WHY YOU NEED A REALTOR?

As a licensed real estate professional I provide much more than the service of helping you find your ideal home.  Realtorsâ are expert negotiators with other agents, seasoned financial advisors with clients, and superb navigators around the local neighborhood.  They are members of the National Association of Realtors (NAR) and must abide by a Code of Ethics and Standards of Practice enforced by the NAR.  A professional Realtorâ is your best resource when buying your home.

Let Me be Your Guide —

And the best thing about me as your Realtorâ is that all this help normally won’t cost you a cent.  Generally, the seller pays the commission to the Realtor®. 

 

UNDERSTANDING AGENCY…

         Who Works for Whom?

Seller Agency (Single Agency)

• Agent will represent the best interests of the seller
• Agent will owe the seller fiduciary duties
• Agent must give the buyer all material facts so that the buyer can make an educated decision

Buyer Agency (Single Agency)

• Agent will represent the best interests of the buyer
• Agent will owe the buyer fiduciary duties
• Agent must give the seller all material facts so that the seller can make an educated decision

Transaction Broker (Dual Agency)         

• Agent represents both the buyer and the seller equally
• Agent’s objective is to get a mutually satisfactory agreement among all parties
• Agent gives all options to the buyer and the seller
• Depending on the local market, all parties may be present at contract presentation to negotiate on their own behalf
• All parties have confidentiality.  Agent may do nothing to the detriment of either the buyer or the seller
• Both the buyer and the seller have a right to counsel.  Before making any decisions, both parties have the right to seek family, religious, legal, or financial counsel.

 In all realationships, as your Agent, I have a duty to act honestly with both the buyer and the seller. 

 

REASONS TO BUY A HOME

1. Quality of Life
2. Tax Deductibility of Mortgage Interest
3. Tax Deductibility of Property Taxes
4. Appreciation Potential
5. Deferred Gain and Capital Gain Treatment
6. Once in a Lifetime Exclusion
7. Principal Accumulation
8. Pride in Your Home
9. No Landlord
10. Leverage (where else can you buy this size of an investment with 5-10% down)
11. The Real Cost of Renting (At $700 per month, with a 6% rental increase per year, you will pay $110,719 over a 10 year period.)

 

WHAT EVERY BUYER SHOULD
KNOW BEFORE PURCHASING

1. Property taxes and qualified interest are deductible on an individual’s federal income tax return.
2. Often, a home is the largest asset an individual has and is considered one of the most valuable investments available.
3. A portion of each amortized mortgage payment goes to principal which is an investment.
4. A home is one of the few investments that you can enjoy by living in it.
5. A REALTORâ can usually show you any home whether it is listed with a company, a builder, or even a For Sale By Owner home.
6. Working through a REALTORâ to purchase a For Sale By Owner home can be very advantageous because someone is looking out for your best interest.
7. Your Real Estate professional can provide you with a list of items you’ll need to complete your loan application so you’ll be prepared.
8. A homeowner can exclude up to $500,000 of capital gain tax if married and filing jointly or up to $250,000 if single or filing separately.  The home must have been the taxpayer’s principal residence for the previous two years.
9. Beginning with May 07, 1997, there is no longer a requirement to purchase another home more expensive than the one sold.  Homeowners are free to buy up or down with no tax consequences assuming their gain is less than the allowable amounts.
10. Ask the Real Estate professional if they are familiar with the neighborhoods where you want to live. 
11. Ask the Real Estate professional whom he/she is representing in the transaction.
12. Ask the Real Estate professional what he/she will do to keep you informed.
13. Your Real Estate professional should provide you with the highest level of service and advice.

 

Las Vegas LIDS and SIDS Explained

HOA fees and Master Plan fees

There are a couple of different types of fees that may be involved in purchasing a Las Vegas home that have to do with the community chosen. SIDs and LIDs - When a developer builds on unimproved land, the city will install the sewer plumbing, streets, water hydrants, and lighting. This cost is passed on to the developer who can then choose to pay the city up front and add the cost to the sales price of each lot/home, OR  not pay up front and allow the city to place an assessment on the community as a whole.  The assessment is then divided among all of the properties within the master planned community.   There is the total assessment amount and the annual assessment amount. The annual amount is a portion of the total assessment that is due each year until the total amount is paid in full. The assessment runs with the property, so if the property is sold whatever amount is still left is transferred to the new owner and so on until the assessment is paid in full. The community is basically paying off a bond /loan at a fixed interest rate for a set amount of years. However, each homeowner has the option to pay their SID/LID in full at any time. This is very common in our valley.  As a side note, you will find that our property taxes are much lower than in most other states. HOA fees and Master plan fees - The HOA or Homeowner's Association fee is paid to the association company that is maintaining the affairs of the community. The community does not have to be gated for there to be an association, but if it is gated then the gated community may have a second association that maintains the area within the gates. Many Las Vegas Valley communities have associations. The Association will ensure that the maintenance and all matters pertaining to the community are addressed. In addition there may also be a Master plan community fee for the overall upkeep of the entire geographic area within which there are many sub-communities. The outer walls, community entrance, landscaping, etc.  The fees can range from $15/m to $150 and up depending on the community. Association fees are fixed and only a meeting and voting session by the board members can change those fees.

 

BEFORE WE BEGIN…

PRE-QUALIFICATION AND PRE-APPROVAL

Many buyers apply for a loan and obtain approval before they find the home they want to buy.  Why?

Pre-qualifying will help you in the following ways:

1. Generally, interest rates are locked in for a set period of time.  You will know in advance exactly what your payments will be on offers you choose to make.
2. You won’t waste time considering homes you cannot afford.

Pre-approval will help you in the following ways:

Pre-approval is submitted with an offer.

• A seller may choose to make concessions if they know that your financing is secured.  You are like a cash buyer, and this may make your offer more competitive.
• You can select the best loan package without being under pressure.

How Much Home Can You Afford?

There are three key factors to consider: 

1. The down payment 
2. Your ability to qualify for a mortgage
3. The closing costs associated with your transaction.

Down Payment Requirements:

Most loans today require a down payment of between 3.5% and 5.0% depending on the type and terms of the loan.  If you are able to come up with a 20-25% down payment, you may be eligible to take advantage of special fast-track programs and possibly eliminate mortgage insurance.

Closing Costs:

You will be required to pay fees for loan processing and other closing costs.  These fees must be paid in full at the final settlement, unless you are able to include them in your financing.  Typically, total closing costs will range between 2-5% of your mortgage loan. 

Qualifying For The Mortgage:

Most lenders require that your monthly payment range between 25-28% of your gross monthly income.  Your mortgage payment to the lender includes the following items:

• The principal on the loan (P)
• The interest on the loan (I)
• Property taxes (T),
• The homeowner’s insurance (I). 

Your total monthly PITI and all debts (from installments to revolving charge accounts) should range between 33-38% of your gross monthly income.  These key factors determine your ability to secure a home loan: Credit Report, Assets, Income, and Property Value.

HOW MUCH CAN YOU AFFORD?

Use the following to chart to determine your monthly principal and interest payments at various interest rates for either a 15 or 30-year term.

Interest Rate Factors Per $1,000
Interest Rates	Term 15 Years	Term 30 Years	Interest Rate	Term 15 Years	Term 30 Years
4	7.40	4.77	8	9.56	7.34
4 ¼	7.52	4.92	8 ¼	9.70	7.51
4 ½	7.65	5.07	8 ½	9.85	7.69
4 ¾	7.78	5.22	8 ¾	9.99	7.87
5	7.91	5.37	9	10.14	8.05
5 ¼	8.04	5.52	9 ¼	10.29	8.23
5 ½	8.17	5.68	9 ½	10.44	8.41
5 ¾	8.30	5.84	9 ¾	10.59	8.59
6	8.44	6.00	10	10.75	8.77
6 ¼	8.57	6.16	10 ¼	10.90	8.96
6 ½	8.71	6.32	10 ½	11.05	9.15
6 ¾	8.85	6.48	10 ¾	11.21	9.33
7	8.99	6.65	11	11.36	9.52
7 ¼	9.13	6.82	11 ¼	11.52	9.71
7 ½	9.27	6.99	11 ½	11.68	9.90
7 ¾	9.41	7.16	11 ¾	11.84	10.09

1. Find the appropriate interest rate from the chart above.
2. Look across the column to the appropriate term to determine your interest rate factor. 
3. Multiply the interest rate factor by your loan amount in $1,000s.

Add your monthly insurance premium and your property tax to your principal and interest to determine your total monthly payment.

I am providing this information as a guide. I strongly recommend that you contact our mortgage specialist.

 

LOAN APPLICATION CHECKLIST

 

þ General:
	Picture ID with Social Security Number
	Payment to cover application fee.
	Name and complete address of all landlords (past 2 years).
þ Income:
	Employment history, including names, addresses, phone numbers, and length of time with that company (past 2 years).
	Copies of your most recent pay stubs and W-2 form (past 2 years).
	Verification of other income (social security, child support, retirement).
	If you are self-employed: Copies of signed tax returns including all schedules (past 2 years), and a signed profit and loss statement of the current year.
	If you are retired: Tax returns (past 2 years).
	If you have rental property income: Copies of all lease agreements.
þ Assets:
	Copies of all bank statements from checking/savings accounts (past 3 months).
	Copies of all stock/bond certificates and/or past statements/retirement accounts.
	Prepare a list of household items and their values.
	Copies of title documents for all automobiles, boats, or motorcycles.
	Face amount, monthly premiums, and cash values of all life insurance policies (Cash value may be used for closing costs or down payments.  You need documentation from the carrier indicating cash value).
þ Creditors:
	Credit cards (account numbers, current balances, and monthly payments).
	Installment loans (car, student, etc.)  Same details as for credit cards.
	Mortgage loans (property address, lender with address, account numbers monthly payment and balance owed on all properties presently owned or sold within the last 2 years).  Bring proof of sale of properties sold.
	Childcare expense/support (name, address, phone number).
þ Other:
	Bankruptcy – bring discharge and schedule of creditors.
	Adverse credit – bring letters of explanation.
	Divorce – bring your Divorce Decrees, property settlements, quitclaim deeds, modifications, etc.
	VA only – bring Form DD214 and Certificate of Eligibility.
	Retirees – bring retirement and/or Social Security Award Letter.

 

THE TEN COMMANDMENTS

When applying for a Real Estate Loan

1. Thou shalt not change jobs, become self-employed or quit your job.
2. Thou shalt not buy a car, truck or van (or you may be living in it)!
3. Thou shalt not use charge cards excessively or let your accounts fall behind.
4. Thou shalt not spend money you have set aside for closing.
5. Thou shalt not omit debts or liabilities from your loan application.
6. Thou shalt not buy furniture.
7. Thou shalt not originate any inquiries into your credit.
8. Thou shalt not make large deposits without first checking with your loan officer.
9. Thou shalt not change bank accounts.
10. Thou shalt not co-sign a loan for anyone.

 

WORKING WITH HOME BUILDERS

Why use an Agent to purchase a new home?

The advantages of having an agent help you purchase a new home are the same as those for purchasing a resale home…

• Knowledge of the market
• Help in finding the perfect home quickly
• Expertise in contract writing/negotiation
• Closing assistance. 

The builder has a professional representative watching out for his/her needs, and you need the same expert representation.

Buying a new home is a little more difficult and time-consuming than buying a resale.  I can professionally guide you through this process. 

It is very important that your interests be professionally represented when you are entering into a contract for a semi-custom or build-to-suit home.  These transactions are complex and the contract details must be exact in order to protect you and to ensure you get exactly the home you want!

REMEMBER – the Builder requires that your Agent accompany you on your first visit to the Builder’s sales office, or they will NOT PAY your representative’s fee!

 

HOME WARRANTY PROTECTION

New Home Warranties.....

When you purchase a newly built home, the builder usually offers some sort of full or limited warranty on things such as the quality of design, materials, and workmanship.  These warranties are usually for a period of one-year from the purchase of the home.

At closing, the builder will assign to you the manufacturer’s warranties that were provided to the builder for materials, appliances, fixtures, etc.  For example, if your dishwasher were to become faulty within one year from the purchase of your newly built home, you would call the manufacturer of the dishwasher – not the builder.

If the homebuilder does not offer a warranty, BE SURE TO ASK WHY!

Resale Home Warranties.....

When you purchase a resale home, you can purchase warranties that will protect you against most ordinary flaws and breakdowns for at least the first year of occupancy.  The warranty may be offered by either the Seller, as part of the overall package, or by the Realtor.  Even with a warranty, you should have the home carefully inspected before you purchase it.

A home warranty program will give you peace of mind, knowing that the major covered components in your home will be repaired if necessary.  Ask me for more details about home warrant packages.

 

HOME INSPECTION

If you are purchasing a resale property, we highly recommend that you have a professional home inspector conduct a thorough inspection.  The inspection will include the following:

• Appliances
• Plumbing
• Electrical
• Air conditioning and heating
• Ventilation
• Roof and Attic
• Foundation
• General Structure

The inspection is not designed to criticize every minor problem or defect in the home.  It is intended to report on major damage or serious problems that require repair.  Should serious problems be indicated, the inspector will recommend that a structural engineer or some other professional inspect it as well.

You home cannot “pass or fail” an inspection, and your inspector will not tell you whether he/she thinks the home is worth the money you are offering.  The inspector’s job is to make you aware of repairs that are recommended or necessary.

The seller may be willing to negotiate completion of repairs or a credit for completion of repairs, or you may decide that the home will take too much work and money.  A professional inspection will help you make a clear-headed decision.  In addition to the overall inspection, you may wish to have separate tests conducted for termites or the presence of radon gas.

In choosing a home inspector, consider one that has been certified as a qualified and experienced member by a trade association.

I recommend being present at the inspection.  This is to your advantage.  You will be able to clearly understand the inspection report, and know exactly which areas need attention.  Plus, you can get answers to many questions, tips for maintenance, and a lot of general information that will help you once you move into your new home.  Most important, you will see the home through the eyes of an objective third party.

 

WHAT IS A REAL ESTATE CLOSING

What is a Real Estate “Closing”?

A “closing” is where you and I meet with some or all of the following individuals: the Seller, the Seller’s agent, a representative from the lending institution and a representative from the title company, in order to transfer the property title to you.  The purchase agreement or contract you signed describes the property, states the purchase price and terms, sets forth the method of payment, and usually names the date and place where the closing or actual transfer of the property title and keys will occur. 

If financing the property, your lender will require you to sign a document, usually a promissory note, as evidence that you are personally responsible for repaying the loan.  You will also sign a mortgage or deed of trust on the property as security to the lender for the loan.  The mortgage or deed of trust gives the lender the right to sell the property if you fail to make the payments.  Before you exchange these papers, the property may be surveyed, appraised, or inspected, and the ownership of title will be checked in county and court records.

At closing, you will be required to pay all fees and closing costs in the form of “guaranteed funds” such as a Cashier’s Check.  Your agent or escrow officer will notify you of the exact amount at closing.

What is an Escrow Account?

An escrow account is a neutral depository held by your lender for funds that will be used to pay expenses incurred by the property, such as taxes, assessments, property insurance, or mortgage insurance premiums which fall due in the future.  You will pay one-twelfth of the annual amount of these bills each month with your regular mortgage payment.  When the bills fall due the lender pays them from the special account.  At closing, it may be necessary to pay enough into the account to cover these amounts for several months so that funds will be available to pay the bills as they fall due. 

 

MOVING

CONGRATULATIONS! You have closed on your new home and now you are ready to move!  The next few pages contain tips and checklists so that your move is as organized and effortless as possible.  Think about your move as a series of small projects that you can begin while your home is under contract.  Your move will progress as your contract and closing progress.  That way, when the day comes to physically move your belongings, most of the details will be taken care of.

Keep detailed records – some moving expenses are tax deductible!

Keep detailed records of all moving expenses if your move is job related.  Many expenses, including house-hunting trips, are tax deductible.  If your move is 35 miles or more from your home, you can deduct your family’s travel expenses, including meals and lodging; the cost of transporting furniture, other household goods and personal belongings; food and hotel bills for up to 30 days in the new city if you have to wait to move into your new home; and the costs associated with selling your old home or leasing your new home.

Note:      There is a ceiling on deductions which is outlined in detail in the IRS’s Publication 521, “Tax Information on Moving Expenses,” available free form the IRS offices.