GUIDE TO YOUR HOME SEARCH
650.852.1400 wilson@leungre.com www.leungre.com Elite Representation Real Estate Group | leungre.com
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CONGRATULATIONS
Most people say buying a home is the biggest investment- and debt you’ll ever make. As such, the home buying process can be one of the most exciting, but sometimes stressful, experiences your ever go through. Whether you’ve already bought many homes in the past, you’re looking to buy your first, or you’re looking for an investment property, I am here to guide you and make this a swift process for you. The purpose of this Home Search Guide and our first meeting is to help you understand the home buying process, to acquaint you with current market activity, and to explain how Keller Williams Realty and my team can assist you in the purchase of your property. We believe that being a real estate agent is one of the greatest professions in the world and believe that we can provide you with the greatest customer service and satisfaction! We treat each client as if they are family and work on each offer as if it is our own. Our honesty, knowledge, tremendous work ethic, motivation and constant communication will be evident throughout the transaction.
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PROFESSIONAL PROFILES WILSON LEUNG
Realtor, Associate Broker
KARL CHANG
Realtor, Lead Buyer Specialist
I started my career in real estate at the age of 16 when I was given
Born and raised in the San Francisco Peninsula, Karl has made it
the opportunity to manage a duplex in San Francisco. I was charged
his obligation to know the Bay Area. With close to a decade of
with the daily operations of the property, which included marketing
experience assisting people find a place to call home, Karl has made
rental units, screening of tenants, coordinating maintenance and
lifelong connections with all walks of life and has proven to be an
repairs, maintaining budget and records, educating myself on
indispensable resource. His expertise in the local real estate market
applicable law, and handling tenant issues to ensure everyone was
and trends is a commodity well-sought after and one that is utilized
happy. Over time, I began managing, and eventually supervising
to its fullest potential for his clients. Karl epitomizes integrity,
the sale of, additional residential, mixed-use, and commercial units.
energy, diligence, and creative service in every detail of each real
Experiencing success in property management and sales early in my
estate transaction. He is a family man with a devotion to God and
career, I was determined to seek out and assist more people with their real estate needs and obtained my real
is often found at a local coffee shop with a book in hand. Karl is committed to go above and beyond what is
estate broker’s license at the age of 23.
expected – when going the extra mile has become the standard, Karl goes the extra ten.
My years of extensive property management has afforded me local expertise as to the constantly changing real estate market, superior and heightened awareness as a fiduciary, and valuable industry relationships that can be leveraged for my clients.
CATHY NGUYEN
Realtor, Operations & Project Manager
PROFESSIONAL QUALIFICATIONS
Born and raised in San Diego, California. In 2012 Cathy moved to
ss
Wilson was selected and is part of the prestigious Redfin Partner Agent Program. Redfin Partner Agents
ing at a major financial institution as a Teller and worked her way
are selected through an extensive interview and training regimen and are the most nimble in navigating
up to become Sales & Service Specialists. Cathy has had the chance
a quickly changing market. Wilson is rated 5 Stars on Yelp.com.
to work among various management styles and has learned to
ss
San Francisco to further her education and career. She began work-
process all feedback constructively while integrating any coaching
Wilson is recognized as a Realtor® and a member of the SAMCAR, State of California and National
received in the execution of her daily duties. Cathy excels in provid-
Association of Realtors®. ss
of all backgrounds, income levels and professions as he has experience managing and marketing unique properties from luxurious estates and, cozy single-family homes, to multifamily investments. ss ss
ing value in the areas of problem management, client interactions
Wilson is fluent in English, Mandarin and Cantonese. He is adept in creating strong bonds with people
and clerical duties while her main interest lies in the operational aspect of managing a business. Cathy is focused and excited to continue developing her career alongside Wilson Leung as his Executive Assistant by providing support and coordinating operational strategies while
Wilson has completed BOLD by MAPSCoaching at Keller Williams Real Estate, which is a 7-week
working to get her Real Estate license.
business planning and building course specifically catered to real estate so he can better serve his clients.
Cathy’s clients can count on her exceptional attention to detail and client care focus. Cathy can tackle your
Wilson received his B.A. in Business Management Economics with an emphasis in Accounting and a
burdening concerns and will make sure you have a smile at the end of any project.
Minor in Legal Studies from the University of California – Santa Cruz in 3 years (2006-2009). ss
Wilson is actively educating interest buyers at various locations, hosting First-Time Homebuyer Seminars.
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THE HOME FINDING PROCESS The Home finding process typically includes many of the following elements. I will be your resource and consultant every step of the way.
OBTAIN FINANCING »» Find a mortgage company »» Consult with loan officer
INITIAL CONSULTATION
»» Prequalification »» Complete loan application
»» Determine your priorities and needs
»» Obtain loan pre-approval
»» Review “agency” choices and select appropriate working relationship
»» Provide requested documentation
COMPLETING THE SETTLEMENT PROCESS »» Deposit of earnest money deposit »» Review seller’s property disclosures »» Review preliminary title report »» Home, termite and other inspections »» Remove any contingencies »» Arrange for homeowners insurance, »» home warranty, movers »» Final walk-through of property with Wilson
»» Discuss financing options »» Property inspections »» Property appraisal »» Loan processing »» Final loan approval
»» Provide balance of down payment and closing costs »» Sign documents »» Loan funding »» Recording of title »» Receive keys from Wilson »» MOVE IN!
FINDING THE RIGHT HOME
PREPARING AN OFFER »» Review comparables to determine offer price
»» Show you properties based on your criteria
»» Review progress of loan pre-approval
»» Evaluate each property with Wilson
»» Decide on terms (inspections, possession date, personal property, etc)
»» Choose the right home
»» Prepare earnest money deposit
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REACHING AN AGREEMENT WITH A SELLER »» Present your offer »» Negotiation of terms & potential counteroffers »» Agreed-upon sales contract with seller
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RENT VS BUY You may have considered the factors that go into renting versus buying a home and found yourself unsure about which option is best for you. The San Francisco Bay Area is notorious for its high rent rates and it’s no secret that rent is rising and remaining uniformly high. If you’re still unsure about which route to take, take a look at the pros and cons of each and be sure to consider long term effects:
RENT PROS
BUY CONS
PROS
CONS
»» no long term committment
»» limited control over property
»» complete control over property
»» monthly mortgage payments
»» no large initial outlays of money
»» no tax deduction benefits
»» build equity
»» real estate taxes
»» no maintanence costs
»» inability to build equity in your property
»» decreases in mortgage payments
»» repair fees
»» monthly rental payments
»» stable housing payments
»» renter insurance
»» use your home as an investment
»» need money in hand for the down payment and closing costs
»» tax benefits
Data collected by the California Association of Realtors shows there is tremendous value in owning a home compared to renting. Buying a home in San Francisco will net your income 119% per month over a 7 year time frame given rent and price appreciation. (http://www.car.org/marketdata/data/rvb/)
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SO WHY SHOULD YOU BUY A HOME? ...AND WHY NOW?
LOW INTEREST RATES Now is the time to take advantage of all-time low interest rates! Thirty-year fixed mortages rates have remained steadily low and are at their lowest levels since 2013 (averaging 3.58% on a typical 30-year fixed loan from 3.85% a year ago), allowing for more increased affordability and lower monthly payments. According to Fortune Magazine, the housing recovery that began in 2012 is over thanks to these low rates in addition to investor trust.
TAX ADVANTAGES One of the largest perks that come with buying a home is the financial advantages you receive. The tax code allows property taxes and qualified interest on your mortgage to be deducted from your federal income tax return. You’ll also be able to deduct interest from home equity loans, also known as lines of credit which can help you shift credit card debts to home equity loans.
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SO WHY SHOULD YOU BUY A HOME? ...AND WHY NOW?
WAGE GROWTH IS BOOSTING AFFORDABILITY The latest Housing Affordability Index from the California Associatoin of Realtors shows that 34% of California households could afford the median-priced home in the first quarter compared to 30% in 2015’s fourth quarter. This is mostly due to wage growth, low intrest rates and seasonal housing price fluctuations. According to the California Association of Realtors, the percentage of California home buyers who could afford a single-family and median-priced home already rose from 30% in the fourth quarter of 2015 to 34% in the first quarter of 2016.
HOME VALUE APPRECIATION With current home value appreciation, the ability to afford a home is becoming increasingly more obtainable. Home values in the United States have already increased by 4.9% in the past year and are projected to rise about 2.4% within the next year. On a more local basis, take a look at Zillow’s forecast of San Mateo County home values: The median home value is $1,083,900. In the past year home values have already increased by 11.8% in the last year in California.
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DETERMINING HOW MUCH YOU CAN AFFORD The first step in going about financing is understanding how much you can really afford. Some of the factors that determine this amount include but are not limited to: all costs & fees involved in the transaction, property taxes, mortgage insurance, your savings, credit score, debt-to-income ratio, savings and spending habits.
GETTING PRE-QUALIFIED VS. PRE-APPROVED Pre-qualification allows you to get a sense of what properties you can afford and is a general assessment of a potential buyer. A loan pre-approval actually gets you approved to get a loan and essentially guarantees you a loan before the offer is made. It’s highly reccomended to get pre-approved as some sellers won’t even bother making an offer to buyers who aren’t pre-approved! Here’s what you’ll need for your lender: »» Proof of income and other documentation in the form of W-2 statements, income bonuses, tax returns, paystubs from the last 2 years. »» A good credit score »» Employment verification
WHAT TYPE OF MORTGAGE IS RIGHT FOR YOU? »» With a 15-year mortage, you are able to save a bundle on interest and pay off the loan in half the time. »» A 30-year mortage is easier to qualify for, is more flexible, can get you a higher-priced home and results in lower monthly payments. This is ideal if you’re planning on staying long and raising a family. »» If you plan on moving in 10 years or less, an adjustable-rate mortgage would be ideal. An ARM begins with a fixed interest rate during a set period of time and then changes in relation to an index.
REFINANCING A MORTGAGE Refinancing is essentially obtaining a new mortgage to be more cost effective afert paying off an existing loan. Currently it’s one of the best times to refinance! Low mortgage rates are driving up the number of mortgage applications. On a year-over-year basis mortgage applications are up 64% while refinance applications are up 94%. This is all great news for you- these lower rates make refinancing less time consuming with less risk on average. Refinancing your mortgage can: »» Reduce your mortgage rate and monthly payments »» Help you switch from fixed-rate mortgages to a more variable mortgage such as ARM or the other way around »» Get rid of mortgage insurance premiums
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THE SEARCH
The Wilson Leung Real Estate will be there right with you to advise you in looking for the perfect home. Based on your preferences, lifestyle and priorities, we will persisently analyze the market and sift through online sources to satisfy your home desires. Whether you have a big family and require a large backyard or you value the people around you and want to live in a vivacious neighborhood, your preferences come first. We know you may not be entirely familiar with sites like Zillow, Redfin and Trulia. Luckily, we are- and we will go far beyond using internet resources. We will aid you in monitoring showings you may be interested in and review the seller’s disclosures about the property. Our agents will utilize our advanced expertise of the housing market to consistently put you first and focus on your needs in the home search process!
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WHAT TO CONSIDER IN A NEW HOME If you’re a first time buyer, certain aspects of your home and neighborhood may not immediately seem as important as they actually are. Keep these factors in mind when planning your dream home so you are prepared for what buying a new home offers.
LOCATION: Make sure to get a feel for the type of
TYPE OF HOME: a condo, townhome or house.
neighborhood by talking to residents and driving or walking
Living in a condo or townhome may be cheaper
around the neighborhood during various parts of the day.
but have restrictions such as where you park. Also
Be sure to plan for your commute to work and proximity
consider noise from closeby neighbors. Additionally,
to nearest shopping center, library, and parks in advance
any improvements or renovations added to your
so you have a sense of travel time to common destinations.
home may have to be approved by the owners.
PLAN AHEAD: Even if you don’t plan on having children in the nearby future, always be ready! Research surrounding school districts and ensure your home, yard and general neighborhood are safe and suitable for young children.
RESALE POTENTIAL: Be wise about your home’s resale potential. Treating your home too much as a business investment and constantly adding value to your home may not always attract the next buyer. At the same time, plan accordingly so you always have the option of resale.
HOME SIZE: It’s best to avoid purchasing a property WANTS VS NEEDS: Understand what you’re looking for and prioritize what you need rather than what you simply want such as by creating a ‘need’ versus ‘want’ list. Consider the most important factors like size and space of your home, number of bathrooms, floor type, kitchen, windows, lighting, house age, internet installation costs and school district.
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that is too small in size. The future is unpredictable -- you never know when you will decide to start a family and suddenly need more space. Too much space, on the other hand, may cause you to pay more on your mortage and heating bills when unecessary. You should get a feel for how much square footage Tip: consider having at least one extra room that can serve as a guest room or office in the future.
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BUYER QUESTIONNAIRE 1. What and where is your ideal home?
2. What features are the most important to you regarding your next home?
3. How long have you been looking for a home? Is someone helping you find the right home?
4. Have you seen anything you like?
5. How soon were you thinking about making a move when we find you the right home?
6. What are some lingering questions you are concerned about regarding your home purchase?
7. What are you looking for in the agent you want to work with?
8. What are your expectations from me so I can best serve you?
9. Where do you live now? Can you see yourself there for another 2 years?
10. What would make this a win for you?
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MAKING AN OFFER
What to Include In Your Offer:
Negotiating a Price:
»» Purchase price and terms & conditions
We will use our expertise to give you a comparative market analysis to determine
»» The address, description and sale price of the property
the home’s value and see if the price is fair for you. Your offer will often depend on
»» Personal letter about you and your family and why you love this home »» Earnest deposit amount and how it will be returned to you in the event that your offer is rejected. »» Your pre-approval and other financial statements »» Contingencies:
whether the property needs any improvements, any contingencies in place, and your pre-approval status. Keep in mind that if a highly popular house goes on the market, offering the full price can allow you to beat out other competitors who desire the house as well. The seller can either accept your offer, reject it, or make a counteroffer. You may also accept, reject or even make a new counteroffer. An appraisal gives you a market
»» Financing
value and price estimate that can help you come up with and negotiate a price. An
»» Inspections
appraiser takes similar home sales in the area into account and analyzes homes that
»» Approved title report, the seller’s transfer disclosure statement,
have recently sold.
appraisal, California tax reports, preliminary title report, and acquisition of homeowner’s insurance
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HOME INSPECTION Having a home and termite inspection is imperative to your safety and well-being when buying a home. It’s important to make sure everything is in good working order before you put your deposit down and take on your mortgage.
DON’T FORGET ABOUT A PEST INSPECTION Another equally important inspection is a carpenter ant and termite inspection to eliminate any chance of further infestations. Termites are one of the leading causes of home damage and infestations may not be easily detectable. Regular inspections should be conducted about once a year to ensure safety and can last roughly 30-45 minutes. Be sure to check for dampwood, drywood, formosan and subterranean termites. Elite Representation Real Estate Group | leungre.com
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TITLE SERVICE GUIDE Title service fees are part of closing costs when you get your mortgage. They normally include title search, insurance and appraisal which all act as a legal safeguard so no one can claim your property as theirs and you are given full legal ownership. To put it simply, a title to your property provides evidence that the owner legally has possession of the property.
WHAT IS TITLE INSURANCE? Title insurance is there to protect you and the lender in the event that your seller did not have ownership of the property and therefore cannot transfer ownership to you. It acts to protect your finances in case of any defects to the title of your home, property loss or other forms of damage. These can include fraud, forgery, or wrongly recorded documents.
WHAT IS ESCROW? This is the process during which transaction funds are held and maintained by a 3rd party such as the title company or an attorney. The buyer deposits an earnest money deposit when the escrow is opened. Escrow is best opened as soon as possible and after all parties involved sign and agree to a contract. The amount of time that an escrow is open depends on buyer and seller move in dates, inspector and appraiser availabilities and how long it takes for the lender to qualify the buyer, approve the home and fund the loan.
WHAT IS THE TITLE INSURANCE POLICY PROCESS? When the title order is opened, a title agent/attorney starts the title search and the home buyer will review a preliminary report. The title insurance policy is then created after all recordings of escrow documents are confirmed, extensive searches of public records to determine if any other entity than the seller has a claim to the property are conducted and costs are paid.
HOW DO I GET TITLE INSURANCE? After the purchase agreement is signed, we will help choose a title insurer for you which may require you to pay a one-time fee of about 1% of your purchase price during closing costs.
Lenders need title insurance since it protects their investment into your home until your mortgage is paid off and is normally required to get a mortgage loan. Buyers need title insurance since your lender’s title insurance will not protect you if you lose your home.
How long is an escrow? This usually depends on the purchase agreement terms and varies from 10 days to a few months.
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CLOSING PROCESS & COSTS After your your offer is accepted and home inspections complete, you will then go through one of the final phases of the home buying process before you can get your dream home: closing. Also known as settlement, this is essentially the legal transfer of ownership of property to you! It’s important to know that average closing costs make up about 2-5% of the purchase price.
You should get a sense of what’s to come whether it’s closing costs or how to go about the closing process. There is a great deal of legal steps involved so here’s what you should expect: »» You will meet with the seller, seller’s agent, and a title company representative »» You will open an escrow and later fund the escrow by depositing funds in addition to the earnest money when you signed the purchase agreement »» You will complete both the home and pest inspections during the closing process »» You will do a title search and obtain your title insurance »» You will go through a final walk-through to ensure that the seller has vacated the property and it is in great condition for you »» You will remove any contingencies that your offer is contingent upon »» You should bring all prior legal documents, identification, and a checkbook in case any problems arise »» You will be presented with closing costs that include but are not limited to: »» Down payment »» Notary fee »» Appraisal fee SAMPLE ESTIMATED CLOSING »» Notary fee Sales Price $(1,000,000.00) »» Owner’s title insurance premium 1st Loan Amount $800,000.00 »» Lender’stitle insurance premium Owner’s Title Insurance Premium $(2,337.00) Lender’s Title Insurance Premium $(826.00) »» Deed recording fee Sale / Loan Escrow Fee(s) $(1,615.00) »» Escrow fee Miscellaneous Fees $(25.00) »» Mortgage closing costs Notary Fee $(175.00) »» Receive your keys Recording Fees $(123.00)
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MOVE IN
You’ve finally finished the home buying process and now have the luxury of moving into your new home! You’re almost done, here’s what you should remember: »» Contact a moving comapany to help you move all of your belongings and be prepared for moving expenses »» transfer all your records, insurance, subscriptions and services to your new address. This is especially important if you’re moving into a new city. »» Take EVERYTHING from your old property- including keys! »» Ask some family or friends to assist you with moving in »» Set a budget for yourself with regard to purchasing furniture and home decor and don’t immediately rush into buying furniture. It’s better to wait until you find what you truly like and can afford. »» After you move and settle in, get around town and meet your fellow neighbors! »» Don’t forget to become prepared for future property tax payments and any other payments that may apply to you.
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CONCLUSION
If you’re a first time home buyer, this may have been a lot to take in. We understand, and that’s why we’re here to help. This buyer package is just a start -- there is more to come and much to take care of. You’re already taking the first step in familiarizing yourself with the process which will ultimately benefit you in making this a less stressful experience. The Bay Area is one of the most rewarding places to live in and I am looking forward to helping you settle down in one of the greatest locations in the world. Thank you for allowing the Leung real estate team to serve you and congratulations on your new home!
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