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Buyers

The Buying Process – What A Mountain Springs Agent Will Do For You

The Buying Process

What You Can Expect From Our Agents

Our goal in the home buying process is to help you achieve your goals. We will educate you about the entire process up front.  We will introduce you to lenders that can handle your mortgage and financing needs so you can choose the right lender for you! Once you have chosen a lender, the lender will help your lender give you an estimate of the cost involved with buying and financing your new home.

We will guide you through each step of the buying process and we will advise you with our market knowledge and experience in the process, to help you make more informed decisions.

We will protect your interests above all other parties in the transaction.  We will use all the tools and technology available to give you a competitive advantage.

We will communicate with you in a timely manner, and we will complete all the paperwork and make sure all deadlines are followed and we will be present to answer any and all questions for you throughout the entire buying process. Even after the transaction is closed, we will be here to help you and answer any questions you may have. We believe in creating customers for life!

What Our Agents Will Do For You

One of the most important decisions to make is who you want to represent you – an experienced agent is a great asset in helping you find your dream home and can make buying a new home a wonderful experience. There is a small amount of paper work to complete to get an agent set to represent you. Once that’s done, the next step is getting qualified with a lender. I have a list of agents past clients have loved working with, or pick your own. You will want to sit down and talk to a lender and get them all the information they ask for.

Once you have been qualified, the lender will provide you with a pre-qual letter. Now that we both know what you qualify for, it’s time to go looking for a new home. I will sit down and talk to you about what you want in a new home, where you want to live, and other important items to consider. I will create a customized search to find all the homes on the market that meet your needs. You decide which ones you want us to go look at together, and I set up appointments for us to go see them.

Once you find a home you want, we’ll make a formal offer. This may involve some negotiation, and that’s what I’m here for. It’s my job to negotiate the best possible deal for you. Once the price and the terms of the deal are agreed to, you will need to provide an Earnest Money check. Earnest money is basically a deposit that holds the property until closing (this money will be credited towards the purchase price at closing). And now you are ‘under contract’ on your new home

You will want to have a home inspection done as quickly as possible. This allows you to have the home inspected to see if you want the seller to fix any issues before you purchase the home. I have a list of numerous qualified inspectors that Mountain Springs Realty has done business with if you are needing some ideas of who to call.

You may also choose to have a radon inspection. If the home has a basement, it may be a good idea to have a radon inspection.

While this is happening, the lender will be proceeding with the loan approval process. This may include pulling a new credit report, having the house appraised, verifying all the information you provided to the lender. At the beginning of the process, the lender will have provided you with an estimate of your closing costs. And at this point they will confirm your closing costs and down payment. Once everything is done, you will get a loan approval.

During this time, the title company will also be doing their searches. The title company facilitates the transaction for both sides and is responsible for recording the ‘official’ ownership documents when the transaction has been completed. The title company will assemble all the closing costs; they will coordinate with the lender and make sure all the documents are ready at the closing.

On the actual closing day, you and I will meet with the Title Company Representative and you sign your paperwork, and officially buy your home. Be prepared to sign your name a lot and be ready for a lot of paperwork. But once it’s done, you are a homeowner and you can officially move in!!

Brokerage Relationships

This is informational.

The State of Colorado has four definitions for what kind of relationship you can have with a Real Estate Agent.  

You should be aware of these. There are four kinds of relationships available:

Seller's Agent

 A seller’s agent (or listing agent) works solely on behalf of the seller to promote the interests of the seller with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the seller. The seller’s agent must disclose to potential buyers all adverse material facts actually known by the seller’s agent about the property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the seller.

Buyer's Agent

A buyer’s agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the buyer. The buyer’s agent must disclose to potential sellers all adverse material facts actually known by the buyer’s agent including the buyer’s financial ability to perform the terms of the transaction and, if a residential property, whether the buyer intends to occupy the property. A separate written buyer agency agreement is required which sets forth the duties and obligations of the broker and the buyer.

Transaction-Broker

A transaction-broker assists the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting the parties with any contracts, including the closing of the transaction without being an agent or advocate for any of the parties. A transaction-broker must use reasonable skill and care in the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction-broker concerning a property or a buyer’s financial ability to perform the terms of a transaction and, if a residential property, whether the buyer intends to occupy the property. No written agreement is required.

Customer

 A customer is a party to a real estate transaction with whom the broker has no brokerage relationship because such party has not engaged or employed the broker, either as the party’s agent or as the party’s transaction-broker.

Why I Prefer To Be A Buyer's Agent

As a Buyer’s Agent, I work only for you, to protect your interests above all others, including my own.  I will advocate only for your side of the real estate transaction. I will give you my expert real estate and negotiation advice. I can give you information you might not know to ask for.  To act as a Buyer’s Agent requires a written agreement for a specific term. The length of the agreement is negotiable. And at any time, if I am not providing you the service you want and expect, you can send me written notification and terminate this agreement.

Why You Need A Buyer's Agent

A Buyer’s agent represents only you. As a Buyer’s Agent, I can show you any property. That means any property! I can show you homes with another company’s for sale sign, or a new homebuilder’s home, any for sale by owner, and any property for sale. All you have to do is call me, and I’ll get you the information you need. I will work only for you in the transaction and use my expertise, knowledge and negotiating skills to find your dream home and get it for the best price!

About The Lender

The lender is a critical part of the success of the new home purchase. Use a lender you know and like, or ask me for lenders I have worked with in the past. Any lenders that I suggest to you are lenders I’ve worked with and know they are knowledgeable and reputable and do quality work and complete it on time. I have confidence that these lenders will provide you the same high quality customer service that I do, and will find you the best mortgage to fit your specific needs because they have done it time and time again for my past clients.

Get Pre-Approved

It is critical that when you make an offer to purchase a home, you have a strong lender letter that shows you have done your homework and you are actually financially qualified to purchase the home you are making an offer on. A lender letter will provide the sellers with assurance that you are qualified to purchase the home you are bidding on.

Don't Do These Things

After you apply for your mortgage:

  • Don’t open any kind of credit! Nothing! If you are offered a great deal to open a credit card, don’t do it!  
  • Don’t buy furniture!
  • Don’t buy a car!
  • Don’t take out or consolidate student loans!
  • Don’t make any large deposits!
  • Don’t make any large withdrawals!  
  • Don’t do anything that can disrupt your financing for your new home.

 

If you are in doubt, call me!

Other Things To Remember About The Lender

The lender’s goal is to get you final loan approval as quickly as possible. Remember, the lender is going to be verifying your information through this process. That means they may ask for more paperwork. It is normal. The lender may ask you to prove:

  • Your annual income or ask for your tax returns.
  • They may ask for your employment history and a contact number for your boss.
  • They may ask for information about any current mortgages you have.
  • They might ask to verify bank account balances.
  • They may ask where your down payment is coming from.
  • The lender may ask for you to provide additional documentation if you are using the V.A. for financing.

 

Feel free to ask questions of the lender.

What Do We Expect Of You?

Your job in the home buying process is as much about eliminating properties as it is about finding the right one.

It’s completely acceptable to rule out houses and even neighborhoods.  Remember the most successful buyers are the ones that are actively engaged. If you see a home you want, or think you want, you can always drive the neighborhood to look around. If you stop in at Open Houses or Model Homes, I will give you a stack of my business cards and all you have to do is give it to the person at the desk so they know you are working with a licensed realtor.

The easiest way to let me know you are engaged with the process is to mark the homes in the portal that you like with a heart. Mark possibilities with a light bulb. Of course, mark the ones you don’t like as well. Don’t worry; I’ll explain all of this again when I get the portal set up for you.

Finding A Home

Did you know that most people buy one of the first houses they see? Also most people look at less than 15 houses before they purchase a home.

My job is to talk to you about the home after each showing. I will try to help you sort through a great deal of information and make comparisons between the homes we see. I have quite a few systems of helping you rate and rank homes and features. I may ask you what you thought of the home compared to the last home or the first home. This will help you eliminate homes and clarify which ones are your favorites, as well as helping you keep the homes straight. If you are out driving around and see a home you like and there are flyers at the home, grab one for me. If there aren’t any flyers, just provide me with the address of the home you like and I can research it for you

Use Technology To Help Find The Right Home

Technology is a great tool to have when looking for a home. However, websites like Zillow.com and Realtor.com largely have old information! Instead of relying on public websites, let me set up a customized portal for you that will give you access to all the homes in the Colorado Springs MLS system that meet your specific criteria.

This portal will allow you to receive properties daily that are brand new to the market and specifically meet your criteria. In this portal you can mark your favorites, and mark others to disregard. This way, you are actually getting current information about homes coming on the market.

Negotiation Process

Just as you have me to negotiate for you, the seller’s also have broker that will negotiate for them. It’s my job to talk to their broker and negotiate for you. At no time should you talk to the seller’s broker. If for some reason the seller’s broker calls you, refer the call to me. That’s my job

Final Thoughts

Remember, as the Buyer’s Agent, it’s my job to protect your interests. That is my number one priority! It is my job to negotiate. It is my job to take care of the paperwork. It is my job to take care of deadlines and make sure the transaction is as smooth as possible. It is my job to make the process easy and enjoyable for you. It is my job to customize the process to meet your needs!  You will have questions. Feel free to give me a call and ask. I’m here to help you.

Glossary

A mortgage on which the interest rate is adjusted periodically based on a pre-selected index. 

An estimate or opinion of the value of property, made by a qualified professional called an “Appraiser”.

The act of acquiring title to property which has an existing mortgage, and agreeing to be personally liable for the terms and conditions of the mortgage including the payments. Assuming a loan can usually save the buyers money since this is an existing mortgage debt, unlike a new mortgage which closing costs and possibly higher market interest rate charges will apply.

The meeting between the buyer, seller and lender or their agents where the property and funds legally change hands. 

Usually includes an origination fee, discount point, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement.  Normally, the costs of closing will be 3 percent to 6 percent of the mortgage loan.

A mortgage not insured by FHA or guaranteed by VA or Farmers Home Administration.

A report documenting the credit history and credit status of a borrower’s credit standing

In many states, this document is used in place of a mortgage to secure the payment of note

See points.

 Understanding of the earnest money deposit is of the utmost importance. At the time a written offer is initiated, the seller will most likely request you provide earnest money. The amount of the earnest money varies. It may be provided in the form of a personal check, teller’s check, or promissory note. The earnest money will be deposited into the closing entity or listing broker’s escrow account once the offer has been accepted. It will remain in escrow until the time of closing. This amount is credited to the you in settlement figures at the closing. If the offer is not accepted this amount is returned to you. Should you go under contract and the contract is terminated under a provision of the contract, this money will be returned to you.

The difference between the fair market value and current indebtedness  which is also referred to as the owner’s interest.

Refers to neutral third party who carries out the instructions of both the buyer and seller to handle all of the paperwork of settlement or “Closing”. Escrow may also refer to an account held by the lender into which the homebuyers pay money for tax and insurance payments.

 A loan insured by the Federal Housing Administration open to all qualified home purchasers. While there are limits to the size of FHA loans, they are generous enough to handle moderate-priced homes almost anywhere in the country.

Insurance, paid by the borrower that protects the lender against loss if the borrower should default on the mortgage payments and foreclosure should become necessary. This insurance is required on all FHA loans.

A general home inspection deals with many aspects of a house including: appliances, water and plumbing, electrical, heating and ventilating, bath and kitchen fixtures, crawl spaces, basements, garages, roofs, attics etc. If requested, I will recommend knowledgeable professional home inspectors who you may choose to use. The inspector will provide you with a comprehensive report on the condition of the property. From this report we will decide whether (or not) to ask the seller to make any repairs. Keep in mind, the general home inspection focuses on items of safety, security and major expense (such as a roof replacement) not on decorative concerns. The cost of the inspection is paid by the buyer and is usually based on the size of the property. This cost is not refundable.

 A written estimate of all loan charges made by a lender to proposed borrower. The estimate is a requirement of RESPA and must be provided to a borrower within three days of receipt of application.

A contact whereby an insurer, for premium, agrees to compensate the insured or loss of a specific property due to certain hazards, (I.e., fire, windstorm, etc.).

A department of the Federal government under whose auspices the FHA is operated. The department provides control over government programs designed to provide housing and the improvement of housing standards.

The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time.

A formal document executed by an owner or property, pledging that property as security for payment of a debt.

The Lender.

 The borrower or homeowner.

The instrument signed by the borrower promising to pay the debt and secured by the Deed of Trust.

The fee charged by a lender to prepared loan documents, usually computed as a percentage of the face value of the loan.

There are many other types of inspections you may want to have such as a Sewer line scope, or a structural inspection. These are not a part of the general home inspection. They are performed by knowledgeable professionals for an additional fee.

Principal, interest, taxes and insurance.

Prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount. (e.g., two points on a $100.000 mortgage would cost $2,000.).

Expenses necessary to create an escrow account or to adjust the seller’s existing escrow account. Prepaid can include taxes, hazard insurance, private mortgage insurance and special assessments.

Insurance written by a private mortgage insurer, (rather than by the FHA) that protects against loss caused by a borrower’s default. Normally required when the down payment transaction is less then 2o%.

 Radon is a radioactive gas which occurs in nature. You cannot see, smell, or taste it. Exposure to radon increases the risk of developing lung cancer. Special equipment is needed to detect radon and generally may be included as a part of the general home inspection for an additional fee.

Money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records. (i.e., warranty deed, trust deed).

Short for the Real Estate Settlement Procedures Act. RESPA is a federal law that allows consumers to review information on known or estimated settlement costs after application and again prior to or at settlement. The law requires this information to be furnished after application.

Money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records. (I.e., warranty deed, trust deed).

 A map of description of land, showing the precise location of any improvements on the site, as well as the location of easement, right-of-way or encroachments.

A document evidencing an individual’s right to/or ownership in property.

When property is being sold (or refinanced), the lender and the buyer need to understand what liens and encumbrances currently encumber the title (ownership). The buyer will receive a title commitment (which is a commitment to issue a title policy at the closing) that will indicate exactly what recorded liens and encumbrances (such as an easement allowing access to the local cable company) currently exist on the property. The title commitment will also indicate the owner of record and any restrictions on the use of the subject property. Title insurance is required on all property in Colorado and is negotiable cost. The cost is based on the sales price of the property. The buyer is required to furnish the lender with a lender’s policy showing the lender as a lien holder on that property. These charges will be incurred at the time of settlement (closing) as a part of your closing costs. When the sale of the property is final, the title company records the necessary documents and then will issue a title insurance policy to you and the lender.

 A long-term, low or no-down payment, loan guaranteed by the Veteran’s Administration. Restricted to individuals qualified by military service or other entitlements.

A fee charged by the VA to defray administrative costs. The fee is currently one percent of the loan amount and is required on all VA loans. 

Home warranties are available to cover resale homes. The buyer or the seller may purchase a home warranty policy that will protect against repairs or replacement of certain appliances, heating, plumbing or electrical items. As with most insurance policies, the coverage will vary by company. You may consult with warranty services companies to determine exactly what is covered and the cost of the policy.

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