Special offer

First Time Homebuyer Seminars .............. Shopping For A House

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

So far in this series on First Time Homebuyer Seminars, I have covered the Pre-Approval Process and the process of Choosing A Realtor.  So now that the Buyer knows the price range that they can purchase in, and they have chosen a Realtor that they want to work with, they are ready to start "Shopping For A House.

When they first meet with the Realtor that they have chosen, and signed a Buyer/Broker Agreement, they will then need to provide him/her with some basic information:

  • The Price Range- This will be one of the first things that the Realtor will need to know in order to begin his/her search for properties, and it is the amount that the Loan Officer Pre-Approved them for when they went through the Pre-Approval Prosess.
  • Location - The Realtor will need to know what towns the Buyer is interested in purchasing in.
  • What they are looking for in a house- Things like number of bedrooms, bathrooms. garage, amount of land, one floor or multi-floor house, and other basic information like that, will help the Realtor to refine his/her search in the MLS, and come up with a number of properties that might meet the Buyer's needs.

Once all this initial information is gathered, and the perfect house has been found The Buyer will:

  • Submit a formal written offer with price and any stipulations to the purchase such as:
    • Seller Paid Costs
    • Appliances that are to be left behind
    • Time periods for Inspections, Loan Commitment, Closing Date.
  • Include a deposit with the offer know as "Earnest Money".
  • Also at this time the Loan Officer will need to provide a Pre-Approval Letter to be submitted with the offer.  I always make mine property specific, because I want to see what the taxes are on the property that they are purchasing.  As I mentioned in a previous blog, the taxes can be very different form on town to another on the same price house.  So I need to know what the taxes are, and make sure that they still qualify.  That last thing I want to do is to give a worthless Pre-Approval Letter because I did not take the time to make sure that everything still worked. 

If their offer is accepted the clock starts to tick on everything that has to be met within the contract, especially the dates for the things I mentioned above.

  • Inspections- All inspections need to be completed within the time period that was established within the contract, if not the Buyer will lose the opportunity to use the Inspection Reports to further negotiate items that are discovered during the inspection.  Inspections that a Buyer might do here in Connecticut are:
    • Home Inspection
    • Well Inspection
    • Septic Inspection
    • Radon Inspection
  • Commitment Date- This is the date that the Buyer will have to have a Loan Commitment by.  Up to now all they have is a Pre-Approval from the Loan Officer.  Loan Commitment is a commitment of funds by the Lender, and will have to go through the formal application for a loan, and collection of all the necessary documents.  I will explain this further in the next blog on this First Time Homebuyer Seminar Series.
  • Closing Date - This is the date that the purchase on the house has to be completed by, and I will cover the Closing Process in a future blog as well.

Because these dates are so important, and missing anyone of them could cause the Buyer to lose their "Earnest Money Deposit", it is extremely important that the Buyers meet with their Loan Officer as soon as possible to get the Loan Process going.  This will be the next part that I will cover in this First Time Homebuyer Seminar Series "Applying For A Loan"

First Time Homebuyer Seminars

First Time Homebuyer Seminar .............. Basic Openning Questions 

First Time Homebuyer Seminars ................ Pre-Approval Process

First Time Homebuyer Seminars .............. Choosing A Realtor

 

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Who To Call For Your Mortgage Needs In Connecticut:

George Souto NMLS# 65149 is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage. 

Posted by

George Souto
NMLS# 65149

C (860) 573-1308
CALL 7 Days/Wk
Fax (860) 760-6891

Email Me
About Me
My Blog

I am a Mortgage Loan Officer who can assist you with all your mortgage & refinancing needs in
CT, and RI

I can assist you with your Conventional,
FHA, CHFA, VA, USDA, & 203K loan programs.

I reside in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Haddam. E. Haddam, Higganum, Chester, Essex, Deep River.

 

Comments(14)

Jon Cagle
Senior Loan Officer at US Bank Home Mortgage - Eugene, OR
Lane County Oregon - Direct FHA, VA, USDA Lender

George, I used to do First Time Home-buyer Seminars a lot. But over the past year, I have not had any luck getting people to attend. I just tried to do one and I advertised in the Real Estate section of our paper, and I didn't get any calls. What are you doing to get the word out? Thanks!

May 18, 2011 07:58 AM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

George,

It's a good post.

I have a problem though with "Price Range" You say: "it is the amount that the Loan Officer Pre-Approved them for when they went through the Pre-Approval Process."

I disagree. The Loan Officer Pre-Approves the client for the maximum loan amount under the scenario submitted, not a range. (Interest rate, taxes, Insurance, HOA, et al.) HGTV would have us believe that it's easy to get another 5, 10, 15, 20,... 50% added to the loan amount, it's not!

The consumer can with the help of the Loan Office set his own "Price Range" based on the payment amount the consumer is comfortable making. The REALTOR can set a "Price Range" based on the amenities and location, location, location. But, all the Loan Officer can do is set the maximum!

A first time buyer needs to know that qualifying is totally different than living comfortably with a loan/home! No REALTOR or Loan Officer can determine what the consumer will be comfortable with. Consumers should look at their current housing expense and compare it to their projected expense and ask where the extra (If needed) is going to come from. Approvals are based on averages, but almost no one is average!

Consumers, their REALTOR and Loan Officers should discuss your comfort zone/Price Range you may well want your approval reduced. If you're making an offer of say: $150,000 on a $175,000 listing you don't want to let the sellers see you're pre-approved for $225,000.  If you're approved for more you're approved for less and your Loan Officer should be able to quickly provide a lower letter.

Bill

May 18, 2011 09:06 AM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

George: Thanks for the great series. I appreciate you educating all of us on the necessary steps to buying a home. Take care.

May 18, 2011 10:28 AM
Tim Peterson
Wisconsin Realtor Safety and Concealed Carry Classes - Madison, WI
Realtor Safety Training Classes

Hi George-great article for buyers on how to shop for home after approval

May 18, 2011 12:40 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Jon I covered that in my first blog on this series "First Time Homebuyer Seminars".  We promote the Seminars on the radio and on billboards.  Also when someone comes on our website we have a link that takes them to our registration screen which also gives them the date, time, and location of the First Time Homebuyer Seminars going on throughout the month.

Bill I understand what you are saying, but let me explain what I mean when I say Price Range.  I view the Price Range as the Sales Price between $1.00 up to the Purchase Price that I Pre-Approve them up to.  I completely agree with your second comment "that qualifying is totally different than living comfortably with a loan/home", and I covered that in my third blog "First Time Homebuyer Seminars ................ Pre-Approval Process"  that is why I did not go into more detail on that here.  As to your third point, as I stated in this blog I always make my Pre-Approval Letters property specific, which means that I do not put a Sales Price Limit or Loan Amount Limit on the Pre-Approval Letter.  I only list the Loan Program and the Property Address.  This allows the Realtor to negotiate without having to come back to me every time that the offer price changes.  The Buyers Realtor and the Buyer know what the limit is, and it isn't the Sellers business as to what that limit is.  All that I feel that has to be disclosed to the Seller and the Sellers Realtor is that the Buyer qualifies to purchase the house for the price that the Buyer is offering.  After all that I don't think we are in disagreement on any of these points.

Paul thank you for those kind words.

Tim, I hope that those that read this series find the information useful.

May 18, 2011 02:35 PM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

George,

I know we agree, I have no question about that. My problem is the way people perceive the term "price range."

We also no there is a lower limit, a miniamum loan amount.

Bill

May 18, 2011 02:43 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Bill one of the dangers of doing a series like this is that you have to get to each point quickly and keep it brief or very few people will read it.  That is why if I cover a point in one blog, I then do not go into detail in a later blog like this again.

Your point on "price range" and how it can be miss interpreted is valid, but between your comment on this blog and the blog you wrote tonight "What's My Price Range Another Stupid Question"  it will help to bring a little more clarity to this topic.

May 18, 2011 03:01 PM
Ann Hayden 636-399-7544
Berkshire Hathaway HomeServices Select Properties-St. Louis Missouri - Des Peres, MO
SelectAnn.com

George,

Great post...but you need to fix your title...shpping..  ;-)

Ann Hayden in Wildwood, MO

May 18, 2011 03:11 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Ann, thank you.  It is a good thing that I have a lot of people in the Rain that know I can't spell and double check my spelling :) :) :)

May 18, 2011 04:35 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

George

This has been a great series, with some good ideas for those who are interested in running similar events, or just talking with buyers.

Jeff

May 18, 2011 04:57 PM
Ed Silva, 203-206-0754
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

George, having had buyers get sticker shock over a monthly payment, I have gotten into the habit of just checking with the loan officer before sending over a contract. In their excitement, a buyer will not give proper consideration to taxes, insurance, HOA if applicable, and of course PMI. They need to know what the cost of home ownership really is, and have some left over after they pay the mortgage.

May 19, 2011 01:52 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Jeff, hopefully this series can provide an outline for anyone else that would like to do these Seminars.

Ed, that is why when I am Pre-Approving someone I repeat that monthly mortgage payment, with tax, and insurance, as well as PMI and HOA if applicable over and over.  I want them to understand the full payment that they will be committing to.

May 19, 2011 07:25 AM
Jon Cagle
Senior Loan Officer at US Bank Home Mortgage - Eugene, OR
Lane County Oregon - Direct FHA, VA, USDA Lender

George, thank you for getting back with me! It has been very helpful.

May 20, 2011 05:22 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Jon you are welcome

May 21, 2011 04:40 AM