READY TO BUY? DON’T KNOW WHERE TO START?
THIS IS YOUR GUIDE TO
HOME BUYING SONJA SOLBERG REAL ESTATE BROKER Berkshire Hathaway HomeServices Chicago
ssolberg@bhhschicago.com | 312.590.7941 sonjasolberg.bhhschicago.com
RICK PANTOGA MORTGAGE CONSULTANT Prosperity Home Mortgage, LLC
RickPantoga@phmloans.com | 312.893.1397 RickPantoga.phmloans.com
TABLE OF CONTENTS
TABLE OF CONTENTS 4 REASONS TO BUY NOW ...................................................................... •
Prices Will Continue to Rise Across Chicagoland
•
Lower Interest Rates Reduce the Cost of Ownership
•
The Reality of Mortgages
•
Time for the Next Step!
STEPS FOR HOME BUYING ....................................................................
1
3
•
Step #1: How to Navigate Getting Pre-Qualified for a Mortgage
•
Step #2: Select a Real Estate Professional
•
Step #3: Fall in Love with Your Perfect Home
•
Step #4: Getting to the Close
•
Step #5: Closing Day
Q&A .............................................................................................................
8
MEET THE TEAM ......................................................................................
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BUYERS ADVANTAGE PROGRAM......................................................... 10 NOTES AND NEXT STEPS....................................................................... 10
4 REASONS TO BUY NOW
4 REASONS TO BUY NOW 1. HOME PRICES VARY DEPENDING ON MARKET STABILITY (IS IT IS A BUYERS’ MARKET OR A SELLERS’ MARKET?) THE LOCATION AND CONDITION OF THE HOME. •
According to CoreLogic’s Home Price Index (2019), home prices are predicted to increase by 5.4% from April 2019 to April 2020
•
Prices will continue to increase at varying levels across Chicago depending on market conditions particular to neighborhood trends
2. INTEREST RATES ARE ALWAY SUBJECT TO VARIABILITY •
Current interest rates are at almost historic lows making it a great time to buy as mortgage rates remain reasonable
•
Mortgage rates are running about 2% below levels predicted by experts and are predicted to stay below 4% through 2020
•
The low interest rates make your monthly payment more affordable in the long term
3. EITHER WAY YOU ARE PAYING A MORTGAGE •
Pay your landlord’s mortgage or pay your own. Either way you are paying a mortgage! Let’s do the math: Your rent is $
x 12 months = x 3 yrs. $
•
Want to learn how much you can save by buying? Visit my website: sonjasolberg.koenigrubloff.com > Financial Tools > “Am I better off renting?”
1
4 REASONS TO BUY NOW
4. IT’S TIME FOR THE NEXT STEP IN YOUR LIFE •
According to the latest Rent vs. Buy Report from Trulia, (2018) buying a home is 26.3% cheaper than renting a home, nationwide
•
The monthly cost of a home is determined by your mortgage, property taxes and homeowner’s insurance. The total monthly payment covering all expenses will in most cases be lower than your rent – while you build equity!
•
The purchase price of your home is determined as previously stated, by condition, location and market trends
•
2
You must consider all factors into your buying decision
STEPS FOR HOME BUYING
STEP #1: HOW TO NAVIGATE GETTING PRE-QULIFIED FOR A MORTGAGE THROUGH RICK PANTOGA WITH PROSPERITY HOME MORTGAGE, YOU CAN EASILY BE PRE-QUALIFIED ON THE SPOT STEPS FOR A SUCCESSFUL PRE-APPROVAL 1.
Three ways to apply for a pre-approval with Rick Pantoga
FACE-TO-FACE
PHONE
ONLINE
INFORMATION COVERED DURING THE PRE-APPROVAL PROCESS •
Range of purchase price/down payment
•
Income verification, credit history and asset information
•
Determine a monthly payment comfort level
•
Budgeting for closing costs
2. Start gathering documentation: •
1–2 month(s) of pay stubs
•
2 years of W2’s/1099’s/K1’s
•
2 years of 1040’s (tax returns)
•
2 months of broker/bank statements (checking, savings, 401K’s, etc.)
3. Shop with confidence!
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STEPS FOR HOME BUYING
STEP #2: SELECT YOUR REAL ESTATE PROFESSIONAL TOTAL REPRESENTATION •
Receive exclusive representation.
•
Important to understand the various agent representation/relations: BUYER’S AGENT: represents only the home buyer’s best interest throughout the home buying process. SELLER’S/LISTING AGENT: represents only the home seller’s best interest through the home selling process.
DUAL AGENT: represents both the buyer and seller ethically and honestly, safeguarding the confidentiality of both clients.
•
Set up a one hour meeting with your prospective agent
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Discuss the home buying process
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Develop an action plan with your agent including your preferred means of communication
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Set maximum home buying price, location and criteria
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Provide your mortgage preapproval letter to your agent
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Sign exclusive buyers’ agreement
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STEPS FOR HOME BUYING
STEP #3: YOU FOUND A HOME! •
Make sure you have been provided with all disclosures: lead paint, radon, mold, or property conditions such as asbestos, water in basement, etc.
•
Decide if you want to make an offer
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Ask your agent to create a comparable market assessment that will evaluate recent sales of similar homes in the immediate area
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Your agent will determine the fair market of the home and work with you to create a viable offer and an agreed upon negotiation stategy
•
Your agent will write up a contract for you to sign
PRESENTING THE OFFER •
Your agent will present the offer to the Sellers agent, who will communicate the offer to the Seller. Your agent negotiates directly with the seller’s agent and keeps you informed in a timely manner of counter offers.
•
If your offer is not accepted discuss the sellers counter offers and determine whether you want to counter with a higher offer
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Repeat until offer is accepted or you decide to terminate the offer
•
When a price is agreed upon – the fun begins!
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STEPS FOR HOME BUYING
STEP #4: GETTING TO THE CLOSE HOME INSPECTION — CONTINGENCY #1 FIVE AREAS TO CONSIDER WHEN CHOOSING A HOME INSPECTOR 1.
Qualifications — determine what’s included in your inspection and if it warrants specific certifications/specialties.
2.
Sample Reports — request a sample to determine their style.
3.
References — request contact information from past clients.
4.
Memberships — not all inspectors belong to national/state associations, but memberships often mean additional education.
5.
Errors & Omission Insurance — determine what the liability of the inspector or company is once the inspection is over.
HOME INSPECTION TIPS & STEPS •
Talk with your inspector about also attending the home inspection
•
You will receive a detailed inspection report
•
This report will be forwarded to your attorney. They will notify the seller attorney of deficiencies and will request to repair or credit.
ATTORNEY REVIEW — CONTINGENCY #2 •
Attorney will review the accepted sales contract and handle legal notifications of inspection issues to the seller’s attorney
•
Attorney will make any contract revisions required based on inspection/ appraisal or other conditions that may affect agreed upon contract price
•
Attorney will attend contract closing to review all documents with you and make sure your interests are represented
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STEPS FOR HOME BUYING
MORTGAGE CONTINGENCY — CONTINGENCY #3 •
Apply for written mortgage application with Rick Pantoga.
•
Provide
evidence
of
a
written
mortgage
commitment
letter
(clear to close) •
Once you receive clear to close from the lender, the attorney will schedule closing with the seller’s attorney
•
You will receive a closing disclosure from your lender at least 3 days prior to closing, reflecting the actual terms of your loan transaction, as well as the final amount due (closing costs)
•
Closing costs are also known as settlement fees. Closing costs are fees charged by the people representing your purchase such as your lender, title company and other third parties. These fees are typically between 2-5% of your purchase price.
PREPARING FOR YOUR CLOSING DAY DO
DON’T
1.
Do tell your mortgage loan officer or loan originator about all debts or liabilities.
2.
Do continue to make all your payments on time.
3.
Do contact your mortgage loan officer before changing your jobs, quitting your job, becoming self-employed or any changes to your income.
1.
Don’t authorize any inquiries into your credit (that is, don’t apply for any new financing including credit cards, furniture, appliances, vehicles, boats, cell phones, cable, alarm companies, etc.)
2.
Don’t incur any additional debts, including increases in credit card balances and co-signing for others.
3.
Don’t close any open accounts.
4.
Don’t sign-up with any credit repair or “consolidation” company.
5.
Don’t spend money you have set aside for closing.
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STEPS FOR HOME BUYING
STEP #5: CLOSING DAY SET-UP A FINAL WALK THROUGH •
Final Walk through 24 to 72 hours in advance of closing day to ensure that the property is in good condition and that nothing is out of order
CLOSING DAY WHAT YOU NEED ON CLOSING DAY •
A valid drivers license or state ID
•
Proof of Home Owners Insurance
•
Monetary amount your lender has instructed you to wire *When buying in Illinois, any amount greater than $50,000 must come by wire. Always confirm with your title company before wiring any funds. Your real estate agent or attorney will NEVER instruct you to wire funds. If you receive wiring instructions from either, call them.
TIME TO CELEBRATE!
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Q&A
Q&A
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ABOUT SONJA
SONJA SOLBERG, REAL ESTATE BROKER Berkshire Hathaway HomeServices Chicago 980 North Michigan Avenue, Suite 700 | Chicago, IL 60611 (312) 590-7941 ssolberg@bhhschicago.com sonjasolberg.bhhschicago.com
As an award winning, entrepreneurial sales professional, I experienced years of success helping fortune 300 companies achieve strategic objectives, through truly understanding their business. That curiosity and passion for helping clients reach their goals, is also true of my real estate practice. Careful listening to what you are trying to accomplish on your path to home ownership, whether it is your first home or your fiftieth, is key to achieving a satisfying transaction and landing YOU in your happy place! It is truly a privilege to help people like you make the transition from thinking about buying or selling - to doing it! With a deep understanding your needs, an true understanding of the market, full transparency and great communication every step of the way, we will work together to create a great real estate experience. Whether you are a seller, a buyer, or a person looking to lease, I am excited to have the opportunity to work with you to help you meet your home ownership needs.
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ABOUT RICK
RICK PANTOGA, MORTGAGE LOAN OFFICER NMLS 552590 Mortgage Consultant
Prosperity Home Mortgage, LLC 980 North Michigan Avenue, Suite 700 | Chicago, IL 60611 (312) 893-1397 RickPantoga@phmloans.com rickpantoga.phmloans.com
Rick has been in the mortgage industry for 30+ years. He has performed nearly every aspect of residential mortgage financing. He began in Southern California working with other brokers to assist them in placing all types of mortgage loans with a variety of lenders. This gives him the know-how to work with varying types of buyers and mortgage products. Also in Southern California, Rick entered the field of mortgage operations and became the VP/Operations for a large mortgage company over processing, underwriting and closing. After operations, Rick moved into the world of Mortgage Originations as a loan officer with a major national company. This was in 1995. For the past 24 years, Rick has been originating residential mortgages for first time home buyers, investment purchases, second homes, as well as seasoned buyers. With the knowledge of mortgage programs and underwriting guidelines, Rick is a valuable resource for all residential mortgage lending transactions. In his spare time, Rick enjoys travelling. With 25 countries visited including Turkey, Uruguay and China, he has his sights on Ecuador and Vietnam in the future.
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Rick Pantoga Mortgage Consultant NMLS#: 552590 Office: 312-893-1397 Cell: 773-899-5100 Rick.Pantoga@phmloans.com www.rpantoga.com
980 North Michigan Ave Suite 700 Chicago, IL 60611
All first mortgage products are provided by Prosperity Home Mortgage, LLC. (877) 275-1762. Prosperity Home Mortgage, LLC products may not be available in all areas. Not all borrowers will qualify. Licensed by the NJ Department of Banking and Insurance. Licensed by the Delaware State Bank Commissioner. Also licensed in AL, AR, AZ, CO, CT, DC, FL, GA, IL, IN, KS, KY, MA, MD, MI, MN, MO, MS, MT, NE, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, VA, WA, WV and WI. NMLS #75164 (NMLS Consumer Access at http://www.nmlsconsumeraccess.org/) ©2019 Prosperity Home Mortgage, LLC. All Rights Reserved.
Rick Pantoga Mortgage Consultant NMLS#: 552590 Office: 312-893-1397 Cell: 773-899-5100 Rick.Pantoga@phmloans.com www.rpantoga.com
Rick Pantoga
Mortgage Consultant NMLS#: 552590 Office: 312-893-1397 Cell: 773-899-5100 Rick.Pantoga@phmloans.com All first mortgage products are provided by Prosperity Home Mortgage, LLC. (877) 275-1762. Prosperity Home Mortgage, www.rpantoga.com
980Bank NorthCommissioner. Michigan Ave SuiteAlso 700 licensed in AL, AR, AZ, C Department of Banking and Insurance. Licensed by the Delaware State Chicago, IL 60611 TX, VA, WA, WV and WI. NMLS #75164 (NMLS Consumer Access at http://www.nmlsconsumeraccess.org/) ©2019 Prosper
All first mortgage products are provided by Prosperity Home Mortgage, LLC. (877) 275-1762. Prosperity Home Mortgage, LLC products may not be available in all areas. Not all borrowers will qualify. Licensed by the NJ Department of Banking and Insurance. Licensed by the Delaware State Bank Commissioner. Also licensed in AL, AR, AZ, CO, CT, DC, FL, GA, IL, IN, KS, KY, MA, MD, MI, MN, MO, MS, MT, NE, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, VA, WA, WV and WI. NMLS #75164 (NMLS Consumer Access at http://www.nmlsconsumeraccess.org/) ©2019 Prosperity Home Mortgage, LLC. All Rights Reserved.
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Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act. Georgia Residential Mortgage License Number: 32253. Regulated by the Colorado Division of Real Estate. Licensed by the Delaware State Bank Commissioner to engage in business in Delaware, License # 5837, Expiration 12/31/17. Illinois Residential Mortgage Licensee MB.6761077. Kansas Licensed Mortgage Company, License Number: MC.0025365. Ohio Mortgage Loan Act Certificate of Registration: 490683 SM.501899.000; Ohio Mortgage Broker Act Certificate of Registration: 490683 MB.804161.000. Oregon Mortgage Lending License ML-5251. 2700 Westown Parkway, Suite 345, West Des Moines, IA 50266.