As a home buyer , you can get a feel for whether a home’s systems and appliances are in working order. However, you can’t know for certain until after the home’s been inspected.
This is why real estate agents recommend that buyers hire a licensed home inspectors immediately after going into contract. It’s the best way to really know the home which you’re buying.
By definition, a home inspection is a top-to-bottom check-up of a home’s physical condition and systems, including a review of the structure, and its plumbing and electrical systems. Home inspections are not the same as a home appraisal, which is a valuation of the property.
When you commission a home inspection, you should be present for it. Here are 3 reasons why :
Seeing For Yourself There’s a big difference between reading a report and seeing “live” what may be right or wrong with a home. With first-hand knowledge of a potential issue, you’ll be in a better position to determine whether a problem warrants contract cancellation, or whether it’s an additional negotiation point.
Discovering The Home Via a home inspection, you will learn where the systems reside within a home (e.g.; boiler room, garage), and how to operate them. This is a valuable educational opportunity and most inspectors are happy to share what they know. It’s also a chance to ask questions about maintenance and upkeep.
Better Understanding A home inspector’s job is to review and disclose the condition of the home. The inspector’s report, however, is just a summary on paper. In being present for the inspection, a buyer will be able to visualize and understand the report’s conclusions more clearly. This can make for more effective re-negotiations with the seller, in the event that damage or distress is identified.
So, what should you do during the home inspection? Your primary tasks are to watch, listen, learn and ask questions. A professional home inspector will welcome your participation in the process.
Chris Diaz is the founder of Charis Financial, Inc. He has over 15 years experience in helping homeowners with their mortgages and has closed hundreds of short sales over the last 4 years. His website is http://www.charisfinancialinc.com. Send questions to firstname.lastname@example.org; reference ³Short Sales² in the subject line. I was recently approved for a short sale by (my bank). The loan was in escrow and ready to close within a few days. I then got a letter from (the bank) denying my short sale due to “quality review”. My approval letter wasn’t set to expire for another two weeks and nobody in (the bank) could give me a valid reason as to why I received this denial. Have you seen this scenario before and do you have any suggestions for me as I really don’t want to lose my home to foreclosure?
Yes, the out of the blue “QA Review” denial. This one is a difficult one because of the lack of explanation from your bank. It’s difficult to accept that one can have an approval in hand, with an expiration date that hasn’t yet expired, and still get a denial for a reason that is unexplained. However, this is a reality and it does happen, albeit somewhat infrequently.
Even though your lender has accepted responsibility for their part in one of the largest instances of mortgage fraud on record with the robo-signing incident, they have a QA team that dedicates a great deal of time and effort in making sure that their company is free from other purveyors of fraud. As well they should because there are lots of unscrupulous people trying to steal a buck instead of earn one.
One recent incident, in which a bank was victimized, was where short sale negotiators were doctoring up fake approval letters along with a fake bank account to have funds wired to, and stealing money that way. The FBI said that three California men probably netted $10 million doing that.
Here are two of the main reasons that we’ve been told as to why a QA department would deny your file and what you can do to reverse or overturn the decision:
1. Buyer information is incorrect. Sometimes QA will deny a deal if the buyer’s preapproval has inaccuracies like the wrong NMLS number, broker number, or property address. This can also happen if the buyer’s “proof of funds” is determined to be fraudulent or doctored in any way. We have also seen it happen where the buyer is getting a loan but has enough money in the bank to pay for a property in cash. Even though they could’ve bought the house in cash, because there was no preapproval letter for a loan, QA denied the short sale until we provided that letter. This has happened even if we weren’t specifically asked for the letter.
2. The Equator account being used to process the short sale has been flagged. Some banks use an automated processing system called Equator to handle their short sales. Equator centralizes all communication for all files that a real estate licensee is working on with them. Sometimes, a licensee can involve themselves in schemes like I described above, or can just be guilty of shoddy work and upload documents from files incorrectly. If the QA team catches either of these two things they may flag that file or all of the files of that particular agent. Once that happens they would contact the agent for an explanation. However, if they feel that there are deliberate inaccuracies in the file an agent can be suspended from doing any further deals with that bank. If that happened your deal could be denied even if there was nothing fraudulent done on yours.
If a QA team has denied your short sale, have your agent address these two situations first as they are the most common. So long as you’re dealing with someone who is ethical, there is probably just a minor oversight of buyer info that the bank needs to have satisfied. Have your agent submit the complete buyer info first and then call to have the decision reversed.
Mortgage insurance is viewed nearly universally as a bad thing, but in reality, it’s a tool to be used that is very good for home buyers, the housing market and the economy in general.
Why do many complain about mortgage insurance? Because it’s expensive, and sometimes difficult to get rid of when it’s no longer necassary. If that’s the case, why do I say it’s good for buyers and the economy? Because it’s a tool that allows people to buy a home with less than twenty percent down.
Mortgage insurance insures the lender against the risk of the buyers default on the loan. It does NOT insure the buyers life, like many people think.
The single biggest hurdle for home buyers is accumulating an adequate down payment. Lenders want buyers to put twenty percent down for two reasons. First, a buyer with a large down payment is less likely to quit making their payments. Second, if a buyer does default, the more the buyer put down usually means more equity in the house when the lender forecloses, which means the lender loses less money.
But, if a buyer wants to buy a $200,000 and has to put up a twenty percent down, that will equal a $40,000 down payment! Hard to save up, for most buyers. BUT, with the use of mortgage insurance, that buyer might be able to put as little as $6,000 down! A lot easier to save.
So, mortgage insurance can be a very benficial tool.
With that being said, don’t let your lender shoehorn you into only considering monthly mortgage insurance. There are other options such as single premium mortgage insurance, or “split” mortgage insurance. These programs can be more expensive up front, but sometimes much less expensive over time. They don’t work for everyone, but they certainly should be looked into.
SG16 is an experienced real estate investor looking for real estate investment opportunities in the Portland metro market. This investor is an all Cash buyer and will not need bank or lender approval to finalize any agreement made.
If you have good credit and savings, now is a great time to buy. According to Zillow.com, “Homes are more affordable than they’ve been in the past 35 years.”
Not only have home values fallen in many key markets, making homeownership more accessible to the average buyer, interest rates are at historic lows, meaning that once a home is purchased, monthly payments are smaller than in our recent past.
Zillow notes that “today’s median home buyer can expect to pay about 17% of his monthly gross income on his mortgage, compared to a 25% average since 1975.”
In the 1980’s, when interest rates were dangerously near 20 percent, this would take up nearly 45 percent of a buyers gross monthly income. In comparison, today’s rates are an extreme bargain.
The main road block to homeownership at this time is access to credit. Although nearly one-third of all home purchases in recent months have been all-cash, that leaves the majority of the market shares requiring financing.
The tightening of lending standards in recent years, though, has been in direct response to the subprime lending trend during the housing boom.
Federal Reserve research indicates that a quarter of all mortgages in 2006 were subprime. This means that these loans were made to borrowers with credit scores below 620-660 and who were unable to put down the traditional 20 percent.
Today, buyers need credit scores in the 700s, with the higher the better. According to Zillow, “Applicants with FICO scores under 620 were virtually unable to get loans at any rate, thus being effectively excluded from the home-buying market. And those with FICO scores below 620 represent almost a third of the population.”
There has also been a return of the 20 percent downpayment. This is in your best interest, as it means savings when it comes to closing costs. “The difference between a 10% and 20% down payment means she now has to save up another $17,220 in addition to any closing costs.” (Zillow)
So, while it is more difficult for many homeowners to get into the market in today’s economy, for buyers who have good credit and adequate savings, homes may never have been more affordable.
I think the success of the OregonRealEstateWanted.com site is due to the massive amount people that are involved in the OregonReal Estate market right now. The difference between their involvement today compared to 5 years ago is there are more people looking to sell real estate than there are looking to buy. Buyers have so many opportunities to consider that it is sometimes difficult for them to settle on exactly the right property to fit within their dreams and goals. Sellers have a problem making sure their property is exposed to buyers that could be a good fit for their opportunity. There is just so much to look at that often times their buyer has chosen something else before they even had a chance to consider their property.
The issue might be how opportunities are presented to buyers and where they come from. In some cases the best way for an opportunity to be identified is after the seller has had a chance to learn what the buyer is looking for and if they see a fit with the real estate they are selling. Only then does the seller reach out to the buyer to explore any advantage in developing a deal. In this context the buyer is looking at properties from a wide range of areas with in the market. As real estate brokers and private property owners alike may present opportunities. In some cases deals have been developed on properties that were not formally on the market.
The next steps for OregonRealEstateWanted.com are to list people looking to lease or rent commercial and residential real estate. The plan is to start listing people that are looking for lease hold or month to month rental relationships on the site by June 1st., 2011..
If you are looking to buy real estate fin the Oregon market to live in or as an investment. Contact Fred Stewart of Stewart Group Realty for a private one on one consultation and possible listing on the site. All information shared with Mr. Stewart is confidential and there is no charge unless the real estate you are looking for is found.
New buyer (SG14) has been posted on the OregonRealEstateWanted.com web site. This buyer is an investor and they are looking for residential multifamily opprotunities under $200,000 in the Portland Metro area. Buyer is looking for seller financing opportunities only. To learn more about this buyer and others that may be looking for real estate you have for sale. Please visit OregonRealEstateWanted.com