Posts Tagged 'Purchase'

10 Benefits a Great Realtor will add to your Purchase Experience!

Congratulations! You have decided to take the steps to become a homeowner in today’s market. This is no small task and it can be overwhelming. Many new buyers start there search online on their own. In fact 82% of buyers start their search online. I understand that you do not want to be sold or bound to a Real Estate agent. I get it but you have to do your due diligence and hire a professional. Here are 10 benefites a great Realtor will add to your purchase experience:

1) Professional Advice – Real Estate agents are trained in the very thing you are looking to accomplish, Finding the right home. They can offer professional advice on Style, Location, and Price. They also have knowledge or professional contacts to make sure the structure, floor plan, area are all up to your standards. There is no substitute to Professional Advice.

2) No Cost to You – As a buyer you do not pay the commission of your selling agent. They are paid by the seller for finding you and selling the sellers home to you. It does not cost you anything. Their time they spend with you, the advice they give you, and all the additional benefits come at no expense to you until they find you the right home and you agree to buy it.

3) Negotiation – Realtors are skilled negotiators. A large portion of the job that they do is negotiating the right price and terms of your purchase. This can be the difference and to me very well could be the number one benefit.

4) Expanded Search – Agents not only have access to the local MLS but they also have access to a network of other agents that have inside knowledge on upcoming properties. This extends in most cases above and beyond their own company. Overtime Real Estate agents build strong relationships with colleagues. It is like water cooler talk. In the end you may be the beneficiary.

5) Knowledge of the Area – You may be familiar with the area that you are buying in and you may not. Agents are generally connected with the chamber of commerce, local churches, school associations and restaurants through their farm. Many agents concentrate on specific areas and know everything there is to know about that area.

6) Determine overall value to insure appropriate price –  Agents have knowledge of values and sale prices that are accurate in your market. It is their job to stay current with market values and sales in today’s market. There are two markets going on today: The normal market and the distressed REO market. Realtors can help you navigate the two markets and help you to determine the appropriate value or price you may offer.

7) Limit Liability – An agent can limit your liability and make sure that you are protected as a buyer. There are time frames, contingency periods that a buyer must meet and there are contractual obligations to meet. Your agent will guide you through this process and help you to make educated decisions regarding your liability.

8) Emotion Manager – The market today can be very stressful for a buyer. It is essential to control your emotions. You cannot get attached to a property. If you write an offer on a short sale it is essential to understand that you may be waiting for a long period of time and your agent will help set that expectation keeping your emotions in check.

9) Simple Explanations to Complex Issues – Your agent will break down complex situations so that you can understand them fully. It can be very overwhelming upfront but your agent will break down a complex process and help you to understand the little pieces. This will be a major life-changing event and the Real Estate agent will help simplify it.

10) Experience only time and transactions can provide – Your agent has seen nearly all the situations that you may encounter during your purchase. From uncovering a hidden defect, loan issues, property not appraising, title defects, zoning, septic, well, inappropriate disclosure, and many more. They are there to help you understand the concerns that may arise and help work through any situation they may not have experienced.

If you are in the Sacramento  Area or Sonoma County Area I recommend the following Real Estate Agents. I have worked with each and everyone of them at some point. In my opinion each of them comprises everyone of these benefits described above. Please contact me for their contact information as out of respect for them I will not post it.

Sacramento Area – Dayna Neuse Remax Gold Roseville , Peter Bond Remax GoldRoseville, Karen Wallace Lyon Real EstateRoseville, Robert Wallace Lyon Real EstateRoseville, Kevin Nakano Nakano Realty Elk Grove, Bryan Hill Pacific Coast RealtyRoseville, Nathan Novelo Connect Realty Antelope, George Snyder Lyon Real Estate Roseville and many others. I am sorry if I missed you here are there are too many of you too mention.

Sonoma County – Brook Terhune Platinum Real Estate Santa Rosa, Delia Nieto Coldwell Banker Santa Rosa, Larry Mitchell CPS Real Estate Santa Rosa.

In summary, it is imperative that you use the services of a qualified Real Estate agent. It is up to you to interview each and every Real Estate agent that you may want to work with. Determine who is a good fit for you. Communication is the key to every relationship and it is a two way street. Qualified Real Estate agents will help you have a successful buying experience.

Mortgage Locks: Certainly Uncertain! 3 Tips on locking your Mortgage.

When is the best time to lock in my mortgage rate? After all rates are at 3.95% are they not? Heck I think I should wait because the stimulus package is going to help me out and lower the rates to zero. My friend said that they got 4.5% yesterday and I want that rate. I heard that the fifteen year fixed mortgage is 4%. I read in the news that my loan can be modified to as low as 2% and I would like to do that right now can you help me.

OK, I am getting a little redundant but the point to all of the above ranting is simple. Rates are all over the map and they are custom tailored to the individual, the property, and the time that you are acquiring your loan. It is a common question to ask your professional is today the day that I should lock? If they state that absolutely without a shadow of a doubt today is the best day Run!

Larry Baer of Market Alert has this to say: The Market is always right! You and I are some of the time.

In layman’s terms that means to me that you will never be able to time the market and there will always be a rate lower than yours and there will always be a rate higher than yours. Here are three tips that will help you in your decisions to lock your mortgage:

1) If you like it, Lock it – I am a huge proponent of this tip alone. It is your mortgage and your payment that you have to live with for the next thirty years. If there is a payment that you are comfortable with and you like the rate then lock and never look back. Rates are changing by the minute. A swing is rate of a .5% for the worse on 200K is about $62 a month. We tend to think about how much it could go down but I encourage you to remember that we are at historically low interest rates and any rate is a good rate.

2) Don’t Share your business with Friends and Relatives – I am not saying not to be excited about your new home purchase but I am saying to be selective about your excitement. Comparing rates and down payments and programs is certain to hurt someones feelings. As I said before there are always lower and higher rates than your own. If you are the higher rate you wonder why and second guess a good thing and if your lower your celebration has caused others to second guess their dealings. How often do we share our retirement funds or down payment options, or income and credit? That is right we keep the information that tailors our mortgage to ourselves and shout out our rate. Only you and your family have to be excited about your finances and the rest of the world can remain in the dark.

3)  Ask your Broker or Banker about Float Down Policies or Rate Renegotiation Prior to Locking – Many of the wholesalers have taken a proactive approach to the market changes. They do not want to lose your business because that costs them money. In order to keep the loan active they are  sometimes willing to renegotiate the terms of your lock. Other wholesalers have a float-down policy in place. They will allow for a float-down of the rate to current market. There is almost always a cost to do this so consult with your Mortgage Broker or Banker on how this applies to your Mortgage.

Just Remember that your Mortgage is yours. It has to work for you and noone else. It is important to be educated and confident in your choices. Choose a Mortgage Professional that makes you feel comfortable with those decisions. You have made a great choice to buy in the current market environment. Take control of that choice be proactive in your education and trust your choices.

As Always thank you for reading,

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The 8 stages to homeownership. An illustrative guide for buyers

Stage 1 – Pre-approval – The pre-approval process is a time that you meet with your Loan Officer and talk through the financial side of the purchase. The loan officer will take an application and gather all of your documentation required for pre-approval. This documentation includes but may not be limited to the following: Last Two Years Tax Returns, current pay-stubs covering 30 days (W-2), last two years W-2’s, two month’s bank statements all pages and all accounts, most recent statement for 401K, money market, cd’s, stock, mutual funds and the like. Other items can include mortgage statements, homeowner’s insurance declaration page, bankruptcy papers, divorce papers, lease agreements and more. The more detailed you are with your documentation the more accurate the pre-approval will be. Loan Officers review the documentation, check credit, verify income and run your scenario through our automated engine to receive an automated approval. The automated approval assesses risk and cross references secondary market guidelines to determine your borrowing capability. The accuracy of the information inputted into the system is everything. The automated approval will give you a list of items that you will have to provide to obtain funding of your loan in the end.

 

Stage 2 – The House Hunt – After you are pre-approved by your Loan Officer they will issue a pre-approval letter to you and your Realtor. As far as the lending side of things you are on a hiatus. Your loan cannot be locked until you have found a property. We lock the collateral not the borrower. During the house hunt your loan officer will keep you up to date on any guideline changes, industry news, and rate movement. They will also be in communication with your Real Estate agent to make sure that your team is all on the same page. When you find a home that you like you will place an offer and wait for the response. There may be counter offers and you may have to write more than one offer before you have an offer accepted. Your Real Estate agent will guide you through this process and provide great advice on how to approach the house hunt.

 

Stage 3 – Offer Accepted – Now that the offer is accepted and you are in contract to buy the home. There are several things that will occur during this stage. The first few days will be a flurry. In my practice I like to meet with you again and obtain updated information if the hunt has taken a few months. Along with gathering updated information we will go over current rates and pricing, fees, and determine if we want to lock now or hold off. At this point a check for the appraisal is collected and the appraisal is ordered, preliminary title reports are requested, and I request a copy of the fully executed contract. (Please note every loan officer will approach this differently and certain loans such as VA have different appraisal processes.) Gathering the information above from the Title Company and the BANKS can sometimes be a process. The title companies on the Bank owned properties are located all over the place. I have worked with one in Philadelphia. At the same time Your Real estate agent and you will be ordering inspections such as home and termite if you choose too. It is highly recommended and your Real Estate agent will talk you through this. Once the documents above are gathered the loan package will be submitted to our wholesaler of choice to be underwritten.

 

Stage 4- Underwriting – Once we have chosen the wholesaler that will provide you the money to buy your home we submit the loan package that we have created to be underwritten. The cleaner the package we submit the smoother the process. This is why I am so through upfront and ask you to provide all the information and all pages of everything. The reason that there is an underwriting process although you were already approved through our engine is that we have to have a human check to make sure that the data that we entered in the computer is supported by our documentation. They are checking income, assets, credit depth, appraisal, title reports and contracts for accuracy, missing signatures, appropriate calculation and use of income such as overtime. This underwriter will be overly thorough in today’s market environment so this process will take time. The time varies depending on who we choose to work with and their current volume of business. One thing that will delay the underwriting process is incomplete files. Again, this is why it is important to work with a Loan Officer that can package a clean file for underwriting and important for you to provide everything they ask for to the best of your ability. This stage can be as quick as 48hours and some wholesalers are running 20+days. If the wholesaler is quick it can because they are well staffed, the rates are not that great, they specialize in few products or if they are slow it could mean all the same. The goal of this process is to get a conditional loan approval from our underwriter.

 

Stage 5 – Loan Approval and Conditions – Once the underwriter has approved the loan they will issue a conditional loan approval. There are conditions that are labeled prior to documents and there are prior to funding conditions. Many of the conditions are behind the scenes and should not be a requirement of you as the borrower. If you are through upfront with documentation there should be minimal conditions at this stage. Some examples of typical prior to document conditions include updated pay-stub, appraiser to provide more data, estimated closing statement, W-2 or letters to explain items that may need clarifying. Some example of prior to fund conditions may include insurance or 4506T results. The conditions I have given as examples are not the only conditions that may occur they are meant for example only.  At this point our job is to quickly gather the conditions and submit them back to the underwriter to be satisfied. This process, like underwriting, varies on the time to complete. The quicker we get back the conditions necessary the quicker we move to the next step. Once the underwriter has cleared the conditions we move to the next stage loan documents.  

 

Stage 6 – Loan Documents – When the Underwriter clears the prior to loan document conditions we are able to order your loan documents to be signed. Loan Officers fill out a request for loan documents and submit this to the wholesaler. The wholesaler has a department that works specifically on preparing loan documents to send to the title company. Again, this is a process and every wholesaler will vary on the time that it takes to get the loan documents sent out. In the electronic era that we live in the loan documents are most commonly sent via e-mail. Once the title company receives the loan documents they will prepare the estimated settlement statement and send to your loan officer to review. The settlement statement reflects the costs, loan amounts, down payment requirements and any deposits you have already made as good faith. The Loan officer will review this statement to make sure that it is in-line with the good faith estimate and what you discussed with your loan officer originally. There are a few items that are pro-rated so the numbers will very slightly. Once the settlement statement is reviewed for accuracy either the title company or the loan officer or a combination will schedule a time for you to sign. The signing will take place at the title company, at your home with a notary or at an alternate location that is convenient to all parties. The signing of the loan documents is where you agree to the terms of the loan. You will in front of a notary acknowledge this agreement. Once the signing is complete the title company will overnight the signed package back to the wholesaler for the next stage.

 

Stage 7 – Funding – Once the wholesaler receives the returned package from the title company they will review the package for completeness. This again is a process that varies from institution to institution. Once the file is reviewed they will issue a funding checklist with any outstanding conditions to be satisfied. There should be very few conditions if any at this stage that require you as a borrower to do something. Between your loan officer and the title company all conditions will get completed. That does not mean that you will never have any conditions required of you. There are cases that you will have to provide additional documentation. This is a rare case as all of it should have been handled prior to documents. Once the funder has cleared all the conditions they will fund your purchase. This is the process of sending a wire of the funds from the loan to the title company to be combined with your down payment to complete the purchase. Once the wire is received the escrow officer will release the file to be recorded in the county of the purchase. Now for the last stageJ

 

Stage 8 – Recording – The purchase transaction is recorded with the county recorded so that you are officially the homeowner on record. Congratulations you have made it through all eight stages of the home ownership process.

 

* These stages do not represent the process for every loan officer or lending institution. They constitute the process I have learned as a Mortgage Broker and through my time in the industry. You may use them as a general guide to help better understand the stages that you may encounter when buying a home. This is for illustration and not intended to be the ultimate guide to home-ownership.

 

 

Home Purchase:How to Survive your 30 day escrow

The market is phenomenal and the opportunity to buy a home is now. Many of you are taking advantage of the opportunity and that is amazing. Warren Buffet said, “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.  Many of you are listening.

The time-line for an escrow to close is 30 days in most cases. In the thirty calendar day period we need to get our inspections done, appraisals done, have the loan underwritten, satisfy any conditions of the loan and be understanding of the turn-times of the third party services we employ. It is a cooperative group effort. I have given you below a few tips to help you survive the 30 day escrow and sneak out a winner.

Tip #1 – Be responsive to the requests from the professionals you hired- Before you began the process of buying a home you found a few professionals that you felt would best help you through the process. Many times these professionals (Real Estate Agent and Loan Officer) do not make the rules of the game. They are there to facilitate the process. If one of these professionals request documentation or a check for a service be quick to get them what they need. Your process will stop without it.

Tip #2 – Provide the documentation requested – It is imperative to provide all of the documentation requested. Do not try to find a way around it or think that something will be sufficient if that something is not what was requested. If you do not have what was requested get with your affiliate or loan officer and come up with an alternative. Holding back information from professionals that are on your team can cost you in the long run.

Tip #3 – Remember that we are on your side – All too often we forget that we are all on the same team. A victory is represented by a closed transaction. Communication is the key to that transaction. It stems from all parties who all have a lot riding on a transaction. Small details excluded can lead to a disaster that was avoidable upfront. Tell me the property is zoned service commercial and grandfathered in so I may come up with a solution prior to the problem.

Tip #4 – Be Prepared to fight for the home you want – It is not 2003, 04, 05 and obtaining a mortgage is a little more invasive than the past. If you could fog a mirror we gave you money in the past. Now we are asking for Birth Certificates to show the child support will continue for three years. The age on the application is no longer significant. This starts with the investors and trickles down to the buyer. Nothing good comes easy in life. It will pay off to be diligent and fight for the property.

Tip #5 – Everything is time sensitive – The purchase time-line is as follows. You go into contract and the clock starts. Your loan officer orders the appraisal, gets all the signed disclosures for the property, requests the preliminary title report and a copy of the fully executed purchase contract. Our wholesalers want a complete package to look at your file. The appraisal can be anywhere from 3-5 days, preliminary title report depends solely on the title company (I have dealt with companies in Philadelphia), Fully Executed Contract which can take time if the property is bank owned 3-15 days I have waited and all of this prior to submitting the loan to underwriting. Once we have all the documentation we can submit to underwriting which can be 3-9 days to underwrite. Business Days but the weekends count on the escrow. Once the file is approved there are generally a few conditions to meet and to be reviewed once they are obtained can be 2-4 days. When they are cleared and we are able to order your loan documents this is a 2-3 day job. Then we sign and the package is returned to be reviewed for funding. The funding process is 2-3 days. So if you add up the days on the short end a perfect process can take up to 12 business days with no hold up at all. This would include 2-3 weekends at 6days and we close the escrow in 20 calender days. On the long end 34 business days and 4 weekends would be a 42 day escrow.

In summary, it would require a group effort to survive your 30 day escrow. Note that we all have the same goal in mind. Home-ownership for you as the client is our goal and what we do best. I look forward to working with all of you in the years to come.


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