amortization Schedule-A schedule showing the principal and interest payments throughout the life of the loan.

Appraised Value– An opinion of the value of a property at a given time, based on facts regarding the location, improvements, etc., of the property and surroundings.

Assumption Transfer Fee-A fee assessed by the lender to the buyer to assume the present loan.

Credit Report– A report on the past ability of a loan applicant to pay installment payments.

Document Preparation-A fee charged by an attorney for preparation of legal documents for the transaction.

Escrow Fee– A fee charged by the title company to service the transaction, to escrow monies, and to cover documents. The amount varies with company; usually split between buyer and seller.

Escrow/Impound Account-Funds held by the lender for payment of taxes and insurance when due. Usually does not include maintenance fees.
Homeowner’s Insurance-Protects the property and contents in case of loss; must be for at least the loan amount or for 80% of the value of the improvements, whichever is greater.

Inspections-An examination of property for various reasons such as termite inspections, inspection determine if repairs are required.

Interest-Rate charged for the use of loan funds. Always paid in arrears, and is included in the monthly mortgage payment.

Loan Application Fee-Paid to the lender at time of application; contact lender for amount.

Loan Discount-The points a lender charges; may be paid by either buyer or seller on conventional loans; number of points fluctuates with mortgage money market.

Maintenance Fee/Homeowner dues-Charged by the homeowner’s association as set out in subdivision restrictions.

Mortgagee’s Title Policy– Required by the lender to insure that the lender has a valid lien; does not protect the buyer.

Origination Fee-A fee the buyer pays the lender to originate a new loan.

Owner’s Title Policy-Insures that the buyer has title to the property.
Point-1% of loan amount

Prepayment Penalty– Charged by the lender on some loans for premature payment of a loan balance.

Private Mortgage Insurance– Insurance against a loss by a lender (mortgagee) in the event of default by a borrower (mortgagor). Required on FHA loans or conventional loans with less than 20% down payment.

Realtor Fees– An amount paid to the realtor as compensation for his or her services.

Recording Fees-Charged by the County Clerk to record documents in the public records.

Restrictions-Certified copy of deed restrictions required by lender.

Survey-Confirms lot’s size and any encroachments or restriction violations.

Tax Proration-Taxes are charged to the Seller and credited to the Buyer from January 1 to date of Closing.

Tax Certificates-Certificates issued by taxing authorities showing the current years taxes, the last year the taxes were paid, and any delinquencies to be collected from seller at closing.