Home Purchasing Information
HOME PURCHASING INFORMATION
Home Inspection Checklist (Download PDF File)
Housing Services are located in Community Services Center, Building 470, Room 1215, at the corner of Constitution and Replacement Avenues.
You must report to HSO prior to making any housing arrangement. HSO will provide you with information and guidance on housing in the community, including a list of facilities off limits. Approval to reside off post cannot be issued until you have officially processed into the installation. Personnel with permissive TDY for house hunting must, upon arrival at Fort Leonard Wood, present DA Form 31 for validation. Failure to do so could result in your house hunting time being charged as leave.
Some utility companies waive the deposit for permanent party personnel assigned to Fort Leonard Wood. HSO will provide you with a list of these companies. However if you participate in this program, you will be required to either make deposit or close out your account prior to clearing the installation.
First Time Home Buyer's Guide:
Homeowners Assistance Program (HAP)
READ THIS BEFORE YOU CONSIDER PURCHASING A HOME.
Keep in mind that while there are many organizations, both business and professional, that can assist you; the burden of assuring the quality of the house is the responsibility of you, the prospective buyer.
Buying a home in rural Missouri is basically no different than anywhere else in the United States. The term "built to code" generally means the structural, plumbing, electrical and heating/cooling components of the home meet an established set of safety and quality standards. The city governments of Waynesville, St. Robert, Richland, Dixon, Crocker, Lebanon and Rolla have all adopted a standardized national building code. However, in this area, homes constructed outside the incorporated city limits are not covered by any code restrictions. In addition, older homes within these towns may have been built prior to the adoption of a code.
One of the most critical conditions to investigate is the sewer system serving the house you are considering, particularly those located outside the city limits. Some homes have individual septic systems, some have lagoons and others have private sewer systems serving several homes. Contact the county health department for assistance in determining if the system meets State requirements.
If you are planning to purchase a home located outside a city's limits, determine who has jurisdiction over road maintenance. For example: is there a financial obligation to a homeowners association; is there a special levy for snow removal and maintenance; or, is the road owned and maintained by the county? Also determine who is responsible for fire and police protection.
Keep in mind that an elaborate or large house is not always an indication of how well it is built. Don't be swayed by what is referred to as "curb appeal", investigate - investigate - investigate.
Some housing developments may have applied for the "Regional Commerce and Growth Association Endorsement". This means they meet the above building criteria. However, other areas and developments, particularly within city limits, may also meet the criteria but have chosen not to apply. Remember, when buying a home, it is your responsibility to ensure your investment is protected.
GUIDE FOR SELECTING AND BUYING A HOME
The decision to buy a home should not be made lightly. For most of us buying a home represents the biggest purchase of a lifetime.
WHAT ARE THE BENEFITS? Owning your own home gives a feeling of belonging in the community. You have more freedom to change the home to suit your taste and needs. Homeowners are eligible for tax advantages that are not available to renters. Houses typically increase in value over time. If you are financing the home, over time you will accumulate equity (value of property over amount owed on the loan) that you may be able to borrow against or regain in cash if you sell the property.
WHAT ARE THE DISADVANTAGES? Home ownership is not for everyone. As a homeowner you cannot move as easily. An economic reversal or slowdown could cause a decline in property values. You will have responsibilities such as repairs and maintenance. You must also pay property taxes, homeownerís insurance, and utilities. If you are not sure you can handle the costs involved you should postpone buying a home.
If you decide to purchase a home you need to consider location, price and your lifestyle. You may be sure about what you want now, but think about the future as you begin your search. If you may be moving in a few years you need to find a house that will appeal to as many future buyers as possible.
WHAT SORT OF HOME DO YOU WANT? You should start by defining your needs. Include other family members in discussing the features you would like in your home. Organize your thoughts by making a list and rate the items in order of importance. How many bedrooms and baths do you need? Do you enjoy cooking? Do you prefer a large eat-in kitchen or do you enjoy formal dining? Do you need space for a computer or sewing room? Do you need a garage and outside storage? Do you enjoy gardening and lawn care or do you prefer a small lawn?
When looking at homes pay attention to floor plans. Changing layouts of rooms can be expensive.
Consider whether your needs are likely to change. Moving can be costly; do not buy just for today.
If you are planning to purchase a mobile home, check with your transportation office. You will need to know limits and restrictions on shipping.
WHERE DO YOU WANT TO LIVE? You may want to drive around neighborhoods and housing developments. See if the homes are visually appealing. Are the residents keeping up lawns? Are the roads kept up? Do the homes need paint? Introduce yourself to any home owners you see outside. Take along a notebook and record any information you obtain along with your impressions. Rate items like proximity to work, schools and shopping.
Keep in mind that changes in the neighborhood could influence the appreciation potential of the houses located there. Try to determine if there are any projects such as new shopping areas, road construction, or school improvements that might affect the future market value of the homes in that area. Inquire about flood zones, toxic sites, septic and water problems. Investigate the quality of the schools by asking about curriculum and statistics. Check crime rates by contacting the local police. Real estate brokers hesitate to give you opinions on schools and neighborhoods because of the human rights law. The law requires brokers to show you as many homes in your price range as possible. You will be the one to set limits.
Having a home built gives you the opportunity to select the right site, position the house as you desire and customize to reflect your taste and personality. Take precautions when you buy your land. Investigate the availability of water, sewer, electric and gas services. If you will use a septic tank, be sure your sales contract will not be binding if the land does not pass a percolation test. The United States Army Corps of Engineers maintains maps that indicate flood-prone areas. The ground slope should allow water to drain away from the house. A long driveway may be expensive to build and maintain and a steep one could be a problem during icy conditions. Consider the climate conditions unique to the property. A wooded area can block northern winds but will also have a higher level of humidity. An area open to the sunís rays will be needed if you are planning to use solar heat. Make sure you will have adequate levels of privacy.
Buying in a development may get you more house for your money. You will usually be able to make some choice as to floor plan, cabinets and carpeting. However, you are dependent on the developer to complete the project as promised.
To research a new community prior to your arrival, subscribe to itís local newspaper and write to the chamber of commerce. Location cannot be changed. Choosing a good community should be one of your primary considerations.
HOW MUCH HOUSE CAN YOU AFFORD? In most cases your home payment will be your largest monthly expense. Lenders usually use the formula that all debts should not exceed 36 percent of monthly income. Monthly costs of home payment plus tax and insurance payments should not exceed 28 percent of gross monthly income. Review your personal credit obligations to avoid overextending yourself financially. Another good check is to compare costs of owning a home to what you are now paying in housing costs.
Buying a home is a business transaction. You may want to seek professional help. Before using a business, check the reputation of the firm. If possible talk to people in the community who have recently used these services. Ask for proof of professional certification or license, about experience and how long the firm has been in business. Learn how the charges will be set, who will be responsible for payment and when payment is due. Remember to ask to whom the professional will report. Services paid by the seller may be compromised by employment obligations.
SHOULD YOU RETAIN A REAL ESTATE BROKER? Most real estate brokers belong to multi-listing services. They are able to provide customers with a selection of properties in the price range and area the customer is interested in. They are able to provide data on these properties and make arrangements to show the properties. Other services provided include : credit rating check, estimating how much you can afford, strategy for financing a loan, arranging for necessary inspections, estimate of cash needed at settlement, information on building regulations and permits, and information on builders and developers. Real estate brokers also ensure that fair housing laws are followed. Using a broker saves you time and work.
Most brokers have agents working in their firms. Both brokers and agents are licensed by the state. Most agents will begin with an interview conducted in their office to determine your desires and needs. They will inform you of their nature of agency (working for buyer or seller). Be aware of the relationship you have with the broker.
The most confidential relationship is the one you have with a buyerís broker. The buyerís broker is obligated to put the principal clientís interest above anyone elseís. This applies even if the broker is receiving payment from the sellerís agent. A buyerís broker is responsible to obtain the lowest possible price. A buyerís broker is required to keep the clientís information confidential.
A sellerís broker on the other hand is responsible to report to the seller. Any information relayed about financial abilities or amounts to be offered will be passed on to the seller. The sellerís broker is responsible to obtain the highest possible price. However the sellerís broker is responsible to follow disclosure laws and report to the potential buyer any known defects in the home. The broker must inform you if they are working for the seller.
In some cases the broker may be working for both the buyer and seller. This could cause a conflict of interest.
Look for an agent that explains things in a way you can understand. The agent should be familiar with local conditions and be able to provide maps and information. Choose an agent with which you feel comfortable. The first properties shown to you should reflect that the agent has been listening and understands your needs.
SHOULD YOU HIRE AN ATTORNEY? Your attorney will provide you with the best source of confidential advice. Your lawyer will act as your advisor, prepare the purchase contract and review title transfer documents. Your lawyer will also represent you at closing. Having an attorney review your paperwork could help you avoid trouble later.
Your lending association will also be represented by an attorney. Be aware that you may also be charged for the lenderís attorney. Inquire about costs to avoid double charges for the same work. Lawyers usually charge by the hour.
If you are eligible for legal assistance from the Fort Leonard Wood Staff Judge Advocate, an attorney can be provided to review your purchase documents. There is no charge for this service, however, military attorneys are not available for closing services. To contact the legal assistance office call 573-596-0629. You can locate real estate attorneys through The Missouri Bar Lawyer Referral Service (314-636-3635 or 1-800-392-8777).
SHOULD YOU UTILIZE A PROFESSIONAL BUILDING INSPECTOR? In the early stages of house hunting you will probably spot problem areas and eliminate obviously poor choices. Ask the seller if there are any hidden defects. A seller must, by law, reveal known defects.
Once you have selected a property you may want to go a step farther. A professional home inspection is usually conducted after a purchase offer is accepted. It is a good idea to have a contingency clause that would allow you to cancel the contract if the house needs major repairs.
Home building inspectors are not federally or state licensed (except for Texas). So finding a qualified inspector will take some research. One organization you may want to contact is the American Society of Home Inspectors. This society requires members to be tested and to be experienced in home inspection. It is a good idea to avoid hiring an inspector that is also in the business of home repair. You will want an inspector that is completely objective.
Be sure to ask exactly what the inspector will do. Some inspectors will only do random checks on such things as electrical outlets. Some will not check to see if the heat is uniform throughout the house or see if the self-cleaning oven really operates adequately. If there are pollutants that a family member cannot tolerate, you should have the inspector check to see if they are present. Many building materials can contribute to poor air quality in the home. The impact depends on the age of the material, the way it is used and ventilation.
It is best to be present during the inspection. If the inspector spots a problem he can explain how it could be corrected. This allows you to decide if the home is still a good purchase. A seller may adjust the price if major problems are found. Do not expect the home inspector to tell you if the property is worth the amount you have offered. The home inspector will not do an appraisal.
Be sure to get a written report. Also ask about insurance and warranties on the inspection service. Fees may vary depending on the extent of the inspection. It may cost more for a home that has a well, septic tank or other additional services.
WHAT IS THE ROLE OF THE APPRAISER? The appraiser provides a report about the worth of the property. Appraisers are state certified. If you are using a lending institution, an appraisal will be required. The appraisal report must indicate to the lender that the property is adequate collateral for the loan. If the report is sent to the lender the buyer can request a copy. In most cases the buyer will pay for the appraisal. Fees are set by the amount of time and effort required to accomplish the task.
You should have a contingency clause that would allow you to cancel your purchase agreement if you are unable to obtain a loan. If you want to purchase the house even though it did not appraise at loan value, you may pay the difference. The seller may be willing to adjust the purchase price.
IS A SURVEY NECESSARY? A licensed surveyor is trained and authorized to locate a given parcel of land and determine itís legal description. Legal descriptions will be recorded on the title and deed. The survey is the only way to locate the boundaries at the property site. A "spot" survey is a sketch that shows the size and locations of buildings on the property. A survey can also show any encroachments on the property. A lender may require a survey. If the survey work is time-consuming or difficult it could be costly.
DO YOU PLAN TO HIRE AN ARCHITECT? An architect can advise on drainage problems and siting of the home. Services include drawing up plans, preliminary cost estimate and supervising the contractorís work. Fees usually are a percentage of construction costs.
WHAT YOUR BUILDING CONTRACTOR SHOULD DO: The contractor should give a warranty for faults that may show up during the first year. Ask if the builder does routine service calls during the first year. Do requests for service after the sale have to be in writing? Whom do you contact for service? The builder should receive final payment only after you are satisfied that everything has been completed as promised. Funds for this purpose are usually held in escrow. To protect yourself from potential lawsuits make sure your contract calls for subcontractors to be paid prior to closing.
The federal government does not enforce a national building code. Ask about codes for the area in which you are interested.
Open houses sponsored by builders are good opportunities to look at the quality of the construction. Get specifics from the sales representative. Check design of the home for living space, estimate future costs of upkeep and energy usage.
Talk with people who have purchased homes from the builder. If they are unhappy with their homes they will let you know. If they are satisfied, they will be willing to recommend that you use the builder. Talk with several homeowners and ask questions to determine if the builder meets schedules, does quality work and stands behind warranties.
Prices are set by the builder based on cost and are usually not negotiable. However, sometimes you may be able to obtain an upgrade on fixtures or other items.
DO YOU NEED TITLE INSURANCE? Title insurance protects the purchaser and lender against loss because of a legal defect in a title. In most parts of Missouri the seller pays for the title report and title insurance.
Some homeowners prefer to handle their own properties to save on the brokerís commission. You will have extra work when you buy directly from the owner.
THE HOMEOWNER MAY NOT KNOW HOW TO PROCEED IN THE SELLING PROCESS. It is extra important to use an attorney and home building inspector if you are planning to purchase directly from the owner.
HOMEOWNERíS SOMETIMES SET THE ASKING PRICE FROM A SENTIMENTAL STANDPOINT. You need a grasp of the prices in the area.
HOMEOWNERS MAY NOT BE KNOWLEDGEABLE OF HUMAN RIGHTS LAW. Be aware of your rights. Your HSO can provide you with the location of the fair housing office nearest you. Booklets explaining your rights are available. If you feel you have been a victim of discrimination, your HSO can assist you in filing a complaint.
The purchase contract is a legal document consisting of a formal offer and acceptance. The contract usually provides for the purchaser to make a deposit toward the purchase price or closing costs. The contract may allow a refund of the deposit under some circumstances. Make sure you understand the contract before you sign. In Missouri the offer and acceptance must be in writing.
WHAT IS NEGOTIABLE? Anything that is not illegal is negotiable. This is the time to arrange move in dates. Any personal property to be included in the sale should be listed.
IS THE SALES PRICE FIRM? Some contracts call for an escalator clause which allows the builder to increase the price if building costs increase. If your contract has this clause, it is best to have it state that you have the right to cancel the contract.
WHAT OTHER COSTS WILL BE INVOLVED? The contract should include provision for anticipated closing costs. It should indicate what costs will be applied to the seller and what costs will be applied to the buyer. The contract should state the amount of down payment and provisions for financing.
There should be agreement between the buyer and seller regarding sharing of annual costs such as, taxes, utility bills, and home owner association fees.
Buying with cash is the simplest and quickest method and may be worth a concession on price. You will still need legal advice. Your attorney needs to make certain that taxes are paid and that you are receiving a clear title.
Since interest on a home loan can be taken as a deductible on federal tax returns, most buyers will finance the purchase. When you apply for financing, you will be required to provide documentation of your financial history. If you plan to purchase shortly after your arrival at Fort Leonard Wood you will need to have your financial documents available. Do not ship them in your household goods as the delay in getting your loan approved could cause you to lose a favorable rate. Interest rates change frequently.
You can acquire information about various types of loans and interest rates from bank loan officers or real estate agents. You should inquire at several institutions to find the loan that suits your needs. Make a comparison chart to use in your search and keep a record of the name of the loan officer you whom you spoke. Ask about loan processing time and prepayment penalties, special programs such as first time home buyers, government assisted and energy efficient loans.
The amount of your monthly payment will depend on the length of the loan and the interest rate. It may be possible to bring the interest rate down by paying points. A point is one percent of the loan paid up front to lender.
A fixed rate loan may be your best choice if you will stay in the home for a long time. Loan payments will stay the same and repayment terms are usually set at 15, 20 or 30 years. Balloon loans offer lower interest rates for a shorter term (usually five, seven or ten years). At the end of this term, new financing must be arranged or the balance of the loan paid off. An adjustable-rate mortgage (ARM) also may initially offer a lower interest rate. The rate you pay is adjusted to keep in line with changing interest rates. An ARM or a balloon loan may be attractive if you plan to sell the home in a few years. The lending market offers a large range of choices. You need to shop around to see which fit your spending plan.
If you plan to keep the house a short period of time, closing costs may be more important than rate of interest. Certain costs are standard, but some lenders inflate their profit with nuisance charges. Know what you are paying. The lending institution wants you as a customer; you may be able to negotiate some of these fees if you are well-qualified.
In Missouri, a deed of trust is used to convey title to a neutral third party (escrow agent) until the loan balance is paid. You will have a responsibility to make your payments on time, maintain the property, and pay taxes and insurance. If you fail to do so, the lender can demand full payment or sell the property to pay off the debt and foreclosure expenses.
WHAT IS A CONVENTIONAL MORTGAGE? A conventional mortgage is one that is not insured by the government. Banking regulations apply. A typical down payment is 20 %. The down payment may be less if the buyer purchases insurance to guarantee payment.
WHAT ABOUT GOVERNMENT LOANS? The federal government has agencies that help home buyers qualify for loans. With the exception of some Rural Housing Service loans, the loan is not actually made by the government agency. The agency insures or guarantees the loan. The properties being purchased must meet certain standards. To obtain these loans, you apply through a lender that is approved to handle them. There is usually a loan originator fee.
The U.S. Department of Veteranís Affairs (VA) helps veterans finance the purchase of homes with little or no down payment. VA guaranteed loans are frequently offered with lower interest rates than other types of home purchase loans. With exception of the Veteranís Certificate of Eligibility (VA Form 26-1880) and the VA appraisal, the application process is much the same as for a standard loan. The VA does not guarantee the condition of the house they only guarantee the loan.
The Federal Housing Authority (FHA) was established to help the borrower buy a home with a low down payment. FHA insures the lender against loss in case of foreclosure. The insurance premium is paid by the borrower and is due in a lump sum at closing. The premium can be added to the amount of the home loan. A portion of the premium will be refunded if the loan is paid early. The loans are not intended for expensive property and maximum loan amounts are set for various regions. The property must be appraised by an approved FHA appraiser. FHA is an agency of the Department of Housing and Urban Development (HUD).
Persons with low to moderate income living in rural areas or small towns may qualify for a loan from the Rural Housing Service (RHS). RHS is a branch of the U.S. Department of Agriculture and offers low interest rate home loans with no down payment requirement. Loans for persons with low incomes are made directly by the agency. Loans for persons with moderate incomes are guaranteed by the agency. Information on these types of loans may be obtained from the USDA Rural Development Office located at 1050 Highway 72 E, Rolla, MO 65401. The telephone number is 573-364-2088.
As your closing date approaches it is a good idea to walk through once more. This your final opportunity to spot any problems.
Unless the buyer is paying cash for the property, the real estate closing will occur in two stages.
Closing on the loan will involve signing the loan and the deed of trust (the document pledging the property as collateral for the loan). The loan officer will explain all of the loan papers, the loan charges, and your responsibility for repayment. The deed of trust will later be recorded in county records and then sent to the lender.
The second stage will be the closing on the title transaction. This includes the seller signing the deed to transfer ownership. The deed will later be recorded in the county records and then mailed to you.
You should be allowed to review the settlement sheet before the closing date so you will know your closing costs in advance.
Home listings, brochures, maps and other informational materials are available at HSO. Stop by or call if you desire additional assistance.
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