A Guide to Home Buying
OUR PROMISE
A FIVE STAR EXPERIENCE YOU WILL ALWAYS REMEMBER
Meet Nikki
Real estate is a family passion. Growing up with a father who is a builder and a mother who is a real estate agent, Nikki always wanted to be in real estate. In her near decade career, she has helped hundreds of clients buy their dream home and/or sell their existing one. Nikki has partnered with Property Collective and has the best technology and intelligence available to agents. Nikki has sold over $500 million in real estate throughout the DC Metro area. In 2018, 2019, and 2022 Northern VA magazine named her Best Realtor and Top Producer. She was also named in The Washingtonian as 100 Best Agents in the DC Metro area for 2019 and 2020.
Nikki still studies the market every day and knows the average sold time, average list prices, and days on market, enabling her to follow market trends. Nikki has direct insights and personal experience with Northern Virginia real estate because she lives here with her family – Brad, Dorian, and Layne. In addition to Nikki’s extensive knowledge, she makes the home selling process enjoyable, ensuring each client has a personal touch. With documents and information detailing all aspects of the sale, clients can be confident that everything will be properly handled. They are well informed and often get a response within minutes. There is no sales tactic or pressure, only education and honest guidance.
Nikki is more than an agent, she is an ally.
Sales Process Timeline
Understanding the overall process and major milestones of your transaction will go a long way in helping you to feel confident in your purchase.
Pre-approval
Work with a trusted lending professional to get fully approved
Home Search
Work with your agent to locate your next home
Negotiations
Work with your agent to negotiate the terms of the purchase for your home
Inspections
If you negotiated inspections into your contract you may have the home inspected by qualified professionals
Appraisal
A licensed appraiser will inspect the property to provide an unbiased opinion of value to your lender
In Escrow Negotiation
Depending on the appraiser’s opinion of value and inspection findings (if applicable) you may further negotiate the terms of your purchase agreement
Contingency Removals
Once you have verified your desire and ability to purchase, you will remove your contract contingencies
Docs to Title
You lender will generate necessary loan documents and deliver them to your title company
Signing / Closing
All buyers and sellers will sign legal documents for the transfer of ownership; buyers will also sign loan commitment documents. It’s common for keys to be delivered at this time.
Funding
After the lender has reviewed and approved all signed documents they will send funds to escrow to finance your purchase.
Release to Record
Once all necessary documents are signed and funds are collected the title company will request that the county officially record the transfer of ownership for your property.
Recording
Once the county officially records the transfer of ownership, you will have completed your home purchase… CONGRATULATIONS!
Closing Costs 101
APPRAISAL: Home appraisals can cost $400 to $600 depending on the subject property. If you pay for the home appraisal at time of service, it will not be included in your closing costs.
INSPECTIONS: Home inspections are typically paid for at time of service directly to the inspector professional, and are not included in closing costs. The cost for inspections varies depending upon the types of inspections performed and the subject property. The overall cost for inspections generally falls between $400 and $700.
EARNEST MONEY DEPOSIT (EMD): Most likely, you will pay an earnest money deposit when your offer is accepted by the seller. Earnest money deposit amounts are negotiable and typically fall between 1% and 2% of the purchase price. The amount you’ve paid in earnest money will be subtracted from your down payment, reducing the total amount you owe at closing.
LOAN ORIGINATION FEE: Your lender may charge you a fee for creating your loan. Not every lender will charge you an origination fee. Be diligent in understanding the fees your lender charges. Ask what their fee covers and if it’s negotiable.
LOAN PROCESSING FEE: Lenders may also charge a fee for processing your loan. This fee covers any additional costs incurred for underwriting or services performed to finalize your loan. Again, ask your lender what the fee covers and if it is negotiable.
LOAN DISCOUNT POINTS: If you purchased points to lower your interest rate, you will pay a one-time fee for them at closing. A discount point can lower your interest rate by 0.25% to 0.5% and, just like interest rates, the price of points changes daily.
PRIVATE MORTGAGE INSURANCE (PMI): PMI is generally required if your down payment is less than 20% of the home’s value. FHA and VA loans may also require you to pay an upfront fee for private mortgage insurance at closing in exchange for allowing you to have a lower down payment. PMI is typically included as part of your monthly loan payment. However, some loans will allow you to pay your PMI upfront as a one-time fee at closing. It’s up to you to decide if you want to pay more at closing or higher monthly mortgage payments.
HOMEOWNERS ASSOCIATION DUES (HOA DUES): If the subject property is located in a HOA community, you will pay one month’s dues upfront at closing. Homeowners association dues vary by property and generally cover maintenance fees and operations costs.
ADDITIONAL HOA COSTS: Some HOA’s may also charge document preparation fees and homeowner transfer fees. The costs of these fees very widely and are set by the HOA.
HOMEOWNERS INSURANCE: Your Homeowners Insurance premium for the year may be included in your closing costs. The cost will vary depending on the subject property.
PROPERTY TAXES: You will pay a portion of your annual property taxes upfront at closing. The amount you’re billed will be calculated based upon what portion of the current year you will own the subject property.
TITLE INSURANCE: Title insurance is a one-time fee paid as part of your closing costs. As the home buyer, it’s common for you to pay for the lenders title policy in addition to your own “owner’s policy.”
Think Like a Seller
AND WIN IN A COMPETITIVE MARKET
GET APPROVED:
KNOW THE STATS:
HAVE SKIN IN THE GAME:
MAKE IT EASY:
BE FLEXIBLE:
BE GENEROUS:
Tips fo a Stress Free Purchase
SECRET TRICKS OF THE TRADE
STEP O1: LAY THE GROUNDWORK
Collect financial docs, such as bank statements, tax returns, pay stubs, etc. and avoid big purchases until you’ve met with a mortgage professional. Adding to your monthly payments can affect your ability to get a loan. If you can, start saving as early as possible to ensure you have adequate funds for a down payment and moving expenses. These steps will make your loan application process much easier.
STEP 02: WORK WITH A TRUSTED REAL ESTATE PROFESSIONAL
Nikki and her team will guide you through the process and make sure you are informed every step of the way. In almost all circumstances, the seller pays the real estate commission for both their own agent and the buyer’s agent. This means you get to reap the benefits of working with an agent for no out-of-pocket expense. Whether it’s finding the best mortgage broker or helping you negotiate through a multiple offer situation, your agent will be there to help you win.
STEP 03: COMMUNICATE EFFECTIVELY
Ask questions. If something in your contract seems confusing, ask about it before you sign. You don’t want to have questions after you’ve committed. Pick a STEP communication method since there will be a lot of back and forth between you and the team. Finally, be direct with your team and don’t hesitate to speak up if you don’t like something. Our goal is to please.
STEP 04: BE PATIENT, PERSISTENT AND DECISIVE
Buying a home is an important decision. You have to balance patience with your ability to be decisive when you find the right home. Depending on market conditions, your first offer may not get accepted but be persistent. Trust your intuition when you’ve found the right house and go for it.
STEP 05: BE FLEXIBLE
Remember, you can always update your home, the neighborhood may change in a few years, or you may decide to move again, so this might not be your final home. Besides your financial capabilities, almost everything else is beyond your control so be flexible with the process.
How to Kill Your Deal in 10 Easy Ways
01
CHANGE JOBS IN THE MIDDLE OF ESCROW
If you change companies, become self- employed, or quit your job, you’ll likely be throwing up red flags to your lender that your employment is not stable. This can be a huge concern for underwriters and could ultimately lead to your loan approval being withdrawn, and you losing your ability to purchase your next home.
02
GET A BRAND NEW CAR TO GO WITH YOUR NEW HOUSE
One of the primary factors considered by your lender is your debt-to-income ratio, meaning the percent of your total income that is allocated towards your monthly bills. Adding a car payment to that calculation may push your ratio to a place that increases your interest rate or even causes your approval to be withdrawn completely.
03
GO ON A CREDIT CARD SPENDING SPREE(OR MISS A PAYMENT)
Remember, the underwriter’s job is to evaluate you as a borrower and determine your credit worthiness. If you overspend or miss a payment, two negative outcomes can occur. 1) The increase to your monthly credit card bill can adversely affect your debt to income ratio. 2) The underwriter can infer that you are likely to not be consistent in paying your mortgage in full and on time. Either event may cause your rate to be increased or your approval to be withdrawn.
04
SPEND THE MONEY YOU HAVE SET ASIDE FOR YOUR DOWN PAYMENT OR CLOSING COSTS
We get it. Buying a new home is incredibly exciting, and you probably can’t wait to start decorating. Just keep in mind, if you dip into your savings too much, you may not have enough left at the end of your transaction to cover your cash to close – that is the balance due on your down payment and your closing costs. If you don’t the funds required to close, you will lose your new home entirely.
05
FORGET TO MENTION DEBTS TO YOUR LENDER
While it can be tempting to leave out the less flattering details of your financial situation, doing so will only result in problems down the road. This could potentially cause you to lose your financing and your new home.
06
BUY FURNITURE ON CREDIT
It’s easy to be tempted by those no payments and no interest special sales offered by the big box furniture stores when you’re planning out how you will live in your new home. Caving to the pressure is not a good idea! Even though you won’t technically have payments due for a year or more, the underwriter will still include that debt in your debt to income ratio which could impact your interest rate or cause your lender to withdraw your approval altogether.
07
MAKE LARGE DEPOSITS WITHOUT FIRST SPEAKING WITH YOUR LOAN OFFICER
This one is tricky! It may seem like having more money in your account should always be a good thing, but you will need to source any and all unusual deposits made on the bank statements you provide to your lender. If you’re not able to adequately document where the deposit is coming from and why you received the funds it could jeopardize your loan approval. Always talk to your loan officer before making any unusual deposits.
08
ALLOW YOUR CREDIT TO BE PULLED
Having your credit pulled can lower your credit score and it indicates to the underwriter that you may plan to take on additional debt, which makes you look like a potential credit risk. Don’t do it.
09
CHANGE BANK ACCOUNTS
It may seem like a simple enough change, but you need to provide 60 days worth of bank statements to the lender as part of the approval process in order for your lender to verify your funds. If you have a brand new bank account that’s going to be impossible and it could easily cause delays in your approval or closing.
10
CO-SIGN ON A LOAN
By co-signing on a loan, you are personally guaranteeing that debt will be paid back which means it will impact your debt to income ratio. What’s worse is that if the person you co-signed for has a late payment it will negatively impact your credit score, potentially preventing you from qualifying for your mortgage.
Crafting a Winning Offer
01 – SALES PRICE
The offer price will ultimately be determined based on what you feel the home is worth an amount that you are comfortable paying based on the information we provide you. We’ll run a cross analysis of properties comparable to the home that you decided on and base our assessment off that. When competing with other offers, it’s often necessary to go above the sale price. A helpful way to land on your maximum price point is to ask yourself: “What amount would I be comfortable with in a losing bid if the winning bid were $1 higher?”
02 – ESCALATION
If a bidding war is likely, we can explore adding an escalation clause that would permit us to go up in price to present a more compelling offer. In such a situation, you will decide the maximum amount above the listing price that you are willing to pay, and we will incrementally escalate the next best offer price during the negotiation. The main benefit with this approach is that the price is increased only if there is another offer placed that is higher than ours.
03 – EARNEST MONEY DEPOSIT
The EMD goes into an escrow account at the title company until settlement, at which time it is credited back to you and can be used towards your down payment, or refunded. The EMD is required to make any contract binding. The market average in the DMV is 3- 5%, however the larger the EMD the more security the seller has that you will move forward to settlement. In our experience this is an easy and free way to leverage having liquidity to give you an advantage the negotiation.
04 – FINANCING
Adding a financing contingency to your contract does cause pause for many sellers, and can make or break an offer. We will be working with your lender to get you fully approved, with all of your documents reviewed and your credit reviewed prior to submitting your offer. If you need to add a financing contingency because of your personal circumstances, the shorter the contingency the more compelling your offer will be.
Note: Oftentimes, larger banks need more time to work through loan approval, as they work with several 3rd party vendors throughout the lending process. This can be detrimental in the offer process since the seller is looking for the most concrete offer and extended contingencies can make them very nervous. Additionally, the lack of speed can be extremely stressful for the purchaser as we work through the waiting game of approval. This is why we recommend using our preferred lender.
05 – APPRAISAL CONTINGENCY
In the event the appraisal comes in lower than the sales price, the purchaser would pay the difference between the appraised value and the contract price. An appraisal contingency gives you the right to negotiate with the seller to potentially pay a part of or all of the difference, however, if you add this contingency and another buyer does not, often the seller will favor the certainty associated with their contract. Make sure to discuss the impact of a deficit in the appraised value with your lender and agent.
O6 – SETTLEMENT DATE
We will find out what time frame is preferred by the seller before submitting an offer, and we will want to do everything in our power to ensure you are getting a timeframe that works for you and the seller is also pleased with the closing time frame. A 21 to 30-day close is what we see most in this market, although every seller is different so time frames can be anywhere from 15-90 days.
07 – POST SETTLEMENT OCCUPANCY
Sometimes, a seller will request a rent back – this can be a very compelling tactic because many agents do not ask the right questions to determine if this will be helpful for the seller and can really set your offer apart. The reason it can be very compelling is because if the seller needs to purchase another home after the closing they can have a window where they have the proceeds from the sale to purchase
their next home without the stress and concern that something may go wrong. Please discuss this with your agent in more detail.
08 – HOME INSPECTION
There are several different ways to handle the home inspection. There are many strategic options to consider. The range is from adding a contingency to the offer for a select number of days. In our market, the buyer is able to back out of the contract for any reason, so even when nothing is wrong with the house, it still gives the seller an uneasy feeling until all contingencies are lifted. In our experience, if another offer is written where the buyer does not add the home inspection contingency or does an informational inspection but accepts the home in AS/IS condition, the seller will almost always counter that offer or accept it first. Please discuss your options in detail with your agent.
09 – LOVE LETTER
We know it sounds corny, but trust us, it works. Write a personalized letter to the seller telling 09 them why you were drawn to their home and how you can see yourself living there for years to come. Attach a picture of the family and include it with the offer..
10 – THE HOME WARRANTY
The home warranty covers all appliances and major systems for the first year. It costs about $600 and is rolled into your closing costs. I strongly suggest purchasing this warranty for the added piece of mind.
What to Expect Financially
PERCENTAGES ARE BASED ON SALES PRICE OF PROPERTY
Down Payment: 3% – 20%
Earnest Money: 2% – 5%
Home Inspection: $350 – $750
Appraisal: $600
Closings Costs: 2.5% – 3%
Priority Access Program
ACCESS TO HOMES NOT AVAILABLE ANYWHERE ELSE
Off Market Homes
Agent Network
Circle Prospecting
Geofencing
Targeted Marketing Letters
Real Estate Terminology
UNDERSTANDING THE LINGO
ADJUSTABLE RATE MORTGAGE (ARM)
The interest rate is tied to a financial index making the monthly mortgage payment go up or down over time.
ANNUAL PERCENTAGE RATE (APR)
The percent of interest that will be charged on a home loan.
APPRAISAL
A report highlighting the estimated value of the property completed by a qualified 3rd party. This is typically done for the benefit of the buyer or the buyer’s lender to ensure the property is worth the purchase price.
ASSOCIATE FEE/HOA FEE
In addition to a mortgage, certain housing communities (such as town homes) have a monthly fee associated with maintaining the common areas and amenities.
BALLOON MORTGAGE
A long-term mortgage loan that starts out with small installments due but has a large lump-sum payment due at maturity.
CLOSING
When the new title to the property is officially recorded by the County Recorder’s Office and ownership of the property transfers to the new buyer.
CLOSING COSTS
The buyer and seller have expenses associated with the transaction other than that of the actual cost of the home. For example, the buyer has a variety of fees due for obtaining a new loan and the seller must pay commisions for both agents.
CLOSING DISCLOSURE
A form that provides the final details about the mortgage loan. It includes loan terms, projected monthly payments, and how much the additional closing costs amount to.
COLLATERAL
Something of value (in this case your home) that is held to ensure repayment of a loan or mortgage.
COMMISSION
A percent of the sale price of the home that is paid to agents. The seller traditionally pays commission for both the buyer and listing agents.
COMPARABLES
Homes in the area of interest with similar features that have recently sold.
CONTINGENCIES
Conditions which must be met in order to close. Contingencies are typically tied to a date, referred to as a deadline. If the contingency is not satisfied the contract may be cancelled.
COUNTER OFFER
The conditional acceptance of an offer that is subject to the other party’s agreement to additional conditions or adjustments.
DEBT TO INCOME RATION(DTI)
A lender will evaluate whether a borrower’s income is large enough to handle their payments on existing debts plus their new mortgage payments by determining what percent of their income is necessary to cover all such payments on a monthly basis.
DOWN PAYMENT
A percent of the price of the property that is paid up front as part of the mortgage.
EARNEST MONEY DEPOSIT
The deposit made from the buyer to the seller when submitting an offer. This deposit is typically held in trust by a third party escrow company. Upon closing, the money will generally be applied to the down payment or closing costs.
ESCROW
This term has multiple meanings. It can reference the neutral third party charged with holding funds, or “escrow company.” It can also reference the period of time from when the contract is accepted by the seller to when the home sale actually closes.
EQUITY
The difference in the market value of a home versus the debt owed on the property’s mortgage.
FHA
A mortgage that is financed through a private lender and insured by the Federal Housing Administration, often requiring a lower down payment and income to qualify than conventional financing.
FIXED RATE
The interest rate will remain the same for the entire life of the mortgage.
HOME EQUITY LINE OF CREDIT (HELOC)
A loan or line of credit that your lender may offer using the equity in your home as collateral.
HOME INSPECTION
The process in which a professional inspects the seller’s home for issues that may not be readily apparent, and then creates a report for the buyer to review.
HOME WARRANTY
A one-year service that covers the cost of repairs or replacement for items covered in the chosen plan minus the applicable service call fee. These types of plans often cover major appliances and systems in the home, such as stoves, dishwashers, air conditioners, heaters, etc.
HYBRID
A loan that starts with a fixed rate period, then converts to an adjustable rate.
MORTGAGE INSURANCE
Insurance written in connection with a mortgage loan that protects the lender in the event the borrower cannot repay their loan. This is typically required in cases where the borrower is putting less than 20% down.
MORTGAGE NOTE
A promise to pay a sum of money at a standard interest rate during a specefic term that is secured by a mortgage.
MULTIPLE LISTING SERVICE (MLS)
The national list of real estate properties that are available for sale. These are the most reliable sources to receive up-to- date listing information.
PRE-APPROVAL
The process in which a lender makes an initial evaluation of how much money a buyer might be qualified to borrow based on the preliminary financial information provided. This gives the seller more confidence in the buyer’s ability to close escrow, but is not a guarantee that the loan will be approved.
PRINCIPAL
The underlying amount of the loan which is actually borrowed.
PROPERTY TAXES
These are the taxes that are enforced by the city, town, county, and state government entities.
Sometimes they are included in the total monthly mortgage payment paid to the lender and sometimes they are paid directly by the home owner.
REO
Real estate owned proprieties or foreclosed properties currently owned by a financial institution such as the bank that made the loan to the previous owner.
REVERSE MORTGAGE
This is specifically for seniors and it allows them to convert the equity in their home to cash.
SHORT SALE
A situation when the home’s market value is less than the mortgage owed and the seller’s lender is willing to accept an offer and allows a sale to be completed for an amount less than the mortgage owed by the seller.
TITLE
A legal document proving current and proper ownership of the property. Also referred to as a Title Deed, this document highlights the history of property ownership and transfers.
UNDERWRITING
The process in which the potential home buyer is evaluated for their financial ability to obtain and repay a loan. This normally includes a credit check and an appraisal of the property.
VA LOAN
Special no down payment loans that are available to Americans who have served in the Armed Forces. These loans are issued by private lenders and are guaranteed by the Department of Veterans Affairs.
Happy Clients
If you are looking for an agent who is honest and has integrity, Nikki is the agent for you. Not only does she have knowledge of the purchase and real estate process but her negotiation skills are what won me the home of my dreams, and on the first try might I add.
Nikki is a great communicator and was very helpful guiding me through the buying process, especially since I was a first time home buyer. I felt as though she always had my best interests at heart and managed my expectations very clearly.
BOUGHT A HOME IN RESTON, VA
This was our first home purchase and we didn’t know what we didn’t know. She educated us in advance about all the crucial steps and decision points. As someone who likes to plan, I really appreciated her strategic and proactive nature. She was always available and brought positive energy and great ideas to every interaction.
Nikki also brought a great team with her, including our
mortgage broker, title company and home inspector. Her coordination ensured things went very smoothly. They say buying a home is stressful, but with her help it was a seamless and rewarding experience.
BOUGHT A HOME IN BRAMBLETON, VA
Nikki was so helpful throughout the entire process. As soon as we met her we knew that she was going to be the key to finding our dream first home. She was very responsive whenever we had a question, and worked so hard to secure us our house once we felt we saw the right one. She worked through the weekend and a family party to negotiate with the other realtor, and we are eternally grateful for her persistence. I have already recommended Nikki to all of our friends, and will continue to recommend her to anyone who asks.
BOUGHT A HOME IN RESTON, VA
Nikki is a great agent. She is very patient (especially since initially I started with her about a year ago and decided to postpone purchasing to next year). Also, she gave me all the good advice throughout looking for properties and purchasing phase. She studied
my likes and dislikes and later on she knew which one I would like and which ones I wouldn’t. I highly recommend her to anyone.
BOUGHT A HOME IN MCLEAN, VA
Nikki was fantastic to work with! As a first timer (during a pandemic, nonetheless), I was unfamiliar with the process of buying a home. I had a number of random questions and concerns which Nikki was willing to answer. She was very responsive throughout the whole
process, took the time to get to know me, kept me informed, as well as catered the home search to what I was looking for. I 100% recommend working with her, you will not be disappointed!
BOUGHT A HOME IN STERLING, VA
If you’re moving to Northern Virginia, you’re doing yourself a disservice if you don’t take Nikki on as your realtor. Nikki made my home-buying experience easy and stress-free from start to finish. Once you tell her what you’re looking for in a home, she can take it from there. Her responsiveness to my first-time home buying questions, her dedication to my happiness, and her expert-level knowledge of the Northern Virginia housing market were utterly impressive. Nikki is a the highest tier of professional and you can trust her wholeheartedly to get your deal done.
BOUGHT A HOME IN HERNDON, VA
Nikki’s Passion Project
Nikki is proud to be the founding Community Partner to The Friends of The Fairfax County Animal Shelter. This organization is a 501(c)(3) nonprofit fundraising partner of the Fairfax County Animal Shelter and funds important needs beyond what the shelter can provide.
She contributes financial support for animals in need to pay for necessary medical care. Ensuring these animals receive the best possible care also offers them the best opportunity to find a loving forever home.
In addition to her financial contributions, Nikki has also opened her home and serves as a foster pet parent for NOVA Pets Alive, an organization dedicated to helping animals most at-risk of euthanasia.
Nikki is committed to continuing to serve these animals in need just as fervently as she does her real estate clients because everyone deserves a place to call home.