home THE ROAD TO A HOME BUYER'S GUIDE PRESENTED BY: Laurie Lecomte REALTOR®

hello, I A M L A U R I E L E C O M T E Y Y O U R L O C A L R E A L E S T A T E P R O F E S S I O N A L S I O N A L I believe in an honest consultative approach to real estate, providing my clients with , market knowledge, negotiating skills, contract management, regular communication, and creative solutions that only come with years of professional client care experience. While it is important to find a home that you will love, I also want to make sure that is a great investment for your future. 479-684-8026 [email protected] NORTHWESTARKANSASHOMESWITHLAURIE LAURIELECOMTEREALTOR LET'S CONNECT LAURIE-LECOMTE

10 TO BUYING A HOME 1 2 3 4 6 7 8 9 5 FIND THE RIGHT AGENT PREPARE FINANCING START HOME SHOPPING NEGOTIATE AN OFFER ORDER AN INSPECTION NEXT STEPS PREPARE FOR CLOSING 10 CLOSING DAY steps GET PRE-QUALIFIED FOR UNDERSTANDING NEW CONSTRUCTION

network of Collier agents and brokers. Understanding the local real estate market is essential when it comes time to make an offer on a house. NEIGHBORHOOD EXPERT I will work hard to protect all of your interests and take on any issues that may arise throughout the entire process. I work tirelessly to make sure buying a home is a fun and stress-free process. PROBLEM SOLVER The seller typically pays the commission for both the seller’s agent and the buyer’s agent. AFFORDABILITY 1

2 3 CHECK YOUR CREDIT SAVE CASH FOR A DOWN PAYMENT & OTHER EXPENSES •A Down Payment is typically between 3.5% & 20% of the purchase price. •Earnest Money is money you put down to show you’re serious about purchasing a home. It’s also known as a good faith deposit. This deposit will be credited to you at closing. •Closing Costs for the buyer run between 2% & 5% of the loan amount. •A Home Inspection costs $300 to $500, depending on the square footage. FINANCING Mortgage lenders recommend you do not buy a home that is more than 3 to 5 times your annual household income. If you are not purchasing a home with cash, you will need a mortgage preapproval provided by your mortgage lender. A lender will work with you to get a loan that meets your needs. Some buyers are concerned with keeping their monthly payments as low as possible, others want to make sure that their monthly payments never increase. A mortgage requires a good credit score. You can improve your score by: •Paying down credit card balances •Continuing to make payments on time •Avoiding applying for a new credit card or car loan •Avoiding making big purchases •If possible, avoiding job changes In order to make your dream of buying a home a reality, you will need to save cash for your down payment, earnest money, closing costs & home inspection. HOW MUCH HOUSE CAN YOU AFFORD? Before beginning your search, your first step is to get pre-qualified for a mortgage loan (unless you will be paying in cash for the full price of your home). Your agent can connect you to qualified mortgage brokers in the local market Based on your income and credit history, the loan officer will determine how much the bank will lend you, which will help you determine the price range for your search prepare GET prequalified

Lender GET YOUR FINANCIAL DOCUMENTS IN ORDER FOR YOUR INCOME QUALIFICATIONS W-2 Income/Salary Income from part-time jobs Income from a second Job Overtime & Bonuses Seasonal jobs Self-employed Income Alimony & child support (Documentation required) Income from the lottery Gambling Unemployment pay Single bonuses Non-occupying co-signer income Unverifiable income Income from rental properties QUALIFYING INCOME NON-QUALIFYING INCOME W2’S FROM THE PREVIOUS 2 YEARS PROFIT & LOSS STATEMENTS AND/OR 1099 FORMS FOR BUSINESS OWNERS 2-3 MONTHS WORTH OF PAY-STUBS BANK STATEMENTS (PAST 2-3 MONTHS) PREVIOUS TAX RETURNS LIST OF YOUR DEBTS & ASSETS ADDITIONAL INCOME DOCUMENTS REQUIRED BY LENDER NEEDED documents Required documents will vary depending on the lender and your situation

Veterans Personnel with honorable discharge Reservists & National Guard Surviving Spouses NONE NONE 580 Any borrower who meets the income limits and is buying a home in a USDA - designated rural area NONE REQUIRED 580 Any borrower who meets the minimum credit and income levels At least 3.5% of purchase price REQUIRED 580 620 On down payments below 20% Varies from 3%-20% of purchase price Any borrower with solid credit and the minimum down payment VA Department of Veteran Affairs USDA Department of Agriculture FHA Federal Housing Administration CONVENTIONAL WHO QUALIFIES DOWN PAYMENT MORTGAGE INSURANCE MINIMUM CREDIT SCORE T Y P E S O F L O A N S TYPES OF mortgage loans

WHAT TO DO DURING THE HOME BUYING PROCESS not change or quit your job(s) make large purchases such as a car, furniture etc.... use credit card excessively spend your down payment apply for any new credit omit debt on your loan application change banks co-sign any loans Do not Do not Do not Do not Do not Do not Do not Do not

4 What type of neighborhoods do you prefer? How close must the home be to work, play, school, shopping? Do you prefer a new or existing home? What age of home interests you? What size home do you need? What school district do you want to be in? Some things to consider: We will take notes on all the homes we visit. It can be hard to remember all the details of each home, so take pictures or videos. HOME SHOPPING We will make sure to check every little detail of each house •Test the plumbing •Test the electrical system •Open and close the windows & doors to make sure they work properly We will evaluate the neighborhood and surrounding areas •Are the surrounding homes well maintained? •How much traffic is on the street? •Is it conveniently located to schools, shopping, restaurants, & parks start tip START TOURING HOMES IN YOUR PRICE RANGE

5 understanding NEW CONSTRUCTION In general, new construction refers to a home that has just been built and has had no other owners. This can include homes that are commissioned as a custom build, as well as homes constructed by a builder/developer at their discretion. The process for buying newly constructed homes is a bit different than the traditional homebuyer to homebuyer process. Be sure to engage the services of an agent who can help you navigate the entire process to include: understanding base costs negotiating an offer and interpreting contract managing potential delays in closing due to construction set backs vs customization choices and costs clauses Not having a buyer's agent when purchasing directly from a developer could result in first-time new construction homebuyers to overpay, not thoroughly inspect the new home, or default to the preferred builder's lender rather than shopping around for the best rates.

CONTRACTCONTINGENCIES WHENTOMAKE AN OFFER: Congratulations, you have found THE home! In a market when the demand is higher than the amount of homes available it is important to act fast! HOWMUCHTO OFFER: What you offer on a property depends on a number of factors, including its condition, length of time on the market, buyer activity, and the urgency of the seller. While some buyers want to make a low offer to see if the seller will accept it, this often isn't a smart choice because the seller may be insulted and decide not to negotiate at all. Together we will look at recent sales and current buyer activity in the area, as well as the value of the property in its present condition. Putting all this information together, we will determine the price that you would like to offer. COMPONENTS TO STRENGTHEN YOUR OFFER Put Down a Healthy Earnest Deposit A large earnest money deposit shows the seller you are serious Cash Talks A transaction that is not dependent on receiving loan approval is more attractive to a seller Offerto Close Quickly Many sellers prefer to close within 30 days. Some sellers may need a delayed closing. Your flexibility will strengthen your offer. 6 negotiate AN OFFER When putting together an offer, I will help you consider which levers you can pull, including contract contingencies. T This clause specifies a window of time in which the buyer must obtain financing to purchase the home. If the buyer doesn’t secure a loan by that deadline, they can withdraw from the deal without penalty. Mortgage Contingency: Title Contingency: This clause involves the window of time the buyer has to get the property they plan to purchase professionally inspected. If it turns out the property has defects, and the seller elects not to repair or remediate the issues which are raised by the buyer, the buyer can terminate the contract. This provides the buyer the right to obtain a title search and raise any objections to the status of the title to the property, which must be cleared by the seller in order for the buyer to close on the transfer of title. Home Inspection Contingency: Sale of a Prior Home Contingency: This protects buyers who need the cash proceeds from the sale of their existing home to be able to afford a new home. If the buyer needs to sell their current home first by the deadline indicated in the contract, but they cannot find a buyer, they can escape the real estate contract. Appraisal Contingency: This safeguards the buyer by stipulating that the property must appraise for the indicated sales price, at minimum, or the contract can be nullified. This is because banks don’t like to loan money to borrowers for a house that costs more than it’s worth.

THE SELLERCAN: •ACCEPT THE OFFER •DECLINE THE OFFER •COUNTER-OFFER •ACCEPT THE SELLER’S COUNTER-OFFER •DECLINE THE SELLER’S COUNTER-OFFER •COUNTER THE SELLER’S COUNTER-OFFER OFFER ISACCEPTED This happens if the seller thinks your offer isn’t close enough to their expectations to further negotiate. A counter-offer is when the seller offers you different terms. If this happens, we will work together to review each specific area of the counteroffer, to make sure we negotiate the best possible price and terms on your behalf. you can: You can negotiate back and forth as many times as needed until you reach an agreement or someone chooses to walk away. You will sign the purchase agreement and you are now officially under contract! This period of time is called the contingency period. Now inspections, appraisals, or anything else built into your purchase agreement will take place. OFFER responses Now that you are under contract you can COMPLETE THE LOAN PROCESS Finalize the loan process with your lender. You'll lock in your interest rate and receive a loan estimate that includes closing costs. I will send you a checklist of things to accomplish between now and closing, with a timeline based on the contract date. Congratulations!

7 AN INSPECTION Immediately after going into contract we will schedule an inspection with a reputable home inspector to do a thorough investigation of the home. Home inspectors look at the exterior and interior parts of the home, including but not limited to electrical, plumbing, roofing, HVAC, and foundations. Once completed, the inspector will provide us with a list of their findings. You can take the issues as-is or request the seller to address some or all of the findings. We will be mindful and reasonable on smaller items while being very cautious and vigilant of potentially significant issues. Home inspection cost can be $300 - $500, depending on the square footage. No house is perfect. Typically home issues are revealed in the home inspection, and those issues tend to result in another round of negotiations for credits or fixes. 1. Ask for credit for the work that needs to be done. Likely, the last thing the seller wants to do is repair work. 2. Think “big picture” and don’t sweat the small stuff. A tile that needs some caulking or a leaky faucet can easily be fixed. Repairs are still up for negotiation and perhaps a small credit would help with closing costs. 3. Major repairs are necessary and seller isn't willing to make them If the seller will not make the repairs or offer you a credit, and the expense is more than you want to take on, you can break contract. FROM THE INSPECTION order outcomes

8 OTHER OUT OF POCKET EXPENSES TO PLAN FOR You'll need home owner's insurance for the new home before closing. This will protect against things like fire, storms, and flooding. HOME OWNERS INSURANCE NEXT steps APPRAISAL Your lender will arrange for a third party appraiser to provide an independent estimate of the value of the house. The appraisal lets all parties involved know that the purchase price is fair. The loan file then moves on to the mortgage underwriter. If approved, you will receive your final commitment letter that includes the final loan terms & percentage rates. PROPERTY TITLE SEARCH This ensures that the seller truly owns the property and that all existing liens, loans or judgments are disclosed. Closing costs can vary depending on your home’s purchase price and where you are located. You can generally expect your closing costs to be around 2% to 5% of the home’s sales price. These closing costs can sometimes be shared with the seller. CLOSING COSTS

9 SCHEDULE YOUR MOVE PREPARE FOR Get quotes on moving services Transfer utilities to the new home for closing day Process a change of address with USPS Start packing! closing FINAL WALKTHROUGH REVIEW THE CLOSING DISCLOSURE We will do a final walk through the home within 24 hours of closing to check the property’s condition. This final inspection takes about an hour. We will make sure any repair work that the seller agreed to make has been done. We will be sure to: • Check that all appliances are working properly • Run the water in all the faucets and check for any possible leaks • Open and close garage doors with opener • Flush toilets • Run the garbage disposal and exhaust fans Lenders are required to provide you with a final closing disclosure, at least three days before closing. This will show you what your final loan terms and closing costs will be. You will have three days to review the statement. This is done to ensure that there are no surprises at the closing table. If there is a significant discrepancy between the loan estimate and the closing disclosure, we must notify your lender and title company immediately. PREPARE FUNDS FOR CLOSING Obtain a certified check from your bank or Schedule a wire transfer of funds with your bank. Contact your bank in advance to secure this process and get transfer information from the title company. To make sure your closing goes smoothly I will be by your side to guide you through all of the the final steps.

10 DAY Closing day marks the end of your home buying process and the beginning of your next chapter! CLOSING TABLE Who will be there: • Your agent • The seller • The seller’s agent • A title company representative • Your loan officer • Any real estate attorneys involved in the transaction The closing typically happens at the title company. You will be signing lots of paperwork so get your writing hand warmed up! Some of the papers you will be signing include: the deed of trust, promissory note, and other documents BRING TO CLOSING • Government-issued photo ID • Homeowner’s insurance certificate • Certified check to cover all outstanding costs RECEIVE YOUR KEYS Congratulations! It was a lot of hard work but you are now officially homeowners!! Time to throw a party and get to know your new neighbors! closing Transfer of title moves ownership of the property from the seller to you. The title company receives your funds from the lender to pay for the home. TRANSFER OF TITLE DELIVERY OF THE DEED A deed is the document that transfers ownership of real estate. The deed names the seller and buyer, gives a legal description of the property address, and contains notarized signatures of the seller and witnesses. At the end of closing the deed will be taken and recorded at the county clerk's office . It will be sent to you after processing.