Realtors can be invaluable when you are buying your home - especially if you are a first-time buyer. Their experience in the market and negotiation skills can help you get the home you want for a great price. Below are a few other reasons working with a Realtor could benefit you.

Working with a Realtor won''t cost you anything. That''s right! Realtors are paid by the sellers who hire them to list and sell their homes. Buyers don''t pay for their services.

A real estate transaction is complicated. In most cases, buying or selling a home requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page government-mandated settlement statements. A knowledgeable guide through this complexity can help you avoid delays or costly mistakes.

Buying a home is time consuming. Searching for your perfect home takes a lot of time. Realtors search for homes in your area every day. Their searching will save you time searching. Many realtors also have access to For Sale By Owner lists and can add those homes to their search criteria when conducting a search for you.

Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with someone who speaks that language.

Realtors have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. That’s why having an expert on your side is critical.

Realtors provide objectivity. Since a home often symbolizes family, rest, and security, not just four walls and roof, homeselling or buying is often a very emotional undertaking. And for most people, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you keep focused on both the business and emotional issues most important to you.

Realtors are members of the NATIONAL ASSOCIATION OF REALTORS^Ò, a trade organization of more than 1 million members nationwide. Realtors subscribe to a stringent code of ethics that helps guarantee the highest level of service and integrity.

Credit scores, along with your overall income and debt, are a big factor in determining if you’ll qualify for a loan and what loan terms you’ll be able to qualify for.

1.)    Check for and correct errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.

2.)    Pay down credit card bills. If possible, pay off the entire balance every month. However, transferring credit card debt from one card to another could lower your score.

3.)    Don’t charge your credit cards to the maximum limit.

4.)    Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after   a year.

5.)    Don’t purchase big-ticket items for your new home on credit cards until after the loan is approved. The amounts will add to your debt.

6.)    Don’t open new credit card accounts before applying for a mortgage. Having too much available credit can lower your score.

7.)    Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

8.)    Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie Mae Foundation.

Here are some things to keep in mind as you prepare for homeownership.

Decide how much home you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.

Develop a wish list of what you’d like your home to have. Then prioritize the features on your list.

Select three or four neighborhoods you’d like to live in. Consider items such as schools, recreational facilities, area expansion plans, and safety.

Determine if you have enough saved to cover your downpayment and closing costs. Closing costs, including taxes, attorney’s fee, and transfer fees average between 2 percent and 7 percent of the home price.

Get your credit in order. Obtain a copy of your credit report.

Determine how large a mortgage you can qualify for. Also explore different loans options and decide what’s best for you.

Organize all the documentation a lender will need to preapprove you for a loan.

Do research to determine if you qualify for any special mortgage or downpayment-assistance programs.

Calculate the costs of homeownership, including property taxes, insurance, maintenance, and association fees, if applicable.

Find an experienced Realtor who can help you through the process.

Real estate financing is available from numerous sources, mortgage companies that have worked with local Realtors and in some cases, individual Realtors themselves. Based on his or her experience, the Realtor may suggest one or more lenders with a history of offering competitive programs and delivering promised rates and terms.

The loan officer will carefully review your financial situation, including your credit report and other information. The lender will then suggest programs that most closely meet your needs. For instance, a first-time buyer may qualify for statebacked mortgage payments with little money down and low interest rates, while a repeat purchaser (someone who has bought a home before) with more equity (money invested in the home) might want to get a 15-year loan and the lower overall interest costs it represents.

Credit scores range between 200 and 800. Scores above 620 are considered desirable for obtaining a mortgage. These factors will affect your score.

• Your payment history. Whether you paid credit card obligations on time.

• How much you owe. Owing a great deal of money on numerous accounts can indicate that you are overextended.

• The length of your credit history. In general, the longer the better.

• How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay promptly.

• The types of credit you use. Generally, it’s desirable to have more than one type of credit—installment loans, credit cards, and a mortgage, for example.

The form of ownership taken - the vesting of title - will determine who may sign various documents involving the property and furture rights of the parties to the transaction. These rights involve such matters as: real property taxes, income taxes, inheritance and gift taxes, transferability of title and exposure to creditor''s claims. Also, how title is vested can have significant probate implications in the event of death.

The California Land Title Association (CLTA) advises those purchasing real property to give careful consideration to the manner in which title will be held. Buyers may wish to consult legal counsel to determine the most advantageous form of ownership for their particular situation, especially in cases of multiple owners of a single property.

The CLTA has provided the following definitions of common vestings as an informational overview. Consumers should not rely on these as legal definitions.

SOLE OWNERSHIP - Sole ownership may be described as ownership by an individual or other entity capable of acquiring title. Examples of common vesting cases of sole ownership are:

A Single Man/Woman:  A man or woman who has not been legally married.

An Unmarried Man/Woman:  A man or woman who was previously married and is now legally divorced.

A Married Man/Woman as His/Her Sole and Separate Property:  A married man or woman who wishes to acquire title in his or her name alone.

CO-OWNERSHIP - Title to property owned by two or more persons may be vested in the following forms:

Community Property:  A form of vesting title to property owned by husband and wife during their marriage which they intend to own together. Community property is distinguished from separate property, which is property acquired before marriage, by separate gift or bequest, after legal separation, or which is agreed in writing to be owned by one spouse.

Community Property with Right of Survivorship:  A form of vesting title to real property owned by husband and wife during their marriage which they intend to own together. This form of holding title shares many of the characteristics of Community Property but adds the benefit of the right of survivorship similar to title held in joint tenancy. There may be tax benefits for holding title in this manner.

Joint Tenancy:  A form of vesting title to property owned by two or more persons, who may or may not be married, in equal interest, subject to the right of survivorship in the surviving joint tenant(s). Title must have been acquired at the same time, by the same conveyance, and the document must expressly declare the intention to create a joint tenancy estate.When a joint tenant dies, title to the property is automatically conveyed by operation of law to the surviving joint tenant(s).

Tenancy in Common:  A form of vesting title to property owned by any two or more individuals in undivided fractional interests. These fractional interests may be unequal in quantity or duration and may arise at different times. Each tenant in common owns a share of the property, is entitled to a comparable portion of the income from the property and must bear an equivalent share of expenses.

REMEMBER:  How title is vested has important legal consequences. You may wish to consult an attorney to determine the most advantageous form of ownership for your particular situation.

Reprinted with permission from the California Land Title Association.

Congratulations!  Once you have decided to buy a home, your first step should be to contact a qualified lender and find out how much home you can afford. Ask for a "letter of pre-approval" that shows that you are pre-approved up to a specific amount of money.  This will ensure that you are in the "ready-position" to make an offer that sellers will take seriously if a good opportunity arises. Contact us for referrals if you do not know a good lender.

Condominiums and townhouses offer an affordable option to single-family homes in most areas. But consider these facts before you buy.

Storage. Some condos have storage lockers, but usually there are no attics or basements to store belongings.

Outdoor space. Yards and outdoor areas are usually smaller in condos, so if you like to garden or entertain outdoors, this may not be a good fit. However, if you hate yard work, this may be the perfect option for you.

Amenities. Many condo properties have swimming pools, fitness centers, and other facilities that would be very expensive in a single-family home.

Maintenance. Many condos have onsite maintenance personnel to care for common areas, do repairs in your unit, and let in workers when you’re not home.

Security. Many condos have keyed entries and or even door attendants. Plus, you’ll be closer to other people in case of an emergency.

Reserve funds and association fees. Although fees generally help pay for amenities and provide savings for future repairs, you will have to pay the fees agreed to by the condo board, whether or not you’re interested in the amenity or not.

Resale. The ease of selling your unit is more dependent on what else is for sale in your building, since units are usually fairly similar. Single-family homes usually are more individual.

Freedom. Although you have a vote, the rules of the condo association can affect your ability to use your property. For example, some condos prohibit home-based businesses. Others prohibit pets. Read the covenants, restrictions, and bylaws of the condo carefully before you make an offer.

Proximity. You’re much closer to your neighbors in a condo or townhome. If possible, try to meet your closest prospective neighbors before making a decision.

Here are 8 steps you can take to getting your finances in order.

Develop a family budget. Instead of budgeting what you’d like to spend, use receipts to create a budget for what you actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc., as well as predictable costs such as rent.

Reduce your debt. Generally speaking, lenders look for a total debt load of no more than 36 percent of income. Since this figure includes your mortgage, which typically ranges between 25 percent and 28 percent of income, you need to get the rest of installment debt—car loans, student loans, revolving balances on credit cards—down to between 8 percent and 10 percent of your total income.

Get a handle on expenses. You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save.

Increase your income. It may be necessary to take on a second, part-time job to get your income at a high-enough level to qualify for the home you want.

Save for a downpayment. Although it’s possible to get a mortgage with only 5 percent down—or even less in some cases—you can usually get a better rate and a lower overall cost if you put down more. Shoot for saving a 20 percent downpayment.

Create a house fund. Don’t just plan on saving whatever’s left toward a downpayment. Instead decide on a certain amount a month you want to save, then put it away as you pay your monthly bills.

Keep your job. While you don’t need to be in the same job forever to qualify, having a job for less than two years may mean you have to pay a higher interest rate.

Establish a good credit history. Get a credit card and make payments by the due date. Do the same for all your other bills. Pay off the entire balance promptly.

A Mello-Roos district is an area where a special tax is imposed on those real property owners within a Community Facilities District. This district has chosen to seek public financing through the sale of bonds for the purpose of financing certain public improvements and services. These services may include streets, water, sewage and drainage, electricity, infrastructure, schools, parks and police protection to newly developing areas. The tax you pay is used to make the payments of principal and interest on the bonds.

"Preapproval" means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a preapproval letter, which shows your borrowing power. You can visit as many lenders as you like and get several preapprovals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports.

Although not a final loan commitment, the preapproval letter can be shown to Realtors when bidding on a home. It demonstrates your financial strength and shows that you have the ability to go through with a purchase. This information is important to owners since they do not want to accept an offer that is likely to fail because financing cannot be obtained.

You will usually be paying for such things as appraisal fees, loan fees, escrow charges, advance payments such as property taxes and homeowner''s insurance, title insurance premiums, pest inspections and the like.

The amount you pay for closing costs will vary; however, when buying your home and obtaining a new loan, an estimate of your closing costs will be provided to you pursuant to the Real Estate Settlement Procedures Act after you submit your loan application. This disclosure provides you with a good faith estimate of what your closing costs will be in the real estate process. An itemized list of charges will be prepared when you close your transaction and take title to your new property.

By purchasing an interest ina subdivision within a Community Facilities District you can expect to be assessed for a Mello-Roos tax which will typically be collected with your general property tax bill. These special tax payments are subject to the same penalties that apply to regular property taxes.

Due to recent natural disasters in our state, we suggest that you start shopping for homeowners/fire insurance as soon as your offer is accepted (it is a good idea to call your current insurer first). Know the age of your home when shopping for insurance. Don''t forget to have your agent contact your escrow officer when you have made your decision.

The day escrow closes is the day the deed records with the county and you become the owner of your home. It could take 6-10 weeks from that date for the county to mail you the original signed/recorded deed.

The answer is simple:  The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and your mortgage lender, want to make sure that the property is indeed yours - lock, stock and barrel - and that no individual or government entity has any right, lien, or claim to your property.

Title insurance companies are in business to make sure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly and that your interests as a homebuyer are protected to the maximum degree.

Before issuing a policy, the title company performs an extensive search of relevant public records to determine if anyone other than you has an interest in the property. With such thorough examination of records, any title problems usually can be found and cleared up prior to your purchase of the property. Once a title policy is issued, if for some reason any claim which is covered under your title policy is ever filed against your property, the title company will pay the legal fee involved in defense of your rights, as well as any covered loss arising from a valid claim. That protection, which is in effect as long as you or your heirs own the property, is yours for a one-time premium paid at the time of purchase.

There are many good reasons why owning a home is a good idea. Below are just a few:

Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, property taxes you pay, and some of the costs involved in buying your home.

Gains. Between 1998 and 2002, national home prices increased at an average of 5.4 percent annually. And while there’s no guarantee of appreciation, a 2001 study by the National Association of Realtors^Ò found that a typical homeowner has approximately $50,000 of unrealized gain in a home.

Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

Predictability. Unlike rent, if you have a fixed mortgage, your mortgage payments don’t go up over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will rise.

Freedom. The home is yours. You can decorate any way you want and be able to benefit from your investment for as long as you own the home.

Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Answer these questions to help you decide whether moving up makes sense.

1.   How much equity do you have in your home? Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of paying a mortgage, but if you’ve owned your home for a number of years, you may have significant unrealized gains.

2.   Has your income increased enough to cover the extra mortgage costs and the costs of moving?

3.   Does your neighborhood still meet your needs? For example, if you’ve had children, the quality of the schools may be more of a concern now than when you first purchased.

4.   Can you add on or remodel? If you have a large yard, there might be room to expand your home. If not, your options may be limited. Also, do you want to undertake the headaches of remodeling?

5.   How is the home market? If it’s good, you may get top dollar for your home.

6.   How are interest rates? A low rate not only helps you buy more home, but also makes it easier to find a buyer.

In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate this:

1. Take the purchase price of the home: This is the sale price, not the amount of money you actually contributed at closing.

2. Add adjustments:

• Cost of the purchase—including transfer fees, attorney fees, inspections, but not points you paid on your mortgage.
• Cost of sale—including inspections, attorney’s fee, real estate commission, and money you spent to fix up your home just prior to sale.
• Cost of improvements—including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.

3. The total of this is the adjusted cost basis of your home.

4. Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.

Preparing for an open house is easy if you know what to do. Below are some helpful tips and advice to help you prepare your home.

Hire a cleaning service. A spotlessly clean home is essential; dirt will turn off a prospect faster than anything.

Mow your lawn, and be sure toys and yard equipment are put away.

Serve cookies, coffee, and soft drinks. It creates a welcoming touch. But be sure the kitchen has been cleaned up; use disposable cups so the sink doesn’t fill up.

Lock up your valuables, jewelry, and money. Although your Realtor will be on site during the open house, it’s impossible to watch everyone all the time.

Turn on all the lights. Even in the daytime, incandescent lights add sparkle.

Send your pets to a neighbor or take them outside. If that’s not possible, crate them or confine them to one room (a basement or bath), and let the salesperson know where to find them.

Leave. It’s awkward for prospective buyers to look in your closets and express their opinions of your home with you there. Your Realtor will be there to answer all their questions and give them the selling points about your home.

When holding an open house, it''''s important to try to make your home as irrisistible as possible to any prospective buyers that visit. Here are some ideas that have worked for us. 

• Put fresh or silk flowers in principal rooms for a touch of color.
• Add a new shower curtain, fresh towels, and new guest soaps to every bath.
• Set out potpourri or fresh baked goods for a homey smell.
• Set the table with pretty dishes and candles.
• Buy a fresh doormat with a clever saying.
• Take one or two major pieces of furniture out of every room to create a sense of spaciousness.
• Put away kitchen appliances and personal bathroom items to give the illusion of more counter space.
• Lay a fire in the fireplace. Or put a basket of flowers there if it’s not in use.
• Depersonalize the rooms by putting away family photos, mementos, and distinctive artwork. Buyers need to envision themselves in your home.
• Turn on the sprinklers for 30 minutes to make the lawn sparkle.

Below are some tips designed to help make your move easier.

1. Give your forwarding address to the post office, usually 2-4 weeks ahead of the move.

2. Notify your credit card companies and bank of the change of address.

3. Arrange to have utilities disconnected at your old home and connected at your new one.

4. Check insurance coverage for moved items. Usually movers only cover what they pack.

5. Note the weight of the goods you’ll have moved, since long-distance moves are usually billed according to weight. Watch for movers that use excessive padding to add weight.

6. Have a “first open” box with the things you’ll need most—toilet paper, soap, toothpaste, etc.

If you’re moving out of town, get copies of medical and dental records, prescriptions and children''s school records.

Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:

• You have lived in the home as your principal residence for two out of the last five years.
• You have not sold or exchanged another home during the two years preceding the sale.

Also note that as of 2003, you also may qualify for this exemption if you meet what the IRS calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.

Make your home more appealing for potential buyers with these quick and easy tips.

1. Trim bushes so they don’t block windows and cut down on light.
2. Buy a new doormat.
3. Put a pot of bright flowers (or a small evergreen in winter) on your porch.
4. Put new doorknobs on your doors.
5. Put a fresh coating on your driveway.
6. Edge the grass around walks and trees.
7. Keep your garden tools out of site.
8. Be sure kids put away their toys.
9. Buy a new mailbox.
10. Upgrade the outside lighting.
11. Use warm, incandescent light bulbs for a homey feel.
12. Polish or replace your house numbers.
13. Clean your gutters.
14. Put out potpourri or burn scented candles.
15. Buy new pillows for the sofa.
16. Buy a flowering plant and put it in a window you pass by frequently.
17. Make a centerpiece for your table with fruit or artificial flowers.
18. Replace heavy curtains with sheer ones that let in more light.
19. Buy new towels.
20. Put a seasonal wreath on your door.

Before you put your home on the market, there are some things you can do to differentiate your house among the competitors.

When preparing to put your home up for sale, your first concern is the home''s exterior. If the outside, or "curb appeal" looks good, people will more than likely want to see what''s on the inside. Keep the lawn and landscape nicely manicured. Trim the bushes and season permitting, plant some flowers. Be sure your front door area has a "welcome" feeling. A fresh coat of paint on the front door looks great.

Of all the rooms inside your home, pay special attention to the kitchen and bathrooms. They should look as modern, bright and fresh as possible. It is essential for them to be clean and odor free. A fresh coat of paint just may do the trick. If there are any leaky faucets, have them taken care of. A call to a plumber is a wise investment.

Since you want your home to look as spacious as possible, remove any excess or very large furniture. Make sure that tabletops, dressers and closets are free of clutter. Don''t use your garage, attic or basement to store these extra things. These areas also need to have the impression of space. Instead, put them into storage. Make sure walls and doors are free of smudges and look for anything that might indicate a maintenance problem, such as cracked windows, holes in the wall or stained ceilings.

Quick Tips For Showings:

• Keep countertops cleared.
• Replace all burned out light bulbs.
• Open all drapes and window blinds.
• Put pets in cages or take them to a neighbor.
• Keep kitchen sink clear of dishes.
• No laundry in the washer/dryer.
• Empty the trash.
• Clean or replace dirty or worn carpets.
• Put on soft music.
• Burn a fire in the fireplace on cold days, otherwise the fireplace should be clean.

Always look at your home from the buyer''s point of view. Be objective and honest.

If your primary goal is to sell your home as quickly as possible, below are a few tips you might consider.

Price it right. Set a price at the lower end of your property’s realistic price range.

Get your house market-ready for at least two weeks before you begin showing it.

Be flexible about showings. It’s often disruptive to have a house ready to show on the spur of the moment, but the more often someone can see your home, the sooner you’ll find a seller.

Be ready for the offers. Decide in advance what price and terms you’ll find acceptable.

Don’t refuse to drop the price. If your home has been on the market for more than 30 days without an offer, be prepared to lower your asking price.

A Deed of Reconveyance is a recordable document issued by your previous lender in conjunction with the payoff of your loan. This document is recorded at the county recorders office and shows that the mortgage in your name has been released from the property and paid in full.

Appraised value is an objective opinion of value, but it’s not an exact science so appraisals may differ.

For buying and selling purposes, appraisals are usually based on market value—what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.

Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value.

Appraised value doesn’t consider special considerations, like the need to sell rapidly.

Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer.

Used with permission from Kim Daugherty, Real Estate Checklists and Systems

Once an offer is accepted, various inspections will be done. The two most common are the Pest Inspection (sometimes referred to as the Termite Inspection) and the Physical Inspection (sometimes referred to as the Buyer''s Inspection). While these inspections do not provide guarantees on the condition of the property, they do provide valuable information to the buyer. Your Realtor can explain the part of your Purchase Contract where inspection details are negotiated.

Strucutral Pest Control Inspection:  Often referred to as the "Termite Report", this inspection is conducted by a licensed inspector. In addition to actual termite damage, the pest report will indicate any type of wood destroying organisms that may be present, including fungi ( sometimes called dry rot).

Physical Inspection:  Usually done by a General Home Inspector, this inspection is a thorough inspection of the house. The inspection results in an overall assessment of the present condition of the property.

Geological Inspection:  This inspection evaluates the soil conditions at the home. This is an especially important inspection if your home is situated on a hillside that can be prone to mudslides. It is performed by a Geotechnical Engineer and involved not only physically inspecting the property, but also researching past geological activity in the area.

Possible Further Inspections:

• Hazardous Materials
• Well and Septic
• Water Conservation
• Structural Engineering
• Chimney Inspection
• Heating and Air Conditioning
• Zoning and Building Permit Compliance
• Energy Audit
• Roof Inspection
• Pool/Spa Inspection

On the date of recording your escrow officer will have your proceeds available for your review. At the time of signing, you may request that your escrow officer either cut you a check for your proceeds or wire the funds directly into your bank account.

Your lender continues to accrue interest to the date that they post your loan as being paid in full. This could be one or two days from the date your escrow officer sends your payoff check via Federal Express or wire transfer.

A 1099 form is the reporting form adopted by the I.R.S. for submitting information required by law. Under guidelines established by the I.R.S., sellers of real property are required to have their gross proceeds from the sale reported on the 1099 form.