The information and tips below are not found elsewhere in any one single location. This guide contains the collective research and experience over many years and is designed to arm home buyers with the knowledge they need to ensure they:

• Find the best home, real estate agent, and mortgage company
• Negotiate the best price
• Avoid paying unnecessary fees and other costs

Specifically, this document provides you with:

1. Key questions to ask a real estate agent to ensure they are:

• Experienced in your specific real estate market
• Properly incentivized to get YOU the best house for the best price (not just incentivized to sell you a house and make a commission)

2. Important considerations to think about when choosing an insurance company

3. Critical information and tips to ensure you choose the best mortgage and mortgage company without getting scammed into paying more than you have to

4. Tips on how to find the best house, including:

• What to say & do (and what NOT to say!) at “Open Houses”
• Items to research and key inspections to obtain to ensure no unpleasant “surprises” after you buy the home

5. Negotiating strategies for making an offer

6. Tips for when closing on the house to avoid paying unnecessary fees and to ensure an “on-time” closing

AND MUCH MORE….. ENJOY!

REQUEST: If you have an additional tip that you think should be added to this guide, please provide a comment below.

House Buying Guide

1. Find a Real Estate Agent:

• Speak with at least 3 real estate agents before choosing one (find through referrals or via in-person meetings through open houses)
• Make sure real estate agents show you the entire range of properties available on the market, including FSBOs (for sale by owner properties), bank-owned properties, properties offered at auction and new construction.
• Ensure they are a Buyer’s Agent (as opposed to being a “double agent” or one with dual agency relationships). They should have a fiduciary responsibility to the buyer alone.
  • You need to get this in writing prior to working together to ensure you have engaged a buyer agent and not a seller agent or a transactional agent as there may not be a fiduciary commitment in place to serve your needs as the buyer

• Ask key questions:

  • Are you a Buyer’s Agent?
    • If yes, what experience have you had as a buyer’s agent?
    • What specific training do you have as a buyer’s agent?
  • Does your office have ongoing sales meetings on ways to benefit buyer clients?
  • Are you a member of a Buyer's Agent association?
  • How long have you worked on the buyer's side? How long did you work on seller's side?
  • Do you also list houses for sale?
  • Do agents in your office list homes for sale?

• If yes, how do you plan on keeping my information separate from seller's agents in your office?

• Do you have a private office? Private fax? Private phone service?

  • Do you have regular office meetings to discuss the market and techniques in real estate?

• If yes, do your sales meetings focus on ways to get the best price and terms for sellers, for buyers or for both?

  • Do you work with a partner in your office?

• Does your partner list homes for sale?

• If yes, what will you do in the event that your partner is the listing agent on the home that I want to buy?

  • If you (and your partner) list homes for sale, how many of the last 20 transactions that you have done have been on the buyer's side?
  • Will you sign a guarantee that you represent my interests exclusively and will not attempt to sell houses you or your partner list?
  • What geographical areas are you most knowledgeable about?
  • Do you have full access to the area's Multiple Listing Service (MLS)?
  • Do you have access to For Sale by Owner (FSBO) and foreclosed properties?
  • What is your fee structure? Will you give that to me, in writing?
  • Will you make decisions about what homes to show me without regard to co-fees offered to cooperating agents on MLS listings?
  • How many homes are you prepared to show me?
  • How long have you been in the business?
  • How many escrows did you close last year?
  • What type of properties have you bought or sold?
  • What is the price range of these properties?
  • How quickly will you respond to my communications and how will you respond?
  • Who will be my main point of contact if you are not available?
  • How will my home be marketed and how will you get my home in front of target buyers? (have agents present examples of past ads and fliers for listings)
  • What is the plan for open houses? How many will you have, and will you be personally be sitting at each one? If not, who will be there in your place?

• Avoid agents who: 1) say they can get an exceptional price above the market value for your home (they may just try to win your business and cut the price later), 2) work in real estate part time, 3) charge a low commission

• Commissions are traditionally 5-6% paid for by the seller (split between the buying and listing agents). It is not the norm for the buyer to pay a commission.

2. Find Home Insurance: Be prepared to provide this information to insurance agents

• Inform agents if you have custom features in your home (e.g., chef’s kitchen with granite countertops and stainless steel appliances, steam shower, soaking tub in high-end master bathroom, etc.) Make sure policy covers them all.
• Determine if additional coverage is required for high-value items such as jewelry, collectibles, electronics, musical instruments, sporting equipment, etc.
• Construction of home: Brick, frame, stucco or siding, attached garage or carport. Age of home.
• Material and age of roof
• Basement – water-backup coverage may be additional
• Swimming pool or trampoline? Is backyard fenced in?
• Sheds or other buildings on property?
• Home-based business that requires insurance coverage?
• Location of home (crime rate, fire station nearby?)
• Current liability insurance enough if someone injured at my house?
• Worth of current belongings?
• Flood insurance?
• Qualify for any discounts? (multiple policies, being claims-free or having certain safety features in home such as alarm system, deadbolt locks, smoke detectors, sprinkler system)
• Deductible amount?

3. Research mortgage rates and closing fees from different lenders:

• Ask the mortgage professional to provide a pre-qualification initially, but then file an application for a true pre-approval, or true mortgage commitment, with a lender at some point soon after. It gives you greater leverage when negotiating.
• Make sure that you get a Good Faith Estimate (GFE), of closing costs when you apply for a mortgage. There are strict regulations with regard to the preparation of a GFE and the difference, if any, between the estimate and actual costs at closing. They don't include all costs. You may also incur closing costs such as home inspections, personal attorney, title insurance, etc. in addition to the costs noted on a GFE.
• There are some "fixed" costs that won't vary between banks. These would include items such as recording fees, transfer tax, mortgage tax, flood certification fee, and credit report fee. Then there are "variable" costs that will differ between banks. They refer to these by many different names such as: commitment fee, settlement fee, underwriting fee, document prep fee, bank attorney fee, etc.
• Review options on www.bankrate.com , E-loan.com, Quicken Loans, ingdirect.com (Orange Mortgage), www.LendingTree.com, small banks, credit unions
• Try www.costcofinance.com (First Choice’s Preferred Lender Network offers competitive lending fees and could save up to $4900 over life of loan)
• Review www.kiplinger.com or www.Hsh.com to compare interest rates and once you decide on a few, ask each for a good-faith estimate of fees.
• Understand if loan will be a non-recourse mortgage (i.e., if you ever default, the lender gets the house but cannot come after other assets)
• When asking about rates, be sure to ask if the quote interest rate reflects payment of points
• Ask lenders in advance to see the lender’s list of settlement costs to compare:
  • Fees should be listed in the GFE documents that you receive within 3 days of applying for mortgage (and they are listed again in the HUD-1 you receive at closing), however, it is hard to comparison shop since you get the GFE only after paying for the cost of the appraisal and credit report.
  • Processing fees may be labeled as “underwriting fee”, “Application fee” or even “rate-lock fee”. If lender tacks on $450 processing fee and a $300 underwriting fee on top of the fairly common application fee, you are probably paying more than you should
  • Legitimate charges include:
    • Origination Fee: Expressed as % of loan amount, cover’s lender’s work in evaluating and preparing loan
    • Government recording and transfer taxes
  • Onerous junk fees could include:
• Application Fee: Levy over & above the origination fee (intended to weed out the tire-kickers). This is redundant if you are serious borrower who actually applies for mortgage. If you are approved, you shouldn’t be charged twice for the same thing
• Document Preparation Fee: for drawing up the note, deed or trust and other legal documents. Sometimes though, the escrow agent draws up these documents, not the lender – so verify first.
• Document Review Fee (or Attorney’s Fee): for reviewing loan package when it is returned after closing. However, unless they suspect fraud, lenders rarely review files when they get it back and even if they did, it should take a low-level clerk 5 minutes to do it.
• Mortgage Guarantee Fee: Fannie Mae or Freddie Mac charge lenders for guaranteeing the principal and interest payments and so lender is passing this along to borrowers, however, sometimes lenders hold the loans or sell them to non-government entity and still charge borrowers
• Tax Service Fee: Covers cost of paying property taxes on your behalf, however, since most lenders pay taxes in bulk by wire, this fee is usually excessive. And sometimes they often collect this even if you are paying your own taxes to confirm that the taxes are indeed being paid.
• Underwriting Fee: Reviewing your loan application to make certain you qualify (this is the lender’s job though!). This cost should be covered by the origination fee.
• Processing Fee: Another cost that should be covered by the origination fee
• Inspection Fee: Covers examination by lender or outside inspector, but was inspection actually made?
• Warehousing Fee: Charge for holding all the papers in a file until transaction is closed, or holding loan on a shelf until it is sold in secondary market – bullshit charge
• Courier Fees ($35-50): For sending papers back and forth between lender and settlement agent. Sometimes borrowers are charged this even if nothing was sent overnight or by courier. Ask to see a signed receipt before paying it.
  • Many closing agents have no choice but to collect them if that’s what the lender requires. But you have a choice – refuse to pay and threaten to walk. Many lenders relent at the last minute.

4. Look for homes listed for sale:

• Online:
  • Multiple Listing Service (MLS)
  • www.realtor.com - comprehensive database of listed properties
  • www.Trulia.com – shows For-Sale-by-Owner properties
  • www.Zillow.com
  • www.Redfin.com
• Open Houses: Look at a LOT of homes for sale to get a “gut” feel for value
  • A word of caution: The agent (or seller) who is holding the open house has a goal in mind. They want to find a buyer who falls in love with the home. They may ask you personal questions designed to help them “sell” you this particular home.
• DON’T give them personal information that could be used against you.
• Don’t let them know how interested you are in the home.
• Don’t let them know how much of a mortgage you qualify for
• Don’t let them know the price range of homes you are considering.
• Don’t let them know where you work, or how much you earn.
  • To do so is like playing poker with a mirror behind you such that others can clearly see your cards. Keep your cards close to your vest.

5. Do Research on the Property You Like:

• If you find a property that you like, you need to do research such as: finding out as much as you can about the property, the community, the septic system, zoning, setbacks, water supply, etc. Buyer's agents do this work regularly and will give you lots of tips.
• Research sex offenders that live nearby: www.familywatchdog.us
• Research environmental concerns: www.epa.gov/epahome/commsearch.htm
• Research water quality: www.scorecard.org
• Walk the neighborhood and talk to residents on street. You will be surprised at the useful information you will pick up. Try to ferret out answers to these questions:
  • Are the sellers truly “motivated” as the agents say, or are they just trying to find out how much they could get for their house?
  • Are they scheduled to go to settlement on a new house?
  • Why are they selling?
  • How long have the sellers lived here and what did they pay for the house?
  • When do they want to settle?
  • Do the sellers need to stay in the house after settlement? If yes, for how long?
  • Would they consider helping you with the purchase, perhaps by paying closing costs?
  • Check tax assessor’s office for up-to-date information on taxes for the property
  • View property at different times of day and different days of the week to understand noise levels (barking dogs, idling buses, kids hanging out, etc.), talk to neighbors and peruse local newspapers and blogs
• Prior to making any offer, make sure you are familiar with other houses on the market that meet your needs and your budget objectives. Make sure you are also aware of the recent sales in the community and that you compare the house you want to purchase with these comparable sales. Comparable houses sold within the last 6 months must be close to the house we like in age, style, size, condition and location. Scrutinize terms and conditions – properties sold with seller financing, for example, can’t be readily compared with those sold using conventional 30-yr mortgages.
  • How long did each one take to sell?
  • How much of a spread was there between original asking price and actual selling price? Is that the normal differential?
  • Has anything occurred to warrant setting a higher margin?
• Decide if this is the best house for you in this price range. If the house does not suit you, what's the benefit of getting a good deal on it? Your buyer's agent will do a market study for you that will give an estimate of the property's true market value. Asking prices vary wildly from final sale prices. A Buyer's Agent gives you the facts you need to move forward with confidence. Use this information to decide how much to offer.
• If you decide to move ahead, prepare a written offer to purchase that includes price, terms, conditions, and contingencies - all of which are in your best interest. (In some states, real estate contracts need to be in writing to be legally binding). The typical binder deposit accompanying an offer is $500 to $1000.
• Prepare a negotiating strategy. (Identify the reasons why the property owner should accept your offer. Include information about yourself and the fairness of your offered price and terms.) A professional Buyer's Agent has studied ways to negotiate for the best price and terms for buyers. Listen to their advice, then make your decisions.
• Make the offer presentation. Your agent will do so following your chosen negotiating strategy. Make sure the written offer includes the following:
  • Date and amount of deposit (earnest money)
  • Your name as buyer and property owner’s name as seller
  • Total purchase price
  • Full legal description and street address of property
  • Lawyers, brokers and others involved in the sale, as well as the terms and conditions of their compensation
  • Options available to both buyer and seller should either party default
  • Key protective and escape clauses that make the entire agreement contingent on or subject to their fulfillment:
• Earnest money – ensure your check will be deposited in a trust account or with a neutral 3rd party such as a title company, escrow service or attorney acting as an escrow agent. If it is a large earnest-money deposit, stipulate that it be held in an interest-bearing account and that interest earned will be credited to your side of the ledger at settlement.
• Returning earnest money – set out any conditions for return of your money including how quickly you would get it back if offer expires or you withdraw it or if seller decides not to sell
• Deed and title condition: State the type of deed and condition of title you’ll accept from the seller and make clear what actions seller must take to deliver a good title by settlement and what recourse I have should that not occur.
• Financing: Make offer contingent upon getting written loan commitment within specified time and at terms agreeable to me
• Seller financing: Terms and conditions of any seller financing should be fully and exactly spelled out.
• Settlement date and possession: Settlement usually correlates with time required for title search and mortgage approval (45-60 days) and possession occurs immediately after settlement.
• Settlement agent: specify the attorney or title company that performs the final settlement services.
• Prorating: Property taxes (among other things) will be prorated to the closing date.
• Sale of current residence (if required)
• Response time limit: Requires seller to accept offer in writing within certain time period (~48 hrs) or the offer will be void.
• Home inspection: Right to have property inspected and ability to withdraw offer if inspection report is not satisfactory to me for any reason. It may also allow for price reductions to pay for any necessary repairs.
• Environmental tests: Requires property to be tested for radon, lead paint, asbestos, or urea formaldehyde insulation.
• Termite inspection – requires seller to order and pay for termite inspection.
• What goes with the house: Furnishings (curtains, rugs, chandelier, etc.)
• Condition of house at settlement: Specify what must be in demonstrable working order at time of settlement, as verified during a walk-through of premises a day or so before settlement.
• Write a “love” letter to the seller to set yourself apart from other bidders: This really works due to the emotional factor. Describe yourself and spouse and children and why you want the house (include pictures of the house your children have drawn of the home).
• Hire a home inspector to evaluate the house to identify any defects requiring corrective action.
  • Leaky roof, long ago floods or mold, radon gas, underground fuel tanks
  • Pay extra for peek inside walls or underground for termites and mold and radon gas
  • Pay extra for inside-the-wall inspections for faulty wiring and old plumbing (even if they say it has just been upgraded)
  • Heating/cooling systems
  • Interior and exterior plumbing
  • Electrical systems
  • Roof/attic
  • Visible insulation, walls, ceilings, floors, windows
  • Foundations/basements
• The best ones to use are those who issue reports that meet or exceed the internationally accepted standards of the American Society of Home Inspectors (ASHI).
  • These inspections are fairly general and depending on the home you are buying, you also may want to consider additional inspections and tests such as:
  • Radon testing, lead paint testing, mold testing, furnace cleaning & inspection, chimney cleaning & inspection, pest inspection, swimming pool inspection, well testing, septic inspection
  • http://www.epa.gov/radon/index.html
  • http://www2.epa.gov/lead
  • http://www.epa.gov/mold/index.html
  • http://www.cpsc.gov/en/newsroom/news-releases/2002/cpsc-urges-seasonal-furnace-inspection-to-prevent-co-poisonings/
  • http://www.csia.org/
  • http://www.orkin.com/learningcenter/
  • http://www.poolsafely.gov/parents-families/resources-for-parents-families/
  • http://www.nsf.org/consumer-resources/health-and-safety-tips/water-quality-treatment-tips
  • http://www.nsf.org/consumer-resources
• Attend the inspection and from the report identify any problems that you will ask the seller to correct prior to the closing date. Your Buyer's Agent can help you "digest" your inspection report. Then you will have a clearer sense of what work awaits you after closing, and whether this is still the house you want. Your agent will recommend a course for a re-negotiation if it is necessary after your inspection.
• Once buyer and seller agree on the inspection items, a purchase and sale agreement is signed by both parties. Legal assistance is recommended for all contracts. Your Buyer’s Agent will coordinate among the professionals on your team - your lawyer, your lender, your broker.

6. Determine appropriate price for home you have selected and develop negotiating strategy:

• Don’t assume that the selling cost is the actual cost!
• While real estate agents use comps as a way to price a house, consider what it might cost to buy and build a home on piece of land in that area
• Hire an appraiser for a thorough assessment (search zip codes online at www.appraisalinstitute.org)
• Define your negotiating strategy:
  • Price isn’t everything. Buyers need to look at the larger picture and prepare for writing an offer that includes components other than offer price that can be included in the offer.
• Points to consider in building your negotiating strategy include:
  • What price should you offer?
  • What other terms should you consider?
  • What is your ideal closing date?
  • What contingencies are there? (inspection, financing at a specified interest rate, seller’s help with mortgage points or other closing costs)
• Ask homeowner to provide us with copy of CLUE report from Choicepoint, which shows every insurance claim on the house that has been filed over the last 5 years. This information will help us search around for home insurance and determine if the home is insurable
  • Should you ask the seller to make certain repairs, ask for a repair credit, or offer a lower price and handle repairs yourself?'
  • What did the seller pay for the property?
  • What improvements has the seller done since they have owned the property and what is the value of these?
  • What are other homes similar to this one selling for in the area?
  • What is this home really worth?
  • What defects or potential defects are there in the home?
  • What deferred maintenance is there?
  • How is the neighborhood? Crime? Noise? Smells? Ease of access?
• Set the maximum price that you would consider paying for the property. Then start at a price below that maximum price that is still supported by facts (such as property condition and selling prices of similar homes) but that still allows for some negotiation room with the seller. However, be aware that sometimes when a home is priced right and there are other competing buyers, a full price or over full price offer may be necessary.
• Bid an odd-numbered amount that is just above what you believe others will offer (since others typically bid in round numbers)
• Also take into consideration your strength and the strength of your offer.
  • E.g.: if you've been pre-approved for a mortgage, if you can close quickly, or if you are able to delay closing and allow the seller to rent back for a period.
• Consider the seller’s motivation to sell.
  • Is the home vacant or soon to be?
  • Have the sellers purchased another home, or do they have another home under contract subject to selling the home you are interested in?
  • Has the property been on the market for an extended period of time including expired listings with the current agent or other previous agents?
  • Are the owners divorcing?
  • Has there been a death in the family that is forcing the sale?
  • Is the property in foreclosure?
• Other negotiating considerations include:
  • What is the likely counter offer from the seller?
  • What will your next counter offer be?
  • What can you give up in the negotiating that isn’t as important to you as it is to the seller?
• Before making an offer, have someone who is knowledgeable with regard to building structural components and mechanical systems go through the home with you. This will give you additional information to help determine your negotiating strategy. Your Offer to Purchase should include a contingency for a professional inspection.
  • Such a person could be a relative, a contractor, or your real estate agent (“buyer agent” only). The point is to get additional information in the form of personal opinions without it costing you money at that stage. Make sure that the person you are relying on is in fact knowledgeable about property evaluation.
• It is important that any offer to purchase contract contain a contingency clause that states that the offer is subject to whatever testing you intend to do and that the results of said testing and inspections must be satisfactory to you or you may cancel the contract and receive your deposit back.
• Know the property you are purchasing. Have the appropriate inspections and testing done as part of the deal. Further negotiating may be in order in the event that such testing and inspections indicate the need for a repair or replacement.
• Making the offer contingent upon testing and inspections gives you the leverage to be able to re-negotiate with the seller, as you would then have the option either to cancel the contract and get your deposit back if they won't make a repair or have them give you a repair credit for legitimate problems. After this negotiation is completed, the Purchase and Sales Agreement can begin.
• Many states have a property disclosure law that requires a seller to complete and sign a property condition disclosure that asks pertinent questions about the condition of the property. A copy of this form generally needs to be given to buyers "before" they write an offer. Some states have no such law, but some sellers will provide this document.
• Caution: This is not a substitute for property inspections. There may be problems with the home that the seller doesn't know about and doesn't put on the disclosure.
• An Offer to Purchase contract written from the buyer’s perspective should have numerous contingencies in it to protect the buyer. The Purchase and Sales Agreement will have some contingencies carried over, as well as additional legal conditions.
• Depending on the buyer’s circumstances - The Offer to Purchase should be subject to:
  • Engineer/property inspection
  • Other structural and mechanical system inspections
• The Purchase and Sales Contract should be subject to:
  • Obtaining financing and mortgage commitment
  • Bank appraisal equal to or greater than purchase price
  • Receipt and approval of a property condition disclosure completed and signed by seller, if applicable
  • Sale of a property owned by the buyer or pre-closing possession by the buyer, if applicable
• Also, part of the negotiating process should include the buyer asking for certain contingencies and changes or additions to the so-called standard language.

7. Continue to Monitor and Follow-up to Ensure on-time Closing:
The closing date indicated in a purchase and sale contract is a target date. Too many buyers, and sellers for that matter, assume that the closing will in fact take place on that date. However, very rarely does that happen, unless someone continues to monitor and follow up with the transaction.
This means that someone needs to make sure:

• That the appraisal gets done on time.
• That the home appraises for at least the purchase price.
• That the appraiser and lender are requiring no repairs.
• If there are repairs required to be made before closing, that an agreement is made between yourself and the seller as to who will do the repairs and who will pay for the repairs.
• That the repairs actually get done and are re-inspected in a timely manner.
• That a written mortgage commitment gets issued on time. Also, that any contingencies of the mortgage commitment are taken care of. A “clean” commitment has no contingencies that are not 100% certain to be cleared before or at closing.
• That the seller’s attorney has located the abstract of title, sent it out for re-dating (if that is applicable for your area) and ordered the survey (if that is applicable for your area). Check these items with your buyer agent or your attorney.
• That calls are made to set up the closing time and date.
• That the closing attorney has checked with the lender to make sure the closing documents are expected on time.
  Your attorney then reviews the title documents and sends a letter to the seller's attorney with regard to any title defects they have found, so that title defects can be corrected. Your attorney then orders title insurance and delivers the title package to your lender's attorney. Then the attorneys determine an actual closing time.
  There is still a "to do" list to manage and complete. It includes these steps:
• The home buyer needs to get their insurance binder, pay one full year’s premium in advance, get a receipt for the payment, and have copies faxed to their attorney before a closing can be set.
• The home buyer needs to call the utility companies to transfer service into their name. This includes phone and cable, as well as gas, electric, trash collection, water, and propane or fuel oil deliveries.
• Final walk-through inspection: This takes place shortly before closing and is a final opportunity for the buyer to see the home that they are buying. The Purpose of the Final Walk-Through Inspection:
  • To make sure that the home is still in the condition that it was when you entered into the contract to buy it
  • To check for water leaks, damage from movers, yard damage from storms, and other adverse changes
  • To make sure any personal property, such as appliances or window treatments, that are included in the sale, are in fact still there
  • To check that any available instruction booklets for appliances and mechanical systems are there
  • To make sure that any remote garage door openers are there
  • To check that a set of keys will be at closing for you
  • To make sure the utility meters get read and the meter reads called in.

Review of the Preliminary Closing Statement:

• The buyer's attorney compares closing costs and adjustments with the seller's and lender's attorneys. Your attorney will then prepare a preliminary closing statement.
• The amount should be close to the preliminary closing estimate (GFE-Good Faith Estimate) that the lender gave you.
• Someone needs to review the preliminary closing statement and compare it to the lender's estimate to determine the accuracy of the numbers.
• Provide your attorney with a copy of your GFE and have him or her compare the numbers. If there are major discrepancies, call your lender.

The Closing: Final Preparations and the Event

• Know what items need to be brought to closing. You will need to bring:
  • A cashier’s check payable as per your attorney’s instructions for the total amount you are told to bring
  • Your driver’s license(s) so the lender can verify that you are you
  • The original insurance binder and paid receipt - this may or may not be needed, but bring it anyway
  • Your mortgage commitment and lender good faith estimate in case you need to refer to them.
    The closing attorney has the final packet from the lender. The seller or his/her agent or attorney brings the new deed, proof of CO/smoke detectors from the fire department, proof of paid taxes and water bill (if municipal water), proof of paid condo fee (if it's a condo), and keys to the home.

If someone has diligently been monitoring the process, has you prepared for the closing, and has reviewed the preliminary closing statement, the actual closing should be a breeze.
However, that is a big if. Many times the above preparation isn't done in advance of closing. Things often get left to be settled at closing. And closings can become battle grounds and take longer than expected.

It may help to have a professional, knowledgeable agent working only for you at the closing to make sure that all goes well. With preparation, the right agent, and the right attorney, closings truly can take less than an hour.
Real estate closings in many areas take place at the lender's attorney's offices. Sellers can sign papers in advance but many of them attend the closing. The buyer has to be there order to sign the mortgage documents. They typically will be accompanied by their attorney and their real estate agent. Buyer's agents do attend closings, monitor the process leading up to the closing, and in general do what has to be done to ensure a smooth transaction.

Closing Costs

• Points - upfront charges you pay to reduce loan rate. They are also tax-deductible!
• Per diem interest - interest accrued from the closing date to first day of following month. This charge depends on what day of month the loan closed. This is your first mortgage payment, made at closing.
• Legitimate fees are fees paid to third-party vendors for loan services, including:
  • Title Insurance – shop around to get the best deal rather than use the company my agent suggests (www.titleinsurance.com)
  • Escrow
  • Attorney settlement fee
  • Appraisal fee
  • Courier fee
  • Credit report fee
  • Notary fee
  • Recording fees
    Even these legitimate fees may be inflated. For example, a lender may charge $100 for a credit check that really only costs $25. Do not hesitate to ask if some of these fees can be lowered.

Hidden “junk” fees - upfront charges made by a lender and itemized as closing costs and they may give the home buyer an opportunity to negotiate. Such fees to be aware of include:

• Application fees
• Underwriting fees
• Processing fees
• Warehouse fees
• Administration fees
• Amortization fees
• Affiliate consulting fees
• Bank/lenders inspection fees
• Endorsement fees
• Express mail fees
• Document preparation fees
• Origination fees
• Miscellaneous fees (anything else they want to add)

Lenders are required to provide in writing a “good faith estimate” within 3 days of receiving a loan application. You may have time to negotiate or eliminate fees before closing. Once you approve the terms of the loan, be sure you have them in writing and take that with you to the closing, where you should carefully review the charges before signing off. Review them with your Buyer’s Agent to evaluate the opportunity to lower your costs whenever possible.

Additional Tips:

• Ask your lender if you can add the closing costs to the mortgage

• Ask tax accountant about how you should take title to the house (your name alone, joint ownership) and what you should change your tax withholding to since you will now be able to deduct mortgage interest and property taxes.

• Boost deductible on home insurance to $1,000 to reduce your annual premium by 20% or more