Real Estate 101


Getting Pre-approved

This is the process of providing your financial information and overall personal profile to a lender for the sake of getting a pre-approval letter, so that you can go out and shop for a new home. The pre-approval process, should allow for the lender to pull your credit and analyze your financial picture to determine how much home you may or may not qualify to purchase. The process will also allow for a lender to give figures for monthly payments, down payment options and overall general interest rates. Getting a pre-approval letter is the starting place for shopping for a home, since it allows your real estate agent to show you homes that you qualify for and helps you provide valuable insight to your real estate agent on your loan needs.
Once you are pre-approved, you will be provided with a pre-approval letter that allows you to go out and shop for homes. this letter is usually provided to the seller when writing an offer to show them your credit worthiness. If you decide to shop for houses without this letter, you may find yourself up against other buyers who are pre-approved and could possibly lose your dream home because of it.

Finding the House 

When looking for a house, decide what is important…


Ranch – one level living – kitchen, living and dining rooms and all bedrooms.
1.5 Story – one bedroom on the main level, all other bedrooms are on the second or lower levels
2 Story – all bedrooms are on the second level
Side to Side Split – multi level living, bedrooms are usually on the top level.

Location, Location, Location
It’s the most important factor when buying a home and it’s something to keep in mind when reselling the house.

The Real Estate Transaction

Finding the house
Negotiating the price
Conducting inspections
Resolving the unacceptable conditions per the inspections
Loan approval

Finding the house is your first hurdle. Once you find the house you’ll make an offer and negotiate a price between you and the seller. You now have 10 days to conduct inspections with a licensed home inspector. If there are issues that need to be repaired or replaced then you can asked the seller to do so… sometimes they will and sometimes they won’t and remember to only focus on the safety issues. Once you and the seller have signed off on the inspections your lender will order the appraisal. The house must appraise for the purchase price. After the appraisal is completed the loan will go through the underwriting process for closing.

Who Pays the Commission?

The seller pays the commission for your real estate agent. There may be a fixed commission that you pay (Better Homes charges $210.00 to every buyer and seller in a real estate transaction) but that is the only cost to you to buy a house.

Please Keep This In Mind…

Your real estate agent is a independent contractor. Even though they are working for a real estate brokerage, i.e., Better Homes and Gardens, Reece and Nichols, ReMax, etc., your agent is not compensated until you have closed on your house. Please be courteous and respectful of your agent and the time and efforts they spend to find you a home!

Buyers Agent

The buyers agent works exclusively for the buyer; is entrusted with the responsibility of representing the buyer’s interest during the home buying process. The buyers agent will:

Help you find the fight home to match your needs.
Explain finance options and help you place your loan.
Provide you with information about the home and community.
Respond accurately and honestly to your questions.
Disclose material defects about the home.
Discuss types of insurance that are required.
Prepare a Competitive Market Analysis on comparable properties.
Council you on what price to offer the seller.
Present your offer to the seller.
Negotiate for your offer and counteroffers.
Represent you in the purchase of unlisted properties.

Buyers Agency

Document signed by both you and your agent to protect both parties and insure your agent is working for you exclusively.

Helpful Hints When Applying For A Loan

Pat Gormly with Fairway Mortgage has provided me with a list of DO’s and DON’Ts when applying for a mortgage.  As you know getting pre-approved is the most important step when starting the home buying process.

Pat has been in the mortgage lending business for over 12 years and prides himself in providing stellar customer service, a wide variety of financial options, and the ability to have your loan processed and underwritten locally.

Dos and Don’t

To contact Pat go to

or apply online at

The best money you will spend when buying a house is the cost of the inspections.

     Once a real estate contract has been signed by both parties the buyer has 10 days to conduct inspections. The inspections will cover the following items: roof, exterior walls and gutters, porches, steps and decks, electrical service, air conditioning, water heater, heating system, plumbing, basement, bathrooms, kitchen, attic interior, fireplace, and the garage. The inspection will cost between $300.00 and $550.00 and more if you want a structural engineer. Termite inspections are required by the lender and cost approximately $75.00 and many people test for radon and that’s an additional cost.

     Most real estate agents agree that the inspections are the most difficult part of a real estate contract, all of the paperwork and signatures mean nothing until the inspections have been completed and both parties have agreed on the resolutions of the inspection process.

Here are some tips to for a successful inspection:

Don’t ask for everything to be fixed that the inspection report says is wrong with the house, NO HOUSE IS PERFECT.

Focus on the safety issues; the roof has to be in good shape or you could have problems insuring the house. The furnace is in good working condition and no cracks in the heat exchanger.  The water heater is installed and vented correctly.  No movement in the foundation and the electrical has been updated to at least 100AMP service.

Select a good inspector.  All real estate brokerage have an inspector list with names and telephone numbers of inspectors recommended by their agents.  Your agent should not set up the inspections and should give you more then one name.   Make sure your inspector will work with you and answer your questions during the inspection.  Remember, you’re paying them a lot of money and they should never be rude or unaccommodating throughout the inspection.

When negotiating work to be completed per the inspection don’t loose sight of the goal.  Work with the seller to resolve any issues and don’t get hung up over the little things or an insignificant amount of money.  Too many times buyers will have unrealistic expectations about what should be repaired or price reduction in lieu of repairs so be careful, the seller has a bottom line and sometimes there is only so much they can do, be respectful and again… focus on the safety issues.

As a last resort, if you’re unable to successfully negotiate your inspections you can cancel the contract and retrieve your earnest money deposit.

Good luck with your inspections and you can contact me at with any questions.

Choosing an Agent

Be smart when choosing a real estate agent. I know it’s important to support your friends and family when making a decision about what real estate agent to hire but do they have the experience and are they knowledgeable about the area you want to live?

Interview your agent. How many homes do they sell a year? Do they sell real estate full time or are they a part-time agent. If you’re buying a condominium, do they have experience with condominium purchases? If you’re buying an old house, what do they know about old houses? What areas of Kansas City do they you sell in? If you’re selling your house, what kinds of marketing are they going to do to sell your house?

And asked for references, this is becoming more and more common for buyers and sellers to request references before making a decision.

Buying a house is the biggest purchase most people will make in their life, so make a smart decision with hiring your agent and do your research.

Buyers Beware


Tips on Selling your home



%d bloggers like this: