1. Q: What do I need to do before I think about purchasing a home?

A: Get Your Finances in Order
Often when people are considering buying a home whether it be a first time investment or another home, they believe they can just puchase one like buying a new item for a kitchen. That is not usually the case. Here are some things you should do before you buy a home.

Check with a lender to see what you qualify for.

You should know facts such as:

Annual Income

Amount of Cash you have for a down payment*

Other Home Loans

Credit Card Balances

Other Loan Balances (Vehicles, etc.)

School Loans

Other factors affecting your income e.g. child support, tax payments, dividends, etc.

*Note: Some first time home buyer loan programs do not require a down payment.

2. Q: Do I need to be prequalified?

A: It is generally a good idea to get prequalified.
Many sellers require a prequalification letter with your offer to purchase. So you should have that readily available when it comes time to make an offer. In general it will make your offer look stronger.

3. Q: What is the cost of prequalification?

A: There is no cost associated with getting prequalified.

4. Q: What is prequalification?

A: Prequalification is where you have spoken to a lender about a possible home loan.
This is when you have spoken to a lender, usually over the phone. You will provide him with the information described above. They in turn will give you an estimate of what they believe you would qualify for if all the information you have given them is accurate.

IT DOES NOT MEAN YOU ARE QUALIFIED!!

People often think because they are prequalified they can get the loan when they find the home of their dreams. That is not true. At this point in the loan process they have not run a credit check, or verified any of the information you have provided. There may be things on your credit report that are inaccurate or that you have forgotten about that may inhibit the loan process, or affect the loan amount.

What is the difference between "pre-qualified" and "pre-approved"?
If you are "pre-qualified" you have determined, with a loan officer, what price you can afford based on the down payment, your debts and the amount the mortgage company will approve for your mortgage. Being "pre-qualified" is only a determination of your probable credit. If you are "pre-approved", your credit, employment and funds have been approved by the lender.

5. Q: If I find a home that is not listed by you can you still show it to me?

A: Yes
I am able to show you ANY home, new or resale, no matter who the listing broker is. If you see a home advertised in the newspaper, or if you drive by a home that interests you, please call me! If you visit an Open House or a New Home Community, please tell the seller's agent in the home that I am representing you. Remember, home information is always available to me, even if it is not a Coldwell Banker listing.

6. Q: When we find a house we like how do we buy it?

A: It is a many step process here is a brief overview of the process
You will need an earnest money check to accompany the Offer to Purchase. This may be in the form of a personal check, or in some cases a certified check. A minimum of 1% of the sales price is deemed adequate in most cases. When your written Offer to Purchase is presented to the seller, he has three choices:

1. He can accept your offer
2. He can reject your offer
3. He can make a counteroffer.

Negotiations after the initial written offer are conducted verbally until an agreement is reached. When the seller accepts your offer, or you accept his counteroffer in writing, you have a binding contract for sale on that property. Your earnest money will be deposited in the listing broker's trust account to be held until closing.

7. Q: Is it best to make a really low offer at first?

A: If your offer is too low you may take some unwanted risks.
It is important to remember that if you make a low offer on a home and the offer is rejected or countered, another prospective buyer may submit an offer that may be accepted by the seller before you have the opportunity to submit another offer or accept the seller's counter to your offer. I have even heard of experiences where a buyer made a low offer to the seller, and the seller was insulted and refused to entertain any more offers from the client.

8. Q: Would it be in my best interest to work with several Realtors® and not just one?

A: It is in YOUR best interest to work exclusively with me.
I have access to every home that is in the Maryland Multiple Listing Service. I am self-employed, not on an expense account, and will be paid only when I find the right home for you. Your loyalty is appreciated, and in return, you will receive the maximum in service from me and my team. All of my time and professional advice, experience, and assistance is FREE to you!

What are closing costs?
Closing costs are an accumulation of charges paid to different entities associated with the buying and selling of real estate. For buyers, they are usually about 4-6% of the total sales price of a property. Some of the closing costs you might encounter are: application fees, appraisal fee, county taxes, credit report, discount points, documentation fee, escrow fees, homeowners' association fees, loan fees, mortgage insurance, origination fees, tax registration and title insurance premium.

What is a point?
One point is equal to 1% of the new loan amount. Whenever government regulation, state usury laws and/or competitive practices prohibit the lender from charging a rate of interest that would make the real estate loan competitive with other fields of investments, the lender must seek some method of increasing the yield for the investors. By charging "points", the lender can bring the real estate loan up to those other investments.

What is earnest money?
When you make an offer, you will need to put up an earnest money deposit as a sign of good faith that you are seriously interested in buying a home. That deposit becomes a part of the purchase price and is held in a trust account until there is full acceptance of the offer. Typically, an earnest money is 3-5% of the offer amount.

What is title insurance?
Title insurance protects the named insured against loss because of defects, liens, encumbrances, adverse claims or other matters not shown or disclosed to the new owner that attach before date of policy.

Is VA or FHA financing unfair to sellers?
FHA and VA loans provide purchasers the opportunity to buy homes with minimal cash investment and at lower interest rates. The result is a larger market for sellers, who also benefit by receiving all cash for their equity.