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      Buyer Information

      Welcome to Home Ownership

      Step 1: Working with ShoreViews™

      Working with ShoreViews™ will save you time, money, and provide the expertise you need when buying a home.

      1. Pre-selecting homes that are within your price range and meet your requirement for size, type, etc..
      2. Scheduling appointments for you to view homes, even when the owners are not there.
      3. Working with your lender.
      4. Preparing a buyers market analysis.
      5. Giving you current selling prices for houses similar to the ones you are considering as a basis of comparison.
      6. Guiding and directing you on obtaining up-to-date legal and community information.
      7. Handling negotiations regarding the amount and terms of your offer.
      8. Coordinating house inspections and other inspections that you have requested.
      9. Obtaining a Property Condition Disclosure Form and Title X Lead-Based Paint Disclosure where required by the seller.
      10. Explaining required state and federal forms.
      11. Working with your choice of professionals, such as attorneys or surveyors, when appropriate.
      12. Providing you with sources for the information that you wish to obtain.

      Connecticut law requires that ShoreViews™ Realtors® furnish you with a written agreement setting forth all the terms and conditions of the representation between you and ShoreViews™. We must furnish you with this agreement prior to showing you a property.

      Buyers typically pay nothing for our services. Commission on listed properties is normally paid by the listing broker.

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      Step 2: Getting Pre-Approved

      Before you venture out to look at properties you should meet with a qualified lender to discuss your financial ability to borrow money. A pre-approval is necessary to begin your search.

      Borrower's Pre-Approval Checklist:

      1. Pay stubs for one month
      2. W-2's for the last two years
      3. If CHFA, last three years of tax returns (1040, 1040A, 1040-EZ)
      4. Employers name & address for the last two years
      5. Contact person and phone number at employer(s) for last two years
      6. If student in the last two years - transcript or diploma from the school
      7. If self-employed, last two years of tax returns - business & personal
      8. If receiving or paying child support or alimony, provide divorce decree or separation agreement
      9. Residence address for the last two years
      10. Landlord's name, address, and phone number or landlord letter or last 12 months if canceled rent checks
      11. If current homeowner, mortgage lender's name, address and account number
      12. All pages of most recent two monthly statements or quarterly statement to verify assets:
        (statements need to include: name, acct. #, date, name of institution)
        • savings accounts
        • money market funds
        • checking accounts
        • mutual funds
        • brokerage accounts
        • 401K, 403-B, savings and investment plan
      13. If applicable, Discharge of Bankruptcy, Debtor's Petition and explanation of bankruptcy
      14. If VA, Certificate of Eligibility
      15. If not US Citizen, Green Card
      16. Check or MC/VISA/DISCOVER/ for credit work
      17. Two months' bank statements.

      Pre-approval is not a commitment by the lender. After you have a binding contract, you will complete a formal loan application, your lender will give you:

      1. A Truth-In-Lending Disclosure. This statement provides information about the proposed loan, such as annual percentage rate (APR), total finance charges, amount financed, total payments, schedule of payments, late payment charges, prepayment penalty (if any), and assumption options, which indicate the lender’s willingness to allow a future buyer to take over your original loan. The APR permits you to compare the cost of credit among various loans.
      2. A “Good Faith Estimate” of Closing Costs. The exact forms that lenders use to prepare this estimate vary, but the information is basically the same. This estimate gives you a rough idea of the fees the lender will chargewhen you apply for a loan. There are many variable fees, including application fee, points, appraisal and credit report fees, and closing and settlement fees. This ‘Good Faith Estimate’ should be brought to closing and is a essential reference should you have to question the terms of the loan at the closing table with your attorney..
      3. A Booklet From HUD (U.S. Dept. Of Housing and UrbanDevelopment). This will help you understand ClosingCosts and Truth-In-Lending Disclosures. When you have been approved, the bank will send you a “commitment letter”. You have not been approved for the loan until you receive the commitment letter. If there are any conditions contained in the commitment letter, immediately bring these conditions to your attorney’s and REALTOR®’s attention.

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      Step 3: Searching for the Perfect Home

      As you begin house hunting, you may want to consider the type of home ownership you want and the features that you consider most important. The type of home you choose also impacts your lender pre-approval. You may qualify for a larger mortgage on a multi-family home than on a single family home because of the income a multi-family generates. Condos have fees attached that single and multi family homes do not have. Every municipality has it’s own mill rate and taxes affect how much you can borrow.

      Types of Home Ownership:

      You will be responsible for paying the mortgage, property taxes, insurance and any maintenance costs.

      Condominium, Planned Unit Development (PUD), Time-Shares and Cooperatives:
      As the owner of a condo or PUD, you own your living. As the owner of a co-op, you buy shares in the corporation that owns and manages the property. Under both of these forms of ownership, you also own a share of the common spaces and pay a monthly maintenance fee. The owners’ association makes decisions about how the condo, PUD or co-op is run. The association may provide a variety of services and you must obey the by-laws and rules of the association.

      This style of home has separate living quarters for two or more families to rent. The owner may be able to use rent from the tenants to cover his or her own housing costs.

      ShoreViews makes searching easy!

      Create a ‘My Listing Manager’ account or have your agent set you up to receive automatic searches based on your needs! You will instantly get the info on every new home that meets your criteria as soon as it comes on the market as well as notification of price reductions and new photos!

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      Step 4: Making the Offer

      Once you have zeroed in on a property, your ShoreViews™ agent will help you to research and gather information from the seller or public agencies. (It is important to note that as this information may be gathered from various agencies and departments that use the information for their own purposes, the information may or may not be up-to date or accurate.) While your ShoreViews™ agent is performing his or her job, you should also be engaged in the process. For instance, if the zoning of the property is important so that a home business is permitted, speak with that town’s zoning authority. If adding onto the property is in the future plan and the location of the boundary lines is key, speak with that town’s building department.

      ShoreViews™ helps prepare you to make an informed offer!

      Your ShoreViews™ agent will prepare a Buyer’s Market Value Analysis report just for you! This comprehensive review of recent selling prices of similar homes in the area helps you to establish a sensible offer price and negotiate with the Seller. Your lender also looks at recent sales when they have the property appraised after you apply for your loan.

      It is important not to get attached. Your offer may be turned down or the Seller may get a better offer. At ShoreViews™, we know that there will be other homes to your liking.

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      Step 5: Negotiating the Contract

      It may take more than one offer before you get a contract signed by the Seller. Often, dates and provisions change and will need to be initialed by all parties before you have a legally binding agreement. Your purchase and sale contract covers not only the purchase price, but has down payment, financing, inspection and closing date specifics. The purchase agreement also states which party (buyer or seller) will pay for which settlement or closing costs, the type of loan you are applying for, the interest rate, term of the loan, and the date by which you must have the loan. Once the seller signs the purchase agreement, it becomes the contract between the parties. Do not hesitate to seek an attorney’s advice concerning the contract or to ask that the purchase agreement form contain a provision requiring that your attorney approve the contract.

      Be aware that Connecticut law states that an oral contract for the purchase of real estate is generally not enforceable. So, although the seller has verbally agreed to your offer, the seller is not obligated to sell the property to you unless the seller has executed and delivered a purchase agreement. In the State of Connecticut, Real Estate Brokers representing the Seller are required to hold deposits in a bank account separate from their business account. Unless agreed to by both parties, the broker is not allowed to release held deposits to either party. If there is a dispute between the parties, the fate of such deposits are remedied by a court of law.

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      Step 6: Choosing a Home Inspector

      At ShoreViews™, we cannot stress strongly enough just how important it is for every Buyer, experienced or not, to conduct thorough inspections using licensed professionals.

      It is essential that you know if there are any specific problems that could change the property’s value. The inspection will help you decide on those items you wish to ask the seller to repair. Each inspection should be accompanied by a detailed report of problems found. The buyer typically pays for the inspector. A home inspector should be a member of ASHI (American Society of Home Inspectors) or CAHI (Connecticut Association of Home Inspectors). The basic home inspection includes an evaluation of the home’s mechanical, electrical and structural systems. Exterior siding, doors, windows, chimneys and roof coverings are also inspected. You must be present during the inspection. Your ShoreViews™ agent will also be present. Walking through the house together will give you a hands-on feel for what is right and wrong with it. The average home inspection takes approximately 2-3 hours. As of July 1, 2000, Connecticut requires house inspectors to be registered with the Department of Consumer Protection.

      Mold Inspection - Mold Abatement Contactors:
      Potential homebuyers may want to know if a significant mold problem exists in a house prior to purchase. This may be especially important if their family has members who are susceptible to mold spores, such as asthmatics. However, it is important to remember that mold is present at some level in all homes. Only homes with significant sources of water/moisture and resultant mold growth require investigation and cleanup.
      Wood Destroying Insect and Pest Inspection:
      Your wood destroying insect and pest inspector should be licensed by the State of Connecticut and be a member of the Connecticut and National Pest Control Associations. If wood destroying insects are found, you must have proof that the house has been treated and that any termite damage has been repaired.
      Water Potability & Quality:
      These tests determine whether your water meets Connecticut standards for potable drinking water and whether there are chemicals in present that might be harmful to drink or give the water an off-color or taste.
      Well Water Yield Testing:
      This test determines how many gallons per minute the well will produce. It is extremely important to be sure that once you have purchased your home that there will be ample water to service your needs.
      Radon Gas:
      These tests determine whether there are levels of radon gas in the home or water that exceed levels recommended by the Federal Department of Health and Human Services. Radon can be found in the air and water.
      Lead Based Paint/Lead Based Paint Hazards:
      Every buyer of a home built prior to 1978 has the right to perform tests to determine the presence of lead-based paint or lead based paint hazards. You should have been provided with a booklet discussing lead-based paint and lead-based paint hazards. Thoroughly review the contents of this booklet. There are also certain disclosures the seller must provide to you.
      Sub-Surface Sewage Disposal:
      Residences are connected to their own private sub-surface sewage disposal system. The care and use of private, sub-surface sewage disposal systems is much different than the use of public sewers. The Connecticut Health Department has several brochures containing information on subsurface sewage disposal. In addition, a standardized examination report is available concerning the septic system.
      Well Water Recovery Test:
      This test determines how much water the well produces each minute. A relatively low gallons per minute rating does not necessarily indicate a bad well provided the well has sufficient storage capacity. You should discuss this with your house inspector, well contractor or the local health official.
      Underground Oil Tanks:
      Leaking underground oil tanks present liability issues for buyers and sellers. Connecticut law imposes responsibility on any land owner whose underground oil tank leaks for cleanup costs and damage to other properties as a result of a spill. Fortunately, Connecticut has an amnesty program that shields a homeowner from most of this responsibility and provides financial assistance for clean up costs. The amnesty ends on January 1, 2002. In addition, some towns have special ordinances regarding underground oil tanks. It is important for a purchaser to know whether or not the property has an underground oil tank and to speak with the local Fire Marshal, the State Department of Environmental Protection, or building inspector concerning underground oil tanks and Connecticut’s amnesty program.

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      Step 7: Choosing a Lawyer

      As a Buyer, you will need to retain a lawyer. At ShoreViews™, we recommend that you hire a law firm that specializes in real estate law and has an adequate ‘closing’ staff to support the attorney. In Connecticut, attorneys are required to provide a written fee agreement unless the attorney has previously represented you. Remember that a real estate transaction is complicated. Your lawyer’s advice can help you solve problems that arise before closing and help you avoid future problems. Once you have a signed contract your attorney will order a title search to identify any problems on the title that need to be cleared before closing. The sooner in the process that the title search is conducted, the more time the Seller and Seller’s attorney will have to clean up the title.

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      Step 8: Appraisal and Title Search

      After your offer is accepted, the lender will order an appraisal. This is a written opinion of the property’s value. The appraiser visits the house and reviews recent selling prices of similar homes in the area. You will pay the appraisal fee at the closing or as part of your mortgage application.

      The title search is generally ordered or performed by your attorney and is required by your lender. It involves investigating the land records in the town where the property is located, as well as other sources of information, such as probate and tax records, to uncover any possible problems with title (legal ownership) to the property. If problems are found, you may decide not to purchase the property. (For instance, there may be an unknown heir, a secret spouse, or a faulty land survey on the property). If no problems are found in the search, the title company issues you a title insurance policy. This is for your protection. Title insurance provides protection against financial loss that could result from title defects or claims against your property. The title insurance policy or policies are issued at the time of the closing. There is a one-time premium payable at closing by the buyer. There are specific exceptions from the coverage of the policy, but they will be set forth on the policy as items not being covered.

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      Step 9: Final Steps to Closing

      Before Closing Checklist:

      1. Review all loan documents and your purchase agreement;
      2. Call utility companies and arrange to have utilities transferred to your account;
      3. Call and arrange for homeowner’s insurance. Typically, your lender will require that it be listed on the policy and that you provide proof of insurance and a receipt for one year’s premium; and
      4. Do a final “walk through” inspection as close to the day and time of the closing as possible. Make certain that all repairs the seller agreed to perform have been made and no items in your agreement have been changed or removed from the house.

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      Step 10: Closing

      The actual closing is when papers and checks change hands and the home officially becomes yours. You must pay for the remaining closing costs, down payment and adjustments at closing. Payment should be by a certified or cashier’s check rather than a personal check. Your attorney will tell you how the check should be made out. Closings are either “informal” or “formal”. If the closing is “informal”, you and the seller will meet with your respective attorneys separately, and the attorneys will meet to exchange papers and checks. In a formal closing, the buyers, sellers, the respective attorneys and the Realtors® will all meet at the same time. Papers will be signed in the formal closing and distributed along with the proper checks. It really does not matter what form of closing is used, and the form of the closing is a matter of agreement between the parties. A closing ordinarily takes approximately 1 to 1 1/2 hours. Typically, you will be asked to sign the following documents at the closing:

      RESPA or HUD-1 Form:
      This form lays out all the financial aspects of the transactions and accounts for every penny in the transaction.
      Truth-In-Lending Statement:
      You received a Truth-In-Lending Statement when you applied for the loan. This is the final Truth-In-Lending Statement and you will be asked to sign it at the closing.
      Promissory or Mortgage Note:
      This is your written promise to pay the lender the amount you are borrowing to purchase the property. The amount, interest rate and term of the loan should match what is described on your loan commitment.
      Mortgage Deed:
      This is a long document that gives the lender the home you are purchasing as collateral for your promise to pay made in the promissory note. The seller must also sign some paperwork at the closing. Typically, sellers will provide the following documents for the closing:
      This is “the bill of sale” for the property. It will be signed by the seller and will contain a legal description of the property you are buying. There are various forms for these deeds. The typical form used in Connecticut is a warranty deed. Your attorney can explain the difference in deed types.
      Conveyance Tax Return:
      Connecticut charges a conveyance or sales tax on the sale of real estate. This is paid by the seller, and the seller also furnishes the conveyance tax return. You will be asked to furnish your social security number to complete the conveyance taxform.
      The seller will provide checks for the conveyance taxes, real estate commissions, mortgage payoffs and the rest of the seller’s sales expenses.
      Keys and Garage Door Openers:
      The sellers will provide the keys, garage door openers, alarm codes and other means of entry into the property at closing. Typically, these are provided at the end of the closing.

      Terms to Know:

      Closing Costs
      Closing costs are the costs that the buyer of a home must pay at the time of purchase. Closing costs usually include an appraisal fee, title search, title insurance and lawyer’s fees. They may also include “points” and other fees (such as oneyear homeowner’s insurance premium and private mortgage insurance, if required). Closing costs are in addition to your down payment and vary slightly from lender to lender. Your lender must give you an estimate of these costs when you apply for a loan.
      Finance charges that are paid to the lender as part of the closing costs are referred to as “points”, “origination fees” or “loan discounts”. Each point equals 1 percent of your total mortgage loan. Points can be negotiable and are sometimes tied to your interest rate.
      Prepayment is the ability to make early or extra payments toward the principal (amount borrowed). Prepayment can shorten the length of your mortgage and thus lower your total in interest payments. However, lenders may charge a penalty if you pay off the mortgage very quickly, usually in the first few years. Be sure to ask about prepayment conditions in your mortgage and read all the documents.
      Private Mortgage Insurance (PMI)
      Private mortgage insurance is insurance the buyer carries to guarantee that the lender is paid off if the buyer defaults (fails to pay) on a mortgage. This is different from homeowner’s insurance. It is generally required for all mortgages with less than a 20 percent down payment. The exact amount (usually a few hundred dollars) depends on the amount of the loan and the size of the down payment.
      Adjustments or Pro-Rations
      There are certain expenses that the seller has paid in advance. The purchase agreement typically requires you to reimburse the seller for a portion of these expenses. This reimbursement is called an “adjustment” or “pro-ration”. Customary adjustments include property, sewer and water taxes, fuel oil, and association fees.