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. They don’t tend to be accurate or up to date. Those searches are actually advertising portals made to sell ad space, not be an active Realtor portal that provides the most accurate and up to date information.
A Realtor can set you up for automatic search via the BLC (Broker Listing Cooperative). This means that each day (or how often you want to receive the search results) you’ll be emailed a list of all new properties matching your criteria or price reductions which now put a property in 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.
So, how do you find and pick a Realtor?
Well, hopefully you’ll contact me at 317-413-1360 or LeeAnnBalta.com so we can meet for coffee to see if we would be a good fit together. 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, as you’re going to be spending a lot of time with that person. See if you click. If so, you need to determine if that person has the experience, customer service and understanding of the market that you’re looking for.
Start out by noticing how quickly the Realtor responds to your initial phone call or email. If the Realtor doesn’t get back to you within a maximum of 24 hours, that’s a bad sign. This business moves fast and deals can be lost if your Realtor doesn’t respond quickly on your behalf during negotiations.
Second, understand how to work with a Realtor: 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. That helps to ensure that your Realtor will keep private information confidential.
So, let’s get together and have coffee and chat!
Have any questions?
Call or text: 317.413.1360
email me: LeeAnnBalta@C21Scheetz.com
So, You’ve picked ME as your Realtor…Yey!
Now we need to get you ready and able to buy a home. This involves:
Buyin a home involves A LOT of paperwork. 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 the paperwork and to 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 all of the forms needed, from the convenience of your phone, tablet or computer! You could also sign all of them in a secure and verified way.
It will speed up the process of buyin a home, by giving you the ability to put an offer the moment we find THE ONE, and any other document that will need your approval and signature from there.
As Realtors, we won’t put an offer in on a house for a client unless he or she has been preapproved.
Without a pre-approval, a 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 as certain price points, what interest rate you qualify for, and how much you’ll be paying each month in taxes, home owner’s insurance, etc.
The Mortgage Underwriting Approval Process, it’s an article that I highly recommend all buyers 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 might end up regretting the lender you chose for years if you end up paying a higher interest rate than you should have if you had shopped your loan through various lenders. You could also lose out on your dream property because your mortgage lender was disorganized and couldn’t get you fully approved during underwriting, etc. That’s why it’s important to work with the best. We recommend:
Our Recommended Lenders
Paperwork You Need to Gather
Each lender has slightly different requirements regarding what documentation they need from you for the preapproval 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) of any asset information listed on the application. Generally: checking, savings, 401k, mutual funds, individual stock accounts, IRA’s, etc
• The most recent month of a paystub
• Past two years’ worth of W2 (i.e., 2017 and 2018 W2)
• Past two years’ worth of US Tax Returns (i.e.. 2017 and 2018 Federal Tax Returns)
• 2017 and 2018 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 you can afford to purchase, you should ask your lender to show you what that preapproval amounts into 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 at that pre-approval letter. 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 can provide you with more detailed estimates: based on your exact pre-approval price. Remember, these 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.
Therefore, if you’re buying a $500,000 property and putting down 20% towards the loan 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 different interest rates, so it’s crucial you shop your loan around to at least two lenders, in my opinion. We recommend waiting 2-3 weeks between meeting 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 by a few points. If you wait a few weeks between having your credit pulled it generally won’t affect your credit at all.
Have any questions?
Call, text: (317) 413-1360
email me at LeeAnnBalta@C21Scheetz.com or
The 80.10.10 Rule
At this point, you’re probably excited and full of optimism. You’ve gotten pre-approved, your Buyer’s Questionnaire printed out and have (hopefully) started to complete it. Now comes the most important step. Finding the right home.
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 and they 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. Get it?
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 you love with the kitchen of your dreams, we can remember that it doesn’t have central AC so we don’t waste time seeing it. Once that’s done, I’ll set you set you up for auto search on the BLC (Brokers Listing Cooperative). This means that you will receive an email as new properties that come on the market matching your criteria as well as any price changes which put homes in your budget that were previously over your budget. It’s the best way to find a great home in Indy.
When the email comes in I need you to:
- Check the BLC to review all of the properties sent 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 when we schedule a time to see homes. Properties you want to think about longer ‘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 to those questions to you.
- I’ll ask that you select your top four or five properties as your favorites; keeping the others as ‘Possibles’ or ‘Discard Listing’. When we look at homes, I’ll schedule your favorites and we should intend to make an offer. Note: If time permits drive by the properties to look at the neighborhood; checking for anything undesirable. Eliminate homes by driving by. Don’t have time? Consider Google Maps for undesirable buildings or structures nearby.
- If there’s something you want to see, shoot me a quick text or email letting me know when you’re available and what you want to see. That way I can set up the showings. Remember, some properties require 24 hours’ notice for showings or need time to prepare for a showing, but I will always my best to set a showing scheduled. Also, properties are usually available to be seen Mon – Fri from 9 am – 7:30 pm and Saturday and Sunday from 10 am – 6:30 pm. Sometimes sellers will allow us to view a property outside of those hours, but it’s up to the individual seller. Also, during the spring and summer, great properties sell in 3-4 days so it’s important that you review the BLC email daily so we can jump on a great property as soon as you see it.
- Tell me when you are available. I’ll set up the showings and email you where we are meeting and when.
- Remember to wear comfortable slip on shoes for showings as we’ll generally need to take them on and off at each property.
- 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 our contacts to find you homes before they go on the market.
At this point there should be no need for you to continue to look on other sites such as Zillow, Trulia, etc. as all of those properties should be showing up in your BLC feed. Let when you can’t see one. We can tweak the search parameters of your BLC feed.
Now on to the showings!
Have any questions? Call or text or email me at: LeeAnnBalta@C21Scheetz.com or (317) 413-1360
You’ve found properties on the BLC you’re interested in seeing, We’ve set up your showings and we head out soon to see them!
Before we head out here are a few important things to know:
- Most sellers require you are pre-approved before being able to see their home.
- Sellers put limitations on showings such as no showings after 6pm or on Sundays, etc. Ideally, we will schedule our showings a day in advance to give Sellers ample time to prepare.
- Wear comfortable slip on shoes as we may be asked to remove our shoes in some homes.
- If a lot of sunlight is important to you in a home, then try to do showings during daylight hours.
- Dress for the weather. The walkway or driveway may be snowy, icy, muddy, etc. The house may or may not have AC or heat.
- Vacant houses may not have any utilities turned on.
- Don’t assume we’ll be able to use the restroom so plan accordingly.
- Focus on the property not their furnishings, artwork, etc. as you’re buying the property not their stuff.
- Avoid touching furniture or personal items as we don’t want to be responsible should something break.
- Remind children not to play with the toys and things they see in the house.
- The home inspection comes AFTER a contract is agreed upon and signed by both the buyer and seller. During a typical showing we should not be in the crawl spaces, attic, etc.
- Some sellers will have Nanny Cams in their homes so be aware of what you say and do. Don’t talk about how much you can afford, what kind of offer you want to make while in the house, in case someone is listening.
- If sellers are home, be careful not to give too much away about yourself and why you’re buying as that information could hurt us later during the negotiation process.
- Bring drinks and snacks as looking at lots of homes can be grueling!
Generally, the day before we are scheduled to look at homes, I will email you the route so you will know where we are meeting and when.
Now let’s go see some homes!
Have any questions? Call, text or email me at: LeeAnnBalta@C21Scheetz.com or (317) 413-1360
A home warranty is not the same thing as homeowner’s insurance, nor is it a replacement for homeowners’ insurance. Homeowners insurance covers major perils such as fires, hail, property crimes, and certain types of water damage that could affect the entire structure and/or the homeowner’s personal possessions. On the other hand, a home warranty is a separate contract covering repairs and replacements on systems in your home. Usually, it covers for a period of one year. New construction that has never been lived in, the builder should give you a one-year warranty and after that, the home warranty kicks in for a certain amount of time.
What does a home warranty usually cover?
Policies differ based on which company your warranty comes from. In general, a home warranty will cover your home’s appliances and systems such as electrical and plumbing. The home warranty usually does NOT cover exterior issues such as the roof, water intrusion due to a roof issue, fencing, decking, landscaping, etc. The cost and coverage of a home warranty can vary widely; always compare policies before purchasing.
In general, warranties usually range between $425 – $700 and are good for one year from the purchase date. Also, while home warranties cover many of your new home’s crucial systems and appliances, those items must be in working order before the contract. When you buy a home warranty, consider premium and optional coverage to customize the plan to fit your needs, especially if your home has more than one oven, dishwasher, a wine fridge, etc. These extra appliances may not be covered under the standard warranty.
Who pays for the home warranty?
That depends. Sometimes we negotiate for the seller to provide a home warranty as part of the contract negotiations. In that case, the home warranty would be provided and paid for by the seller. You’ll then receive the details of the home warranty at the closing. If we did not ask for a home warranty as part of the contract, then you need to decide if you want to purchase one separately.
How much does a home warranty cost?
The cost depends on several factors, such as how old your home is, how big it is, and what you want covered. Usually the cost is between $500 – $1,000. When something breaks, and the company sends someone, there is usually a service fee call of approximately $75 per trip. With most warranty programs, there are no additional fees to repair an item beyond the service fee call.
What if an appliance can’t be repaired and needs to be replaced?
The home warranty company will try repairing the item first. If that doesn’t work and the appliance needs to be replaced, they will usually replace it with a model that has similar features. For instance, if you have a fridge that has an ice machine and a water dispenser, you’ll get one with the same features. However, it most likely won’t be the same brand. For instance, American Home Shield normally replaces all appliances with a GE brand. Therefore, if you have a Subzero fridge, you’re most likely not getting another SubZero. Instead, you’ll get a GE fridge with similar features. If you really want a Subzero, most warranty companies will give you the cost of the GE fridge in cash and you can put it towards purchasing the Subzero on your own.
Where can I buy a home warranty?
If the seller is not providing you with a home warranty and you want to purchase on I will order one through HSA Home Warranty to begin the day of closing.
When a home warranty is understood and utilized for its intended purposes, it saves on home repairs and reduce the extra stress that comes with buying or selling a home.
Have any questions? Call, text or email me at: LeeAnnBalta@C21Scheetz.com or 317.413.1360
You’ve found the perfect backyard and want to put in an offer.
In today’s market we need to put your offer in asap; ideally within a few hours. Before we can put an offer in on a home, there are a few things you need to know:
Full legal name: Please email us the full legal name of anyone who will be on the contract as well as their phone number and email address.
Offer price: What price do you want to offer for the home? Let’s have a discussion about the sale to list price in the neighborhood. It will tell you a lot about whether you should expect to pay below asking price, asking price, or above asking price based on today’s market.
Your walk away price: Don’t expect to pay your initial offer price as it’s rare for a seller to accept your initial offer without some negotiating back and forth. That’s why it’s called an initial offer. In addition to deciding what offer you want to put in to start, we need you to decide now how much you’re willing to pay for this property and what your walk away price is before thing get heated and emotional.
Closing date: Typically in Indiana, closing takes place 30 days from contract acceptance. Sometimes you can ask for a longer closing date depending on the seller’s needs, but we wouldn’t expect it. Therefore, if you want to move around July 1, plan on putting in offers at the beginning of June.
If you’re paying 100% cash you can often close faster than 30 days (around 21 days), but 30 days is usually the required minimum if you’re using a mortgage to buy the property. If you are down payment assistance, we’ll likely 45 days as there are typically more details to address.
Earnest money: How much earnest money are you comfortable putting down on this property? Typically, contracts in Indiana ask for 1% of the purchase price as earnest money. This earnest money is due in two days. The earnest money is part of your down payment. For example: if you’re planning to put $40,000 for a down payment and you’re paying $15,000 in earnest money, at closing you would owe an additional $25,000 for the remainder of the down payment.
Down payment: For the contract, we need to know how much you’re going to put down for your down payment.
Closing cost credits: Do you want to ask for any credits for closing costs? It would go towards the amount of closing cost fees you have to pay for, on top of your down payment.
Home warranty: Do you want to ask the seller to provide a home warranty on the property?
Contingencies: Any other contingencies we need to be aware of? Do you need to sell your current home before we can buy this home?
Lastly, buyers sometimes want to know what happens if the contract is accepted and they have a change of heart or the inspection reveals a huge problem. If the inspection reveals a huge problem (aka Defects) I can help you navigate through that for a reasonable outcome (lines 214 through 223 of the Purchase Agreement for an explanation of Defects and how to handle them). If it’s a change of heart you must consult a Real Estate Attorney for advice.
Want to review the contract in advance? Review the Indiana Purchase Agreement
Congratulations on having an accepted contract on a house. Until we have an executed contract (which means everything has been signed by both the sellers and the buyers) we do not have an enforceable contract. That is why it’s urgent that a signed contract be received by all parties asap and within designated timelines. Once a signed contract is received, several things need to happen:
- The contract needs to be sent to your mortgage lender. If I am your Realtor, I’ll take care of this. This lets your mortgage lender know that you’re under contract and starts the process for getting you approved for the mortgage (remember, right now you’re only pre-approved). Be sure to respond promptly to your mortgage lender. They will ask you to fill out a lot of paperwork. Some mortgage lenders joke it’s like getting a financial colonoscopy. Unfortunately, it’s not optional; it’s required and the quicker you can fill it out and get it back to them, the better. Read Things Not to Do.
- Schedule the home inspection, do it as soon as possible.
- Write and drop off the earnest money check. Send me a picture of your check so that I may track it internally. The earnest money check is made out to the seller’s agent’s brokerage and is in the form of a personal check. It should be dropped off at the seller’s agent’s office within 2 business days of contract acceptance. I will provide you with this information.
After the above items have been done, I’ll email you every few days with an additional next step. Think of it as our friendly way of giving you homework to ensure a smooth transaction and to help you make sure everything gets done on time.
Have any questions? Call or text or email me at: LeeAnnBalta@C21Scheetz.com or 317.413.1360
Once we’ve negotiated the Purchase Agreement, you will need to schedule your home inspection as soon as possible. Ideally, the inspection should occur within the next 2-3 days, however, during the busy summer months, inspectors may be booked out up to a week or more in advance. It’s important that the home inspection occur quickly as it often takes the inspector 1-2 days to write the report after the inspection. Once the report is written we still need some time to review the report and ask the seller for any credits or repairs before the inspection period ends, which is expressly spelled out in our purchase agreement, but usually within 10 days.
Plan to attend the inspection which takes approximately 2 hours for a condo and 3 hours for a single-family home. Inspectors usually only work Mon – Fri and do not work evenings or weekends so you will probably need to arrange to be off work for the inspection. Wear comfortable clothes which can get dirty as the inspector may want to show you something in the basement, on the roof, etc.
Your inspector will schedule access to the home through Centralized Showing Services which obtains approval from the Sellers. While your inspector is inspecting the home, you have an opportunity to measure windows and spaces, get to know the home, and make plans. There is a verbal inspection summary at the end of the inspection. Inspectors appreciate this time with you sharing their findings and answering your about the home, so please ask questions! The inspector will follow up with a detailed report that includes pictures of their findings. This report allows us to negotiate failed inspection items with the seller to repair.
You may choose any inspector, but here are a few companies we trust.
- Heartland Housemaster
Phone (317) 209-9100
- Pillar to Post Home Inspectors
Mobile (317) 550-4044
- Nova Home Inspections, Inc.
Phone (317) 535-2555
Plan to bring your checkbook or credit card to the inspection to pay the inspector.
Have any questions? Call or text: 317.413.1360 or email me at: LeeAnnBalta@C21Scheetz.com
This is very important so please read and take heed!
Your mortgage pre-approval was granted to you based on the amount of money you had at the time of the pre-approval in your savings accounts, checking accounts, retirement accounts, etc. and was based on the amount of debt you had at the time (car payments, student loans, your current mortgage if you already own a home, etc).
If you go out and buy a TV, a new car, new furniture, etc. between now and closing it could put your chances of being approved for your mortgage in jeopardy as THE LENDER PULLS YOUR CREDIT ONE MORE TIME THE DAY BEFORE CLOSING. Therefore, it is imperative that you spend as little money between now and your closing date as possible.
In addition, be sure to pay all of your monthly bills on time going forward. Don’t open or close any credit cards, don’t take extravagant vacations, don’t pay off any debts. Often buyers think it won’t make a difference if they buy a couch, new TV, etc and charge it to their credit card, but it very well could put your loan in jeopardy.
See Things Not to Do. So please do not buy ANYTHING big until after closing.
Then go wild!
If in doubt as to whether a potential purchase will affect your ability to obtain a mortgage, please speak with your mortgage lender.
Have any questions?
Call or text: 317.413.1360
Email me at: LeeAnnBalta@C21Scheetz.com
Schedule the Closing On Your Calendar
Now that you have an executed contract, it’s important to schedule the closing on your calendar and arrange to take the day off from work.
Here are a few things to know about your closing date as specified on your executed contract:
- It could change. While we hope closing occurs on your closing date, there are many factors which could cause it to be pushed back, such as a tight time frame for closing (anything 30 days or less) causing the mortgage company to need more time, etc. However, for planning purposes right now, count on your closing date being the final date.
- Closing generally takes place at a title company. On average closing takes about an hour. Title company’s work banking hours. We can schedule on the hour from 9:00 am with the last closing at 4:00 pm.
- While I aim us all towards a location and time, nothing is firm until your mortgage officer gives us Clear to Close (CTC), meaning you’ve been completely approved for the loan without any conditions. This generally occurs 3 days to one week prior to your closing.
- It’s best if you attend the closing in person, however, if you can’t be there that day, notify me, your mortgage lender, and the title company. That way the title company can create a Power of Attorney (POA) so you can skip the closing. This needs to be done at least two weeks in advance of closing as your mortgage officer needs to review and approve the POA, you need to have it signed and notarized and get the original signed paper copy back to the title company at least one day before closing. In addition, write a letter explaining why you can’t attend the closing. Attend closing, it’s important you understand the closing documents, when your first mortgage payment is due, how you make your first mortgage payment, etc. All of that will be explained at the closing.
- The day prior to closing you will need to wire transfer your down payment and closing costs to the title company (anything over $10K). The wire instructions for this transfer will come from the title company. Do not follow anyone else’s instructions unless it comes directly from them. There are many scams out there targeted at buyers where scammers will email you fake wire transfer instructions in an attempt to steal your money. Therefore, it is imperative that you only follow instructions sent from. At the end of closing you will receive a refund check for the overage amount which you will take with you when you depart.
- If you are planning to move into your new home on the day of closing, schedule the move for at least 1 – 2 hours after closing ends, if possible. Legally you can’t move into the house until the end of closing once the bank funds the loan and transfers the funds to the seller.
- At the very end of closing, you will receive the keys to your new home!
Have any questions? Call or text: 317.413.1360 or email me at: LeeAnnBalta@C21Scheetz.com