Bringing ‘Peace of Mind’ to Home Buying Since 1979 Congratulations!!
RE/MAX Legends Group / Atlas Group and I understand you are beginning the process of purchasing a home. Whether this is your first home or you have purchased many homes before, searching for and buying a new home always brings with it an array of emotions and even a bit of stress. That is where I come into the home buying equation. I am here to bring you “Peace of Mind” in the process of you becoming a part of my Homes Around Indianapolis Buyers Club. Hello. I am Phil Lande and this packet was designed by me to assist you in making sound real estate decisions from choosing an agent to settling into your new home and beyond. It was also designed to help both me and you understand what exactly you are looking for so if we decide to work together we can find your perfect match. Please take time to review and if you have any questions feel free to email, call or text me anytime. I look forward to meeting your real estate needs and assisting in your home search and purchase.
Phil Lande RE/MAX Legends Group / Atlas Group
Homes Around Indianapolis Buyers Club When you and I work together you become a member of my exclusive Homes Around Indianapolis Buyers Club where you will be able to make the most of buying an Indianapolis area home. You will find it to not only a great way to enjoy “Peace of Mind” but also a way to optimize your home buying experience. Offering valuable services and outstanding benefits; the Homes Around Indianapolis Buyers Club has been tailored made for you, a busy buyer.
Highlights of the Homes Around Indianapolis Buyers Club
Buyer Agency with a Service Guarantee Multiple ways to access homes for sale via phone, tablet or PC Automatic Updates so you are always on top of the market Market Analysis before, during and after the purchase Professional Partners and Team Players Free notary, faxes, & copies forever Realtor Referrals for anywhere in the US
This is just part of what you receive when you and I work together me and become a member of the Homes Around Indianapolis Buyers Club. I am here and ready when you are.
Phil
Why use a Realtor when buying a home: A basic rule in real estate is that all properties are unique. No two properties -even two identical models on the same street -- are precisely and exactly alike. Homes differ and so do contract terms, financing options, inspection requirements and closing costs. Also, no two transactions are alike. In this maze of forms, financing, inspections, marketing, pricing and negotiating, it makes sense to work with professionals who know the community and much more. Millions of new and existing homes are sold each year. There's no shortage of housing options, but with so many choices the challenge becomes finding the property which best meets your needs. The housing market is complicated because the stock of homes for sale is always in flux. If it were possible to have a complete list of every home for sale at this very moment in a given community, such a list would become obsolete within seconds as new homes become available and properties now for sale are put under contract. In effect, buyers are looking at a moving target in a marketplace that is never static. Because of this, it is important to know as much as possible about the choices in preferred markets, and the way to do that is by working closely with a local Realtor who has a good lay of the land.
What to expect from your Realtor: Once you select a Realtor you will want to establish a proper business relationship. You likely know that some Realtors represent sellers while others represent buyers. Each Realtor will explain the options available, describe how he or she typically works with individuals and provide you with complete agency disclosures (the ins and outs of your relationship with the agent) as required in your state.
Once hired for the job, the Realtor will provide you with information detailing current market conditions, financing options and negotiating issues that might apply to a given situation. Remember: Because market conditions can change and the strategies that apply in one negotiation may be inappropriate in another, this information should not be set in stone. During your time in the marketplace Realtors will keep you updated and alert you to each step in the transaction process.
What is pre-approval: "Pre-approval" means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a pre approval letter, which shows your borrowing power. You can visit as many lenders as you like and get several pre-approvals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports. Although not a final loan commitment, the pre-approval letter can be shown to listing brokers when bidding on a home. It demonstrates your financial strength and shows that you have the ability to go through with a purchase. This information is important to owners since they do not want to accept an offer that is likely to fail because financing cannot be obtained.
Why is pre-approval needed: The idea is to get the loan that's right for you -- the mortgage with the lowest cost and best terms. Realtors routinely suggest that consumers start the mortgage process well before bidding on a home. By meeting with lenders and looking at loan options, you will find which programs best meet your needs and how much you can afford. Pre approvals are recommended for another reason: Purchase forms often require buyers to apply for financing within a given time period, in many cases, seven to 10 days. By meeting with loan officers in advance and identifying mortgage programs, it won't be necessary to quickly find a lender, check credit, and rush into a financing decision that may not be the best option. After you’ve been pre-approved for a certain amount be sure to be conservative enough so that you can move into your new home and truly enjoy it without worry. Remember there will be moving expenses involved and probably upgrades that you will want to make such as new paint colors, new kitchen and bath accessories or other purchases that will help personalize your new house. Your new home may also be in a neighborhood that has Home Owner Association fees. These will add to your monthly financial obligations.
How to get pre-approval: Real estate financing is available from numerous sources. Your Realtor may suggest one or more lenders with a history of offering competitive programs and delivering promised rates and terms. The loan officer will carefully review your financial situation, including your credit report and other information. The lender will then suggest programs which most-closely meet your needs. For instance, a first-time buyer may qualify for state-backed mortgage programs with little money down and low interest rates, while a repeat purchaser (someone who has bought a home before) with more equity (money invested in the home) might want to get a 15-year loan and the lower overall interest costs it represents. Typically, first-time buyers opt for the traditional 30year loan, with either a floating interest rate or a fixed rate of interest over the life of the loan.
What are you looking for: A home is more than just a collection of bedrooms and bathrooms. Several properties -- each with four bedrooms, three baths, and the same price -- may well represent radically different designs, commuting distances, lot sizes, tax costs, interior dimensions, and exterior finishes. Each of us is different and so it's important to list the features and benefits you want in a home. Consider such things as pricing, location, size, amenities (extras such as a pool or extra-large kitchen) and design (one floor or two, colonial or modern, etc.). Next, it's important to consider your priorities. If you can't get a home at your price with all the features you want, then what features are most important? For instance, would you trade fewer bedrooms for a larger kitchen? A longer commute for a bigger lot and lower cost? Lastly, consider your needs in several years. If you'll need a larger home, maybe now is the time to buy a bigger house rather than moving or expanding in the future. If you expect your income to increase, perhaps you should consider a more expensive home financed with a loan program where monthly payments increase in the future. It’s important to look at your needs vs. your wants. Some buyers like to search REALTOR.com by looking at listings on the basis of location or price; others prefer to have local REALTORS suggest properties; and many buyers prefer both approaches. Regardless of your choice, it's important to target your search. By using basic measures such as general location and affordability, you can refine your search and focus on homes that offer the most desirable features. As a guide, you should maintain a file with information on each of the
homes you like. You can print out listing pages from REALTOR.com and then make notes for each one -- what you like, questions, etc.
Location, Location, Location They say that the 3 most important things to think about when buying are home are location, location, location. You can live with almost any imperfection in a home if you love the neighborhood and your neighbors. You can change almost everything else. But, once bought, you cannot change your home's location. When you go house hunting, consider any potential home's proximity to your work, the charm of the neighborhood, how the home is situated on the lot, ease of access, noise from neighbors, traffic, or pets, and access to parks, shopping, schools, and public transportation. Situation Factors Beyond location, look at the particular site of the home. If the home is on a hill does it have a view, a walkout basement, or lots of stairs to climb? Do neighbors' windows look directly into the home? Is the yard suitable for kids, pets, gardening, or other uses? Is access to the property safe regarding driveway elevation, stairs up to (or down to) the front door? Check Out the Neighborhood Be sure the neighborhood, and not just the house, meets your expectations. They say that you should own the smallest home in the nicest neighborhood that you can afford. You'll have a great view! Drive around on week days and weekends, during the day and in the evening. Are homes in the neighborhood consistent in size and features? Do the neighbors keep the yards clean and tidy or are there old cars and trash around? Is the neighborhood safe enough for people to walk, run, or bike and are there children playing in the yards? Does the neighborhood have a Home Owners Association? If so – be sure to get a copy of all of the rules up front. If you have pets and want to build a privacy fence – will the HOA allow it to be built? What do your monthly fees cover and who runs the association? Consider a Home's Curb Appeal Your home should reflect your lifestyle. Do you live a laid-back life? Then you might not want a formal Victorian or Tudor style home. Something simpler and more contemporary might be in order. Look at the exterior features. A brick home is easier to maintain, but permanent. Is the roof in good condition? Is the landscaping attractive and are the sidewalks leading to the home safe? How do the neighbors keep up their homes? Size and Floor Plan You may be thinking about buying your dream home. But is your dream home impractical? Do you really need 4 bedrooms and 4 baths when you live alone? A large home can give you the
extra space you've always wanted for a home office or crafts or art projects. But you'll pay higher heating bills and have higher taxes. It will take more furniture to furnish and money to decorate. Think about how the new home space will be used and whether it will fit your lifestyle now and in the future. Bedrooms and Bathrooms Decide how many bedrooms and bathrooms you really need, and only look at homes that meet your criteria. It would be a shame to fall in love with a cozy, charming cottage that just isn't big enough. An extra bedroom is always a plus, as it can be used for a home office, craft studio, or guest room. If you think you'll be adding more room later, be sure to consult an architect who can advise you on space planning, lot usage and city regulations.
The Kitchen If the kitchen is the heart of your home, don't settle for a home with a kitchen that just won't work. You can always remodel, but it's very costly. Can you just replace cabinet faces and countertops? Will an inexpensive makeover be sufficient? Don't worry about appliances, as they can usually be easily replaced.
Closets and Storage Older homes tend to have little closets and not a lot of storage space. If you have lots of sports equipment, craft supplies, out-of-season clothes, and holiday decorations, be sure you know where it will go in your new home. Newer homes tend to have big closets and lots of storage. You can always add storage space, but you might have to sacrifice living space in your rooms.
Windows and Lighting Do you love a bright sunny room or do you love privacy? Look at a home with light and sunshine in mind. Look at the locations of electrical outlets and fixtures. Will they accommodate your lighting needs? Is there recessed lighting in the kitchen, cove lighting in the family room and a lovely chandelier in the dining room? If not, you can add them later, but it's nice to have it in place when you move in.
Finishing Touches Sometimes the simplest home looks spectacular because of the installation of moldings, hardware and a fireplace. If these elements are important to you, look for them while house hunting or be ready to add them after you move in. It’s doubtful that any house you choose will be the perfect match to your taste but many things can be changed or added inexpensively such as paint colors, carpeting, decks or patios and landscaping. These things will add your personal touch to your new home.
Is it THE house? A house is shelter, but a home is far more. It's where you live, relax, entertain friends, raise families, and work. A home is where you spend much of your life, and so choosing a house is an enormous decision that requires a lot of give and take on your priorities. Only you can make the final decision but your Realtor can help guide you through the process. The Offer Once you’ve found the house that you want to purchase your Realtor will be most helpful in preparing the offer. Is there competition for the house from other potential buyers or has the house been on the market for a while looking for a buyer? Your Realtor will have this information and be able to help you formulate a fair bid. Your Realtor will also be able to insert other negotiable items into your offer that are important to you such as appliances or move dates. Negotiating takes tact and experience - your Realtor will act on your behalf taking the stress and emotion out of the process.
Remember . . . your agent is “your advocate”. Regardless of whether you are buying a home on the MLS/BLC, FOR SALE BY OWNER, or BUILDER NEW CONSTRUCTION. Do NOT go it alone. This may sound strange, but the “selling” party provides the payment to your agent, not you. This is especially true of Builder New Construction. And there is no difference in the final price that you will pay.
Now, RELAX . . . YOU’RE WORKING WITH
RE/MAX
Use a Realtor When Purchasing New Construction #1: There are No Savings When You Forgo a Realtor In my experience, not having a buyer’s agent does not add value. You don’t get to keep his/her 3% commission or get a better “deal.” Honestly, if anything, you get a worst deal. I know Realtors have been able to get additional deals for many of their clients because they are able to show comparison to lower-priced houses and really advocate for the best deal.
#2: Sales Office Real Estate Agents Are Sellers (Not Buyers) Advocates These agents work for the builder. Think of them as the sellers agents. At the end of the day, their goal is to sell the house for the builder. They are not there to help you when issues arise on your side, they are there to close the loan. When we were buying our house, we ran into some financing issues due to it being an investment property. The only reason it went through was because our agent advocated for us and helped fix the issue. I know that I also appreciated a second opinion when it came to what upgrades would have the best resale value. [Excerpt from a HAPPY Buyer]
#3: They’re a Third Set of Eyes If you are not an interior decorator you may struggle picking out the different tiles and other features. This may be totally new for you, as other types of houses are purchased as fixer uppers, or as is. I had also never bought a new build, as all of my houses had been short sales or foreclosures, so I was not used to being able to have an opinion. It was a huge asset to have another person to bounce ideas off of, and get an idea for what is acceptable and normal. For example, there were botches on the outside of the house where the paint didn’t set because it was too cold when they painted. They told me they would fix it in the summer, and it was nice to have a second opinion to let me know that that truly was fine.
At the end of the day, I am so thankful that we had our Realtor for this sale. She came to all the walk-throughs and meetings. She was a huge asset, and I couldn’t image not having had this type of assistance, especially since there is no discount for not having it. [Another HAPPY Buyer]
A Piece of Advice Make sure that you don’t register until you bring your Realtor, otherwise you will NOT be able to use him/her. Every developer is different, but definitely keep that in mind.
Yes, We Can Represent You If . . . . . . You see an interesting For Sale by Owner Simple give us the address . . . Bank Foreclosures or Short Sales are of Interest We have abundant information as well as the knowledge & experience to insure you get the best price with the lease hassle. . . . A Different Real Estate Company has the property listed As Realtors we cooperate with all of the Realtor companies via the MLS/BLC ALWAYS KEEP YOUR AGENT A PART OF YOUR ENTIRE HOME SHOPPING EXPERIENCE
HOME WARRANTY Buying or selling your home can be stressful, especially if one of your home's systems or appliances breaks down unexpectedly. A home warranty covers costly home repairs and replacements due to normal wear and tear. It's not your homeowner's insurance policy; a home warranty is a separate contract covering repairs and replacements on systems in your home, usually for a period of one year. Home warranties cover many, but not all, of your home's appliances and systems. Contract costs and coverage can vary widely, so always compare before purchasing. Home warranties cover many of your home's crucial systems and appliances, but they must be in working order before the contract is entered into with the warranty company. Make sure you have reviewed your contract and coverage before you need it to understand what is covered and what is not. When you buy a home warranty, consider premium and optional coverage to customize the plan to fit your needs. When a home warranty is understood and utilized for its intended purposes, it can be the easiest way to save on home repairs and reduce the extra stress that comes with buying or selling a home.
What is the difference between home insurance and a home warranty? Home insurance and home warranties are both designed to help you in the event that you experience loss or damage to your home and/or your belongings. A typical home insurance policy covers many things including the structure of your home, personal belongings, and other structures on your property if damage or loss is caused by a covered peril. A home warranty, on the other hand, offers repairs and replacements for your covered home appliances and systems only that fail due to normal wear and tear - which a homeowner's insurance policy does not. A home warranty is a contract, not a policy.
Some examples of the items covered?
There are a variety of different Home Warranty Companies:
HOME INSPECTION Why Home Inspections are Important An Indianapolis home inspection isn’t just a good idea; it’s a necessity. When looking to invest in something as expensive as a home, it’s important to know what you’re getting into before taking ownership. Moreover, getting a comprehensive assessment of a house may end up saving you time and money on future repairs and maintenance. You can protect your investment with the dedicated service and exemplary attention to detail of Security Home Inspections – the name to trust Indianapolis home inspection services.
Reasons to schedule a residential inspection:
Contingency – If an inspection uncovers any issues with a home, the buyer can then negotiate repairs with the seller.
Safety – Inspections can check for certain issues that may pose a safety hazard to you and your family, like improperly installed wiring or even elevated radon levels.
Protection – As your most valuable asset, a home should be well maintained to ensure its value remains intact. Home inspectors have knowledgeable advice to help keep a house in pristine condition.
5 Things Your Mortgage Broker Wishes You Knew
The financial side of home buying can sometimes feel like a nightmare in which you’re stuck in a calculus final that never ends—and you’ve forgotten the meaning of everything. PITI (or principal, interest, taxes, insurance)? Prepayment penalties? Contingencies? “Confusing” is an understatement. We’re the first to admit that looking for a house is lots of fun—but paying for one? Not so much.
But if you have a solid mortgage broker to help tutor you through the process, you’re guaranteed to bring your A-game to the home-buying table. In addition to helping you find the best deal, a mortgage broker is also an invaluable resource for newbie buyers trying to understand how this complex, and often tortuous, undertaking works.
Here’s what your mortgage broker wishes you knew from the start:
1. Your broker should be the first one you call When it comes to financial matters, your mortgage broker should be your first call—and you’re probably going to want to keep him on speed dial. He’s not there just to find you a loan; alongside your Realtor, he’s eager to guide you through the home-buying process. When you’re navigating the murky, turbulent waters of homeownership (especially if it’s your first goround), your mortgage broker will be able to provide personalized advice geared toward getting you to shore—safely, happily, and without leaking cash.
2. Have a team in place Part of preparing to purchase a home is “putting a team together so when [buyers] start the process, they’re already locked and loaded,” Petrowsky says. So who do you need on your side? A Realtor®, of course, but also a home inspector and attorney, all of which will be handy once closing time rolls around. When you’re already panicked about your budget, rising expenses, and just plain moving, not having to worry about finding a reputable attorney or home inspector gives you some peace of mind. “Wouldn’t it be better to already know who you’re going to use?” Petrowsky asks. “People without a clear plan tend to have buyer’s remorse—they panic, they’re nervous versus ‘I’ve got my team in place.’”
3. Understand the rules about down payments You can’t borrow money from a friend, and underwriters will review any large deposits to ensure they’re gifts—not loans. A mortgage broker can help you figure out the best legal way to fund your down payment, but when it comes to financial regulations, things have to stay fully above-board. “First-time home buyers short of cash think they can take money from their friend and use it and pay their friend back.” Let’s be crystal-clear on this: “You can’t borrow a down payment—it’s just not allowed.” If you’re using gift money to cover any part of your deposit, make sure it’s thoroughly documented.
4. Keep your mortgage broker in the loop Speaking of documentation: Have a lot of it, and share it all with your mortgage broker. “My favorite clients are the ones who ask me before they do anything,” according to lenders. “Even if they think something is right, it might turn out not to be.”
Your broker will be intimately familiar with the financial regulations involved in buying a home, and thus will be better able to liaise between you and the underwriter when issues arise. That goes for credit problems, too. If you’re having difficulty getting approved for a bank loan, try working with a mortgage broker first—and have all your papers in order. “I don’t mind these kinds of challenges,” says Petrowsky. “I see it as an opportunity to prepare to be a homeowner. I go through every single item on a credit report and address what needs to be done.”
5. Don’t make any sudden changes Once you’ve started the loan process, don’t make any major changes or purchases without speaking to your mortgage maven. And chances are good he’ll advise you to wait. Any large expenditure or financial upheaval can delay your closing—or even result in a decline from the bank. Want to buy a new car? Dying for a spiffy new boat? Or maybe some fancy furniture for your new digs? Buying any of these big-ticket items could put your home loan at risk. “Be sure your closing has gone through, and only then can you go ahead and make any major new purchases.” The same applies to new jobs: Even if you get an offer with a significant pay increase, you still shouldn’t start a new job during closing. Or even accept it. Try to put it off until after the close. Many lenders require recent pay stubs (from the past 30 days), so taking on a new role during the home-buying process will mean pushing back the closing date. Think you can hide this stuff from your bank? Many lenders do a verbal employment confirmation before funding your loan, and if they find any discrepancies, it can wreak havoc on your loan. Don’t change anything from the time you check with your lender. Don’t make any changes to your employment. Don’t even put in notice to your current employer.
UNDERSTANDING THE PROCESS
You are HERE
Glossary of Terms for Homebuyers Adjustable Rate Mortgage (ARM). A loan whose interest rate is adjusted according to movements in the financial market. Amortization. A payment plan by which a borrower reduces a debt gradually through monthly payments of principal and interest. Annual Percentage Rate (APR). The annual cost off credit over the life of a loan, including interest, service charges, points, loan fees, mortgage insurance, and other items. Appraisal. An evaluation to determine what a piece of property would sell for in the marketplace. Appreciation. The increase in the value of a property. Assessment. A tax levied on a property or a value placed on the worth of property by a taxing authority. Assumption. A transaction allowing the buyer of a home to assume responsibility for an existing loan on the home instead of getting a new loan. Balloon. A loan which has a series of monthly payments (often for 5 years or less) with the remaining balance due in a large lump sum payment at the end. Binder. A receipt for a deposit paid to secure the right to purchase a home at terms agreed upon by the buyer and seller. Buydown. A subsidy (usually paid by a builder or developer) to reduce the monthly payments on a mortgage loan. Cap. A limit to the amount an interest rate or a monthly payment can increase for an adjustable rate loan either during an adjustment period or over the life of the loan. Certificate of Occupancy. A document from an official agency stating that the property meets the requirements of local codes, ordinances, and regulations. Closing. A meeting to sign documents which transfer property from a seller to a buyer. (Also called settlement)
Closing Costs. Charges paid at settlement for obtaining a mortgage loan and transferring real estate title. Conditions, Covenants, and Restrictions (CC and Rs). The standards that define how a property may be used and the protections the developer has made for the benefit of all owners in a subdivision. Condominium. A home in a multi-unit complex; each purchaser owns an individual unit, and all the purchasers jointly own the common areas, such as the surrounding land, hallways, etc. Conventional Loan. A mortgage loan not insured by a government agency (such as FHA or VA). Convertibility. The ability to change a loan from an adjustable rate schedule to a fixed rate schedule. Cooperative. A form of ownership in a multi-unit complex; the purchasers own shares of the entire complex rather than owning individual units. Credit Rating. A report ordered by a lender from a credit bureau to determine if the borrower is a good credit risk. Default. A breach of a mortgage contract (such as not making monthly payments). Density. The number of homes built on a particular acre of land. Allowable densities are usually determined by local jurisdictions. Down payment. The difference between the sales price and the mortgage amount on a home. The down payment is usually paid at closing. Due-on-Sale. A clause in a mortgage contract requiring the borrower to pay the entire outstanding balance upon sale or transfer of the property. A mortgage with a due-on-sale clause is not assumable. Earnest Money. A sum paid to the seller to show that a potential purchaser is serious about buying. Easement. Right-of-way granted to a person or company authorizing access to the owner’s land; for example, a utility company may be granted an easement to install pipes or wires. An owner may voluntarily grant an easement, or in some cases, be compelled to grant one by a local jurisdiction. Equity. The difference between the value of a home and what is owed on it. Escrow. The handling of funds or documents by a third party on behalf of the buyer and/or seller. Federal Housing Administration (FHA). A federal agency which insures mortgages that have lower down payment
requirements than conventional loans. Fixed Rate Mortgage. A mortgage whose interest rate remains constant over the life of the loan. The payments are not necessarily level. (See Graduated Payment Mortgage and Growing Equity Mortgage). Fixed Schedule Mortgage. A mortgage whose payment schedule for the life of the loan is established at closing. The payments and interest rate are not necessarily level. Graduated Payment Mortgage (GPM). A fixed-rate, fixed-schedule loan which starts with lower payments than a level payment loan; the payments rise annually over the first 5 to 10 years and then remain constant for the remainder of the loan. GPMs involve negative amortization. Growing Equity Mortgage (Rapid Payoff Mortgage). A fixed-rate, fixed-schedule loan which starts with the same payments as a level payment loan; the payments rise annually, with the entire increase being used to reduce the outstanding balance. No negative amortization occurs, and the increase in payments may enable the borrower to pay off a 30-year loan in 15 to 20 years, or less. Hazard Insurance. Protection against damage caused by fire, windstorm, or other common hazards. Many lenders require borrowers to carry it in an amount at least equal to the mortgage. Housing Finance Agency. A state agency which offers a limited amount of below-market-rate home financing for lowand moderate-income households. Index. The interest rate or adjustment standard which determines the changes in monthly payments for an adjustable rate loan. Infrastructure. The public facilities and services needed to support residential development, including highways, bridges, schools, and sewer and water systems Interest. The cost paid to a lender for the use of borrowed money. Joint Tenancy. A form of ownership by which the tenants own a property equally. If one dies, the other would automatically inherit the entire property. Level Payment Mortgage. A mortgage whose payments are identical for each month over the life of the loan. Mortgage Broker. A broker who represents numerous lenders and helps consumers find affordable mortgages; the broker charges a fee only if the consumer fins a loan.
Mortgage Commitment. A formal written communication by a lender, agreeing to make a mortgage loan on a specific property, specifying the loan amount, length of time and conditions. Mortgage Company (Mortgage Banker). A company that borrows money from a bank, lends it to consumers who want to buy homes, then sells the loans to investors. Mortgagee. The lender who makes a mortgage loan. Mortgage Loan. A contract in which the borrower’s property is pledged a s collateral and which can be repaid in installments over a long period. The mortgagor (buyer) promises to repay principal and interest, to keep the home insured, to pay all taxes, and to keep the property in good condition. Mortgage Origination Fee. A charge by a lender for the work involved in preparing and servicing a mortgage application (usually 1 percent of the loan amount). Negative Amortization. An increase in the outstanding balance of a loan when a monthly payment is not large enough to cover all of the interest due. Note. A formal document showing the existence of a debt and stating the terms of repayment. PITI. Principal, interest, taxes, and insurance (the 4 major components of monthly housing payments). PMI. Private Mortgage Insurance. An amount applied to your monthly payment when your down payment is under 20% of the home price. Point. A charge of 1 percent of the mortgage amount. Points are a one-time charge assessed by the lender at closing to increase the interest yield on a mortgage loan. Prepayment. Payment of all or part of a debt prior to its maturity. Principal. The amount borrowed in a loan, excluding interest and other charges. Property Survey. A survey to determine the boundaries of your property. The cost will depend on the complexity of the survey. Rapid Payoff Mortgage. (See Growing Equity Mortgage). Recording Fee. A charge for recording the transfer of a property, paid to a city, county, or other appropriate branch of government.
Real Estate Settlement Procedures Act (RESPA). A federal law requiring lenders to provide home buyers with information about known or estimated settlement costs. The act also regulates other aspects of settlement procedures. R-Value. The resistance of insulation material (including windows) to heat passing through it. The higher the number, the greater the insulating value. Sales Contract. A contract between a buyer and seller which should explain, in detail, exactly what the purchase includes, what guarantees there are, when the buyer can move in, what the closing costs are, and what recourse the parties have if the contract is not fulfilled or if the buyer cannot get a mortgage commitment at the agreed-upon terms. Settlement. (See Closing). Shared Appreciation Mortgage. A loan in which partners agree to share specified portions of the downpayment, monthly payment, and appreciation. Tenancy in Common. A form of ownership in which the tenants own separate but equal parts. To inherit the property, a surviving tenant would either have to be mentioned in the will or, in the absence of a will, be eligible through state inheritance laws. Title. Evidence (usually in the form of a certificate or deed) of a person’s legal right to ownership of a property. Transfer Taxes. Taxes levied on the transfer of property or on real estate loans by state and/or local jurisdictions. Veterans Administration (VA). A federal agency which insures mortgage loans with very liberal down payment requirements for honorably discharged veterans and their surviving spouses. Walk-Through. A final inspection of a home before settlement to search for problems that need to be corrected before ownership changes hands. Warranty. A promise, either written or implied, that the material and workmanship of a product is defect-free or will meet a specified level of performance over a specified period of time. Written warranties on new homes are either backed by insurance companies or by the builders themselves. Zoning. Regulations established by local governments regarding the location, height, and use for any given piece of property within a specific area.
Source: National Association of Home Builders
88 Possible Types Of Turbulence Or Stunts We Could Encounter… Buying or Selling a home is like taking an airline flight across the country. When you start on your trip, you have no idea how the trip will go. Neither does the pilot. You could run into 88 different types of turbulence, or other passengers on the trip could pull stunts on you. Ideally, you should have a smooth flight and land on time. Certainly the pilot will try to use his or her experience to navigate around the storms and go for the smoothest flight plan, but if they’re honest, they can’t promise a turbulent-free trip. Their job is to get you to your destination in the least time and with the least aggravation, while keeping you informed throughout the trip. Attached is a somewhat humorous list of the 88 different types of turbulence, or stunts we might run into. This list is not all encompassing, but it catches most of the common issues we might run into. While some of the items are "picky" to some, they are very real and fearful to others. Please take a few minutes to review the list. As your REALTOR, I see myself as the pilot of your plane. My job is to assist you in getting your home purchased on time and with the fewest aggravations. I can’t promise you no turbulence, or that other parties to the transaction won’t try and pull a few stunts, but I can promise you that I’ll utilize my experience and expertise to take you on the smoothest flight that I can. And if we do hit turbulence, I won’t bail out on you. I’ll be your teammate throughout the flight, until we get you safely to your destination. Rest assured your advocacy is my number one goal, and that means you must be delighted with the product and service we deliver beyond your expectations during the process. As always, should you have any questions or concerns, please don’t hesitate to call me. Your Realtor,
Phil Lande, ABR, ASP, CDPE, CRS Your Real Estate Consultant For Life! Email: plande@atlasrealty.com Web: www.remax-atlasgroup.com
88 Possible Types Of Turbulence Or Stunts We Could Encounter‌ The Buyer/Borrower: 1. Does not tell the truth on the loan application. 2. Submits incorrect information to the lender. 3. Has recent late payments on credit report. 4. Found out about additional debt after loan application. 5. Borrower loses job. 6. Co-borrower loses job. 7. Income verification lower than what was stated on loan application. 8. Overtime income not allowed by underwriter for qualifying. 9. Applicant makes large purchase on credit before closing. 10. Illness, injury, divorce or other financial setback during escrow. 11. Lacks motivation. 12. Gift donor changes mind. 13. Cannot locate divorce decree. 14. Cannot locate petition or discharge of bankruptcy. 15. Cannot locate tax returns. 16. Cannot locate bank statements. 17. Difficulty in obtaining verification of rent. 18. Interest rate increases and borrower no longer qualifies. 19. Loan program changes with higher rates, points and fees. 20. Child support not disclosed on application. 21. Borrower is a foreign national. 22. Bankruptcy within the last 2 years. 23. Mortgage payment is double the previous housing payment. 24. Borrower/co-borrower does not have steady 2-year employment history. 25. Borrower brings in handwritten pay stubs. 26. Borrower switches to job requiring probation period just before closing. 27. Borrower switches to job from salary to 100% commission income. 28. Borrower/co-borrower/seller dies. 29. Family members or friends do not like the home buyer chooses. 30. Buyer is too picky about property in price range they can afford. 31. Buyer feels the house is misrepresented. 32. Veterans DD214 form not available. 33. Buyer has spent money needed for down payment and closing costs and comes up short at closing. 34. Buyer does not properly "paper trail" additional money that comes from gifts, loans, etc. 35. Does not bring cashier’s check to title company for closing costs and down payment.
The Seller:
36. Loses motivation to sell (job transfer does not go through, reconciles marriage, etc.) 37. Cannot find a suitable replacement property. 38. Will not allow appraiser inside home. 39. Will not allow inspectors inside home in a timely manner. 40. Removes property from the premises the buyer believed was included. 41. Is unable to clear up liens against their property – short on cash to close. 42. Did not own 100% of property as previously disclosed. 43. Thought getting partners signatures were "no problem," but they were. 44. Leaves town without giving anyone Power of Attorney. 45. Delays the projected move-out date. 46. Did not complete the repairs agreed to in contract. 47. Seller’s home goes into foreclosure during escrow. 48. Misrepresents information about home & neighborhood to the buyer. 49. Does not disclose all hidden or unknown defects and they are subsequently discovered. 50. Builder miscalculates completion date of new home. 51. Builder has too many cost overruns. 52. Final inspection on new home does not pass. 53. Seller does not appear for closing and won’t sign papers. The OTHER Realtor(s): 54. Have no client control over clients. 55. Delays access to property for inspection and appraisals. 56. Unfamiliar with their client’s financial position – do they have enough equity to sell 57. Does not get completed paperwork to the lender in time. 58. Inexperienced in this type of property transaction. 59. Takes unexpected time off during transaction and can’t be reached. 60. Jerks around other parties to the transaction – has huge ego. 61. Does not do sufficient homework on their clients or the property and wastes everyone’s time. 62. Engineer will not approve septic system or well. 63. Inspection report reveals substantial damage and seller is not to fix or repair. 64. Home was misrepresented as to size and condition. 65. Home is destroyed prior to closing. 66. Home not structurally sound. 67. Home is uninsurable for homeowners insurance. 68. Property incorrectly zoned. 69. Portion of home sits on neighbors’ property.
willing
70. Unique home and comparable properties for appraisal difficult to find. The Escrow/Title Company: 71. Fails to notify lender/agents of unsigned or unreturned documents. 72. Fails to obtain information from beneficiaries, lien holders, insurance companies, or lenders in a timely manner. 73. Lets principals leave town without getting all necessary signatures. 74. Loses or incorrectly prepares paperwork. 75. Does not pass on valuable information quickly enough. 76. Does not coordinate well, so that many items can be done simultaneously. 77. Does not bend the rules on small problems. 78. Does not find liens or any title problems until the last minute. The Appraiser: 79. Is not local and misunderstands the market. 80. Is too busy to complete the appraisal on schedule. 81. No comparable sales are available. 82. Is not on the lender’s "approved list." 83. Makes important mistakes on appraisal and brings in value too 84. Lender requires a second or "review" appraisal.
low.
Inspectors: 85. Too “picky” with conditions and “scares” the buyer. 86. Infuriates the seller. 87. Home inspector not available when needed. 88. Inspection reports alarm buyer and sale is cancelled.
If you want smooth sailing during your real estate transaction, and a pilot who can bring you in for a safe, smooth landing, trust…