Information for Home Buyers
Owning your own home is a dream for many people. Is it right for you at this time? Only you can tell. If
something breaks either you have to fix it or you have to hire someone to fix it. You will be in charge of
mowing the grass, raking the leaves, and shoveling the snow. But you will also be able to remodel
and redecorate the home to match your tastes and desires, your loan payment can stay at the same
level as rents increase, and interest paid on your mortgage loan is tax deductible.
If you are a first time home buyer or an experienced buyer you need to think about why you want to
buy now. Are you moving to a bigger or smaller home? Are you moving to a better location? Are you
moving because of a new job or a transfer? Are you retired and moving to your retirement home?
Determine Your Needs vs. Wants
A home is a major purchase and you have to do some serious thinking about what you need and
what you want. You may need three bedrooms and two baths for you, your spouse, your son and
your daughter. You may not need an in-ground pool. You just want one. In establishing your needs
look at minimums and maximums. You need a minimum of three bedrooms and would consider
four bedrooms but no more than four. You can list your wants, give each one a rating of importance,
and prioritize them. Just remember the more features you look for in a house the less number of
houses on the market will match your search criteria. Try to limit your wants to the top three and
remember that once you buy a house you can remodel and add some features.
Depending on where you are in life can determine what you want and need. Many baby boomer's
are looking to downsize. Smaller houses mean less energy costs to heat and cool the house and
less upkeep. They are also looking for houses with a bedroom, bath, and kitchen on one level.
Knowing that their health may decline they want less stairs and wider hallways and doors to
accommodate walkers and wheelchairs. Some baby boomer's are now competing with first time
home buyers for these smaller houses. That's good if you are looking to sell a small house and
move to a larger home.
Sell First, Then Buy
If you are selling a house to buy another one get working on the Seller's Guide first and then come
back here. You do not want to find the perfect house but then have to hold up the sale because you
need to sell your current house. A seller may pass on your offer because another offer was not
contingent on selling a house and they did not want to wait on you.
Working with a REALTOR®
Once you have determined criteria such as location, school district, number of bedrooms and baths,
and style of house you are ready to look for financing and search for your new home. Now is the
time to decide whether to buy your house all by yourself or call in a professional. What do you know
about searching for a house, negotiating a sale, and closing the deal? A REALTOR® can guide you
through all this. When working with a buyer the REALTOR® is referred to as the buyer's agent.
How does a REALTOR® gets paid?
If you said anything but <E> then you're wrong. The REALTOR® only gets paid a commission once a
house is sold and they are either the Listing Agent or the Buyer's Agent. As a home buyer you
usually pay nothing for the services of a REALTOR®. How does that work? REALTORS® working
with sellers list the house in the MLS or Multiple Listing Service. In the Peoria area this is an Internet
based system maintained by the PEORIA AREA ASSOCIATION OF REALTORS®. Other
REALTORS® in the area have access to this system and can search for houses that meet the
criteria of their buyers. The Listing REALTOR® will offer a co-op commission to any REALTOR® that
brings a qualified buyer to buy their house. This is usually 50% of the commission the seller is
paying to their REALTOR®. The majority of the houses sold in the Peoria area will be sold through
the Multiple Listing Service.
How can you find a REALTOR®? How about calling the REALTOR® listed on the For Sale sign in
front of the house or in the advertisement? That REALTOR® is the Listing Agent and works for the
seller of the house. He/she represents the interests of the seller and negotiates for the seller. You
want a REALTOR® that works for you and not the seller. There are many REALTORS® in the Peoria
area and you can find one by word of mouth, in the newspaper, or through a web site.
Once you have found a REALTOR® he/she will probably ask you to sign a buyer representation
agreement that designates him/her as your Buyer's Agent. The agreements spells out what you will
do, what the REALTOR® will do, and what the Realtor's broker will do. It can be an exclusive buyer
agreement that says you will only work with this REALTOR® and not with any other REALTOR®. Also
if you find a house by yourself through the newspaper or drive by an open house the REALTOR® will
still represent you, help you prepare an offer and collect a commission. In a non-exclusive buyer
agreement you are free to work with multiple REALTORS®. The problem here is that a REALTOR®
may not want to spend much time and money finding and showing you houses unless they know
they will be compensated. Remember that a REALTOR® gets paid a commission only if they are the
Listing Agent or the Buyer's Agent in the sale of a house.
Pre-Qualification or Pre-Approval
Your REALTOR® will want to know if you have talked with a lender about a mortgage loan. When you
talk to a lender you can be pre-qualified or pre-approved for a loan. There is a big difference in the
eyes of the house seller. Pre-qualified for a loan means a loan officer has written up an opinion of
your ability to qualify for a home loan based on asking you questions about how much money you
make and how much money you owe. This is not viewed as strong as pre-approval in the eyes of the
seller since it is usually based on your word and no credit check has been done. To become pre-
approved for a loan means you have completed a loan application and provided debt, income, and
savings documentation that an underwriter has verified and approved. Getting pre-qualified can give
you an idea of how much money you may be able to borrow for a house but getting pre-approved
gives you credibility that makes your offer look better in the eyes of the seller.
Your REALTOR® will need to know how much you can borrow to know the upper limit of house
prices to show you. You should also have an idea of what you can look at but remember that just
because a lender says you are approved for a $200,000 loan does not mean you need to spend that
much. If you are currently renting you may have a better idea of how much of a monthly loan payment
you can make compared to your monthly rent.
If you do not have a lender your REALTOR® may be able to recommend some to check out. You will
be responsible for contacting them and providing your personal information. Be sure to find out
about loan origination fees.
Your REALTOR® will take your list of features you need in a house and the amount you can spend to
search the Multiple Listing Service database. Depending on the current housing market he/she will
present you with a long or short list of houses that meet your criteria. Once you both review the
houses against your list of needs and wants you and your REALTOR® will schedule time to view the
best houses.
something breaks either you have to fix it or you have to hire someone to fix it. You will be in charge of
mowing the grass, raking the leaves, and shoveling the snow. But you will also be able to remodel
and redecorate the home to match your tastes and desires, your loan payment can stay at the same
level as rents increase, and interest paid on your mortgage loan is tax deductible.
If you are a first time home buyer or an experienced buyer you need to think about why you want to
buy now. Are you moving to a bigger or smaller home? Are you moving to a better location? Are you
moving because of a new job or a transfer? Are you retired and moving to your retirement home?
Determine Your Needs vs. Wants
A home is a major purchase and you have to do some serious thinking about what you need and
what you want. You may need three bedrooms and two baths for you, your spouse, your son and
your daughter. You may not need an in-ground pool. You just want one. In establishing your needs
look at minimums and maximums. You need a minimum of three bedrooms and would consider
four bedrooms but no more than four. You can list your wants, give each one a rating of importance,
and prioritize them. Just remember the more features you look for in a house the less number of
houses on the market will match your search criteria. Try to limit your wants to the top three and
remember that once you buy a house you can remodel and add some features.
Depending on where you are in life can determine what you want and need. Many baby boomer's
are looking to downsize. Smaller houses mean less energy costs to heat and cool the house and
less upkeep. They are also looking for houses with a bedroom, bath, and kitchen on one level.
Knowing that their health may decline they want less stairs and wider hallways and doors to
accommodate walkers and wheelchairs. Some baby boomer's are now competing with first time
home buyers for these smaller houses. That's good if you are looking to sell a small house and
move to a larger home.
Sell First, Then Buy
If you are selling a house to buy another one get working on the Seller's Guide first and then come
back here. You do not want to find the perfect house but then have to hold up the sale because you
need to sell your current house. A seller may pass on your offer because another offer was not
contingent on selling a house and they did not want to wait on you.
Working with a REALTOR®
Once you have determined criteria such as location, school district, number of bedrooms and baths,
and style of house you are ready to look for financing and search for your new home. Now is the
time to decide whether to buy your house all by yourself or call in a professional. What do you know
about searching for a house, negotiating a sale, and closing the deal? A REALTOR® can guide you
through all this. When working with a buyer the REALTOR® is referred to as the buyer's agent.
How does a REALTOR® gets paid?
- REALTORS® get paid each time they show a house to buyers,
- REALTORS® get paid by the hour,
- REALTORS® get paid a salary whether they find a buyer a house or do not,
- All money earned by a REALTOR® goes into a big pot at their company and then it is split up
evenly between all agents, - REALTORS® are independent contractors that are paid a commission based on the sale
price of a house only after it is sold.
If you said anything but <E> then you're wrong. The REALTOR® only gets paid a commission once a
house is sold and they are either the Listing Agent or the Buyer's Agent. As a home buyer you
usually pay nothing for the services of a REALTOR®. How does that work? REALTORS® working
with sellers list the house in the MLS or Multiple Listing Service. In the Peoria area this is an Internet
based system maintained by the PEORIA AREA ASSOCIATION OF REALTORS®. Other
REALTORS® in the area have access to this system and can search for houses that meet the
criteria of their buyers. The Listing REALTOR® will offer a co-op commission to any REALTOR® that
brings a qualified buyer to buy their house. This is usually 50% of the commission the seller is
paying to their REALTOR®. The majority of the houses sold in the Peoria area will be sold through
the Multiple Listing Service.
How can you find a REALTOR®? How about calling the REALTOR® listed on the For Sale sign in
front of the house or in the advertisement? That REALTOR® is the Listing Agent and works for the
seller of the house. He/she represents the interests of the seller and negotiates for the seller. You
want a REALTOR® that works for you and not the seller. There are many REALTORS® in the Peoria
area and you can find one by word of mouth, in the newspaper, or through a web site.
Once you have found a REALTOR® he/she will probably ask you to sign a buyer representation
agreement that designates him/her as your Buyer's Agent. The agreements spells out what you will
do, what the REALTOR® will do, and what the Realtor's broker will do. It can be an exclusive buyer
agreement that says you will only work with this REALTOR® and not with any other REALTOR®. Also
if you find a house by yourself through the newspaper or drive by an open house the REALTOR® will
still represent you, help you prepare an offer and collect a commission. In a non-exclusive buyer
agreement you are free to work with multiple REALTORS®. The problem here is that a REALTOR®
may not want to spend much time and money finding and showing you houses unless they know
they will be compensated. Remember that a REALTOR® gets paid a commission only if they are the
Listing Agent or the Buyer's Agent in the sale of a house.
Pre-Qualification or Pre-Approval
Your REALTOR® will want to know if you have talked with a lender about a mortgage loan. When you
talk to a lender you can be pre-qualified or pre-approved for a loan. There is a big difference in the
eyes of the house seller. Pre-qualified for a loan means a loan officer has written up an opinion of
your ability to qualify for a home loan based on asking you questions about how much money you
make and how much money you owe. This is not viewed as strong as pre-approval in the eyes of the
seller since it is usually based on your word and no credit check has been done. To become pre-
approved for a loan means you have completed a loan application and provided debt, income, and
savings documentation that an underwriter has verified and approved. Getting pre-qualified can give
you an idea of how much money you may be able to borrow for a house but getting pre-approved
gives you credibility that makes your offer look better in the eyes of the seller.
Your REALTOR® will need to know how much you can borrow to know the upper limit of house
prices to show you. You should also have an idea of what you can look at but remember that just
because a lender says you are approved for a $200,000 loan does not mean you need to spend that
much. If you are currently renting you may have a better idea of how much of a monthly loan payment
you can make compared to your monthly rent.
If you do not have a lender your REALTOR® may be able to recommend some to check out. You will
be responsible for contacting them and providing your personal information. Be sure to find out
about loan origination fees.
Your REALTOR® will take your list of features you need in a house and the amount you can spend to
search the Multiple Listing Service database. Depending on the current housing market he/she will
present you with a long or short list of houses that meet your criteria. Once you both review the
houses against your list of needs and wants you and your REALTOR® will schedule time to view the
best houses.
Peoria Area Homes Buyers Guide:
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www.greaterpeoriahomes.com
BUYERS GUIDE
Sponsored by Dave McMillin, Jim Maloof/Realtor®, East Peoria, IL
Copyright© 2007-2008 Greater Peoria Homes
Copyright© 2007-2008 Greater Peoria Homes
