These days most people start their home buying search by looking at sites such as Realtor.com, Zillow, or Trulia. That’s completely understandable, but when you are ready to move beyond the searching phase to the purchasing phase, the first thing to do is hire a Realtor to represent you and advocate on your behalf.

Search engines are fun while you are looking, but tedious when you’re seriously trying to find your next home. The sites aren’t 100% accurate, because listings that were never in the BLC (Broker Listing Cooperative), such as pocket listings or For Sale by Owner properties, will be missing. Sites aren’t always up to date, either. A property might show as still ‘Active’ on Zillow, even though it sold months ago.

Find a Realtor

How do you find a good Realtor? Hopefully, you’ll connect with me so we can see if we would be a good fit. Remember, not all Realtors are right for all people.

You need to find someone who is not only great at his or her job but someone you like and trust, as you’re going to be spending a lot of time with that person.

First, see if you click. If so, you need to determine if that person has the experience, customer service skills, and understanding of the market that you’re looking for.

Notice how quickly each Realtor responds to your initial phone call or email. The Realtor should get back to you within 24 hours; if not, that’s a bad sign. This business moves fast, and deals can fall apart if your Realtor doesn’t respond quickly on your behalf during negotiations.

Second, understand how to work with a Realtor. See Working with Real Estate Agents.

Third, expect to sign a buyer representation agreement. Legally, before you disclose confidential information to your Realtor, you should have a signed buyer representation agreement. It helps to ensure that your private information will be kept confidential.

So, let’s get together and have coffee and chat!

So, You’ve picked ME as your Realtor…Yey!

Now what?

Now we need to get you ready and able to buy a home. This involves:

Paperwork!

Buying a home involves a lot of paperwork. But don’t worry, you picked the right agent when you hired me.

I will introduce you to a unique solution called dotloop. It is an online workspace that connects everyone and everything needed to complete a real estate transaction in one place. dotloop allows us to edit, complete, sign, and share documents without ever needing to print, fax, or email. It helps us eliminate actual paper and keep your transaction organized. We save all the documents there, and you will be able to see the process in action while I do the work.

You will create an account and will be able to fill out all the forms needed, from the convenience of your phone, tablet, or computer! You can also sign all of them in a secure and verified way.

It will speed up the process of buying a home by giving you the ability to make an offer the moment we find THE ONE and any other document that will need your approval and signature from there.

Pre-approval

As Realtors, we won’t put an offer on a house for a client unless he or she has been preapproved.

Without a pre-approval, the seller does not know if the offer is financially reliable. In addition, it’s essential that you have an understanding of how much you can comfortably afford to spend on a home, what your monthly payments will be at various price points, what interest rate you qualify for, and how much you’ll be paying each month in taxes, homeowner’s insurance, etc.

The Mortgage Underwriting Approval Process is an article that I highly recommend all buyers should read before applying for a mortgage.

Having the right mortgage lender is a crucial part of ensuring a smooth transaction. Working with a bad mortgage lender can make the process a living hell for everyone involved and put your purchase in jeopardy of not closing on time or at all. You could lose out on your dream property because your mortgage lender was disorganized and couldn’t get you fully approved during underwriting. Shop around to compare lenders. It’s important to work with the best.

Our Recommended Lenders:

Sue Vyzral
Hallmark Home Mortgage
317.694.1285
svyzral@1hallmark.com

Nick Claghorn
AnnieMac Home Mortgage
317.625.1206
NClaghorn@annie-mac.com

Janai Santana Roberts
Elements Financial
317.341.4925
jroberts@elements.org

Paperwork You Need to Gather

Each lender has slightly different requirements regarding what documentation they need from you for the pre-approval process, but in general, expect to provide the following items:

• A completed application. The lender will give this to you directly.

• The two most recent months (or a quarterly statement) for any assets listed on the application. Generally, checking, savings, 401k, mutual funds, individual stock accounts, IRAs, etc.

• Your most recent paystub

• Past two years of W2 forms

• Past two years of Federal Tax Returns

• Past two years of Corporate Tax Returns (if self-employed and you own over 25% of the company)

Getting a Pre-Approval Letter

Generally, once you submit the above items to your lender, you should receive a pre-approval letter within 2-3 business days. The lender may ask for additional documentation. They are not trying to be difficult by asking for additional documentation. After the housing bubble burst, underwriters became much stricter regarding the loan approval process, so a lot more documentation is needed today than it was 10 years ago.

In addition to receiving a pre-approval letter, which shows the amount of house you can afford, you should ask your lender how the preapproval amount breaks down in terms of a monthly mortgage payment plus any PMI, taxes, and insurance. That way you can make sure you are comfortable with what your monthly housing payment will be. Once you’ve received your pre-approval letter, forward it to me for your file so we can have it when we are ready to submit an offer.

Get a Loan Estimate and Understand Your Closing Costs

Also, mortgage lenders are required to provide you with a Loan Estimate (LE) within 3 days of receiving your pre-approval. The LE provides an estimate of the closing costs you’ll need on top of your down payment and shows exactly what fees the mortgage lender is charging you. Make sure you understand these fees.

Generally, we estimate closing costs to be approximately 2.5% of the purchase price of the property. Your mortgage lender will provide you with more detailed estimates based on your exact pre-approval amount. Remember, closing costs are due at closing (except for the appraisal and inspection fees, which are due on the day those services occur) and are on top of your down payment.

So, say you’re buying a $500,000 property and putting down 20%. You’ll need to have $112,500 cash available at closing ($100,000 for your down payment and approximately $12,500 for the closing costs).

Should You Shop Your Loan Around?

Absolutely! Every lender charges different fees and interest rates, so it’s crucial you shop your loan around to at least two lenders. We recommend waiting 2-3 weeks between meetings with lenders as the lender will need to pull your credit report to give you an accurate pre-approval letter. If your credit is pulled by various lenders in the same week, it could affect your credit rating by a few points. If you wait a few weeks, it generally won’t affect your credit rating at all.

The 80.10.10 Rule

At this point, you’re probably excited and full of optimism. You’ve gotten pre-approved and have (hopefully) started to complete the Buyer’s Questionnaire. Now comes the most important step: finding the right home.

I will have set you up for automatic search via the BLC (Broker Listing Cooperative). Each day (or however frequently you want to receive the search results) you’ll be emailed new properties on the market matching your criteria as well as any price drops on homes that were previously over your budget. This is a HUGE time saver. And if you’re in a market like Indiana, where great properties sell in a matter of days, it can be an enormous advantage to be able to get in and to see a property within a day or two of it going on the market.

Before we start, what is the 80/10/10 rule? No home will be perfect but thinking through the process I’ve outlined below will help eliminate homes that simply will not work for your family. However, once we begin looking at homes, I want you to think about them in this way:

• Does this home meet 80% of my needs?

• Can I change 10% to make the home meet 90% of my needs?

• Can I live with the remaining 10% I cannot change?

Now make a list of your top 4-6 needs and a list of your top 4-6 wants. Examples of needs are:

• 3 bedrooms (because we have 2 kids that will fight and drive us crazy if they have to share a room)

• In a certain school district/s

• Yard for the dog (because you’re sick of walking the dog in the dead of winter)

• Central AC (because the kids are driving you crazy complaining about the heat)

• Updated and move-in ready (because you don’t even own a hammer)

These are the things you absolutely cannot live without. You won’t even see a property unless it has every one of the above items.

Then, make a list of your wants. Examples of wants are:

• Hardwood floors throughout

• Ensuite master bathroom with double sinks

• Updated kitchen with granite and stainless steel

• Wood burning fireplace

• Rainbows over the home, flying unicorns, and pots of gold in every room

These are the things you’d really like but can live without if needed (unless your budget is $40 million, then we can probably find something with everything on your list).

Once you’ve made your lists, share them with me. That way when you see a property on the BLC that you love with the kitchen of your dreams, but I notice that it doesn’t have central AC, we won’t waste time seeing it.

When the email of listings comes, I need you to:

1. Review all of the properties sent to you that day. Hover over the shaded heart to mark properties you want to see as ‘Save as Favorite’. That tells me to schedule that home for you to view. Properties you want to think about longer, mark ‘Save as Possibility’. Properties you definitely don’t like mark as ‘Discard Listing’. If you have any questions about a particular property once you click on the address to bring up more information, write those questions in the ‘Notes for you and your agent’ located under the pictures. I’ll monitor those sections and will get answers back to you.

2. I’ll then ask that you select your top four or five properties. If time permits drive by the properties to look at the neighborhood, checking for anything undesirable. Eliminate any homes you no longer want to see. Don’t have time for a drive-by? Consider Google Maps instead.

3. Shoot me a quick text or email letting me know when you’re available. That way I can set up the showings.

4. NOTE that during the spring and summer, great properties sell in 3-4 days. It’s important that you review the BLC email daily so we can jump on a great property as soon as you see it.

5. I’ll bring printouts for each property so no need for you to bring anything other than snacks or drinks if you think you might get hungry.

While you’re looking at the BLC feeds each day I’ll also be networking with our contacts to find you homes, before they go on the market.

At this point, there should be no further need for you to look on Zillow, Trulia, etc., as all of those properties should be showing up in your BLC feed. If needed, we can fine-tune the search parameters of your BLC feed so you will only receive the listings that really get your heart fluttering!

Now on to the showings!