WITH BLU.INK REAL
ESTATE
WHAT’S INSIDE
financing information stages of the buying process
‘closing costs’ defined definitions & numbers to know answers to frequently asked questions best next steps
FINANCING
Determining how much you can afford before you begin your home search will save you valuable time and energy.
It also will put you in a better position for making an offer when the time comes.
This starts with the ‘Pre-approval Process’.
Why should I get pre-approved?
• Pre-approval for a mortgage helps you determine how much house you can afford and assures you that you are looking in the correct price range,
• Pre-approval from your lender means that you have provided them with the necessary paperwork, and they have approved your actual loan amount.
• Most lenders require that your monthly mortgage payment, including principal, interest, taxes and insurance, range between 25 and 28 percent of your gross monthly income.
• Having pre-approval for a home loan will put you in a much better negotiating position, because the seller knows you are a bona fide buyer and able to obtain your loan to purchase their home.
DOWNPAYMENT
• An FHA loan only requires 3.5% down and makes a great option.
• If you have a 20% percent or higher down payment you may qualify you for a lower percentage rate.
OUR RECOMMENDED LENDERS
Umpqua Bank
Dylan Langei : 360.927.5897
Dylanlangei@umpquabank.com
Caliber Home Loans
Ian Mullen : 360.318.3660
Ian.Mullen@CaliberHomeLoans.com
Home Bridge
RJ Bennett : 360.922.5168
Rj.bennet@homebridge.com
STAGES OF THE BUYING PROCESS
Stage One: Finding Your Home
Pre-Approval
As previously mentioned, a pre-approval tells you exactly how much home you can afford. You do not want to find your ideal home, only to find out that you cannot qualify for a loan to buy it. A pre-approval also strengthens your bargaining power when negotiating with a seller.
Determining your Needs and Wants
When we meet, we will go over the questions on pages 1 & 2, so I can begin to picture what you are looking for in a home. Your wants and needs may alter or change as we begin looking at homes. This
is perfectly fine, just let me know so I can make sure to show you homes that really work for you.
Searching for Homes
With your answers, I will customize a search for you online. You will receive all the homes currently on the market that fit your parameters. Every day while you are working, I’m working, following up with properties and searching new listings.
As new homes come on the market that fits your parameters, you will receive email updates with pictures and details on the home so you instantly know what homes are available.
If you see something you like, let me know.
If I see something I think you will like, I will also let you know.
Viewing Homes
From the list of homes you receive, you can let me know which homes you would like to go view. Our search will begin by familiarizing yourself with the current real estate market.
The first tour of homes will be an educational day. We’ll talk about resale and what holds the best value. We’ll talk about old homes and some items that you’ll need protection from. We’ll look at what you can get in your price point in different areas. Most importantly it will help me understand what you are looking for and you will also get an idea for other important items. My goal isn’t to sell you a home but instead, help educate you and use this opportunity for me to learn more about your likes and dislikes.
I strongly encourage you to go to open houses on your own and to scout out the paper and internet sites for properties that interest you. I will be doing
this as well, but four or six eyes are more effective than two.
The Search Continues
We will continue to search for homes, looking at several at a time, or just one – depending on how many catch your attention at a given time.
Typically I have a pretty good idea of what you are looking for in a home after a couple outings. Sometimes you might be the one to find the home (sometimes a home above or below your search price or in an area you were not originally searching in). This is totally fine.
The most important part of my job isn’t finding you a home, but researching the property, searching for other areas of concern, analyzing the price, writing an offer that protects you, negotiating, and following up with lenders, title, escrow to ensure a smooth closing.
Normal Sales, Short Sales, Bank Owned
Properties & For Sale By Owners
We will discuss the pros and cons of these different purchasing options. Depending on your time frame and goals, you may decide to look at all of these or rule a few out.
STAGE TWO: WRITING AN OFFER
Pending simply means your house is under contract, which puts us anywhere between 2 and 6 weeks away from it officially being sold.
Generally, two major things happen during this time. First, the home buyer hires a home inspector to go through and asses things. Then, we enter round two of price negotiations and discuss any repairs they may request.
If the buyer is purchasing the home with a loan from a bank, that bank will order an appraisal. Essentially it’s the bank’s way of determining the home is worth the amount we decided on.
Once those two things are done, you are set to close. Congrats!
Timeline & Important Dates
We will be providing you with a ‘Pending to Closing’ timeline after we have mutual acceptance on your home. It is a visual display of the important dates of your contract and the things you need to complete.
Home Inspection
Home inspections are important.
You should know if there are any problems with the home you are purchasing. In most situations the home inspection will occur after we have reached a mutual agreement with the seller.
I recommend you hire a professional home inspector to help you with this task. The cost (usually $400) is paid for by you, but worth the money to know if you’re buying a sound investment or a money hole. This inspection should cover items such as the roof, gutters, wiring, plumbing, foundation, framing, and insulation. It will usually include a rudimentary inspection of the heating system.
It’s a good idea to accompany the inspector you hire so you can learn the features of the home as well as the areas that need attention. We will be there during the inspection, too. In every home the home inspector will find items that need to or should be fixed to extend the life of the home and keep it safe.
This will serve as a nice ‘To Do List’ to start on once you move in. If some items come up on the inspection report that are not satisfactory to you, it is possible to negotiate with the seller to make the necessary repairs. The seller is not obligated to agree to do this, but if they don’t, you are not obligated to complete the purchase.
Title Commitment
The sellers of the property will provide you with a title insurance policy. This policy protects you against loss arising from disputes over ownership of the property. We will have an opportunity to review the policy and determine if there are any exceptions to the policy that you find objectionable. Your lender will require you, the borrower to purchase a separate policy that covers them.
Appraisal
Your lender will hire an appraiser to determine if the property is worth the price you are paying. The appraisal is performed for the lender, as a bank will not loan you more money than they believe a property is worth. There are contingencies built into the financing addendum to protect you and your earnest money if the appraisal comes in lower than the purchase price.
Insurance
Within the first 5 days of the transaction it is important to select a hazard insurance agent and begin the process to get insurance on your new home. I can give you recommendations as to who to contact.
Home Owner’s Association
If the property belongs to a Home Owners Association, we will have an opportunity to read and accept the documents pertaining to the association. These documents describe the rules, regulations and finances pertaining to the association.
STAGE THREE: CARING FOR CONTINGENCIES
STAGE FOUR: CLOSING & POSSESSION
Signing
In order to close there are many papers you will need to sign. Escrow will arrange for you to come in 24-72 hours before closing occurs to sign paperwork. If you need to bring money to closing for the down payment or closing costs, Escrow will let you know how much. You will need to provide a cashier’s check for this amount. At your request, I will accompany you at the signing so that I can answer questions and try to solve any problems that might arise. I am not an attorney and cannot provide legal advice, but my presence can be useful if a last-minute addendum is needed or a document is missing from the escrow agent’s file.
Closing
The escrow agent’s function is to facilitate an orderly transfer of ownership from seller to buyer. Taxes need to be prorated, any underlying liens on the property must be paid and documents will be reviewed, signed and notarized. *Note – It is not uncommon for closing dates to be extended. There are a number of different things that can delay the process. I will keep you posted on the status throughout the transaction.
Utilities
Call utility companies a few days prior to closing to transfer the accounts into your name.
Possession
The time and date of possession of the property is defined in the sales contract as 9:00pm on the closing date. Thus, though we may close on a Tuesday, it will not be your house until that evening at 9pm. Usually I recommend waiting to move until the next day.
CLOSING COST CONSULTATION
CLOSING COSTS ARE AN ASSORTMENT OF FEES COLLECTED BY THE ESCROW COMPANY AT THE SIGNING APPOINTMENT.
Some closing costs, such as excise tax on the sale and real estate commission, are the responsibility of the seller. Some closing costs, such as the cost of the escrow company, are split between the buyer and seller. Many of the closing costs are related to the buyer’s mortgage and these are the buyer’s responsibility.
One of the largest costs associated with the mortgage is the “loan origination fee” or the fee charged by the lender to provide the loan. This varies between lenders and is something that you should be considering when shopping for a lender. Some buyers elect to pay a separate fee to “buy down” the interest rate.
Lenders also can charge for an appraisal, title insurance, courier fees, etc. In addition to closing costs, the escrow company will be instructed by the lender to collect “pre-payment amounts”, also referred to as “pre-paids”. These pre-payments are for such things as real estate taxes, insurance, etc. The kind and amount of closing costs you will incur will depend on your loan, your lender, and the home you decide to purchase. Upon making your initial loan application, your lender will provide you with a Good Faith Estimate which will give you a better idea of what to expect.
If keeping more money in your pocket after closing is important, structuring an offer so the seller pays for your closing costs is an option. We can discuss this in more detail and what it means in terms of negotiating.
NUMBERS & DEFINITIONS
• The Purchase amount is the amount you are paying for the house. It is inclusive of the Earnest Money. It is inclusive of your down payment. It is not inclusive of the Closing Costs.
• Closing Costs are charges associated with the buyer’s loan, the transaction itself, and prepayments required by the lender.
• The Earnest Money, paid by the buyer, is a portion of the purchase amount that is held by the Escrow Company while the transaction is in process. The purchase and sale agreement is specific regarding the disposition of earnest money if a transaction is being terminated. When the transaction closes and the buyer becomes the new owner of the home, the Earnest money will become part of your down payment or purchase amount. Earnest Money is usually in the ball park of 1-3% of the purchase amount. You will write a check for the Earnest Money when we write the offer and it will be deposited when the offer is accepted.
• The Down Payment is the portion of the purchase price that the buyer is paying in cash. The balance is the mortgage amount. Down payments can range drastically. Each buyer, working with their lender, determines the best scenario for their particular purchase.
FAQ’S & ANSWERS
What if I need to sell my home before I buy a new one?
To put yourself in the best negotiating position before you find a new home, you want to hire a qualified real estate agent to help you put your home on the market.
At this point, you have an option to write an offer on a new home “contingent” upon the sale of your home. A buyer in this position may not have the same negotiating power as one whose home has already sold (or at least has an accepted offer). The seller may be hesitant to accept your offer because there are too many things that must happen before the sale can close.
An alternative option may be a Bridge Loan depending upon the equity in your current home. For more information about Bridge Loans, please ask me or your lender.
How does my offer get presented to the seller?
I will call the listing agent for the home you have chosen and find out the best means for your offer to be accepted by their seller. Often times this will be by an appointment with the seller to personally present your offer. Other times it will be by delivering it to the Listing Agent with detailed information explaining the details of your offer and negotiating on your behalf.
What happens if I offer less than the asking price?
With any offer, the seller has three options. They can accept the offer, counter your offer, or reject it completely.
Remember that there could be another buyer who is also interested in the home you’ve chosen... If they happen to write an offer at the same time you do, the seller will have two offers to compare.
There are usually many aspects of each offer to consider, but ultimately, the seller will want to accept the best and most complete offer. In active real estate markets, homes often sell for their listed price.
As a real estate professional, I can help you plan your strategy, based on the current real estate market.
Does it cost me money to submit an offer?
No. There are no fees associated with writing the offer. Once it is accepted is when there become expenses (hiring an inspector, providing earnest money for deposit, closing costs, the purchase price of the home, etc).
When you write the offer on the home you’ve chosen, you will be expected to include an earnest money check (a personal check works fine). This is a sign of your good faith that you are seriously interested in buying the home. The check will only be deposited if they accept the offer.
How do we pay our realtor?
Realtors are paid by the sellers, which is great news for buyers. Though, despite being paid by the seller, your realtor still works solely for you.
Where does my earnest money go?
Once the buyer and seller have a mutually accepted offer, the earnest money is deposited into an Escrow account or a trust account. That deposit becomes a credit to the buyer and becomes part of the purchase expense.
Can I lose my earnest money?
Real estate contracts are complicated legal transactions. This is another area where having a knowledgeable and professional agent is a necessity. Rarely does the buyer lose the earnest money.
We include contingencies into the contract to help protect you and your earnest money. Most often, if the transaction falls apart, there are circumstances beyond the buyer’s control that cause it to happen.
If the buyer willfully decides, however, that they no longer want to buy the house, and has no legal reason for rescinding their offer, then the seller has the right to retain the earnest money.
Is that all the money that’s involved?
Some lenders require the cost of the appraisal and credit report at the time of the loan application.
SO, WHAT’S NEXT?
Next steps look different for each person depending on how far along you currently are in the process and how soon you’d like to buy. However, there are two actions I recommend regardless of where you are in your process.
First: talk with a Realtor. If you are ready now or if you are waiting a year, meeting with a realtor will be a chance for you to ask questions and for the Realtor to implement a few systems to help you learn about the current Market.
If you work with me, I will set up an Email Notification search that will alert you to new homes on the market or price drops on homes. Monitoring these as well as looking at the pictures and areas in which they are located is a helpful way to see what is available at different price points. Another option is to receive an email monthly with homes that have sold within certain parameters (price, location, etc). This is also a beneficial tool to monitor and learn about the market.
Second: Talk with a Mortgage Planner/Loan Officer. This step isn’t just to be pre-approved, it’s also a valuable time to learn about what you should or should not be doing in regards to savings and credit to put you in the best position to purchase a home.
When I purchased my first home I met with my Mortgage Advisor about 6 months out and it was super helpful. He made great suggestions for what I could be doing over the next 6 months to make my credit stronger than it already was and position myself to be completely ready to buy a home. If you would like help choosing someone to work with, please let me know, I’m happy to refer you to someone excellent.
COST ESTIMATES
EARNEST MONEY
— Typically 1% of purchase price (outlined in Purchase & Sale Agreement)
— Refunded or applied to down payment and closing costs at closing
— Payment via personal check or wire transfer to designated Title Company
WHOLE HOUSE INSPECTION
— Estimated $450
— Other inspections may be purchased a la carte for an extra charge
- Wood-destroying organisms
- Moisture
- Roof
— Payment via personal check or credit card at the time of the inspection
TRANSFER FEES
— HOA Transfer Fees
- Payment amount & responsibility to pay are determined by each HOA
- Read the HOA by-laws and CC&Rs for this info
— Other Transfer Fees
- In some cases, “special” transfer fees may apply in addition to those above
- Example: Buyer pays .25% of purchase price in Sudden Valley (Bellingham)
APPRAISAL
— $575 - $900
— Required by the bank on every loan to verify the Property as adequate collateral for the loan amount. (Ask your Realtor for details in a “low appraisal” situation.)
— Payment typically goes via credit card. In some cases, your lender may be able to wrap this payment into your closing costs. Ask your lender for details.
Your lender will have an estimate for your official closing costs. This will depend on the property type and loan amount and can be anywhere between 1-3% of the property price. It is also possible to have the seller pay your closing costs for you.
The following are different costs that could be associated with different property types. You could pay none or all of the following:
Short Sales/Bank Owned Properties
• Excise Tax
—In some cases, Buyer may be responsible to pay excise tax
—1.78% of purchase price, to be paid in cash at closing (not to be financed)
• Negotiation Fee
—Bank may require a flat fee to cover the short sale negotiations
—Typically ranges from 3-10% of purchase price (not to be financed
Unique Property Needs
• Sewer Scope
—$250-$500
—Cost increased if a toilet must be removed to insert scope
• Septic Inspection
—Typically, Seller is required to conduct an inspection within the last 12 months
—In some cases, Buyer may opt to be responsible for this inspection or pumping
• Well Inspection
—Buyer may conduct inspection(s) of the well system at Buyer’s expense
—Water testing, flow tests, etc. all vary in price greatly
• Water Supply Testing
—$22 for basic chloroform, bacteria testing
—$125+ for deeper testing
— Payment directly to testing company
• Boundary Survey
—Cost varies greatly based on property size and type
—Payment directly to surveyor
• Elevation Certificate
—Only necessary when the Property is in a flood zone, when insurance is needed
—USDA loans require it, so does FEMA
— Helpful to potentially reduce flood insurance premiums
• Certificates for Lending
—Lenders may require inspection in order to certify aspects of the property
—Can apply to manufactured homes, for instance. (Engineering Certificate)
— $400-$600 per trip inspector makes
— Payment directly to inspector or poten tially can be wrapped into closing costs
• Utility Activation
—Buyer may be required to activate utilities to conduct inspections/appraisals
—Cost based off local utility district
CLOSING COSTS
RECOMMENDED INSPECTORS
BNB Home Inspection Services
Brad Barbour : 360.724.8180
Bnbhomeinspections.com
Pillar to Post
Jefferson Livingston : 360.392.8731
PugetOffice@pillartopost.com
Brickkicker
Dan Crocker : 360.766.7200
Brickkickernw@msn.com
KYLE VAN DER VELDE
I am Kyle van der Velde, a Realtor in Whatcom & Skagit Counties. I started selling real estate in February of 2015 and haven’t looked back since!
I have a background in marketing, graphic design, and creative planning. All of which have been crucial in my real estate career thusfar. When I am not working, I play music with my wife, spend time with my 2 kids, or enjoy a nice hot cup of coffee at a local cafe.
I have sold over 120 homes in my career, putting me in the top 5% of realtors in Whatcom and Skagit County.
Thank you for the chance to help you with all of your real estate needs!
TAYLOR ASSINK
I am Taylor Assink, life-long resident of Whatcom County! My husband & I currently reside in Lynden as homeowners ourselves.
I joined the vandervelde + co. team in August of 2019. We are dedicated to serving our clients the best in the business. I work for you!
Whether you are looking for the dream home for you and your family or wanting to sell your home want help along the way, I want to be at your righthand and help you turn your needs to reality.
I have a background in property management, marketing and, most importantly, customer service! I want to give you the best buying and selling experiences possible.
KYLE VAN DER VELDE
Kyle was highly professional and extremely responsive. He was very respectful of our time and set up efficient viewings of multiple properties.
Most importantly, he was able to find exactly what we were looking for and closed the deal quickly. I look forward to working with him again.
— Justin B. 08.21.2020
KYLE VAN DER VELDE
Without a doubt, Kyle is the most outstanding realtor you’ll find in Bellingham!
We had no idea that COVID would put us into a competitive sellers’ market, but he worked tirelessly to find us a beautiful home that checked off everything on our wish list. He is extremely knowledgeable about every aspect of home-buying, and he knows exactly how to write offers that win in a multiple offer situation. What’s more, he’s one of the kindest humans we’ve met.
He went above and beyond to make us feel like we were his only clients, and he was always available to answer our questions and offer advice. We’re brand new to this city, so we’re so thankful that we found him.
If you’re looking for a realtor who will go the extra mile for you and then some, Kyle is your guy.
— Alyssa G. 08.12.2020
TAYLOR ASSINK
Taylor was extremely professional, thoroughly engaged in the process, always on our side, and frequently went above and beyond to make sure we achieved all of our goals in the finishing of construction and purchasing of our home.
We couldn’t be more pleased with how everything turned out, and would recommend Taylor to anyone in the market for a new home.
— Johnny 08.24.2020
TAYLOR ASSINK
Taylor went above and beyond helping me with my home. She was very detailed and thorough which I appreciated. I would recommend her to all! Definitely give her a call, she won’t let you down.
— Brandon R. 01.09.2020
