Know The Ropes Before Plunging Into The World Of Home Buying



Today's rock-bottom interest rates have inspired many first-time home buyers to take the plunge.

According to the Multiple Listing Service, 125 buyers jumped into home ownership in the last three months. This can be an exciting, yet stressful venture and a complex process with many actors; the Realtor, loan officer, escrow officer and home inspector.


Debi Russell of First American Title explains to her assistant, Dan Bunting, some of the services they offer home buyers and refinance customers. Low interest rates are helping many first-time home buyers achieve the American dream.

Ray Pugel, broker/owner of Coldwell Banker Bishop Realty, has some advice for those considering buying a home.

"Educate yourself on the process," he said. "Find an experienced Realtor and talk to a mortgage lender who can pre-qualify you for a loan before you start looking. Then you know what you can afford."

This sentiment is echoed by Julie Ruttle, vice president of National Bank of Arizona.

Ruttle stresses the importance of knowing your credit history before talking to a lender. "If you don't have a credit history, there are alternative sources of credit such as 12 months of paying your (electric) bill on time," she said. "If you are proactive about your credit, you can qualify or eventually qualify for a home loan."

Once you have been pre-qualified for a loan, it is time to work with a Realtor. Some buyers choose to avoid Realtors and buy a For Sale By Owner (FSBO). Pugel says this can be risky.

"Not only is there more protection with a Realtor, but I have found that many FSBOs are overpriced and the buyer lacks access to the comparables that a Realtor can provide," he said.

Tudi Martin, broker/owner of Century 21 Woodland, says experience is the most important thing to look for in choosing a Realtor.

"If you needed a lawyer," she asked, "would you choose someone who just passed the bar or someone with years in the courtroom?"

Martin says designations such as GRI, CRS or CBS -- usually listed on an agent's business card -- indicate that they have sought further education and take an interest in their vocation.

Martin also stresses the importance of familiarity with the purchase contract since "this will be the largest purchase in most people's lifetime."

So you've jumped through all the hoops and have an accepted purchase contract on your new home.

One thing all Realtors agree on is the importance of a home inspection.

"It's highly recommended," says Kham Tang, sales associate at ERA Young Realty. "Buying a home warranty or asking the seller to pay for one is also a good idea."

What about escrow? What exactly is this final process in the transaction?

"It's hard to put into simple terms," says Debi Russell, marketing director at First American Title.

"Escrow is when a neutral third party, the title company, transfers title from the seller to the buyer. A deed, the document that shows this transfer of title, is then recorded."

In layman's terms, at the end of the escrow period, the home legally belongs to you.

Buying a home is no longer a one-page contract and a handshake.

It is more important than ever to educate yourself on the process before jumping into the quagmire. Yet home ownership is, and always will be, part of the American dream.

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