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Category Archives: Waldo home for sale

DON’T WAIT UNTIL IT’S TOO LATE!

“For most folks, no news is good news; for the press, good news is not news.”  – Gloria Borger

You hear the bad news everywhere you turn. It’s on the television, the Internet, the radio and in print headlines. A lot of negative coverage has been devoted to today’s housing market.  What you don’t hear is the good news about the real estate market and the many reasons why the current real estate market may be beneficial to you.

Bad news sells newspapers and gets high television ratings; therefore, the media has no reason to report the upside of today’s real estate market to the average American. This is where I come in. For example, did you know that approximately 30 percent of homeowners own their home free and clear?

The current market also affords some great opportunities for those looking to purchase a home. First-time homeowners, move-up buyers and investors can all benefit from low home prices, and historically low-interest rates, making now a great time to lock in a long-term mortgage. Also, the large selection of homes and low sales prices make it a great buyer’s market. And did you know that if you buy in a rural area –Alachua, High Springs and Newberry qualify as rural areas –  you may qualify for a USDA loan, which is a 100% loan – a “no money down” loan.

Ultimately, though, these favorable conditions will go away. As inflation rises, so do interest rates. If you are looking to become a homeowner, you need to strike while the iron is hot!

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SAFEGUARDS FOR CONTINGENT BUYERS

SAFEGUARDS FOR CONTINGENT BUYERS

“This I do know beyond any reasonable doubt. Regardless of what you are doing, if you pump long enough, hard enough and enthusiastically enough, sooner or later the effort will bring forth the reward.”  –   Zig Ziglar

Okay, so you’ve finally decided to put your home on the market – after the holidays – and start looking for that new home. There are dozens of new model homes to tour, and several areas you are considering. Once you start marketing your home, what can you do to protect yourself against that “domino” effect if you go on contract for a new home, while considering offers on your existing one? How can you minimize your risk, the way a builder does in a new home purchase?

It’s actually a great idea to “mirror” the builder’s program for purchasing a new home by conducting the sale of your new home along the same lines. Find out how much earnest money is required by the builder, and ask the same (or more) from a potential buyer. If further deposits are required by the builder along the way, ask for similar deposits from your buyer to feel confident that they are as committed as you are to the purchase. This may give you the feeling of lessened exposure in your transaction.

Your real estate agent can guide you through this process; ask him or her to “structure” counter-offers to buyers so as to minimize your risk. If you look at new home purchase agreements, there are time frames and safeguards in place for all kinds of elements of the agreement. Many new home contracts ask for written preliminary loan approval within the first 30 days of acceptance.

Depending on the escrow time for the offer on your home, it would be wise to do the same. This is one of the most critical aspects of either transaction, because everything hinges upon procurement of a qualified, loan approved buyer. (Ask your agent to explain the importance on “liquidated damages”, so that you know what recourse you have should your buyer fail to perform according to the terms of the contract).

Are you afraid your home will sell so quickly that you may not have time to find just the right new home? Add a clause to your acceptance that gives you a comfortable time frame in which to find a home, such as “offer accepted contingent upon seller’s purchase of another home within the first — days after acceptance of this contract.” I am sure at this point everyone will want to give you advice on where to find a new home! This is also a great protection for you if you are moving to an area unfamiliar to you, where it may take some time to scout all the new home areas.

There are three common scenarios when buying a new home while dealing with selling your existing one. One is to make a completely contingent purchase agreement. This is one in which you sign a contract with the builder to buy their home, but the purchase is wholly dependent upon the sale of your own. The “up” side of this is that you really are risking nothing monetarily. You are also put into the position of “first right of refusal” to any new buyer wishing to purchase the same home. This means that, if the builder is presented with a buyer whose position is stronger than yours (home in escrow, or no home to sell), they must give you a period of time – usually 48-72 hours – to decide if you can remove your contingency on that particular home site. If the down payment for your new home is primarily dependent upon the proceeds from the existing home, you may opt to “let go” of the new home and transfer your deposit to another home in the subdivision, or bow out altogether. The “down” side is that you may lose the home site or home of your dreams. Offers contingent on the sale of a home in a relatively healthy new home market have the potential to send you and your family on an emotional rollercoaster, so prepare yourselves for the ride.

Another consideration is to decide not to sign a purchase agreement on a new home until yours is in escrow. This may limit your time frame to move or find another home, but can give you the confidence you need to proceed with a new home purchase. Most builders consider “contingent upon the close of escrow” to be a fairly sure thing, especially when you and your real estate agent have furnished the builder with written loan approval for your buyer. If this is the route you choose, you may need to consider interim housing, should your new home not be ready for occupancy in time.

The third scenario is applicable only if you have the wherewithal to qualify for a new home purchase without the proceeds from your existing home. That is, you are willing to sign a non-contingent purchase agreement with the builder. You may have your home listed you home through the process of buying the new one, but are willing to do whatever it takes to make the new home purchase proceed without the proceeds from your old one. This may include an eventual change of terms or pricing on your listed home to make it sell, or even the idea of leasing it out until it sells. This can be a scary prospect to many buyers who envision double house payments at some point. Your listing agent is the person to rely upon to communicate recent neighborhood home sale activity, and should be willing to recommend your course of action. Hopefully, you would not have to get of the point of renting it out, unless the prospect of it does not deter you completely.

A real estate expert can guide you through this process as your advocate and advisor. Just remember that the agent is employed by you during the listing period. Communicate all of your concerns to your agent so that he or she can better represent your needs to potential buyers of your home. A good agent is, indeed a safeguard. Even if your agent does not represent you in the purchase of your new home, they will want to help you achieve your objective of a new home purchase if they indeed have your best interests at heart.

SELLERS; IF YOU WANT IT, ASK FOR IT!

SELLERS; IF YOU WANT IT, ASK FOR IT!

“Ask, and it shall be given unto you.”  –  Jesus Christ

There’s nothing more frustrating to a ready, willing, and seemingly able buyer than to lose an offer to another buyer — especially since the seller was not specific (down to the letter) about what he expected to receive.

Sure, there’s the list price; but in today’s fast-paced market, a buyer/ prospect may offer thousands more than the list price and STILL not be the lucky buyer who gets the property!

That’s why sellers should be as specific as possible with buyers in what they want to receive and achieve in a successful offer.

Let’s tackle the major elements the seller should be prepared to address with serious buyers. I suggest that sellers (or their real estate agent) prepare a “Suggested Contract Requirement” sheet to give to buyers, outlining what they expect in the following:

Loan pre-approval
By now, it should go without saying that buyers without loan pre-approval shouldn’t be competing in the current market; but sadly, some are. That’s why it’s important for the seller to specify that buyers be pre-approved for loans ample enough to fund the purchase price, AND detail the type of loan and respective costs (if any) the seller would cover.

For example, a buyer might claim to be pre-approved for a mortgage of “x” amount. What she fails to disclose, however, is that it’s Veteran’s Administration (VA) financing and she expects the seller to cover her two discount points. On a $140,000 sales price (with zero down) that’s a hefty $2,800 for the seller.
Or what about the buyer who claims to have “cash” coming to him to fund the purchase (often coming from proceeds of an estate or settlement of a law suit.) The buyer’s funds are delayed. In order to close the sale, he must borrow the money, causing the seller a three-week delay in accessing his proceeds. Verifying the buyer’s funding (which is tougher to do in a “cash” sale) is vital for sidestepping potential delays for the seller.

Earnest Money
In the old, slower school of home buying a decade or more ago, buyers would offer a meager amount of earnest money or even a post-dated check with the idea that they could always up the ante if need be. In today’s market, more (rather than less) earnest money is advised in most situations. Not only does it subtly signify to the seller how financially motivated a buyer is, but can serve as a buyer’s first (and often only) shot at a strong first impression to the seller.
By letting prospective buyers know (in writing on the “Suggested Contract Requirement” sheet) the minimum amount of earnest money the seller is seeking, it places a strong buyer on equal footing with competitors. It also gives a heads-up that if you want a stronger foothold with the seller in this area, exceeding the suggested minimum amount is certainly in order! If a buyer structures an offer to include minimal contingencies like obtaining financing in a certain amount and the property appraising for at least the sales price, etc., earnest money would be at little risk of loss.

And what about contingencies? Should a seller require that buyers make all offers free of positively all contingencies if they’re serious about the property? Hardly. But keeping contingencies to a minimum (as we’ll see in Part II of this article) definitely gives buyers an added advantage over their competition and results in a smoother sale for you as a seller.

IF YOU ARE A “FOR SALE BY OWNER” THEN YOU NEED TO KNOW THIS!

IF YOU ARE A “FOR SALE BY OWNER” THEN YOU NEED TO KNOW THIS!
“He is happiest, be he king or peasant who finds peace in his home.” –  Goethe

Many homeowners believe to maximize their home sale they should sell it themselves. At first glance, they feel selling a home is simple. Why would they pay a broker free for something they could do themselves? In fact, close to 25% of all the homes sold last year were sold For Sale by Owner (FSBO).

However, close to half of the FSBOs said they would hire a professional next time they sold. Thirty percent said they were unhappy with the results they achieved by choosing FSBO. Why?

Many FSBOs told us the time, paperwork and everyday responsibilities involved were not worth the amount of money they saved in commissions. For others, the financial savings were even more disappointing. By the time they figured the fees paid to consultants, inspectors, appraisers, title lawyers, escrow and loan officers, marketing, advertising, they would have been better off to have paid the broker’s fee that would have included many of these charges.

Selling a home requires an intimate understanding of the real estate market. If the property is priced too high, it will sit and develop a reputation for being a problem property. If the property is priced too low, you will cost yourself serious money. Some FSBOs discovered that they lost money as a result of poor marketing decisions. In the final outcome, this far outweighed the commission they would have paid.

Before you decide to sell FSBO, consider these questions and weigh the consequences of assuming the responsibility versus employing a professional. A little time spent investigating now could pay off tenfold in the end.

Questions To Consider

  • Do I have the time, energy, know how, and ability to devote a full forced effort to sell my home?
  • One of the keys to selling your home effectively and profitably is complete accessibility. Many homes sit on the market much longer than necessary because the owner isn’t available to show the property. Realize that a certain amount of time each day is necessary to sell your home.
  • Am I prepared to deal with an onslaught of buyers who perceive FSBOs as targets for “low balling”?
  • Another challenge of selling a home is screening unqualified prospects and dealing with “low ballers.” It often goes unnoticed that much time, effort and expertise is required to spot these people quickly. Settling for a “low ball” bid is usually worse than paying broker commissions.
  • Am I offering financing options to the buyer? Am I prepared to answer questions about financing?
  • One of the keys to selling, whether it’s a home, a car.. anything, is to have all the necessary information the prospective buyer needs and to offer them options. Think about the last time your purchased something of value, did you make a decision before you had “all your ducks in a row?” By offering financing options, you give the home-buyer the ability to work on their terms. You’ll open up the possibility of selling your home quicker and more profitably. A professional real estate agent will have a complete team for you to profit from… lenders… title reps… inspection companies… they’ll be completely at your disposal.
  • Do I fully understand the legal ramifications and all the necessary steps required in selling a home?
  • Many home sales have been lost due to incomplete paperwork, lack of inspections or not meeting your state’s disclosure laws. Are you completely informed of all the steps necessary to sell real estate? If not, you may want to consider consulting with a professional.
  • Am I capable of handling the legal contracts, agreements and any disputes with buyers before or after the offer is presented?
  • Ask yourself: “Am I well-versed in legalese? Am I prepared to handle disputes with buyers?” To avoid any disputes, it is wise to put all negotiations and agreements in writing. Many home sales have been lost due to misrepresentations of what was negotiated.
  • Have I contacted the necessary professionals… title, inspector (home and pest), attorney, and escrow company?
  • Are you familiar with top inspectors and escrow companies? Don’t randomly select inspectors, attorneys, and title reps. Like any profession, there are inadequate individuals who will slow, delay and possibly even cost you the transaction. Be careful!

My hope with this report has been to educate you and help you avoid the pitfalls many FSBOs go through. I hope you found the ideas valuable and if there is every any way I can be of service to you or anyone you care about, please contact my office. Your initial consultation is always completely free and you’re under no obligation of any kind. I’d love to hear from you!

Sincerely,
Jocelyne Grandjean-Brown
RE/MAX Professionals
352-870-9929

WILL MY UTILITY BILLS BE PRO-RATED IN ESCROW?

“If a man has money, it is usually a sign too, that he knows how to take care of it; don’t imagine his money is easy to get simply because he has plenty of it.” – Edgar Watson Howe

At close of escrow, certain expenses will be pro-rated, giving the Buyer and Seller any credits they may be due or paying any unpaid expenses owing from either party. The pro-ration of these expenses divides up the expense fairly between the parties, determined by the length of time each party owns the property.

The typical expenses which are pro-rated are the property taxes, interest, insurance premium, rents, homeowners dues or maintenance charges. These are expenses which, if unpaid, could become a lien on the property. Utility bills, on the other hand, are not typically attached to the property but rather to the person’s name alone. Although they typically do not become a lien against the property, there are some states where this is the exception.

In some states, utility charges may become a lien against the property and thereby encumber the title. Water, sewer, and propane charges follow the title of a property and can become a lien if left unpaid. When closing a transaction, the closing agent will be very careful to verify the status of these utility bills, determining if they are paid or unpaid, and any remaining balance due. The charges will be determined and the Buyer and Seller’s proportional share will be pro-rated in escrow at the time of closing.

Verify with your closing agent if utility charges will be pro-rated in your state. If you are the Seller, providing your closing agent with your utility bills early in the escrow will save time and clear up any uncertainties at the time of closing.

If you are the Buyer, ask to verify the utility pro-rations which appear on your escrow instructions and closing statement and be certain that all unpaid bills will be paid at the time of closing. You don’t want any surprises after the close of escrow or to find an unpaid water or sewer bill that could attach to the property and become a lien against your title.

THE PURCHASE CONTRACT

THE PURCHASE CONTRACT

“The world is a dangerous place to live – not because of the people who are evil but because of the people who don’t do anything about it.” – Albert Einstein

When you are buying the single largest purchase of your life, it is important that you get the terms of the sale in writing. Like the famous movie magnate Sam Goldwyn once said, a verbal agreement (or hand-shake) isn’t worth the paper it’s printed on. And despite the advent of technologies such as the Internet, even e-mail isn’t good enough, at least not until fool-proof (and affordable) personal identity software is available. You may be able to use the phone, e-mail, or fax machine to volley the negotiations back and forth, but when it comes to signing on the dotted line, make sure you Fed-ex the sales contract and that both parties sign in writing, and make subsequent changes in writing. According to the Real Estate Buyer’s Agent Council, the purchase contract is a “legally binding document that sets forth the terms of the sale, establishes the rights and obligations of the parties involved, specifies the actions to be taken in order to close the sale, and establishes the time frames for those steps to be completed.” The contract form is typically filled out by the real estate agent, buyer’s attorney or the buyer and seller if no agent is involved. Standard pre-printed forms contain such agreements as price, closing date, financial terms, and contingencies. Changes can be made to the contract by crossing out the part in dispute, circling the change and having both parties initial the change. REBAC advises buyers to be sure that they understand all of the terms of the contract before signing. Some of the items that you may be agreeing to when you sign the pre-printed form may include:

  • *What personal property will be included or excluded from the sale.
  • Who will pay for required repairs or retrofits.
  • What the seller’s disclosure obligations will be.
  • What the seller’s obligation to maintain the property will be.
  • What the seller is warranting about the property.
  • What the buyers inspection rights will be.
  • What will happen in the event either party does not comply with the contract.
  • What the parties legal rights and attorney fee provisions will be in the event of a breach of contract

*Reprinted with permission from the Real Estate Buyer’s Agent Council (REBAC.)

You should try to obtain forms that are most commonly used in your area of the country. For example, in parts of the northeast, an attorney handles the seller’s side instead of the Realtor. In parts of the south and west, agents act as legal fiduciaries. It is easy for buyers and sellers to focus most on issues such as price, terms, and dates for inspection, appraisal, and closing, but losses can occur on both sides through missing the small details. Most misunderstandings occur between buyers and sellers when some terms are not fully disclosed. For example, do not assume that any moveable object such as window treatments, refrigerators, ceiling fans, chandeliers or special ornamentation will remain with the house. If any of those features are significant to you as a buyer or seller, you must include or exclude them clearly in the contract. By reviewing and understanding the purchase contract form ahead of time you can strengthen your negotiating position, protect yourself from incurring unnecessary costs or problems, and have a better understanding of what you will need to do to conclude the sale.

Where to get real estate forms?

Since real estate is a state-regulated transaction, you can go to the search engines and key in “real estate forms – your state.” A general inquiry will pull up the occasional state, but mostly you will find forms marketed to Realtors. Another approach is to go to Realtor.com and click on Realtor Associations. Go to the association that represents your city or town, and call them or e-mail them to ask for forms. If your city is not represented, click on the state association. For example, the Washington Association of REALTORS® sell residential sales contracts in packages of 50 for about $53, but they do not sell individual forms to consumers. Another on-line solution is to contact the Real Estate Library and the ‘Lectric Law Library. These sites have a wealth of information about all aspects of the real estate transaction, including access to forms. You can also contact a local attorney that specializes in real estate transactions. Even if you are buying or selling a home without the benefit of an agent, it is in your best interest to have someone look at your legal exposure in a sales contract of the magnitude of a home purchase.

You can also check the real estate section and classified section of your local newspaper to see if there is a local business that sells forms. You may also find forms from your local property taxing authority. Since the forms vary extensively from state to state, it is in your best interest to contact your local real estate board or state association to get a list of all the documents which should be included in any real estate transaction.

If You Are A “For Sale By Owner” Then You Need to Know This! If you are a seller attempting a “For Sale By Owner” you will need to know that these companies that help “For Sale By Owners” do charge for the service of putting your home on their website. You will be the one who has to take the pictures, make the flyers and take off from work to accomodate the potential buyers so they can come to view your home. If you get a buyer, you then have to be the one to check whether or not the buyer can truly afford your home and scrounge up the proper forms to execute a contract. Then of course, to make sure all is legal, you’ll need a title company to check the title of your home, and a lawyer to fnalize all the paperwork.

Whew, that’s a lot of work! Why not just make your life simple from the get go. When you hire a Realtor, they advise you on how to prepare your home so it show well. They will create all the advertizing – after all, the big companies like RE/MAX have plenty of software for thier agents to create advertizing pieces.

Then again, a big company like RE/MAX is not just statewide, or nationwide, they are global. So not only does your home get put on the local and national advertizing avenues, but because RE/MAX is global people in Austrailia can view listings in America. and visa versa.

Aside from this bit of great advertizing, every RE/MAX agent has their listings enhanced on Realtor.com – the largest public real estate website and they sindicate their listings to 40 other websites as well. Couple this with their exceptional training and up to the minute technology, why would you go it alone, or with any other agency besides RE/MAX?

THE TROUBLE WITH MORTGAGE CALCULATORS

THE TROUBLE WITH MORTGAGE CALCULATORS

“How we think shows through in how we act. Attitudes are mirrors of the mind. They reflect thinking.” –  David Joseph Schwartz

Years ago, people used charts and simple multiplication to calculate the time value of money. Then, Hewlett-Packard introduced its ubiquitous hand-held financial calculators, and those “time value of $1” charts faded from memory. The latest incarnation is the Web-based mortgage calculator, provided online by real estate brokerages and agents, lenders and mortgage brokers and such companies as Bankrate Monitor and Nolo Press, among others. Calculators pose intriguing questions: How much can you afford to borrow to buy a home? How much will your monthly mortgage payment be? Should you refinance your mortgage? And so on.

Do mortgage calculators work? Yes and no. Calculators plug user-entered data into complex equations that would be daunting for the average not mathematically inclined person to solve by hand. However, the results lack real-world reliability and can vary from one calculator to the next. Some calculators are so suspect, in fact, that they’re accompanied by small-print disclaimers warning consumers not to rely on the results. If you want to use online mortgage calculators, keep these caveats in mind:

Mortgage calculators rarely reveal their behind-the-scenes assumptions.
Few mortgage calculators are accompanied by any explanation of how they work or what assumptions are used. Does the monthly payment include mortgage insurance, if required? Does it include an impound account for property taxes and casualty insurance? Is the equation adjusted to reflect a higher interest rate on a jumbo loan or a non-owner-occupied property? The more questions you’re asked before you click “calculate,” the more reliable the outcome is likely to be, but that’s assuming the information you enter is correct.

Mortgage calculators can’t predict payments on hybrid or adjustable-rate mortgages (ARMs) beyond the initial fixed-rate period.

The interest rate on a traditional 30-year mortgage is a fixed constant that can be plugged into an equation, but the interest rate on a hybrid or ARM is unknown beyond the first adjustment, which might occur in one month, six months, a year, three years, five years or 10 years, depending on the mortgage. There’s no way for a calculator to account for this unknowable factor. Some calculators tackle the worst-case scenario. That’s useful up to a point, but again, the reliability of the results still depends on secret internal assumptions and formulas and the accuracy of user-entered data.

Refinance calculators usually ignore the longer term on the new mortgage.
Many people refinance their existing mortgage with the goal of lowering their monthly payments. However, if you’ve been making payments on your existing mortgage for some time and the new mortgage will be amortized over a full 30 years, refinancing can cost more over the lifespan of the loan even if the monthly payments are lower. Mortgage calculators that purport to show whether you should refinance tend to focus on the monthly payment and the payback period for the refinancing costs, while ignoring the longer term of the new mortgage. This flaw is fatal.

Mortgage calculators can be fun and possibly educational.

The positive side to mortgage calculators is the ability to make rough comparisons among various scenarios. Plugging different numbers into one calculator can give novice borrowers good insights into the interplay between the cost of the home, the interest rate, the downpayment percentage and the monthly payment. But again, it’s important not to make real-world decisions solely on the basis of these numbers

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