Homebuyer FAQ’s …  good starting point or refresher

by | Dec 2, 2015 | Real Estate | 0 comments

Upcoming Free (& non-promotional) Home Buyer Classes: 

Saturday, December 5th , from 9am-12pm (ish)
Marshall Community Center, conference room
1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Monday night, December 14th , from 5pm-8pm (ish)
Marshall Community Center, conference room
1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Saturday December 19th , from 9am-12pm (ish)
       Vancouver YMCA
11324 NE 51st Circle, Vancouver WA (SR 500 & 112th/Gher Road)

**please remember that in November & December we do limited classes because of the holidays.  If these class dates and/or times don’t work for you, please let us know.  We understand that you have lives, and families, and work.  We will work something out that works better with your schedule.  Just let us know….                                                                                  
….we also have home seller classes available too…link on left on website

Remember…with reservation…we will throw in lunch, or dinner!  😀
~~~~~~~~~
 I know…I have to keep reminding you about our WINTER CLIENT APPRECIATION event will be held on Saturday, December 19, 2015, for the Opening Weekend of STAR WARS: The force awakens.  The event will be held from 2:30pm-5:30pm, with seating to start at 2:45pm.

Because this is expected to be a pretty big event, Chris Berg (Pinnacle Mortgage 503-320-0295,cberg@pcmloan.com), & I are also renting out the top living room portion for 21+….and yes, there will be tickets this time that we will have available for pick up at the Pinnacle Mortgage office with Chris.  We are taking reservations now, so please…if you plan on attending let us know how many tickets you need.  The 21+ area is now full, and we only have a few left for the general seating area.  We look forward to seeing you there!!  😀

Happy whatever day of the week it is…..

At this point I think I have lost the days of the week….ever have that happen to you?  My husband had to go out of town for work for a couple of days this week, and that always throws me off.  Also,there is the fact that I will be out of town next week.  You can still get a hold of me with any questions you have by email, text, phone, or facebook (since I will just be standing in line), but I won’t physically be in town next week.  If you see a home you love, and want to see (and it can’t wait for me to get back), just let me know and I will set that up for you to see it.  I have a couple of agents/friends who we take care of each other while the other wants to get away so I got you covered if a home comes up that you need to/want to see while I am gone.  When you’re self-employed it’s harder to get away, but there are times when you need to do so.  🙂 

So, this week I had a clients father send me some questions.  They are excellent questions, and ones that come up quite frequently, and while we cover them in the classes, it is also a good refresher, and/or starting point as well.  Please do not hesitate to call or text me with any questions.  I am, as always, here to help!!

(1)  Is it mandatory to include insurance and real estate tax in the monthly mortgage payment? If not, what are the agent’s recommendations?

It used to be quite common for people going with a conventional loan to not include homeowners (aka hazard) insurance & property taxes as part of their payment, however, since the crash most lenders I know do insist on having those payments held in escrow as part of the mortgage payment.  I find it’s easier to just make one payment and let it all get paid out of the escrow account.

(2) How deeply should we need to be involved with a bank before we make an offer?  

With the craziness of our current market, which is very firmly a sellers market, you need to be pre-approved with a lender before you even contact a realtor and start looking at homes.  If you see a home you would like to make an offer on, as your realtor, I have to contact your lender and have them send me over an updated pre-approval letter to submit to the sellers agent with your offer.  Without a pre-approval letter from an accredited institution, in a multiple offer situation, the sellers won’t even consider your offer.  We advise people to stay away from out of area, or online, lenders as there is no one to actually connect to and be in physical contact with. 

(3)  If we make an offer, what are the customary contingencies (i.e. ways out)? One is a satisfactory home inspection by a 3rd party, for example. Another may be finding a loan that meets certain conditions. Any others?  

The standard contingencies as part of making an offer are: the inspection contingency,the financing contingency (we do have to disclose the type of loan being used, the downpayment,and any requested closing costs paid by the seller), the utilities form (to give the title company the authority to pay those utilities that follow the home), the homeowners insurance contingency, the optional clause form which also has some boxes we check off for information/protection/disclosure to both parties, and of course, the promissory note which says that the buyer will provide the title company the earnest money check within 3 days from mutual acceptance.

(4)  What is the customary amount for the Earnest Money Deposit and when is it due? Who holds the money pending home inspection and the other contingencies in the offer?  

Earnest Money in the price range you are looking at is typically $1000-$1500, however, the seller can request more to be held.  Around the $250,000, an earnest money of $1500 is usually acceptable.  The earnest money, based on the promissory note is due within 3 days of mutual acceptance, is made out to the title company (a neutral 3rd party), and is deposited/held by them. 

There are 4 legal reasons to back out of a purchase/sale agreeement:

1:  homeowners insurance.  The home needs to be able to be insured by an insurance company.

2:  home inspection. The standard home inspection is about $350-$375, and takes about 2-3 hours. The home inspection can be done for cheaper, but this isn’t where you want to go the coupon route.  I am happy to provide 2-3 names of inspectors.  I also have a weekly email blog where, on one of them, I went over home inspections, questions to ask,and what the buyer should expect.  I always try to let buyers know that what we are looking for as part of the home inspection is anything that could affect the health or safety of the home or occupants, or anything that could require a contractor.  Both the buyer and the buyers agent will be at the inspection.  Any requested repairs by the buyers are negotiable to the seller.  The seller can agree to all repairs, no repairs, or a few items, but not the rest.  The buyer then has the right to respond by agreeing, backing out (and getting their earnest money back), or offering another solution.  If both parties can not agree the deal dies, and the earnest money goes back to the buyer.  The fee paid to the inspector though is non-refundable as the buyer is paying the inspector for their time.

3.  appraisal.  Here’s where it gets a bit sticky… the inspector is hired by the buyer for their information. The bank doesn’t care what the inspector says, and won’t see the inspection report. The appraisal is paid for by the buyer still, but hired by the bank.  We won’t see, or talk to the appraiser.  The appraiser is looking for value for the bank. The problem is that no two appraisers are the same.  You never know if we’ll get Captain America or Hitler….for example, in May of this year I had a client buying a detached home by the mall with 3 bedrooms, 2 1/2 baths, a one car garage, and a small fenced yard with AC. Very cute, clean, and move in ready for $212,000. This was a no brainer and no one was worried….until the first appraisal came in at $190,000!  This was crazy as I had just sold a townhome not too far away that appraised for more than that. The seller does not have to come down in price, and this seller wouldn’t either.  This particular client was buying with a conventional loan, and only because of that, he was able to switch to a FHA loan, and we were able to order a new appraisal. The new appraisal came in 10 days later at $210,000, with good comps.  Two different appraisals and 10 days apart….  My client, the buyer, and the seller, were able to negotiate the $2,000 difference by the seller coming down the $2000, but paying $1000 less in closing costs for my buyer.  The appraisal is a lot like 2 different churches….they’re both supposed to be going off the same book (or rules for the appraiser), but it’s how each interpret that book, or rules.  No two are the same.  The bank will only loan the buyer either the appraised amount, or the purchase amount….whichever is less.  If the home is appraised for more than purchase price, the seller won’t know. If the home appraises for less, the appraisal will have to go to the seller to show that the home didn’t appraise. The seller then has the right to agree, or negotiate to the lesser amount, or back out. The fee paid to the appraiser by the buyer is non-refundable.  
If the appraiser calls out any repairs, those repairs are now ‘lender required’ which means if they don’t get done, the buyer can’t buy the home. The appraiser does receive a copy of the purchase/sale agreement.  

4.  financing. If the buyer loses his/her financing within 30 days that is a legitimate reason to back out and get their earnest money back.

There is a LOT more to it than this, of course, I would advise coming to one of the free home buyer education classes I teach.  I have 3 coming up in December, and classes booked through next year already. 🙂   Those classes can be found on my website. 

Information is power, and I hope that I am able to help you.  Good luck, and as always…May the odds be ever in your favor out there….  AND If you are looking for a real estate agent, I would love to be able to help you.                                                                       
As always….this is just a quick overview…. please remember that your agent, and your lender work for YOU.  You drive the bus…we are merely GPS to help you get to your goals.  Like the classes, this weekly blog email is to help you with your home adventure.  The goal is to be informative and non-promotional.  🙂  We are, however, hoping you will call and want us to help with your adventure.  

If you have any questions about this, or something you have heard…or if you would like me to help you with your home adventure, please call, email,  text, or facebook me anytime.  I am, as always, happy to help!
 
Thank you again for your business and your referrals!!  …and thank you for referring these classes to your friends, family, and co-workers. 
 
 .   ..disclaimer…if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings… 
 
 Upcoming Topics:  Septic vs Sewer,   What is ‘escrow’?  &  “When do I get KEYS?”

Last Week:   Winter Market, Interest Rates, & Best Time to Buy?                           
Have a great day, and I will talk to you soon,
;-D

Tracie DeMars / Realtor

ReMax Equity Group
License# 81289
Vancouver, WA
360-903-3504

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