Posts Tagged ‘home buying’

Navigating and Negotiating a Home Inspection Report

January 12, 2015

Want to introduce and thank Aaron G. for his Guest Post regarding the importance of Home Inspections.

A home inspection report is a crucial element to both buying and selling a home, so it’s important to understand how to navigate one and what to do with the results. Some homes require extensive repairs, while others may be nearly ‘turn key’ and ready to move into right away. It’s unreasonable to expect perfection up front as every as home has its issues.  In fact even a brand new home will have something.  Without experienced representation, lots of buyers may get spooked by home inspection reports and miss out on great opportunities.

As a buyer, you need to feel confident that you are making a wise investment by buying a home. Finding peace of mind that the large and small details are taken care of is where your Agent can assist. These are some of the key items to look for when reviewing a home inspection report; how to differentiate between serious and minor issues, and how to negotiate necessary repairs.

Red Flags

These are some of the more serious issues that you and your agent should be concerned about when reviewing a home inspection report. But just because multiple red flags exist, it doesn’t mean you should bail and look elsewhere. Take a deep breath and pay attention to the inspector’s advice about long-term solutions.

Mold and Mildew Issues

Mold and mildew aren’t just disgusting and unsightly; they are also indicators of serious moisture damage in a house. Poor roof drainage is often a common cause of mold and mildew in the attic space or even in the crawl space.

Electrical Wiring Issues

Many older houses have outdated electrical systems and electrical wiring setups that range from inefficient to downright dangerous. Electrical configurations can be complicated, so if you don’t understand what the report says, ask the inspector to explain it to you in detail.  In some cases a licensed electrician may be hired for a review of the home.

Plumbing Issues

When reading your home inspection report, find the section where the inspector describes the water pressure and drainage from the house’s pluming system. Plumbing problems can be difficult to detect because pipes are hidden behind walls and inside closets. Keep in mind that even the smallest leak could turn into a major household problem.

Roofing Issues

Check the report to determine if there are any shingles missing, gutters bent, or soft spots in the roof. Look for words like aging, cupping, blistering, lifting, and insect damage. If your prospective home has a fireplace, check the inspection report for details about the condition of the chimney, as chimneys are a major cause of home fires.

Manageable Issues

Although sellers don’t like to feel like they’re being nickeled and dimed, most won’t let a good deal get away from them over just a few small repairs or a couple hundred dollars. These issues may seem less alarming than the ones above; however, they shouldn’t be overlooked when you review your report. Remember, buying a house involves a little give and take.

  • Not enough outlets
  • Leaky sink
  • Carpeting stains
  • Outdated air conditioner
  • Inefficient lighting
  • Gas range burners

Negotiating with the Seller

It’s important to be cordial and cooperative with the seller and the home inspector throughout the entire process to ensure that necessary items are repaired and to work out the details of paying for the repairs. Engage in open, honest discussions together about which flaws are just minor signs of normal aging and which ones are red flags for serious future issues.

An experienced real estate agent can help you negotiate with the seller to address all the issues in your home inspection report and leave nothing up to chance. For other useful buyer tips, including choosing a realtor and putting in an offer, check out HomeCity’s “Ultimate First Time Home Buyer’s Guide” to get prepared, comfortable, and excited for your new home!

Aaron G. lives in Austin, loves his dog, and often writes about Georgetown homes for sale.

Mortgage or a Note to a Deed of Trust?

June 16, 2014

Often people commonly use the word Mortgage when they take a home loan.  A true Mortgage however is much different from a ‘Note to a Deed of Trust’ which make up the majority of all home sales.

Mortgages typically deal with homes with 40+ more acres and were designed for Farm, Ranches and large Estates.  That will be another article….. today we will touch on a ‘Note to a Deed of Trust’ .  What is it?  How typical is it?  Why do banks use them’?

For real estate purchases, state law requires either a mortgage or a deed of trust to provide security for a home loan. In many ways, a deed of trust functions like a mortgage. However, one major difference between the two lies in who holds the legal title for the home while the loan is being paid. In a deed of trust, the legal title is held by the trustee, often an escrow company, while the equitable title is held by the borrower. Also, in a deed of trust, a foreclosure can be conducted outside of the courts, which is almost always faster and less costly than a judicial foreclosure.

A deed of trust secures repayment of the loan by placing a lien on the property. There are three parties to a deed of trust: the borrower, the lender, and a trustee. Some states permit both a deed of trust and mortgage, while others use just one or the other. A deed of trust is always used together with a promissory note, which is a contract that sets and controls the terms of the loan and repayment. The trust deed is simply a security instrument—without it, the note still creates indebtedness, but it is an unsecured debt. The money would still be owed, but a lender would not be able to force a sale in satisfaction of the note without going to court as an unsecured creditor.

When a note is secured by a deed of trust, it allows the loan holder to take back the property if the conditions for repayment aren’t met. Remember that with a deed of trust, this can be done without court proceedings.   The deed of trust, not the note, is recorded with the county recorder in the county where the property is located and indexed in the public records.

 

For more information on deeds and to purchase real estate deeds for your county and state, visit

deeds.com.

Closing a Real Estate Transaction – What to Expect

July 31, 2013

When you are purchasing a home, the closing is the last piece of the puzzle before you receive your keys to move into your new home. Your closing day may seem to move like a whirlwind, as there are many steps in the process that make sure everything is done professionally and accurately. What can you expect at closing? There are many things you need to know but here are a few of the basics.

First; the closing will generally be held at a Title Company, at an agreed location. However, depending on the circumstances, situation, and/or state you live in, it may also be conducted at your lender’s office, a real estate attorney’s office, or anywhere else that is legal and has been agreed upon.

There could be a number of different people who will attend the closing, such as your attorney, the seller and their attorney, both real estate professionals, your lender, the builder’s representative, the title company, a notary public and a closing escrow agent. It all depends on many different factors, such as; if it is a new construction home or existing, if there are attorneys involved, and the type of property that is being purchased. In many places the seller and buyer may sign at separate times. In some areas it may be customary for everyone to be at the same table at the same time.

Once the day and time has been scheduled for everyone at the agreed location, the closing process begins. Your closing escrow agent will review a settlement statement with you also known as the HUD (Housing and Urban Development) form, summarizing all the charges, credits and misc expenses that pertain to your particular purchase such as; title fees, loan fees, and other associated charges and credits that may apply based on the contracted details of your purchase.

When everything has been explained thoroughly and clearly so that everyone understands and is in agreement, then signing commences. The items you will have to sign may vary depending on the type of transaction. As an example; a cash deal will require a lot less forms to complete versus a standard ‘Conventional’ loan, but an ‘FHA’ (Federal Housing Authority) or ‘VA’ (Veterans Administration) loan will require a great deal more paperwork to review. Other documents you will also need to sign are the ‘Deed of Trust’ or mortgage, the promissory note, and the Clarity Commitment document. There might be other items to sign depending on your own specific situation and location.

Generally if you are financing your home then you will probably be required to provide evidence of homeowners insurance known as a ‘Binder; and in some cases the inspections that were performed on the home. Most all lenders require the buyer to have a homeowners insurance policy in place before they can sign over the home. This ensures that the lenders interests in the home are protected in case of a catastrophic event such as fire, water damage, etc.. This may also vary depending on your States requirements.

You will provide your down payment, closing costs, prepaid interest, taxes and insurance by using a certified or cashier’s check in most cases. Ask your closing agent what is the best form of payment that is acceptable. After all the parties involved have completed and signed all documents pertaining to the transaction, the lender (if applicable) will be notified to release funds to the closing escrow officer who will then distribute said monies as instructed by the agreement to the appropriate parties. The final step: Your new transaction will be recorded with the state, designating you as the rightful owner of your new home. In some states full funding may occur at the closing table, other states only after recording. Check with your agent for what is typical to expect in your State or area.

In order to cover everything, sign and delegate funds, the closing procedure may seem like a lengthy process. But once everything completed and all payments are distributed, the closing will be complete and you get the keys to move in to your new home.

About the Guest Author
Winter Park Colorado Real Estate Company, Coldwell Banker Mountain Properties is pleased to bring you this article on what to expect during a closing. Coldwell Mountain deals with Grand County Real Estate in Colorado. If you are interested in seeing their listings, check out their website today.

Where Is Your Real Estate Mind Set?

June 15, 2012

I recommend anyone looking to buy a home in the near future to read this article “Mistakes homebuyers make as seller’s market looms”  as it touches on many vital points to consider.  Buying today has changed and those who are slow to change their mindset may find themselves frustrated and discouraged.    Currently the market has made a fundamental shift but it is easy to stay caught in an old mindset.  The ‘Buyers’ market in many areas has all but diminished for now.  Where the future goes time will tell.

A couple of my favorite highlights in the article are;

  • Some buyers don’t realize or can’t accept that the market has changed, real estate agents and analysts say.
  • “Right off the bat, buyers say, ‘I want a steal,’ and I tell them they have to wipe that word out of their vocabulary,”
  • WAITING TO GET PREAPPROVED FOR A MORTGAGE BEFORE STARTING THE SEARCH: During the boom years, buyers didn’t worry about arranging their financing up front because mortgages were easy to get. Not so anymore.