home buyer's guide

Buyer’s Guide

Buying Your Home With the Expert Help of

MARY ANN DICKHOFF

Contents

Introduction

About Mary Ann

Community

Windermere

Financing

Good Faith Estimate

The Search Begins

Making an Offer

Crafting a Winning Offer

Contingencies

Numbers to Know

Inspections

Escrow

Title

Pending to Close

Closing Costs Defined

Closing & Possession

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Mary Ann Dickhoff

Introduction

Who I Am

Both of my parents came from Washington pioneer families. My great-great grand-

father was a civil war veteran who was given a land grant on Vashon Island for his

service. Washington was just a territory then and he did some of the original short

platting on Vashon and in West Seattle. So I guess you could say that I inherited my

love of real estate. My husband and I have owned homes in both Seattle and New

York and we truly believe that investing in real estate is still the surest way to build a

solid financial future and a strong community.

What I Do

I’ve been selling and financing homes for 30 years. Buying and selling real estate are

very important life decisions that must be carefully planned and patiently worked

through. I have helped over a thousand clients navigate this process. Think of me as

your personal real estate resource, using my experience to help you realize your real

estate dreams. If you are thinking about buying, selling, or financing real estate, I’m

here to help you make

informed choices.

Why I Live and Work in Seattle

My husband and I love city living: the museums, galleries, libraries, concert halls, and

coffee shops that surround us. We looked for a location with the highest walking score

we could find because we would rather walk than drive. Whether you’re a native

Washingtonian or a new arrival; there is a perfect Seattle neighborhood to match

your own lifestyle. Share your vision with me and I’ll help you make it a reality.

1 Mary Ann Dickhoff

Mary Ann Dickhoff

C: 206-556-0713

F: 206-448-3291

E: [email protected]

W: MaryAnnSellsRealEstate.com

About Mary Ann

2

Open, Honest & Driven to Succeed

Real Estate is challenging, exciting, and tests your limits of determination. I bring to my work

ambitious aims to guide my clients successfully through this process. My work with my clients is

always honest, intelligent, open and driven to succeed in meeting the needs and goals of

those I work with. I am known for my professionalism, outstanding service, and attention to

detail with endless energy.

Experience Counts

I am a full time, licensed, professional, Managing Broker and also a Realtor. I am a member

of the Washington Association of Realtors and the Seattle/King County Association of

Realtors. I sell and list everything from cottages to mansions, and rentals too. I am a full-

service realtor that always has time. I am friendly, enthusiastic, and knowledgeable.

Knowledge & Negotiating Skills

In today's market, you need someone who knows what they're doing and will work hard to

get the job done. My knowledge of the real estate market, negotiating skills, and ability to

listen to clients' needs and desires keep me ahead of my competition.

I Will Do Whatever It Takes

Working hard and efficiently for my clients is important as they, like you, have busy lives. I

strive to make the process as seamless as possible by working for your greatest gain with the

least amount of inconvenience to you. I am confident that I will exceed all of your expecta-

tions of a knowledgeable professional who will provide courteous and competent service.

Customer and client satisfaction is always first and foremost in my business.

I Am Your Resource

I strive to continue to be a resource to my clients long after they have settled into their

homes. I have strong relationships with business professionals in many different trades and

professions. When you need anything from a dentist to a dog walker. I am here for you!

Mary Ann Dickhoff

Commitment

Windermere - Helping Homeless Families

My commitment to serving our communities goes beyond providing the best in real estate

services. Since the beginning, through our Windermere Foundation (founded in 1989), I’ve al-

so reached out to help address one of America’s most pressing problems – homelessness.

Housing is Our Business

Supporting programs that provide housing and related services to help homeless and low-

income families is a natural extension of our business. We assist homeless families by giving

funds to a variety of nonprofit social service programs for emergency and transitional shelter

projects, temporary rent assistance and daycare for families in need. Other activities include

underwriting the cost of summer camp, and basic necessities such as new school shoes,

socks and underwear. I believe that building a child’s self-esteem is an investment in the fu-

ture of our communities.

Every Transaction Makes a Difference

What makes the Windermere Foundation unique is the way that it is funded. Every time a

Windermere agent sells a home, a portion of the commission goes to the Windermere Foun-

dation. Salaried employees and managers, as well as the public, make contributions. Since its

inception, the Foundation has contributed millions of dollars to non-profit organizations dedi-

cated to fighting homelessness, with less than one percent going to administrative costs.

Windermere & Community

3 Mary Ann Dickhoff

Windermere

The Best Tools

Windermere’s structure allows offices to operate independently while retaining the benefits of

being associated with respected brand benefits such as advertising buying power, agent

benefits and powerful technology tools. At the same time, I am intimately familiar with my

local communities, allowing me to provide knowledgeable and high-caliber real estate ser-

vices tailored to your needs.

As part of the Windermere network, I also take advantage of a variety of programs and inno-

vative services including technology, marketing and education that I put to work in the local

market. These innovative tools allow me to serve homebuyers and home sellers in a way that

is unique to Windermere.

“Windermere has always emphasized professionalism. Our associates are the primary com-

ponent to our success and growth. We’ve worked very hard over the years to build our repu-

tation as a company whose representatives are fair, honest, knowledgeable and genuinely

care about their communities.”

-Geoff Wood, Chief Executive Officer, Windermere Real Estate

Windermere.com At the touch of a button, you can view thousands of homes throughout the West via Winder-

mere’s award-winning website, Windermere.com. From here you can effortlessly preview

homes for sale, learn about my company and get information to help you make your buying

and selling decisions. The easy-to-use site includes homes listed by Windermere as well as

other real estate companies.

Photo Gallery

Allows you to view multiple photos of a home.

PropertyPoint An exclusive interactive map search tool now featuring Google Maps.

myWindermere

A feature, which automatically notifies you via email of new listings that fit your criteria daily

or weekly. You can create multiple searches.

Mortgage Calculator

Determine if the home is within your price range.

Builder Gallery

For newly constructed homes, which can assist you in learning about the home, builder and

development.

The Best in Seattle

4 Mary Ann Dickhoff

Financing Your Dream

Getting Pre-Approved

By getting pre-approved, you know exactly how much home you can afford. There is

nothing worse than finding your dream home, only to find out that you cannot qualify for a

loan to buy it. A pre-approval also strengthens your bargaining power when negotiating

with a seller.

Determining how much you can afford before you begin your home search will save you

valuable time.

Pre-qualification vs. Pre-Approval

Pre-qualifying for a mortgage generally helps you determine how much house you can

afford. Remember, becoming qualified does not necessarily mean that you will be

approved for a loan of that amount. Pre-approval from your lender means that you have

provided them with necessary paperwork, and they have approved you for an actual loan.

Having pre-approval for a home will put you in a much better negotiating position, because

the seller knows you are able to obtain your loan to purchase their home.

Down Payment

Most lenders require a 3.5 to 20 percent down payment.

I can help you locate a lender who will assist you in finding a financing package that best

meets your needs.

Preferred Lenders

If you do not already have a lender, please let me know. I will put you in touch with one of

my trusted partners who knows how to get the job done.

The buying process...

5 Mary Ann Dickhoff

Good Faith Estimate

What Is A Good Faith Estimate?

The Good Faith Estimate or GFE is a form, which lenders are required to complete and

provide to borrowers applying for a mortgage. It is intended to make it easier for borrowers

to compare mortgage offers from different lenders and it is required under Real Estate Settle-

ment Procedures Act (RESPA) rules.

There are actually two forms to look at. The first is the Good Faith Estimate itself, and must be

provided when you apply for the loan. The second is the Settlement Statement, which breaks

down and details all final costs, and is provided before the actual closing. The two forms are

designed to allow the borrowers to compare the estimated and final costs to ensure they are

either unchanged or that the changes are within the limits allowed by law.

Origination Charges

On the Good Faith Estimate, the main thing a borrower needs to be concerned with is the

section titles “origination charges.” These are all the fees that the lender is charging you for

making the loan. All a borrower has to do is compare origination charges to see exactly

what different lenders would charge for issuing similar loans.

The origination charges section also details any points that are being paid or credited to raise

or lower the mortgage interest rate. This enables borrowers to more accurately compare the

true cost of offers from different lenders.

Settlement Charges

The second main item borrowers need to be concerned about is “settlement charges.”

This details all third party costs, such as title insurance and transfer taxes.

An optional table that can be filled out by the lender shows how you can raise or lower your

interest rate by opting for higher or lower settlement charges, and vise versa.

Can Your Rates, Payments, Loan Balance Increase?

The Good Faith Estimate also details your initial loan balance, interest rate and monthly pay-

ments, and whether any of these can rise during the course of the loan and if so, by how

much. It also requires disclosure of any prepayment penalties and whether there is a balloon

payment on the loan.

Finally, the form spells out which charges on the GFE cannot increase at the time of settle-

ment (as detailed on the Settlement Statement). There’s also a “shopping chart” that allows

borrowers to compare terms on up to four different mortgages.


6 Mary Ann Dickhoff

The Search Begins

Pre-Approval Letter in Hand

Before we begin searching for homes, you should have already contacted a Mortgage

Broker and received your pre-approval letter. This allows us to narrow down your search to

include only those homes that are within your price range. It makes no sense to look at

homes out of your price range and miss something that is. With letter in hand, we are ready

to begin the search for your new digs!

Determining Your Wants and Needs

I have several methods to help you determine your wants and needs. I have found the most

effective method is for everyone who will be living in your home to sit down and fill out a wish

list. This helps you, as a group, to really analyze everyone’s expectations.

The Search Begins

Often, I will preview properties that meet your style, size, price, location requirements and

choose the most suitable properties. Sometimes we discover new listings together. If you are

like most buyers you’ll be searching online and visiting open houses whenever you can!

Re-Analyzing Your Wants and Needs

Often times after our first day of looking at homes you will gain a greater insight on what you

want and need in your new home, and so will I. This allows us to narrow our search and

become more focused on your priorities.

New Properties on the Market

In addition to checking the MLS database at

least once a day, I input your information into

the MLS, which notifies me via email when new

properties are added that meet your criteria.

As new properties come available I will tour

them with or without you (your choice).


7 Mary Ann Dickhoff

Making an Offer

Determining Your Offering Price

Once you have found the right house, you will probably feel educated enough to know what

is a good deal and what is a reasonable price. I will also guide you with my knowledge of

the marketplace. We will take into account time on market, comparable properties, the

condition of the house and decide what is a fair price to offer. It will always be your decision,

but I will help you as much as I can to ensure you are educated enough to make confident

decisions.

Zillow Schmillow

Many buyers look at online sites to get pricing for homes. All these averages don’t matter

much if the properties are not really that similar to the home you’re making an offer on. This is

the biggest drawback to rough-and-dirty web CMA sites like Zillow. They get their essential

specs for your property and the comps from the public records, which are often incorrect.

They can’t adjust for a house that has a huge addition, is in an inferior location or is simply

very different from neighboring homes. Also, if the neighborhood market took a major up-

swing or downturn three months ago, the six-month-old sales won’t be nearly as predictive of

the value of “your” home. I want my clients to be aware of the difference.

Writing the Offer

Our goal is to get the home on your terms which includes things like closing dates, things to

be included in the sale, price and earnest money. I will explain your contractual rights and

responsibilities, talk about different negotiating strategies and give as much advice as I can.

The offer will spell out how much you are willing to pay for the home, what type of financing

you will obtain and a myriad of other important details and dates relevant to the purchase of

the property.

Remember to Breathe

Once I have presented your offer, the

seller’s agent will review it with his or her

clients and either accept it or send back

a counteroffer. This can be a trying time

for some people, worrying whether or not

their offer will be accepted. I want you to

remember to breathe. Know that we

have done our best and will be up to the

challenge of negotiating anything that

comes our way!


8 Mary Ann Dickhoff

Crafting the Winning Offer

Homes Will Always Sell at Market Value

Market value is determined by what a buyer is willing to pay. Market value is not a fixed, rigid

price, but instead a range of value. This is because no two buyers are alike. While one must

have a pool, another will consider a pool a liability. You, the buyer, are the market.

In our current real estate environment, there are two distinct categories of buyers. One in-

cludes the traditional buyer looking for a good home at a good “value” today, because to-

day is when they are shopping. The second category of buyer is a little less concerned with

timing or even suitability of the property and much more concerned with value, not only in

the context of value today but in terms of anticipated value tomorrow or next year.

Regardless of the category in which you fall, keep in mind that both flavors of buyers are in

the same market at any given time. Unless your goal is to accumulate a scrapbook of reject-

ed offers you will one day share with your grandchildren, it is critical to remember that you

are offering to purchase a home. A home, unlike a share of stock, a gallon of milk, or a com-

mercial office building, is inherently emotional. So, it is helpful to keep in mind a few do’s and

don’ts when creating your offer.

Don’t Offend

Write a cover letter summarizing why you believe this is the right home for you. On many oc-

casions, I have seen a seller accept a lower offer because they felt a connection with the

buyer.

Do Be Prepared to Negotiate

No buyer wants to think they paid too much, and no seller wants to think he sold out. Expect

to go a round or two. “Take it or leave it” offers are rarely met with high-fives and bear-hugs

from the seller. In negotiations, everyone wants to feel like they were in control and that they

prevailed.

Don’t Be Unreasonable

The is value, and then there is crazy-talk. If a home is offered for X, and you are willing to pay

10% less than X, do not offer X minus $2 million and then ask the seller to throw in his bedroom

furniture and a pony. You will not be taken seriously.

Today’s real estate market is teeming with opportunity for the buyers. But, insanely great

“deals” are still needles in the proverbial haystack, because the market value will always be

determined by what a buyer is willing to pay. I will work with you to make sure your offer is

strong and that we have discussed every option to get a great house at a great price!


9 Mary Ann Dickhoff

Taking Care of Contingencies

Plans A through C

When you’re buying a home, Plan A is always to buy the home on the terms in the original

contract. Plan B is to buy the home after negotiating some of the terms. Plan C is the contin-

gency plan: if there is an irresolvable flaw in the condition of the home, the home doesn't ap-

praise for the purchase price, or your lender refused to fund your loan for whatever reason,

you can back out of the transaction with no penalty (other than money you’ve spent on in-

spections) so long as you have the appropriate contingencies in place.

Home Owners Association aka HOA

If the property is a part of a Home Owners Association, we will have an opportunity to read

and accept the documents pertaining to the association. These documents describe the

rules, regulations and finances pertaining to the association. We want to make sure that eve-

rything is in good order and that there are plans to keep it that way.

Title Commitment

The sellers of the property will provide you with an insurance policy. This policy protects you

against loss arising from disputes over ownership of a property. We will have an opportunity

to review the policy and determine if there are any exceptions to the policy that you find ob-

jectionable. Your lender will require you to purchase a separate policy that covers them.

Appraisal

Your lender will hire an appraiser to determine if the property is worth the price you are pay-

ing. There are contingencies built into the financing addendum to protect your earnest mon-

ey if the appraisal is lower than the purchase price.

Inspection Resolution

You have the right to have an inspection of

the property prior to closing. I recommend

you hire a professional inspector to help you

with this task. If you find any problems with the

property, you can ask the seller to repair them

or compensate you for future repairs. Please

see the home inspection article for more on

the inspection process and to see my list of

trusted providers.


10 Mary Ann Dickhoff

Numbers to Know

Purchase Amount

The purchase amount is the amount you are paying for the house. It is inclusive of your ear-

nest money. It is inclusive of your down payment. It is not inclusive of your closing costs.

Earnest Money

When you make an offer by signing a contract, you’ll also pay a deposit called earnest mon-

ey, usually 2- 5% of the purchase amount, to show that your interest in the house is serious.

Paid by the buyer, earnest money is a portion of the purchase amount that is held by the es-

crow company while the transaction is in process. When the transaction closes, the earnest

money is transferred to the seller as a portion of the original purchase amount. It is not an ad-

ditional fee.

Closing Costs

Closing costs are not a part of the purchase amount, but rather charges associated with the

buyers loan, the transaction itself and prepayment required by the lender such as taxes and

hazard insurance. The escrow company collects closing costs at the same time that the

down payment is collected.

Down Payment

The down payment is a portion of the purchase price that the buyer is paying in cash. Down

payments can range between 3.5% and 100% and each buyer, working with their lender, de-

termines the best scenario for their particular purchase.

How Does This All Work?

Upon entering into a contract to purchase a home for $200,000 (purchase amount) with ear-

nest money of $5,000, the buyer’s earnest money check is deposited into the escrow compa-

ny’s trust account. The buyer’s decide on a mortgage program with a 5% down payment

($10,000) and their closing costs total $3,750. The buyer will also pay prepaid taxes and insur-

ance etc. The mortgage will be for 95% of the purchase amount ($190,000).

Down Payment $10,000

Closing Costs $3,750

Prepaid Taxes & Insurance $1,000

Total $14,750

Earnest Money Credit ($5,000)

Additional Amount Collected $9,775

From Buyers at Closing

Purchase Amount $200,000

Buyer’s Closing Costs $3,750

Prepaids/Tax & Insurance $1,000

Total Cost to Buyer $204,750



Home Inspection

Benefits

There are many obvious reasons to have an inspection done on a home

you are interested in buying. A home inspection evaluates the structure

of the house, gives you feedback on other systems such as the roof, elec-

trical system, heating, insulation, doors, windows and plumbing. Yes,

home inspections are an added expense and are usually optional, but

they make sure your largest purchase is in good working order.

No matter how much you like the house—old or new; it’s always a good

idea to have an inspection to avoid a “Money Pit” situation.

The Power of the Inspection Contingency

If your offer to purchase includes an inspection contingency, you can back out of the pur-

chase if the inspection uncovers more problems than you are willing to take on or if you are

unable to come to agreement with the seller regarding repairs or monetary concessions. The

sellers are not obligated to make any repairs, so be prepared for the possibility of another

round of negotiations.

My Cousin’s Brother’s Friend

It’s not a good idea to let family or friends perform the inspections for you. Even though they

may have some expertise, there could be a huge problem if they miss a major issue. Inspec-

tors have insurance that is an added protection for you, and it’s far easier to convince a sell-

er to take our requests seriously when the inspector’s name isn’t Uncle Joe.

Hiring an Inspector

In addition to checking the licensure, ask about a home inspector’s experience in the build-

ing trades, and current membership in a professional inspection association such as ASHI

(American Society of Home Inspectors) or you can call me and I will put you in touch with

one of my trusted partners.



Escrow

What Is Escrow?

Escrow is a written agreement (or property or money) delivered to a third party or put in trust

by one party to a contract to be returned after fulfillment of some condition.

In Layman’s Terms

Escrow is the process by which property is transferred from one party to another, and where

the conditions set forth within the Purchase and Sale Agreement, Loan Commitment and oth-

er written instructions are satisfied. The escrow process brings together all of the people, pa-

per, money and answers the question—Who gets the money? And who gets the property?

It is important to have a neutral third party involved to assure that everyone’s interests are

met. The costs for the escrow company are generally split between the buyer and the seller

equally and are also a part of the “Closing Costs.”

Escrow Instructions

Escrow instructions define all the conditions that must occur before the transaction can be

finalized. Your escrow instructions specify, in a debit and credit format, the disposition of your

purchase funds. They also provide for title protection for your home.

Who, What, Where, When

Your escrow officer will contact you to make an

appointment for you to sign your escrow instruc-

tions and final loan papers. At this time, the es-

crow officer will also tell you the amount of money

you will need (in addition to your loan funds) to

purchase your new home. Your loan funds will be

sent directly to escrow by the lender. You may

sign your escrow contract instructions and loan

documents at the escrow company’s office, or

some other location that is convenient.

Where Is My Money?

Written evidence of your deposit is generally in-

cluded in your copy of your purchase contract.

Your funds will then be deposited in your separate

escrow or trust account and processed through

your bank.



Title

What Is It?

For a seller, it is important to prove that they own the property and that there are no liens

against it, other than the mortgage. This is done by showing clear title to the buyer. The title

to the property can be insured as marketable and the buyer is made aware of title issues that

might need to be resolved prior to closing. This is why it is beneficial for the seller to order a

“Preliminary Title Commitment.” Upon listing their property, one of the first steps they will do is

order this report from the Title Company, who will research ownership of the land back to the

time it was owned by the government.

Who Pays For It?

Once an offer is received, all parties involved will want to review the Preliminary Title Commit-

ment. There will be two separate title insurance policies purchase. The seller will buy the pur-

chaser a title insurance policy, and the buyer will purchase one for their lender. This is a one

time charge and a policy that last as long as the buyer owns the home.

The Title Search

After your sales contract has been accepted, a title professional will search the public rec-

ords to look for any problems with the home’s title. This search typically involves a review of

land records going back many years. More than 1/3 of all title searches reveal a title prob-

lem that title professionals fix before you go to closing. For instance, a previous owner may

have had minor construction done on the property, but never full paid the contractor. Or the

previous owner may have failed to pay local or state taxes.

The Owner’s Title Policy

Owner’s Title Insurance, called an Owner’s Policy, is usually issued in the amount of the real

estate purchase. It is purchased for a one-time fee at closing and lasts for as long as you or

your heirs have an interest in the property. Only an Owner’s Policy fully protects the buyer

should a covered title problem arise with the title that was not found during the title search.

The Loan Policy aka Lenders Title Insurance

Most lenders usually require a Loan Policy when they issue you a loan. The Loan Policy is usu-

ally based on the dollar amount of your loan. It only protects the lender’s interests in the

property should a problem with title arise. It does not protect the buyer. The policy amount

decreases each year and eventually disappears as the loan is paid off.



Pending to Close

The Details

Once we make an offer on a home it is my job to make sure your offer is accepted, carefully

executed, that every detail of your transaction is completed, and adheres to the strict time

schedules of your contract.

Timeline

I will be providing you with a Pending-to-Close timeline once we have mutual acceptance

on your home. The timeline below is a visual display of the important dates of your contract.

Sample

Transaction Time Table for Mr. & Mrs. Smith

09/23/15 Mutual Acceptance! Congratulations.

09/26/15 Must have written application for financing.

09/28/15 Must have the inspection contingency removed.

10/12/15 Estimated signing date.

10/15/15 Closing and Possession.



Closing Costs Defined

What Are Closing Costs?

Throughout the shopping phase of buying a home, choosing a lender and settling on a

mortgage program, the words closing costs are tossed around frequently.

Closing costs are an assortment of fees based on the transaction between the seller and the

buyer of a home (fees based on the closing of the transaction, hence the name). They are

fees that are collected by the escrow company at the signing appointment, usually a day or

two before the transaction is recorded.

Who Pays Them?

Some closing costs, such as excise tax on the sale and real estate commissions, are the

responsibility of the seller. Some closing costs, such as the cost of the escrow company, are

split between the buyer and seller. Many of the closing costs are related to the buyers mort-

gage and these are the buyer’s responsibility.

One of the largest costs associated with the mortgage is the “loan origination fee” or the fee

charged by the lender to provide the loan. This varies between lenders and is something that

should be considered when shopping for a lender. Some buyers, at times, will elect to pay a

separate fee to “buy down” or lower the interest rate. Lenders can also charge for appraisal,

title insurance, courier fees, etc.

In addition to closing costs, the escrow company will be instructed by the lender to collect

“pre-payment amounts”, also referred to as “pre-paids”. These pre-payments are for such

things as real estate taxes, insurance, etc.

How Much Are They?

The kind and amount of closing costs

you will incur will depend on your loan,

your lender and the home you decide

to purchase. Upon making your initial

loan application, your lender will provide

you with a Good Faith Estimate which

will give you a better idea of what to

expect.



Closing and Possession

Closing

The “closing” is actually comprised of two separate closings. At the real estate closing you

will sign closing documents relating to the transfer of the property. The loan closing takes

place after you sign the loan documents. Once all documents are signed, the lender disburs-

es the funds to the closing agent, the seller is paid and title to the home is transferred into

your name.

Don’t Be Nervous

Closing makes many first-time buyers nervous because it seems like a procedure where you

sign your life away on a bunch of papers you don’t have time to read. Actually, by the time

closing rolls around, the hardest part is truly over. Closing actually feels a little bit giddy and

at the end, you have the keys to your new house! You will sign your name 487 times, but if

you’ve done everything right up to this point, it will not be stressful. Relax.

Possession

The time and date of possession of the property is negotiated on the contract. Upon posses-

sion, you can start moving in!

Open Champagne & Smile!



Mary Ann Dickhoff

206-556-0713

[email protected]

MaryAnnSellsRealEstate.com

Windermere Real Estate/Wall Street Inc. 2420 2nd Ave Seattle, WA 98121

home buyer's guide

Documents

real estate market

love of real estate

real estate dreams

mary ann dickhoff introduction

personal real estate

west seattle

financing homes

ill help