Your Guide to buying a House

YOUR GUIDE TO
BUYING A HOUSE

Presented by:

Julie Mayfield

Real Estate Professional

A BUYER’S AGENT

WHY YOU SHOULD HAVE ONE

YOUR INTERESTS ARE PROFESSIONALLY REPRESENTED

Enlisting the services of a professional Buyer’s Agent is similar to using an accountant to help you with your
taxes, a doctor to help you with your health care, or a mechanic to help you with your car. If you had the
time to devote to learning everything about accounting, medicine and automotive mechanics, you could
perform the services yourself. But who has the time? This is why you allow professionals to help you in their
specific areas of expertise.

YOU GET A PERSONAL SPECIALIST WHO KNOWS YOUR NEEDS

Just as your accountant, doctor and mechanic understand your specific needs, your Buyer’s Agent will un-
derstand your real estate needs and concerns. This type of relationship is built through open communica-
tion at all times. Your Buyer’s Agent will save you time by providing you all the details about the home be-
fore you see it. In addition, your Buyer’s Agent will listen to your feedback and concerns about each home.

YOU WILL GET A GREAT HOME FASTER AND WITH LESS EFFORT

It is much easier to find a home that meets your needs, negotiate a contract, and close the transaction with
an experienced agent by your side. You won’t need to spend endless evenings and weekends running
around looking for homes or trying to search computer networks by yourself. When you tour homes with
your professional Buyer’s Agent, you will already know that the homes meet your criteria and are within
your price range.

YOU WILL GET THIS AT NO COST TO YOU

Entering into a Buyer’s Agency Relationship has countless advantages. You are simply agreeing to “hire” a
personal representative who, by law, must represent your best interests to the best of his/her ability. All of
this personal service is available at absolutely NO COST TO YOU! The Seller’s Broker is responsible for
paying your Buyer’s Agent fee. When you sign a buyer’s agency agreement, you get a professional experi-
enced agent devoted to protecting your needs and to helping you make one of the most important invest-
ment decisions of your life.

As licensed real estate professionals, we provide more than service. We are mem-
bers of the National Association of Realtors and must abide by a Code of Ethics
and Standards of Practice. A professional Realtor is your best resource when buy-
ing your new home. Let us be your guide.

As knowledgeable Realtors ….

• We can save you significant amounts of time, money and frustrations.

• We know the housing market inside and out.

• We can help you with any home - with other agencies or for sale by owner.

• We know the best lenders in the area and can help you understand the importance of being
pre-approved versus pre-qualified for a mortgage.

• We are excellent sources for both general and specific information about the community and
its services, schools, shopping and transportation.

• We are experienced at presenting your offer to homeowners and can help you through the
negotiation process. We bring objectivity to every transaction and can point out the ad-
vantages and disadvantages in any property.

OVERVIEW OF HOME

BUYING PROCESS

Buying a home is one of the biggest investments and financial deci-
sions you can make. While it is a major commitment and responsibil-
ity, it is also a very exciting time in your life. We are proud that we
will get to play a part in it and are excited about to have the privilege
of handing you the keys to your new home!

With that said, it is important to keep in mind that buying a home is a
complicated process. We will be working hard to make sure that eve-
rything is as rewarding as possible, guiding you at every step and
making sure that your needs and desires are met.

This guide was designed to inform you about all steps of the home
buying process so that you can feel confident, make informed deci-
sions and be an educated buyer. It will also help us understand the
things that you’re looking for in a home so that our search can be
made as easy as possible.

Please take some time to review carefully all of the information pre-
sented here. If you have any questions about the topics discussed,
we will be glad to go over them with you in detail. Since every real
estate transaction is unique, you will most likely have questions or
concerns not presented here. That’s what we’re here for - to assist
you at every step, to answer your questions, and to help you find the
home you desire!

The Home Buying Process

Below is a typical outline of the home-buying process. Most transactions close within
45-60 days of the accepted offer. However, the timeline can vary depending on the two
party’s situations and lender programs available.

Select an Agent you Trust
Obtain Financial Pre-Approval

Analyze your Needs in a Consultation

Select Properties

View Properties

Write an Offer to Purchase

Negotiate Terms
Accept Contract

Conduct an inspection Remove Contingencies Conduct a title search
Resolve any issues Remove any encumbrances
Obtain Mortgage Financing
Obtain Title Insurance
Credit Check ∙ Underwriting ∙ Appraisal ∙ Survey ∙ Insurance

Obtain Funds for Closing

Close on Property

Obtain Possession of you Home!

CONGRATULATIONS

YOUR FINANCIAL
COMFORT ZONE

Most homebuyers find that they need to finance at least part of their home purchase.
Therefore, the first stage in finding the right home is to review your personal financial sit-
uation and make an informed estimate of your true purchasing power. Your purchase
power will depend on:

• Your Income
• Your Credit Rating
• Your Monthly Expenses
• Your Down Payment

How Much Home Can You Buy?

The next steps discussed will help you review home financing and get you prepared to speak in detail
with a lender.

STEP 1:

Make a rough estimate of how much home you can afford based on your income. Here is a
method that will give you an approximate starting point for how much home you can afford: A
house payment should be no more than 30% of your gross monthly income (before taxes and
deductions). Annual Salary

Annual Salary Gross Monthly Income Maximum House Payment
$50,000 $4167 $1250
$60,000 $5,000 $1500
$70,000 $5833 $1750
$80,000 $6667 $2000
$90,000 $7500 $2250
$100,000 $8333 $2500
$110,000 $9167 $2750
$120,000 $10,000 $3000
$130,000 $10,833 $3250
$140,000 $11,667 $3500
$150,000 $12,500 $3750
$160,000 $13,333 $4000

Keep in mind that these are guidelines. There are many other factors that determine how much home you can afford.

DETERMINE YOUR
FINANCIAL COMFORT ZONE

STEP 2 STEP 3

Preparing to Meet with a Lender Talk to a Qualified Lender.

. After looking at this information for
yourself, it’s time to speak to a quali-
Below you will find a list of documents you fied lender. A professional advisor will
may be: not only be able to give you information
on the best rates and terms available in
• Social Security Number the current market, but he or she can
• Pay Stubs (most recent months) also explain to you what options you
• Bank Statements for checking and have given your unique financial situa-
tion. Talking to a lender at this time will
savings accounts help you get a more accurate idea of
• IRA/Retirement plan what you can afford.
• Life insurance policies
• Creditor Information - includes What NOT To Do

debts like student loans, auto There are a few actions that you can
loans, credit cards, child support take that will negatively affect your
payments credit score and therefore your home
• W2 forms from previous two years purchasing power. If at all possible,
• Employment History Summary you should avoid making a major
• Federal Tax Returns (for past two purchase or changing your job if you
years) are seriously considering buying a
• Complete Record of Assets home in the next few months.
• Stocks, bond and investment ac-
counts
• IRA/Retirement plan
• Automobiles owned



10 TIPS FOR A SMOOTH TRIP

• Don’t change jobs or become self-employed
• Don’t make any major purchases until long after the closing (such as an automobile or large

appliances)
• Don’t use your credit cards or let your payments fall behind
• Don’t spend the money you have saved for your down payment
• Don’t buy furniture before you buy your house
• Don’t originate any new inquiries on your credit report
• Don’t make any large deposits into your bank account
• Don’t change bank accounts
• Don’t co-sign for anyone
• DO try to keep your financial picture as clear as possible until closing day by following

RECOMMENDED LENDERS

HOMESTEAD FINANCIAL USA MORTGAGE TOWN & COUNTRY BANK

JR Obrecht Emile Flowers Sue Cress

314.393.1314 618.530.2444 618.691.9243

Email: JR.hfmloans.com Email: [email protected] Email: [email protected]
Apply: Jr.homesteadfinancial.com Apply: eflowers.usa-mortgage.com Apply: suecress.com

AMERICANHOMELENDERSUSA,,LLC FIRST MID BANK & TRUST CARROLLTON BANK

Jeff Beck Scott Gruber - Edwardsville Steve Lacefield—Edwardsville

618.806.2281 618.978.2433 618.616.2166

Email: [email protected] Email: [email protected] Email: [email protected]
Apply:
Apply: Ahlusa1.com Apply:

GUARANTEED RATE Also Also
Richard Coolbaugh—St Clair County
Greg Griffin Jennifer Sawyer—Bethalto
618.593.8384
618.531.8826 618.731.3149
Email: [email protected]
Email: [email protected] Apply: Email: [email protected]
Apply:: Apply:

CREDIT REPAIR: When the unexpected pops up, sometimes you need an extra hand.

Phoenix Credit Consultants helps to educate and guide you to meet your credit goals.

Phoenix Credit Consultants

Charlie Scanlon ~ 314.429.2040
Email: [email protected] ~ Www.123pcc.com

ARE YOU AN A, B, OR C BUYER?

Here at Keller Williams Marquee, We want our motivation to match your motivation. This
means that if you need to buy a home today…..you probably want me to call you every
time a new listing becomes available. Now if you are not really in a hurry to buy…..you
probably don’t want me to call you every time a new listing becomes available (perhaps
the mail would work better for you in this situation) Never the less, by completing
this form you will help us make sure that we can match your motivation.

When touring The Keller Williams Marquee office it doesn’t take long to see how busy the Buyer
department is. For you, the Buyer….that’s a good thing. You want a Buyer Specialist who
is active and really knows the market. Touring our office you probably also noticed our
Buyer Activity Boards. These boards serve a couple of purposes. One is to enable us to
match properties with specific Buyer needs. The second reason and the most important is
to classify all of our Buyers by motivation. In order for our team to focus on your real estate
needs we must first determine your motivation or your “readiness” to buy. Since all Buyers
don’t have the same needs….we categorize our Buyers by motivation as follows:

“A” Buyer Our highest priority Buyer. These are people who have to buy
a home now. They have either sold their existing home,
transferred into town, or their lease has expired. In many
cases they could potentially be homeless.

“B” Buyer Our second highest priority Buyer. These are people who are
ready to buy, except they have a home to sell first, have a
lease to fulfill, or are in the stages of getting pre-approved.

“C” Buyer Our third highest priority Buyer. These people may buy a
home when the right one comes along. (low motivation)

As you can see…..if you are a “B” or “C” Buyer doesn’t mean your are less important to us;
your needs are paramount. It only means we are trying to find homes for the “A” Buyers first.
Remember you could quickly become an “A” Buyer and become top priority! We will always
do our best to accommodate you. Should your motivation change at any time please let us
know so we may adjust our motivation to match yours.

WRITING AN OFFER

When you have found a home that you are interested in, it’s time to write an offer. As your buyer agent,
I will draw up a contract with your offering price and necessary contingencies into a formal contract. I will
take the time to sit down with you to go over each part of your offer.

EARNEST DEPOSIT

You will need to provide an earnest deposit. Typically an earnest deposit equals between 1% to 3%
of the property purchase price. You will not be at risk of losing your earnest deposit as long as you
do not default on your contract. The amount will be credited towards your down payment at closing
and will be cashed and held at the seller’s brokerage.

After you have made your offer, In most cases, a seller will not accept your initial offer out-
the Seller will be able to: right. Typical counter offers include modifications to:
• Accept your offer • Purchase price

• Reject your offer • Closing date

• Execute a counter offer

When you make an offer on a house, you should be repared for the negotiations to go back and
forth several times before both parties agree to the terms. You might also have to compete with
other interested buyers in certain market conditions.
When an agreement is reached on all issues, and both the seller and you as the buyer have signed
the offer, you are both under a legally binding contract.

OFFER HAS BEEN ACCEPTED
NOW WHAT DO WE DO?

Your offer is accepted! Now it’s time to get to work.
The following pages highlight the steps that need to be taken before we
can close and to make sure the purchase is a sound decision.

HOME INSPECTION

BUY WITH CONFIDENCE, GET A HOME INSPECTION

The property inspection is one of the most important stages of the purchase process. This
can also be a time when emotions and stress become elevated. Our job is to guide you
through the inspection process, and give you the resources and opinions you’ll need to
make good judgements.

You are free to use whichever inspection companies you wish. We will also be giving you
some references of companies we use consistently, but please keep in mind that we can-
not warrant or guarantee the work done by the professionals we refer, in the same you
would not expect a friend to guarantee the work done by a dentist they refer you to. Also,
we do not get anything from the professionals we refer, except the confidence that they’ve
done a great job for our clients in the past.

A HOME INSPECTOR SHOULD:

• Search for any structural, mechanical and/or other flaws in the property
• Inspect all heating, air conditioning, electrical wiring, plumbing and other systems in the

home
• Examine the exterior of the house, including the roof, foundation, chimney, etc.
• Look at the attic and the home’s interior for proper venting, insulation, electrical outlets,

etc.
• Test all appliances and plumbing fixtures to verify they are all in working condition
• Inspect all bathrooms for moisture and/or if it has affected the areas around the tub,

shower or sink

Depending on the results of the inspection, you will have the opportunity to:

• Approve the results of the inspection, satisfying the inspection contingency
• At inspector’s recommendation, give notice to the seller that you intent to have

additional inspections conducted by a licensed contractor or specialist
• Negotiate that repairs are made by the seller before final purchase of the property
• Terminate the written agreement, and have your earnest deposit refunded if major

problems are discovered

KEY POINTS ABOUT HOME INSPECTIONS

No property is perfect and all properties have issues - this is very important to know, and it is
without exception … even new built homes have issues. Some issues are minor and some are
major. We will sort through the issues (and there will be many) and see which ones are major
and which are minor.

Don’t sweat the small stuff - we will focus primarily on big issues that are costly to fix. We
want to zero in on the “biggies” … in other words we don’t want to “trip over dollars to pick up
pennies”.

The inspection report could be 30+ pages - we like to make people aware of this upfront because
it can be intimidating. There will be a lot of items that are cited in the report … and ‘close up’
pictures of issues that can make the house look like its in awful shape. After reviewing the report,
many people feel like they’ve stumbled across a house that is about to fall down! But the reality is
most issues are usually minor and can be taken care of by either the buyer, the sellers, or a little
bit of effort from both with minimal out of pocket expense.

Inspectors know a little about a lot - inspectors are NOT specialists. They are not electricians,
plumbers, roofers, etc. So, it’s quite likely the inspector may call for further investigation by a li-
censed specialist should they find something questionable … which can be an additional cost to
you.

Inspectors are human too - the inspectors we work with on a regular basis are great. They’re very
specific and they uncover issues that both ARE a problem and could BECOME a problem. Nonetheless,
inspectors miss things too. There’s probably no inspector who catches 100% of everything in a house …
that’s just the nature of property inspections.

Some properties have a private well and septic system. In most cases they sellers are responsible for or-
dering, obtaining and paying for the inspections/tests. You will have the opportunity to review the results,
and should any action be necessary, your buyer agent will guide you through the process.

RECOMMENDED INSPECTORS:

This list is provided for your convenience. It is not a guarantee of the qualifications but merely a list of
some of the individuals and companies who are active in the applicable trade or profession. I suggest you
independently determine the qualifications of the individual or company to be hired and to confirm they
hold applicable state credentials, if any, for the inspection being performed.

CD INSPECT: Nick Bufano ~ 217.553.1317
email: [email protected]

MADEWELL INSPECTIONS: Bob Madewell

618.610.5885 or 618.310.3901
email: [email protected]

HAWLEY INSPECTIONS: Matt Hawley ~ 618.593.7115

email: [email protected]

INSPEKTRA SERVICES: Benji Ramsey ~ 618.614.0845
website: www.inspektraservices.com

US INSPECT: Nick Broyles ~ 618.207.9669

TITLE COMPANIES ROLE

Title Insurance:

Clearing the Home Title, What is Title Insurance and Why is it Needed?

Simply explained, “title” is the right to own, possess, use, control and dispose of property. Pro-
tecting purchasers and lenders against loss is accomplished by the issuance of a title insurance
policy.

Who’s covered?

Typically there are two policies issued:
Lender’s policy insures the lender for the amount of the loan
Owners Policy: insures the purchaser for the purchase price.

HOW IS TITLE INSURANCE DIFFERENT FROM OTHER INSURANCE POLICIES?

While the function of most other forms of insurance is risk assumption through the pooling of
risks for losses arising out of unforeseen future events (such as sickness or accidents), the pri-
mary purpose of title insurance is to eliminate risks and prevent losses caused by defects in title
arising out of events that have happened in the past. To achieve this goal, title insurers perform
an extensive search and examination of the public records to determine whether there are any
adverse claims (title defects) attached to the subject property. Said defects/claims are either
eliminated prior to the issuance of a title policy or their existence is excepted from coverage.

What’s involved is a title search?

A title search is done to determine:
That the person who is selling the property actually has the right to sell it
That the buyer is purchasing the correct parcel of land
Possible defects in title. A “title search” is really made of up three separate searches:
1} Chain of Title - History of the ownership of the subject property
2) Tax Search - The tax search reveals the status of the taxes and assessments
3) Judgement and Name Search - Searches for judgements and liens against the
owner’s and purchaser’s name

How does Title Insurance protect you?

Should there be a claim made against your title as covered by our policy, it is then the Title
Company’s obligation to protect you by:
• Defending your title, in court if necessary, at the Insurer’s expense

• Bearing the cost of settling the claim if it proves to be valid, in order to perfect your title and
keep you in possession of your property

HOME APPRAISAL

An appraisal is an estimate of the STEP 4
value of the property made by a
qualified professional. The appraisal TASKS TO DO
of your home is as important as your • Obtain homeowner’s insurance and notify your lender of the
credit history in obtaining a mort-
gage. After all, the property you are selected insurer
purchasing serves as collateral for
the loan. • Coordinate cancellations, transfers and change-of-address
notifications
Although the primary goal of the ap-
praisal is to justify the lender’s in- • Organize the connection of services and utilities at your new
vestment, it also protects you from home
overpaying. Your lender will hire the
appraiser and will charge you as the STEP 5
buyer a fee for the service.
WALK THROUGHT OF THE PROPERTY
If the appraisal falls short of the
amount you wish to borrow you may Conduct a final walk-through of the property prior to closing.
be refused a mortgage or offered a This will give you an opportunity to see that the condition of the
smaller amount on the mortgage. house is the same as it was at the time of contract. Additional,
Your offer contract will be contingent you will be able to ensure that any repairs agreed to by the sell-
on whether the appraisal comes in er, based on the inspection contingency, have been completed.
at or above the purchase price you
and the seller have agreed upon. STEP 6

SIGNING AND CLOSING
All the preparation is complete. Now it’s time for closing!
Closing is the legal transfer of ownership of the home from
seller to buyer. Your closing officer will coordinate the signing
of the documents and the collection and disbursement of
funds.

In order to ensure a smooth closing you will need to:
Review the Settlement Statement that your lender or closing
agent will provide you 1-2 days prior to closing. These docu-
ments will contain a detailed description of all costs associat-
ed with the transaction, including the exact dollar amount you
will need to bring to closing.

Verify with your lender and/or closing agent any other items
that you need to bring with you such as a valid driver’s li-
cense or other form of identification.

RECOMMENDED INSURANCE COMPANIES

This list is provided for your convenience. It is not a guarantee of the qualifications but merely a list of some of the indi-
viduals and companies who are active in the applicable trade or profession. We suggest you independently determine
the qualifications of the individual or company to be hired and to confirm they hold applicable state credentials, if any, for
the services being performed.

ALLEN INSURANCE STATE FARM - Wolfe
Lisa Allen Adam Wolfe
618.407.8448 618.307.6650
[email protected] [email protected]

AFTER THE CLOSING

An Ongoing Relationship with Our Clients

While the closing may mark the end of the purchase process, we hope it will mark the beginning of
our ongoing relationship. We make a concerted effort to keep in touch with our clients and to con-
tinue to be a resource for their real estate and neighborhood needs. As a client, you can look for-
ward to receiving updates on the market and neighborhood events. Of course, if you need referrals
for plumbers, electricians and other service professionals, we are always happy to provide you with
a list of trusted vendors.

Your Referrals Are Key!

Maintaining ongoing client relationships is part of our commitment to provide a level of real estate
service well above and beyond expectations. Our clients share their positive experiences with
friends and associates who then seek us out. This has allowed us to build a successful real estate
practice based on referrals. As a result, we can devote more of our time helping clients and less
looking for new ones. If you are happy with our services, we hope you will spread the word and
send people our way so we can help them the same way we helped you. That’s a win-win all
around!

MEET JULIE MAYFIELD

Have have worn many hats all my life. I have raised 5 children
While building a successful service business. I have been
self-employed since I was 27. I have devoted my career in
customer service. While building my service business, I found
a passion for marketing. I strive in thinking outside the box in
both marketing and problem solving.
In 2009 I decided to pursue a career in Real Estate. I
thoroughly enjoy helping people in the home buying process.
Many times people don’t know the process or even know
where to begin, I love educating the buyer in the process and
helping them reach their dream of home ownership.

What does a realtor do? Here is quick look at everything a Realtor
must do in the home buying/selling process.

CONTACT US Julie Mayfield, Realtor
Keller Williams Marquee
We are committed
to giving you the best 1254 University Drive, Suite 200
possible service available. Edwardsville, IL 62025

If we are not available, leave a detailed 618.830.1245
message and we will get back to you as
soon as possible. [email protected]

Please call us with ALL your real estate Text KW2Y0O6OW
needs. We are members of the Region- to 87778
al Multiple Listing Service and North- Juliemayfield.kw.com
western Wisconsin Multiple Listing Ser-
vice and have access to every listing of OFFICE HOURS
all Real Estate Companies in the Metro
East St. Louis Area. This includes Mad- Monday - Friday
ison, St. Clair, Macoupin Counties 8:30 am - 6:30 pm

Should you call another Office for infor- Weekends
mation, please tell them you are work- By Appointment
ing with us. They will still be happy to
answer all your questions.

Empowering others
to create their PERFECT LIFE

by providing Residential
Real Estate SOLUTIONS.

Julie Mayfield, Realtor