Buying a Home 101

1. List your Net (after tax) Income
2. Monthly Expenses.
3. Calculate Homeownership Costs - Principle, Interest, Taxes, Insurance, HOA Fees, etc.
4. Use a Mortgage Calculator that incorporates everything above.

Note 1: Funds will need to be available for items paid outside of closing. Approximately $2,000.
Note 2: Most mortgage calculators only provide principle and interest in the payment estimate. Taxes and insurance will add at least $300-500 to that cost. Contact a highly reviewed local lender to get an accurate estimate.
Misconception 1: Shop Local = Pay More. Mortgage lending is usually the opposite in our experience. Realtors have the opportunity to work with many mortgage companies and loan officers on a day to day basis. They understand the value of working with lenders that provide prompt and accurate estimates, make sure loans close on time, competitive rates and products, pre-qualifications on weekends or weeknights, and in depth guidance & communication through the loan process. There is no financial relationship between a lender and a Realtor. If there is, it must be disclosed to you by law.
Misconception 2: 20% down payment. Don't panic! There are many loan programs available with down payments as low as 0%. Contact a lender to see which program works best for you.

When a buyer contacts a mortgage company about getting pre-qualified, the loan officer will be discussing many things with them. This includes credit scores, income, employment, and debts and assets. Likewise, they will discuss how much of a mortgage a buyer can qualify for, interest rates, mortgage payments, estimated closing costs and required down payment requirements. How much of a down payment a buyer will need to obtain a mortgage will depend upon several factors.

• Prior to sitting down with a REALTOR you should:
  • 6-12 months before you plan to purchase a home, you should get to know your credit score and approximately how much home you can afford.
  • 1-3 months prior to starting your search, you should speak with a lender about getting pre-qualified. If there are any minor blemishes on your credit or special circumstances, a good lender will put you on the right path to success. You'll know what you can afford and more importantly, how much you are comfortable with.

Pre-qualification: Buyer provides lender authorization to pull credit and buyer verbally provides info about income and assets.

TBD Approval: This is exclusively through Atlantic Bay Mortgage.

Nothing is more exciting or rewarding than working with first time homebuyers! If you are excited about purchasing your first home, you've found the team to make it happen!

A great buyer's agent is worth their weight in gold. You're getting 18 years of touring over 30,000 homes at the seller's expense. Any hesitation you have about a buyer's agent can go out the window. You've found the right place! In 18 years, we've welcomed 850 happy clients. If you're excited about finding a home, you've found the right team to make it happen!

• During our first meeting, we will discuss and learn several things.
  • How the buying process works.
  • What roles each person has during the buying process.
  • What it's like to work with The Melton Team.
  • Your home buying goals and needs.
  • If we're the right fit for you and vice-versa.

The Multiple Listing Service (MLS) is a property search by agents for agents. It is something that nearly 100% of real estate agents subscribe to. The MLS is a cooperative service agents use to ensure every home listed gets an equal amount of exposure to all subscribers. There is public and non-public information on MLS listings. Listings on public sites only have the public information.

• What do all of these sites have in common?
  • They all get their listings, photos and information directly from the MLS.
  • They display public information only.
  • They are a great place to browse.

There are several sites that offer For Sale By Owner (FSBO) homes. You may see FSBO signs while you're driving around town. Share them with your agent! Almost all FSBOs are willing to work with your agent and are merely trying to DIY the selling side.
Note: The Melton Team has never forced or even asked a buyer client to pay for our services, out of pocket. Don't burden yourself with these thoughts. We can't speak for other agents or brokers, but it is very simple and clear for our team.

You've found the home you want. How do you make an offer?

1. Talk to your agent. They will guide you in constructing an offer that fits your needs and benefits you the most.
2. Sign the offer. The offer to purchase will be signed (by hand or electronically) by all purchasers and their agent.
3. The offer to purchase will be sent to the listing agent. The listing agent has an obligation to submit all offers to their seller clients in a timely manner. A time table can also be specified in the terms.

Note: This is where a good agent truly shines. The price of the home is only one term of the offer. Crafting an offer that meets all of your needs is something that requires an agent to ask the right questions and incorporate their experience.

An Earnest Money Deposit (EMD) is a deposit of good faith on a home, from buyer to seller. How much and in what form (personal check, cashier check, money order, etc) is usually pre-determined and printed in the non-public portion of the listing in the MLS. A good agent will help you make the best earnest money deposit for your situation without causing you to overextend yourself unnecessarily. Earnest money is included in the estimated costs prior to closing.

It is very important that you understand, this is a deposit of money, held in a separate account. It is still your money, however, it can be forfeited if you are found to be in violation of the terms of the contract. If you properly release from the contract during a contingency period, you will receive 100% of your deposit back.

Example: $1,000 earnest money deposit to be held by the listing agent's firm; made by personal check. This check will be deposited into an escrow account within 3 days of ratification of the contract.

Your offer to purchase has been written and signed by all buyer(s) and their agent. It was sent to the listing agent and presented to the seller(s).

The seller(s) have 4 (common) options:

1. Do nothing. They are not obligated to respond. This rarely happens, but if there was no communication, you can submit the offer again as rescinded (removed).
2. Accept your offer exactly the way it was written. The seller(s) and their agent (if applicable) would sign the offer. The offer would then become a binding contract.
3. Reject your offer. Send a rejection of your offer. This is usually done by writing REJECTED across the first page, similar to writing VOID across a check.
4. Submit a counter offer. Modify the terms of the offer. The offer is initialed in the places where changes were made and signed by the seller(s) and their agent. The counter-offer is then sent to the buyer's agent to be presented to the buyer(s). If the buyers agree, they will initial next to the changes and send back the counter-offer as ratified. If they do not agree, they can make their own changes and submit a counter offer of their own. This process goes back and forth until there is a meeting of the minds.

Note: This is a part of the process where things can get emotional for either side. It is also a good way to tell how the closing process will play itself out. Easy and reasonable buyers and sellers at the beginning would be a good sign. Difficult and unreasonable at the beginning might be a bad sign. Experience is crucial in these negotiating periods.

For a purchase agreement to become ratified, every change will be initialed by all buyers and sellers as well as signed by all parties, including representatives (real estate agents). Until every paper signed and initialed, you do NOT have a binding agreement. Either party may rescind or reject any offer or counteroffer at any time prior to ratification. Everything is signed and initialed? You now have a legally binding, ratified contract between the buyer and the seller.

A title search buyer's expense at closing (included in buyer's closing costs estimate) is conducted by the buyer's closing attorney (title company). If there are any issues with the title of the home, those have to be cleared before the home can sell.

Appraisal Contingency: An appraisal is ordered by the lender at the buyer's expense (paid to lender). The appraisal isn't shared with the listing agent and subsequently, the seller unless it appraises for less than the sales price or there are certain repairs that need to be made. If there are appraisal required repairs, they would be at the seller's expense and are included in the cap. If the home appraises for less than the sales price, we go back into negotiations. If no agreement can be made, a release is signed and earnest money is returned to the buyer in full.

A termite inspection is conducted at the seller's expense (unless otherwise negotiated).

REIN Agreement (Hampton Roads): There will also be a moisture inspection. Treatments or repairs are at the seller's expense up to a cap of 1% of the purchase price.
VAR Agreement (Richmond/Williamsburg):   Treatments or repairs are at the seller's expense up to a cap of $1,000.

1. Agree to make all requested repairs
2. Agree to make some requested repairs and cross through others.
3. Agree to do none of the requested repairs.
4. Offering a concession in lieu of repairs.

A survey is not required to purchase real estate, however, the buyer may ask for one in their offer to purchase.

The surveyor will draw a map that shows where the house, garage, and other features, like boundary fences or walls, driveways and sheds are located. The survey will show you the property boundaries, structures, any easements, setbacks and potential encroachments.

• The buyer will sit down with the title company and sign all of the paperwork necessary to close.
• Several options are available (specific power of attorney) when one or more buyers are not available to sign.
•  Attendees:
  • Buyer(s) and a closing representative (attorney, paralegal, etc) or notary.
    • Note: The buyer's agent may be present at the buyer's request, but does not have a role at closing. They are mainly there for high fives, hugs and fist-bumps!
• Non-attendees:
  • Sellers, seller's agent, lender, inspectors, etc.

The keys, garage remotes and any other portable devices are handed over to the buyer(s). You may receive them during walkthrough and leave them at the home.

The lockbox will be removed from the property on or around the time of closing. If it is not removed 24-hrs after closing, please contact your agent.

The for sale sign will be removed from the property on or around the closing date. Please be nice if it isn't gone before the sun sets. You may pull it out and lay it beside the house.