INFO FOR BUYERS & SELLERS
| Northstar Group Realty CRS, GRI co-huds.com 303-257-8000 |
| Northstar Group Realty www.co-huds.com Direct: 303-257-8000 Fax: 720-596-5555 Email: mike1realtor@msn.com |
How does one go about Buying a Home?
Well, there are several steps involved in purchasing a property, from wishing to closing.
It may go smoothly without a hitch, or the process could pose problems and obstacles
every step of the way. It could take just hours or days, or weeks and months. (Yikes!).
Our job as Real Estate Broker is to represent your interests & motivations above all else
and help guide you through all the steps along the way, making sure you get the
property, the loan and the terms you want as smoothly as possible.
[1] Get Prequalified
This is the first step. This involves talking to several Lenders or Mortgage Brokers and
getting them to tell you how much you can afford to pay for a home, both in sales price
as well as monthly mortgage payments. The first thing they will do is pull your credit
report and see what type of Borrower you may be, from excellent credit risk to poor.
See our link on the page titled "About Credit." They will also interview you about your
income, liabilities, debt, taxes, employment history, and other relevant information.
That information will be input into a computer which will find the best program for your
scenario, which will then spit out a value for a purchase price or a monthly payment that
a Lender SHOULD approve you for.
NOTE: Click on the buttons on the page titled "Calculator" and you can do your own
rough prequalification to see what payments you can afford, or given a specific
payment, what purchase price you are looking at.
If you do not know a good Lender we have several that we work with on a regular
basis that we have found give the clients the utmost honest & ethical representation
that we demand.
[2] Shop around
Talk to several Lenders and compare rates & terms. This is also covered on the page
called "Types of Loans." Choose a program that best suits your needs & objectives.
Evaluate rates, terms, origination fees, points, prepayment penalties, etc.
[3] Find a Home!
Here is where we come in! We will sit down with you and find out what is the amount
the Lender prequalified you for. Then armed with this information we will ask you to
give us your "wish list" and put down on paper all the criteria you are looking for in a
home. Then we will set out to enter that information into the MLS (Multiple Listing
Service) and find you the best possible home for your budget! Often we will go out first
and "preview" properties that meet your criteria then if they actually appear as good in
reality as they do on paper, we will take you out to see them for yourself. We want you
to find the best value for your money and the perfect home for all your needs. After all,
a home purchase will be one of the most significant decisions you will make because it
will be the greatest material asset you will own, as well as impact you for many years to
come in terms of community, relationships with neighbors, proximity to work and
recreation, who your children will meet at school, and many other areas!
[4] Lay an Egg--Submit an Offer
Now that you have found your dream home, we submit your offer and negotiate on
your behalf. The offer may be immediately accepted (HOORAY!), or there may be
several stages of counteroffers until an agreement is reached. When the offer is
accepted it becomes a CONTRACT. Now there are several things that happen once the
contract is accepted. Think of this process in terms of eggs. Placing offers are like
laying eggs. Acceptance of an offer and creating a contract is like fertilizing that egg.
Getting to closing is when the egg hatches and you have something brand new and
wonderful; however this is the most important stage of the process: getting what's
inside the egg to come to maturity through proper care & nutrition! Now lots of things
involving lots of people doing their jobs have to happen within a specified time to get
this beast to the closing table! Let's look at them:
The Incubation Process
Now is where everyone involved goes to work for you! Lots of things are happening all
at once. The signed contract is sent to you the Buyer, the Seller, the Realtors involved,
the Lender doing the loan and the Title Company that will conduct the closing, and
everyone gets to work!
[5-a] The Lender's Job
The Lender commences submitting your full loan application to the Underwriting
Department. They now ask you for all documentation, such as the past 2 years of tax
returns, W-2's, bank statements, verification of employment (VOE), verification of rent
(VOR), and anything else pertinent to you obtaining a loan. The Underwriting Dept. will
process all this information. Sometimes they will approve the loan without complication,
but most other times they will give what is called "Conditional Approval," or "Approval
with Conditions." Some conditions may include a past unpaid collection or debt be paid
before approval. Other conditions may include verification of cash deposits on hand,
ability to make payments, removal of a lien, payoff of a loan or credit card bill, proof of
funds on account, having the equivalent of 6 months of payments on hand in the bank
for the past 2 months (called "seasoning"), verifying job history for 6-12 months, or
many other things that will satisfy the Lender that you are a creditworthy borrower.
Then the Lender inputs all the charges required to buy the property, such as down
payment, loan payments, property taxes, insurance, interest, origination fees, points,
loan fees, etc. onto what is called the "Borrower's Statement" of all charges to the
Buyer, then sends that to the Title Company for closing. The Lender will also order the
property to be appraised by one of their in-house appraisers, to determine that the
property has the value stated on the contract. Then once all conditions are met the
Lender issues their final approval, called the "Clear to Close!" That means there are no
more obstacles and the Title Company may prepare the documents for closing.
[5-b] The Title Company's Job
The Title Company that will conduct the closing does a search on all the past owners of
the property for approximately the past 60 years. They prepare the Title Insurance
Policy that you will receive, insuring that you are buying "Good and Clear Title," to the
property, and making sure all claims, liens, encumbrances and any "clouds" or defects
are satisfied from any previous owners prior to your obtaining the Title. Then they
communicate with your Lender, the Seller and their mortgage company, the Realtors
and anyone else involved, receiving all the figures to be charged or paid off and input
them into the Settlement Statements to the Buyer & Seller. Then all parties involved
review them to ensure accuracy. If they are correct they sign them, usually 24 hours
prior to the closing date, and approve the closing.
[5-c] Your Job as Buyer
And you thought you could just sit by and let everyone else do your work for you! Once
you have your offer accepted & a contract is created, you have some things to do as
well:
As a security measure, there are several "outs" of the contract if you as Buyer cannot
perform your obligations, or if the property does not meet certain requirements. The
most common areas of relief are: Unfavorable inspection, failure to obtain loan
approval, the appraisal being less than contract price, failure to obtain Title Insurance,
failure to secure property Insurance, and unacceptable CCR's. If you notify the Seller
within the contractual deadlines then you can be released from the contract with full
refund of the earnest money deposit.
[5-d] Our Job as your Agent
The Colorado Contract to Buy/Sell Real Estate is 11 pages of fine print legal-ese. The
front page of the contract alone starts with a table of 25 very important dates and
deadlines that all must be met within a 2-3 week timeframe! Missing even a single date
or deadline could literally cost you thousands of dollars or even the house itself! It is
our job as licensed Brokers to guide you through this entire process, being diligent in
communicating with all these parties involved to ensure that everyone does their job in
a timely manner and that everything gets done properly to bring you to a successful
closing!
[6] Hatch the Egg!
Now that all the parties have performed their respective tasks, everyone breathes a
sigh of relief and heads over to the Title Company for the closing presentation. If
everything goes smoothly and all the figures are correct, the procedure should take
between 30 minutes to an hour. If there is a loan, there are actually TWO closings, the
loan and the property. This is still called "The Closing." Some possible common delays
are if even a single figure is incorrect on the Settlement Statement, they have to correct
and reprint them, which takes 10-15 minutes to do. Another is if the money being
borrowed is not wired into the Title Company by the wiring deadline to "fund" the
transaction. In that case the papers are signed, but the transaction is not really closed
until the next day, called "closing in escrow." Then the Seller gets their proceeds, the
Realtors get their commission, everyone gets their payoffs and you own the property!
The usual time from presenting an offer until closing is generally about 3-4 weeks,
although a cash deal will go in about half that time, and if the loan process is
complicated it could take weeks longer.
Documents needed for a loan application
There are several things the Lender or Mortgage Broker will ask you to bring in with you
when you get to the full-application process of obtaining a loan. If you anticipate a very
short time table it's an especially good idea to start digging these things up to be ready
to submit. Here are the main things you may need to have ready to bring in once they
obtain your credit report:
It pays to be prepared! If you don't have all these documents, ask the bank or
appropriate people to research and get you copies of what you need so your loan does
not delay. Missing a loan commitment deadline could cost you a house, and going
beyond your 30-day lock-in period for your interest rate could cost you tens of
thousands of dollars if rates increased since your application!
If you have any questions about any part of this process, please feel free to click on the
"Contact Us" button and we will respond to you promptly.
Well, there are several steps involved in purchasing a property, from wishing to closing.
It may go smoothly without a hitch, or the process could pose problems and obstacles
every step of the way. It could take just hours or days, or weeks and months. (Yikes!).
Our job as Real Estate Broker is to represent your interests & motivations above all else
and help guide you through all the steps along the way, making sure you get the
property, the loan and the terms you want as smoothly as possible.
[1] Get Prequalified
This is the first step. This involves talking to several Lenders or Mortgage Brokers and
getting them to tell you how much you can afford to pay for a home, both in sales price
as well as monthly mortgage payments. The first thing they will do is pull your credit
report and see what type of Borrower you may be, from excellent credit risk to poor.
See our link on the page titled "About Credit." They will also interview you about your
income, liabilities, debt, taxes, employment history, and other relevant information.
That information will be input into a computer which will find the best program for your
scenario, which will then spit out a value for a purchase price or a monthly payment that
a Lender SHOULD approve you for.
NOTE: Click on the buttons on the page titled "Calculator" and you can do your own
rough prequalification to see what payments you can afford, or given a specific
payment, what purchase price you are looking at.
If you do not know a good Lender we have several that we work with on a regular
basis that we have found give the clients the utmost honest & ethical representation
that we demand.
[2] Shop around
Talk to several Lenders and compare rates & terms. This is also covered on the page
called "Types of Loans." Choose a program that best suits your needs & objectives.
Evaluate rates, terms, origination fees, points, prepayment penalties, etc.
[3] Find a Home!
Here is where we come in! We will sit down with you and find out what is the amount
the Lender prequalified you for. Then armed with this information we will ask you to
give us your "wish list" and put down on paper all the criteria you are looking for in a
home. Then we will set out to enter that information into the MLS (Multiple Listing
Service) and find you the best possible home for your budget! Often we will go out first
and "preview" properties that meet your criteria then if they actually appear as good in
reality as they do on paper, we will take you out to see them for yourself. We want you
to find the best value for your money and the perfect home for all your needs. After all,
a home purchase will be one of the most significant decisions you will make because it
will be the greatest material asset you will own, as well as impact you for many years to
come in terms of community, relationships with neighbors, proximity to work and
recreation, who your children will meet at school, and many other areas!
[4] Lay an Egg--Submit an Offer
Now that you have found your dream home, we submit your offer and negotiate on
your behalf. The offer may be immediately accepted (HOORAY!), or there may be
several stages of counteroffers until an agreement is reached. When the offer is
accepted it becomes a CONTRACT. Now there are several things that happen once the
contract is accepted. Think of this process in terms of eggs. Placing offers are like
laying eggs. Acceptance of an offer and creating a contract is like fertilizing that egg.
Getting to closing is when the egg hatches and you have something brand new and
wonderful; however this is the most important stage of the process: getting what's
inside the egg to come to maturity through proper care & nutrition! Now lots of things
involving lots of people doing their jobs have to happen within a specified time to get
this beast to the closing table! Let's look at them:
The Incubation Process
Now is where everyone involved goes to work for you! Lots of things are happening all
at once. The signed contract is sent to you the Buyer, the Seller, the Realtors involved,
the Lender doing the loan and the Title Company that will conduct the closing, and
everyone gets to work!
[5-a] The Lender's Job
The Lender commences submitting your full loan application to the Underwriting
Department. They now ask you for all documentation, such as the past 2 years of tax
returns, W-2's, bank statements, verification of employment (VOE), verification of rent
(VOR), and anything else pertinent to you obtaining a loan. The Underwriting Dept. will
process all this information. Sometimes they will approve the loan without complication,
but most other times they will give what is called "Conditional Approval," or "Approval
with Conditions." Some conditions may include a past unpaid collection or debt be paid
before approval. Other conditions may include verification of cash deposits on hand,
ability to make payments, removal of a lien, payoff of a loan or credit card bill, proof of
funds on account, having the equivalent of 6 months of payments on hand in the bank
for the past 2 months (called "seasoning"), verifying job history for 6-12 months, or
many other things that will satisfy the Lender that you are a creditworthy borrower.
Then the Lender inputs all the charges required to buy the property, such as down
payment, loan payments, property taxes, insurance, interest, origination fees, points,
loan fees, etc. onto what is called the "Borrower's Statement" of all charges to the
Buyer, then sends that to the Title Company for closing. The Lender will also order the
property to be appraised by one of their in-house appraisers, to determine that the
property has the value stated on the contract. Then once all conditions are met the
Lender issues their final approval, called the "Clear to Close!" That means there are no
more obstacles and the Title Company may prepare the documents for closing.
[5-b] The Title Company's Job
The Title Company that will conduct the closing does a search on all the past owners of
the property for approximately the past 60 years. They prepare the Title Insurance
Policy that you will receive, insuring that you are buying "Good and Clear Title," to the
property, and making sure all claims, liens, encumbrances and any "clouds" or defects
are satisfied from any previous owners prior to your obtaining the Title. Then they
communicate with your Lender, the Seller and their mortgage company, the Realtors
and anyone else involved, receiving all the figures to be charged or paid off and input
them into the Settlement Statements to the Buyer & Seller. Then all parties involved
review them to ensure accuracy. If they are correct they sign them, usually 24 hours
prior to the closing date, and approve the closing.
[5-c] Your Job as Buyer
And you thought you could just sit by and let everyone else do your work for you! Once
you have your offer accepted & a contract is created, you have some things to do as
well:
- Submit an earnest money deposit of predetermined amount, to be held in escrow
until closing. All HUD homes only require $1,000 earnest money. - You should hire a Home Inspection Company to evaluate the condition of the
property. It is advised to never purchase a property without a thorough qualified
inspection! - Obtain an appraisal, which is generally arranged automatically by your Lender.
- Review the CCR's, Covenants, Conditions & Restrictions, if there are any. If it is a
condo or townhome there will be "Common Interest Community Governing
Documents as well, which will include the HOA (Homeowner's Association)
information, bylaws, board meeting minutes, financial statements etc. Why is this
a good idea? Because you may be buying a property where certain restrictions
apply, such as not being able to park an RV in back, or a vehicle unenclosed, or
have a shed, or the condo complex may have just voted an increase in dues or
assessed $3,000 each for a new roof!
As a security measure, there are several "outs" of the contract if you as Buyer cannot
perform your obligations, or if the property does not meet certain requirements. The
most common areas of relief are: Unfavorable inspection, failure to obtain loan
approval, the appraisal being less than contract price, failure to obtain Title Insurance,
failure to secure property Insurance, and unacceptable CCR's. If you notify the Seller
within the contractual deadlines then you can be released from the contract with full
refund of the earnest money deposit.
[5-d] Our Job as your Agent
The Colorado Contract to Buy/Sell Real Estate is 11 pages of fine print legal-ese. The
front page of the contract alone starts with a table of 25 very important dates and
deadlines that all must be met within a 2-3 week timeframe! Missing even a single date
or deadline could literally cost you thousands of dollars or even the house itself! It is
our job as licensed Brokers to guide you through this entire process, being diligent in
communicating with all these parties involved to ensure that everyone does their job in
a timely manner and that everything gets done properly to bring you to a successful
closing!
[6] Hatch the Egg!
Now that all the parties have performed their respective tasks, everyone breathes a
sigh of relief and heads over to the Title Company for the closing presentation. If
everything goes smoothly and all the figures are correct, the procedure should take
between 30 minutes to an hour. If there is a loan, there are actually TWO closings, the
loan and the property. This is still called "The Closing." Some possible common delays
are if even a single figure is incorrect on the Settlement Statement, they have to correct
and reprint them, which takes 10-15 minutes to do. Another is if the money being
borrowed is not wired into the Title Company by the wiring deadline to "fund" the
transaction. In that case the papers are signed, but the transaction is not really closed
until the next day, called "closing in escrow." Then the Seller gets their proceeds, the
Realtors get their commission, everyone gets their payoffs and you own the property!
The usual time from presenting an offer until closing is generally about 3-4 weeks,
although a cash deal will go in about half that time, and if the loan process is
complicated it could take weeks longer.
Documents needed for a loan application
There are several things the Lender or Mortgage Broker will ask you to bring in with you
when you get to the full-application process of obtaining a loan. If you anticipate a very
short time table it's an especially good idea to start digging these things up to be ready
to submit. Here are the main things you may need to have ready to bring in once they
obtain your credit report:
- Past 2 years tax returns
- Past 2 years W-2's
- Past 3-12 months bank statements
- Past 3-12 months pay stubs
- If self-employed, Verificication of Employment from employer (VOE)
- If self-employed, P&L statement from past 1-2 years
- If renting or leasing, cancelled rent checks or Verification of Rent from Landlord
(VOR) - Name of Insurance carrier and declaration page for the new purchase or
refinanced home - Sometimes required: average bank balance in the amount of 2-6 months PITI
- There may be more or less documentation required depending on the Lender and
type of loan.
It pays to be prepared! If you don't have all these documents, ask the bank or
appropriate people to research and get you copies of what you need so your loan does
not delay. Missing a loan commitment deadline could cost you a house, and going
beyond your 30-day lock-in period for your interest rate could cost you tens of
thousands of dollars if rates increased since your application!
If you have any questions about any part of this process, please feel free to click on the
"Contact Us" button and we will respond to you promptly.
 |
 |
 |
 |
 |
 |
 |
 |
 |