Home Buyer's Guide- Seattle 2021 - Jeffie

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WHY STATION CITIES ................................................................ 4 PROPERTY TYPES...................................................................... 5 THE HOME BUYING PROCESS.................................................. 6 FINANCING .................................................................................. 7 CLOSING COSTS ........................................................................ 8 COMMON TERMS........................................................................ 9 VIEWING PROPETIES ............................................................... 11 OFFER NEGOTIATIONS............................................................ 12 BEYOND REAL ESTATE........................................................... 13 TABLE OF CONTENTS

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Home Buyer’s Guide - Seattle

The information contained herein is for general informational purposes only. Station cities makes every effort to provide current and correct information, but it does not guarantee the accuracy or completeness of the information contained herein.

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Home Buyer’s Guide - Seattle

WHY STATION CITIES

Dear Future Homeowner,

Station Cities is a local boutique firm supported by the largest destination services company in the world, Dwellworks. I am a full-time member of a very collaborative team with extensive industry knowledge, support, and heightened customer service skills. My team and I work with clients daily to help solve their housing and relocation needs. A boutique firm means a specialized full-service experience for our most valued asset – you the client. At Station Cities we invest in ourselves and operate at the highest level in our industry. Purchasing a new home is not only complicated but packed with many moving pieces. We understand trends, are expert negotiators, and have extensive local real estate knowledge. Station Cities provides the services you need as we advocate and represent your best interests, integrate appropriate techniques, source information, highlight options, and creatively problem solve while navigating your home purchase process. This distinctive skill set results in a better home buying experience, better investment, and a leg up on the competition. Choosing me to represent you means you will participate in a transaction that includes:

• Collaboration and a Win/Win Mindset • Timeline Management • Education • Frequent Communication • Exploring Alternatives • Creative Problem Solving • Anticipating Stressors

My duty to my clients and cooperating broker partners is to operate with integrity, intent, and professionalism during our time together and beyond. This core of specialized work does not cost more, you just get more. I am looking forward to my time with you and making your dreams of ownership in the great Pacific Northwest a reality!

Sincerely,

Jeffie Ritchie 206.550.1740 jeffie.ritchie@stationcities.com

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Home Buyer’s Guide - Seattle

PROPERTY TYPES Learning the difference between these three common property types allows you to decide which home style is right for you. It’s important to consider where you want to live, what’s most desirable in a home, how you envision your lifestyle, and what stage in life this home represents for you. Location is everything in the real estate market and it is not uncommon to find small condos in highly sought after areas with much higher price tags than single family homes in outlying areas.

Property Type

Description

Advantages

Disadvantages

HOA dues add to monthly costs Possibility of fiscal irresponsibility Smaller living space Higher price per square foot Lower resale value Higher interest rates Often restrictions on pets, rentals, and certain renovations Possibility of fiscal irresponsibility Rental restrictions Less shared HOA coverage Few to no shared amenities for residents

•

Lower entry point Desirable urban locations

• • • • •

•

Single unit within a larger building. Condos generally share walls with other units and have community spaces for residents to enjoy.

• • • • •

Amenities

Low maintenance Cheaper homeowner’s insurance

Condo

Easy lifestyle

•

Feels more like a single family home Offered in more locations from the city to the suburbs Larger interior space

•

Somewhere in between a condo and single-family home. Often multiple floors and share at least one wall.

•

• •

• • • •

•

Individual garage Lower HOA dues

Townhome

Personal outdoor space

More overall maintenance

•

Greater privacy Personal yard

• • •

All costs for upkeep and repairs fall on the owner Generally higher purchase Increased property taxes, insurance, and utilities

•

Fewer limitations on property use May have neighborhood HOA More storage options with individual garage and/or outbuildings

Single home built on a single lot with no shared walls.

•

Single Family Home

•

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Home Buyer’s Guide - Seattle

THE HOME BUYING PROCESS

WHAT TO EXPECT FROM SEARCHING TO SOLD

SELECT A BROKER

SELECT A LENDER

Obtain Loan Pre-Approval, Determine Loan Type and Price Point

Discuss Criteria, Ask Qu estions and Formulate a Search Plan

THE SEARCH

Use collaborative online search tools to source suitable properties.

Make an offer (may involve further negotiation)

View Homes

CONTRACT

POSSIBLE CONTINGENCIES

Specific terms such as price, closing date, earnest money, loan type, down payment, and requested contingencies.

Inspection, Financing, Title, HOA Review, Seller Disclosure, Sale of Residence

ROAD TO CLOSING

Appraisal

Finish Loan Application

Satisfy Contingencies

Underwriting

Closing and Possession

Additional Documentation

Final Loan Approval

Sign Documents

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Home Buyer’s Guide - Seattle

FINANCING Getting pre-approved for a loan is one of the most important steps you’ll need to take. And remember—being “pre-qualified” is not the same thing as being pre-approved. A pre- qualification is just a rough estimate. A pre-approval results in a commitment letter from the lender for the loan amount you qualify for, which is vital to have in our market when you make an offer to purchase. WHAT DOCUMENTS WILL YOU NEED? • A copy of your driver’s license/social security card • Your green card or visa, if you are not a US citizen • Paystubs from the last 30 to 60 days • W-2’s, 1099’s, and tax returns from the last two years • Bank statements from the last 60 days (including checking, savings, 401Ks, mutual funds, etc.) • Divorce decree, alimony agreement, or child support agreement • Bankruptcy papers, if you’ve filed in the last seven years (including a letter of explanation) • Current mortgage statement and other liens or equity lines BE PREPARED BEFORE YOU APPLY

WHAT QUESTIONS TO EXPECT FROM YOUR LENDER? • Are you receiving gift funds? • Do you need to liquidate funds from an investment account?

• How much do you have for a down payment? • How is your credit score? Any current debt? • Can you cover the transaction closing costs (roughly another 1.5% of the purchase price in addition to your down payment)? • What monthly payment are you comfortable with (you may be approved for more than you want to spend)?

WHAT SHOULD I AVOID DURING THE LOAN PROCESS? • Do not change or quit your job • Do not make a large purchase with a loan • Do not co-sign on any loan • Do not use credit cards excessively • Do not miss payments

• Do not omit any debts on your loan application • Do not make any other inquiries into your credit • Do not change banks

Rule of thumb – Continue living the way you live at the time of your loan pre-approval through the closing of your home purchase. A choice that impacts your employment or current financial status could result in your loan being denied in which case the seller may pursue damages in the form of your earnest money.

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Home Buyer’s Guide - Seattle

CLOSING COSTS In addition to your down payment there will be costs associated with your home purchase due at the time of closing. These costs average about 1.5% of the purchase price and are not financed into the loan. In other words, budget for this added expense. The good news is the largest portion of your closing fees are the pre-payment of property taxes and homeowner’s insurance to pad your reserve account. Here are the general fees the parties in a transaction pay to close the purchase.

BUYER

SELLER

Loan Origination Fee

Paying off Existent Mortgages

Appraisal

Real Estate Commissions

Credit Report

Pay Off Leased Items

Homeowner’s Insurance (1 yr.)

Prorated Taxes

Prorated Property Taxes

Escrow Fees (50%)

Document Preparation Fee

Title Insurance (for buyer)

Title Insurance (for lender)

Excise Tax (1.78% of sale price)

Recording Fees

Escrow Fees (50%)

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Home Buyer’s Guide - Seattle

COMMON TERMS MUTUAL ACCEPTANCE – The date buyer and seller have a contract agreement signed by all parties. Mutual acceptance acts as day zero and all timelines begin counting at day one which is the first day following mutual acceptance. EARNEST MONEY – A good faith offering to show your commitment to purchase a home. Earnest money counts towards your down payment and is held by the escrow company facilitating the transaction. Earnest money is commonly between 2% and 5% of the purchase price and due within two days of mutual acceptance unless negotiated otherwise. Earnest money may be retained by the seller as damages if the buyer fails to complete the purchase for a non-contingent reason, such as getting “cold feet”. CONTINGENCY – Any condition or “subject to” clause in the contract allowing the buyer an opportunity to terminate the transaction and obtain a refund of the earnest money. Typical contingencies include financing and home inspection. Each contingency built into the purchase contract has its own timeline which begins at mutual acceptance. A financing contingency may run the entire term of the contract. ESCROW – Impartial third party facilitating the transaction, accounting for monies, and recording final documents showing the sale of the property. SELLER DISCLOSURE – Completed by the seller and made available to the buyer disclosing the existence of material facts or material defects based on seller’s actual knowledge of the property. APPRAISAL – Often referred to as the “Lender’s Appraisal”. A neutral third-party opinion of the value of the property performed by a licensed home appraiser. In a home purchase the appraiser is tasked with finding comparable homes and adding/subtracting value for features to determine if the home is valued at the purchase price. CLOSING COSTS – Fees and costs due by both buyers and sellers at the time of closing. Buyer costs include loan origination fees, title and escrow fees, and prepayment of property taxes and property insurance. TITLE – The story of the house. It tells who owns it and other recorded items against the home such as easements, CCR’s, and liens. DEED – The instrument used to transfer the property from one owner to another. This is a document recorded by the escrow company at closing. HOA – A homeowner’s association is an organization in a planned community, condo, or subdivision. HOA’s usually have monthly or annual fees and rules and regulations restricting what residents can do with their properties.

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Home Buyer’s Guide - Seattle

CCR’s – Covenants, Conditions, and Restrictions which describe requirements and limitations for using the property. It is possible to have CCR’s without an HOA, but not an HOA without CCR’s. TITLE INSURANCE – Protects you and the lender from losses if a property ownership dispute occurs. FINAL SETTLEMENT STATEMENT – A document given to borrowers at closing that itemizes services and fees charged to both parties and monies due to the seller at the time of closing. The Buyer and seller receive their own itemized final statements. EASEMENT – The rights granted to others to use the property for specific purposes. Must be recorded to be valid. POSSESSION – Agreed upon date the buyer will take possession of the home. This typically occurs the same day as the transaction closes unless negotiated otherwise. DTI – Debt to income ratio is used by the lender to determine how much a buyer can afford as a monthly mortgage payment. DTI is based on income and other financial obligations such as student loans, auto payments, credit card debt, etc. RESERVES – An escrow account, sometimes called an impound account, set up by the mortgage lender to pay property taxes twice a year (April and October) and homeowner’s insurance once a year. These make up the additional portion of your monthly payment beyond the principal and interest payment.

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Home Buyer’s Guide - Seattle

VIEWING PROPETIES

WHAT TO EXPECT

Viewing properties is exciting! Since we will likely be visiting several it can be an overwhelming experience. Here are some tips to help when viewing homes: • Be prepared to visit homes one at a time or to spend the entire day depending on available options. • Bring a note taking tool. I will have printouts of each home with relevant data as well. • Take photos of anything you like or are concerned with in each home. • Dress comfortably, and wear shoes that you can easily take on and off. • Prepare a list of property-specific questions to ask or clarify. If visiting larger properties with land, wear appropriate and sturdy shoes for walking outdoors. • Communicate your schedule so I can plan viewings around your work and lifestyle. All appointments are scheduled, so be on time and let me know right away if you are running late or need to cancel/reschedule. • Trust me to guide and advise you as you visit each property. • Some homes are vacant, and others are owner occupied. Respect property no matter the occupancy status. • Breaks will be built in to longer showing days for snacks and restroom use. • Other showing protocols may be in place based on listing broker, seller, or local guidelines. • Kids are always welcome, but must refrain from touching décor, jumping on furniture, and touring the home unsupervised. • Avoid visiting model homes, new construction, or open houses without your broker’s knowledge to avoid issues with agency relationships from on site agents. • It is normal to view a home you like more than once.

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Home Buyer’s Guide - Seattle

OFFER NEGOTIATIONS Many factors influence how your offer to purchase a property may be structured. Careful consideration and research will be made to determine the best offer for the situation. Your offer will be thoroughly discussed so you understand what the offer includes and why. As the buyer, you make the final decision based on my guidance and recommendations. Generally, the following aspects impact your offer:

• Location of the home • How long it has been on the market • Multiple offers • Condition of the property • Your overall desire to purchase the home

I put my negotiation skills on display for my buyers to create a win/win scenario that both buyer and seller feel happy with. Sometimes those skills come in the form of “winning” the home through my guidance, expertise, connections, and relationships. Other times I can integrate more favorable buyer terms agreed upon by the seller.

BASIC OFFER COMPONENTS:

• Purchase price • Earnest money deposit amount and due date • Closing date • Included contingencies • Possession date • Items included in the sale (refrigerator, washer, dryer, etc.)

• Assumption of pending assessments • Seller closing credit to buyer (if any) OTHER NEGOTIATION TACTICS:

• Best and final purchase price • Escalation clause increasing purchase price incrementally against other offers • High earnest money deposit • Waiving home inspection • Performing a pre-inspection before offering • Quick closing (21 days or less) • Waiving the right to revoke your offer based on the seller disclosure • Making earnest money non-refundable • Offering additional funds down in the event of low appraisal • Waiving the low appraisal term • Waiving the financing contingency at a certain point or completely • Seller rent back or delayed possession

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Home Buyer’s Guide - Seattle

BEYOND REAL ESTATE When you work with me for your homebuying needs, you are represented by a real estate professional ensuring you have a positive experience from start to finish. Remember, with me you simply get more which in the long term saves you time, stress, and money. MOVE PLANNING I will help you understand the nuances of greater Seattle like moving services, banking, schools, commutes, and more. SETUP AND CUSTOMIZATION After purchasing your beautiful new home, I can assist with vendors for furnishings, interior design, general contracting, maintenance, organization, and storage. TEMPORARY HOUSING If you can’t move into your new home before your current home sells, or if you’re relocating to Seattle from another city, I have the connections you need for short term furnished and unfurnished housing. FUTURE SUPPORT I am always here for you after your home purchase is finalized. From advice on new paint colors, to selling and upsizing, I have the connections you need. Referrals fo friends, family, and co-workers are always appreciated as well.

REMEMBER - Station Cities is the only local real estate firm with this depth of experience in the relocation and destination services space. Stick with me and see why we are loved by hundreds of clients each year.

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Home Buyer’s Guide - Seattle

Page 14 Home Buyer’s Guide - Seattle Station Cities I A real state agency that moves with you

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