THANK YOU!

Thank you for the opportunity to discuss the purchase of your new home in Rowan County. I am looking forward to working with as you prepare for the purchase of a home.

Here's the information that you will need in order to make the best decisions in buying your new home.

Introductory Meeting

The purpose of our first meeting is to get to know one another. If you have any questions about "agency relationships," which I'll get to in a moment, I'll answer them then. In addition, I'll ask you several questions about you and your wants and needs in order to begin to pull together a number of listings for you to see.

During that meeting, I'll try to answer any questions that you might have regarding the area, local real estate laws and customs, getting a loan, and the home buying process in general.

My goal is to make buying your home nearly as painless as buying a loaf of bread. You're the boss. If you want to look at ten houses in one day, just tell me. If you'd rather see one house a day for a month, let me know. If you'd like a printout of every listing in the county that meets your needs, I can provide that, too.

I'll do my very best to work with you on your schedule and on your terms. And, once we've found the property you want, I'll help you coordinate every aspect of the buying process, from making the offer, to financing, all the way through closing.

Remember that my success comes from your satisfaction. Much of my business comes through referrals from happy clients. I'd like to add you to that list. I look forward to working with you!

Agency Disclosures

On July 1, 1995, North Carolina enacted a law that requires real estate agents to disclose to buyers and sellers who they represent in any transaction. Generally, agents are either Seller's Agents or Buyer's Agents.

Seller's Agents

If I have a Listing, I have signed a contract with the Seller, which obligates me to act as a Seller's Agent. Even though my primary obligation is to the Seller, I am required to disclose to a potential purchaser any material facts that I know about the property. I can tell you anything I know about the property itself, but I cannot disclose any personal information about the seller, such as why they are selling, how quickly they need to sell, or anything about their financial condition.

Buyer's Agents

The law requires me to be either a Seller's Agent or a Buyer's Agent. Unless I have signed a Buyer's Agency Agreement with you, I' m acting as a Seller's Agent. Please do not give me any information about yourself or your financial situation that you don't want the Seller to hear unless we have a Buyer's Agency Agreement.

As a Buyer's Agent, I am in a better position to get you the best deal possible. Even though the Seller still pays my commission, the Buyer's Agency Agreement allows me to have information that may help me negotiate a better deal for you.

By law, we are required to give you a choice of Agency relationships so that you can decide how you want to be represented. Your signature on one of these forms verifies that we have provided this information to you. Although these forms can be written so as not to obligate you in any way, be sure to read and understand the Buyer's Agency Agreement before you sign.

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Finding Your Home

Once we've determined the price range, style and location of your new home, I'll put together a list of all the homes that match your requirements. From this list, we'll select the homes you're interested in. I'll give you the Multiple Listing Information sheets on these homes, and you can decide which ones you want me to make appointments to see. If you'd prefer just to drive by and check out the neighborhood, that's fine, too.

KeyReal Estate, Inc. is a member of the Salisbury and Charlotte Boards of Realtors, so we have access to every listing by any company in Rowan and surrounding counties. This saves you the time of going from office to office meeting different agents and signing more agency disclosure forms.

Pre-Qualification

Once we've started searching for a home, you need to begin the pre-approval process with the lender of your choice. You'll find a list of local lenders later on in this booklet. The lenders on this list all have good reputations and competitive rates. Of course, you're free to select any lender you choose, whether they're on this list or not.

As you looking for financing, you need to ask about the following:

Type of Loan
Interest Rate
Itemized Closing Costs
Required Down Payment and Prepaid Expenses
Mortgage Insurance

Be sure to contact at least two or three lenders before you make a decision. A good interest rate may mean higher closing costs, a higher down payment, or a higher interest rate.

Making the Offer

Once you've found the home you want and have been pre-qualified by the lender of your choice, it's time to make your offer.

Obtain all Sellers' Disclosures, including Lead-Based Paint (if the home was built before 1979).

The Seller is required to provide certain property disclosures to prospective purchasers. These disclosures cover any defects or problems that the seller is aware of, including the foundation, the roof, heating, plumbing, appliances, etc., or neighborhood problems that might not be obvious at first glance. If the house was built prior to 1979, the Seller will also provide a notice that lead-based paint may have been used at one time.

If you noticed any problems during your showing, or if the Disclosures mention any problems, you might want to take these into consideration in your negotiations.

Determine your Offering Price

Remember, as a Buyer, you can offer whatever price you want. There are several factors that will influence a Seller to accept your offer. Are you pre-qualified for a loan? How much Earnest Money are you putting down? How long has the property been on the market? What is the competition for the property?

Write the Offer

Your offer will include the price you are offering, how much Earnest Money you are putting down, and several conditions that must be met before you are obligated to complete the purchase. Do you or your lender require inspections? (See next section). What type of loan are you seeking? When do you want to move in? What do you want included in the purchase (appliances, window coverings, ceiling fans, etc.)?

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Inspections

There are several inspections that you or your lender may want, and your offer is subject to your being satisfied with the results of these inspections. The Purchaser usually pays for these inspections unless the Seller has agreed to pay closing costs. These include:

Termite Inspection ($50-$75)
Home Inspection ($200-$450)
Survey ($250 and up)
Well and/or Septic (if applicable) ($50 for well)
Appraisal ($250-$500)*

*Your lender will ask you for the cost of the appraisal when you make your loan application. If the Seller is paying your closing costs, this amount will be credited to you at closing.

Most lenders will require a termite inspection, and some lenders require a survey. Be sure to ask when shopping for a loan.

Inspections are good insurance for you, the Buyer. While new homes are guaranteed to be free of termites and structural problems, resale homes carry no such promises. If an inspection turns up any problems, you can negotiate with the Seller on the price, ask the Seller to fix the problem, or back out of the deal and get your Earnest Money back. (Of course, the Seller can also back out of the deal if a compromise can't be reached.)

Your Offer to Purchase will include a date by which these inspections must be completed, usually two to three weeks before closing. It's a good idea to order these inspections as soon as you and the Seller have agreed to the price and terms of the contract. I have included a list of reliable inspectors later in this booklet. I can order these inspections for you if you will fill out a form authorizing me to do so.

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Tax Credits

First Time Buyers are eligible for an $8,000 tax credit if they purchase a home before December 1, 2009.  As part of the Stimulus Program, this credit is available to buyers with a combined income of $150,000 (or $75,000 for single buyers). You cannot have owned a home during the last 3 years. You must remain in your home for 3 years in order to avoid having to repay the tax credit.

In addition, North Carolina is offering a Mortgage Credit Certificate which allows buyers to take a federal tax credit of 20 percent of your annual mortgage interest, up to $2,000 a year.  You can also deduct the remaining 80 percent of interest on your federal taxes.  This program can be combined with the $8,000 credit until December 1, 2009.

Financing

There are four main types of mortgage loans: Conventional, FHA, VA and non-conforming.

Conventional

Conventional loans are the most common home loans. Most banks and mortgage companies offer them. Down payments must be at least 5% of the price of the home. With down payments less than 20%, mortgage insurance is usually required. Mortgage insurance gives a lender additional security by reducing his risk in lending to those with lower down payments. The amount of down payment and the quality of the Buyer's credit determine the interest rate on conventional loans. Ratios are 28/36.*

FHA

FHA is a federally insured loan program. There are several advantages with FHA loans. Your down payment can be as little as 3 1/2%, and it's easier to qualify for a higher loan amount with FHA. FHA also requires its own version of mortgage insurance. FHA loans can sometimes be combined with special federal and state programs to provide very good interest rates, particularly for first-rime homebuyers. Ratios are 29/41. *

VA

VA loans are available to certain veterans of the armed forces. There is no down payment required on many VA loans, and there are other advantages for those still active in the military. These loans require a "Certificate of Eligibility" which will determine the maximum price of a house with no down payment. Ratios must be 29/41 or better. *

*See discussion of "Ratios."

Non-Conforming

If none of the loan programs described above suits you, then we can explore non-conforming loans. Below are some of the different types of non-conforming loans:

In-House Loan: This could be a construction loan to give you financing while your new house is under construction or a farm loan if you are buying a large parcel of land. Or, if you have a special relationship with your banker, you may be able to negotiate a loan with better terms than conventional loans offer.

If your credit leaves a little bit to be desired, or if you don't want to reveal certain financial information to a lender, then a non-conforming loan might be for you. There are several mortgage brokers in town who specialize in "difficult to place" loans.

*Ratios

When lenders speak of "ratios" they are talking about the percentage of your income that you can spend for housing. For example, 28/36 means that your housing expense cannot be more than 28% of your gross income before taxes. Housing expense includes your payment, plus taxes, homeowners insurance, mortgage insurance, and homeowners' association dues (if any). AND, your housing expense plus any long-term debts cannot be more than 36% of your gross income. Long-term debts are debts that will take longer than six months to pay off. Here's what you qualify for:

Your lender will review your ratios with you to help you select the best loan.

Getting to Closing

Your lender will begin collecting information from you, including bank statements, paycheck stubs, maybe tax returns and other financial information. They will also get a credit report on you from one or more of the national credit bureaus.

The inspections you and your lender have ordered will begin. Depending on the results of these inspections, further negotiations may be needed with the Seller. I will take care of any necessary negotiations for you.

You will be asked to select an attorney to handle the closing. I have provided a list of reputable local attorneys. The attorney's job is very complex and includes:

"Title Search" establishes a chain of ownership for your property going back at least 30 years. They look for any problems, such as liens against the property, lawsuits that may affect the Seller's ability to give you clear title or easements or special assessments that may prevent you from using the property the way you wish. With clear title, the attorney purchases title insurance on your behalf, which guarantees your future enjoyment of your property.

The attorney's staff prepares your loan package, which includes all the paperwork you'll be asked to sign for your loan, your title insurance policy and your deed. In addition, they make arrangements to pay any bills incurred during the buying process.

On Closing Day, you and your Seller meet with your attorney to sign loan documents, deeds, etc., which the attorney then records with the County. After that, you get the keys, and the Seller gets his money. I will accompany you to closing in case you have any questions.

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My Guarantee

I will never pressure you to make a decision to purchase a home that you aren't comfortable with. I will ensure that you make an informed buying decision by providing all available information on your potential home purchase.

I will give you my best advice throughout the purchasing process and will coordinate every phase of your transaction from negotiations through inspections to closing. If necessary, I will help you find the best loan you can get. Remember, my reputation depends on your satisfaction.