BEFORE BUYING A NEW HOME FOLLOW THIS

2. Determine a realistic price range. Your mortgage lender can determine in a matter of minutes how muchof a loan you can pre-qualify for, depending upon your income and debts. With these numbers in hand, you can begin looking at homes that are in your budget.
3. Select a Realtor.   Normally, it is best to select a Realtor that has been referred to you by a trusted source. Working with one person that fits your personality and listens to your home needs will help assure positive results. You also want a Realtor that has experience in your area of interest, and can tell you about any non-obvious factors that may affect the value or future marketability of the home you are interested in purchasing.
(We have several experienced Realtors that give great service - feel free to contact us for a referral.)
4. View a variety of homes and neighborhoods. Don‘t be discouraged if you don‘t find the right home the
first day. Also remember that love at first sight can apply to homes, too.
5. Select the home for you and make an offer to the seller on an earnest money contract. Your Realtor will prepare the contract and review it with you. When both parties have agreed to all terms in writing, you are on your way to home ownership!
6. Select your loan program and lock in your interest rate. You need to make sure you have selected a
loan program that you understand, and one that has been tailored to fit your financial wants and needs. Also,
the interest rates move everyday, sometimes several times per day — depending on the volatility of the market.
Once you have selected a loan program that you are pre—approved for, you should consider locking in the rate to avoid upward movement.
7. Arrange for a home inspection by a Licensed Real Estate Inspector. Have a licensed pest inspector check the home for termites. Both should provide written reports upon inspection completion.
8. Arrange for Hazard Insurance (Homeowner's Insurance). It is best to have this done at least 1 — 2 weeks prior to your closing to give the insurance company plenty of time to put a quote together.
9. Consider a home warranty plan. Home warranty companies will, upon failure of eligible systems and
components of your home, provide for repair or replacement. These plans are effective for one year from the
closing date. They can be part of the contract negotiations (to be purchased by either the buyer or the seller).
10. Plan your move well ahead of time. Contact utility companies in advance, and if you are currently
renting, give your landlord atleast 30 days notice before vacating. Depending on your rental agreement, you
may be required to give further advance notice.
11. Enjoy your new home. Homeownership is the American dream. By planning ahead, getting involved and
staying informed, you can start building on that dream today.

1. Get Pre-approved for a maximum purchase price before looking at any homes.

The last thing that
you want to happen is to find your dream home, then make an offer that is accepted — only to find out that
there is some error on your credit report that will take more time to correct than allowed by the contract sale
date. You want to start looking for homes with the assurance that you are already pre-approved to buy at a
certain price limit, so you can negotiate with confidence. Also, many Sellers won't accept an offer from a Buyer
that has not already been pre-approved, and you can easily lose a home that is in demand when you have to
get pre-approved and other buyers that are interested are already preapproved and ready to buy.

Buying Your First Home

Buying your first home can and should be a fun, exciting experience.

It will probably also be the single largest investment you ever make. For this
reason, it is important to be involved and informed.

The series of steps in the next pages can help eliminate much of the guesswork and make
you a much more informed buyer, so that your home purchase can be a joyful
experience.

Mass appraisal and automated valuation models

Mass Automated valuation models (AVMs) are growing in acceptance. These rely on statistical models such as multiple regression analysis or geographic information systems (GIS). While AVMs can be quite accurate, particularly when used in a very homogeneous area, there is also evidence that AVMs are not accurate in other instances such as when they are used in rural areas, or when the appraised property does not conform well to the neighborhood. AVM's have also gained favor in class action litigation, and have been substantiated in numerous cases, both in Federal and state courts, as the appropriate method for dealing with large-scale real estate litigation problems, such as contaminated neighborhoods and automated valuation models

Types of ownership interest

Implicit in the analysis of the subject property is a determination of the interest in the property being appraised. For most common situations (e.g. -- mortgage finance) the fee simple interest is explicitly assumed since it is the most complete bundle of rights available. However, in many situations, and in many societies which do not follow English Common Law or the Napoleanic Code, some other interest may be more common. While there are many different possible interests in real estate, the three most common are:

• Fee simple value (known in the UK as freehold) - The most complete ownership in real estate, subject in common law countries to the powers reserved to the state (taxation, escheat, eminent domain, and police power)

• Leased fee value - This is simply the fee simple interest encumbered by a lease. If the lease is at market rent, then the leased fee value and the fee simple value are equal. However, if the tenant pays more or less than market, the residual owned by the leased fee holder, plus the market value of the tenancy, may be more or less than the fee simple value.

• Leasehold value - The interest held by a tenant. If the tenant pays market rent, then the leasehold has no market value. However, if the tenant pays less than market, the difference betweent the present value of what is paid and the present value of market rents would be a positive leasehold value. For example, a major chain retailer may be able to negotiate a below-market lease to serve as the anchor tenant for a shopping center. This leasehold value may be transferrable to another anchor tenant, and if so the retail tenant has a positive interest in the real estate.

Highest and best use

Highest and Best Use (HABU) is a term of art in the appraisal process. It is a process to determine the use of the property which produces the highest value for the land, as if vacant. There are four steps to the process. First, the appraiser determines all uses which are legally permissible for the property. Second, of the uses which are legally permissible, which ones are physically possible. Of those, which ones are financially feasible (sometimes referred to as economically supported). Of those uses which are feasible, which one and only use is maximally productive for the site. In a simple context, the appraiser must do this twice, comparing the results—as if the land is vacant and in the as-is-improved state, taking into account the costs of demolishing any existing improvements. The outcome of this process is the highest and best use for the site. An appraisal of market value must explicitly assume that the owner or buyer would employ the property in its highest and best use, and therefore value the site accordingly.

In more complex appraisal assignments (e.g. -- contract disputes, litigation, brownfield or contaminated property valuation), the determination of highest and best use may be much more complex, and may need to take into account the various intermediate or temporary uses of the site, the contamination remediation process, and the timing of various legal issues.

Scope of work

Scope of work

While USPAP has always required appraisers to identify the scope of work needed to produce credible results, it became clear in recent years that appraisers did not fully understand the process for developing this adequately. In formulating the scope of work for a credible appraisal, the concept of a limited versus complete appraisal and the use of the Departure Rule caused confusion to clients, appraisers, and appraisal reviewers. In order to deal with this, USPAP was updated in 2006 with what came to be known as the Scope of Work project. In short, USPAP eliminated the Departure Rule and the concept of a limited appraisal and created a new Scope of Work rule. In this, appraisers were to identify six key parts of the appraisal problem at the beginning of each assignment:

• Client and other intended users
• Intended use of the appraisal and appraisal report
• Definition of value (e.g. -- market, foreclosure, investment)
• Any hypothetical conditions or extraordinary assumptions
• The effective date of the appraisal analysis
• The salient features of the subject property

Based on these factors, the appraiser must identify the scope of work needed, including the methodologies to be used, the extent of investigation, and the applicable approaches to value. The rule provided the explicit requirement that the minimum standards for scope of work were:

• Expectations of the client and other users
• The actions of the appraiser's peers who carry out similar assignments

The Scope of Work is the first step in any appraisal process. Without a strictly defined Scope of Work an appraisal's conclusions may not be viable. By defining the Scope of Work an appraiser can begin to actually develop a value for a given property for the intended user, which is the intended use of the appraisal.