GUIDE TO BUYING A HOME The OKey Group at Brock Real Estate 2235 - - PDF document

GUIDE TO BUYING A HOME

The O’Key Group at Brock Real Estate

2235 Hyperion Ave. Los Angeles, CA 90027 323-207-5270 info@theokeygroup.com www.theokeygroup.com

Real estate is smart. It’s savvy. And it’s within your reach. Hi! We’re The O’Key Group, part of Brock Real Estate, a boutique firm in the Silver Lake neighborhood in Los Angeles. Buying a home is exciting, and it’s our mission to keep it that way; with a combined 35 years of real estate experience, our team has the knowledge to make your real estate dream a reality. We represent people looking to live in LA’s hottest housing markets. We have a pulse on the city, and we’re really, really into real estate. We buy homes to renovate, flip, and rent. If you’re looking for a turnkey home, great; if you’ve fallen in love with a fixer-upper, we can consult with you about the renovation process and set you up with an outstanding team of home improvement professionals. A wise man once said, “Life is like a box of chocolates—you never know what you’re going to get.” That applies to home buying, too—it can be smooth sailing, or it can have a few unexpected hiccups along the way. Our team is here to guide you through every step of the process and keep the experience as positive as possible. It’s our job to help you find houses that meet your needs, to negotiate fiercely on your behalf, to handle the legalities and intricacies involved in every real estate

• transaction. It’s your job to fall in love with the house of your dreams and make the

decision to call it “home.” We’re so confident in our work that we’ll make you this promise: if you’re not happy in the first 12 months of your purchase, we’ll buy your house back.

THE O’KEY GROUP

Sound good? Let’s go into a little more detail about the home buying process and what working with The O’Key Group will look like.

WHY BUY?

Three words: no more rent! Instead of throwing your money away on rent every month, you’re putting your money straight back into your piggy bank. Real estate values appreciate over time and far outpace inflation. You can borrow against your home’s equity down the line for tuition, medical bills, a new business—anything that might come your way. Qualified mortgage interest and home equity loans are income tax deductible. Woohoo! Say you’re married or filing your taxes jointly and you decide to sell the house you’ve been living in for the past two years. You can exclude $500,000 in capital gains on your taxes if you put that money into a new home. If you’re single or filing your taxes separately, you can exclude $250,000 in capital gains if you put that money into a new home. You get preferential tax treatment on gains made from assets held for more than one year (for example, if you make more on a home sale than the capital gains exclusions mentioned above). SILVER LAKE, LOS ANGELES

WHY WORK WITH THE O’KEY GROUP?

We’ve Got The MLS On Our Side

Sites like Zillow and Redfin are great public resources, but they lag several weeks behind the market—the house of your dreams might be in escrow by the time it shows up on those sites. We’re members of the MLS, which means we see homes the minute they come on to the market. We’ll put together a daily update of homes that match your home buying criteria from all the real estate compa- nies, including foreclosures and bank-owned properties. If it’s active and on the market, you’ll see it with up-to-date and accurate pricing.

OUR SERVICES ARE ABSOLUTELY FREE

In almost every single case, the seller pays the buyer’s agent’s fees, so there’s really no downside to working with a realtor. Of course, there are rare instances when, to make an offer more attractive, the fees are split between buyer and seller or handled by the buyer alone, but these instances are not the norm.

FOR SALE BY OWNER: TRICKY BUSINESS

Working directly with the owner of a home is the easiest way to get ripped off. They’re hoping you don’t work with an agent so they save on the commission and so they can charge you way more than the market value for their home; on average, you’ll spend $30,000 more than you should have. Working with an agent ensures accurate market pricing. We’ll take care of you and look out for your best inter- ests.

Builder’s Homes

Most builders are happy to work with the agent who accompanies the buyer to the property on the intial visit. Agents know the right questions to ask builders, which ensures that you’re getting accurate information on a new or renovated home. This extra information costs you nothing.

WE KNOW TODAY’S LANDSCAPE

What does it mean to buy a foreclosure or a short sale—are you really getting a deal in today’s market? It’s important to work with someone who knows how these transactions dramatically differ from traditional home sales, someone who can help you make decisions based on the intricacies of every type of real estate transaction.

Lots of People Want What You Want, So You’ve Got To Be Fierce

If a home is perfect for you, chances are, it’s perfect for several other potential home buyers. That means you need someone who can aggressively fight for your interests. On average, buyers look at 20 houses, write offers on 10, and get accepted on five before settling on that one perfect home. We’ll act quickly and shrewdly, making sure your offers are competitive with those of other buyers who have agents fighting for them. 5

HOME BUYING FROM START TO FINISH

Here’s a step-by-step overview of what working with The O’Key Group will look like. We’ll go into more detail in the next few pages.

INITIAL interview—let’s talk

We’ll sit down with you so you can let us know exactly what you’re looking for. What’s hot and what’s not? Where do you want to live? How much do you want to spend? The more details you can provide, the more likely it is that you don’t miss out on your perfect home.

FINANCING

We’ll help set you up with a lender who can guide you through the particulars of the financing

• process. An important first step is getting pre-approved for a loan; this will help narrow down

your home search and will give buyers the signal that you’re making a serious offer.

SEARCHING FOR THE PERFECT HOME

Once we know what you’re looking for, we’ll be able to find you houses that meet your criteria. We’ll take you for viewings and open houses, and you’re welcome to visit some on your own, too--you can leave our card and we’ll take care of the rest. The more houses you visit, the more likely we are to get an offer accepted and get you moved in to your new home. 2105 Ellenwood Pl., Eagle Rock 90041

HOME BUYING FROM START TO FINISH, CONT.

MAKING AN OFFER

It’s a myth that an offer constitutes a legally binding contract to buy. Offers are like college applica- tions; you send out a bunch and then pick from the ones that have been accepted. The second you decide that a house might be right for you, we’ll send the seller an offer online via Docusign so that they immediately know they have a possible transaction on the table. We’ll negotiate with their agent to beat out the competition and get you the best possible price.

PAPERWORK and escrow

Once your offer is accepted, you can decide to continue on to the escrow process. Here’s where a lot of the action takes place: you’ll sign paperwork, provide your down payment, get an appraisal, and go through home inspections—included in the contract is the provision that gives you 10 days to have any and all inspections including electrical, lead, mechanical, pest, plumbing, radon, and structural.

sign those documents—the home is yours!

Once you sign the final escrow papers, the house will go into its closing period. The actual date of close is a moving target; we can give estimates, but when the lender actually moves forward with the financing is up in the air. Once that money gets transferred, pop that champagne bottle—the keys are yours! 8522 Oak Ct., Los Angeles 90046

BUYING A HOME: THE RUNDOWN

INITIAL CHAT PRE-APPROVAL SHOW HOMES WRITE OFFERS CONTRACT OPEN ESCROW APPRAISAL INSPECTIONS SETTLEMENT IT’S ALL YOURS! MLS CREDIT REPORT NEGOTIATE DOWN PAYMENT LOAN COMMITMENT BUILDERS TITLE SEARCH FSBO

LIVING THE DREAM...

Why are you looking for a home right now? When do you want to make the move? Do you need to sell a property before buying? Have you decided what neighborhood you want to live in? If so, where? What style home do you like? How many bedrooms, bathrooms, and living areas are you looking for? What’s hot and what’s not in your new home? The more detail, the better! Are schools important? If yes, which ones and why? Have you met with a mortgage broker and found a price range you’re comfortable with? Are you pre- approved for a loan? When is the best time to look at houses? If we found the right home for you today, is there anything that could keep you from making the purchase? Does anyone else have to approve of your purchase?

FINANCING THE DREAM...

The O’Key Group has close relationships with several mortgage brokers that can help you get your finances in order. They’ll help you establish the following:

Estimated purchase costs:

How much you’ll need to buy the home, including down payment, loan fees, and title fees

Mortgage qualification:

How much you are qualified to borrow, which will help you figure out which houses you can afford

Alternate financing plans:

The different options available to you when establishing how to finance your home

Mortgage accelerator:

The advantage of adding an additional amount of money to your fixed rate mortgage to shorten the term and save tens of thousands of dollars in interest

it starts with pre-approval...

Getting approved for a loan before making offers on a home is mandatory in today’s market. Pre-qualification is a procedure where a mortgage officer looks at your financial information and makes an estimate regarding how much you’ll qualify for. This can help you discover any glaring problems before going into the pre-approval process. Pre-approval requires a complete application with credit reports and verifications. The mortgage com- pany will offer a commitment with a specific interest rate and points and a satisfactory appraisal once you’ve identified the property you want to buy. There are time limits involved, so you want to make sure you’re ready to go ahead and make a decision once you’ve gone through the pre-approval process. Being pre-approved is really helpful: You’ll be able to narrow your search to homes you can afford You’ll be spared the heartache of finding your dream home and finding out you can’t afford it You can save a lot of money with sellers who want to take their home off the market and are looking for buyers with definite loan commitments You’ll save time down the line, as mortgage approval is usually the lengthiest process Eagle Rock, Los AngelES

FINANCIAL DATA

What size monthly payments do you want? $ What price range are you looking at? $ How much cash is available? $ Do you currently own a home? Y/N Do you need to sell before buying? Y/N How much do you think your home is worth? $ What is the unpaid balance? $ Interest rate % Term years dated / / Type of loan? Monthly payment $ If renting, how much is your rent? $ List your regular monthly payments (installment debt, revolving charges, student loan, etc.) Are all debts current? Y/N Is there any problem with your credit? Y/N What is your monthly income? $ Employed/Self-Employed? What is your spouse’s monthly income? $ Any other monthly income? $ Where are you employed? How long have you been there? Have you or your spouse ever taken bankruptcy? Y/N If yes, explain: Have you or your spouse ever had a home foreclosure? Y/N If yes, explain: $ $ $ $ $

Preparing Your Mortgage Application

Mortage application criteria change all the time, so check with your lender about what you’ll need. Below is a list of what you can expect to provide:

EMPLOYMENT

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 If self-employed: Two years’ Federal Income Tax Returns Current year profit and loss statement

CREDITORS

Each creditor’s name, address, and type of account Account numbers for each Monthly payments and approximate balances Amount of child care expenses

BANKING

Names and addresses of banking institutions Account numbers for all accounts Types of accounts and present balances

MISCELLANEOUS

List of assets in stocks, bonds, and property Life insurance cash value (document 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 application fee

PROPERTY

Copy of sales agreement Copy of listing on property (for short sales) Instructions on how appraiser is to gain entrance

HOME PROTECTION PLAN

Some sellers 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 Electrical pool equipment If a Home Protection Plan is not provided on the home you contract for, you can acquire the coverage yourself. The programs will vary in price and coverage depending on the carrier.

HOME INSPECTION

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. 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 are 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 We’d be happy to supply you with a list of recommended inspectors. You’re encouraged to accompany the inspector to ask questions, and be sure to ask for a written report itemizing any areas of concern.

MUTUAL COMMITMENT

If The O’Key Group will: Make our best effort to find the home that meets your needs until you find a home or tell us to stop looking, Dedicate our time, resources, and experience to find exactly what you want while incurring our own expenses, Jo O’Key, Principle, The O’Key Group You will: Tell us what you like and dislike about the homes we look at, Tell us if you want to look at a home listed with another broker, builder, or for sale by owner, Tell us if you feel the need to talk to another agent, Let us know if your plans change, Work with us until you find the right home. Buyer Print name

• Excellent. Now it’s time to put The O’Key Group to work.