Tag: mortgage

While searching for a home, you might see a home that is listed “as-is” that happens to be in the exact location in which you are looking but with a lower price tag. It can be tempting, should you consider it?

Often sellers will list their home for sale as-is when they don’t want to do any repairs before closing. This means there are no guarantees from the seller that everything’s in working condition. Purchasing a home “as-is” makes you vulnerable and could find major problems down the road that you will be responsible for the repairs.

However, “as-is” does not always mean there are issues broken beyond repair. Often there are simply minor and even no issues. It means you are buying the home in whatever condition it is currently in. You can have an inspection done but the sellers don’t have to repair an issue. Having a professional inspect the home before the purchase is important. While you would have to pay for the inspection yourself, it is a small investment to make that can help you avoid thousands of dollars in repairs down the road.

A home that is being sold “as is” is most likely priced lower than its neighbors does not mean you would be getting the home for a bargain. If there are repairs to be made, there will be a cost. Many buyers like these types of homes because there is a good chance there are just relatively minor repairs to be made – such as a new roof – and the home is worth more than they paid for it. Of course, if the inspection comes back and there is something huge, like a foundation issue, the deal might be better to avoid.

Getting a loan for a home sold “as-is” is much more difficult and complicated than getting a loan for a home that has gone through the traditional processes. Banks use homes as collateral and any home in poor condition can be grounds for a loan being rejected. Buyers would have to come up with the money on their own. If you are a first-time home buyer, purchasing a home “as-is” might not be the best direction.

Hiring the best Realtor to help you navigate the process of buying this type of home will be your best decision. It helps to have someone on your side that can provide good advice and help to know when to back out of a deal if they are sure you will lose a lot of money in the long run. Another bonus of having a Realtor is that they can help with the process of securing a loan as well as figuring out an estimate of the budget you will need for any repairs.

The Bottom Line: There are plenty of homes on the market listed “as-is” that discourage many buyers. Of course, you should be cautious, but “as-is” does not always mean that the house is a money pit. Sometimes the seller can’t vouch for any repair work that has been done – thus an inspection can help and a decision can be made accordingly. Or, the home could have been inherited and the seller is not aware of the issues and does not want the responsibility of fixing any problems. Whatever the reason, it’s in the buyer’s best interest to get all the information about the house before an offer is made.

Most buyers acknowledge that when they are buying a home title insurance is a vital part of the transaction. Title insurance protects the buyer from any unanticipated property issues. Are there risks if title insurance is not bought? Absolutely.

Buying a home is one of the largest investments anyone will probably ever make. You are prepared, you have stayed within your budget, the home has been inspected and the home insurance is locked in. What’s the worst that could happen without title insurance?

• Unknown Liens on the Title: Occasionally businesses will file a lien against a home, which means they are legally entitled to any proceeds made in the sale of the house to settle a debt the seller owed them. This lien is attached to the home, not the seller, so it will end up being the buyer’s issue. Examples: contractor’s fees, taxes, and child support. A title company will do a search on the home to check for any of these claims.
• Unrevealed Heirs: You can lose your home, quite literally. Upon the death of someone, the ownership of their home can end up in the hands of the heirs either by direction of a will or in the absence of a will, to the closest living relative in accordance with the county/state law. However, there might be heirs that are missing or unknown at the time of death that could appear years later and claim part ownership and will ask for financial compensation for their portion of the property. Or, they can claim that the home is theirs. With title insurance, the new owners will be given money for their legal bills if the issue ends up in court, plus insurance will pay any compensation they might be required to give the missing heir.
• Encroachment Issues: Encroachment occurs when someone, such as a neighbor or a construction company, takes over part of your property without permission or proper legal notification. This happens due to an inaccurate survey or otherwise. Title insurance covers these unknown risks that are not agreed to in the sale, but if discovered at a later date will interfere with the title.
• Identity Theft and Fraud: Title insurance provides a clear chain of ownership for the home. The real estate industry experiences millions of dollars worth of fraud every year. Documents such as deeds, transfers, and even wills are forged. This will all be covered by a title policy.

The Bottom Line: Essentially, there are no perfect titles. Government restrictions, utility easements, claims of adverse possession, and tax liens are examples of limitations or defects that can impact a title. Title searches will uncover a lot of these limitations or defects. However, there are some that may not be discovered in even the most diligent title search. Title insurance protects you from these risks.

Why would anyone do a “rent to own” agreement? This process can be a way for people with limited savings or with questionable credit scores to buy a home. This type of agreement allows for the opportunity to save for a down payment. If there are credit challenges, this process can buy some time in the home before having to qualify for a mortgage.

In the contract, a portion of the rental payments will go toward the home purchase. The contract will stipulate what the price of the home will be when the lease ends. At the end of the lease, the renter acquires a mortgage for the property and finalizes the sale.

State laws vary on rent-to-own contracts, but typically, the deals can be set up any way the buyer/tenant and seller/landlord prefer. Both parties must agree on the purchase price, which can be tricky when the sale is happening several years in the future. In a rising market, for example, the seller might want the buyer to pay more than the current value of the property.

There are two types of agreements:

• A rent-to-own contract also called a lease purchase, refers to the contract where the buyer is legally obligated to purchase the property at the end of the lease.
• A lease with the option to purchase also called a lease option, gives the buyer the right to buy the property at the end of their lease term. In other words, the buyer is not contractually obligated to purchase the home.

The terms rent-to-own and option to purchase are sometimes used interchangeably so both the seller and the buyer should be clear about the nature of the contract before signing it. In particular, the buyer should be aware of the terms and conditions so they do not mistakenly agree to buy the home when the lease ends.

Until the tenant exercises the option and purchases the rental property, the premises are owned by the landlord.  The title to the house remains with the landlord until the tenant exercises the option and purchases the property.

It’s often advised to consult with a real estate attorney to clearly define the details such as when rent is due; how much of the rent will go toward the purchase; who takes care of any repairs and the general upkeep of the home during the lease period and so forth. Once the best terms have been reached for both parties an inspection should be conducted with an arrangement of payment by the landlord. An inspection will single out any major issues that could end up being a big expense going forward as well as a way to protect the person leasing from any claims of damage if the intention is not to buy at the end of the contract.

The Bottom Line: Renting to own may be a great option for people that want to own but have a poor credit score or don’t have the money for a down payment. Additionally, this might be the best option for a seller in a market that isn’t doing very well. There are plenty of pros and cons that come with this process, so it’s in the best interest of everyone to consult with a real estate attorney as well as a realtor to help make this decision.

Selling a home is often a long and complicated process that requires skills, strategies, and the best realtor on your team to succeed. Some homes seem to effortlessly hit the market and sell quickly. What’s the secret behind these sales? Key strategies that the highest performing realtors will tell you:

PRICE RIGHT: Get the perfect most competitive price point and your home won’t be sitting on the market long. Your realtor should be proficient in determining the price by using comparables in your local area. Data shows that pricing a home slightly below market value and on par with the lesser competition is the best way to get the most money. Aggressive pricing like this can set up the conditions for a bidding war as people tend to be motivated by the fear of missing out on a great deal.

ONLINE MARKETING: Numerous buyers go to realtors after finding their dream house online. An outstanding web presence is proving to be one of the most effective ways to get buyers into your home. It’s important that you have a realtor on your team that understands how to utilize all the resources available online. The content they create to showcase your home must be consistent and of high quality. Photos should be professional and captured in the best light and staged appropriately. Adding descriptions to pictures is another way to grab the buyer’s eye. Everyone loves a good story.

KILLER FIRST IMPRESSION: After a buyer looks through your online presence, they may do a drive-by and what they see will either get them in the front door or have them drive to the next option. Powerwash off the mud, dust, water stains, and accumulated dirt. Freshen up the landscaping with mulch and annuals, trim overgrown shrubs, and clear away any fallen debris. Don’t forget to wash all your windows and if needed – refresh and repaint your front door. Some of the best realtors will have a crew at their fingertips ready to help make your home look its very best. After all, the realtor wants you to sell fast, too. He should have all the resources to find the best vendors in your area that he has worked with before.

STAGE: The atmosphere inside your home must be appealing and void of any personal collections, keepsakes, photographs, and such. The buyer needs to imagine themselves living there. If you can’t hire a professional stager, your realtor should be able to guide you in maximizing the full potential of your home by rearranging furniture, removing pieces to make rooms look larger, and making the very best welcoming impression.

The Bottom Line: The condition of your home is key to how quickly you will sell it. A house that is well-maintained coupled with the above tips will sell faster than a house that hasn’t been taken care of. If the home is in disrepair but is well staged, makes a good first impression, is priced right, and is marketed well will fall apart during inspections. It’s important to know what upgrades and renovations you need to do before listing your home. Work with a professional, experienced realtor who knows your market and can provide expert advice to streamline the selling process and increase all chances of a quick sale.

It’s time to sell your home and others in your neighborhood have decided to do the same. Now, you are competing against all of them. There, quite possibly, will be numerous other houses offering similar features. How will you make your house stand out?

Step Up Your Curb Appeal: There are just a few seconds to make an impression on a buyer, so when the buyer pulls up it has to be great. Take a good look around at the exterior, landscaping, driveway, and any other component that contributes to your home’s overall curb appeal. Your well-maintained and landscaped front yard, clean exterior walls and windows, and welcoming front entrance will be sure to get prospective buyers to come inside.

It is said that people develop an emotional attachment to a home within the first few minutes and the curb appeal is the first thing they notice when they get to your home. Other homes on the market will have their homes in tip-top shape on the exterior, so you have got to match, even exceed their efforts.

Depersonalize the Inside and Hire a Stager: Vacant homes that are staged typically show much better than occupied homes because it enables buyers to easily see themselves moving into them. However, not everyone can simply move out of their home when they put it on the market. The next step would be to completely depersonalize each room and make it look as if it’s a model home.

Take down your family photos and political or religious accessories, and replace them with more neutral pieces. Pack up any collections or pieces that would only be meaningful to you and not necessarily to the average buyer.  By creating this depersonalized, neutral space you will help buyers visualize themselves as owners of the home, which is exactly what will entice them to put in an offer. 

Hire a professional stager who will take emotion out and remove items and reshuffle furniture. Staging your home for sale can feel like a luxury. But when you’re competing with your neighbors for buyers’ attention, staging your home can help sell your home faster.

Repair, Replace, and Dust: Go through each room with a fine tooth comb and search and fix any scuff marks on the walls or chips in the tiles. It can be too easy to overlook these minor items, but fixing them can go a long way in improving the overall look and feel of your home. Replace any loose hardware on cabinets in the kitchen and bathrooms as well as make sure there are not any loose doorknobs. Be certain of working lights and lamps and have them on if a room needs to be brighter. Open the curtains and raise the shades! If you have hardwood floors are they in need of refinishing, staining, or shining?

Dust your ceiling fan blades, the corners of each room, the light fixtures, and behind doors. Most of us forget about the cobwebs and dust bunnies that collect.

Provide Printed Additional Information: Have notes detailing what the home comes with – appliances, chandeliers, drapes, play structures outside, and anything else that will keep your home as the front runner. Are there any historical details? Did you just replace the roof, if not how old is it? Is the water pressure, air conditioning, heat, and even fireplace worth showcasing? How long is the commute to downtown? Any good local information? Try to tap into anything that would make your home better than the neighbor’s home for sale.

The Bottom Line: Choose a real estate agent you are comfortable with and rely on their knowledge to help you sell your home fast. Your realtor should be experienced enough to price your home right and be realistic about its value. These are just a few tricks to help your home stand out.