THE BASIC HOME BUYING PROCESS

The ten basic steps of purchasing a home

With just about 10 weeks before the Home Buyer Tax Credits expire, I've decided to post the 10 Basic Steps of the home buying process. I will jump-start the program with the first two; examining your finances and finding a REALTOR®. Each week, thereafter, I will post an additional step.

1. EXAMINE YOUR FINANCES
It's important to consider your income and the total of your other debt payments (like credit card debt or car payments) when deciding if you can afford to purchase your own home. Think about how much money you can use for a down payment. Use an affordability calculator (http://tinyurl.com/ydggoz6) to get an idea of how much you can afford.

It is important to check your credit score (http://www.myfico.com) and fix any errors (http://www.ftc.gov/freereports) that may appear before starting the loan approval process. Lenders often look at credit scores as one factor in determining whether or not to approve a loan. Your score can affect the interest you can get. Consult with a mortgage lender about how much you can realistically afford.

First-time homeowners are often startled by the hidden costs of owning a home. These are some of the costs, often overlooked: (http://tinyurl.com/nut8hm)

Got all of that? If not, you can always ask a question here, facebook or contact me directly. Ok... now on to finding a Realtor.

2. FINDING A REALTOR® First, not all real estate agents are REALTORS®. A REALTOR®, and I am one, is a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® (NAR). I abide by the Code of Ethics, (http://tinyurl.com/yem47rj) which sets forth standards of practice that includes honest and ethical treatment for all parties in transaction-related matters. REALTORS® may be identified by the REALTOR® "R" logo on a business card, website or other marketing and sales materials.

Buyers can find all sorts of stuff including market trends, comparables and many other stats from sites such as Trulia, Zillow, Yahoo and others. However, for a comprehensive and up-to-date assessment of your local real estate market, it is imperative that you contact a local real estate professional. The local MLS has the most current and complete data available.

You can ask friends, family and co-workers for a referral. You can also inquire at your local REALTOR® board/association to find a REALTOR®. There are 24 local boards and associations in New Jersey. A list can be found at www.njar.com.

Most importantly, after interviewing several REALTORS®, you will want to select one who you are comfortable sharing personal information with. You want someone who not only understands the local market but is open, can empathize with you and explain the process in terms that you understand. It is not necessary, but you may wish to enter into an agreement to use a Buyers Agent; here is why - (http://tinyurl.com/rdo7vq)

And a final note; New Jersey law requires that real estate licensees inform prospective buyers and sellers about the four types of business relationships prior to the first discussion of financial matters or the motivation for buying or selling. The Consumer Information Statement (CIS), which must be delivered to the buyer or seller at the time of the first meeting, helps explain these relationships. Before showing you a single home, I will ask you to sign acknowledging that this legal requirement has been accomplished. It is NOT a contract.

The four business relationships are:

Buyer's agent
Seller's agent
Disclosed dual agent
Transaction broker

So, that's the basics of finding a REALTOR®. If you have unanswered questions, I'm here to answer and help. Now...on to shopping for a mortgage, next week.