BUYER GUIDE
Guide to buying your first or next home
THE HOME BUYING PROCESS
The process of buying a home is the most significant transaction for many individuals. I am honored that you have selected me as your REALTOR® to guide you through this journey. Throughout this process, I will ensure that you are well-informed and prepared by outlining the key steps involved in the homebuying process, allowing you to know what to anticipate at each stage.
ESTABLISH BUDGET
I highly recommend getting pre-qualified for a loan amount before you start your home search.
WISHLIST
What are you looking for in a home? What are “must-haves,” and what are just “nice-to-haves”?
BUYER TOUR
To find the perfect property to write an offer on, let’s look at properties, revise, and refine the wishlist.
MAKE AN OFFER
I’ll run a comparative market analysis (CMA), and we’ll discuss a fair market value.
OFFER ACCEPTED
From the start of escrow opening, I’ll guide you through inspections and other critical decisions until keys are exchanged - and beyond.
CLIENT LEVEL SERVICES
Buying a home is about more than just finding four walls and a roof; it is an exciting milestone and one of the largest investments you’ll ever make. Harry Norman, REALTORS® has been helping homebuyers navigate the real estate market for over nine decades. As trusted advisors, we are committed to keeping your best interests at heart every step of the way. We will go above and beyond to protect you from unforeseen issues during the homebuying process. We set ourselves apart by:
1. Navigating through the complexities with expertise
The home buying process is full of potential pitfalls. Our seasoned sales associates offer expert guidance to help you steer clear of delays, costly mistakes, and other headaches that may potentially interfere your experience. We’ve seen it all and know how to make it smooth.
2. Guiding you from discovery to negotiation
We aim to ensure your home buying process is a success. We’ll help you discover homes that match your interests, prepare a competitive offer, negotiate the best price and terms, and coordinate professional inspections and consultations. Leaning on our expertise, we will assist you in finding a home you love within your specified criteria, looking beyond surface details to focus on what truly matters.
3. Offering access to an extended search power
Our sales associates have access to extensive networks that give you access to a comprehensive view of listings and market data others don’t see. You’ll have the information edge to make wise decisions.
4. Relentlessly advocating at the negotiating table
In every real estate deal, numerous elements come into play, ranging from pricing to repairs to the timing of possession. We will act on your behalf, approaching the transaction with your criteria in mind. Our sales associates will assist you in negotiating a purchase agreement that aligns with your requirements, giving you the opportunity to conduct thorough research before committing to the purchase.
5. Comprehensive understanding of Due Diligence
With new laws, regulations and procedures constantly emerging, we can navigate the complexities of today’s dynamic market effortlessly. As licensed professionals who handle transactions day in and day out, we’re always up to date to guarantee a smooth, compliant experience.
6. Emotional support throughout the process
Buying a home is inherently stressful. We’re here to be reassuring voices of reason when you need them most.
BROKERAGE RELATIONSHIPS IN REAL ESTATE TRANSACTION ACT
Harry Norman, REALTORS® appreciates the opportunity to assist you in your real estate needs. We are pleased to work with you in the agency relationship that best meets your needs and satisfies Georgia Agency Law. Our services to you are based on our desire to provide the highest quality of service possible. Our mission is that you will be satisfied before, during and after the sale or purchase of your property.
BROKERAGE IN GEORGIA
» Sales associates are licensed and are affiliated with a licensed broker, typically as independent contractors.
» Buyers and sellers interact with sales associates who are supported by their Broker.
» Licensed brokers and sales associates are required, by law, to be honest, truthful and to disclose materially adverse conditions relative to the purchase and sale of a property.
» Georgia law defines working relationships between buyers, sellers and real estate brokers and how relationships are established.
AGENCY RELATIONSHIPS
Consumers work with sales associates as either “clients” or “customers.”
CLIENTS
» Clients are represented by real estate brokers and their sales associates.
» Brokerage duties to the client are loyalty, confidentiality and protection of the client’s interest in the transaction.
» Georgia law requires that clients and Brokers sign a brokerage agency agreement for representation.
» If the buyer and seller in a transaction are clients of the same brokerage and working with the same sales associate, Dual Agency occurs.
» Dual agency requires the written consent of both buyer and seller.
» Disclosure and consent to dual agency is provided in the seller’s listing agreement and in the buyer’s agency agreement.
» In dual agency, neither party is exclusively represented. Confidentiality is maintained for each party, unless information relevant to the transaction is false, unlawful, materially adverse or harmful to the position of either party. If the buyer and the seller in a transaction are clients of the same brokerage but represented by different sales associates, Designated Agency occurs. Designated agency is not dual agency in Georgia.
CUSTOMERS
» Customers are not represented by a broker in a legal or agency capacity.
» If both the buyer and seller are customers, the Broker is a Transaction Broker. A transaction broker represents neither party in the transaction.
» Services available to a customer are called “ministerial acts.” Ministerial acts include: locating property, providing information, preparing contracts and providing names of other professionals such as inspectors, attorneys, and lenders.
FAMILY OF SERVICES
In connection with the purchase or sale of your home, mortgage financing, title insurance, settlement services, and homeowners insurance may be necessary. Harry Norman, REALTORS® recommends that you consider our family of services to help you with these needs. Ask your Harry Norman REALTOR® or visit them online through the websites listed below.
When purchasing a home, customers can count on Prosperity Home Mortgage’s extensive resources and capabilities to address their unique financing requirements. Prosperity Home Mortgage, LLC is focused on value as well as quality. Therefore, they offer practical rate, term and closing options so our customers can effectively optimize tax advantages and leverage their capital.
For more information, visit: PHMLoans.com.
As an independent insurance agency, HN Insurance Services represents a carefully selected group of nationally known insurance companies. HN Insurance’s independence allows their professional insurance agents the flexibility to shop and compare a wide variety of insurance and financial products for customers. Existing solely to serve the needs of the Harry Norman, REALTORS® organization, HN Insurance Services is a part of our team of trusted advisers.
For more information, call 404-943-1899 or visit HNInsurance.com.
Township Title Services offers quality title services for buyers and sellers while providing a smooth closing experience. A strategic joint venture alliance between Harry Norman, REALTORS® and Campbell & Brannon, LLC, Township Title Services was created to provide buyers and sellers with the vast knowledge, skills, and experience of the Township Title attorneys and staff. Campbell & Brannon, LLC is a law firm at the forefront of real estate law and litigation in metro Atlanta and Georgia. Township Title shares a customer service philosophy with Harry Norman, REALTORS® which supports serving the client first and foremost.
For more information, call 404-504-8700 or visit CampbellAndBrannon.com.
Get the peace of mind an American Home Shield Home Warranty provides. Harry Norman, REALTORS® has partnered with American Home Shield to offer comprehensive and affordable home warranty coverage, with unmatched customer service. American Home Shield has over 35 years of experience. Whether you are buying or selling a home, an American Home Shield home warranty eliminates the uncertainty of unplanned expenses for repair or replacement of covered items and limits your exposure to a reasonable deductible.
For more information, visit HarryNorman.com/HomeWarranty.
MORTGAGE BASICS
Although each individual home financing package has its own variety of features, the concept of a mortgage is really quite simple: a mortgage is a loan to help you finance a home. Your lender advances you a certain amount of money, which you repay over a specified period of time.
RATES, POINTS AND LOAN FEES
The total cost of your mortgage is determined by a number of different factors, most notably the interest rate, discount points and loan fees. The expenses that contribute to the cost of your loan can be expressed as the annual percentage rate (APR).
» Interest Rate refers to the percentage of your outstanding loan balance that you pay the lender each month as part of the cost of borrowing money. Your interest rate will be based on the current overall rate environment, as well as your financial profile and the specific features of your loan.
» Discount Points allow you to “buy down” your interest rate at closing. One point equals 1% of your loan amount. The more points you pay, the lower your interest rate will be and the less you will have to pay each month.
» Loan Fees are up-front charges to cover the cost of originating, processing and closing your loan, among other things. An origination point is a loan fee that equals 1% of your loan amount.
When considering a loan, keep in mind that rates, points and fees should be considered together. The interest rate alone only tells part of the story.
YOUR MONTHLY MORTGAGE PAYMENT
Mortgage payments can generally be divided into four parts: principal, interest, taxes and insurance.
» Principal refers to the amount of money you borrow to buy a home, and to the outstanding loan balance at any point during the mortgage term.
» Interest is the cost of borrowing money. As noted above, the amount of interest you pay each month is determined by your interest rate.
» Taxes assessed by your local government will likely be collected by your lender as part of your monthly payments and then paid annually or semi-annually on your behalf. This process is known as an escrow.
» Insurance, like property taxes, is normally collected by the lender in an escrow account. Insurance offers financial protection and has two major components:
» Homeowner’s Insurance, also called hazard insurance, protects you against damage to your property caused by fire, wind or other hazards.
» Mortgage Insurance provides partial protection to your lender in the event that you fail to repay your mortgage. Whether you must pay mortgage insurance usually depends on the loan and the size of your down payment.
PRE-APPROVAL vs. PRE-QUALIFICATION
A pre-approval indicates that a lender has taken a detailed look into your financial background and has committed to lend you a certain amount of money, pending specific property details and verification of financial details. Because pre-approval entails a credit check and a review of supporting documentation, it’s more powerful than a pre-qualification letter, which generally only estimates what you can afford based on information you have provided.
ADVANTAGES OF BEING PRE-APPROVED:
Pre-approval offers a number of advantages over waiting to apply for a mortgage until after you have found a home. It entitles you to:
1. Shop for a home with the confidence of knowing you are conditionally approved for the price range for which you are looking.
2. Take advantage of the preference most home sellers have for pre-approved buyers. With a pre-approval, sellers know they have a conditionally-approved buyer qualified to purchase their home. This often will give you an advantage over an unapproved buyer when more than one contract is presented.
3. Strengthen your negotiating position.
4. Allow your sales associate to structure the financing portion of the contract based on your financial needs.
5. Obtain a quicker closing date.
6. Discover possible qualification issues early in the home buying process, minimizing last minute surprises.
When searching for a new home, the last thing you want to be concerned with is the financing. A pre-approval helps remove much of the stress and anxiety during the home buying process by giving you the confidence that the financing will be in place.
CHOOSING A LOAN
LOAN TYPES
Selecting the right mortgage is central to the home buying process. You need to consider two things at the outset: which loan type best meets your home buying needs and which loan term offers the ideal repayment schedule. Your Prosperity Home Mortgage representative can assist you in the process, but here are a few things to keep in mind:
Although most home loans fall into one of two general categories, fixed rate mortgages and adjustable rate mortgages, there are also other basic loan types such as flexible qualifying programs and government loans.
» Fixed Rate Mortgages have interest rates that stay the same for the entire life of the loan.
» You will have predictable monthly payments throughout the life of the loan.
» You will be protected from rising rates, so your principal and interest payments can never increase.
» Adjustable Rate Mortgages have interest rates that adjust periodically based on market conditions.
» The initial rate is fixed for an introductory period (usually one to ten years) and is typically lower than for a fixed-rate mortgage. After that, the rate adjusts annually based on a market index, but can’t go above a predetermined adjustment cap.
» Because of the lower initial rate, some borrowers may be eligible for a larger loan amount with an ARM than with a fixed rate mortgage.
» Flexible Qualifying Programs are designed for borrowers with less-than-perfect credit histories, excessive debt or previous bankruptcy, foreclosure or tax delinquency.
» Government Loans are offered by conventional lenders like Prosperity Home Mortgage, but insured by the federal government. They come in two types: FHA and VA.
» FHA loans are backed by the Federal Housing Administration, and are designed to assist lowto-moderate income home buyers by offering low down payment requirements and flexible qualifying guidelines.
» VA loans are backed by the Department of Veterans Affairs (formerly the Veterans Administration), and are available to qualified veterans and active-duty military personnel and their spouses. They offer many of the same features as FHA loans.
LOAN TERMS
The “term” of a loan is the period of time for repayment. The most common loan term is thirty years, but other terms are available, ranging from 10 years all the way up to 40 year terms. Whether you’d be better off with a longer or shorter loan term depends on a number of factors, most notably your monthly income and long-term financial goals.
» Longer Mortgage Terms offer lower monthly payments and are a good option if you’re on a tight budget or would prefer to direct your monthly cash flow toward other investments or expenses.
» Shorter Mortgage Terms mean higher monthly payments, but allow you to repay the loan faster and save money on interest.
DOCUMENTS REQUIRED FOR LOAN APPLICATION*
INCOME
W-2 forms from the last two years
Federal tax returns, all pages, for the past two years for self-employed or commissioned income sources
A copy of the lease agreement(s) for rental property
A complete copy of the divorce settlement agreement (if using income to qualify)
Year-to-date pay stub
Pension/Social Security: Current year award letter. Copy of most recent check or, if direct deposit, a copy of the most recent bank statement showing receipt of funds
Self-employed: Year-to-date Profit & Loss Statement
Self-employed: Corporate/Partnership Tax returns for the past two years
ASSETS
The two most recent bank/brokerage statements, all pages, for all accounts
LIABILITIES
Credit card account numbers, lender’s name, balances and minimum payments
Car loan: Lender’s name, account number, payment and balance
Mortgage loans: Lender’s name, account number, payment and balance for each loan
Landlord’s name, address and telephone number dating back two years
Complete copy of divorce/settlement agreement
OTHER ITEMS
Application fee
A copy of the fully executed contract on your home
A copy of the relocation agreement (if applicable)
Alimony/Child Support/Note Income. Copy of note receivable or divorce decree/paternity award. Six months cancelled checks or deposit slips showing receipt* (to use income to qualify, it must continue for a minimum of three years)
*Alimony, child support, or separate maintenance income need not be revealed if the borrower or co-borrower does not choose to have it considered for repaying the loan.
BEHIND THE SCENES OF YOUR MORTGAGE APPLICATION
HOME MORTGAGE CONSULTANT
» Works with you to gain an understanding of your needs and determine the product and program that best suit your financial needs
» Gathers data and documents to pre-underwrite your loan and when possible issue a pre-approval commitment
» Discusses purchase price ranges, mortgage payments and closing cost expectations
» Sets expectations from application to closing
MORTGAGE SPECIALIST
» Accepts your loan file from the Home Mortgage Consultant and collects any additional documents needed for loan approval
» Follows up on appraisal report and title orders with the closing attorney
» May make the underwriting decision if certain criteria are met, otherwise refers the file to underwriting
UNDERWRITING
» Reviews the loan file and makes the underwriting decision
» May request additional documentation from you
» Communicates with the Home Mortgage Consultant and Mortgage Specialist, who, in turn, contact you
CLOSING DEPARTMENT
» Prepares instructions for the closing attorney based on your approval
» Assembles the package for your closing and sends it to the closing attorney’s office
» Reviews and verifies final closing figures and authorizes funding
CLOSING ATTORNEY
» Obtains payoffs
» Reviews title examination and survey on your property. Clears any survey and title problems found
» Prepares settlement statement and faxes a copy to the closing department and Mortgage Consultant
» Conducts closing and executes all lender documents Information
YOUR OPINION COUNTS
HARRY NORMAN, REALTORS® EXCELLENCE PROGRAM
Harry Norman, REALTORS® is dedicated to being the very best fullservice real estate company. In fact, Harry himself was often heard to say “The quality of any product or service is only as good as the customer says it is,” and that mantra remains the cornerstone of our business. Towards that end, you will receive a survey shortly after closing from Testimonial Tree. If at any time while we are working together you feel that the level of service provided to you does not meet or exceed this standard, we would welcome the opportunity to discuss it with you. Providing quality real estate service is our passion and livelihood and we are commited to earning your business and your trust for a lifetime.
A post-closing survey will be sent via email following your closing. Agents’ ratings are available to you at TestimonialTree.com. All ratings are legitimate, reliable, and validated from previous surveyed clients.
