How To Approach House Hunting
When starting your search for a new home there are several things to consider:
- Utility - what do you need or not need in your new home? Establish your wish list.
- How much can you afford? Or if you already know, how much are you willing to spend for the features you're looking for - and are they realistic?
- Where do you want to live? Are you commuting? Do you want to keep your children in the same school district? What's important to maintaining your lifestyle?
- Selecting a realtor and knowing how they protect your interests above anything else.
- Selecting an attorney that has real estate experience and who has time to work with you.
Mortgage Pre-Qualification / Pre-Approval
When looking for a new home, it is important to have your financing in order and in doing so you may hear two phrases thrown around & sometimes used synonymously but should not be:
Mortgage Pre-qualification, which results in receiving a Pre-qualification Letter from a lender
&
Mortgage Approval, which results in receiving a Commitment Letter from a lender
Mortgage Pre-qualification
This is an extremely important step in that it establishes what you can afford. It only takes moments to do and results in a Pre-qualification Letter from a lender. It also enables you to make an offer on a home knowing that you have had your finances reviewed by a lender - and quite frankly, it helps your position when a seller is reviewing your overall offer (a seller doesn't always accept an offer based on price, it is often times based on a buyer's ability to purchase and flexibility on taking possession of the home).
Mortgage Approval
Once you have decided that you're on a serious house hunting mission, you should start pulling together the following items so that your lender can start processing your loan application (the actual loan amount to be determined when you have a signed contract of sale - but getting this process started earlier positions you for hopefully a smooth and on time closing).
- One month's most recent pay stubs for salaried employees
- W-2's for the past two year period for salaried employees
- 1040's for past two year period for salaried employees, when using bonus or commission income to qualify
- 1040's for past two year period for self-employed individuals
- Corporate tax returns for past two year period for self-employed individuals
- Year to day profit & loss statement for self-employed individuals
- Three month's worth of bank/brokerage statements with all attachments for verification of down payment & closing costs
- Copy of purchase contract For additional guidance on the pre-qualification or pre-approval process, email us and we will gladly provide you with a list of lending institutions: mbjacobson@optonline.net.
Choosing A Realtor
When you meet with a Realtor for the first time, it is important to take some time to review the "Disclosure Regarding Real Estate Agency Relationship" form. "Pursuant to Section 443 of the New York Real Property Law, this document must be presented by a licensee and signed by all parties at the first substantive meeting with prospective purchasers" (New York Real Estate for Sales Persons, page 412) . By signing this you are merely acknowledging that you have been made aware of the different types of agency relationships that exist.
Fiduciary Duties
As a realtor, we are required to provide our clients with a relationship based upon trust because we owe you: Loyalty, Obedience to any lawful instructions, Diligence, Disclosure on material & non-material facts, Confidentiality - whatever you tell us stays with us always, Accountability in handling documentation, and Reasonable Skill & Care.
Buyer Agency Agreement
Exclusive Buyer Agency Agreement (or Exclusive Right to Represent): The buyer works exclusively with one real estate agency who receives compensation on whatever property is purchased - whether they located it for the buyer or not.
Note: When selecting a Realtor, make that they are able to tell you what their fiduciary duties are as well as explain the various agency agreements. You should also ask if they have an ABR designation or are in the process of receiving it - Realtors who are involved in the ABR designation have received additional credentialing to work with buyers and understand how to protect their rights/interests. For a comprehensive homebuyer's brochure, email your request to: mbjacobson@optonline.net
- NUMBER1EXPERTS™ 
