Buyer Information Packet
In this folder you will find the following information to assist you
throughout the property buying process.
1. Tuscany’s Commitment
2. 7 Reasons to Buy a Home
3. Good Financial Information Leads to Good Decisions
4. My Unique Selling Position
5. Process of Buying a Home
6. Buyer Agency; Best Served as Customer or Client?
7. Duties and Responsibilities of a Licensed Real Estate Agent
8. Mutual Agreement
9. Property Search Information Form
10. Financial Data Form
11. Pre-Approval Program
12. Items needed for a credit application
13. What Can You Afford? Estimating affordable mortgage amount
14. Title Insurance and Closing Costs
15. Home Protection Plan
16. Home Inspection Services
Please use this packet to keep all of your property buying documents together in one place
throughout your property purchase experience.
We, At Tuscany,
ARE a full service real estate company...
Serving all your residential, commercial, industrial and investment real estate and
financing needs with professional Realtors.
SPECIALIZE in regional communities with local agents...
Including the greater Bay Area, Stockton, Modesto, Lodi, Sacramento, Elk Grove,
Laguna, Roseville, Rocklin, Granite Bay, Folsom...
UTILIZE the latest technology and internet networking to produce and maximize the
exposures for all properties for sale or for lease.
HAVE full access to the MLS (Multiple Listing Service) / Metrolist to provide property
information to potential clients throughout Northern California.
PROVIDE one of the most comprehensive advertising plans:
- MLS / Metrolist
- Major / Local Newspapers,
- Chinese and Vietnamese Newspaper and Magazines in the Bay Area, San Francisco,
Oakland, Stockton, and Sacramento.
Our Agents are all members of the California Association
of Realtors, who commit to professionalism, integrity,
excellence in servicing our clients in today's real estate
7 Reasons to Buy
1. You can enjoy it – Pride of Ownership
Pride of ownership is a key reason for wanting your own home. Decorate
it to your own taste and enjoy all of the benefits while making a great
2. Appreciation Potential
Real estate over time has been considered a good investment
because most of it has appreciated. The effects of leverage can
multiply the increase when borrowed funds are used to purchase the
home. Many times, the largest investment a person owns is their home.
Homes have been a good hedge against inflation. Homeowners build
equity and can borrow against that equity for a variety of reasons that
could include college, medical, or to start a business.
3. Tax Deductibility of Mortgage Interest
Qualified mortgage interest and home equity loans are deductible for
Income Tax purposes.
4. Tax Deductibility of Property Taxes
Property taxes on a first or second home are deductible on for Income Tax
purposes. Deferred Gain and Capital Gain Treatment
5. The Opportunity to take Advantage of the 1997 tax law revision and
exclude up to $500,000 of capital gain every two years.
A homeowner can exclude up to $500,000 of capital gain if married, filing
jointly or up to $250,000 if single or filing separately for homes that have
been the taxpayer's principal residence for the previous two years. There
is no age requirement for taking the capital gains exclusion like the “over
55” rule in the past. It is not necessary to purchase a replacement home
more expensive than the one sold. Homeowners can buy a more or less
expensive home with no tax consequences assuming their gain is less
than the allowable amounts.
6. Preferential tax treatment
Preferential tax treatment on gains that have been made from capital
assets held more than one year are permitted by IRS. This is especially
important for homeowners with gains in excess of the allowable exclusion.
7. Principal Accumulation
Mortgage payments include the interest for the time that the money has
been used and principal to retire the debt over a period of time. Each
month, part of the payment is for principal accumulation
Good Financial Information Leads to
Better decisions are made when they are based on good financial information.
The enclosed reports are simple to read and easy to understand. Knowing there
are alternatives helps to determine the right choices.
Estimated Purchase Costs – It is important to know how much you’ll need to
buy a home not only for the down payment but for all of the fees that are charged
in connection with getting the loan and conveying title.
Mortgage Qualification –Discover what size mortgage you can qualify for using
the same guidelines that a mortgage company uses.
80-10-10 – This report will show you the savings achieved by eliminating Private
Mortgage Insurance. Not only will you save money in the initial purchase costs
but also in the monthly payment.
Alternate Financing Plans – Choices will help you to make a better decision as
to how to finance your new home. You deserve to know what options are
available and that is exactly what you’ll get.
Mortgage Accelerator – Discover the advantage of adding an additional amount
of principal to your fixed rate mortgage on a regular basis to shorten the term and
save tens of thousands of dollars in interest.
My Unique Selling Position
There are a lot of agents available and willing to help you with your home
purchase. To make a solid case for letting me help you, I have to provide more
services and higher-level services both before the sale and after the sale. I am
not just looking for one sale from you. I want you to consider me as your real
estate professional for life.
The reasons for doing business with me must be so compelling that not only will
you not consider doing business with anyone else, you will refer me to your
friends who are looking to buy or sell a home.
I will know the neighborhoods that you are considering or will find someone who
does. I will identify comparable sales, and information on the schools, shopping,
crime, demographics, and other things you feel are important.
Appropriate Houses to Consider
I will look for what you want and can afford in an area you want to live. I’ll show
you all the homes that are available not just the ones that I have listed. I will look
for homes that are not yet on the market.
Good Financial Decisions
Every buyer needs basic financial information to make a good buying decision.
You’ll know that you qualify for the home, what the payments and the closing
costs will be. I’ll also make additional suggestions like making extra principal
contributions with your regular payment and suggest an alternative type of
mortgage to allow for the least expensive cost of housing.
Work Diligently to Find Your Home
I’ll work hard to find your new home. I understand that finding a home is a
priority and will consider it the same. I’ll screen and preview homes so as to not
waste your time and when I find one that I feel meet your needs, I’ll show it to
you as quickly as possible.
You become familiar with how I work so that you can place confidence in
my ability. You develop rapport necessary to communicate easily and I can
come to understand your particular needs. I can afford to make a
commitment in time and effort because I can feel assured of making a sale.
Process of Buying a Home
During the initial interview, you’ll share your expectations and learn about the
process of buying a home. You’ll obtain valuable market knowledge about areas,
prices, financing, your qualifications, and normal procedures.
Considering your wants, abilities, and needs, you decide on price, size, style, and
area. At this point, we will begin the search to find your new home.
A strategy for a successful purchase is to apply for pre-approval prior to finding a
home. Negotiating a contract with a loan commitment can be advantageous to
There are specific things necessary to make a loan application and assembling
them can take some time. It is recommended to use the enclosed list.
Formulating an Offer
When you find the right home, you will want to make an offer to purchase it. This
is done in writing specifying every detail that is part of the agreement. There are
standard forms that your real estate agent can provide you.
The last step is to assemble all of the loan papers at the settlement. You will
need to pay the balance of your down payment and your closing costs at this
time. Usually, a cashier’s check is required for these funds.
Home Buyer Process Cont…
Pre-Approval Credit Report Loan Commitment
Show Homes MLS Builders FSBO
Offer Written Negotiated
Appraisal Earnest Money Title Search
Best Served as Customer or Client?
Customer Profile: (Non-Agency)
As a buyer, you may be best served as a CUSTOMER when
Are merely need exposure to the property
Are familiar with real estate
practices and procedures and/or
business in general
Know how to mentally structure an offer
Are capable of negotiating for yourself
Are capable of analyzing the
property and legal forms (or can
engage the services of someone
Real estate agents work WITH a CUSTOMER
Client Profile: (Agency)
As a buyer, you may be best served as a CLIENT when you:
Are inexperienced regarding real estate purchasing
and/or business in general or when you are a
Have a strong need for help in negotiating
Have limited funds, restricted terms or types of financing
Rely heavily on input from the salesperson ("What would
YOU suggest I do?")
Have a confidentiality that needs to be kept and/or want
to keep your identity confidential
Are a very cautious, analytical buyer; constantly probing
for every detail
Speak English as a second language
Real estate agents work FOR a CLIENT
Duties & Responsibilities of a Licensed Real Estate Agent to a:
Buyer as a “CLIENT” Buyer as a “CUSTOMER”
Buyer has signed an Exclusive Buyer Buyer has elected to use the services of a
Representation Agreement with a specific brokerage firm but not signed an agreement for
brokerage firm. a buyer representation.
A. Needs Assessment
As a Buyer-Client As a buyer Customer
1.Your Exclusive Buyer Agent can devote full 1. The seller agent’s duty of undivided loyalty
attention to your needs without an obligation to to the obligates the company to attempt to
match you with a seller-client’s property. keep you focused on the property that you
called about until you reject the seller’s
2. Your Exclusive Buyer Agent’s duty of 2. A seller agent’s duty of full disclosure to the
confidentially enables you to provide seller means that you should not tell the seller’s
information without fear of harming your agent or subagents any information that will
negotiating position. harm your negotiating position.
3. Your Exclusive Buyer Agent’s duty of 3. Because it is in the seller’s best interest for
undivided loyalty enables your agent to suggest appropriate properties for you to be in short
alternative solutions to your needs, thus supply, the seller’s or subagent will not take
increasing the supply for appropriate any action which would expand your market.
B. Property Selection
As a Buyer Client As a Buyer Customer
1. Your Exclusive Buyer Agent is obligated to 1. The seller’s agent or subagent is obligated to
find the best property for you. A buyer’s agent find the best buyer for the seller’s property.
has access to the entire market and is not
limited to properties that have been listed for
2. If necessary, your Exclusive Buyer Agent can 2. A seller's agent who works FOR you by
promote your search for an appropriate property promoting a buyer's search may be accused of
through promotions in print media, to seller's creating an implied agency with you. This
agents and directly to owners of properties that includes placing ads in print media or contacting
may be appropriate for you. owners of properties that are not listed for sale.
3. Because of your Exclusive Buyer Agent's duty 3. The seller's agent will notify you of new listings
of undivided loyalty, you should be notified of after buyer-clients have had an opportunity to
new listings and be given an opportunity to view view these properties.
these properties before buyer-customers are
4. Your property selection is not limited by the 4. Unless a seller-client agrees otherwise, you
seller's list price. Your Exclusive Buyer Agent should only be shown properties priced within
may help you to negotiate the sales price down your range of affordability. To do otherwise
into your range of affordability. would imply that the seller would accept less
than list price.
C. Viewing Properties
As a Buyer-Client As a buyer Customer
I. Your Exclusive Buyer Agent will assist you in 1. A seller's agent will disclose material facts
making an objective evaluation of a property, about the property to you, but will not provide
including both positives and negatives. an objective assessment of the property nor
address any negative aspects that are not
2. Your Exclusive Buyer Agent will assist you in 2. A seller's agent will not assist you in
making an objective comparison with comparing competing properties.
D. Negotiating the Purchase Agreement
As a 'Buyer-Client As a Buyer-Customer
1. Your Exclusive Buyer Agent will plan your 1. The seller's agent plans a negotiating
negotiating strategy with you. strategy to obtain an offer from you at the
seller's price and terms.
2. Your Exclusive Buyer Agent will suggest 2. The seller's agent will implement a
procedures which will strengthen your negotiating strategy that will strengthen the
negotiating position. seller's negotiating position.
3. Your Exclusive Buyer Agent will provide 3. The seller's agent will provide a Competitive
price counseling for you: Market Analysis for you only if the CMA
a. Information on similar properties which have supports the seller's listing price.
b. Information on similar properties which are
currently on the market.
4. Your buyer's agent will suggest protective 4. The seller's agent will attempt to negotiate
clauses for the purchase agreement to protect protective clauses in the purchase agreement
you. to protect the seller.
5. Your buyer's agent will suggest financing 5. The seller's agent will suggest financing
alternatives that may be in your best interests. alternatives to you that increase your chances
of qualifying and at the least expense to the
6. Your buyer's agent will implement 6. The seller's agent will implement negotiating
negotiating techniques on your behalf as techniques on the seller's behalf as
7. During the term of a negotiation, your 7. During the term of the negotiation, the
buyer's agent will continue to search for other seller's agent will continue to market the
appropriate properties for you to enhance your seller's property in an attempt to obtain a better
negotiating position. competing offer.
8. With the previous client's consent, your 8. Unless the seller agrees otherwise, details
buyer's agent can tell you about the details of about the seller's previous negotiations,
unsuccessful negotiations in the past or any motivations to sell, financial position, or any
other information about the seller which would other information that would aid your
aid your negotiating position. negotiating position must remain confidential.
9. Unless you agree otherwise, any information 9. Unless the seller agrees otherwise, any
about the seller that would aid your position information about you that would aid the
must be disclosed to you. seller's negotiating position must be disclosed
to the seller.
E. Follow Through After the Purchase Agreement
As a Buyer-Client As a Buyer-Customer
1. Your Exclusive Buyer Agent will attempt to 1. The seller's agent must attempt to solve
solve' problems to your satisfaction. You and problems to the seller's satisfaction. Seller and
the seller or seller's agent are kept informed of buyer are kept informed of progress in
the progress in preparing for the closing. preparing for the closing.
If I Will:
Make my best effort to find a property to meet your needs
Commit my time, resources, and experience to find exactly what you want
Incur all my car, phone and administrative expense
Continue the property search until you find a property or tell me to stop
Let me know if your plans change?
Tell me if you want to look at a property listed with another broker, builder,
or for sale by owner?
Tell me what you like and dislike about the properties we look at?
Tell me if you have the need to talk to another agent?
Work with me until we find you the right property?
Property Search Information
Following are several questions to consider when planning your home purchase.
Please be prepared to discuss these questions as we engage in our counseling
What things are most important to you in a home?
Are schools important? Yes No
If yes, which ones and why
Where do you want to live?
What style home do you prefer? When do you want to move in?
How many bedrooms? Desired square footage?
How many Baths? What size garage?
What size land parcel? 1-5 acres 5-2oacres 20-40 acres Over 40 acres
Where do you work?
When is the best time to look at homes?
Will you be selling the home you are living in right now?
If we found the right home for you today, would there be anything that could keep you from
Does anyone else have to approve of your purchase?
Including taxes and insurance, what monthly payments do you want?
What approximate pricing range do you want to look into?
How much cash do you have available for a down payment?
Does this include closing costs? YES NO
Are you currently renting? YES NO
Do you currently own? YES NO
Do you need to sell before Buying? YES NO
How much do you think your property is worth?
What is the unpaid balance? $ Interest Rt. %
Term Year(s) Date Monthly payment:
List your regular monthly payments (revolving charges, student loans, etc.)
Are you currently in debt? YES NO
Is there any problem with your credit? YES NO
What is your monthly income? $ Employed Self-Employed
What is your spouse income? $
Other monthly income? YES NO
If YES, How much? $
Is there any problem with your credit? YES NO
How long have you been employed with this employer?
Is there any problem with your credit? YES NO
If YES explain :
Have you or your spouse had a home foreclosure? YES NO
If YES explain :
Many buyers are applying for a loan and obtaining
approval before they find the property they want to
Here are the benefits:
You look at the "right" properties
You save money dealing with a comfortable
You close more quickly
You minimize trauma of not knowing whether
or not you will qualify
Items Needed for a Credit Application
Addresses for two full years
Gross monthly income
W-2s, if available
Proof of pensions, retirement, disability or Social Security
Proof of income from rentals, investments, etc.
Proof of child support or alimony paid/received
Year to date pay stub
Two years 1040 Tax Returns
Current year profit and loss statement
Each creditor's name, address and type of account
Monthly payments and approximate balances
Amount of child care expenses
Names and addresses of saving institutions
Account numbers for all accounts
Type of accounts and present balances
List of assets in stocks, bonds, etc.
Life insurance cash value (documented if used as cash down
If applicant is selling a home, a copy of sales contracts
Social Security numbers for all parties
Veterans - Certificate of Eligibility & DD-214
Cash or check to pay for application fee
Copy of sales agreement
Copy of listing on property
What Can You Afford?
In addition to having the cash for the down payment, closing costs and good
credit history, the mortgage lender will want your house payment and other
debts to conform to accepted qualifying ratios. While 28%736% are the most
common, some loan ratios differ.
Column A Column B
Annual income before taxes (gross): $
Divide by number of months: / 12
Monthly gross income: = =
Many lenders will not allow you to spend more than 28% of your
monthly gross income on housing expense: (column B)
Maximum monthly housing expense allowance (column B) =
Many lenders allow 36% of monthly gross income for long-term X .36
debt: Long-term monthly expense allowance: =
Figure out your monthly long-term obligations below, and subtract it from the allowance:
child support $
auto loan +
credit cards +
association fees +
total long-term obligations: =
Monthly housing expense allowance: =
Record the smaller figure in Column A or B :
Estimating about 20% for taxes and insurance, leaving
80% for payment of mortgage (principal and interest): X .80
Allowable monthly principle and interest expense: +
Divide by Monthly Payment Per Thousand Dollars from table
Multiply by 1000: xlOOO
Estimated Affordable Mortgage Amount $
Rate I5 yr. 30 yr. Rate I5yr. 30 yr. Rate I5 yr. 30 yr. Rate I5yr 30 yr
6.0% 8.44 6.00 7.75% 9.41 7.16 9.5% 10.44 8.41 11.25 11.53 9.72
6.25% 8.S8 6.16 8.0% 9.56 7.34 9.75% 10.60 8,60 11.5%
% 11.69 9.91
6.5% 8.72 6.33 8.25% 9.70 7.51 10.0% 10.75 8.78 11.75 11.85 10.10
6.75% 8.85 6.49 8.5% 9.85 7.69 10.25 10.91 8.97 12.0%
% 12.01 10.29
7.0% 8.99 6.65 8.75% 9.99 7.87 10.5%
% 11.06 9.15 12.25 12.17 10.48
7.25% 9.13 6.82 9.0% 10.14 8.05 10.75 11.22 9.34 12.5%
% 12.33 10.68
Title Insurance & Closing Costs
In California, most purchase and sale transactions involving residences and land
are handled by Title Companies, who prepare necessary documents, preside at
the signing of final papers, verify the payment of funds, and record the change of
ownership with the county clerk.
These title companies also search all available records for liens or judgments
against the property, such as loans and liens filed against the seller by builders,
service companies, and even neighbors who dispute a fence line, for example.
The object is to uncover any officially recorded claim that might come back to
haunt you as a new owner after the sale.
Title companies issue an insurance policy, saying, in effect, that except for
certain exceptions, which they are willing to name, they will defend your title
against others who might try to threaten your ownership. This policy generally is
paid for by the seller, at a price based on the price you pay for the property.
Selling commission, too, is almost always paid to the real estate agency by the
seller. As a buyer, you will have much more modest closing costs. These may
include half of the cost of preparing documents, all of the costs of securing a
mortgage, and any unusual services you specify that are not usually necessary
to close a transaction.
Before the time of closing, you will receive a detailed estimate of all costs you will
be expected to pay, and you will have an opportunity to ask any questions that
may occur to you. Your real estate agent can help you to be sure that you
understand the charges, and that you are being treated fairly.
Home Protection Plan
Some sellers provide a Home Protection Plan for the buyer that covers certain
items for a one-year period like:
Heating and air conditioning systems
Electric pool equipment
If a Home Protection Plan is not provided on the home you contract for, you can
acquire the coverage yourself. The price of programs will vary in price and
coverage and among carriers.
Usually, the seller will provide a property disclosure for interested buyers prior to
writing a contract. This will declare the material facts about the physical
condition of the property.
The property disclosure does not take the place of a buyer’s inspection that is
usually made after a contract is completed.
A provision for a home inspection can be added to the sales contract identifying
the areas to be inspected by a professional inspector. The purpose of the
inspection is to find major defects in the home.
The areas of concern include but not limited to:
Mechanical – heating, air-conditioning, appliances.
Plumbing – fixtures, lines, water heaters, sewers.
Electrical – wiring, out of date systems.
Structural – doors, windows, roof, foundation, drainage, ventilation, and
I will be happy to supply a list of recommended inspectors. You are encouraged
to accompany the inspector to ask questions and receive a written report
itemizing any areas of concern.
Home Inspection Services
ERRORS & LIABILITY
FIRM OMISSIONS CERTIFIED