THE HOMEBUYER CHECKLIST: 10 STEPS TO BUY YOUR HOME WITH CONFIDENCE Bankers Title & Bankers Closing Services www.BankersTitleMN.com 952-955-8111 2017

The homebuyer checklist Determine Your Budget Select Your Lender Find Your Home Secure Your Offer Select Your Title Insurance Company And Closing Agent 1 2 3 4 5 Get Title Insurance Review Closing Documents Sign Closing Documents And Transfer Funds Buy With Confidence Receive Your Owner’s Title Insurance Policy 6 7 8 9 10 Buying a home is an exciting time, but it can sometimes be confusing or even frustrating to finalize the transaction. The safe and efficient transfer of real estate involves a number of steps. This homebuyer checklist will help you buy your home with confidence.

1 Determine your budget A down payment of less than 20% usually requires private mortgage insurance. Take into consideration that closing costs amount to around 5% of the home’s value (i.e. $10,000 for a $200,000 home). The first step in buying a home is determining your budget. Calculate how much you can afford—you’ll want to factor in additional costs that are necessary when buying a home. Each homebuyer’s situation is unique, so you will want to work with your Realtor® and lender to determine your budget.   For example, if your down payment is less than 20% of the home’s estimated value, your lender will likely require that you purchase private mortgage insurance (PMI). This helps mitigate the risk that the lender is taking, and the cost is simply added to your monthly mortgage payment. Closing costs include the title search, title insurance and other legal fees. The amount will vary based on the value of your home, but on average you can expect closing costs to be a few thousand dollars, or 2%–5% of the value of your home.

2 Select your lender Provide financial details to your lender. Save time by getting pre-approved for your mortgage rate and amount. Before you decide which home you will buy, select your lender and provide the financial information so you know your price range. It pays to get pre-approved for your loan. That way, you can save time getting your offer accepted by the seller. Once you do, it’s time to find the home that’s right for you.

3 Find your home Discover homes in your desired location by working with a real estate agent or by using free mobile apps like Zillow, Redfin or Trulia. Starting the search for your new home can be exhilarating and a bit overwhelming. That’s why real estate agents are so important. They can help you weigh your options and select the home that best suits your needs. Your real estate agent likely has access to homes that may not be listed online, giving you an advantage over someone shopping for a home on their own. Many homebuyers choose to set aside a few hours each weekend and visit multiple homes with their real estate agent. It helps speed up the process and allows you to compare your options while in the same state of mind. A real estate agent can also share comparison homes (comps) in the neighborhoods that you’re searching. This will to give you a better idea of what market value is, and the going price for similar homes on your list. In your spare time, you can also tour open houses that pique your interest. Ask your real estate agent about open houses, or use one of the several convenient mobile apps out there that will tell you if there are live open houses happening near you at any time.

4 Secure your offer Identify the right home for the right price with help from your real estate agent, and submit an offer. If the offer is accepted, you are ready to begin the closing process. Once you find the right home and you’re ready to commit, your real estate agent will help you make an offer. Here are a few things to keep in mind when submitting an offer: Timing is important. You don’t want to let a great home get away because you took too long. However, you don’t want to make a hasty decision that you will soon regret. The key is communicating openly with your real estate agent about your needs, and feeling confident about your decision. Submitting an offer is just the first step. You may have to go back and forth with the seller to strike a deal that both sides feel is fair. Once the seller accepts your offer and you sign a contract, you’ll want to get a home inspection. Ask your real estate agent for recommendations, or search home Sinspector reviews online. A good home inspector will charge a few hundred dollars, but they will be able to identify any structural issues with the home before you buy. After the home inspection is complete, the final stage of the home buying process begins. It’s time for closing.

Select your title insurance company and closing agent 5 Select your title insurance company and closing agent Your title professional examines land records to ensure the seller can transfer title to the new owner. A closing agent is the neutral party who coordinates among the seller, buyer and lender to transfer all documents and disburse funds. Your first step is to select a closing agent to handle all of the closing details. You can ask your real estate agent for a recommendation, since they work with closing agents on a regular basis. An alternative is to do your own research online or through family and friends. The American Land Title Association is a great resource for finding closing agents. Depending on where you’re buying, the closing agent may be an attorney, settlement agent, title agency, title agent or escrow company. Regardless of their job title, they are a trusted third-party that helps ensure your transaction goes smoothly. Next, you’ll need to select your title insurance company. In some cases, your closing agent is also a title professional. If they aren’t, you’ll need to select a title professional. Your title professional will perform a search to examine the public records for information related to the title of your prospective home. This search provides information about liens, debts or title issues relating to the current owner before the property can change hands. Closing on your home usually takes 30–90 days.

Get title insurance for peace of mind 6 Get title insurance for peace of mind Owner’s title insurance protects your property rights. Remember, lender’s title insurance only protects your bank’s financial investment. Your closing agent or title insurance company will provide you with a title report after the title search. This report will show you if there were any liens or claims on the land. The agent will take care of all of this for you, but it’s important to protect yourself from future claims by getting owner’s title insurance. Ask your title insurance professional about title insurance, one of the most important parts of the closing process. There are two types of title insurance: owner’s title insurance and lender’s title insurance. Owner’s title insurance is a low, one-time fee at closing that protects your property rights as long as you or your heirs own your home.   So if there are any issues related to your home’s title, such as unpaid mortgages, property taxes or child support liens, owner’s title insurance provides legal protection. It also protects against items that could limit the use of your property, such as utility and sewer easements. If a title defect arises, such as a missed easement or forged deed, and as long as you’ve purchased an owner’s policy of title insurance that covers the issue, your title insurance company will seek to resolve it. Either the homebuyer or the seller may pay for the owner's policy. Every negotiation is different. Lender’s title insurance is similar except that it protects the bank or lender’s investment in the property. So if there are any claims against your property, the lender is compensated financially—just like owner’s title insurance protects you as the homebuyer. Either the homebuyer or the seller may pay for the lender's policy. Typically, the homebuyer pays for the lender's policy. Ask an ALTA member how it's handled in your area.

Review closing documents 7 Review closing documents By law, you must be provided a five-page Closing Disclosure three business days prior to closing. The Closing Disclosure contains the actual terms and costs of your transaction. Your closing agent will also work with your lender, Realtor® and the seller to provide you with a final summary of the entire transaction, prior to closing.   Your closing agent can help explain the content of the documents you will then sign.

Sign closing documents and transfer funds 8 Sign closing documents and transfer funds Everything is in order, so it’s time to close on your home! By the time you are ready for your closing day, all of the behind-the-scenes work has been completed.   There are only a few things that could delay your closing: The basic loan product changes (i.e. if you switch from a fixed-rate mortgage to an adjustable rate mortgage, or to a loan with interest-only payments). Annual percentage rate (APR) increases by more than 1/8 percent for fixed-rate loans or 1/4 of a percent for adjustable loans. A pre-payment penalty is added, making it expensive to refinance or sell the property.

Buy with confidence at closing 9 Buy with confidence at closing You sign the remaining legal documents on closing day. Receive your keys and peace of mind! On the day of closing, you will go to the closing agent’s office and sign many documents. But it’s all worth it, because once you do, the home is legally yours!   After closing, while you’re unpacking boxes, the settlement or escrow agent will transfer the funds to all of the parties who provided services in connection with your closings. The closing agent also records the documents in the county records. Generally, you don’t have to be involved in any of this, because your settlement or escrow agent coordinates everything. With the right real estate agent, closing agent and owner’s title insurance, you can rest assured and buy your home with confidence.

Receive your owner’s title insurance policy 1 Receive your owner’s title insurance policy Don’t forget to check the mail! Now that you are all settled into your new home, don’t forget to check the mail for your owner’s title insurance policy. It’s your written record that your property is protected. ENJOY!

Bankers Title & Bankers Closing Services QUESTIONS? Bankers Title & Bankers Closing Services www.BankersTitleMN.com 952-955-8111