Why use a closing attorney?

Today we interviewed a great closing attorney, Brad Legare, with Weissman Law. We based our questions off of the those we have gotten from our clients and from inquiries on facebook, instagram and the like. If you didn’t find the answer to YOUR questions in this video link, drop either myself or Greta a line and tell us what burning question you have so we can get it answered for you. The thing is, if you have a question on your mind, it is likely there are others who also wonder the same thing but are afraid to ask! So help them out.

Watch our video interview of closing attorney Brad Legare.

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How Loan Estimates Work

Okay. You have been doing some online house hunting and found a few homes in an area you like. This gives you the confidence you need take the next steps.

1. You see an ad on TV and call for a mortgage loan.

They take some basic information from you – your social security number to run a credit report, how much you make, how much you owe, and generally how much home you want to purchase. You begin getting all the back up documents together to provide to the loan officer.

2. You select a Real Estate Agent to represent you as you move forward locating the right home, making an offer, and completing all the things that have to be completed before you close on the deal.

But did you know?

Loan officers normally provide best-case scenario loan estimates. Depending on your credit score, there may be credit-score adjustments down the road that cause you to take a hit on the interest rate. The lower the credit score, the higher the interest rate adjustment. So ask what the likelihood of an adjustment is when you get the good faith estimate (fee sheet). Ask if this estimate is firm.

Shop Around!

I’ve had clients tell me that they don’t want to have multiple loan companies pulling their credit scores since everyone knows that multiple hits can negatively affect your credit score and if they are borderline, they don’t want the hits themselves to leave them out in the cold without a loan.

Well, guess what? If the credit score hits are mortgage-based, and done within a same 90 day period, only the first hit shows up as a hard hit. The others are considered to be within the same category of hits. Don’t go crazy though. To be safe, only shop around with two or three mortgage companies. More than that and you could (not will, but could) find yourself with more hard hits than are recommended. The credit companies take into consideration that smart loan shoppers are likely to check rates with two or three mortgage companies rather than going with the first one they talk to. Your Agent may be able to provide you with a list of other companies to shop your loan request to.

You have a good mortgage rate and company…

Now be disciplined! Do not increase your debt by taking out any other loans, buying or leasing cars, buying new furniture for the house, or running up your credit cards. Continue to pay your bills faithfully. Once you enter into a contract on a house, it will be another 30-60 days before you actually close on the deal and are able to move in. You should probably move your needed down payment and moving money in a separate savings account and out of your checking account so you don’t accidentally spend it. And it can earn interest for you in the meantime.

 

 

Is Buying a Foreclosure a Good Idea for You?

Foreclosures occur when a home owner has fallen into arrears on their mortgage payments and the bank is taking over. Banks don’t really like taking over. They prefer to remain in the money lending business, not the home ownership business. If you are falling into arrears, or anticipate the possibility of not being able to meet future payments due to some change in your financial status, reach out the your lender immediately. Don’t  wait until you are months in arrears. I don’t know of any that won’t work with you to come up with a solution that will keep your credit in good shape and keep your payments coming until you can get back on your feet. But that isn’t the topic of today’s blog. Today we will discuss the stages of foreclosure and whether or not buying a foreclosure is a good idea for you. The pros and cons of buying a home involved in foreclosure vary with the phase of foreclosure the property is in when purchased.

More for Less

Buyers interested in purchasing foreclosed homes can often buy more house for their money. That’s because foreclosures are usually priced below market value. The banks and other financial institutions that take over foreclosures want to sell the properties as quickly as possible. They often price them low so that a greater number of buyers will make offers.

Lower Down Payments

Foreclosures may also present opportunities for first-time home buyers. Traditionally, down payments can prove a serious hurdle to new home buyers. Most conventional mortgage lenders require buyers to come up with down payments of 10 percent to 20 percent of a home’s purchase price. Because foreclosures tend to have lower price tags, buyers have to come up with smaller down payments when purchasing them.

Nicer Neighborhoods

Buyers may be able to move into higher-priced neighborhoods that they otherwise might not be able to afford. A house in a neighborhood of $250,000 homes might go on the market for $190,900 when it is sold as a foreclosure.

Investment Opportunity

The foreclosed home can be an ideal investment for the amateur or professional handyman. You can often make a number of improvements to the property yourself before selling the house for a handsome profit. If you have experience fixing up homes, the foreclosure auction is a place where you can get your foot in the door of real estate investment. Your sweat equity can pay off in real dollars when you sell the house.

Phases of Foreclosure

1.  The Owner has started missing payments.

In this case, a seller wants to sell before the lender gets involved. They will be motivated to achieve a fast sale and may create an opportunity for a below market purchase price. In this case the seller may be more likely to do repairs and might even be able to assist the buyer with some major closing cost credits or other concessions. As a buyer, you can use use regular mortgage financing and you can obtain desired inspections within standard due diligence/contingency period. The seller must legally provide a complete history of property’s condition, problems, repairs, etc.

Having said that, the seller probably won’t be able to negotiate a price below the outstanding balance of their mortgage. And since they are likely living in the home, they still have to find somewhere to move in which case you will not be able to move in on closing day and will have to rent the house to the previous owner until they move out.

2.  Pre-Foreclosure/Short Sales

In this case, the missed payments have gone on long enough that the Lender has filed a Notice of Default (NOD) or Lis Pendens and the Seller is now attempting to complete what is known as a Short Sale.  This seller will be motivated for a fast sale, increasing the buyer’s bargaining power. As before, the Buyer can do all the standard inspections during the due diligence/contingency period. Unless the purchase price will pay the mortgage and closing costs in full, the lender’s approval of price and terms of sale will be required (i.e. short sale). The Lender may not approve the price, seller concessions or closing cost credits and short sales generally take longer to close. They may take 45-90 days longer than a normal purchase. And in this case, the sellers still have to move out.

3.  The Foreclosure Auction

The short sale process hasn’t worked or the owner has walked away from the property and isn’t trying to work with the lender, so the property is now being offered up in a Foreclosure Auction. As a buyer the advantages are that the property will be sold for the outstanding mortgage balance owed to foreclosing mortgage holder and because auctions require cash payments, there is generally less competition for the purchase.

The obvious disadvantage is that the auction purchase price must be paid in cash on the same day as the auction and no mortgage is usually allowed. In addition to this, auctioned homes are “as-is” which means no inspections are allowed and the property condition might be suspect due to damage done by upset homeowners. And the buyer needs to do some research on the state of the title before bidding since the house may come complete with other liens, back taxes and mortgages. No commissions or attorney’s fees are paid and the buyer must pay for their own representation.

If the bank believes the auction will not recover a good price it may buy the property at auction.

4. Post-Foreclosure. The Bank now owns the property.

This is known as an REO property (Real Estate Owned by Lender). Remember I said banks don’t like to be in the property owning business so they are generally motivated to get it sold and will negotiate prices, down payments, closing costs, escrow length and a myriad of other concessions. The title will be clear, so the buyer won’t have to worry about any other liens or back taxes. Inspections and mortgage financing are allowed within normal due diligence/contingency periods. The house will be vacant and can be moved into immediately after the closing ceremony. REO sales close within a normal escrow period of time.

The properties are usually listed on MLS and the bank will pay real estate agents’ commissions.

What is the down side? Well although you can do normal inspections, they are just for your information because the Bank will not agree to do any repairs treating this as an as-is sale. Banks will usually require additional paperwork. And because they have never lived there, they cannot provide disclosures as to property history/condition issues.

Alternatives to the Foreclosure

Okay, that is the story behind foreclosures. But is it a good deal for you? Think about this.

1.  New Homes

When you purchase a new home you are protected by a warranty. Builders provide a one-year limited warranty on workmanship and materials, as well as a ten-year structural warranty.

When buying a new home, many builders have special incentive programs to assist buyers. These incentives may include below market financing or help with closing costs and they can save you thousands of dollars and make it easier for you to qualify for your home purchase.

If you need a quick response to your offer, a new home is a smart way to go. In most cases, you’re dealing directly with the builder, which ensures a prompt reply and as long a the new home is ready for you to move in, you can expect to close in a timely manner and move in.

Of course, the main benefit of buying new is that everything is pristine, sparkling, and brand new. In many cases you can work with the builder customize the home, selecting items like cabinetry, countertops, and flooring.

2. Resales

By law, conventional sales on new or resale homes require full disclosure of any known details or drawbacks on the property. The seller can be held liable if a problem arises as a result of an issue that wasn’t fully disclosed at the time of the sale. With foreclosures, it’s always “let the buyer beware.”

Resales homes are generally in pretty good shape. The sellers are moving because they want to. Perhaps they are moving up in size or downsizing, or maybe they are moving because of better paying job opportunities or to be closer to an aging family. Whatever the reason for selling their home, they normally work with an agent to sell it at fair market price and take a little profit out to use as a down payment on their next home. Real Estate Agents working with buyers help determine what is a good price to offer, walk them through the inspection, and work with them through every step of the home buying process. The inspection will point out everything from major to minor issues a home buyer should be aware of and offers an opportunity to re-negotiate the terms of the sale or for the seller to make repairs before the closing ceremony. And you can always get a home warranty to cover unexpected equipment malfunctions within the first year of purchase. I recommend to my buyers that they make the purchase of a home warranty a condition of the sale. It actually benefits both the buyer and the seller since it covers the house on behalf of the seller up to the day of closing and then one-year after that for the buyer.

Hopefully, this has given you something to think about. Just remember – whatever your decision, I am here to help you with you Real Estate needs.

 

Moving Yourself? What do you need?

One of the frustrating parts of moving is… every time you get home from the store you realized you should have gotten.. yet another item you need to pack with and ran out of. Here is a list of items you need in order to pack as well as items that would be smart to keep out of the moving truck until the very last second.

Boxes

Packing Tape

Packing Paper

Bubble Wrap

Moving Blankets (you could also use old towels)- to wrap furniture or artwork and tape over the fabric; this creates extra layers of protection for your glass or delicate belongings.

Markers or Label maker-Label, Label, Label. You will not regret it.

String or Rope

Screw Drivers-sometimes you have to take doors off the hinges to get furniture through, or you have to take furniture apart

Cleaning supplies-clean as you go, it makes the process easier (broom, dustpan, vacuum, Clorox wipes, Windex, paper towels, etc.)

We know how fast moving tape is used, and depending on how many “movers” you have, you might want to invest a tape gun per mover, or have two people share one and label it. Have a designated spot to sit down your moving supplies so you are not constantly looking for what you need.

Hope this helps you in your DIY Move!

What time of year is the best time to move?

As we continue to kick off the New Year we can see how full our schedules are. We all know that different seasons, months, holidays of the year bring different pros and cons. So what are the best and worst parts of moving during different seasons? When is the best time to move?

Unfortunately, the best time to move can also be the most inconvenient time to move for some. The slower months for moving companies, realtors, etc. are during the holiday season of November through January which also mean the cheapest prices for you as a mover. The con to consider as you move during the holiday season though is traffic. When considering the time it will take to move, double the amount of time it should take you to get to your new home, that way you are not frustrated and you do not feel behind. As many travel during the holiday season roads are easily clogged and traffic is guaranteed.

The same also goes with the days of the week. Monday through Thursday are the slowest and cheapest because no one prefers to take off of work to move. It is easier to acquire a mover and cleaners for your home on these days, which you might want to be mindful of.

Parents: I know you are thinking right about now.. gosh. These are not beneficial to my kids at all. This will disrupt their lives even more than the Move itself and it will be so hard for them to keep up with homework, make friends, etc. The idea is though: it will not make the Move transition any more difficult than it will be already. Why you ask? Because the kids will be at school during the day. You do not have to worry about them, take long lunch breaks, find something to entertain them, etc. Fact: you will need that half hour mental break when you go pick them up. They very well might be excited to see the progress made each day during the Move. Transitioning schools during the school year allows them to make friends instantly in class rather than during the summer the chance of them moping around the house wishing they knew someone in the neighborhood. Moving during the school year can be potentially best for everyone involved and cheaper for your wallet.

Another obvious consideration to moving is the weather. It cannot be controlled, but being mindful of the climate and reoccurring weather in the area that you are moving each year can help you better plan your move. For instance, it would be extremely difficult to move in the south in July because of the extreme heat. It will take double the amount of time to move because the need for water breaks for your professional or volunteer movers. Know the typical weather patterns for your area and use them for your moving wisdom.

Sometimes, as movers we do not have a choice on when we need to move, but this helps us highlight pros and cons if we do have the choice to better enhance the Moving adventure.

 

Get Pre-Approved

Once you have decided to buy a home, you will want to know how much of a home you can afford. Once you know that, well, you can truly begin looking in earnest. All the search engines out there on the internet allow you enter a minimum and maximum price range, filtering out the homes you cannot afford and focusing on those you can. I recommend you download my mobile application to use as one of your search engines. It draws its information directly from the GA Multiple Listing Service (GAMLS), which has the most up-to-date information. But what is better than that, it has a scan feature you can use from your smartphone. As you are driving around looking at neighborhoods or see a particular house you are interested in, you can point your phone at it, hit scan, and it will pull up that home and any others within a 1 mile radius. Cool, huh? To get my mobile application, simply text “scarroll” to 678-400-6100 and follow the directions.

Let’s step back a moment. If you are just curious what’s out there, look at everything. Dare to dream.

But if you are seriously searching, don’t be one of the many buyers who starts looking for a new home without taking the time to find out how much they can afford.  That’s like going to the grocery store without your wallet! How do you figure out how much home you can afford? Well you can use what is called an Affordability Calculator.

Now call me and while you are getting pre-approved, we will start looking for the right home for you.

But I digress. The purpose of this blog is to tell you how to get pre-approved. A pre-approval is generally a written statement from a lender stating the lender’s preliminary determination that a borrower would qualify for a particular loan amount under that lender’s guidelines. The determination and loan amount are based on income and credit information. Most pre-approval letters are good for 60 to 90 days.

Don’t confuse a pre-approval with a pre-qualification. With a pre-qualification, the lender relies on information provided by the buyer to estimate how much the borrower could qualify for. With a pre-approval, the lender verifies the borrower’s information and documentation to determine exactly how much it would be willing to lend to that borrower.

There are many reasons why you should get pre-approved. The most important reason is that you will get an accurate idea of how much home you can afford. This can help to target your home search and ensure you only look at houses that are truly in your price range. A pre-approval letter also helps you prove to real estate agents and sellers that you’re a credible buyer and able to act fast when you find the home you want to buy. Some sellers might even require buyers to submit a pre-approval letter with their offers, though having a pre-approval letter does not guarantee that your offer will be accepted by a seller. A pre-approval letter can make you stand out in a competitive real estate market. If you make an offer on a house without a pre-approval, your offer may not be taken as seriously as an offer from another person with a pre-approval.

So how do you get Pre-Approved?

Gather Essential Information (gather supporting financial documents – don’t guess)

Financial: Income, asset and expense information
If buying: Estimated purchase price and down payment amount
If refinancing: Estimated property value and loan amount

Select a Loan Company. Feel free to email me if you are stumped. I can send you some contacts who I feel comfortable working with and help you identify one matching your particular situation. My email is susan.carroll@bhhsgeorgia.com.

Begin the Pre-Approval Process

Contact a local mortgage consultant by phone or email.
Complete their online application form.
Your mortgage consultant will ask for the financial and property information you’ve gathered. To complete your request, you’ll need to submit your supporting documents before they issue the Pre-Approval letter.

Complete the Loan Application Process

Once you have found the home of your dreams, you will need to complete your application. If they have not already done so, your home mortgage consultant will probably ask you for Pay stubs, your last two years’ W-2s, last two federal returns, two months’ worth of bank statements of all types of accounts, and permission to pull your credit report.

Based on this information, they will provide a Loan Estimate shortly after receipt of your application. The Loan Estimate provides an estimate of the costs of obtaining your loan and the anticipated cash needed to close. After you review the Loan Estimate, you must indicate in writing your intent to proceed with the transaction. Avoid delays by submitting all pages of legible documents as soon as possible, along with any required fees.

There are more steps in the real estate process which must be followed until you actually close on your new home and walk out with the keys. But they are the topic of other blogs.

Here are some of the sources I used to draft this blog in case you want to read more……

http://www.bankrate.com/finance/mortgages/do-you-need-mortgage-preapproval.aspx

https://www.credit.com/loans/mortgage-questions/how-to-get-pre-approved-for-mortgage-home-loan/

The Bidding War

Just in case purchasing a house was not enough anxiety for you, let us create a little bit more, by adding another person wanting to buy the house. So now we have entered into a bid war. One dollar more or less, one change suggestion more or less, and the house is not yours. No stress though, this is not the only house for you no matter how much you love it.

Helpful tips:

Do your homework and research. Make sure this house is definitely the one you want. Look at the community, schools, grocery stores, salons, activities, etc. that you know you use now and make sure the area around the home fits your lifestyle.

Make sure your finances are in order. If they are not and the other bidder has their finances ready to go, pre-approval with money to put down they are more likely to win the bid.

Create an escalation clause. This puts a limit on how much yo are willing to pay on the house and protect you from the sellers expecting you to pay exceedingly higher than the other bidders.

Show the sellers your appreciation. Write a letter, send a picture with your family all excited in front of the home, or video your kids walking through it for the first time dreaming about their bedrooms. This will help the sellers know you will take responsibility for the home, care for it, and take care of it, they will see you in the home and be more likely to pick your bid.

No matter if you win or lose the bid, there is a reason. I hope these small tips help out and help you win your Bidding War and be able to move into your new home!

Making Henry our Home

Henry County is a beautiful, economically thriving, community oriented place that is centered around its residents. It is less than 40 miles south of Atlanta and the Hartsfield-Jackson Airport, giving it a good foundation of public transportation availability, nice restaurants, inside and outside shopping malls, and plenty of entertainment venues. The homes here are beautiful and the community is close-knit, having fall festivals, Christmas light events, running events, festivals, parades, concerts, holiday services etc. hosted at the Atlanta Motor Speedway just out of the historical small city of Hampton and on the McDonough Square throughout the year. Henry County even contains Lake Spivey; a beautifully scenic lake community. Being apart of the old Confederacy, Georgia including Henry county has many historical sites including Nash Farm, the The original 1830’s Courthouse, 1920’s Welcome Center, renovated Old Jail, and many historic houses and properties that reflect our part in the Civil War.

Having a diverse culture and collection of people from all generations, Henry County has the genuine ability to make anyone feel welcome at any time. The different gatherings and attractions make it easy to get involved in the community and allow so many different ways to help those in need. There are always food drives going on, turkey donations, Christmas shoe boxes, feeding the homeless, celebrating Veterans, etc. that drive the community together and create something for everyone to do and enjoy.

Why am I telling you this? Because I want you to experience all that Henry County has to offer! Come join us in Making Henry our Home! If you already live here, appreciate it more and get more involved, if you do not live here, research our beloved county, and come visit or even better move here!

What Do I Need in a Home?

The hardest decisions we have to make are those that require our minds alone, no feedback, no one else’s opinions. Purchasing a home for you and your family is included in a difficult decision. Everyone wonders what will happen if you make a wrong decision. How will it impact your future? Your family? All of the home buying decisions are very, very, important, but  adding more stress to them only makes the decision making harder. Thought, time, research, and planning are the key. This is one of the reasons why having an Real Estate Agent is so important. They are there as an outside perspective, to oversee, to encourage, to research, to be there if you have questions. Real Estate Agents are your home buying and selling confidant and conscience in this respect.

So just like in Tuesday’s blog about selling the home we are going to answer some of the same questions but in reverse order.

First, take a look back at my post called “Preparing for The Move” on August 24th, 2015. Those questions all need to be considered with great thought.

Second, think about your lifestyle. What stage of life are you in? Are you moving by yourself, with kids, hoping to have roommates, or are you a newlywed, newly retired? The differences in who you will be living with changes so much about the floor plan, the room type needs, the style of the home, the yard, etc.

Let’s start with the simple questions:

How many bedrooms and baths?

How many levels do you want your home to have?

How much closet space do you need?

Are you a cook or chef; professionally or do you just enjoy it?

What size laundry room do you need or want? On what floor would you prefer it?

Do you need office space, a “special room” such as a library, practice space for instruments, exercise room, etc.?

Do you need a shop or work space not attached to the house?

Do you want an enclosed garage or a car port? How many vehicles do you need space for?

How much property do you want? Do kids need room to play? Do you have pets that need room to run?

What is different about you that means you have different needs or wants that other people might not have?

Location is also a very large factor. Take a look at “Location, Location, Location” from September 8th, 2015 to get questions you need to think about in that area of buying a home.

Third, as you consider your wants and needs in a home, realize your Realtor will do their best in making sure you have the most off of your checklist, but sometimes, especially if you are geographically bound, not every need or want cane be met. So make sure you prioritize what is most important and stress those 3-5 things. Talk through all of them with your Realtor, with their research abilities and referrals, they can dig deeper to try and find your dream home.