First time home buyer

[-Nick-]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Rodeo Trash</div><div class="ubbcode-body">Zillow is the most inaccurate site there is for finding home values because appraisers don't look at Zillow to get info for their appraisals. When an appraiser does an appraisal they look for "SOLD" homes on the local Multiple Listings and they usually want to use homes that have "SOLD" in the last 60 to 120 days but if they can't find good comparables, then they will look out to 6 months and within 1 mile of where the subject property is located, If they can't find comparables with in that 1 mile radius, then they will look further out. Realtors have access to alot of info including good mortgage companies. </div></div>

+100 again... I've spoken with the President with Zillow as they are a local company and he even says they are not accurate. The "Zestimate" was meant to establish a baseline for Home Owners to be able to come on and +/- any improvements or unknowns. Heck, most Realtors don't know it but we can actually go on-line and adjust the "Zestimate" to more accurately reflect the listing price if it's off.

If you really need to know a homes value then get an Appraisal. Almost all loans will require one anyways and there are Appraisal Condition Addendum to protect the buyer should the home not appraise. Also, many appraisers will only appraise the home to within 1-3K often even if the home is worth more. Why? To avoid liability issues. Unfortunately there are evaders of Natural Selection out there that bought homes that appraised for more then immediately turned around and tried to sell them for more. When they couldn't they sued the appraiser.

 

[-Nick-]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: maxpower220</div><div class="ubbcode-body">
Sorry, but "only 3% extra" is a lot when you are talking hundreds of thousands of dollars.

Sales contracts can easily be found on the internet, just make sure that is applies to the state that you are located.</div></div>

Generic Sales contracts can, but the verbiage & addenda can NOT! There's a saying in the legal system - Anyone who represents himself has a fool for a client.

Brokers spend $$$$ in continuing education, courses, and contract law classes. We are held to the same standards as Attorneys in my State. Only an Attorney or a Real Estate Broker in WA can legally draft a Real Estate contract for that fact. No amount of Googling or research can identify the current legal issues or experience that a good Broker can.

Not directed at maxpower220...

<span style="font-weight: bold">Statistics that don't get talked about...</span>
- 6 out of 10 FSBO's will eventually list with a Broker...
- 3 out of 10 will give up selling the home altogether...
- 1 out of 10 will successfully sell their home as a FSBO...
- Out of those successful... 6 out of 7 said they wouldn't do it again.

Also, FSBO's typically end up selling for 9% less than a Listed Home. Yes... 9%! So... Subtract 6 from 9, then X that by the home sale price and you tell me if it was worth it.

I always find it comical when the trolls on Zillow come out and gripe that a Broker won't show them a FSBO unless it's agreed that they'll get paid. As if we should simply work for free because they want something but aren't willing to pay for it. Between the MLS dues, National Realtor dues, State Realtor Dues, Local Realtor dues, supra key fees, advertising fees, signage, gas, continuing education, extra auto insurance for clients, brokerage dues, legal insurance coverage, the highest B&O tax in my State, and God knows who else dipping their fingers in the cookie jar... and those idiots want to begrudge us wanting to make something so we can pay our own bills and take care of our own families? I have 2 words for them and only the last is appropriate... $#@% Off... lol

Rant Over... It's been a long day I tell you

 

[-Nick-]

Re: First time home buyer

Here's a list of the top 10 missed FSBO items IMO... and their the most basic knowledge items for Brokers

1. Side Sewer Inspections(coming to most cities near you shortly)
2. Appraisal Condition Contingency
3. Utility Addendum (Good thing you called the Utility Companies to look into possible liens coming up... oh you didn't? Oops...)
4. Charges & Assessments due after closing (You sure you made the Seller responsible or did you even think to ask?)
5. A big one her... Preliminary Title Review
6. Financing Contingency
7. HOA Review Contingency
8. Neighborhood Review Contingency
9. Well Inspections
10. Distressed Property Addendum (You could be on the hook and owe fiduciary responsibility to the Seller and not even know it)

 

[ArcticLight]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Broker</div><div class="ubbcode-body">Come on now, do you really need a wood stove for Silverdale? Maybe out towards Seabeck... They are nice though.

In-Wall heaters such as Cadets tend to get recalled every other year, and baseboards aren't much fun either. Aim for forced air, electric or natural gas. </div></div>

HEATH is that you???

My mortgage dude, former Marine sniper, Heath Nicols - used to work at GOlf Savings bank....that you bro???

Yeah I need a woodstove - I cut my power bill down from $300 a month in winter to $90 by using a wood stove!!!

 

[-Nick-]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: ArcticLight</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Broker</div><div class="ubbcode-body">Come on now, do you really need a wood stove for Silverdale? Maybe out towards Seabeck... They are nice though.

In-Wall heaters such as Cadets tend to get recalled every other year, and baseboards aren't much fun either. Aim for forced air, electric or natural gas. </div></div>

HEATH is that you???

My mortgage dude, former Marine sniper, Heath Nicols - used to work at GOlf Savings bank....that you bro???

Yeah I need a woodstove - I cut my power bill down from $300 a month in winter to $90 by using a wood stove!!!

</div></div>

Negative... Just another resident of Kidnap County lol

 

[maxpower220]

Re: First time home buyer

Well, since I already stepped on the toes of realtors and they got their panties in a wad.

Let's look at the current economic situation and the housing industry. We can see what "professionals" got us into. Those appraisers sure do know what they are doing, at least they did in 2004-2007.

I find it funny that I post Zillow and all of the trashing begins. Read the whole post!

Real estate agents can provide a great service. As infrequently as people tend to purchase home, most people can and should use them. However, once you see the process a few times and you know exactly what you are looking for, I have found them to be part of the problem.
All 3 of my FSBO transactions went perfectly, without delay or issues. I can't say that for any of the other sales with agents. Mostly, it is one (or multiple) more people in the communication line that get bogged down. Either too many clients, too many closing, or poor organizational skills where there is a loss in translation.

Mostly, I hope that the OP has a pleasant home buying experience, however he gets to that point. It is already stressful enough to make the biggest purchase of your life and then have to move all of your stuff. Good luck. Hopefully this thread has helped more than confused.

 

[ArcticLight]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Broker</div><div class="ubbcode-body">
Negative... Just another resident of Kidnap County lol </div></div>

LOL You have probably seen my comments in the Kitsap Sun LOL


First time homeowner - Things you need to be aware of - as mentioned above:


INSPECTION INSPECTION INSPECTION BY YOUR INSPECTOR NOT THE REALTORS INSPECTOR!!!!!!!!

Get that house inspected. It's worth the $300

 

[-Nick-]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: maxpower220</div><div class="ubbcode-body">Well, since I already stepped on the toes of realtors and they got their panties in a wad.

Let's look at the current economic situation and the housing industry. We can see what "professionals" got us into. Those appraisers sure do know what they are doing, at least they did in 2004-2007.

I find it funny that I post Zillow and all of the trashing begins. Read the whole post!

Real estate agents can provide a great service. As infrequently as people tend to purchase home, most people can and should use them. However, once you see the process a few times and you know exactly what you are looking for, I have found them to be part of the problem.
All 3 of my FSBO transactions went perfectly, without delay or issues. I can't say that for any of the other sales with agents. Mostly, it is one (or multiple) more people in the communication line that get bogged down. Either too many clients, too many closing, or poor organizational skills where there is a loss in translation.

Mostly, I hope that the OP has a pleasant home buying experience, however he gets to that point. It is already stressful enough to make the biggest purchase of your life and then have to move all of your stuff. Good luck. Hopefully this thread has helped more than confused. </div></div>

You just don't have all the facts.

I love how consumers are always quick to blame "professionals" and how there's ZERO consumer responsibility. And of course there's always somebody out there that did it or knows someone that did it so it must be true. I've sold dozens of Bank Owned homes and I'm the guy they send out for the face-to-face with the ex-homeowner or tenant. I feel bad for maybe 10% of these people. The other 90% are people that were either flipping on mortgages, people that bought 2nd homes before their 1st sold, or people that took out ARM loans because they didn't read their contract or ask questions and then when the Balloon came due they weren't able to pay it. 1... yes just 1 guy I felt genuinely bad for because his wife had stage 4, and I helped him get paid to move and helped him pack when he had no one.

So, from your observation theory all yo need to do is observe something a few times then you can do it yourself? So how do you figure out what you can't observe which is 1/2 our job or more?

I'm not here in a professional capacity to further my paycheck. I'm here to listen and discuss shooting shit. When the topic comes up I present sound advice since I have expertise to offer that others don't. What does annoy me is when friendly advice is given and jack wagons come on and attempt to degrade that profession with BS and undermine that advice with what they see on the news or read on sites like Zillow.

I never "trashed" you, but since My "panties are in wad"... I just have a dislike for people giving crap advice on an industry that they watch from the sidelines and recommending bad tools for what will be one of the most important purchases in their life.

 

[-Nick-]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: ArcticLight</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Broker</div><div class="ubbcode-body">
Negative... Just another resident of Kidnap County lol </div></div>

LOL You have probably seen my comments in the Kitsap Sun LOL


First time homeowner - Things you need to be aware of - as mentioned above:


INSPECTION INSPECTION INSPECTION BY YOUR INSPECTOR NOT THE REALTORS INSPECTOR!!!!!!!!

Get that house inspected. It's worth the $300

</div></div>

Lmao... I had to bail out from The Sun forums due to the excessive trolls that roam there. There's a guy RobinInManette that every time someone even mentions the word "Gun" wants to jump in and challenge peoples manhood and thinks every AW is "machine gun" lmao...

 

[UKDslayer]

Re: First time home buyer

My advice: Do not believe the seller/builder will "fix" items after closing...all promises are out the window once you sign...as much as it sucks to delay closing, do it until everything is "fixed"/completed to your satisfaction!

 

[-Nick-]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: UKDslayer</div><div class="ubbcode-body">My advice: Do not believe the seller/builder will "fix" items after closing...all promises are out the window once you sign...as much as it sucks to delay closing, do it until everything is "fixed"/completed to your satisfaction! </div></div>

+1

 

[Seuss]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Rodeo Trash</div><div class="ubbcode-body">Broker and Seuss, it's to bad that I can't use all of your comments for my CE credits. BaileyMoto said it just right, by having a GREAT team working in the Buyers behalf, this will be an amazingly easy process. Everybody needs to communicate through the entire process and everything will go smoothly and you will end up with a home that you will be happy with. It really should not be a hard process to buy a home with the right people working for you. Here in Utah we have Rural Housing and I'm sure they have it in other places as well, this is a GREAT program for those who are looking in those areas and for those who qualify and there is no PMI w/ 100% financing. </div></div>

Thanks RT, I sincerely tell everyone I work with that I give them the same advice I would give a brother or sister, I've yet to see the transaction worth losing my reputation over. I had 2 single school teachers close today on seperate purchases, both used USDA, zero down, no monthly PMI and a 4.375%, 30 year fixed, life is good.

If you must FISBO, make sure you hire a Real Estate attorney to represent you. I've often said FISBO = Help Wanted. From my standpoint as a lender, something always gets missed in a FISBO and I end up playing Realtor/attorney/home inspector/Mom to the buyers.

 

[ArcticLight]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Broker</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: ArcticLight</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Broker</div><div class="ubbcode-body">
Negative... Just another resident of Kidnap County lol </div></div>

LOL You have probably seen my comments in the Kitsap Sun LOL


First time homeowner - Things you need to be aware of - as mentioned above:


INSPECTION INSPECTION INSPECTION BY YOUR INSPECTOR NOT THE REALTORS INSPECTOR!!!!!!!!

Get that house inspected. It's worth the $300

</div></div>

Lmao... I had to bail out from The Sun forums due to the excessive trolls that roam there. There's a guy RobinInManette that every time someone even mentions the word "Gun" wants to jump in and challenge peoples manhood and thinks every AW is "machine gun" lmao... </div></div>


Yeah he or she is totally clueless, believes that 911 is there to save you.

I don't go in as often as I used to when i waas laid off, I save my internet time for this place

 

[-Nick-]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: ArcticLight</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Broker</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: ArcticLight</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Broker</div><div class="ubbcode-body">
Negative... Just another resident of Kidnap County lol </div></div>

LOL You have probably seen my comments in the Kitsap Sun LOL


First time homeowner - Things you need to be aware of - as mentioned above:


INSPECTION INSPECTION INSPECTION BY YOUR INSPECTOR NOT THE REALTORS INSPECTOR!!!!!!!!

Get that house inspected. It's worth the $300

</div></div>

Lmao... I had to bail out from The Sun forums due to the excessive trolls that roam there. There's a guy RobinInManette that every time someone even mentions the word "Gun" wants to jump in and challenge peoples manhood and thinks every AW is "machine gun" lmao... </div></div>


Yeah he or she is totally clueless, believes that 911 is there to save you.

I don't go in as often as I used to when i waas laid off, I save my internet time for this place

</div></div>

I'm fairly certain it's a he, and he has masculinity issues as he constantly states "A gun doesn't replace manhood" or some crap similar to that. Then the whole Gun Club/Carter/Danielson issue was kind of the final straw as every idiot that new little to nothing about firearms or real estate laws came out of the wood works and infected the forum with moronic ideas that a 100 year old gun club should up and move since they bought a house next to it and then turned around and whined about the noise and safety.

 

[BaileyMoto]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Broker</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: BaileyMoto</div><div class="ubbcode-body">
I'm closing on a second home right now and I agree with many of the above points. I hired an amazing real estate agent, went with an expensive, albeit amazing home inspector, as well as a reputable local lender. They have all made it possible for me to close on this home whilst working overseas. I'm paying a few extra dollars for peace of mind and people who seem to actually care about this deal going through successfully and me being happy with my purchase.
</div></div>



+1 You should post the names of who you used in your area for others near there that might be looking </div></div>

Bought a home in the northwest ABQ area. Ben Levine was my realtor, Kevin Hoover was the lender over at Peoples Bank. My agent set me up with Frank Melendrez from "Inspections Only". He took a considerable amount of time and personally walked me around to every 'problem', as tiny as they were. Posted an in depth report on his website for me to access/download.

Agent even setup utilities in his name for me so we could get the water/gas meters installed for the home inspection. Up until now, I figured customer service went out the window years ago.

 

[-Nick-]

Re: First time home buyer

With all the talk of HOA's and their sometimes communist practices I thought I'd share this story lol...

<span style="font-weight: bold">DNA Samples Will Determine if Condo Residents Aren't Picking Up Behind Their Pooch.</span>
Fines of up to $1,000 if DNA found in left-behind waste matches Owners’ pet DNA.
http://m.pbpost.com/pbpost/pm_32380/contentdetail.htm?contentguid=JsbQoLav

 

[k20350]

Re: First time home buyer

Wanna buy my house? LOL Wife and I bought a very small house that we could afford 10 years ago. Marked tanked, town went to crap, if I didnt drive truck I wouldnt have a job. Half the houses in a 5 block circle are empty. 40k upside down now, 2 bedrooms, one kid came along all is well. Guess what! Oopsie 2nd on the way w/ nowhere to put it. Absolutely no way to build on. Major screwed right now. Wish i would have rented over the last 10. I would be way ahead!

 

[-Nick-]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: k20350</div><div class="ubbcode-body">Wanna buy my house? LOL Wife and I bought a very small house that we could afford 10 years ago. Marked tanked, town went to crap, if I didnt drive truck I wouldnt have a job. Half the houses in a 5 block circle are empty. 40k upside down now, 2 bedrooms, one kid came along all is well. Guess what! Oopsie 2nd on the way w/ nowhere to put it. Absolutely no way to build on. Major screwed right now. Wish i would have rented over the last 10. I would be way ahead! </div></div>

Have you consulted an Attorney about a Short Sale? There's also Loan Modifications, but they almost never work and people are led to believe they shouldn't make payments to try and get the loan mod then they get foreclosed on by the bank, so be careful with those. Sorry hear about your circumstances though...

 

[Rodeo Trash]

Re: First time home buyer

Unfortunately, working as a Realtor I have to deal with people that are going through some pretty tough times whether or not it be medical or family or both that has caused them to loose their homes and then there those that judge other by calling them dumd when they don't even know their circumstances. It's really sad to see this happen to so many people and even more so when it's your friends and neighbors.

 

[Rodeo Trash]

Re: First time home buyer

I also don't recall anyone getting their panties in a wad, just a few people who actually know what they are talking about offering some really good advise to another Hide member and expecting nothing in return.

 

[-Nick-]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Rodeo Trash</div><div class="ubbcode-body">I also don't recall anyone getting their panties in a wad, just a few people who actually know what they are talking about offering some really good advise to another Hide member and expecting nothing in return.</div></div>

No my Panties were slightly wadded, but it was a long day yesterday and the heat made em ride up. Should've gone commando I guess... lol

 

[Bryan27]

Re: First time home buyer

For the real estate and mortgage professionals on here, how are the best deals being had right now? I am in a stable job with about 6 years with the same company, have good income, great credit history and zero debt. My situation is that I don't just park my money in the bank and have it at my disposal, most of my "savings" is tied up in 401k and a roth that I am putting away for retirement and do not want to touch it until that time. Are there loans out there for those of us that have the income and assets to afford a house, but don't want to withdrawl them from savings to put down on a house? I'd like to take advantage of the interest rates in the low 4% range while it's available, but see taking money out of my investments making a higher return to put down on a house as a bad business decision. Are there any ways to get around PMI without 20% down?

There is a chance I'll be getting transfered in the near future, so I'm not exactly looking to buy immedeatly. If transfered, I'll likely be in the house for ~5 years before another transfer would come along, but the company covers losses on house due to transfer as part of the relocation the way I understand it.

 

[BaileyMoto]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Bryan27</div><div class="ubbcode-body">For the real estate and mortgage professionals on here, how are the best deals being had right now? I am in a stable job with about 6 years with the same company, have good income, great credit history and zero debt. My situation is that I don't just park my money in the bank and have it at my disposal, most of my "savings" is tied up in 401k and a roth that I am putting away for retirement and do not want to touch it until that time. Are there loans out there for those of us that have the income and assets to afford a house, but don't want to withdrawl them from savings to put down on a house? I'd like to take advantage of the interest rates in the low 4% range while it's available, but see taking money out of my investments making a higher return to put down on a house as a bad business decision. Are there any ways to get around PMI without 20% down?

There is a chance I'll be getting transfered in the near future, so I'm not exactly looking to buy immedeatly. If transfered, I'll likely be in the house for ~5 years before another transfer would come along, but the company covers losses on house due to transfer as part of the relocation the way I understand it. </div></div>

I'm not a professional, but I'm currently closing on a home right now, so it's all fresh in my memory.

From my understanding, the only real way to avoid PMI is either by 20% down, or 20% equity in the home. Meaning, if you purchase a foreclosure, for example, you could buy a home that is at least 20% lower than current market value. There used to be a time when you could take out 2 loans, one for 80% and one for 20%, essentially allowing you to have '20% equity' on the primary loan. I believe most (it not, all) lenders no longer allow you to do this...for good reason, imo.

If you have very little down, FHA may provide you with better rates. PMI will only be added to the loan for the first 5 years, assuming you have paid at least 20% down. In essence, so long as you carry less than 20% equity, you are likely going to be on the hook for PMI.

Personally, I'd shop for a foreclosure of some sort. There are a ton on the market. Even if you get stuck with PMI, you should be able to pay enough down to get rid of it within a couple years (on a conventional).

 

[Seuss]

Re: First time home buyer

USDA offers zero down, seller can pay all closing costs, and no monthly PMI. There are income limits, but they're fairly aggressive, and the property has to be located in specific areas, but again they're better/broader than you'd think

FHA is 3.5% down, does have monthly PMI (and due to the wonderful guidance of HUD, the cost has doubled in the last 3 years), seller can pay all closing costs up to 6% of sale price

Conventional loans, if you can put ~7% down, there's a PMI option that actually is inexpensive. Without murking this up w too many numbers, it's called "single premium" MI, and is added to your loan (like USDA and FHA's up front MI), financed into the loan, and there is NO monthly MI. On a $200k house, your payment is ~$150 per month lower using this option. Seller can only pay 3% of sale price toward closing costs

With your short time horizon you may want to consider FHA even though it's likely the most expensive of the three, simply due to the fact that the FHA loan is "assumable", meaning your buyer can take over your loan. Higher rates are coming and if you list your house for sale w a 4.50% assumable loan when new money is 5.75%, which house do you think folks will look at first?

Gotta roll, son and I are heading to Reade Range for some movers, fireworks, exploding targets and BBQ. Be safe guys.

 

[-Nick-]

Re: First time home buyer

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Bryan27</div><div class="ubbcode-body">For the real estate and mortgage professionals on here, how are the best deals being had right now? I am in a stable job with about 6 years with the same company, have good income, great credit history and zero debt. My situation is that I don't just park my money in the bank and have it at my disposal, most of my "savings" is tied up in 401k and a roth that I am putting away for retirement and do not want to touch it until that time. Are there loans out there for those of us that have the income and assets to afford a house, but don't want to withdrawl them from savings to put down on a house? I'd like to take advantage of the interest rates in the low 4% range while it's available, but see taking money out of my investments making a higher return to put down on a house as a bad business decision. Are there any ways to get around PMI without 20% down?

There is a chance I'll be getting transfered in the near future, so I'm not exactly looking to buy immedeatly. If transfered, I'll likely be in the house for ~5 years before another transfer would come along, but the company covers losses on house due to transfer as part of the relocation the way I understand it. </div></div>

Best deals are dependent on areas, but Bank Owned properties are fairly popular. Freddie Mac & Fannie Mae are currently offering to pay up to 3.5% in Closing Costs, and Freddie Mac includes a 2 year home warranty worth $1100 on all owner-occupied financed offers. Don't completely discount out private sales as there are still good deals to be had. The best deals are sold within 72 hours usually, so it's all about having a good Broker watching the market and moving quickly when the right deal comes along. The mentality that sitting on it for a while and seeing if the price drops isn't accurate in many markets. Many of by Bank Owned listings get good offers within the first 48 hours. If you're not competing against other offers then I would come in at 90% of list and negotiate from there.

Too often both Buyers and Brokers have this mentality that the Banks are desperate and they come at them when a property list with offers as low as 50% of list, then wonder why the bank doesn't even bother to counter. Most larger banks use a matrix of sorts and have SOP's which limit what they'll take off. The banks also know the value and list accordingly. Of course there's always going to be that guy that knows someone who did or he once did blah blah blah. Don't get caught up in hype or 1x's as I call them.

 

[-Nick-]

Re: First time home buyer

I wrote several articles once that might be helpful, so I'll post them up here as they'll help everyone out...

-----------------------------------------------------------------

Another Reminder to Buyers. Most is self explanatory, some are missed occasionally, and others are lightbulbs going off...

20 Questions To Ask Your Agent Before Making An Offer

1. Is this a Short Sale? This should be discussed prior to the viewing of any homes and addressed immediately with your Realtor® to save time and frustration.
2. Is there a Home Owners Association (HOA)? If so…
a. How much is it a year?
b. What are the Covenants, Rules, & Restrictions (CCR’s)?
3. What is the Tax Assessed Value and how much are the Property Taxes?
4. Is there any future Assessments against the property?
5. What appliances come with the sale?
6. Is there a Home Owners Warranty included?
7. Is the property sewer connected or septic?
8. Furnace? Are there any recent service stickers?
9. What are the average utilities bills for the property? (In most cases you can contact the utility companies directly and get an average cost from them for the property)
10. Have there been any recent filings for Notice of Trustee Sale against the property?
11. Are there tenants in the property? If so…
a. When is their lease up?
b. Will they be gone by closing?
12. Are there any approved planned developments near the property? IE are they going to drop a 24-hour Wal*Mart® in your backyard in 6 months or tract housing that might create pest issues.
13. Has there been any prior water intrusion damage claims on the house? This could affect Title Insurance as well as Home Owners Insurance drastically…
14. Are there ANY know issues?
15. Is there anything here that would prevent the home from passing underwriting condition wise? Many REO’s and Fixer’s won’t pass FHA or VA underwriting guidelines for condition, so be sure to know what is ineligible before…
FHA (http://www.hud.gov/offices/hsg/sfh/ref/chap1.cfm)
VA (http://www.warms.vba.va.gov/admin26/pamphlet/pam26_7/ch12.doc)
16. How long has the property been on market and what was it originally listed at? Long market times don’t always mean the Seller is desperate, or that there are underlying issues with the home. It could just simply be an over-pricing issue. If the properties been on market 6 months and seen 0 price drops there may be a mortgage issue and the seller is avoiding a Short Sale. Expecting the Seller with a long market time (especially in this market) to be all to joyous to see an offer at 65% of listing can and will most likely hurt your negotiation position.
17. Ask “Why are they Selling?” This could be a negotiation point. A Move-Up Buyer has a bottom line and is less likely to sell lower since it’s not a necessary, but a person relocating for employment reasons will be more urgent to sell and hence more negotiable.
18. Do they have pets? Not as important for some as it is for others, but if you have allergies, asthma, or other respiratory problems this may be an issue.
19. Have there been any prior home inspections done? You could learn a lot from another deal falling through. This doesn’t mean you shouldn’t do your own inspections, but if you see issues in the last inspection that weren’t resolved you might save yourself several hundred dollars if there incurable or costly defects.
20. Would you get me a Comparative Market Analysis (CMA) of the home with at least 3 sold comparables in the last 3 months? This is becoming more and more an issue with new underwriting guidelines requiring comparables to be within a certain range in both distance and time. Some rural areas are seeing no comparable sales within the specified ranges and as a result unable to pass appraisal. It’s also an issue of knowing what you’re paying and that it will appraise for what you believe its worth.

 

[-Nick-]

Re: First time home buyer

This article was published by several Title Company to their clients. It's blunt, but it gets the point across.

<span style="font-weight: bold"><span style="font-size: 20pt">Some Guidance For The Misdirected REO Buyer...</span></span>

Buying REO’s (Foreclosures, Bank Owned, or Repossessed Homes) in Washington has some people running circles and getting nowhere. A little guidance, some do’s & don’ts, and a little stress relief... It’s not a complete list but a work in progress and a quick reflection of events past and mental hiccups. I’m sure it will see editing, additions, subtractions, and an occasional dissenting opinion.

<span style="font-weight: bold"><span style="font-size: 14pt">Do’s…</span></span>
1. Always call the agent 1st (or have your agent call) and ask if the property has received any offers and is it still available. In a perfect world websites and MLS search engines would always display accurate statuses, but alas they are imperfect and often wrong. Sometimes a listing may be listed in the MLS as Active but waiting for Seller signatures and not actually offerable. Save yourself the frustration and take the 2 minutes to call and ask…

2. Time is of the essence in getting the “steals” and deals. You MUST have a preapproval letter or Verification of Funds (bank statement showing you have the cash) to make an offer. Most Foreclosures although they would seem to be on the market for several weeks to a month actually receive their offer that will inevitably be accepted within the first 72 hours. “Waiting to see if it will go down” equals standing in line for hours only to get to the ticket window and see “SOLD OUT”...

3. Have earnest money ready even if it’s only $500. Maybe 1 in a 100 banks won’t require a copy of the earnest money check to submit an offer. Promissory notes are useless to them...

4. Preview the property as soon as you possibly can. When you’re there look for the stack of business cards. Are there a LOT? Then you might want to ask yourself how bad you want it and how quick can you make an offer. Once again… Time is of the essence. Waiting can end in disappointment...

5. There is nothing wrong with asking for an inspection. I’ve helped buy and sell numerous REO’s that had inspection contingencies. Some counties REQUIRE septic O&Ms to be done before they can even transfer title. But don’t be confused. Banks prefer offers without Inspections and will take preference. So if you’re an investor and willing to take the risk… but if you’re a first-time home buyer you might want to use caution. Bank Owned are as-is and they will perform lender required repairs on some properties but that’s it. If you buy the home and discover later that there are severe issues you’re on your own...

6. Know what’s within the guidelines of your loan. It’s pointless to make an offer on a property that your bank won’t accept the condition. VA and FHA should definitely take note. Banks will do some lender required repairs, but if your lender comes back and say’s they want some sort of major repair you’re probably up a creek without a paddle and swimming against the current...

7. Ask the listing Agent if there’s known issues with the property. It’s the law for an Agent to give full disclosure of any known material facts to the home. The agent will more than likely not know anything, but in some situations the house may have already undergone an inspection on a prior offer and if there was an issue the agent will disclose it (i.e. septic, water damage, infestations)...

<span style="font-weight: bold"><span style="font-size: 14pt">Don’ts…</span></span>
1. Don’t… Go to the properties without an Agent and “walk the property”. There is a reason why signs are posted in the windows that say “No Trespassing”. It’s illegal and hazardous. Many times the property condition can be hazardous (i.e. open holes from septic inspections, rotted decks, etc). Some of the properties aren’t necessarily vacant either. I’ve seen people walking a property that they thought was available only to discover it had sold the day before and not updated on the website they were using, and guess what… the new owner of the house was less than hospitable when they peeked through their windows...

2. Don’t… Try and make an offer with a Home Sale Contingency. You’ll be wasting your time, wasting your agent’s time, wasting paper, and wasting printer ink. They won’t even consider it. That’s like asking a car dealership if you can borrow a car for 3-6 months and then hopefully be able to buy it...

3. Don’t… Expect the banks to act within the guidelines of a standard transaction. I work for them and I can assure you they have no rhyme or reason sometimes. But, if you want the house you’ll have to play ball by their rules usually. They will go to extreme lengths to avoid future liability. Before you say “Well then I just won’t buy the house unless … blah blah blah” remember, they can always pull the plug and sell to someone that will. You’re trying to get the “deal” not them. They’re just trying to recoup the loss...

4. Don’t… Send a letter along with your offer to the bank pleading your case. If you need a letter to try and convince the bank to accept an offer that’s drastically lower than the asking price you’re shopping out of your price range and flailing your arms in quicksand...

5. Don’t… Take it personal when the bank accepts another offer. It’s business. They don’t have a list with names of people they won’t sell to or a preferred buyer list of investors. They’re selling to whatever buyer provides them the best offer that will close the quickest and cost the least amount possible...

6. Don’t… be afraid to offer less than asking if the home has been on the market awhile and doesn’t currently have offers in. The bank has a bottom line, but they know the costs of maintaining the property when it’s not selling. They might not accept what you offer but they might have a nice counter. Again this is only if it’s been on the market for longer than 60 days and has no offers...[size:20pt][/size]

 

[-Nick-]

Re: First time home buyer

Last one...

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<span style="font-weight: bold"><span style="font-size: 20pt">Did I hear Free Lunch? Who said buying a Foreclosure was easy?</span></span>

You thought you'd get in on the action and ended up with nothing but 20+ pages of scratch paper? Maybe the neighbors advice isn't what you should be listening to... Some more advice for purchasing Foreclosures...

- Are you going to finance the purchase? Then you MUST be pre-approved. It’s not choice but a bank requirement before consideration. In some cases such as Bank of America they’re requiring the buyer to get pre-approved through them 1st before submitting an offer on their REO’s. Are you going to finance the purchase? Then you MUST be pre-approved. It’s not choice but a bank requirement before consideration. In some cases such as Bank of America they’re requiring the buyer to get pre-approved through them 1st before submitting an offer on their REO’s.

- While on the topic of financing… Know the limits of your loan. Banks will make small “Lender required” repairs, but in most circumstances larger repairs such as roofs, exterior paint, new decks, etc the bank will pass. If you don’t know what FHA or VA required property conditions are then consult your Mortgage Professional or Realtor® for a list.

- Time is of the essence. Foreclosed properties priced effectively see purchase offers within the first 72 hours. Waiting for the weekend is the difference between being in the game and sitting on the bench.

- Banks WILL NOT consider any Home Sale Contingency Offers. No exceptions.

- Paying Cash? Then make sure you understand that “Cash” means liquid. A Brokerage Statement or Bank Statement is required when submitting that verifies liquid funds in total of the purchase price.

- Myth… “If I make an offer with a Home Inspection the bank won’t consider it.” Banks typically look on investor purchases for Cash offers with no Inspections, but if you’re a regular Home Buyer then use your Due Diligence and get that Inspection. It’s about the numbers. If your offer is at asking and you’re competing against an investor “lowball” that $40k< asking then your offer begins to look financially better.

- “As-Is” is exactly that. You should always assume what you see is what you get. Banks don’t want to put any more money out than absolutely necessary since it’s another risk. They’re looking to sell the property in its current condition and they price it accordingly (most of the time, lol).

- “Escalation Fever”… It’s real and gets even seasoned investors. Know your limit. I’ve seen properties sit for over a month with zero offers, then get reduced 30k, only to get multiple offers and Escalation Fever that bring them up higher than the original asking price. Be sure to ask yourself “Is it still the good deal it was before?”

- Use your Due Diligence! If you’re worried about liens then get a Title Report & call the Utility companies servicing the property. Most banks bring utilities current before closing. When viewing the property ask this “Is the water and power on?” Just because the utilities aren’t on doesn’t mean they aren’t current. They could be shut-off for Winterization, to discourage vandalism, or just to save money.

- Fact or Fiction? Many stories are told on a daily basis about “I know someone that did…”, “My friend who used to be an Agent said…”, or my favorite “I read online that…” Being a successful Realtor® doesn’t happen by simply applying for a license. It requires constant continuing education, attention to changes in market, transaction management, fiduciary responsibility, and first-hand knowledge through experience. Just because you read it online (irony, lol) or hear it from a friend doesn’t mean like all great stories that there weren’t embellishments or omissions either by intention or accident. If your Realtor® is telling you one thing and your neighbor is telling you another, you would do bell to listen to the one that’s occupation, success, and fiduciary responsibility remains with you. I would like to see the day that someone actually sues the neighbor for poor real estate advice, lol. If you don’t trust your Realtor® over your investor cousin twice removed, well… Maybe you should reconsider your business relationship.


Did I hear Free Lunch? Who said buying a Foreclosure was easy? Who said banks were known for being sensible in their dealings? Who said Investments were without risk?