Buying a Home
RM MANAGEMENT LLC® can make buying a home easy, whatever type of property you are searching for. Whether it's a house, condo, or any other type of property, we can assist you with your real estate needs. RM MANAGEMENT LLC real estate professionals are dedicated to making the process of buying your home as easy as possible.
To help you find your dream home and fine-tune your financial expectations. Working with a buyer agent is worth consideration since he or she is legally responsible for representing the buyer's interest in a real estate transaction. Before making a decision, however, have a Realtor explain the pros and cons of using a buyer agent versus a sales or dual agent. Your RM MANAGEMENT LLC agent can guide you through every step to buying a home.
- Hire a real estate professional.
The first step is to select a professional to help you find your dream home and fine-tune your financial expectations. Working with a buyer agent is worth consideration since he or she is legally responsible for representing the buyer's interest in a real estate transaction. Before making a decision, however, have a Realtor explain the pros and cons of using a buyer agent versus a sales or dual agent. Your RM MANAGEMENT LLC agent can guide you through every step to buying a home.
- Shop for mortgage rates and terms.
A difference of even half a percentage point can make a huge difference in how much you pay over the life of a loan. For example, the difference in the monthly payment on a $100,000 mortgage at 8 percent vs. 7.5 percent is about $35 per month. Over 30 years, that's $12,600. Amortization Calculator
- Prequalify for a loan.
Your third step should be to get prequalified, which determines how much you can afford. It allows you to move swiftly when you find the right home, especially when there are other interested buyers. It also indicates to the seller that you are serious and really can afford to buy the property.
- Define what you want.
The next step is to create a realistic idea of the property you'd like to buy. What features are most important to you? Make two lists: one of the items you can't live without and one of the features you would enjoy. Refine the lists as you house hunt. It is also helpful to search online to see what is currently available on the market. Your real estate professional can then show you houses that meet your expectations.
- Visit properties.
Now you're ready to visit houses. Ask your RM MANAGEMENT LLC agent to arrange showings, and keep track of the properties you've seen.
- Know the features that help or hurt resale.
In some areas, a swimming pool actually detracts from a home's value and makes it harder to sell. In neighborhoods with two-car, attached garages, a single-car or detached garage may impact the home sale and future value. Your RE/MAX professional can point out features that hurt, and those that help, resale value.
- Rate the houses you tour.
After touring each home, write down what you liked and didn't like. Develop a rating system that will help narrow the field down. For example, pick the house you like best on day one and compare all other houses to it. When you find a better one, use the new favorite as the standard.
- Make an offer.
Once you've pinpointed your dream house, it's time to get serious about the financial and contractual side of the purchase. Your RM MANAGEMENT LLC agent will be a strong advantage since you and the seller have different goals.
- Arrange for a home inspection.
After your offer is accepted, set up a home inspection. It's common to find problems, including leaky roofs, cracked walls, insect infestations and foundation problems. Your real estate professional can help find a reputable inspector, and will negotiate to get you the most for your money once the inspector's report is final. If you negotiate repairs as part of the purchase, ask for a "walk through" before finalizing the paperwork. Ask your real estate expert about home protection plans, which may save you money in the near future.
- Close.
Before your closing date, make sure you've made all necessary deposits and completed the paperwork - including mortgage, title, homeowners insurance and any other paperwork required by local or state governments.
- Prepare for life in your new home.
Before rolling out the welcome mat, consider some moving basics: arranging for an alarm company, turning on electricity, water and gas, cleaning or replacing the carpet, and notifying your local post office of your new address. The best time for renovations is often before you move in.
Are you still a little confused? Do you want to know more? Here are a few Real Estate Terms and definitions to better help you understand what you're signing.
Terms and Definitions
Basic Real Estate Terms
Glossary of Real Estate Terms
CCIM: The Certified Commercial Investment Member (CCIM) designation conferred by the Commercial Investment Real Estate Institute (CIREI), is awarded to experts in the disciplines of commercial real estate brokerage, asset management, valuation and investment analysis. The designation is earned by completing the intensive CCIM education program, passing a comprehensive examination and demonstrating a record of accomplishment in the commercial investment of real estate.
CIPS: The Certified International Property Specialist (CIPS) designation is the National Association of Realtors® newest designation, awarded to real estate agents who meet international experience and education requirements.
CRB: The Certified Real Estate Broker Manager (CRB) designation is awarded by the Real Estate Brokerage Managers Council to managers who have completed the CRB Management Series and met stringent management experience requirements. The most successful brokerages are owned or managed by professionals having the coveted CRB designation.
CRS: The Certified Residential Specialist (CRS) is a professional designation awarded to experienced agents who complete an advanced course of study in residential real estate and demonstrate proficiency in sales and production. CRS Designees are members of the Residential Sales Council, a not-for-profit affiliate of the NATIONAL ASSOCIATION OF REALTORS®. Only 4% of all REALTORS® have attained this prestigious designation.
Fee Simple Ownership: Fee simple ownership is probably the most familiar form of property ownership to buyers of residential property, especially on the US Mainland. Fee simple is sometimes called fee simple absolute because it is the most complete form of ownership. A fee simple buyer acquires ownership of the entire property, including both the land and buildings. The fee simple owner does not pay ground rent, but does pay maintenance fees and real property taxes. The fee simple owner has the right to possess, use the land and dispose of the land as he wishes - sell it, give it away, trade it for other things, lease it to others, or pass it to others upon death.
Finance Charge: The total cost a borrower must pay, direct or indirectly, to obtain credit according to Regulation Z.
Graduated Payment Mortgage: A residential mortgage with monthly payments that start at a low level and increase at a predetermined rate.
GRI: Graduated, Realtors Institute. A professional designation granted to a member of the National Association of Realtors® who has successfully completed courses covering Law, Finance and Principles of Real Estate.
Home Inspection Report: A qualified inspector’s report on a property’s overall condition. The report usually includes an evaluation of both the structure and mechanical systems.
Home Warranty Plan: Protection against failure of mechanical systems within the property. Usually includes plumbing, electrical, heating systems and installed appliances.
Index: A measure of interest rate changes used to determine changes in an ARM’s interest rate over the term of the loan.
Joint Tenancy: An equal undivided ownership of property by two or more persons. Upon the death of any owner, the survivors take the decedent’s interest in the property.
Leasehold Conversion: Conversion of leasehold property to fee simple ownership involves purchasing the landowner's remaining interest, called the leased fee interest. The lessors of many, if not most, leasehold properties are currently offering to sell their leased fee interests to their lessees or prospective buyers of a leasehold property. There is a State of Hawaii law and a City & County of Honolulu (Oahu) ordinance affecting the mandatory conversion of residential leasehold properties.
Leasehold Ownership: A leasehold interest is created when a fee simple landowner enters into an agreement or contract called a ground lease with a lessee. A lessee buys leasehold rights much as one buys fee simple rights; however, the leasehold interest differs from the fee simple interest in several important respects. First, the buyer of residential leasehold property does not own the land and must pay ground rent. Second, his use of the land is limited to the remaining years covered by the lease. Thereafter, the land returns to the lessor, and is called reversion. Depending on the provisions of any surrender clause in the lease, the buildings and other improvements on the land may also revert to the lessor. Finally, the use, maintenance, and alteration of the leased premises are subject to any restrictions contained in the lease.
Lien: A legal hold or claim on property as security for a debt or charge.
Loan Commitment: A written promise to make a loan for a specified amount on specified terms.
Loan-To-Value Ratio: The relationship between the amount of the mortgage and the appraised value of the property, expressed as a percentage of the appraised value.
Margin: The number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment.
Mortgage Life Insurance: A type of term life insurance often bought by home buyers. The coverage decreases as the mortgage balance declines. If the borrower dies while the policy is in force, the mortgage debt is automatically covered by insurance proceeds.
Negative Amortization: Negative amortization occurs when monthly payments fail to cover the interest cost. The interest that isn’t covered is added to the unpaid principal balance, which means that even after several payments you could own more than you did at the beginning of the loan. Negative amortization can occur when an ARM has a payment cap that results in monthly payments that aren’t high enough to cover the interest.
Origination Fee: A fee or charge for work involved in evaluation, preparing, and submitting a proposed mortgage loan. The fee is limited to 1 percent for FHA and VA loans.
PITI: Principal, Interest, Taxes and Insurance.
Planned Unit Development (PUD): A zoning designation for property developed at the same or slightly greater overall density than conventional development, sometimes with improvements clustered between open, common areas. Uses may be residential, commercial or industrial.
Point: An amount equal to 1 percent of the principal amount of the investment or note. The lender assesses loan discount points at closing to increase the yield on the mortgage to a position competitive with other types of investments.
Prepayment Penalty: A fee charged to a borrower who pays a loan before it is due. Not allowed for FHA or VA loans.
Previews® Property Specialist: The designation of Previews® Property Specialist is granted to Coldwell Banker professionals who meet prescribed standards of training and experience in the field of luxury real estate. This certification is earned by achieving stringent performance criteria in the marketing and selling of luxury properties and by completing prescribed courses of study through Coldwell Banker and other institutions.
Private Mortgage Insurance (PMI): Insurance written by a private company protecting the lender against loss if the borrower defaults on the mortgage.
Purchase Agreement: A written document in which the purchaser agrees to buy certain real estate and the seller agrees to sell under stated terms and conditions. Also called a sales contract, earnest money contract, or agreement for sale.
R: A REALTOR® is an individual licensed as a BROKER to list and sell real estate, one who is also a member of a local Board of REALTORS®, the State Association of REALTORS® and the National Association of REALTORS®. As a member of these three professional trade associations, a REALTOR® is bound by a strict Code of Ethics, the canons of professional behavior that guide daily activities in the real estate business.
To obtain a BROKER's license, an individual must have a current (active or inactive) Hawaii salesperson's license, a minimum of 2 years full-time real estate experience in Hawaii and have participated in at least 10 qualifying real estate transactions with a Hawaii broker prior to taking and passing the State-required 46-hour broker's prelicensing course.
RA: A REALTOR ASSOCIATE® is an individual licensed as a SALESPERSON to list and sell real estate, one who is also a member of a local Board of REALTORS®, the State Association of REALTORS® and the National Association of REALTORS®. As a member of these three professional trade associations, a REALTOR ASSOCIATE® is bound by a strict Code of Ethics, the canons of professional behavior that guide daily activities in the real estate business.
To become a licensed real estate professional in Hawaii, an individual must be 18 years old and either a U.S. citizen or a registered alien by the State exam date, have a reputation for honesty, truthfulness, financial integrity and fair dealing, complete the State-required 40-hour prelicensing course and pass the State exam.
Regulation Z: The set of rules governing consumer lending issued by the Federal Reserve Board of Governors in accordance with the Consumer Protection Act.
Tenancy in Common: A type of joint ownership of property by two or more persons with no right of survivorship.
Title Insurance Policy: A policy that protects the purchaser, mortgagee or other party against losses.
VA Loans: A loan, made by a private lender, that is partially guaranteed by the Veterans Administration.
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