Keys to Success… Home Buyers Guide
Jared Kelley
Real Estate Agent
BRE Lic#01793501
619.993.6065
Jared@MissionRealtyGroup.com
Table of Contents
Getting Started
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Real Estate Brokerage Relationships
Key Question You Should Ask
My Promise To You
My Ideal Client
The Team
Reasons To Buy A Home
Action Plan
Lenders, Loans and Money
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Selecting A Lender
Loan Application Required Information
Top 8 Things NOT To Do During The Loan Process
Funds And Reserves Needed
Who Pays For What
The Search
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Nice To Have…Need To Have Questionnaire
Pricing Of Property…Understanding Value Range
The Search
Don’t Go It Alone
Reality Check
Closing and Moving
 Timeline At Closing
 What Happens In Escrow
Tips & Checklist / General Information / Questions & Answers
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Supplemental Tax Bill Explained
Tax Bill Guide
Moving Timetable / Checklist
Change Of Address Forms – USPS & DMV
Local Utility & Services Contact Sheet
Glossary
TO BE FILLED OUT AND RETURNED TO ME
 Client Appreciation Form / Preferred Client Club
 “Nice To Have…Need To Have” list
 Questions for Jared
Keys to Success…
Home Buyers Guide
Table of Contents
In This Section:
Getting Started – 5 Star Service
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Real Estate Brokerage Relationships
Key Question You Should Ask
My Promise To You
My Ideal Client
The Team
Reasons For Selling Your Home
Action Plan – Customized VIP Marketing Plan
Real Estate Brokerage Relationships
In California:
Real Estate brokers and their salespersons are required to disclose the type of working relationship
they have with the buyers in a real estate transaction. There are several types of relationships that are
available to you. You should understand these at the time a broker provides specific assistance to you
in buying real estate. Buyer’s Agent and Seller’s Agent relationships are commonly referred to as
‘agency’ relationships and carry with them legal duties and responsibilities for the broker as well as
for the buyers and sellers.
Buyer’s Agent:
A Buyer’s Agent acts solely on behalf of the buyer and owes duties to the buyer which includes the
utmost good faith, loyalty, and fidelity. The agent will negotiate on behalf of, and act as an advocate
for, the buyer. The buyer is legally responsible for the actions of the agent when that agent is acting
within the scope of the agency. The agent must disclose to sellers all adverse material facts concerning
the buyer’s financial ability to perform the terms of the transaction and whether the buyer intends to
occupy the property. A separate written buyer’s agreement is required that sets forth the duties and
obligations of the parties.
Seller’s Agent:
A Seller’s Agent acts solely on behalf of the seller and owes duties to the seller that includes the
utmost good faith, loyalty, and fidelity. The agent will negotiate on behalf of, and act as an advocate
for, the seller. The seller is legally responsible for the actions of the agent when that agent is acting
within the scope of the agency. The agent must disclose to the buyers or tenants all adverse material
facts about the property known by the broker. A separate written listing agreement is required which
sets forth the duties and obligations of each party.
Key Questions You Should Ask
You’ll Want To Choose A Real Estate Professional Who Is…
Working in real estate as their full time career
Fully aware of current market conditions
Associated with a reputable Real Estate firm
Willing to cooperate with ALL brokers
Who is a REALTOR, a member of the National Association of Realtors, not
just a licensed sales person
 Has a strong team of lenders, inspectors, title, escrow and other
professional services available
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Key Questions You Should Be Asking…
 What type of market are we in now…buyers or sellers and what does that
mean to me?
 What do we do first?
 Why is it so important that I select a lender now?
 What is the difference between pre-approved and pre-qualified?
 What do you mean by ‘value range’? What are the benefits and
disadvantages?
 What do I need for deposits?
 Who pays for inspections? Why do I need them?
 Are all properties sold “as is”? What about repairs?
 How do we look for a home?
My Professional Promise To You…
My promise to you is that I will serve as Your Advocate, Your Consultant
and Your Realtor providing guidance as a Real Estate professional with the
highest level of integrity and honesty.
I will keep you up to date of our progress and will present/prepare all offers
in a timely and fair manner.
You have my word that my guidance during our transaction will be based on
information and statistics from the market place.
I understand that we are partners in this transaction and I do not take the
trust that you have placed in me lightly. I will continue to do everything to
perform above expectations on your behalf.
-Jared Kelley
Let me tell you what I am looking for in a client…
Someone who will let me be honest and open with them
Someone who will allow me to tell you what you NEED to hear…Not just what
you WANT to hear
Someone who will be realistic – based on current market conditions
Someone who will agree to work with me and me only
Someone who will let me show them homes consistently until they buy
Someone who understands what I get paid to do
Someone who will let me do what I get paid to do
Someone who will let me give them good news and bad news equally
Someone who will make adjustments when necessary (remembering that we
don’t control the market, we just respond and react to it.)
Someone who will be happy to introduce me to their friends and family members
who are in need of help with their real estate needs
The Team
Buying or Selling a home is like taking an airline flight cross country. When you start
on your trip, you have no idea how the trip will go. Neither does the pilot! You could
run into 88 different types of turbulence, or you could have a smooth flight and land on
time.
As your Personal Real Estate Consultant, I see myself as the pilot of your plane, taking
you 1st class on this journey. My job is to assist you in getting the purchase or sale of
your home done in the least time with the least aggravation.
My job is also to manage the ‘flight crew’ consisting of:
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Lenders
Inspectors
Escrow
Title
Transaction Coordinator who is the “Air Traffic Controller”
During this trip, we will be overseeing 70-100 pieces of papers which includes
contracts, disclosures, reports and communications, most of which require signatures
or initials. We’ll also be receiving and sending upwards of 100-150 phone calls and
emails, each loaded with critical details and information that require attention.
This is why your team and crew need the guidance of an experienced “Pilot”.
Our mission is to have you enjoy your trip and to have a safe landing at the end!
Reasons to Buy A home
Advantages of Home Ownership…
Whether you are looking for more space to raise a family or the perfect place to make your own, there
are many advantages to owning your own home, ranging from the purely personal to the very
practical. For many people, the motivation for home ownership is primarily financial. Owning a home
is a first rate investment for a number of reasons. Here are just a few….
Scheduled Savings:
When you buy a house, your monthly mortgage payments serve as a type of scheduled savings plan.
Over time you gradually accumulate equity.
Stable Housing Cost:
Another advantage of home ownership is that while rents typically increase year after year, the
principal and interest portion of most mortgage payments remains unchanged throughout the entire
repayment period (typically 30 years).
Increased Value:
Houses typically increase in value or ‘appreciate’ over time. It’s not unusual to find a house that sold
for $150,000 fifteen years ago to be valued at much more than that. Even if the market slows or
adjusts, in the long run over a 5 year period you will have increased value.
Tax Benefits:
Homeowners also get significant tax breaks that are not available to renters. Most importantly,
interest paid on a home mortgage is usually deductible.
Additional Value and Benefits of Home Ownership:
Quality of life
Deferred gain and capital gain tax treatment
Pride of home ownership
No landlord
Leverage (where else can you buy this size of an investment with only 3.5-10% of your own
money down?)
 The real cost of renting (at $700 per month with a 6% rental increase per year, you will have
paid $110,719 over a 10 year period)
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Action Plan
Plan of Action for the purchase of your new home:
 We will explore your needs, wants and dreams.
 You will meet with the lender to obtain financing and pre-approval.
 We’ll go out to see if I got it right.
 We go buying!
 We write the offer.
 We negotiate the best offer on your behalf and we open escrow.
 Our team processes the sale.
 You participate in inspections.
 You sign your loan documents and bring in your money.
 We close escrow.
 You receive the keys to your new home!!!
Keys to Success…
Home Buyers Guide
Table of Contents
In This Section:
Lender, Loans And Money
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Selecting A Lender
Loan Application Required Information
Top 8 Things NOT To Do During The Loan Process
Funds And Reserves Needed
Who Pays For What
Who Pays For What In The Market
Loan Application Required Information
When preparing to call or go see a Lender, these are typically items that you
will need…Be sure to ask the Lender what items they require…
 Date of Birth and Social Security Numbers of those who will be
applying for the loan
 Two months most recent bank statements (all pages, even if blank)
 Most recent consecutive paystubs to cover the last 30 days, or
current Profit and Loss statement
 Two years employment history and two years residency history
 Recent mortgage statement or name, address, phone number of
landlord
 Two years W-2’s and 1040’s (all pages)
 If FHA loan, copy of driver’s license and Social Security Card
 If VA loan, copy of DD-214 / Certificate of Eligibility
 Check for credit report and appraisal fee
Top 8 Things NOT To Do During The Loan Process
1) Quit your job. Lenders will verify your employment a couple of days prior to
funding your loan
2) Buy a new car or make any other large purchases. The new payment may
make it difficult for you to qualify for your mortgage.
3) Stop making payments on your mortgage, credit cards, etc. Falling
behind on your current debt can cause your application to be denied.
4) Put your home on the market. Lenders will not lend on a home that is listed
for sale.
5) Begin improvements on your home. A home that is currently under
construction may be difficult to appraise at its true value.
6) Draw off your home equity line. Your loan approval is based on balances at
the time of application. Drawing money on your credit line can affect your
approval.
7) File for Bankruptcy. Most programs require that you be outside of a
bankruptcy for at least two years before you can qualify for a loan.
8) Take advice from your mechanic on mortgage programs and rates.
Would you take advice from your loan officer on what is wrong with your car?
When you need expert advice on mortgage rates and programs, ask your
mortgage specialist.
Funds and Reserves Needed
1) Deposit / Good Faith needs to be in account (usually is 1-5% of
property list price). This is applied towards your total down
payment.
2) Down Payment (usually 3.5%-10% depending on loan program)
3) Closing costs (may be negotiated with seller)
4) Transaction Coordinator Fee ($395)
5) Inspection Fees
a) Home inspection ($300-$800, based on sq. ft.)
b) Pool ($100-$400 if applicable)
c) Fireplace ($40-$75 if applicable)
d) Septic / Well (Buyer will ask seller to have pumped and
certified if applicable)
e) Other – if needed: Structural Engineer, Roofer, Etc.
f) Recommended: Heating and A/C unit inspection
g) Plumbing inspection
6) Locksmith (re-key property upon close of escrow)
7) Property taxes re-assessment
8) Loan reserves as required by Lender
Who Pays For What
SELLER:
Estimate 8% of Sales Price:
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Commission for both buying and selling agent
Escrow expenses (usually half of total escrow fee’s for transaction)
Title
Termite inspection and section 1 repairs
Disclosure of Natural Hazards Report
Transaction Coordinator ($395 paid at close of escrow)
Septic inspection and certification (if applicable)
Repairs as required / requested
BUYER:
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Good faith deposit to be presented with offer
Escrow expenses (usually half of total escrow fee’s for transaction)
Transaction coordinator ($395 paid at close of escrow)
Physical inspection ($300-$800 depending on property size)
Inspections as necessary (pool, fireplace, foundation, etc.)
Cushion for closing as required by lender
HOA – Documentation request fee ($200-$250 paid upfront)
What We Negotiate Prior To Listing:
 Listing Price
 Commission
 Terms of Contract
o Service Providers
o Possession
o Contingencies
o Inclusions / Exclusions
 Transaction Coordinator Fee
Traditional Sale
Seller
Buyer
Commissions
X
X
Escrow
Title
Termite
Inspection
Termite
Repairs
$50
X
X
Short Sale
Seller Buyer
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Varies
Disclosures
$100
Natural Haz
Report
HOA
$200+
Documentation
$300 Home
$500
Warranty
X
Foreclosure
Seller
Buyer
X*
X*
X
X
Fireplace
Inspection
Septic (if
applicable)
$50
X*
X*
X
X
Varies
X*
X*
X
X
Pool / Spa
Varies
X*
Repairs
Varies
X*
X*
X
X
X
X
Good Faith
Deposit
Transaction
Coordinator
Physical
Inspection
1 – 3%
X
X
X
X
X
X
X
$400
$250 $550
X
X
X
X
Change of Door $50+
X
X
X
Locks
Replacement
of Garage Door $50+
X*
X*
X
X
Openers
$10 X*
X*
X
X
Mail Box Keys
$50
X* = Items that are negotiated in a traditional transaction
 Transaction Coordinators are typically used on each side; Buyer / Seller to pay
their own TC fee
 Buyer and Seller list is based off a ‘traditional’ sale where the actual owner is
selling the property. Not a short sale, not a foreclosure.
 All prices are strictly an estimate of sample cost
 List of items above may be included, but are not limited to, actual cost of items.
Who REALLY Gets What – Compensation Two
Ways
FIRST, I work on a contingent basis versus a retainer basis, which means as your
consultant / negotiator and overseer of all details, I invest all of the up-front money
and time to help you make your dreams of buying or selling come true. ONLY when we
have successfully completed that goad, do I actually receive compensations.
Then of course the SECOND way you compensate me is in the form of your
recommendations and introductions to your friends, family and neighbors that you
care about and that I can help.
3% to Seller’s Side
3% to Buyer’s Side
Seller’s Broker
Buyer’s Broker
Agent Taxes / Cost of
Business
Agent Taxes / Cost of
Business
Agent Check
Agent Check
Keys to Success…
Home Buyers Guide
Table of Contents
In This Section:
The Search
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Nice To Have…Need To Have Questionnaire
Pricing of Property…Understanding Value Range
The Search
Don’t Go It Alone
Reality Check
Nice To Have…Need To Have
Top 5 MUST / NEED To Have…
1. _____________________________________
2. _____________________________________
3. _____________________________________
4. _____________________________________
5. _____________________________________
3 Nice to Have Items…
1. _____________________________________
2. _____________________________________
3. _____________________________________
Top Areas:
1. ______________________________________
2. ______________________________________
3. ______________________________________
When would you like to be in your new home by? __________________
If currently renting, are you month to month or on a lease? ___________
How would you rate your “handyman” skills? _____________________
Best way to communicate with you? Email / Phone / Text / Mail ________
What do you expect from me? ________________________________
Other: _________________________________________________
Pricing Your Property – Value Range / List Price
When listing a property, a seller has the option to set a LIST PRICE, for example
$425,000, or establish a VALUE RANGE such as $399,000-$450,000.
LIST PRICE can be compared to a fisherman with a single pole whereas you can only
catch one fish at a time.
However, a VALUE RANGE is comparable to a fishing net in that you are able to
catch many different fish at the same time. In that way you increase your chances of
securing your buyer.
Sometimes it is necessary to adjust the range to enlarge the pool of potential buyers for
your home.
Regardless as to what type of market we are in, there are always buyers needing,
wanting and able to buy.
We are consistently reviewing status reports and evaluations are made regularly in
order to determine if a price adjustment or reduction is necessary.
One general rule of thumb works well….
IF you are getting NO SHOWINGS…your home is overpriced.
IF you are getting SHOWINGS BUT NO OFFERS…your home is close, but still
priced too high.
IF you are getting SHOWINGS AND OFFERS…you are priced right!
The Search
How I Find Homes For You To View…
Using the information you provided in our consultation, I can create a
custom search based off your “needs assessment”
MLS SEARCH (Multiple Listing Service)
I check the MLS daily using your parameters to find out
 What’s new on the market
 What’s been taken off the market and what been put
back on the market
 On which homes prices have been reduced
NETWORKING
I network with other agents, as well as others in related fields.
DRIVE BY AND / OR PREVIEW
If I find something that may be just the perfect fit, I will call or
leave a message for you. Soooo…don’t be surprised if you’ll have
to change your “after work plans” so we can look at a home.
Likewise, if you drive by a home or homes that interest you, give
me a call and I’ll arrange for us to see it.
CUSTOM SEARCH
I will set up a custom search for you so that you will receive email
on properties of interest, as soon as they become available.
Don’t Go It Alone
Have a few of my business cards handy…
You might be out and about and tempted to stop into an open house, a new
home sales office, or even see a sign that is a FSBO (For Sale By Owner)…I
would prefer to have you get the address and bring it to me, but if
temptation over comes you and you do stop in, it is critical that the first
thing you do is present them with MY CARD! They need to know that you
have already arranged for a Realtor to represent you and protect your best
interest.
Reality Check
At some point we may need to have a reality check….is what you WANT
really in your price point? Often your first purchase is not your dream
home….It is your started home and you make it into your dream home!
What we dream about…
…What we think we want
What we can afford now…
Keys to Success…
Home Buyers Guide
Table of Contents
In This Section:
Closing And Moving
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Timeline At Closing
What Happens In Escrow
Timeline at Closing
Although date and time lines are mapped out in the contract, one thing that
I have learned in this business is that not everyone works the same
schedule…no one punches the ole time clock the same…thus sometimes it
might take a day or two to get an answer back from the supporting vendors
and parties involved…
PATIENCE IS SOMETIMES THE KEY!
Final timely steps:
 Once it has been verified that all disclosures are submitted and signed
off….
 Escrow will prepare its final HUD statement and money will go into
escrow if needed…
 The lender will hit the magic button for funding the loan….
 Title will notify us that the funds have been received…
 Title then prepares for recording the deed and that officially makes the
transfer of ownership complete! “We have recorded” are the magic
words we wait for and then…
IT IS OFFICIAL!
Time for celebration and keys get turned over to you!!
Keys to Success…
Home Buyers Guide
Table of Contents
In This Section:
Tips & Checklist / General Information / Q&A’s
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Supplemental Tax Bills Explained
Tax Bill Guide
Moving Timetable / Checklist
Change Of Address Forms – USPS & DMV
Local Utility & Services Contact Sheet
Glossary
Questions For Jared
Supplemental Tax Bills Explained
 The fiscal year runs from July 1st to June 30th
 On January 1st, tax liens are placed on properties in advance for the upcoming
fiscal year.
 There are 2 billing cycles, one from July 1st to December 31st (bills go out in
October and due no later than December 10th), and the other from January 1st to
July 1st (bills go out in February and due no later than April 10th).
 OLD rate will reflect what the seller had been paying – based on what they had
purchased the property for.
 NEW rate will reflect what you the buyer will pay based on your purchase price.
 Reassessments are done at the time of sale, transfer of title or when building
permits are pulled for construction / remodeling purposes.
 At the time of closing, if the taxes have already been paid by the seller, the seller
will be due a credit for overpayment of taxes for the days he was not in the home,
and the buyer will be charged for these days at closing, at the new tax rate.
 The county takes from 2 to 10 months to update their records. The first tax bill
you receive will be at the seller’s old rate. Once records are updated, you will be
sent a supplemental tax bill to pay for the difference between the old rate and the
new rate.
 Supplemental tax bills are only sent out once.
 Lender’s calculate your taxes at your new rate, thus usually funds for the
supplemental tax bill have already been collected and are in your impound
escrow account.
GLOSSARY
ACCEPTANCE: The date when both parties, seller and buyer, have agreed to and completed signing
and / or initialing the contract
ADJUSTABLE RATE MORTGAGE (ARM): A mortgage that permits the lender to adjust the
mortgages interest rate periodically on the basis of changes in a specified index. Interest rates may
move up or down, as market conditions change.
AMORTIZED LOAN: A loan which is paid in equal installments during its term.
ANNUAL PERCENTAGE RATE (APR): A term used in the Truth in Lending Act. It represents
the relationship of the total finance charge (interest, discount points, origination fees, loan broker,
commission, etc.) to the amount of the loan.
APPRAISAL: An estimate of real estate value, usually issued to standards of FHA, VA, and FNMA.
Recent comparable sales in the neighborhood are the most important factor in determining value.
This should be contrasted against the home inspection.
APPRECIATION: An increase in the value of a property due to changes in the conditions or other
causes. The opposite of depreciation.
ASSUMABLE MORTGAGE: Purchaser takes ownership to real estate encumbered by an existing
mortgage and assumes responsibility as the guarantor for the unpaid balance of the mortgage.
BILL OF SALE: Document used to transfer title (ownership) of PERSONAL property.
CLOSING STATEMENT (HUD1): A financial statement rendered to the buyer and seller at the
time of transfer of ownership, giving an account of all funds received or expended.
CLOUD ON TITLE: Any condition that affects the clear title to real property.
COMPARABLE SALES: Sales that have similar characteristics as the subject property and are used
for analysis in the appraisal process.
CONTRACT: An agreement to do or not to do a certain thing.
CONSIDERATION: Anything of value to induce another to enter into a contract, i.e., money,
services, a promise.
DEED: Written instrument, which when properly executed and delivered, conveys title to real
property.
DISCOUNT POINTS: A loan fee charged by a lender of FHA, VA or conventional loans to increase
the yield on the investment. One point=1% of the loan amount.
EASEMENT: The right to use the land of another.
ENCUMBRANCE: Anything that burdens (limits) the fee title to property, such as liens, easements,
or restrictions of any kind.
EQUITY: The value of real estate over and above the liens against it. It is obtained by subtracting the
total liens from the value.
ESCROW PAYMENT: The portion of a mortgagor’s monthly payment held in trust by the lender to
pay for takes, hazard insurance, mortgage insurance, lease payments and other items as they become
due.
FANNIE MAE (FNMA): Nickname for the Federal National Mortgage Corporation (FNMA), a taxpaying corporation created by congress to support the secondary mortgages insured by FHA or
guaranteed by VA, as well as conventional home mortgages.
FEDERAL HOUSING ADMINISTRATION (FHA): An agency of the U.S. Department of
Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage
loans made by private lenders. The FHA sets standards for construction and underwriting but does
not lend money or plan or construct housing.
FHA INSURED MORTGAGE: A mortgage under which the Federal Housing Administration
insures loans made, according to its regulations.
FIXED RATE MORTGAGE: A loan that fixes the interest rate at a prescribed rate for the duration
of the loan.
FORECLOSURE: Procedure whereby property pledges as security for a debt is sold to pay the debt
in the event of default.
FREDDIE MAC (FHLMC): Nickname for the Federal Home Loan Mortgage Corporation
(FHLMC), a federally controlled and operated corporation to support the secondary mortgage market.
It purchases and sells residential conventional home mortgages.
GRADUATED PAYMENT MORTGAGE: Any loan where the borrower pays a portion of the
interest due each month during the first few years of the loan. The payment increases gradually
during the first few years to the amount necessary to fully amortize the loan during its life.
INVESTOR: The holder of a mortgage or the permanent lender for whom the mortgage banker
services the loan. Any person or institution that invests in mortgages.
LEASE PURCHASE AGREEMENT: Buyer makes a deposit for future purchases of a property
with the right to lease the property for the interim.
LOAN TO VALUE RATIO (LTV): The ratio of the mortgage loan principal (amount borrowed) to
the property’s appraised value (selling price). Example – on a $100,000 hoe, with a mortgage loan
principle of $80,000 the loan to value ratio is 80%.
MORTGAGE: A legal document that pledges a property to the lender as security for payment of a
debt.
MORTGAGE INSURANCE PREMIUM (MIP): The amount paid by a mortgagor for mortgage
insurance. This insurance protects the investor from possible loss in the event of a borrower’s default
on a loan.
MORTGAGOR: The borrower of money or the giver of the mortgage document.
NOTE: A written promise to pay a certain amount of money.
ORIGINATION FEE: A fee of the loan paid to the lender, expressed in points.
PRIVATE MORTGAGE INSURANCE (PMI): See mortgage insurance premium.
PROMISSORY NOTE: A written contract containing a promise to pay a definite amount of money
at a definite future time.
REALTOR: A member of local and state real estate boards, which are affiliated with the National
Association of Realtors (NAR).
RENT WITH OPTION: A contract, which give one the right to lease property at a certain sum with
the option to purchase at a future date.
SECOND MORTGAGE / SECOND DEED OF TRUST / JUNIOR MORTGAGE OR JUNIOR
LIEN: An additional loan imposed on a property with a first mortgage. Generally, a higher interest
rate and shorter terms than a “first” mortgage.
SEVERALTY OWNERSHIP: Ownership by one person only. Sole ownership.
SURVEY: The process by which a parcel of land is measured and it area ascertained.
TENANCY IN COMMON: Ownership by two or more persons who hold an undivided interest
without right of survivorship. (In the event of the death of one owner, his/her share will pass to
his/her heirs.)
TITLE INSURANCE: An insurance policy, which protects the, purchaser or lender, against loss
arising from defects in title.
QUESTIONS I HAVE FOR JARED
Jared – 619.993.6065
Jared@MissionRealtyGroup.com
1.
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Notes:
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