Graphic look at why people use a Realtor
Graphic look at why people use a Realtor
Six easy things every homeowner can do to stage their home for a faster sell.
Most homebuyers aren’t able to pay for a home outright with cash. They finance the loan and pay a monthly mortgage. The homebuying process is a carefully choreographed process the could involve your Realtor, your lender, a home inspector, appraiser, and others. Once you have an accepted offer on a home, my job as Realtor becomes that of the choreographer—making sure everyone else hits their steps and performs their responsibilities.
One of the lead players is your lender. Here’s a brief checklist of what your lender does throughout the homebuying process.
Have questions? Let me know.
1. It’s a Sellers Market
Central Florida real estate has been in a strong Seller’s market since mid 2012. A Seller’s market occurs when residential property inventory is low, but Buyer demand is stable/strong. As a Buyer, you may have to compromise on some features you want in a home in order to purchase one. Home choices are few, so you can’t be ultra choosy.
2. Make Your Offer Stand Out!
Some Buyers today are including a personal note (and even a family photo) with their offer telling the Seller about their family, what they like about the Seller’s home, and that they will love and cherish the home as the Sellers did. Hokey? Maybe. But it is winning deals for these Buyers, so go ahead and be hokey. The only thing you have to lose…is the home you really want to buy.
3. Traditional Banks Are Not As Competitive As Mortgage Brokers
If you are using a traditional bank for your mortgage loan you need to understand that they have stricter requirements and are more likely to deny financing to you than a mortgage broker is. A mortgage broker “shops” your loan to numerous non-bank Lenders who have more leeway to compromise on issues than a bank does. You should at least consider having a mortgage broker look at your financial situation to see what they can offer you before you settle with a bank.
4. Buyers Must Make Strong, Appealing Offers
If you lose a property knowing you would have paid just a little bit more for it, will you regret it? If so, then make the highest and best offer you can make the first time. Don’t ask for extra with your offer. Buyers are asking for closing costs, a home warranty, appliances listed as not included, etc. These offers will not be as competitive as strategic Buyers who do not ask for them.
5. Use An Escalatory Addendum
Use of this form allows you to make your original offer at a lower price, but will allow you to raise that price to a maximum price in order to beat out other Buyers. It can be used only for short sales and traditional purchases. Just be sure you can qualify for the higher price, because if it appraises for that price, you are obligated to pay it if your offer is accepted.
6. Consider Making A Larger Deposit
A larger deposit equals a more serious Buyer, period. When a Seller is reviewing the multiple offers for his home, his Realtor will likely direct him to the cash or conventional Buyers, and those making larger deposits. Even if you are financing, you can make a larger deposit that will be applied to your closing costs and you could even receive a refund back at closing!
7. Ask Your Lender To Pay Your Closing Costs
If you are financing your purchase, you are competing against many cash Buyers who don’t need a loan. Cash sales in Central Florida have been over 53% of all purchases in 2012. Cash Buyers are easier to get closed than you are if you finance. Conventional Buyers have an advantage over FHA, VA, and USDA Buyers. If you are among the latter, ask your mortgage broker to increase your loan interest rate so they can pay much of your closing costs, allowing you not to have to ask the Seller to contribute! If they won’t do this, ask me about Lenders that will.
8. Consider Paying More Than The Appraised Value
Many Buyers today are offering MORE than the comparable sales indicate the property is worth. If you are willing to do this, your Realtor can include this in your offer, and it will be very appealing to the Seller. Be sure your Lender will approve this term, because they have specific criteria for you, and one of them may be having a minimum balance in your bank account. If your offer is accepted and the home appraises for less than sales price, the Seller may consider a price reduction, but he is not obligated to. If you do offer more, you may want to perform the appraisal before the inspections, so have your Realtor include this as a term on the contract as well. There is no need to pay for inspections if we can’t overcome a low appraisal.
9. Communicate And Be Honest With Your Realtor
Your Realtor is a licensed professional, but they can’t read your mind. Tell him/her what your specific needs and desires are. Do you have to move by a certain time? Are there any financial issues to overcome? Would you consider a fixer-upper? Could one of your relatives be living with you one day? Are you expecting? Are schools important? The more information you can provide the better you will be served. Buying a home is a huge decision, so be sure to communicate thoroughly.
Have any questions? I’m happy to answer them. Message me.
Taken from a class given by Melanie Ladines, Compliance Manager for Keller Williams Advantage. Thank you Melanie for always being on the forefront of legal compliance!
A look at the trends in Orlando for the past month.
I came across this recent news and wanted to share. It’s great news for those who have been impacted by the recession.
The Federal Housing Administration (FHA) is making it easier for once-struggling homeowners to qualify for a mortgage backed by the agency.
For borrowers who meet certain requirements, the FHA is trimming to one year the amount of time that homebuyers must wait after a bankruptcy, foreclosure or short sale before they may qualify for a FHA-backed mortgage.
The waiting period had been two years after the completion of a bankruptcy and three years after a foreclosure or a short sale.
But only certain consumers who’ve been in those circumstances will be able to meet the criteria attached to the eased restrictions. Borrowers must be able to show their household income fell by 20 percent or more for at least six months and was tied to unemployment or another event beyond their control. They also must prove they have had at least one hour of approved housing counseling and, among other things, have had 12 months of on-time housing payments.
“FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage,” said FHA Commissioner Carol Galante, in a letter to mortgagees announcing the changes.
FHA-backed mortgages are a popular option for first-time buyers and for consumers with lower credit scores who might not otherwise qualify for a loan backed by Fannie Mae or Freddie Mac. However, the agency has recently increased the fees tied to FHA-backed loans.
I can get you in touch with a great local mortgage broker/lender. Message me for details.
Copyright © 2013 the Chicago Tribune. Distributed by MCT Information Services.
Discover the trends, prices, and sales of homes—both nationally and in the Central Florida region–for August 2013.
Here’s a look at the monthly Orlando housing snapshot before it is officially released on the Orlando Realtor Association website. All good news!
Buying a house today is absolutely different from buying one a decade ago. That’s why there are so many myths swirl around a process which is already a little bit difficult to understand. Here are the top four myths about buying a home today.
Myth 1: You need a 20% downpayment even to think about buying a home.
Totally false. “A down payment can be very low,” said Joe Parsons, senior loan officer with PFS Funding, a mortgage banker in Dublin, Calif. “There are conventional loans requiring just 3% for a down payment or even zero – the VA home loan program for veterans will cover 100% of the purchase price.”
Maybe five years ago, in the belly of the beast of the mortgage meltdown, 20% was in fact a necessity, but today most lenders are way more flexible. And if yours isn’t, look elsewhere. Shopping around for a loan should be just as important as shopping around for a new car would be.
Myth 2: Only those with perfect credit need apply for home mortgages.
Not true. The past half dozen years have been rough. High unemployment, a housing implosion, you know the realities. So do lenders, and because so many homeowners have been through a foreclosure, it isn’t as much of a black mark on you as it used to be.
Credit dings and blemishes, even a bankruptcy, short sale or foreclosure do not prevent you from getting a loan, even with a very low down payment such as 3.5% for an FHA loan. A new FHA initiative called “Back to Work” explicitly cuts the time to qualify for a new mortgage after a foreclosure, bankruptcy or similar to as little as one year for borrowers who can prove their past financial difficulties were due to extenuating circumstances out of their control.
Myth 3: Fixed rate mortgages are the only way to go.
Not true, said David Reiss, a professor at Brooklyn Law School who specializes in real estate. He elaborated: “The necessity of getting a 30-year fixed rate mortgage is one of the biggest myths about homebuying. The average American household stays in their home for about seven years. Typically, 30-year fixed rate mortgages have higher interest rates than adjustable rate mortgages (ARMs). Homebuyers should take a hard look at their plans for the new home.”
Only 6.5% of applications for mortgages in a recent period were for ARMs, according to the Mortgage Bankers Association. A typical ARM went out at 3.21% interest, versus 4.69% for a typical 30 year fixed rate. That adds up to a difference worth tens of thousands of dollars over, say, a seven year probable life of the loan.
You can do the math and see if it works for you.
Myth 4: Cut out the realtor, rep yourself and you will save a fast 3%.
That is just about never true.
The realtor’s commission is paid by the seller. In most contracts that realtor agrees to “co-broke,” which means he or she will split his commission with a buyer’s agent.
Most listing agents sign a contract with the seller for a certain commission percentage – for example, 6%. They offer to share a portion of that if a cooperating buyer’s agent enters the picture – for example, 3% – for bringing a buyer to their listing. If there is no buyer’s agent involved, the full 6% is still paid by the seller to the listing agent.
So buyers generally don’t pay for representation in the transaction. (See my ChrisTube video for a quick explanation.)
If you have questions or want to know if something you heard is a myth or true, let me know. I’ll be glad to help you understand the homebuying process.
I can’t tell you how many calls I get from clients wanting to find out more about a home they saw on Zillow or Trulia, only to find out that it is a pending sale or worse—already sold! Those websites are a great place to start a search, but certainly aren’t kept up to date in this fast-paced market. I usually direct my clients to search on my website (www.chriswinn.net), where I’ve made the Multiple Listing Service available to them so they can search in “real-time” what is actually available on the market.
Since I’m a tech guru, I am super excited to take it a step further and announce the Keller Williams Mobile App, making it even easier for my clients to search for homes on the go. Because let’s face it—your home search should go where you go! Using their smartphones or tablets, my customers can be in an area of town and, through the app, know instantly what is available on the market.
The KW Mobile App allows you to
When you’re ready to kick your home search into hyper-speed, download my Keller Williams Mobile App. When you open it for the first time enter my agent code: KW2GUJCKA.