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Home Buyers Guide

If you’re like most people, buying a home is probably the biggest financial decision you will ever make, and that investment will have a large influence on your long-term future.Whether this is your first purchase or you are an experienced buyer, the decision on when and where to buy, and how much to invest, requires careful consideration.

Why do you want to buy?

Are you tired of paying rent? Have you decided to pay your own mortgage and not your landlord’s? Have you outgrown your current home? Are you looking for an investment portfolio? Are you looking for a rental property? Would you like a larger yard? Would you rather live in a different area? Do you want to shorten your commute? Having a clear sense of why you wish to buy will help you choose the right property.

Has your income grown?

Property ownership can be an excellent investment, whether you’re looking for your dream home, an investment property to rent out, or you’ve decided to expand your  investment portfolio. Owning real estate is one of the least risky ways to build equity and obtain a return on your investment.

Preparing to Buy

Before you start shopping for your next piece of property, it’s a good idea to prepare. There are some important records and details you’ll need at the start of the process, and along the way; and it never hurts to review what the process of finding and purchasing real estate looks like ahead of time.

Build your Green File

A Green File holds copies of all your important financial documents along with account details. You will need this information to document your income, assets and debts to secure financing for your property, so start pulling these details together right away.

A typical Green File should contain:

  • Financial statements
  • Bank account statements
  • Investment account statements
  • Credit card statements
  • Auto loan statements, along with details on any other loans you may have
  • Recent pay stubs
  • Tax returns for the last two years
  • Copies of leases for any investment property you may own
  • 401K statements, life insurance policies, details on stocks, bonds, and mutual funds you may own

See our Tampa Home Group Finance Guide, here http://www.tampahomegroup.com/financing-guide-home-buyers/, for more details on gathering information for your Green File and how it helps you get into the home of your dreams faster and more efficiently.

Check Your Credit Rating

Your credit score will have a huge impact on what type of property you can buy, and at what price. A great first step is to check your credit rating with the help of an experienced lending institution to get an idea of what you can afford. You may have an idea what your credit score is if you have access to that information through a credit card account or an auto loan statement.

You may have a good relationship with a lender already, whether you already have a mortgage or you wish to work with your favorite bank or credit union. If not, we are happy to recommend experienced, knowledgeable lenders in the residential, construction, and commercial and investment real estate fields. Learn more about evaluating lenders and selecting one to work with in our Tampa Home Group Finance Guide, here. http://www.tampahomegroup.com/financing-guide-home-buyers/ The lender you choose to work with will check your credit history through the three credit reporting agencies, Equifax, Experian and Trans Union. This may be a good time to correct any information on your credit history that is not accurate.

Be Careful with your Finances

Steady and predictable is your friend. Now is not the time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability. Change can be good, but changes in your finances at this time may not be.

Choosing a Real Estate Agent

Buying property involves making a number of important financial decisions, understanding complex issues and completing a lot of paperwork. It helps to have an expert in your corner from Tampa Home Group when you’ve decided to begin this long, involved process to make a large purchase like a home. We can guide you every step of the way and give you access to property listings before they hit the general market.

Here are some important factors to consider when you choose a real estate professional:

  • Look for a full-time agent – one who has experience completing transactions similar to yours.
  • Interview a few agents: Are they familiar with the area and market where you’re interested?
  • Ask how much time the agent will have for you, and if they are available at night and on weekends.
  • Ask about their credentials and education: A good agent will continually strive to grow and learn about the latest real estate trends and tools. They can demonstrate the results of that professional development by earning certifications in their industry.
  • Does the agent return your calls promptly? Time is money when attempting to buy a property.
  • Ask for a list of properties they have sold, along with a list of references.
  • Choose an agent who listens attentively to your needs and concerns. This is someone you will be working closely with for some time. Pick an agent you like and who makes you feel comfortable.

Time to Go Shopping!

Once your preparation is complete, it’s time to find the right property for you.

Take a Drive

Get to know the neighborhoods, complexes, or subdivisions that interest you. Drive around and get a feel for what it would be like to own property in the area, and a sense for the properties available there.

Narrow Your Search

Choose a few properties that interest you and have your real estate agent make appointments to visit them. Ask your agent about the potential long-term resale value of the specific properties you are considering.

Time to Buy

Once you’ve picked out a property you want to purchase, your real estate agent will help you craft and submit an offer that the seller will accept. Experience counts here.

Your Tampa Home Group agent knows how to write your offer in a way that gives you an advantage over other offers. A good agent investigates the potential costs and expenses associated with the property so you have a complete picture of what it will cost to own and maintain it.

Escrows, Inspections and Appraisals

This next parts of the purchasing process can be some of the most tedious, overwhelming, detailed and time consuming. Your Tampa Home Group team is here to help. We work daily – hourly – to stay on top of important details and steps to keep the process moving forward and get you into your home as efficiently as possible. If you have any questions or concerns, we are just a phone call, text, or email away. Here’s what you can expect once we reach this stage:

The Process, Step-by-Step

The Initial Agreement and Deposit

An effective agreement is a legal arrangement between a potential purchaser and the property’s seller. A couple of important tips can be useful to make sure you are prepared and to help streamline the process

  • Keep written records of everything. For clarity, it is extremely useful to transcribe all verbal agreements (including counter-offers and addendums) and convert them into written agreements to be signed by both parties. We will assist you in drafting all paperwork for your purchase and make sure you have copies of everything.
  • Stick to the schedule. Once your offer has been selected, you and the seller will be given a timeline that lays out every stage in the process of closing the real estate contract. Meeting all requirements on time ensures that negotiations go smoothly and guards against the possibility of either party breaching their agreements. During the process we keep you updated constantly so you’re always prepared for the next step.

Here are some important terms related to steps in the process, and some titles/roles of those who will be involved:

Closing Agent: Either a title company or an attorney will be selected as a closing agent. The closing agent will hold your deposit in escrow and research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing, and that all new encumbrances are properly added to the title. Some properties are subject to restrictions that limit various activities such as building or parking. There may be recorded easements and encroachments that limit the rights to use your property.

Holding Title: You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the title holder.

Inspections: Once your offer is accepted, have a licensed property inspector inspect the property within the timeframe that was agreed upon in the effective contract to purchase. You may elect to have different inspectors inspect the property, if you wish to obtain professional opinions from inspectors who specialize in a specific area (roof, HVAC, structure, for example). If you’re purchasing commercial property, have an environmental audit done on the site for the lending institution. We can recommend several different inspectors. Depending on the outcome of these inspections, one of two things will happen:

  • Either each milestone is successfully closed and the contingencies are removed, bringing you one step closer to closing; or
  • You, as the buyer, review the property and the papers and request a renegotiation of the terms of contract (usually the price).
  • Either way, Tampa Home Group is here to consult with you through each step of the process, and represent your best interests.

Appraisal and Lending: It’s imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine its value for the lending institution, via a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time.

Association Approval: If the property you’re purchasing is conditional upon an association approval, request the rules, regulations, and other important documents from the seller as soon as you have an effective agreement to purchase. Make sure that the application documents and processing fees are submitted to the appropriate person at the association by the required time. Fill out all information completely and legibly so there is no delay in processing the application. If you’re required to meet with the association for your approval, make an appointment as soon as possible for the interview. Most associations require a certificate of approval before move-in. Your closing agent will want you to bring the original copy of this approval letter to the closing, where it will be recorded with the deed in the county public records.

Property Insurance: If you’re obtaining a loan, your lending will require you to purchase insurance on the property. The coverage you purchase depends on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowner’s insurance by shopping around. You can also save money with these tips:

  • Consider a higher deductible. Increasing your deductible by a few hundred dollars can make a big difference in your premium.
  • Ask about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Persons over 55 years of age, long-term customers, or those with other policies at the same insurance provider be given discounts.
  • Insure your house, not the land under it. Disasters damage homes, not the land they sit on. Subtract the value of the land when deciding how much coverage to buy to avoid paying too much.

Not sure where to start? Don’t have a relationship with an insurance agent you know and trust? Your Tampa Home Group professionals are always happy to recommend experienced, knowledgeable insurance agents who understand and can provide appropriate coverage for any type of property.

Moving In

Closing Day

Kudos to you on your preparation and perseverance. Once you’ve gotten this far, it’s almost time for congratulations and a celebration; but not quite yet. Don’t forget to tie up these important loose ends down the home stretch:

Final Walk-Through Inspection: This tends to be a formality if you’ve done your homework and your inspectors have done their job. The final inspection takes place the day before or the day of the closing. You visit the property to verify all is in working order, everything is the same as when you last viewed the property, nothing has been left behind, no contingencies have gone unaddressed, and everything included in your purchase is still on site.

Home Services and Utilities: You will need electricity, water, gas, phone, internet, and other services to make your house a home. We provide a list of phone numbers to call to activate services and utilities after closing.

Be Prepared: We’re ready to assist you should an unforeseen glitch pop up, even at this last stage of the process. If something breaks or some minor detail needs to be addressed don’t worry! We’ve encountered most any problem you can think of before, and we know how to handle them efficiently and in a stress-free way. We’ve got your back.

Closing: The closing agent provides all parties a settlement statement that summarizes and details the financial transactions enacted in the process. You, the buyer, and the seller(s) will sign this statement, along with the closing agent, who will certify its accuracy. If you are financing the purchase, you must sign all pertinent documentation required by the lender. If you are unable to attend the scheduled closing, inform us as soon as possible. Arrangements can be made, depending on the circumstances and notice we receive. If you’re bringing funds to the transaction, you can have then wired electronically into the closing agent’s escrow account, or bring a certified bank check to the closing in the amount specified on the settlement statement. The seller will arrange to bring all property keys, garage door openers and important information to the closing and give them to you there.

Congratulations! You are now the proud owner of your new home!

As you prepare to move in and get settled, please keep us posted. Don’t ever hesitate to reach out to us, your Tampa Home Group partners, if you have any needs, questions, or concerns at any time – today, tomorrow, next year, and beyond. We’re here to help, and we’re always happy to hear from you.

We have a trusted group of local professionals to help you with almost anything you might need – and we also appreciate any referrals you may choose to send our way.