What to Expect when buying a Henderson Home
You've got questions, we've got answers
Buying a new home can be an extremely exciting time. It can also be a bit overwhelming and confusing. In the beginning you may have many questions. What types of homes are available in my price range? What area of town is the best fit for me? What are property taxes like in the area I'm interested in? How much will I need for a down payment and closing costs? This is where we come in.
The first meeting with your real estate agent is an excellent opportunity for you to ask your questions. Some of them will be best answered by your lender, others by your real estate agent and some answers will reveal themselves through the home search process itself.
As real estate agents, we will also have many questions for you. We will want to know what you're looking for in a home, as well as what you're not looking for in a home, what your interests are, your timeline, and more so that we can find just the right home for you.
As your real estate agent our job is to guide you through the entire home buying process from the time you decide its time to buy until the moment you walk through the doors of your new home. We will do our absolute best to listen to your questions and concerns and seek out and ultimately provide you with the best resources possible to make sure your home purchase runs as smoothly as possible.
Here is what you can expect from our experts
- Information on current market conditions
- Someone to assist you in finding your ideal home location that fits your style within your pre-determined price range
- Representation through the entire home-buying process
- In-depth understanding of all contracts, disclosures and forms related to your real estate transaction
- Negotiating the best deal possible for you our client
Finding A Home
While we would love to be the first call you make when you start your home search we also understand the freedom and flexibility that comes with performing a customized online search for just the right home. Let our home search tools be the resource you use to begin this process. On our site you'll have the opportunity to search for homes by address, MLS ID, Zip Code, map, and price. Once you narrow down your search, feel free to give us a call so that we can take on the more tedious tasks of the home search process for you. Let us put our knowledge of the local real estate market, neighborhood geography, negotiating skills and contract writing to work for you to secure the home of your choice.
Preferred Lenders and Pre-Approval
We respect your budget! Buying the right home should be a blessing not a financial burden. That is why searching for a trustworthy lender is just as important as searching for your home. Choosing the right lender that best meets your needs is paramount to the home buying process. Your lender can help you evaluate your priorities, help you stay within your budget and even save you money over the life of your loan. They will also provide you with a strong negotiating tool (a pre-approval letter) which makes you a strong competitor in the current market of multiple offers.
The Escrow Process
So what is the escrow process and why do we need it? You may have heard the term escrow before but maybe you're not quite sure what it really means. To put it simply, when a buyer makes an offer to purchase a property, a pre-determined amount of money (typically referred to as the EMD or Earnest Money Deposit) is deposited with a third party, usually an escrow company or agent. This money is to be held in trust on behalf of the other parties until such time that all conditions of the purchase agreement/contract are met. Purchasing real estate can often be a confusing and complex process. The escrow company will handle all the arduous tasks related to the real estate purchase in a concerted effort to bring the transaction to a successful close.
Often we hear the phrase “escrow has been opened.” This means that the purchase agreement and the good faith funds, also called the earnest money deposit has been delivered to the escrow company and an escrow account number has been generated. Most of the time, the escrow function is performed by a company affiliated with a title insurance company or agency and the closing is conducted by the escrow agent who is acting on behalf of the escrow company to perform the obligations contained in the escrow instructions.
During the escrow process the escrow company will perform several tasks related to your real estate transaction such as conducting a title search to determine the ownership and status of the subject property, request payoffs for all of the financial items that are currently encumbering the title including mechanic’s liens, unpaid HOA fees or fines, trash collection bills, unpaid sewer charges, IRS liens, seller’s loans, etc., They will prorate taxes, HOA charges, interest charges, etc., and other items that will have to be divided or prorated between buyer and seller. The escrowee will also work with the buyer’s lender to understand and monitor the progress of the loan application and underwriting activities.
Just before the closing date, the escrowee will also set up and coordinate the appointments for the seller and buyer to sign the documents required to transfer title. For the seller, these include the deed, several disclosures, and a few other items. For the buyer, these documents will include the buyer’s loan documents (if the purchase is being financed). At this time, the escrow agent will collect the buyer’s funds usually in the form of a wire transfer to the escrow agent’s bank.
After all funds have been deposited, the escrow agent will record various documents with the county recorder to transfer the property from seller to buyer. After recordation is confirmed, the agent will disburse funds to the seller, the seller’s lender (if applicable), HOAs, taxing authorities, home warranty companies, real estate brokers, and others. Also, in most states, after recordation has taken place, the keys are provided to the buyer. The escrow agent will distribute the final documents to the seller’s broker, the seller, the buyer’s broker, the buyer, and others. At this point, the “Closing” has taken place.
It is important to note that there may be variations to these general procedures and tasks due to operational differences among the individual escrow companies and individual state laws governing real estate transactions.
Whether you are buying your first home or selling a home and moving into another, a home warranty could be a valuable protection for your finances and your peace of mind.
Many buyers opt to purchase home warranties, which average $350 to $500 for a basic warranty and $100 to $300 more for a warranty with extra protection. Buyers, particularly first-time buyers, like the fact that they can rely on a warranty to pay for repairs during the first year while they are settling into a new home.
Home sellers particularly if they are selling a home with older appliances and systems, can purchase a one-year warranty that will protect them while their place is on the market and can then be transferred along with ownership of the house to their buyers. Not only does the home warranty provide an extra incentive for buyers who are concerned about potential costly repairs, but it is available for the sellers in case a water heater, oven or some other appliance needs to be fixed.
It is important to have realistic expectations of a home warranty policy. Taking the time to compare different levels of coverage and deductibles across various home warranty companies can not only save you money but headaches in the future.
Home Warranty vs. Insurance
Newly built homes typically come with a one-year warranty on appliances and systems and a 10-year warranty on structural elements paid for by the builder, but an existing home does not normally have a warranty at all. Whether you are a buyer or a seller, you should be aware that a warranty covers specific items under a service contract. If something goes wrong, you will need to contact the warranty company and they will send a repair person of their choice. You will pay a service fee, generally about $50 or $75, to have the appliance or system checked and fixed.
Your homeowners’ insurance covers the house itself and your personal possessions in case of a fire, theft or damage from another cause, but you won’t be able to make a claim if your heat pump fails or your washer and dryer break down.
Among the more important aspects of the closing process are the costs associated with selling or purchasing of real property. These costs are appropriately termed closing costs because they are collected at the time of closing. It is important to know that closing costs are handled and treated differently by escrow companies across the country based on:
- foreclosures – It is included in the charter of various federal agencies that owners of foreclosed homes cannot pay taxes to a local jurisdiction. Since they are effectively the “seller” in some transactions, this responsibility shifts to the buyer.
- short sales – Some short sale banks (the lender who has suffered the buyer’s default) will not pay certain closing costs that would normally be paid by the seller, so these costs fall to the buyer to pay.
- VA loans – These loans require the seller to pay certain closing costs, and the buyer may be prohibited by law from paying these charges.
- agreement of the parties – Buyers are free to ask, in their offers, that the sellers pay for any number of things as a condition of the sale. If the other terms of the contract are beneficial to the seller, the seller may opt to pay some of these items or even provide the buyer with a cash amount to help the buyer pay for closing costs.
Here is a list of some examples of typical closing costs you may encounter during the purchase of your new home.
- Appraisal - This is typically paid by the buyer and ordered by the lender to confirm the fair market value of the home.
- Credit Report
- Closing Fee or Escrow Fee - This is paid to the title company, escrow company or attorney for conducting the closing. The title company or escrow oversees the closing as an independent party in your home purchase. Some states require a real estate attorney be present at every closing
- Survey Fee - This fee goes to a survey company to verify all property lines and things like shared fences on the property. This is not required in all states.
- Courier Fee - This covers the cost of transporting documents to complete the loan transaction as quickly as possible.
- Notary Fees
- Lender's Policy Title Insurance - This is insurance to assure the lender that you own the home and the lender's mortgage is a valid lien. Similar to the title search, but sometimes a separate line item.
- Owner's Policy Title Insurance - This is an insurance policy protecting you in the event someone challenges your ownership of the home.
- Homeowners' Insurance - This covers possible damages to your home. Your first year's insurance is often paid at closing.
- Escrow Deposit for Property Taxes & Mortgage Insurance - Often you are asked to put down two months of property tax and mortgage insurance payments at closing.
- Property Transfer Taxes - This is the tax paid when the title passes from seller to buyer.
- HOA Transfer Fees - Homeowners associations often charge a small fee when homes are sold within the community in order to pay for services and capital improvements. According to the Community Associations Institute, 72% of HOAs impose transfer fees when homes are sold.
- Recording Fees - A fee charged by your local recording office, usually city or county, for the recording of public land records.
- Processing Fee - This goes to your lender. It reimburses the cost to process the information on your loan application.
- Underwriting Fee - This also goes to your lender, covering the cost of researching whether or not to approve you for the loan.
- Loan Discount Points - "Points" are prepaid interest. One point is one percent of your loan amount. This is a lump sum payment that lowers your monthly payment for the life of your loan.
- Pre-Paid Interest - This is money you pay at closing in order to get the interest paid up through the first of the month.
- Property Tax
- CC&R Resale Package - Typically, the seller will pay this fee. The resale package contains CC&Rs, rules and regulations, summary of litigation, budget, financials, and other items pertinent to the community. Once placed in the hands of the buyer, the buyer has five days to look these documents over and either proceed with the transaction or cancel the contract.
- Home Inspection - Usually paid for by the buyer to verify the condition of a property and to check for home repairs that may be needed before closing.
- Home Warranty fee - coverage for items in the home for the first year. This is not a required fee and is negotiable as to who pays for it.
This list is not a complete list of fees you may incur when purchasing a home and each escrow company, lender and brokerage may have additional fees not included here. Closing costs and fees are part of a mortgage, and knowing what they are and how much they should be is a good idea. This will put you in a position to challenge a cost or fee that seems exorbitant. Even if everything is correct, you have the right to ask, and your mortgage company has the duty to explain -- in detail -- each and every closing cost and fee.
Considering buying a brand new home? Buying a brand new home not only allows you to personalize your space, it can provide many benefits you may not find when buying an older home. Newly built homes can be more energy efficient, built with modern construction designs and can often times offer low-cost home ownership. You can often find a home designed for the way you live today, with open floor plans that create ideal spots to entertain or to relax with family and friends.
Let us show you around some of the beautifully designed master planned communities being constructed right now in Henderson like the 2200 acre master planned community of Cadence adjacent to the Tuscany Village and Lake Las Vegas just minutes from the Lake Mead Recreation Area or Inspirada, a quaint 2,000 acre community located in the Southern foothills of Henderson next door to the beautiful community of Anthem Highlands.
What about building your home your way? Ascaya, one of the newest master planned communities to grace the Henderson valley is located high above the city, within the ridges of the McCullough mountain range and offers custom build home sites.