February 2023 - Title First Agency

Home Inspection Before Listing

A pre-listing home inspection uncovers potential surprises that could possibly derail the sale of your house. If you’re ready to sell your home and want to ensure the sale process will go smoothly and quickly, you may want to consider a pre-listing home inspection. You will get a “heads-up” on any problems that a potential buyer will want to have repaired.

Knowing what is wrong, issues can be attended to and taken care of before you even put your home on the market. Too often, a home inspection is where the deal falls apart because buyers will make their offer contingent on approval of the results. Hidden defects or problems can turn any negotiation in the buyer’s favor. Even if you offer to fix a problem that arises on the buyer’s inspection report, skittish buyers may be hesitant to close the deal. Knowing before you list your home gives you the opportunity to fix the problem or price accordingly.

Most Realtors will tell you to make major repairs before you list your home. The buyer’s inspection will uncover significant defects, and you will be expected to repair them if you want to get the full price for your home. The problem is that you will only have until closing to get the repairs done after the buyer’s inspection.

The limited time frame leaves sellers scrambling to get everything fixed in time. With a pre-listing inspection, you set your own schedule for repairs. There is no rush to list the property until you have made sure the home is in good shape.

You’ll be putting your home on the market with the confidence you’ve corrected any large problems.

Sellers can justify their listing prices through a pre-inspection. You can feel confident in the price you are asking with the results available to buyers. In a hot market, some buyers will make an offer on a home without the home inspection contingency.

According to Forbes: …”pre-inspection is a goodwill gesture. It demonstrates a willingness to go beyond what’s expected, and that sets you apart from other sellers. You’re sending a signal that your house is an ‘open book,’ and that you’re being upfront about the property. All of this can give potential buyers peace of mind and confidence.”

Once you have the pre-inspection report in your hand you can’t ignore any issues that came up. You’ll be required to disclose that information as a known defect or fix it before anyone makes an offer. There may be some issues that you aren’t able to take on and it will be reflected in the price. You and your Realtor will be able to establish the right sale price including what you can or can not fix before putting your house on the market.

The bottom line: As a seller, getting a home inspection before listing your home gives you more time to make the repairs that you can and to shop around and control the costs for the work. Be sure to hire an experienced Realtor that will know how to interpret inspection reports, and let you know which issues are vital to address before listing your home.

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Fixed Rate Vs. Adjustable Rate Mortgage

What Is A Fixed Rate Mortgage?

A fixed-rate mortgage is a home loan in which the interest rate is locked in for the term of the loan. For example, if you get a 30-year fixed-rate mortgage with a 7% interest rate, your rate will remain 7% until your loan is either paid in full or refinanced, regardless of changes in going market rates.

The Benefits: Many homebuyers choose a fixed-rate mortgage because of payment stability. With a fixed-rate mortgage, your principal and interest remain the same for the duration of the loan. This makes budgeting easier since you know what the payments will be. Although it’s impossible to forecast if rates will rise or fall in the future, a fixed-rate mortgage helps protect you from an increase in rates. If you want to pay off your loan sooner, you generally have the option to make additional principal payments too.

The Cons: The drawback is that your initial rate could be higher with a fixed rate than what you would pay on an adjustable rate. There is also a chance that rates could go down, leaving you locked in at a higher rate. However, as long as you maintain solid credit, income, and debt levels, you should be able to refinance your loan to get a lower going rate if they were to go down.

What is An Adjustable Rate Mortgage?

An adjustable-rate mortgage (ARM) is a loan in which the interest rate may change periodically, usually based upon a pre-determined index. The ARM loan may include an initial fixed-rate period that is typically 5 to 10 years. The interest rate can/may change (adjust) each year thereafter once the initial fixed period ends. For example, with a 5/1 ARM loan for a 30-year term, your interest rate would be fixed for the initial 5 years and could fluctuate up or down each subsequent year for the next 25 years.

The Benefits: ARMs usually have a lower initial interest rate when compared to a fixed rate, but remember that the rate will reset. Many homebuyers consider this type of rate attractive because of the initial lower payment, which could help them get a larger loan amount. This mortgage allows you to convert it into a fixed rate once the introductory period elapses. If the economic situation seems less certain, this option is convenient. On the other hand, you can stick to the arrangement if the economy is pretty predictable, giving you the confidence of consistency.

The Cons: The potential downside to an ARM is that your rate would go up if market rates increase. This would mean a sudden increase in your monthly mortgage payments. And, depending on the severity of the rate change, the payment increase could be steep. This can make it difficult to budget accurately.

The Bottom Line: This is a huge decision, so be sure to connect with a reputable lender who will be able to guide you on the right type of mortgage for your situation. Key questions you would need to consider are: How long are you planning to stay in the home? How will you plan your housing budget if you get an ARM and the rates rise? At the end of the day, whether you choose a fixed-rate mortgage or an ARM, don’t be enticed into borrowing more than you can afford. Plan on what fits your budget and goals.

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Improve Energy Efficiency and Add Value to Your Home

A green home sells faster and for more money than homes without energy-efficient designations according to Freddie Mac research. It was found that homes with high energy-efficiency ratings sold for 2.7% more on average compared to homes that did not.

You can invest in upgrades that will improve energy efficiency while adding value to your home. Here are a few examples of upgrades that will lower your energy bills and increase the value of your home.

Double-Pane Windows: When the heating and cooling system doesn’t have to work as hard to keep a consistent indoor temperature, there will be an obvious decrease in energy costs. Upgrade to double-pane windows, regardless of the type, and you will see some pretty significant energy savings. Energy Star-rated windows help maintain a consistent temperature inside your home year-round. And when it’s time to sell, window upgrades are a value-added selling point with buyers.

Spray Foam Insulation: Installing new spray foam insulation in a home that was already insulated or in a more contemporary house will see a 10 to 15 percent reduction in its cooling and heating costs. Adding more insulation to the attic is “one of the easiest things homeowners can do to improve the energy efficiency of their homes.

Use Energy Star Appliances: Another easy way that homeowners can improve their home’s energy efficiency is to replace all appliances with newer, more energy-efficient models. These will save you 10% to 50% of the energy required, and much more if you are replacing an old appliance.

Energy Star is a government-backed program for identifying products and appliances that meet certain energy efficiency standards. It was established in 1992 by the US Environmental Protection Agency as a way to promote products designed to use less energy and reduce recurring costs for consumers.

Upgrading your appliances is a way to increase value to your home and make it more appealing, as most buyers don’t want dated, unsanitary, malfunctioning appliances.

New Garage Door: A garage with poor energy efficiency can have a spillover effect on the rest of your home, particularly if the garage is attached to your home. Replacing your garage door will help your entire house stay cool in the summer and warm in the winter. Since a new door allows air conditioning and heating systems to work more effectively, it could reduce electricity waste and lower your energy bill.

The garage door is part of the curb appeal of your home – one of the first features buyers notice. An old, faded and damaged one can create a negative vision. Updating your garage door is one of the best home improvement return on investments.

The Bottom Line: A good realtor will know that a large part of selling your energy saving home will be to educate the buyer of all the benefits and values an energy efficient home brings. Your updated home will be a huge asset especially as the housing market evolves.

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Full-Service Title Company

Buying or selling a home has become a complex transaction and you need a trusted title search company to guide you through the process. The experts at Title First oversee and perform thousands of closings each year. When using Title First, you can sign confidently on the dotted line knowing that all details of your title transfer and closing are in proper order. We are here to answer any questions you may have about buying or selling a home, and our team will guide you through the entire process.

Title First will be responsible for ensuring that all the documents related to the ownership of a property are in order before the real estate transaction is performed. We will also provide an agent to oversee the entire closing process. Insurance will be furnished that protects the buyer and the lender if legal issues arise after the closing.

Once a home is bought, the buyer takes possession of the title for the property. Titles are at the local courthouses and the buyer does not own the property until his name appears on the title. There have been times when titles are not properly taken care of when a home changes hands, which means that if there are any liens on the property still have a claim on it. When this happens, the owner who did not sign off on the deed exchange still has a claim on the title.

Title First will perform searches on behalf of the property owner and the lender. We will review court records to guarantee that any liens on the property have been satisfied and that there are no outstanding claims. We also make sure that the seller that holds the title has the right to sell the property, and that it is has a clear title to close.

Title First will supervise the loan closings and any other real estate transactions. We are then responsible for recording the title, mortgage, and any other document related to the transaction at the local courthouse.

Title First will offer a title insurance policy that will provide coverage for property owners and buyers in the event of legal disputes related to the ownership of the property. However, these issues should not arise as all of the searches are done before the closing. But, there is always the occasion that something was overlooked that can threaten the interest of the owner or lender.

Title First believes in providing value-added services. Whether you’re a Realtor, lender, builder, law firm, buyer or seller, our helpful resources help you meet your goals. If you have a question or would like more information, please contact our title experts. 614-503-7434

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