Buyers Guide
Guide for Buyers
Buying A Home
Ready to take the first step? Start with the RE/MAX Executive Homebuyer’s Guide. This comprehensive resource will guide you through every stage of the homebuying journey. Inside, you’ll find essential information, including key terms, important considerations when choosing a home, and a step-by-step checklist to help you make informed decisions.
Trust RE/MAX Executive to help you navigate the path to homeownership with confidence. Download your guide today and take the first step toward finding your dream home.
Buying A Home
Ready to take the first step? Start with the RE/MAX Executive Homebuyer’s Guide. This comprehensive resource will guide you through every stage of the homebuying journey. Inside, you’ll find essential information, including key terms, important considerations when choosing a home, and a step-by-step checklist to help you make informed decisions.
Trust RE/MAX Executive to help you navigate the path to homeownership with confidence. Download your guide today and take the first step toward finding your dream home.
The Right Agent
The Right Agent
Preparation
Purchasing a home is one of the most significant financial decisions you’ll make in your lifetime. Proper preparation is crucial to ensure a smooth and successful home-buying experience. Here are some useful tips to help you get ready.
CHECK YOUR CREDIT SCORE:
- Obtain a Credit Report: You can request a free annual credit report from the three major credit bureaus: Equifax, Experian, and TransUnion.
- Review for Errors: Ensure there are no discrepancies or errors on your report. If you find any, dispute them immediately.
- Understand Your Score: A higher credit score can lead to better mortgage rates. If your score isn’t ideal, consider waiting and working on improving it before purchasing.
BUDGETING AND SAVING:
- Determine Your Budget: Calculate how much home you can afford. Consider all monthly expenses, not just the mortgage.
- Save for a Down Payment: Aim for a down payment of 20% to avoid private mortgage insurance (PMI). However, there are loan programs available that require less, including loans that offer 100% financing. Working with a professional, you are guided through the prices to ensure you are aware of all the options available..
- Consider Closing Costs: These are additional fees and can range from 2% to 5% of the home’s purchase price.
DEBT MANAGEMENT:
- Pay Down Debt: Lenders look at your debt-to-income ratio. Reducing your debt can improve this ratio and your chances of getting a favorable loan.
- Avoid New Debt: Don’t make large purchases or take on new debt before buying a home. This can impact your credit score and loan approval.
Preparation
Purchasing a home is one of the most significant financial decisions you’ll make in your lifetime. Proper preparation is crucial to ensure a smooth and successful home-buying experience. Here are some useful tips to help you get ready.
CHECK YOUR CREDIT SCORE:
- Obtain a Credit Report: You can request a free annual credit report from the three major credit bureaus: Equifax, Experian, and TransUnion.
- Review for Errors: Ensure there are no discrepancies or errors on your report. If you find any, dispute them immediately.
- Understand Your Score: A higher credit score can lead to better mortgage rates. If your score isn’t ideal, consider waiting and working on improving it before purchasing.
BUDGETING AND SAVING:
- Determine Your Budget: Calculate how much home you can afford. Consider all monthly expenses, not just the mortgage.
- Save for a Down Payment: Aim for a down payment of 20% to avoid private mortgage insurance (PMI). However, there are loan programs available that require less, including loans that offer 100% financing. Working with a professional, you are guided through the prices to ensure you are aware of all the options available..
- Consider Closing Costs: These are additional fees and can range from 2% to 5% of the home’s purchase price.
DEBT MANAGEMENT:
- Pay Down Debt: Lenders look at your debt-to-income ratio. Reducing your debt can improve this ratio and your chances of getting a favorable loan.
- Avoid New Debt: Don’t make large purchases or take on new debt before buying a home. This can impact your credit score and loan approval.
Pre-Approval
WHAT YOU’LL NEED
- Last two months of bank statements
- Last two months of retirement and 401K statements
- Last 30 days of pay stubs
- Award letters for Retirement Income, Social Security, Disability Income, and SSI
- Last two years 1040 Federal Income Tax Returns
- Last two years of Federal Corporate and/or Partnership Tax Returns
- Last two years of W-2 forms
- Copy of Driver’s License
- For Military: Statement of Service (with reenlist eligibility) and Military ID
- If you have rental property income, bring a copy of all lease agreements
Pre-Approval
WHAT YOU’LL NEED
- Last two months of bank statements
- Last two months of retirement and 401K statements
- Last 30 days of pay stubs
- Award letters for Retirement Income, Social Security, Disability Income, and SSI
- Last two years 1040 Federal Income Tax Returns
- Last two years of Federal Corporate and/or Partnership Tax Returns
- Last two years of W-2 forms
- Copy of Driver’s License
- For Military: Statement of Service (with reenlist eligibility) and Military ID
- If you have rental property income, bring a copy of all lease agreements
Know Your Credit Score
%
Payment History
%
Amounts You Owe
%
Length of Your Credit History
%
New Credit You Apply For
%
Types of Credit You Use
Home Search
With a pre-approval letter in hand, you can confidently search for homes within your budget. Sellers are more likely to consider offers from pre-approved buyers since there’s a higher likelihood of the sale going through.
- Location
- Budget
- Size & Layout
- Future Resale Value
- Age & Condition of the Property
- Energy Efficiency
- Local School Districts
- Property Taxes
- Homeowners Association (HOA)
- Future Development
- Natural Disasters
- Commute & Transportation
- Local Amenities
- Noise & Surroundings
- Growth Potential
Home Search
With a pre-approval letter in hand, you can confidently search for homes within your budget. Sellers are more likely to consider offers from pre-approved buyers since there’s a higher likelihood of the sale going through.
- Location
- Budget
- Size & Layout
- Future Resale Value
- Age & Condition of the Property
- Energy Efficiency
- Local School Districts
- Property Taxes
- Homeowners Association (HOA)
- Future Development
- Natural Disasters
- Commute & Transportation
- Local Amenities
- Noise & Surroundings
- Growth Potential
Make an Offer
Once you find a home you love, your agent will help you make a competitive offer based on comparable homes in the area and current market conditions. The seller might accept your offer, reject it, or make a counteroffer. Your agent will guide you through the negotiation process to ensure you get the best deal possible.
DETERMINE OFFER AMOUNT:
Decide how much you’re willing to offer based on the home’s value and market conditions.
CONTINGENCIES:
Decide on any conditions or contingencies you want to include in your offer, such as a home inspection or financing.
EARNEST MONEY:
Decide on how much earnest money to offer, which acts as a sign of your commitment.
OFFER LETTER:
Put together a formal written offer that includes more than just the price. It might also detail terms, contingencies, and other conditions.
NEGOTIATION:
Once your offer is made, the seller may accept, counter, or reject it. Be prepared for some back-and-forth negotiation.
Make an Offer
Once you find a home you love, your agent will help you make a competitive offer based on comparable homes in the area and current market conditions. The seller might accept your offer, reject it, or make a counteroffer. Your agent will guide you through the negotiation process to ensure you get the best deal possible.
DETERMINE OFFER AMOUNT:
Decide how much you’re willing to offer based on the home’s value and market conditions.
CONTINGENCIES:
Decide on any conditions or contingencies you want to include in your offer, such as a home inspection or financing.
EARNEST MONEY:
Decide on how much earnest money to offer, which acts as a sign of your commitment.
OFFER LETTER:
Put together a formal written offer that includes more than just the price. It might also detail terms, contingencies, and other conditions.
NEGOTIATION:
Once your offer is made, the seller may accept, counter, or reject it. Be prepared for some back-and-forth negotiation.
Due Diligence
Due diligence, in the context of buying a home, refers to the process of thoroughly investigating and evaluating a property before finalizing the purchase. It’s a precautionary step to ensure that the buyer is fully informed about the property’s condition, legal status, and any other pertinent details.
PURPOSE AND IMPORTANCE:
Protection: Due diligence protects the buyer from potential pitfalls or hidden issues that might not be immediately apparent.
Informed Decision: It ensures that the buyer has all the necessary information to make an informed decision about the purchase.
Value Assessment: Through due diligence, a buyer can determine if the property is worth the asking price.
Legal Safety: It ensures that there are no legal encumbrances or disputes related to the property.
Steps
- PROPERTY INSPECTION
- TITLE SEARCH
- NEIGHBORHOOD RESEARCH
- REVIEW OF DOCUMENTS
- ENVIRONMENTAL CHECKS
- FINANCIAL ASSESSMENT
- ATTORNEY ENGAGEMENT
Expert Guidance During Due Diligence
In the due diligence phase, your agent facilitates a smooth experience by:
- Thorough Research: Comprehensive property research guides negotiations.
- Strategic Communication: Your advocate in negotiating favorable terms.
- Expert Analysis: Analyzing inspections and advising on repairs or concessions.
- Navigating Legalities: Handling complex paperwork, deadlines, and legal aspects.
- Transparent Guidance: Keeping you informed and explaining intricate details.
- Creative Problem-Solving: Finding solutions for smooth deal progression.
We leverage our industry knowledge to help you achieve your goals during this negotiation phase.
Due Diligence
Due diligence, in the context of buying a home, refers to the process of thoroughly investigating and evaluating a property before finalizing the purchase. It’s a precautionary step to ensure that the buyer is fully informed about the property’s condition, legal status, and any other pertinent details.
PURPOSE AND IMPORTANCE:
Protection: Due diligence protects the buyer from potential pitfalls or hidden issues that might not be immediately apparent.
Informed Decision: It ensures that the buyer has all the necessary information to make an informed decision about the purchase.
Value Assessment: Through due diligence, a buyer can determine if the property is worth the asking price.
Legal Safety: It ensures that there are no legal encumbrances or disputes related to the property.
Steps
- PROPERTY INSPECTION
- TITLE SEARCH
- NEIGHBORHOOD RESEARCH
- REVIEW OF DOCUMENTS
- ENVIRONMENTAL CHECKS
- FINANCIAL ASSESSMENT
- ATTORNEY ENGAGEMENT
Expert Guidance During Due Diligence
In the due diligence phase, your agent facilitates a smooth experience by:
- Thorough Research: Comprehensive property research guides negotiations.
- Strategic Communication: Your advocate in negotiating favorable terms.
- Expert Analysis: Analyzing inspections and advising on repairs or concessions.
- Navigating Legalities: Handling complex paperwork, deadlines, and legal aspects.
- Transparent Guidance: Keeping you informed and explaining intricate details.
- Creative Problem-Solving: Finding solutions for smooth deal progression.
We leverage our industry knowledge to help you achieve your goals during this negotiation phase.
Home Inspection
How it Works
- The home inspection process starts with your agent providing you trusted licensed inspectors.
- Licensed inspectors review every detail of the home from the foundation to the roof, capturing detailed photos in their reports.
- These reports will form the foundation for negotiation, and your agent will guide you through this process, ensuring you’re well-informed and confident every step of the way.
- A licensed home inspector is a generalist who does not open walls. They will often refer you to a system specialist, like an HVAC technician if they see an indication of a larger issue.
- Your agent is experienced and connected with a vast network of vendors, which they can tap into to address concerns and gather quotes for repairs.
Your agent acts as the bridge between you and the home inspector, making sure the inspection process is smooth and straightforward.
Common Home System Lifespans
|
TYPE |
TYPICAL LIFE SPAN |
|
Asphalt Shingle Roof (3-Tab) |
20 Years |
|
Asphalt Roof (Architectural) |
30 Years |
|
Metal Roof |
40 – 80 Years |
|
Electrical Copper Wiring (any kind) |
100+ Years |
|
Ground-Fault Circuit Interrupters (GFCIs) and Arc-Fault Circuit Interrupters (AFCIs) |
Up to 30 Years |
|
Electrical Service Panel |
60 Years |
|
Air Conditioners |
8 – 15 Years |
|
Central Air – Conditioning Unit |
7 – 15 Years |
|
Furnaces |
15 – 25 Years |
|
Gas Fireplaces |
15 – 25 Years |
|
Heat Pumps |
10 – 25 Years |
Home Inspection
How it Works
- The home inspection process starts with your agent providing you trusted licensed inspectors.
- Licensed inspectors review every detail of the home from the foundation to the roof, capturing detailed photos in their reports.
- These reports will form the foundation for negotiation, and your agent will guide you through this process, ensuring you’re well-informed and confident every step of the way.
- A licensed home inspector is a generalist who does not open walls. They will often refer you to a system specialist, like an HVAC technician if they see an indication of a larger issue.
- Your agent is experienced and connected with a vast network of vendors, which they can tap into to address concerns and gather quotes for repairs.
Your agent acts as the bridge between you and the home inspector, making sure the inspection process is smooth and straightforward.
Common Home System Lifespans
|
TYPE |
TYPICAL LIFE SPAN |
|
Asphalt Shingle Roof (3-Tab) |
20 Years |
|
Asphalt Roof (Architectural) |
30 Years |
|
Metal Roof |
40 – 80 Years |
|
Electrical Copper Wiring (any kind) |
100+ Years |
|
Ground-Fault Circuit Interrupters (GFCIs) and Arc-Fault Circuit Interrupters (AFCIs) |
Up to 30 Years |
|
Electrical Service Panel |
60 Years |
|
Air Conditioners |
8 – 15 Years |
|
Central Air – Conditioning Unit |
7 – 15 Years |
|
Furnaces |
15 – 25 Years |
|
Gas Fireplaces |
15 – 25 Years |
|
Heat Pumps |
10 – 25 Years |
Appraisal
An independent appraisal is conducted during this phase, and the lender selects the appraiser. This ensures that the amount the buyer is paying is in line with the property’s actual worth. Lenders also require an appraisal to ensure that the loan amount they’re providing doesn’t exceed the value of the property, which serves as collateral for the mortgage..
Location
Proximity to amenities, schools, and other essential services.
Size
Total square footage and number of bedrooms and bathrooms.
Condition
Age of the home, structural integrity, and the state of major systems.
Upgrades
Renovations or improvements made to the property.
Market Trends
Whether the local market is hot (favoring sellers) or cold (favoring buyers).
Appraisal
An independent appraisal is conducted during this phase, and the lender selects the appraiser. This ensures that the amount the buyer is paying is in line with the property’s actual worth. Lenders also require an appraisal to ensure that the loan amount they’re providing doesn’t exceed the value of the property, which serves as collateral for the mortgage..
Location
Proximity to amenities, schools, and other essential services.
Size
Total square footage and number of bedrooms and bathrooms.
Condition
Age of the home, structural integrity, and the state of major systems.
Upgrades
Renovations or improvements made to the property.
Market Trends
Whether the local market is hot (favoring sellers) or cold (favoring buyers).
Title Insurance
WHY IS IT IMPORTANT?
- Protection from Past Issues: Unlike other insurance policies that protect against future events, title insurance protects against claims for past occurrences. These can include errors in public records, unknown liens, or claims of ownership by others.
- Peace of Mind: It ensures that the buyer is obtaining a property free from undisclosed encumbrances or rights, providing peace of mind in the purchase.
HOW DOES IT WORK?
- Title Search: Before issuing a policy, the title company will conduct a title search. This involves reviewing public records to identify any issues or defects with the title.
- Issuance of Policy: Once the title search is complete and any identified issues are resolved, the title insurance policy is issued. There are typically two types of policies:
- Owner’s Policy: Protects the homeowner from defects in the title.
- Lender’s Policy: Protects the lender’s financial interests in the property.
- One-time Premium: Title insurance is unique in that it requires a one-time premium payment, typically at closing, rather than monthly premiums.
BENEFITS
- Financial Protection: Protects against potential financial loss due to title defects.
- Legal Defense: If a claim is made against the title, the title insurance company will defend the homeowner in court and cover the associated legal fees.
- Coverage Duration: An owner’s policy lasts as long as the homeowner or their heirs have an interest in the property.
Title Insurance
WHY IS IT IMPORTANT?
- Protection from Past Issues: Unlike other insurance policies that protect against future events, title insurance protects against claims for past occurrences. These can include errors in public records, unknown liens, or claims of ownership by others.
- Peace of Mind: It ensures that the buyer is obtaining a property free from undisclosed encumbrances or rights, providing peace of mind in the purchase.
HOW DOES IT WORK?
- Title Search: Before issuing a policy, the title company will conduct a title search. This involves reviewing public records to identify any issues or defects with the title.
- Issuance of Policy: Once the title search is complete and any identified issues are resolved, the title insurance policy is issued. There are typically two types of policies:
- Owner’s Policy: Protects the homeowner from defects in the title.
- Lender’s Policy: Protects the lender’s financial interests in the property.
- One-time Premium: Title insurance is unique in that it requires a one-time premium payment, typically at closing, rather than monthly premiums.
BENEFITS
- Financial Protection: Protects against potential financial loss due to title defects.
- Legal Defense: If a claim is made against the title, the title insurance company will defend the homeowner in court and cover the associated legal fees.
- Coverage Duration: An owner’s policy lasts as long as the homeowner or their heirs have an interest in the property.
Homeowners Insurance & Home Warranty
Homeowners Insurance is required by almost all lenders, so while that may not be optional for you, Home Warranties are. If you’ve got older appliances or systems, Home Warranties can be a great way to help control and anticipate the cost of replacing them.
So what’s the difference?
| HOMEOWNERS INSURANCE | HOME WARRANTY | |
| REQUIRED by Lender | ||
| Covers STRUCTURES On the Property | ||
|
Can pay INJURY OR DAMAGES you or family members cause others |
||
|
Covers APPLIANCE breaks caused by normal wear-and-tear. |
||
| Covers SYSTEM failures, like HVAC or Water Heaters | ||
| Covers Fire, Smoke, Lightening, Windstorm, or Hail Damage | ||
| Covers Damages from Vandalism or Theft | ||
| REQUIRES ADDITIONAL COVERAGE | Covers FLOOD Damage | |
| REQUIRES ADDITIONAL COVERAGE | Covers Mudslide and Earthquake Damage | |
| DEPENDS ON CAUSE | Sudden freezing of plumbing, heating, air conditioning, or appliance | DEPENDS ON CAUSE |
These generalizations are based on industry experience and are not specific guarantees of coverage from any insurance or warranty provider. ALWAYS read the specific coverages before accepting a policy.
Homeowners Insurance & Home Warranty
Homeowners Insurance is required by almost all lenders, so while that may not be optional for you, Home Warranties are. If you’ve got older appliances or systems, Home Warranties can be a great way to help control and anticipate the cost of replacing them.
So what’s the difference?
HOMEOWNERS INSURANCE |
|
| ✔ | Required by Lender |
| ✔ | Covers STRUCTURES On the Property |
| Can pay INJURY OR DAMAGES you or family members cause others | |
| Covers APPLIANCE breaks caused by normal wear-and-tear. | |
| Covers SYSTEM failures, like HVAC or Water Heaters | |
| ✔ | Covers Fire, Smoke, Lightening, Windstorm, or Hail Damage |
| ✔ | Covers Damages from Vandalism or Theft |
| REQUIRES ADDITIONAL COVERAGE | Covers FLOOD Damage |
| REQUIRES ADDITIONAL COVERAGE | Covers Mudslide and Earthquake Damage |
| DEPENDS ON CAUSE | Sudden freezing of plumbing, heating, air conditioning, or appliance |
These generalizations are based on industry experience and are not specific guarantees of coverage from any insurance or warranty provider. ALWAYS read the specific coverages before accepting a policy.
HOME Warranty |
|
| | Required by Lender |
| | Covers STRUCTURES On the Property |
| | Can pay INJURY OR DAMAGES you or family members cause others |
| | Covers APPLIANCE breaks caused by normal wear-and-tear. |
| | Covers SYSTEM failures, like HVAC or Water Heaters |
| | Covers Fire, Smoke, Lightening, Windstorm, or Hail Damage |
| | Covers Damages from Vandalism or Theft |
| | Covers FLOOD Damage |
| | Covers Mudslide and Earthquake Damage |
| DEPENDS ON CAUSE | Sudden freezing of plumbing, heating, air conditioning, or appliance |
These generalizations are based on industry experience and are not specific guarantees of coverage from any insurance or warranty provider. ALWAYS read the specific coverages before accepting a policy.
Closing Day
FINAL WALK-THROUGH
- Before the official procedures, buyers conduct a last inspection of the property to ensure it’s in the agreed-upon condition.
DOCUMENT REVIEW & SIGNING
- At the closing location (often a title company or attorney’s office), buyers and sellers review and sign essential legal documents. These documents detail the terms of the loan, property transfer, and associated costs
PAYMENTS
- Buyers finalize their down payment and cover closing costs, which include various fees like loan origination, title searches, and appraisal fees.
PROPERTY TRANSFER & DEED RECORDING
- Once all documents are signed and payments made, the property’s ownership is officially transferred to the buyer, and the deed is recorded in local records.
MOVE-IN
- With the formalities completed and keys in hand, buyers can now move into their new home!
Closing Day
FINAL WALK-THROUGH
- Before the official procedures, buyers conduct a last inspection of the property to ensure it’s in the agreed-upon condition.
DOCUMENT REVIEW & SIGNING
- At the closing location (often a title company or attorney’s office), buyers and sellers review and sign essential legal documents. These documents detail the terms of the loan, property transfer, and associated costs
PAYMENTS
- Buyers finalize their down payment and cover closing costs, which include various fees like loan origination, title searches, and appraisal fees.
PROPERTY TRANSFER & DEED RECORDING
- Once all documents are signed and payments made, the property’s ownership is officially transferred to the buyer, and the deed is recorded in local records.
MOVE-IN
- With the formalities completed and keys in hand, buyers can now move into their new home!