Tag: title

The money you have saved for a down payment is not the only cash you will need when buying a home. You’ll also need an additional amount to cover closing costs. More than half of homebuyers are surprised by the extra money needed at closing as found in a survey done by ClosingCorp.

New regulations have tightened, forcing mortgage lenders to disclose these costs in loan estimates, however, buyers still find themselves shocked when they see the final tally, which can add up to as much as 5% of the total loan amount.

Closing costs are fees and payments that need to be made to different individuals and organizations who are involved with the transaction of your home sale. The fees charged at your closing will be specific to you, your property’s location, and the lender and settlement service providers you choose to work with. They can include:

• Government recording costs
• Appraisal fees
• Credit report fees
• Lender origination fees
• Title services
• Tax service fees
• Survey fees
• Attorney fees
• Underwriting Fees & Processing Fees
• Escrow
• Home inspection
• Property tax
• Private Mortgage Insurance (PMI)

There are steps you can take to help bring down your closing costs:

• Schedule your closing at the end of the month. Part of your closing costs is prepaid interest charges on your mortgage for the remaining days of the calendar month. If you schedule your closing toward the end of the month, you’ll only pay these charges for a few days.
• Ask the seller to cover some of the costs. In a buyer’s market, and/or if your seller is particularly eager to complete the sale, you can ask them to cover some of the closing costs.
• Compare your loan estimate and your final closing disclosure form. Check for inconsistencies and new charges. If something doesn’t look right, bring it to the attention of your lender.

Your house has been postured to be put on the market after getting everything cleaned, refreshed, landscaped, and staged. You’ve interviewed and hired the best realtor. Pictures have been taken, the marketing is perfect and you’re ready to go. But – there is a problem. A neighbor’s unkempt or other various forms of bad neighbors including being noisy or disruptive. These situations can negatively affect your home’s desirability and cost you some real money.

Respectfully and diplomatically, visit with the offending neighbor (s) and have a conversation with them, letting them know that you are preparing to sell your home and would love their help showcasing the neighborhood in the finest light which will also help them. After all, selling your home at a great price only means good news for them!

There are a multitude of reasons someone’s home can look disheveled. A sickness, or a new baby for instance. If this is the case and they are unable to clean up the outside, offer solutions. Maybe do the work yourself for them or hire professionals to get the job done. While it will be money out of your pocket, you won’t be forced to lower your asking price and in the end, you will be able to recoup that when you sell your home.

If your efforts are not successful, make a call to the city hall. Explore how they can help you. Many cities and counties have ordinances that prohibit things such as a vehicle on jacks, old tires, or an inoperable trailer/truck parked on a lawn. Beyond being an eyesore, it could be dangerous to a child who might wander onto the property, thus the police should be contacted. The fire department and health officials might be concerned about tall, dead grass that could be a fire hazard and an attraction to rats or other animals.

The problem may not be the fault of the homeowner if they rent out their home and their tenants aren’t taking care of it or behaving in a way that impacts the neighborhood. If after you have had a kind conversation with them and things still aren’t getting better, you should find the owner. Your realtor will be able to assist you in tracking him down and help in encouraging cooperation from him.

The Bottom Line: A bad neighbor is hard on a house, especially when your home is for sale. A home’s value can be negatively impacted or cause it to stay on the market longer. Good and direct communication is important in these situations. No matter what you do, keeping your realtor in the loop is suggested. They’ve been down this road before and probably have many good ideas.

The purchase of a home is most likely one of the most expensive and important purchases a person will make. The buyer and the mortgage lender must be certain that the home is indeed completely the buyer’s and that no other person or government entity has any right, lien, or claim to the property at all whatsoever. Like most types of insurance, having title insurance is better to have and not use than needing it and not having it available.

Title Insurance companies are in business to make sure the rights and interests of the property are clear, that the transfer of title takes place efficiently and correctly, and that the interests of a homebuyer are protected to the maximum degree.

Hidden issues can pop up after the closing of a home. Having title insurance will protect the buyer from some pretty sticky situations. Some of these unforeseeable title claims can be:

• Forgery | False Documents – for example, the seller misrepresents the identity of the person selling the property.
• Fraud | deception to achieve unfair gain -for example, someone steals identity and either sells the house without the owner’s knowledge or consent or takes out a second mortgage on the property and walks away with the money.
• Clerical error | inconsistent paperwork and historical records – for example, an unforeseeable discrepancy in the property or fence line confuses ownership rights.

Title insurance is a safeguard against loss arising from hazards and defects already existing in the title. While claims on title insurance are rare compared to other types of insurance, they still happen and can be complicated legal issues to fix.

• Outstanding mortgages and judgments, or liens against the property because the seller didn’t pay required taxes.
• Pending legal action against the property that could affect your ownership.
• An unknown heir of a previous owner is claiming ownership of the property.

After the title company conducts an exhaustive search relevant to the property with assurance that no one else has an interest in it, a policy will be issued. Because of this examination of all the records, any problems with the title will be cleared up before the purchase of the home. Once the title policy is issued, if a problem arises leading to a file against the property, the title company pays the legal fee that would be incurred in the defense of the owner’s rights as well as any loss arising from a valid claim. This protects the owner and any heirs as long as it is their property.

The Bottom Line: The title company hired will conduct a meticulous title search, however, the possibility of something being overlooked cannot be eliminated. That’s why it’s crucial to have title insurance. The policy will protect against any unforeseen issues that may arise with the property’s title. Without title insurance, an owner could end up dealing with expensive legal costs and other charges. An investment like a home should be safeguarded and a title policy should be in place before the day of closing.

So you have decided to have your dream home custom-built on a plot of land that you love. What could be better than watching it all happen from the ground up just the way you want it? While you might be better off doing this, it’s not as easy as it seems. There are a lot of details that need to be worked out and you will need to be prepared.

The first thing you should do is hire the most experienced realtor with new home construction knowledge, who will best represent you and your interests during your home search and the home-building process. A realtor that regularly deals with builders, but isn’t affiliated with a builder. Do this before even visiting a builder’s home construction site. Many model homes are represented by a real estate agent who has a relationship with the builder, and many builders won’t allow you to hire your agent once you already visited their sales office without representation. Seeking the help of a knowledgeable professional who regularly deals with builders and knows the local community will save you time and money. Besides, it will cost you nothing as a buyer to be represented by an agent since it is typically the seller who pays for the commission. Many builders are also happy to work with agents.

Do your research on the builders. Search for online reviews, testimonials, and any news and updates you can find. Then check for the validity and trends in those reviews, since many builders will surely have a history of both happy and unhappy clients. If possible, also talk to local homeowners or current residents. Connect with them in online groups or communities through social media to better educate yourself before making a decision. Also, research the location and the community where the new construction is being built and you can learn about your potential neighbors as well. Ask your realtor if they’ve worked with the builder before and gain insights about their reputation.

It’s normal to be fascinated by that picture-perfect model home, but don’t let it blind you. Model homes are, of course, decorated to look desirable and striking. They have been furnished and staged so that rooms will appear bigger. Model homes were often constructed using a mix of standard materials and fixtures and include many upgrades that don’t necessarily represent what you can get, so it’s crucial to note what exactly you will be getting. Enlist the help of your agent to get a list of the standard features and common upgrades, together with their associated costs.

Most builders are reluctant to lower their prices because it may set a precedent for future buyers in the development who may expect similar discounts. The best way to negotiate with a builder is through upgrades. Consider asking for the builder to negotiate “on the back end,” such as paying for closing costs and performing upgrades at no additional charge. This is the less obvious way for builders to sweeten the deal while still maintaining the value of their neighborhood. With the help of your agent, research the builder’s negotiating style so that you can plan for an effective way to make a creative offer.

Consider other sources where you can find a lender who will offer you the best deal. Don’t automatically use the builder’s lender without shopping around for better options. Builders often have their preferred lender so that they can be fully informed of your progress as a borrower. However, they may not work with your best interests in mind. Your agent can also help you by referring to a trusted list of private lenders.

For some instances where the builder’s preferred lender is the only option, find out if there are incentives, special offers, or competitive rates available to you if you agree to use the builder’s lender. In some situations, it can be a cost-efficient option since they are often willing to offer competitive rates and terms, especially if the builder owns the lending company.

Get an inspection! New homes can have problems or defects since construction workers can make mistakes as well. There may be problems with the HVAC or plumbing installation that only a licensed home inspector can detect. Getting an independent inspection is always a good idea since any problems can be identified before a builder’s warranty expires. It will also help you learn more about the home. A home inspection will guarantee that everything is safe and up to code.

Even if you are working with a respectable builder, make sure that everything you have negotiated and agreed upon will be included in writing. They may honor your requests, but verbal conversations are not binding so they may forget about the promises they made to you. Make sure that everything important will be put in binding documents that must be signed by all parties. It’s especially crucial if you are buying a home that is not yet complete. Your experienced real estate agent can help you ensure everything is in writing and that all documents are properly signed.

Lastly: ask about warranties. Find out what is and isn’t covered and for how long, since not all warranties are created equal. Most builders use third-party warranties that cover materials and workmanship. Builders often use construction materials from different manufacturers or suppliers, like for windows or tiles, so those products may have separate warranties. There’s a great chance the builder might refer all issues to the manufacturers instead of handling the issues directly. Get the builder to specify each product’s warranty information so you can prepare your offer documents to address any concerns before closing. Warranties will also help you understand the process you need to follow once something needs to be fixed.

Pricing your home too high can be damaging. Overpriced homes sit on the market, day after day and month after month while the price gets lowered. The listing becomes stagnant, and buyers assume there is something very wrong with the house thus avoiding it. Eventually, there will be a buyer out there who knows they can get a deal on the house and make a lowball offer.

The first 30 days on the market are the most important. This is when the most showings will occur. Having a home that is priced too high, will push buyers away and they will choose to ignore it or bookmark it to check on the status of the price later. The longer the home sits unsold, though, the more negatively it is viewed. Buyers believe it is overpriced or there is something wrong with it. Waiting too long to drop the price will mean most likely losing the people who have bookmarked the home as they have probably already moved on and bought something else.

Additionally, if the home is on the market too long, potential buyers will think they are in a better negotiating position and end up tossing out a real lowball offer. Even when the negotiating begins, it will be less than the original asking price. To attract the most potential buyers possible, the home must be priced correctly from the onset of its going on the market.

If by chance a seller is lucky enough to get an offer on their overpriced home, there is still a hurdle to get over. The home may indeed be in a desirable neighborhood and have all the bells and whistles, but for the buyers to get a mortgage, they need to have the home appraised. The dollar amount the bank will lend the buyer is based on the appraised value of the house rather than the agreed-upon purchase price between the buyer and seller. The appraiser will use the prices of recently sold nearby comparables to help determine the value of your house.

If the home does not appraise at the price the buyer offered, the seller will either need to reduce the price to meet the appraisal value or the buyer will need to come up with additional funds to make up the difference. Not many buyers are jumping to ante up more money on even their dream home if the appraised value is not matching. Sadly the home will end up back on the market with additional expenses and adding to the days on the market.

Another issue is that any good realtor who is showing homes to buyers is obligated to do what is best for their clients and showing a well-known overpriced home is something they will steer clear of. Properties shown to buyers will meet the current fair market value. They will wait until the price is eventually reduced. If then, the lowered, overpriced home is shown, the buyers will look for all the things that are wrong with it – because they know there has to be if it’s on the market for a long time. The real problem all along was always the price.

Picking the right realtor is the key to a successful sale of a home. Interview several agents before choosing one and have them write out how much they think they can sell the home for. If one gives a significantly higher number than the others, be wary. It’s unfortunate but some realtors will throw a high number into the ring just to get hired. The realtors should come armed with the comps (competitive market analysis) and be able to back the number they came up with.

Some sellers mistakenly believe that Zillow’s pricing estimates, called Zestimates, and other online valuation tools can be used as a good barometer for estimating the price of their home. Beware of these tools and websites as they will never replace a good real estate agent who knows the local market and their estimates are usually far off the the actual selling price of a home.

The Bottom Line: When a house starts overpriced, it almost always ends up selling for less than market value. By pricing it high to drop the price later, you are completely bypassing the best candidates for buyers. They will look for homes for sale that are more accurately priced. Experienced real estate agents know that pricing a home appropriately from the start is critical to getting it sold quickly and at the best price.