Home Buyer's Handbook
Buying a home can be a stressful and scary proposition. This booklet is designed to help educate you in the home buying process. Hopefully it will answer many questions and it might raise a few too! Our goal is to help you eliminate your fears and to earn your trust.
The Buyers Bonus
When asked, most folks will agree home ownership is a childhood dream. Our knowledge of the local real estate market, extensive, continuing education and years of experience combine to make your dream of home ownership become a reality.
What’s the advantage to working with our team?
We are dedicated professionals who know the real estate business. We are confident we can help you achieve your real estate goals, whether you are a novice buyer seeking to purchase your first home or a seasoned real estate veteran investing in another property for you to enrich your portfolio.
Additionally, we believe communication is paramount in our business and together, with your lender, we will work hard to keep you up to date with the progress of your transaction.
As real estate prices continue to appreciate, we know this purchase is one of the most precious and expensive investments you will make in your lifetime. Once we begin the process of your home search, I will be your point of contact. I will work closely with you to make sure your transaction goes fast, fair and hassle free. I would like to introduce the other excellent members of our team. If you are unable to contact me, please feel free to speak to any of my team mates regarding your transaction any time if you have questions.
Meet The Team!
Brenda Bonebrake started selling real estate in the Valley in 1987. Twelve years ago, fate brought Brenda and Sandy Edwards together when Sandy was looking for a new home. It was the beginning of a great friendship and partnership. The team proved so successful that to continue their same level of first-class service, they created their own “dream-team” of Leslie, Mary and Drew. We’d like to take this moment to formally introduce to you “THE TEAM.”
Brenda Bonebrake, our “fearless leader,” started selling real estate in the Valley in 1987. Brenda specializes in working with our sellers and builders, but her steady hand is behind every area of our business. She resides in Lyons with her husband Dave, who was the Agriculture teacher & FFA advisor at Scio High School & now farms full-time. Their daughter Bonnie is an Oregon State graduate and loves her job at Farm Credit Services. Married to Drew, their oldest daughter, Cassi is a nurse & they live in Lyons where they’re raising their two very-busy daughters. The Bonebrakes live and work on the family farm where they designed and built their own home. Brenda loves the sweet smell of new lumber & sheetrock, working on the farm, and teaching her grandkids mischievous new tricks! Brenda was honored with the “Realtor of the Year, 2013” award, presented by the Salem Association of Realtors.
Sandy Edwards, our “Southern Lady,” lives in Sublimity. Twenty-one years ago, fate brought Brenda and Sandy Edwards together when Sandy was looking for a new home and it was the beginning of a great friendship and partnership. Sandy is a transplant from Virginia where she worked for an NBC television affiliate. Sandy hit the jackpot by marrying Don Michael and inheriting 3 daughters and 9 grandchildren! Sandy enjoys showing both locals & transplants the great aspects of the wonderful Willamette Valley. Our clients love her Southern charm and the genuine care she shows each and every one of them.
Leslie Stewart is a full-time Buyer’s Agent; she loves finding the perfect home for her buyers! Leslie grew up in Mill City where she lives with her husband Scott, who works for Frank Lumber Company. Daughter Kelsey is a Graduate of the Vascular Ultrasound school at OIT and is engaged to be married in late summer. Their oldest daughter Kendra is married to Josh. Kendra works at a local medical clinic and Josh is employed by Far Line Bridge. They have two daughters, Quinn and Scarlett. Leslie’s experience and attention to detail is reassuring to her buyers throughout the entire home-buying process. Leslie is also busy working behind the scenes managing the internet marketing for the team
Mary Gries is our other full-time Buyer’s Specialist. Mary’s husband Jim is a supervisor at Oregon State Bridge construction. They have 3 children: Craig, part owner of Oregon State Bridge, is married to Brooke. Jaime and husband David, live in Jacksonville, FL, where they are enjoying their daughters Sarah and Abi. Marcus is a builder in Wilmington, NC, married to Jess and has 2 daughters, Emmy Jane & Elin. Mary has lived in the Stayton area most of her life, moving from Seattle to Lebanon at age 6 and then to Stayton at 16. She worked as a branch office administrator for Edward Jones in West Salem, and before that, worked for a computer software and training company. She was a mentor for 4 years through the Friends of the Family Mentoring Program.
Drew Johnson is the newest Broker on the Bonebrake and Co team. Drew grew up in the small town of Kamiah, Idaho on the Clearwater River but now resides in Lyons. He worked in IT in the medical field for twelve years. Drew's wife Cassi is a registered nurse and has been in the healthcare field for the last eight years. Keeping life busy at home are their two active daughters Haddie 6, and Piper 2. Drew spends his spare time tackling home improvement projects that Cassi comes up with and working on the family farm. He runs a mean chain-saw, enjoys golfing, bow-hunting, and good-naturedly put away his motorcycle when the kids arrived. Life is good and he shows it with his ready smile and steady knowledgeable manner!
Orientation - During the initial interview, you’ll share your expectations and learn about the process of buying a home. You’ll obtain valuable market knowledge about areas, prices, financing, your qualifications, and normal procedures. Consider your wants, abilities, and needs, you decide on price, size, style, and area. At this point, we will begin the search to find your new home.
Financing -A strategy for a successful purchase is to apply for pre-approval prior to finding a home. Negotiating a contract with a loan commitment in hand can be very advantageous to you. There are specific things necessary to make a loan application and assembling them can take some time. It is recommended to use the enclosed list.
Structuring a Good Offer- When you find the right home, it’s time to make an offer to purchase it. This is done in writing specifying every detail that is part of the agreement. I will prepare all the paperwork for your signature(s). This can be done in the office or I can prepare the offer and email it for your signature(s). You will need to include “earnest money” with your offer. This can be done with either a personal check or a “promissory note,” (a promise to pay) which will be redeemed with a personal check once the offer is accepted.
The seller’s response – The seller can accept your offer, reject your offer or make a Seller’s counter offer. This part of the process can take several days.
Open Escrow- Once your offer is accepted and escrow is opened, we will get together to redeem your promissory note if you have not already turned in a personal check.
Order Inspections - We will discuss what kinds of inspection will be beneficial for your purchase. Arrangements can be made for you to be present at the inspection. You will have the opportunity to ask the inspector questions about the property and the inspection report.
Continuous contact with your lender - I will check in periodically with your lender to update them as to our progress in the transaction.
Review Inspection Report - We will need to make time to review the inspection report and decide what items we may ask the seller to repair. We focus mainly on safety concerns and pest and dry rot issues and any major defects that may be found.
Remove contingencies - Once the seller has made the agreed upon repairs, we will have a re-inspection and if everything meets your approval we will remove the contingencies and proceed to closing.
Loan Documents go to underwriting - Your lender will gather all the documentation for your loan including the appraisal, preliminary title report and your verifications and send them to the underwriter for the final loan approval.
Schedule Signing at Title and Escrow Company - Your loan package is sent to escrow, which will facilitate your closing by preparing the closing documents. Once this process is done, the escrow officer will schedule your signing. The escrow officer will let you know the amount necessary to pay the balance of your down payment and your closing costs at this time. A cashier’s check is required for these funds. Bring valid photo identification!
Recording, Possession and Keys - The loan package will be sent back to your lender for a final review. Your lender wires the funds to the title company, who will record the deed and release the funds to the seller.
As per earnest money agreement, on the possession date you get the keys and the property is yours!
As a member of the Multiple Listing Service, I can show you any property, even those listed by other agents, saving you the time and hassle of potentially dealing with many other brokers.
If you should see an ad in the paper or a sign in a yard, call me to find out the information. If you want to see a property, I will be happy to make the necessary arrangements to show it to you.
For Sale by Owner
Dealing with an “unrepresented seller” can be risky. Many times a homeowner will work with an agent, even though the home is not listed with a real estate broker. A homeowner trying to sell his home himself is usually doing so in hopes of saving the commission. Coincidentally, this is the same reason a buyer wants to deal directly with a homeowner. The seller rarely passes this savings on to the buyer.
It is necessary for the agent to introduce the buyer to the property. If you want to see a home offered by the owner and want the advantages of my services, please let me contact the owner and set the appointment.
Most builders are more than willing to work with agents who accompany the buyer to the property on the initial visit. I can get all the information you need to make any decisions. By working through me with builders, you get all the services offered by me in addition to those offered by the builder. You'll get more, but you won't pay more for it.
Better decisions are made when they are based on good financial information. It is important to me to make sure you have a good understanding of the following terms and how they may affect your purchasing power and your financial situation. Knowing there are alternatives helps to determine the right choices.
Estimated Closing Costs – It is important to know how much you’ll need to buy a home not only for the down payment but for all of the fees that are charged in connection with getting the loan and conveying title.
Mortgage Qualification –Discover what size mortgage you can qualify for using the same guidelines that a mortgage company uses.
80 – 10 – 10 – Or 80 - 20 - This loan will show you savings achieved by eliminating Private Mortgage Insurance. Not only will you save money in the initial purchase costs but also in the monthly payment.
Alternate Financing Plans – Choices will help you to make a better decision as to how to finance your new home. You deserve to know what options are available and that is exactly what you’ll get.
Interest Rates – I can show you what can happen to your payment if interest rates go up and how much your purchasing power goes down.
Mortgage Accelerator – Discover the advantage of adding an additional amount of principal to your fixed rate mortgage on a regular basis to shorten the term and save tens of thousands of dollars in interest. I will be happy to provide you with this information based on your mortgage amount.
Applying for a loan and obtaining approval before a buyer finds a home they want to buy can be a distinct advantage. Making a loan application is going to be necessary eventually unless you are going to pay cash for the home.
Having a pre-approval makes your offer more attractive to a seller. Pre-approval requires a complete application with credit reports and verifications. The Mortgage Company will issue a commitment subject to a specific interest rate and points, satisfactory appraisal and preliminary title report when the property is identified.
Time limits are usually placed on pre-approval commitments. It is recommended to be ready to look at homes and make a decision after you receive your pre-approval commitment.
The advantages of being pre-approved are:
· Looking at the right-priced homes.
· Avoiding disappointment in deciding on a home that you can’t afford.
· Saving money with a seller who is confident about taking their home off the market with buyers who have a definite loan commitment.
· One less contingency that the seller will be concerned with to get their home sold.
· Closing more quickly. The lengthiest contingency is usually the mortgage approval. The appraisal can be done quickly.
· Minimizing the anxiety of not knowing whether or not you qualify.
Your pre-approval insures you a better negotiating position
than a buyer without a pre-approval!
Names and addresses for two full years
Gross monthly income
W-2s for two years, if available
Year to date pay stub
Proof of income from rentals, investments, etc
Proof of retirement, disability or Social Security
Proof of child support or alimony paid/received
Two years Federal Income Tax Returns
Current year profit and loss statement
Each creditor's name, addresses and type of account
Account numbers for each
Monthly payments and approximate balances
Amounts of child care expenses
Names and addresses of banking institutions
Account numbers for all accounts
Type of accounts and present balances
List of assets in stocks, bonds, and property
Life insurance cash value (documented if used as cash down payment)
If applicant is selling a home, a copy of sales contracts
Social Security numbers for all parties
Veterans - Certificate of Eligibility & DD-214
Cash or check to pay for application fee
I want you to consider me as your real estate professional. Providing you with the service to make your transaction fast, fair and hassle-free is my No. 1 goal. I know you have a choice and I appreciate the opportunity to assist you in your real estate transaction.
· Neighborhood Knowledge- including schools, shopping, crime, demographics and other things you feel are important.
· Appropriate Houses to Consider- by showing you ALL available homes you might be interested in, including homes that may not even be on the market yet.
· Good Financial Decisions- You will know what you qualify for, how much your payment and closing costs will be and alternative types of financing. I can even show you how to save thousands of dollars on your mortgage. Just ask!
· Diligent Work- to Find Your Home including screening and previewing homes for you so your time is not wasted. My desire is to find you the right house that fits your needs.
· Your Opinion Counts – When we look at a home, I will ask for your candid opinion of the property, good or bad. Remember, I represent you and your feedback will help me pinpoint exactly what you are looking for.
When a buyer agency relationship exists between us, you are entitled to special fiduciary client level services.
Loyalty - the real estate agent must act in the best interest of the buyer.
Obedience - must follow the lawful instructions.
Disclosure - of all material facts such as relationships between the broker agent and other parties, existence of other offers, status of earnest money, a property's true worth, and important contract provisions.
Confidentiality- I promise confidentiality in all conversations and facts surrounding your transaction that will not be shared with others with out your permission.
Accounting in dealings - money placed in the hands of the broker is kept in a Client Trust Account or a neutral escrow account.
Reasonable Skill and Care – working together to arrive at a reasonable purchase price, affirmatively discovering material facts and disclosing them to you, investigating material facts related to the sale and advising you of pertinent inspections or tests that are available or recommended.
With buyer agency, your interests will be represented in the purchase of your home.
Agency is a legal relationship and a written agreement should be completed to explain all the duties and responsibilities.
Lenders and Inspectors
The following lenders and inspectors are people we use ourselves. They have a proven track record and are ready to provide you with excellent customer service.
Jay Seymour Landmark Professional Mortgage 503-585-1105
Scott Price Pacific Residential Mortgage 503-391-2334
Ann Shipley Equity Advantage LLC 503-315-2893
Pillar to Post Mike Rowley 503-856-8775
Ram Inspections Steve Barnett 503-949-0435
Premier Home Inspections Joe Zink 1-888-606-9891
Oregon Property Buyer Advisory Letter
Below is a link to the Oregon Property Buyer Advisory letter. This letter is intended to provide a buyer with guideline to assist them in making an informed decision about the condition and desirability of the property they are purchasing.
Please take a few minutes to read through this document. In most cases, not all of the items covered in the letter will be applicable to your home purchase. But you may find it helpful to educate yourself in advance of your inspections. If you do, you will have a greater understanding of what to expect of your home inspector and inspection report.
Seller’s Disclosure -Usually, the seller will provide a property disclosure for interested buyers prior to writing a contract. This will declare the material facts about the physical condition of the property.
The property disclosure does not take the place of a buyer’s inspection that is usually made after a contract is completed.
Home Inspection - A provision for a home inspection can be added to the sales contract identifying the areas to be inspected by a professional inspector. The purpose of the inspection is to find major defects in the home.
The areas of concern include but not limited to:
· Mechanical – heating, air-conditioning, appliances.
· Plumbing – fixtures, lines, water heaters, sewers.
· Electrical – wiring, out of date systems.
· Structural – doors, windows, roof, foundation, drainage, ventilation, and environmental hazards.
Typically, I ask for the seller to provide a Home Protection Plan for the buyer that covers certain items for a one-year period like:
· Heating and air conditioning systems
· Interior plumbing
· Built-in appliances
· Electric pool equipment (optional coverage)
If a Home Protection Plan is not provided on the home you contract for, you can acquire the coverage yourself. The price of programs will vary in price and coverage and among carriers.
Home insurance companies are using Clue Reports to track claims made on a property. If the property you are purchasing has a history of claims your insurance company may cancel your insurance based on the claims on the household. We ask the seller in our offer for this information, in advance of closing, to help guarantee you won’t run into a cancelled homeowner’s policy in the future.
Septic and Wells
Most rural properties are on private wells and septic systems. The seller, per earnest money agreement, is to complete a purity and nitrate test, unless waived by the buyer. As a buyer you have the option of having other water tests completed. Other tests can include a flow test to determine the gallons per minute flow, lead or arsenic and other metals.
What Exactly is Title & Escrow?
Generally speaking, in Oregon, Title and Escrow companies are one and the same and will take care of two separate jobs for your transaction.
Once your offer is accepted by the seller, I will open an escrow with the escrow company mutually agreed to in the earnest money agreement. The escrow company will be responsible for holding your earnest money funds.
You will review a preliminary title report as provided by your title & escrow officer. This report will show any “exceptions” that are part of the title. The preliminary will show the legal descriptions of the property, a map of the property, legal ownership of the property, a deed of trust, any tax assessments and the status of the taxes, any pending civil actions and any judgments against any of the parties. Other exceptions may include power water and access easements. If Covenants, Conditions and Restrictions (CC&R’s) apply to the property, this is the time we will have to review them as well.
Your escrow officer acts as an impartial “neutral third party” in the transaction and takes instructions from the seller, the lender, the real estate broker and you as a buyer. The escrow officer’s job is to provide the buyer with a title insurance report, processes and coordinates the flow of documents and funds, secures the title insurance policy, prorates taxes and or rents, records the deed and loan documents and prepares the final closing statement for each party.
Customary Closing Costs
The BUYER normally pays for:
· One-half of the escrow fee (according to the contract)
· Lender’s title policy premiums (ALTA)
· Document preparation
· Tax pro-ration (from date of acquisition)
· Recording charges for all documents transferred to buyer’s name
· Fire insurance premium for first year
· Home Warranty (according to contract)
· Inspection fees (according to contract) : Roofing, property geological, termite, etc
· All new loan charges (except those required by lender for seller to pay)
· Interim interest (on new loan from date of funding to first payment date)
The SELLER normally pays for:
· One-half of the escrow fee (according to the contract)
· Work orders such as termite inspection and work, it required (according to contract)
· Owner’s title insurance premiums
· Real estate commission
· Any judgments, tax liens, etc., against the seller
· Any unpaid Homeowner Association dues
· Home Warranty (according to contract)
· Any bonds or assessments (according to contract)
· Any loan fees required by buyer’s lender (according to contract)
· Recording charges to clear all documents of record against the seller
· Payoff of all loans in seller’s name
· Interest accrued to lender being paid off, reconveyance fees and any prepayment penalties
This information provided by Rosi Green at Amerititle
· Pride of ownership is a key reason for wanting your own home. Decorate it to your own taste and enjoy all of the benefits while making a great investment.
· Real estate over time has been considered a good investment because most of it has appreciated. The effects of leverage can multiply the increase when borrowed funds are used to purchase the home.
· Qualified mortgage interest and home equity loans are currently deductible for Income Tax purposes.
· Property taxes on a first or second home are deductible for Income Tax purposes.
· A homeowner can exclude up to $500,000 of capital gains if married, filing jointly or up to $250,000 if single or filing separately, for homes that have been the taxpayer's principal residence for the previous two years. There is no age requirement for taking the capital gains exclusion like the “over 55” rule in the past. It is not necessary to purchase a replacement home more expensive than the one sold. Homeowners can buy a more or less expensive home with no tax consequences assuming their gain is less than the allowable amounts.
· Preferential tax treatment on gains that have been made from capital assets held more than one year is permitted by the IRS. This is especially important for homeowners with gains in excess of the allowable exclusion. Mortgage payments include the interest for the time that the money has been used and principal to retire the debt over a period of time. Each month part of the payment is for principal accumulation.
SAR - Salem Association of Realtors, Member
OAR - Oregon Association of Realtors, Member
NAR - National Association of Realtors, Member
WVMLS - Willamette Valley Multiple Listing Service, Member
CRS - Certified Residential Specialist®
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