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At Action Real Estate, we use checklists for just about everything! It's one way we can ensure consistant service to every one of our clients! Checklists also make our job just a little bit easier when things get hectic!

Now that you're ready to start the process of buying your home, we've designed this special Buyers CheckList to help you stay on track throughout what can sometimes be a hectic process! Print this handy checklist out, refer to it often and don't jump to the next item until you've checked each one before it.

This list will appear daunting at first, but it's an important first step. Also once you get through the first couple items, it gets easier! The important thing is to realize there is work involved in making a major purchase such as a house, and you have to be ready to take those steps. As always, if you need help, or just have a basic question ...your Action Real Estate agent is only a phone call or email away! We'll take those steps with you!



Understand the Process and Terminology. You can learn much about the process right here on this website. However, everyones circumstances are different and so can be the process. You can save some time and have the opportunity to ask questions when you call Action Real Estate and make an appointment to come in and speak with a Realtor®. You can let the agent know that you're not quite ready to look at houses, but you want to understand how the process will work in your particular circumstance. We're happy to help!


Lenders use your Debt-to-Income Ratio (how much debt you owe compared with how much you earn) to help evaluate your creditworthiness. This calculation often carries as much or even more weight than your FICO score, since even if you have a high FICO, if your DTI ratio is too high, you won't get the loan. DTI is sometimes called the Back End Ratio.

First, add up your total Gross monthly income. This includes your monthly wages, overtime, commissions, alimony, etc. If your income varies, figure the monthly average for the past two years. Be sure to include income from rentals, monthly investment distributions, etc. Next, add up your monthly debt obligations. This includes all of your credit card bills, loan and mortgage payments, rent, etc. Do NOT include expenditures such as groceries, gas, etc. These are not debts. Finally, divide total monthly debt by total monthly income and the answer is your DTI Ratio! Pretty easy, huh! Well that depends on the answer! If you're under 30% you're in great shape, and as much as 38% to 40% is usually tolerated by most lenders. More than that, however, and you will need to pay off a credit card or car loan to get that DTI in order. Do NOT ignore this. It WILL come up.


Set your Home Buying Budget by using what lenders refer to as the Front End Ratio. This is the maximum percentage of your income that should go to your housing expenses (mortgage principle, interest, taxes and insurance or what is referred to as PITI). There are two schools of thought on how to approach this budget.

The first more conservative approach, provides the least amount of financial strain to the buyer and will make your lender most comfortable. Take your gross annual income from all sources and multiply it by 0.25 (25%). Divide that answer by 12 and you will have your maximum monthly mortgage payment that you can afford most comfortably. The second approach is suited for folks who can realistically expect at least a moderate or better increase of income within the next year to eighteen months. For example, a spouse who has been unemployed is going back to work, or you have a structured settlement that will pay out in the future, or perhaps you are getting a better position at work. In these cases, multiply your gross annual income by up to (but no more than) 30%. This will give you your maximum that your income will presumably grow into. It helps at this point to talk to your Action Realtor® about meeting with a lender so you can find out what Front End Ratio they will find acceptable.


Start saving now for your downpayment and closing costs. As we mention elsewhere on our website, "mattress money" is no longer counted by lenders. That means no cash savings, lottery winnings, piggy banks, etc. Banks want to see your savings accumulated in either a savings or checking account. And, it must be 'seasoned' or in the account at least 60 days or more. Now, that might sound easy enough ...but... there is a fatal mistake that buyers often make. Read this carefully...

Let's say that on September 10th you are providing information to your lender so they can begin the process of issuing your Loan Commitment. It's a long process, and they will have a lengthy list of information you will need to provide. At this time, you show them you have saved in your bank account, $7000 for closing costs. "Very good", says the lender. "I think your closing costs will be about $6700, so you should be OK!"

Your credit check has come in with a middle score of 730 and you've been at the same employer for many years, so things are looking pretty good. Smooth sailing ahead!

Your closing date is not for a few weeks yet, and there is a great deal on a big screen TV that will look awesome in your new family room! The sale ends Thursday and you wont have your bonus check from work until Friday. You hate to miss out on that 60" HDTV, after all at $2800 its more than half off! You decide to spend the $2800 from the checking account, because you know you have replacement money coming from your paycheck, bonus or whatever. And, you diligently replace the money when you get that check. Everything is fine, right! You got your TV, the money is back in the account! WRONG! W R O N G !

You've just created a huge problem that is not likely to surface until right before closing! It's going to cause a delay and infuriate everyone from the Buyer to the Lender and everyone involved in the transaction. Here's why...

$2800 of your original $7000 is NO LONGER SEASONED! As mentioned above, your lender wants to see your deposit money remain in your account for a certain period of time. This gives them some confidence that you did not just borrow some money to show. This is sometimes called flashing. There was a time when this was useful for legitimate reasons, however, do to abuse and fraud lenders will now stop a transaction dead in its tracks if your seasoned money gets touched! Do NOT touch seasoned downpayment or closing cost funds or you will delay or possible kill your deal!


Order a copy of your credit report from all three providers. Scrutinize everything. If there are mistakes contact the reporting agency and find out their procedure for fixing errors. Usually this will involve contacting the reporting creditor and asking them to submit the corrected information. And ...if you see overdue bills that you were not aware of (hey, it happens, right?) ...pay them off now (but not with your Seasoned Funds). Get those credit reports cleaned up at least 2 months before you expect the bank to look at them!


Get a mortgage Pre-Qualification or better yet, a Pre-Approval. There is a difference. Now, this may be a little oversimplified, but basically a Pre-Qualification is based in large part on what you tell the bank during a brief interview regarding your employment, income and other information.Often, but not always, a credit report is done and your FICO is considered as part of the process. Some sellers or Realtor® will require a Pre-Qual as a minimum standard to demonstrate at least a basic level of credit-worthiness before submitting or accepting an offer to purchase. A Pre-Approval has more teeth and is much more meaningful to a seller, since a more thorough investigation is made to generate a Pre-Approval. This may include Verification of Employment (VOE), a DTI calculation, review of paystubs, etc. Most lenders will not provide an advance Pre-Approval, however, Action Real Estate has close working relationships with several local lenders who are happy to provide this documentation to qualified Buyers. In fact, our lenders will also help you along, if you don't quite qualify right now, and they'll help you take the steps needed to get there! Once again, this is something you will want to call your agent to discuss.



OK, so those were the most difficult steps. If you've made it to here, things are about to get a little easier and a little more fun! If you're like most folks, you've probably been looking through the Homes Magazine or at our internet listings, or perhaps driving around neighborhoods to see whats available.

Well now its time to do more than just window shop and actually go visit some houses! But ...instead of driving around aimlessly at $3.00/gallon for gas, we're going to show you a more organized and cost effective way to separate the wheat from the chaffe.

We're going to assume you know how to use email and the web, since you have probably downloaded this from our website. If you don't know how to use email, then some of the steps below are easily adjusted to suit your needs.



Let your agent know exactly what you want. Tell them everything that would be in your perfect home ...understanding, of course, that you will need to make trade-offs since your perfect home does not exist unless you have it custom built! This excercise helps us understand your desires. Next, let us know a few things that are absolute requirements ...for example... a garage or acreage, etc. This part ensures that we don't waste time researching homes that don't meet your basic requirements.


Stop driving around aimlessly :-) That's right, now you can sit back while your Realtor® researches the MLS database. We'll input your specifications and email you data sheets of homes that meet your needs and fit within your price range. Depending upon your criteria, you may receive a dozen or more data sheets, complete with photos and more information than you could ever hope to get, just driving around! Now, if only one or two homes pop up, your agent may broaden the search so that you have more options to look over.

Your goal now, is to thoroughly review the homes sent to you via email, and narrow the list down to perhaps your top 3 or 4 choices that really seem to meet your needs. Now, simply email or phone your Action agent and we'll set up a convenient appointment to view those homes! Look much time, energy and gas you just saved!


Keep in mind that none of the homes are likely to be perfect matches to all your criteria. Some will have one item but not another. You'll have to decide which tradeoffs are the easiest for you to make, and perhaps take care of after moving in. Once you've decided on a home, its time to discuss with your Realtor® what kind of an offer should be made and how to construct it. This should not be done at the house, but rather back at the Action Real Estate office, where you'll have privacy, mortgage calculators and other tools, as well as the various paperwork required for the offer. Be sure to review our web section on various things to consider when constructing your offer to purchase.


Once your offer is ready, you'll receive a copy of the paperwork, and your Action Realtor® will deliver your offer to the opposing agent, to be presented to the Seller. In most cases you'll have a response within 48 to 72 hours. Some exceptions are when the Seller lives out of state, or when it is a bank owned property, which in these instances there can be significant delays. During this time, sit back and relax if you can. It's now in the hands of the other side, and you must await their reply.


When your agent hears back from the sellers agent, you'll get one of three possible responses. An outright Acceptance, which is the ultimate goal. A counter-offer, which is not so bad, especially if its reasonable. Lastly, you may get an outright Rejection. Usually, if you follow your agents guidance on preparing the offer, this won't happen, since your goal is to construct an offer in the first place that will either get countered or accepted!

If you get a Rejection, you will be in the un-enviable position of having to re-offer if you really did want the property. If you got a counter-offer, you'll need to sit with your Action Real Estate agent, and decide your course of action, which could again be acceptance, countering, or rejecting of the sellers counter-offer. The next step in this checklist assumes you have reached an agreement either through acceptance or through negotiations.