It has been almost three years since I bought our home in Branchburg, NJ. This is our second home since my wife and I got married when we bought our fist home about 23 years ago. A lot has changed with the process of buying a home. Here is a bit of what to expect when you are buying a home nowadays.

Get Pre-Approved 

Mortgage Brokers usually have access to more lenders and more options that might suit you.  Individual banks often have restrictions or limitations but a Mortgage Broker can shop around for rates and terms.   That is just a suggestion, if you are comfortable dealing with your bank then that’s ok too.

–Have necessary documents on hand (previous 2-3 years tax returns,  details regarding any other loans you have plus details of any assets you own or anything you think would be important or affect your borrowing power)

Find a Realtor 

The best way to find a good real estate agent is often by word of mouth. Ask you family and friends who they have used.  If you are not sure then interview a few until you find someone who you feel comfortable with.  It’s important that whomever you choose that you feel they are looking out for your best interest.

Realtor Meeting and Searching For Homes

-Meet with the Realtor to review what you are looking for.

-Review criteria and what is most important to you.

-Let them know if you have any reservations about buying.

-Make sure you ask about the reputation of an area or community if you are not familiar with that area.

-If nothing is available that meets your criteria at that time, your Realtor will most most likely set you up to receive listing alerts as soon as something is listed that is suitable.  This is important so you don’t miss out on a potentially perfect home for you.

Viewings

-As you receive listings, make note of the ones you like and alert your agent if he/she hasn’t already contacted you. Your agent will then set up viewings times that work best for you and the sellers schedule.    Sometimes you may only view a few homes and sometimes you may view a large number before you find the perfect one.  Remember that you may have to make a few compromises, as you may not find one that has 100% of what you want.  Location and lot size you can’t change, so don’t compromise on that. If it needs cosmetic updating that maybe ok for you, if you don’t mind taking that on.   Your agent should be able to guide you through that process and help you weed out those that won’t work for your needs.

The Offer Process

-When you find a suitable home then you are ready to write an offer. The offer will contain most of the following terms and/or similar conditions:

1. The amount you are willing to pay.  Your agent can coach you on where to start based on the asking price, how long the property has been listed and of course taking into consideration your budget.  Your agent should be familiar with the market value for the property/area to make sure you don’t over spend for the home.

Its very common to start with a lower amount and work your way up to a number you and the seller are happy with….unless you have a situation with competing offers on the same property and then you may offer full asking or even more than asking.  It will depend on the market at that time, whether it’s a buyers market or a sellers market.

2. A closing date which is usually 30-60 days from the date of the offer.  This date is often negotiated as well, as the date you select may not work with the sellers schedule, so you have to find a date that works best for both.

3. Subject to confirmation of financing, which is usually within 7-10 business days from the date of the offer.

4. Subject to a satisfactory home inspection.

5. Subject to a current survey acceptable by the purchaser’s lawyer for closing.

6. Subject to a suitable property condition disclosure statement.

7. Subject to inclusions (appliances, window treatments, etc)

8. Subject to a final walk through before closing.

9. Or any other clauses that may relate to the specific home.

The Deposit

-Once an offer is made and accepted by the seller, you are required to pay a deposit to the listing company in trust pending completion of the sale.  It is usually a refundable deposit and would be returned to you if any conditions of the contract cannot be met.  This deposit is also credited towards the purchaser price on closing.  This deposit is usually $1,000 for homes for resale but considerably higher if you are buying a brand new home and having it finished to your specifications.

-If  you walk away from the contract for no legitimate reason,( i.e. you get cold feet) then your deposit may not be returned to you.  In cases where the seller has spent money related to the selling of the home, you could be liable for any expenses they have incurred if you just walk away from the sale for no good reason.

Financing Confirmation

– Once you have an accepted offer in place, your Agent , with your permission, will send all the necessary documents to your bank or mortgage company on your behalf.   Usually approval of financing takes 7-10 business after submission of those documents to the finance company.

The Home Inspection

-Home inspections are usually completed within 7-10 days after an agreement is made and an offer is accepted.-Home inspections generally cost between $500-$600 and are non-refundable. 

-Once the Inspection in completed you should review the results with your Realtor.

-If any major deficiencies are identified in the report you can the seller to have those addressed.

-If the home owner refuses to fix said items you may terminate the transaction; however, the seller reserves the right to fix any items or they could negotiate some compensation in lieu of fixing anything.

Legal Work

-Once financing is approved and the home inspection is complete and terms are agreed to,  then all the documents would be sent to your lawyer.   Your agent can also send those on your behalf.

-The lawyer will take care of title searches, surveys, disbursements, registrations, mortgage instructions, etc.

Home Insurance

 -Once everything is sent to the lawyer you must find home insurance.  Your bank will require confirmation of the insurance before the day of closing before they will lend you your money.  Be sure to shop around for quotes, as the costs can varying considerably from one company to another.

Arrange Movers

If you plan to hire a moving company, hire them well in advance.  Call a few moving companies and get quotes and to make sure they are available to move you that day.  You could also rent your own truck and get your family and friends to help.  Just make sure to have a moving plan in place.  Plan your moving day to be the day after you take possession, if that is possible, as you may not get your keys until late afternoon on the day of closing.

Utility/Oil Companies

– At least a week before the day of closing you must contact the Power Company and/or Oil Company  to set up an account for the utilities to be switched over and billed in your name.  It’s usually scheduled to be switched the day of closing.

7 Days prior to closing 

Contact your lawyer to make sure there are no issues or hickups anticipated for closing.

Arrange a time to meet with them to sign any necessary deeds or mortgage documents.  This meeting is usually one day prior to or on the day of closing.  But it’s good to touch base and have all that arranged in advance instead of waiting for them to contact you.   You may be required to bring them a check or money order for the closing costs and or down payment. They will advise you on that also.

The Day Of Closing

-On the morning of closing you will meet with your Realtor at the home and do your final walk through.  This is to ensure that the house is in the same condition as it was at the time of your original offer and any items you asked to remain have been left plus confirm that any items you requested to be corrected from the home inspection has also been completed.  After your walk thru, and if all is satisfactory, you then contact your lawyer to advise them that everything is good to go and they will then arrange for the transfer of the funds.

-You will receive the keys and be granted access to the home once the seller’s lawyer receives the funds from your lawyer.  The money transfer usually takes most of the day, so it may be late afternoon before you get the keys to your new place.  So if possible plan your moving date for the following day after you take possession.

 I know all this might seem overwhelming….but it’s not once you get started.   Just take it step by step and you will conquer it!

Facing a foreclosure is a very stressful process that any homeowner could go thru. Knowing your options and getting the right people to help you can make all the difference in eliminating some of that stress.

There are many possible options to avoid losing your house. Some of these options could be refinancing the loan and reduce the interest rate for a lower mortgage payment, or you can get a longer loan term. Sometimes you can talk to your lender and they can even adjust the loan amount you owe but sometimes you may just have to walk away from your home. When you have run out of options dealing with the bank and you can’t reach a solution you may be facing a foreclosure. It is important to get informed and work with the right people to hep you avoid the foreclosure.

Here is short interview with my friend Matthew Merenoff from Real Estate Recovery group, where we talk about foreclosures and short sales.

A house is a building that a family lives in. A home is that house where that family makes long lasting special memories.

Our family loves to find any excuse to get together and on most holidays our houses are filled with 20 or 30 family and friends.

Let me share a special moment when my house became a home.

We decided to make a typical South American dish called Tamales. It is a corn based dough with seasoned pork and vegetables that is wrapped in banana leafs. You can find a similar recipe HERE.

The procedure is rather long and time consuming but it is usually done with the help of the whole family. In our case only my mother is considered the expert in making Tamales. We decided to have my mother share her recipe and teach it to everyone in the family, including the little ones as young as 5 years old.

My memories of this event includes my brothers making fun of me because I made some tamales with duck instead of pork, My aunt Connie working hard mixing that huge pile of dough, The little cousins making dough balls for the individual tamales, the 2 family dogs, Max and Panda running around the house chasing each other, the different shapes of everyone’s tamales, but more importantly everybody was involved in the tamale making activity.

The next day when I was looking at all the pictures that we took of the whole family involved in the event is when I realized that the kitchen and my house became a place where the family is making lasting memories. That’s when those rooms in my house becomes a magical place called HOME.

On my last meeting with a seller, I was asked what could go wrong with the process of selling their home so I wanted to write down a few of the most commons issues in a real estate transaction.

As a buyer or seller you have to realize that not every deal is going to go smooth and could possibly not make it to the closing date. There are many ways that the transaction could go wrong and it may be the fault of the real estate professionals, the mortgage professionals, the buyers, the sellers or a combination of them all.

Let’s look at a few of those issues;

Real estate agent is not organized: The real estate agent needs to follow up with other professionals involved in the deal. These professionals could be the attorneys, home inspectors, appraisal inspectors and mortgage brokers. An organized and competent real estate agent will make sure to follow up with attorneys to make sure all documents are being reviewed on time. The agent needs to be able to negotiate through inspections and appraisals.

An interested buyer puts in an offer but he/she has not been pre-approved for a mortgage: This could delayed the transaction and in many cases the buyer finds out that he/she can’t afford the property. This is why is important to get a pre-approval from a reputable bank or mortgage broker. A seller would be wise to prioritize offers from buyers with a strong pre-approval letter.

The inspection report is showing many issues with the home: Some buyers have high expectations on the home and when they receive all the findings on the inspection report they may want to cancel the deal. All houses has problems and every house is right for the right person at the right price. A Home inspector is doing his job to report everything he sees wrong with the house but he should also need to have a conversation with the buyer and explain all the issues. The real estate agent should also be trained to have that conversation with the buyer and point out the positive features of the house.

Bank appraisals issues: For a buyer who is looking to get a loan then the bank appraisal should be in line with the bank guidelines. Many times the seller and buyer will come into an agreement if the appraisal is too low and within a couple of thousands dollars.

Issues with closing documents: Just before closing, there are many documents that need to be reviewed by the buyer, the seller and the banks attorney. Some issues with the documents may be with the title of the property and these need to be resolved before the closing. Some of the issues could be a outstanding liens, bankruptcies and/or public record errors.

It is important to know that real estate deals can fall through. Some of these issues are controllable and as a seller or buyer of a property you should set realistic expectations.

I wanted you to be the first to know about an exclusive offering for my clients!  Whether you’re looking to sell or buy this year, this offer will benefit you!

Gary Keller, the co-founder of Keller Williams cares so much about his agents’ businesses that he created a company for our benefit!   Keller Mortgage is a residential loan company that gives my agents the ability to purchase their new home with $0 in lender fees, appraisal ordered day 1, $1,000 credit at closing to put towards any closing expenses & really, really competitive interest rates!

The company was created so that I could add value to the experience of working with me!  I knew you’d be as excited as I was to hear this information!  Referring me to your friends, family & co-workers just got even better!  Now, they receive the expertise and care that I provide standard plus a financial gain on the lending side!

If you haven’t already downloaded my app, please do so by clicking here http://app.kw.com/KW2KOPKQB.  This is a great tool that provides you with up-to-date information on the market and also contains the ability to apply for this great financing offer right from the app!  Even better is that a Keller Mortgage representative will call you within 5 minutes after submitting your application (up to 8 p.m.).  If you know of someone who is thinking about buying, selling or investing this year please share my app with them too!