WHAT IS A RESIDENTIAL SERVICE CONTRACT?

A residential service contract, also known as a home warranty, is a good defense for buyers against costly repairs or replacement of existing vital household systems and appliances* that may break down from normal wear and tear. Often the seller will agree to pay for the first twelve months of coverage at closing. Coverage normally is for systems and appliances in good working order at the start of the executed contract (i.e. pre-existing conditions are not covered). There is a low trade service call fee, similar to a deductible, for each visit by a service technician. Additional charges may apply to certain repairs and replacements. Visit some of the included links; Old Republic Home Protection, American Home Shield and Best Home Warranty Company to find out more about these service providers and what coverage they offer.

* Please read contract for specific coverage, exclusions and limitations.

WHY DO I NEED AN AGENT TO HELP ME BUY A HOME?

The truth is that you do not need representation, but without it you could find yourself in trouble. Since buyer's agents are usually paid by the seller, you can't miss by having someone represent you. Especially when you have an experienced agent . Purchasing real estate is a complex and major transaction with many details to be handled. In most cases the seller will be represented by an agent that is looking out for their best interests.......not yours. Do you want them to handle your transaction, and get paid double because they didn't have to pay an agent that represents you?

A buyer's representative is responsible for protecting the buyer's best interests. Research by the NATIONAL ASSOCIATION OF REALTORS® has shown that when a buyer's representative is used, the prospective buyer found a home faster and examined more properties than consumers who did not use a buyer's representative.

As your buyer's representative we will at no cost to you:

… Evaluate your specific needs and wants, and locate properties that fit those specifications.
… Assist you in determining the amount you can afford (pre-qualify), and show you properties in that price range and area.
… Assist you in viewing properties -- we will accompany you on the showings, or preview the properties for you to insure that the identified specifications are met as accurately as possible.
… Research the selected properties to identify any problems or issues to help you make an informed decision prior to making an offer to purchase the property.
… Advise you on structuring an appropriate offer to purchase the selected property.
… Present the offer to the seller's agent and/or the seller on the your behalf.
… Negotiate on your behalf to help obtain the identified property -- keeping your best interests in mind.
… Assist you in securing appropriate financing for the selected property.
… Provide a list of potential qualified vendors (e.g. movers, lenders, attorneys, carpenters,insurance companies etc.) when these services are needed.
… Most importantly, fully-represent you throughout the real estate transaction.

WHAT COSTS ARE INVOLVED IN A MORTGAGE LOAN?

Closing costs are the actual expenses that the lender incurs in the origination of a new home loan. Some of the costs are related to your loan application, such as the expense of newly updated credit reports on all applicants. Other fees are related to the house itself, such as the appraisal, and survey of the property. Others are payment to the lender for processing your application, such as the loan origination fee. All these costs are lumped into a broad category called "closing costs." Unless the seller pays them for you, this area of expenses is charged to the buyer, and often runs between 2 and 3 percent of the amount being borrowed. Because different lenders have different fees and taxes vary from area to area, it is impossible to generalize between all lenders. So it's important that you talk with a reputable lender ahead of time about what costs you can expect to pay. At RFKrealty.com we work with many lenders and can help you find a lender that fits your needs.

Loan discount points are, in essence, a form of prepaid interest. One discount point is exactly equal to one percent of the amount being borrowed. It is paid at closing to the lender as a form of interest. Discount points have the effect of lowering the stated interest rate you will pay on the loan you obtain. For example, a lender might offer you a 30 year fixed rate loan at 8% with zero points or the same loan at 7.5% with 2 discount points. Because the points are considered interest, the yield to the lender is approximately the same. So why, you are asking, would I want to pay points? You probably won't, but sometimes new home builders or employers will offer to pay up to a certain number of points as an incentive, and I want to make sure you get everything that's coming to you.

Last, there is the issue of prepaid items (a.k.a. "Prepaids"). Most home lenders want you to set up what is called and "escrow" account. This is nothing more than a savings account that the lender holds. Every month you will, as part of your regular loan payment, deposit a sum for property taxes and for home owners insurance into this account. And when the next bill comes due for taxes or insurance, your lender will make the payment for you. The reason that all this matters today is that, on the day of your purchase, you will be required to set up an escrow account with about 9 months worth of taxes and about 2 months worth of insurance payments. In addition, you will have to pay for the first year's insurance policy in full. These costs are called prepaid items, and are part of the cost associated with most types of mortgage loans.