Inside Realty's Blog

12/07/2013

You're Almost Home - Final Steps to Sold!

Thinking about selling your home? Now is a great time to sell! You're in good hands with the experienced professionals at Inside Realty. We guarantee that your home sale will be a simple and rewarding experience. For an overview, read on.

Determining Your Home's Value

Before you sign a listing contract with one of our realtors, we will provide you with a Competitive Market Analysis (CMA) of your home’s value. We will set the final asking price on your property based on this market value estimate.

When you receive an offer on your home, the buyer’s lender will require an appraisal of the property from a licensed appraiser. This evaluation helps assure the lender that the value of the home is sufficient should the buyer default on their mortgage.

Inspection

In addition to an official appraisal, most buyers will request a home inspection with their offer. The goal of a home inspection is to give the buyer an objective, independent and comprehensive analysis of the physical condition of your property and check for any safety issues that might otherwise be unknowable. A professional inspector will check on the structure, construction, and mechanical systems of the house, such as:

• Lead Paint
• Asbestos

• Electrical systems

• Plumbing and waste disposal

• Water heater

• Insulation

• Ventilation

• HVAC system

• Water source and quality

• Pests

• Foundation

• Doors

• Windows

• Ceilings

• Walls

• Floors

• Roof

Accepted Offer

Once we’ve received an acceptable offer there are several steps that will need to be completed before the transaction and transfer of your property is complete.

1. The buyer submits “earnest money” that is deposited into your real estate broker’s account.

2. A title policy will be ordered on your property.

3. We will set a closing date with your buyer.

4. The buyer will order an appraisal and in most cases, an independent home inspection.

5. After the appraisal and home inspection, The buyer will either remove the “conditions of sale”, try to renegotiate their initial offer, or withdraw their offer entirely.

6. You will need to complete any agreed upon requests for repair that were submitted by the buyer before the closing date.

7. The buyer will most likely schedule a walk through to verify the condition of the property and see any repairs that were made right before your closing appointment.

8. When the final offer is finalized we will submit the final legal disclosures and other material facts relevant to your property.

9. Closing is scheduled and completed. Your house is sold!

What will happen at the closing?

Closing is the legal transfer of ownership of the home from seller to buyer. Closing procedures are usually held at the title company or lawyer’s office. Your closing officer will coordinate the signing of documents and the collection of and disbursement of funds.

In order to ensure a smooth closing you and your Realtor will:

Review the Settlement Statement or HUD-1 that the buyer’s lender or closing agent will provide you 1 to 2 days before closing. These documents will contain a detailed description of all costs associated with the transaction, including the exact dollar amount the buyer will need to bring to closing.

Verify with your closing agent any other items that you need to bring with you such as a valid driver’s license or other form of identification.

Please feel free to call Inside Realty with any questions. We are dedicated professional and love what we do! We are happy to help! Call 248-758-0022, seven days a week.

12/06/2013

What are HOAs and CCRs?

What are HOAs and CCRs?

The acronyms "HOA" and "CCRs," although they are used daily by real estate agents, may be unfamiliar to the average person. Let's break down these acronyms and get you up to speed on what homebuyers should know.

HOA

HOA stands for homeowner association – a nonprofit organization that is funded by all the association's members and overseen by an elected board of directors. In some states, HOAs must be registered with the department of real estate or another state regulatory agency.
Most of the country's HOAs are run by volunteers from within the community, with the remainder run by management companies.
The primary purpose of the HOA is to enforce the policies, procedures, regulations and restrictions agreed to by the members, thereby maintaining property values. Financial support for the HOA comes from each homeowner in the form of monthly dues and occasional assessments.
So, how does one become a member of an HOA? If you purchase a home in a managed community, you don't have a choice about whether to become a member. It is required and automatic. For this reason, when considering the purchase of a home governed by an HOA, reading the HOA documents before you agree to purchase is of critical importance.

CC&Rs

CC&R stands for covenants, conditions and restrictions – the governing documents for the operation of the HOA. These are the rules that homeowners, tenants and guests are obligated to follow.
Want to paint your house psychedelic pink? Check the CC&Rs first. From the number of pets allowed to parking restrictions, the CC&Rs are the laws of the community. Failure to abide by them could mean a hefty fine for the homeowner. Unpaid fines can lead to foreclosure proceedings and the loss of the home to the HOA.
Here are just a few items commonly regulated by CC&Rs, according to the authors of "Nolo's Essential Guide to Buying Your First Home":
Noise.
Landscaping.
Roofing material.
Fences.
Exterior paint color.
Outdoor play equipment such as swing sets and basketball hoops.
Garages and outbuildings.
Mailboxes.
Window coverings.
Holiday decorations.
Clotheslines.
Garbage and recycling containers.
Pets (size, breed restrictions, etc.).
Parking.
Home businesses.

Purchasing a Home in an HOA-Governed Community

Immediately after your offer is accepted on a home governed by an HOA, your agent will go to work to obtain what is typically referred to as the "HOA docs." This is a large package that contains everything you need to know about the HOA and about life in the community.
Unfortunately, the HOA docs need to be ordered, then compiled by the HOA, and typically don't reach the buyer until late in the process. By this time the buyer has usually paid for a home inspection, not to mention the HOA doc fee, which can be quite hefty.
This is the most critical part of the process, though, and requires extreme due diligence. If you don't understand anything in the HOA documents, ask your real estate agent or attorney to explain it. Never close escrow until you've read every word on every sheet of paper in the HOA documents package.

What to Look for in HOA Documents

Several documents in the HOA package require even closer scrutiny:

Special Assessments
A HOA will levy a special assessment when there is not enough money in the reserve fund to pay for major repairs or improvements to the community resources, such as roofs and major systems.
Check the documents carefully for the number of special assessments imposed over the life of the HOA and the amount that was imposed. Excessive assessments are a bad sign.
While you're at it, check for mention of any major projects planned and whether the HOA reserve fund can cover them. You'll find information about the reserve fund in the HOA's budget. There should be a minimum of 10 percent of the annual budget amount on reserve.
Litigation
Your lender will find out about this, so you may as well check to see if there is any ongoing or pending litigation on behalf of or against the HOA. If the litigation is over construction defects, the lender won't approve your loan until the litigation is complete.
Meeting Minutes
The HOA holds meetings and someone is responsible for keeping track of what occurs during the meetings. Look through the minutes for homeowner complaints, especially repeated complaints. This is an indication of an unresponsive HOA - another red flag. Some associations are striking homeowner comments from their minutes. If you see no comments, ask your real estate agent to find out why.
While other documents, such as the insurance policy, are important, the ones mentioned above are those that the layperson can most easily understand. Again, if you don't know how to read an insurance policy (and who does?) run it by your attorney.
No matter how much you love that adorable condo, it's not worth purchasing if the CC&Rs impact your lifestyle and restrict your freedom. Read HOA docs carefully before signing an offer to purchase.

As always, we are here for your home buying and home selling questions! Please contact us anytime!

We are looking forward to your call at 248-758-0022!

11/29/2013

The Advantages of Getting a Mortgage Preapproval

The homebuying process can be exciting, but also stressful. When there are a large number of buyers in the market for real estate, the odds of being able to purchase your desired home can be low. However, getting a mortgage preapproval prior to home shopping can dramatically increase the odds of success.

Make Mortgage Preapproval Your First Step

A mortgage preapproval should be a homebuyer's first step when purchasing a home. A borrower can choose to meet with a lender or get an initial preapproval via the Internet. The preapproval process is similar to the actual mortgage process and will, in fact, eliminate a lot of time after a home has been chosen.

When obtaining a mortgage preapproval, the borrower will complete a mortgage application and submit the necessary documentation to the lender. The lender will pull a credit report and examine the borrower's credit.

Based on all of this information, the lender will determine the amount of funds that the borrower qualifies for. The borrower will receive a Conditional Commitment, which states the amount of funds that the lender agrees to lend provided that the conditions are met. While a preapproval is an important first step, it is not the final mortgage approval.

Impress Homesellers With Your Mortgage Preapproval

One of the advantages of having a preapproval is that this letter can be shown to real estate agents and sellers when looking for a home. By doing so, both the agent and the seller know that the borrower can qualify for a certain amount of funds. It is proof of the borrower's financial standing and ability to proceed with the home purchase.

Another advantage is that some of the work that is involved in obtaining a mortgage is already done. The lender has already examined the borrower's financial situation, including credit, income and assets. During the preapproval process, the lender will also discuss the most appropriate type of mortgage program that fits the borrower's needs, whether it is a conventional loan or a government loan.

This is significant because not all sellers will accept a buyer who is using a government loan. Knowing the details of what type of loan is appropriate for the borrower, the agent can then show them homes that will fit their preapproval both for cost and type of funding.

How Mortgage Preapproval is Determined

The preapproval is determined by putting the information given to the lender through automated underwriting. In most cases, the preliminary loan file goes through a preprocessing before the preapproval is given to the borrower. Since there is an actual examination of the borrower's documentation, the borrower will also receive a list of additional information that may be needed. The borrower can then submit this information while shopping for a home.

Once a home is found and the sales contract is signed, processing the loan is faster since most of the work for the credit file has been done. The final process involves verifications, ordering and receiving the appraisal, ordering title documents, obtaining insurance, etc. The final underwriting is the last step before the loan file is sent for closing.

The preapproval process is an important part of a home purchase. Since there is a lot of information involved in obtaining a mortgage, it eliminates many last minute problems that can arise. Obtaining a mortgage preapproval helps the home purchase process go smoothly.

Questions about your home purchase? Please contact us anytime, we're here to help!

Inside Realty

1877 Orchard Lake Road Suite 204

Sylvan Lake MI 48320

248-758-0022

11/26/2013

Decoding Mortgage Terms

Ah, the home-buying process. It feels as if someone scooped you up and dropped you in a country where you don't speak the language. From your real estate agent to the lender, a lot of what you'll hear may sound like gibberish. Busy real estate professionals who use the acronyms and foreign-sounding terms on a daily basis forget that consumers typically have no idea what they're talking about.

Let's start with the basics: What is a mortgage?
Mortgage is a word that has been in the English language since the late 1300s and comes from the French "mort," which means "dead," and "gage," meaning "pledge." Therefore, a mortgage, in the true sense of the meaning of the word, means that the security pledged to the mortgagee for the debt will be taken from him if he fails to pay the debt, and will therefore be "dead to him upon condition." If, on the other hand, the mortgagee fulfills the obligation to pay the debt, the pledge is dead. Either way, something dies.
A dictionary definition is much simpler and tells us that a mortgage is a "temporary, conditional pledge of property to a creditor as security for performance of an obligation or repayment of a debt."

The Players

It may feel as if you need a program to keep track of all the folks who play a part in your mortgage drama, especially if this is your first experience with this type of loan. Let's take a look at just who these players are and what their roles are.
Mortgagee
More commonly known as "the lender," the mortgagee is the lending institution that provides the mortgage.
Mortgagor
The mortgagor is more commonly known as the borrower or debtor - the person who receives the mortgage loan.
Mortgage Broker
A mortgage broker is a person who acts as the middleman, brokering loans on behalf of borrowers. Like a travel agent, the mortgage broker is an intermediary who shops a number of lending institutions, pledging to obtain the best rates and terms for the borrower.
Loan Officer
If you don't use a mortgage broker, but deal directly with the lender, the loan officer is generally the first person you'll meet. She is the person who will help you obtain a loan preapproval and compile all the documents you will need to obtain a mortgage. This person is the lender's point of contact for you, your real estate agent, and the other folks involved in your home purchase.

Loan Processor
After you fill out all the paperwork, the loan officer sends it to the loan processor who then follows your mortgage from preapproval to closing. He checks all your information for accuracy and verifies your credit and income. He then inputs your information into their in-house system, and packages everything for the underwriter.
Underwriter
The underwriter is the one you would wine and dine if you knew who she was. She is the person who determines the lender's risk in lending to you. She'll analyze your income to determine if you can pay for the loan. She will look at your payment history to figure out if you're the type of person who meets his financial obligations. Finally, the underwriter will evaluate the home you want to purchase to ensure that it's worth the amount you are borrowing.
Appraiser
The appraiser is the underwriter's tool to determine how much the house is worth. All lenders subcontract or employ licensed appraisers who use a number of methods to determine the home's market value.
Escrow Company
The escrow company's primary duty is to receive and disburse funds based on what is mandated in the contract. Escrow companies are independent third parties and can do nothing unless both parties to the transaction are in agreement.
Title Company
Title companies check the chain of title on the home. This is a list of everyone who has ever owned the home - the historical transfers of title. The title officer checks to ensure that the person who is selling the home actually owns it and whether or not there are liens on the property. The title company also orders the survey and reviews it for any problems, verifies that property taxes and HOA fees have been paid, and prepares the title insurance policy.
Now that you're familiar with the players, let's take a look at some of the more common mortgage terms you may hear during your home purchase.

The Loan

Amortization - The amount of time you hold the loan, amortization is sometimes called the repayment period.
Principal - The amount you originally borrow.
PITI - An acronym for principal, interest, taxes and insurance. This is your monthly mortgage payment.

The Disclosures

Good Faith Estimate - Also known as the GFE, the "good faith estimate" is a form that the lender is required to provide to borrowers. It itemizes all of the loan fees and miscellaneous charges to make it easier for the borrower to compare different lenders' offers.
HUD-1 Settlement Statement - An itemized list of services and fees charged to the borrower by the lender. By law, the borrower is given at least 24 hours before closing to inspect the HUD-1.

The Fees

Closing Costs - Expenses incurred in financing the home. Closing costs vary and some are negotiable.
Point - What the lender charges for originating the loan. One point equals 1 percent of the loan amount.
Escrow Impounds - You will be asked to prepay taxes and insurance when escrow closes. This money goes into an escrow account and is used to ensure the timely payment of these bills. The lender may require up to two months of payments to be impounded.
Private Mortgage Insurance - Called PMI for short, this is an insurance policy that the borrower pays for, but it benefits the lender in the event the borrower defaults on the loan. Lenders typically require PMI when the loan-to-value ratio exceeds 80 percent.

Questions?

Have additional questions regarding your home sale or purchase? Please call Inside Realty anytime at 248-758-0022!

We are experts, here to help guide you through the home buying process.

Need To Know Tips Before Buying A Home

Need To Know Tips Before Buying A Home

• Make sure you are ready for the commitment.

• Know if you should build a home or buy a home, depending on where you want to live.

• Find the location that you want to live in.

• Get approved for a mortgage unless you are going to pay in cash for a home.

• Weigh the cost of owning a home to whatever you are doing now.

If you are going to pay in cash, then make sure you have enough for the area and/or home of your dreams.
Find a real estate professional that you like and want to work with through the process of buying a home.
Make sure to have an inspection done on the home that you want before purchasing it.

Get a full disclosure from the inspector and from the agent on what the home needs to have fixed.
Meet with a professional tax consultant to learn about property taxes and any other taxes that come with buying a specific home or a home in a specific area.
Get a copy of the entire process in paperwork from start to finish when going to buy a home.
After you purchase the home, make sure to change the locks first before doing anything else.
This is to prevent any past residents or other agents and their potential buyers from being able to get into your home.

11/21/2013

Buy Again! New FHA Guidelines Make it Easier Than Ever to Own a Home

11/19/2013

Senior Housing

Senior Housing

As more people consider retirement, they might also be looking to downscale their living arrangements. The following shows a list for Oakland County and a list of Macomb County senior housing to help with the transition.