Buyer Tips and Important Information 

Congratulations! Now that you're in the market to purchase a home, you need to make application for your loan from a qualified lender. This section of the buyer binder will explain the various types of loans that are available, and explain the different types of financing. It will also give a definition of financing terms, and a list of lenders I have worked with. You are free to contact your local bank or credit union to inquire about their rates and loan programs. 

Once you have selected a lender, your lender will need many different documents to process your loan. Most lenders require copies of the following items: 

* Last 2 years W 2's
* Last 30 days of pay stubs
* Last 2 years of federal and state tax returns signed and dated)
* History of where applicants have lived for the past 2 years. (If you have been renting, the name, address and phone number of the landlord)
* Name, address and loan number of all mortgages owned during the past 2 years
* History of where applicants have worked for past several years (including employers name, address, zip and phone)
* Last 3 monthly statements of liquid assets (checking, savings, stocks,bonds, mutual funds, etc…)
* Divorce papers, alimony and/or child support documents (if applicable)
* Bankruptcy papers and judges dissolution orders (if applicable) 

Depending on your circumstance, the lender may require additional information. Please be sure to get all documentation to your lender ASAP. Any delay in getting documentation could result in a delay for your mortgage approval.  

It's o.k. to buy a house that needs a little touch-up: Excellent buys are often made on homes that require a little paint and soap. Two identical homes can be priced $1000's apart when one needs about $200 of work. 

Let me do the leg work for you: Working closely with me, I can pre-screen homes that meet your criteria, and save you endless hours of running around. 

Help with the purchase: Your parents, family or friends can contribute to the purchase of your home by way of a "Gift Note." Ask me for details about this simple procedure that may put you into more of a home than you anticipated.
You will need a deposit on any offer that you want to submit: Each contract offer that you make on a home must be accompanied by a deposit in the form of cash or check. 

Price your offer correctly: If you are serious about buying a particular home, it is important to price your offer correctly, you wouldn't want to lose the home to a better offer, if you were prepared to pay more. 

Be accessible after you make an offer: Make sure that you are able to be reached after your offer has been submitted. Multiple offers on the same property are quite common these days, and you need to be able to counter an offer in a timely fashion if you expect the property to still be available. 

When is the contract is binding: The contract is binding only after your offer has been submitted, and the seller has agreed to sell you the property. Even if you make a full purchase price offer, it does not guarantee that the seller will sell. 

I highly recommend that you have the property you will purchase inspected by an ASHI certified inspector. At an independent inspection, the inspector will look over all the major components of the house (i.e. foundation, roof, electrical, plumbing, etc…) to check for defects. Most inspectors will also give you helpful hints on seasonal maintenance of your home, as well as point out things you need to know (i.e. where the main water shut off is, etc…). You should plan to attend!  

When scheduling an inspection, you will be asked if you want a termite inspection (generally required by many lenders) and a radon inspection. Radon is a vaporless, odorless gas that some consider to be carcinogenic when levels are higher than 4.0 pc/l. If you have any concern about radon, I urge you to have the test run. 

Inspections usually take from 1 to 2 hours, depending on the size of the home. Once the inspections have been completed and reports have been distributed to you and me, I will call you to go over the report. At that time we will make a written response to the seller, asking them to repair anything that affects the health, safety or habitability of the house. Prior once the seller has agreed to make repairs and said repairs have been done, you may want to have the house re-inspected to make certain repairs were done properly. 

Ways To Search for Homes 

Multiple Listing Service (MLS) -The MLS is used by all Realtors associated with the Metropolitan Indianapolis Board of Realtors (MIBOR). Since all brokers may represent the same inventory, we can show you any property listed with our office as well as those offered through other real estate companies. Working with one real estate broker in the Indianapolis area is the best policy. It is not necessary to call the listing agents for homes you wish to see; we can show you any property for sale.  

For Sale By Owner (FSBO) - Some homeowners try to sell their homes themselves, without the assistance of a real estate broker, a practice referred to as FSBO. We can help you with non-listed properties such as FSBO’s and strongly recommend that you have our representation for this type of purchase. Our experience with FSBO sellers is that they welcome working with Realtors and their clients. Realtors help the transaction come together and provide a higher probability of closing the transaction. If you see a property that you are interested in, call me with the phone number and address. I will search for comparable sales in the area to determine if it is priced right, and arrange for us to walk through the property together. If you decide to write an offer, I will structure the offer for you, present it to the seller for acceptance, negotiate price and terms for you, and represent your interests throughout the entire purchasing process, including closing. 

Open Houses - Open Houses are a great way to see properties. In the Indianapolis area, resale homes generally have Open Houses on Sunday afternoons (around 1:00 PM – 5:00 PM). New construction model homes are generally open daily from 12:00 PM – 6:00 PM. Just let the agent or builder’s representative know you are working with us so that we can handle the follow up calls for you, and you can look at the house uninterrupted. If you have an interest in the property, give me a call. I will make an appointment for us to see the house. I may be able to point out features and/or problems that you may have overlooked. (A second set of eyes is always important when making a major decision like purchasing a home!) 

Builders - If you happen to visit any builder projects or new construction without us, inform them you are working with us. This is important because if the builder is unaware of our relationship, we will not be able to come in after the fact to protect you with your purchasing decisions. The cost of the home does not increase by having representation by a real estate professional. If you don’t have representation, you don’t save money. We will help you through selections, inspections and make sure the closings go as smoothly as possible, and represent your best interests throughout the whole building process. 

Advertising and Drive-by's - When you see an appealing house with a real estate "For Sale" sign in the yard or advertised in a local publication (such as Homes Illustrated, etc…) give me a call! As a member of the multiple list system (MLS), I can get information and show you homes listed by any real estate company while representing your best interest. I will obtain pricing and amenities information, print listing sheets, and make an appointment to see the interior. Do not call the listing agent to get information. As your representative, I will shield you from innocent sounding questions from other agents that can be used against you later in negotiations. Please do not feel that you are bothering me by requesting information. I am here to serve your needs, and I want to help you! 

Making the Offer to Purchase Real Estate 

A good figure to use in estimating what you will pay for a home in Indianapolis is based on a percentage - list price to sales price ratio. Homes generally sell for about 97% of the list price. For example, a $100,000 priced home statistically will sell for $97,000. We will provide you with a Competitive Market Analysis (CMA) of the neighborhood/area for your future home, which will help in determining a purchase price.  

Indiana property taxes are based on assessed values and are paid in arrears yearly in May and November (May covering the first six months of the year, November covering the second.) With new construction homes, the taxes, as a rule of thumb, are about .0125% - .0175% of the purchase price. It is customary for property taxes to be pro-rated to the day of closing, meaning that the seller pays the taxes for as long as they were in title to the house.  

You will be expected to provide a check for earnest money when I submit your offer to purchase. Customarily, earnest money deposits are 1 – 3% of the purchase price, and are applied to the purchase price at closing. Earnest money checks should be made out to the listing broker, and are deposited in the Listing Broker’s Escrow Account, immediately upon acceptance of the Purchase Agreement. 

We will help you arrange an inspection of the home you plan to purchase in order to evaluate the major elements of the home. The inspection should be completed according to the time guidelines in the Purchase Agreement, but is typically done within seven days after your offer is accepted. This home inspection will cost around $200.00 to $350.00 depending on the types of inspections that are done. Radon inspections and termite inspections are an additional fee. Refer to the “List of Preferred Providers” for our recommended home inspectors. 

You will also need to obtain homeowner’s insurance (commonly referred to as Hazard Insurance). In Indiana, homeowners insurance is paid one year in advance and 2 – 5 months are also put into your escrow account at closing. You will need to bring to closing a paid receipt for this one year of homeowner’s insurance.  

An insured closing helps protect you in obtaining clear title to the property. Your lender will require you to purchase a mortgagors title insurance policy, which will cost around $110.00. This fee is for the title company to make sure that there are no liens or encumbrances on the property or clouds on the title. Keep in mind that you will need to be available (or delegate a power of attorney) to attend the closing, sometime between the hours of 9:00 AM and 4:00 PM on a weekday. Closings usually take about one hour to complete. We will coordinate will all parties involved in setting this date and time after the acceptance of the offer. We will also call you one day before the closing to review the settlement statement with you and give you the exact amount you need to bring. Don't forget to bring a CASHIERS or CERTIFIED CHECK, and have it made out to either yourself and/or the title company. 

After your loan has been approved, I will schedule a closing at a title company for pertinent documents to be signed. Closings customarily take place at the Title Company at the date agreed to in the purchase agreement. (If you prefer a morning or afternoon closing, please let me know ahead of time!) Buyers, sellers and their agents all attend closing, along with a representative from the title company who will conduct the closing. 

At closing, you will be required to bring several things: a PHOTO I.D. (drivers license is preferred), the ORIGINAL TERMITE REPORT from the inspection, a CERTIFIED or CASHIERS CHECK made out to yourselves for the amount due by you (please note that title companies do not take personal checks,) proof of HOMEWOWNERS INSURANCE and a receipt showing PAYMENT HAS BEEN MADE FOR A FULL YEARS PREMIUM, and any other documents required by the lender. THESE ARE VERY IMPORTANT ITEMS! YOU DO NOT WANT TO FORGET TO DO ANY OF THEM! !  

After you close on the property, and you are in title, you will also need to call utility companies and have utilities switched into your name (effective the date of possession.)