The Role of the Lender

Posted on January 17, 2012 by Jeff

For the First Time Homebuyer

You will want to select a lender with whom you are comfortable to assist in qualifying for a mortgage loan. A loan originator can pre-qualify you over the phone since a pre-qualification does not require verification of information supplied by the potential borrower. A pre-qualification will give you an example of your purchasing power.

Next you will begin the pre-approval process. The pre-approval process is really quite simple. You will complete a standard mortgage loan application, provide 30 days of your most recent pay stubs, your most recent bank statement(s) and any other documentation your lender may need. The lender will also need to view your credit report.

When you meet with your loan originator there will be documents to sign that will assist in getting your income, employment and other information verified.

Once the lender has all of the necessary information, he/she will let you know the amount you have been pre-approved for. You may find that the pre-approval amount is more than you want to spend. You can direct the lender to issue a letter for the amount you want to spend on a house.

For more first home buyer information down load our new Free eBook: First Home Buyer Secrets.

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Do You Need A Home Inspection?

Posted on September 23, 2011 by Jeff

Absolutely!

You need someone trained to examine the condition of a home before you purchase it. We all have an “Uncle Joe” the handy guy, or we someone who calls himself a “contractor,” but when you are making the biggest purchase that most people ever make, you need a certified professional.

When you make an offer on a home, it should be contingent (you are not obligated to buy the home) upon a satisfactory home inspection. The inspection is ordered and paid for by the Buyer at the time of the inspection. The cost is based on the size, age, special equipment and other factors, when you consider all of the knowledge that you will gain from the report they provide. The full report includes the results of the inspector’s examination and  operation of appliances, heating and air conditioning system, water heater, garage door opener and more. Plumbing, electrical system, the attic, the roof, and foundation types are identified and rated.

The inspector should meet state requirements. The highest standards and continuous training are held by home inspectors who are certified with the American Society of Home Inspectors (ASHI) or the National Association of Home Inspectors (NAHI).

It is important to understand that there is a difference between the home inspector and the appraiser, they have two totally different task. The appraiser looks at the house to determine the value of the property by comparing it with similar properties in the neighborhood. So please don’t think that this will take the place of a home inspection!

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Make Sure Your Real Estate Agent Represents You!

Posted on September 9, 2011 by Jeff

Until the early 1990′s real estate brokers represented Sellers Only;  Buyers were “customers,” not clients. When the law changed, Buyers with a signed, written agreement were able to have exclusive representation. In the ”Buyer Broker Agreement” the Buyer agrees to work exclusively with his agent and the agent agrees to work only in the interest of the Buyer.

The actual agreement has to have a start and ending date and must spell out how the Agent will be paid. Payment can be from the Buyer or the Seller, it is typically paid by the Seller and built into the list price of the home.

The obligations and duties of the Buyer’s Agent are:

  • Disclosure – making sure that all parties know who the Agent represents
  • Loyalty – to look out for the  best interest of the Buyer
  • Confidentiality – to keep secret information that could affect the Buyer’s ability to get the best price and terms (ex: income, reason for purchase, what highest and best offer would be, etc.)
  • Exclusivity – to advise and negotiate on behalf of the Buyer

The Real Estate Agent who has this written agreement is highly motivated because Buyer Loyalty is not in question.

When you see a For Sale sign on a property, go to an open house, or a New Homes Site, that Seller has someone looking out for their best interests, and since the commission is already built into the price you are paying, why not have someone looking out for you?

 

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Homeownership

Posted on September 5, 2011 by Jeff

FACT: Homeowners’ children live longer, healthier lives.

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Why You Should Have a Home Warranty

Posted on August 30, 2011 by Jeff

Never confuse a home inspection report with a home warranty. At East Coast Realty we strongly encourage all home buyers to have a home inspection. The report will educate the buyer about the condition of the property and the life expectancy of certain appliances, the roof, hot water heater, etc. Keep in mind that, this information is good only for the day of the inspection.

Today’s economy demands that we keep close track of our finances, a Home Warranty will allow you to budget for unexpected repairs and replacement costs. One small deductible per service call will be your only out of pocket expense.

The home warranty plan, which can be renewed yearly may be purchased by homeowners, home sellers, or home buyers. It is especially a plus for a first home buyer because they have not experienced the unexpected costs of home ownership.

Plumbing, heating, electrical systems, air conditioning, appliances (some plans cover roof repair), you have no way of knowing when something will break down, but you can control your costs.

The warranty companies have taken the guess work out of who to call when you need repairs, they will assign contractors who are qualified and approved. You can make a service request 24/7, at no additional cost, and have a guaranteed response and appointment time.

A Home Warranty is “peace of mind” insurance. How can you afford not to have one?

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What is a Short Sale?

Posted on August 25, 2011 by Jeff

 In essence, a short sale occurs when a homeowner’s mortgage balance is more than the property’s present market value. Rather than face foreclosure, the lender agrees to take less than what is owed to settle the debt.

 When a homeowner is behind on mortgage payments, or can no longer afford to make the monthly payment, he has the option to put the home on the market with a knowledgeable real estate agent in hopes of getting a quick sale. To make this happen, the home is priced at or below market value, regardless of the loan balance.

 The homeowner communicates to the lender what he is trying to accomplish. The lender will send a package to be filled out by the homeowner to determine if in fact this is a hardship situation.

 Once an offer is received for the property, a real estate attorney is obtained to negotiate with the lender. If there is more that one lien it has to be a part of the overall negotiation as well. The lender will determine how much of a loss they are willing to take which could include real estate commissions, closing costs for the buyer, the homeowners closing expenses (maybe even financial help for the move out).

 When the price is agreed to by all parties, the buyer will usually have a home inspection for informational purposes and their loan process is completed. The real estate closing is conducted basically similar to a regular sale.

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