The Dos and Don’ts of the Mortgage Loan Process

You need to know the ins and outs of the mortgage process – what to do and what not to do while you’re getting a home loan. The infographic below takes a look at your “dos and don’ts” during the mortgage loan process.

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How To Choose a Home Inspector…COMPARE THEM!

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You have just signed the purchase agreement on your potential new home and now you need a home inspection to make sure that the home you are about to buy is worth it’s salt. Where do you begin?

All too often home buyers will choose a home inspector based solely off of the price of an inspection. That is the absolute worst way to choose a home inspector. Why? Because all home inspectors are not created equal, just as all home inspection reports are not created equal. When hiring a home inspector you want…no…you NEED a home inspector that will describe and document the ENTIRE condition of the home as it sits on inspection day. Not EVERY home inspector does this.

No doubt you have heard home inspection horror stories of items that were missed or defects that were somehow overlooked. While a home inspection is never a guarantee that 100% of all defects in a home will be found, studies show that if you hire the RIGHT home inspector, approximately 90-95% of defects CAN be found and reported on.

So how to choose?

Again, do not let price be your guide! I have actually lost a home inspection over $5.00!! Seriously! No offense, but that is absolutely ridiculous. You are not buying a gallon of milk, you are placing your trust in someone to inspect your home! You need to do your homework. When you are choosing an inspector based solely off of the inspection price, in most cases the old adage holds true…you get what you pay for. Looking for and obtaining the cheapest home inspection you can find will only leave you disappointed and most likely in more debt!

So how do home inspectors charge?

Many of the larger franchise inspection companies charge enormous fees to cover the cost of their offices, marketing to realtors (which is a conflict of interest), their vehicles and staff. On the flip side, many of the smaller independent home inspectors charge too little because they are either too inexperienced or they are in direct competition with the larger companies and are trying to gain an edge.

The following questions (in order) can be used as a useful guide in what you really should be asking a home inspector before making your selection.

1) How long have you been in business. In this industry a home inspector does not even become “somewhat seasoned” until around the 2-3 year mark. Anything over 5 years and the inspector is in the running to be considered a Jedi.

2) How many inspections have you performed? A good minimum answer would be 1000 for a one home inspector firm.

3) How long is your report, what is covered and what is not? Ask for a sample copy of an actual inspection report so you can see for yourself what it looks like and what kinds of things the inspector is calling out. You will be VERY surprised once you do this and I assure you, it will make your decision a much easier one. Many of todays home inspection reports simply do not make the grade when it comes to describing in detail the overall condition of the ENTIRE home. Most inspection reports are about 15 pages long. Approximately 3-6 of those pages are filled with disclaimers and useless information to the home buyer. That leaves you with maybe 10-11 pages (if you are lucky) of information, and to be perfectly honest, that is just not enough to describe an entire home. A good home inspection report should be AT LEAST 30 pages long and preferably larger.

4) Are you in good standing with the Better Business Bureau and/or any other performance based associations such as Angie’s List or Yelp? While this also is no guarantee, it seriously limits your chance of getting ripped off by someone who is not looking out for your best interest. You can easily verify their answer by visiting the appropriate websites and search for the company by name.

5) How much do you charge? Most inspections are based off of the total square footage and foundation type of a home. The average home inspection (1500-2500 sq ft) runs around $300.00-$400.00. While that may seem like a lot of money to shell out in one pop, think of it this way. You are looking for someone to inspect your potential new home. How much is THAT worth to you?

One last thing to remember:

Do not always rely on your real estate agents “list of approved home inspectors”. Why? Because you do not know how those home inspectors got on that list. Did they pay to be on the list? (very common). Do they bribe the agents with money, lunch, candy and/or gift cards to be on the list? (very common). Do they “go soft” on their inspections as to not ruffle the agents feathers? (very common). OR are they the most qualified, the most experienced and most thorough home inspectors in town (not common at all).

The choice is completely yours to make when it comes to choosing a home inspector. Do not feel pressured by anyone into making a wrong decision that could potentially affect you and your family for years to come. You want to feel comfortable in the fact that you did everything you could possibly do to ensure that you are getting the best home inspection possible. While some agents are looking out for you by recommending certain home inspection companies, there are some who just aren’t and there is an inherit conflict of interest present every time an agent refers a home inspector. Be smart and choose wisely.

Key Negotiation Points for Getting your Offer Accepted

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By the time making an offer rolls around, you’ve likely already invested a hefty amount of time and energy into finding the perfect home for your family’s needs. With financing options in place and a great property in your sights, making an offer is the beginning of the backstretch, and, with a little help, you can maximize your chances of having your offer accepted. Particularly in a seller’s market, finding important points of contention that can give your offer a boost of favorability in the eyes of sellers is important to winning bidding wars and walking away with a new home. With the help of an experienced real estate agent, negotiating an offer to acceptance is a distinct probability. Depending on the market and property, the approach you take to submitting your offer will vary, but, by following these key guidelines, you’ll improve your odds of getting accepted. Let’s take a closer look at some key negotiation points to aid in ending your home search on a happy note.

While your opening offer should be serious to alert the seller to your intentions, don’t be afraid to leave the door open for future negotiations. Treating your initial offer as an introduction to the seller can be a good idea if the housing market isn’t too hot.

According to Credit.com, your opening offer on a property is a great opportunity to learn a little more about the seller and customize future negotiations to their individual situation. Did a recent change of job force a quick sale of their home? If so, removing contingencies and shortening closing is a great way to make your offer more favorable, even if you don’t increase your offer price. On the other hand, if the seller refuses to come down from the list price and is slow to respond to your offer, there’s a good chance that a quick sale isn’t a necessity. In this case, increasing your offer is probably a better bet than removing time-intensive contingencies.

Make the seller respond to you in a reasonable amount of time by writing tight deadlines into your offer. By condensing the schedule, the seller won’t be able to wait around for competing offers.

Even if you’re in love with the property, keeping your cards close to the chest and getting a timely response is vital to getting a great deal on your dream home. When placing an offer, putting tight time constraints in place is an ideal way to ensure a prompt response and limit competing offers. A short, 24 hour period to review your offer before expiration could lead to great results. If rushing a seller into making a decision gets your offer accepted before other buyers have the chance to submit an offer of their own, you could save a good bit of time and money while acquiring a great home.

If contingencies and closing costs have you stuck, be prepared to meet in the middle. Splitting the difference can go a long way in the eyes of a seller.

According to About Home, contingencies come in a wide variety of shapes and sizes to help buyers escape the purchase of a home if certain conditions aren’t met. From standard loopholes based on home inspections and appraisals to contracts depending on the buyer selling their current home, offers can be adjusted to include nearly any contingency you can think of to protect your interests while purchasing a home. However, contingencies can make your offer less appealing. If a seller has a problem with the number of escape clauses built into your offer, there’s a good chance that you’ll need to meet in the middle to retain the goodwill of the homeowner. From splitting closing costs to completely removing contingencies, be prepared to negotiate the details of your offer.

Depend on your real estate agent for additional advice on navigating a difficult negotiation. After all, he or she will have the experience needed to create a win-win outcome while working on your behalf.

The number one tool for developing a great offer is the knowledge and experience of your real estate agent. The advice and tips offered by the professionals can be incredibly effective in ensuring a smooth negotiation process. With knowledge of the local real estate markets as well as the ability to communicate directly with sellers or their representing agents, your real estate agent will have the insider information specific to your home search that can get you in your dream home more quickly and without unnecessary stresses and headaches.

Sources:

http://www.credit.com/loans/mortgage-questions/how-to-negotiate-best-price-when-buying-home-purchase-offers/

http://homebuying.about.com/od/offersnegotiations/

Denver housing: Rocky Mountain High and HOT!

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The supply of homes for sale in Denver is down 15 percent from a year ago, the number of days on the market for homes has fallen 31 percent and the median home price is up 11 percent, according to the real estate company Live Urban Real Estate. Homes are flying off the shelves, and bidding wars are the new normal.

“Prices are going crazy. Multiple offers, love letters, videos, all kinds of things to appeal to a seller in order to make yours stand above all the others,” said Denver real estate agent Jill Schafer.

Supply here is low for a number of reasons. Employment is growing at more than 4 percent versus a year ago, home builders really didn’t ramp up production after the recession and land prices in the Denver area are at an all-time high, according to John Burns Real Estate Consulting. Most of the available land is out by the airport, where sales are not particularly strong.

Read More: http://www.cnbc.com/id/102698380