OK — Can I Celebrate Now? In Closing (Conclusion)

 

If you’ve made it through close — YES! Once you’ve climbed that mountain of paperwork and have those keys in your hands, you now officially, finally own a home.

Congratulations! You put in a lot of hard work, including building relationships with your agent, your lender, and other experts along the way.

Now it’s time to start investing in other relationships. Like with your new neighbors 🙂

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This is the end of this series. Thank you all for following along. Please contact me for further assistance.

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What If There are Last-Minute Issues? Should I Panic? In Closing (Part 8)

For your loan to be approved, it has to go through underwriting. The underwriter’s job is to validate all of your financials — confirming that your income, credit, and debt haven’t changed since you were pre-approved for the loan. The underwriter will also review the property’s characteristics and appraisal. If everything checks out, your mortgage will be approved.

If something goes wrong during underwriting though, you’ll have to address the problem before you can close on the home. Let’s say your credit score dropped because you recently purchased a car with an auto loan, or maxed out your credit cards.This isn’t necessarily dire, but you may need to delay closing as you work with your lender to take steps to raise your score. (Also, for that reason, it’s a good idea to hold off on big purchases, avoid overusing a credit line, and doing really anything that could result in a credit inquiry until after the closing.)

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What Is Title Insurance, and Why Do I Need It? In Closing (Part 7)

Every lender requires borrowers to purchase title insurance — a policy that protects you and the lender from outside claims of ownership of the property. Wait, you may be asking, some random person could show up and claim they own the house? Sounds crazy, but it happens.

Let’s say a previous owner didn’t pay all of their property taxes. Because those taxes remain against the property, the taxing entity could potentially take your home if you don’t have a “clean” title. Title insurance also protects you from ownership claims over liens, fraudulent claims from previous owners, clerical problems in courthouse documents, or forged signatures.

The title company will perform a comprehensive search of deeds, wills, trusts, and public records to trace the property’s history and verify that you’re becoming the rightful sole owner of the property. 

Typically, lenders have a preferred title company they work with, but ultimately the buyer decides which title company to use. Your agent could offer a few referrals.

Title insurance comes in two forms:

1. Lender’s title insurance, which (no surprise) protects the lender. It’s required.
2. Owner’s title insurance, which protects you. It’s optional but recommended because it covers your interest in the property. If the insurance company loses a battle over the title in the future but you purchased owner’s title insurance, you’re fully protected. Owner’s title insurance will also cover your legal fees if you have to defend your ownership rights in court.

Unlike most insurance policies, such as homeowners insurance, car insurance, and life insurance, title insurance is paid as a one-time fee at closing. Expect to pay about $1,000 for the lender and homeowner policies combined. However, costs can vary significantly, up or down, depending on the home you’re buying, its location, and the amount of legwork the title company has to perform.

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What Should I Bring? (Other than Champagne?) In Closing (Part 6)

At the closing you should have:

• A government-issued photo ID
• A copy of the ratified sales contract
• A homeowners insurance certificate
• Proof of flood insurance if you’re buying a home in a flood zone
• A cashier’s check or proof of wire transfer, to cover the remainder of the down payment and your closing costs

Also, talk to your attorney about anything else you might need to bring depending on your state or personal circumstances (such as a separation or divorce decree, should your relationship status affect the closing).

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How Much Will I Pay for Closing Costs? In Closing (Part 5)

If you’ve heard people vent frustration with the process of buying a home, you’ve likely heard complaints about unexpected costs at closing. Let’s unpack what you should expect so you’re not surprised, too.

Closing costs can vary widely by location and your home’s purchase price. Costs are split between the buyer and the seller, but the buyer cover the lion’s share. Buyers can generally expect closing costs to be 3% to 4% of the home’s sales price. So, on a $300,000 home, a buyer can pay anywhere from $9,000 to $12,000 in closing costs. (Meanwhile, the seller typically pays closing costs of 1% to 3% of the sales price.)

You can try to predict closing costs with calculators like Nerdwallet’s, which lets you plug in your mortgage details to get a rough estimate of what your costs will be. 

Closing fees often include (but are not limited to):

• Commission for the buyer’s agent and seller’s agent
• A loan application fee
• An origination fee, which lenders charge for processing your loan
• The appraisal fee
• A fee for pulling your credit report
• An underwriting fee, which covers the lender’s costs of researching whether to approve you for the loan
• A title search fee
• Property taxes, which are due within 60 days of the purchase
• A recording fee for filing a public land record with the courthouse

These fees are a bummer. The bright side: Almost all of them are one-time deals.

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Who’s Invited to the Closing? In Closing (Part 4)

Certain people will be there. Who, exactly, depends on your state. Typically, you’ll be joined by:

• Your agent
• The seller
• The seller’s agent
• A title company representative
• Your loan officer
• Any real estate attorneys involved in the transaction

The closing usually takes place at the title company, attorney’s office, or the buyer’s or seller’s agent’s real estate office. FYI: Some states, like California, don’t require an in-person, sit-down closing, because they’ve enacted legislation that allows for electronic closings with remote notaries.

Nonetheless, as the home buyer, you’ll have to sign what might seem like a mountain of paperwork — including the deed of trust, promissory note (promising the lender you’ll pay back the loan), and other documents. That cramp in your wrist will be worth it once everything is done.

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When Will the Final Walk-Through Happen? In Closing (Part 3)

Most real estate sale contracts allow the buyer to walk through the home within 24 hours of settlement to check the property’s condition. During this final inspection, which usually takes about an hour, you and your agent will make sure any repair work the seller agreed to make has been completed.

During the walk-through, you’ll also double-check that everything in the house is in good working order. Be sure to: 

• Run water in all the faucets and check for leaks under sinks
• Test appliances
• Check the garage door opener
• Flush toilets
• Open and close all doors
• Run the garbage disposal and exhaust fans

If the home is in good shape — woo-hoo! Your next stop is the closing table.

If anything is amiss, your agent will contact the listing agent and, in most cases, negotiate to get the seller to compensate you at closing — typically in the form of a personal check — for the costs of fixing the problems yourself. 

Worst-case scenario: You have to delay closing to resolve problems. If that unlikely event happens, your agent will help you address the issue.

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What’s a Closing Disclosure? In Closing (Part 2)

Lenders must provide borrowers with a closing disclosure, or CD, at least three days before settlement. This form is a statement of your final loan terms and closing costs.

You have three days to review the CD. compare it to the loan estimate you received shortly after you applied for the loan. If you need a refresher on loan estimates, you can view a sample version here.

The point of this formal review process is to ensure there are no surprises at the closing table. If there’s a significant discrepancy between the loan estimate and the CD, notify your lender and title company immediately. Depending on what the underlying issue is, the closing has to stop and a new closing disclosure must be sent out with a new three-day review period.

The LE includes a couple of items that can’t change by the time you get the CD — namely interest rate and lender fees. Some items can change by only 10% (fees paid to local government to record the mortgage might be one). Others can change without limit, like prepaid interest, because it can’t be predicted at the start of the loan process.

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In Closing: How to Seal the Home Buying Deal (Part 1)

 By: HouseLogic

Sign that paperwork. Write those checks. Get those keys! 

The closing. It all comes down to this. The grand finale. Once you have the keys, the house is yours. (Cue: Air horn sound!)

Nice work getting this far. You’re almost a homeowner! Let’s run through some questions you may have as you cross the finish line.

What Does “Closing” Mean?

The close or settlement is when you sign the final ownership and insurance paperwork and get the keys to your new home.

The closing process technically begins when you’ve signed a purchase and sale agreement. That agreement should specify a closing date. From the signing date to the closing date typically takes four to six weeks. During this time, purchasing funds are held in escrow, where your money is safe until the deal is officially done.

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4 Common Home Buyer Slip-Ups

  Real estate professionals see a lot of reasons why home buyers ultimately end up losing out on a deal. Practitioners recently shared some of the more common mistakes and ways to correct the situation:

1. Shopping outside their price range.

It sounds obvious, but some home buyers just have trouble sticking to a budget. Shopping online may increase the temptation to bump up the price range. One way to avoid this situation is to get preapproved for a loan so you know what you can truly afford and stay within your limits.

2. Submitting lowball offers in a hot market.

We are in a seller’s market, making a crazy lowball offer can piss off the seller.  Buyers would be smart to offer full price when homes are priced well. I can help you understand how a comparative market analysis can offer insight into pricing.

3. Making a big purchase while in escrow.

Buyers often don't realize they will need to delay big purchases and opening new credit lines while in the process of buying a home. Even buying a fridge can throw off your credit or debt-to-income ratio. If a big purchase is made, the mortgage lender’s underwriter will need to re-evaluate the buyer’s finances and recheck her credit report before closing to ensure the buyer still qualifies for the mortgage, so be sure to heed warning when you're approaching this period.

4. Forgetting to budget closing costs.

Buyers don’t just need money for the down payment. There are a lot of extra fees at settlement, too. Buyers can receive an estimate from their mortgage lender of what the closing costs will be before even making an offer on a property. Make sure to review that information carefully. Closing costs can vary drastically but typically cost 2 to 7 percent of the home’s purchase price.

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Think You Should FSBO? 5 Reasons to Think Again!

Patt Lee Properties - Results that Move You!

In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

Here are the top five reasons:

1. Exposure to Prospective Buyers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you? 

2. Results Come from the Internet

Where did buyers find the home they actually purchased?

• 44% on the internet
• 33% from a Real Estate Agent
• 9% from a yard sign
• 1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial. 

3. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies, which work for the buyer and will almost always find some problems with the house
• The appraiser if there is a question of value

4. FSBOing Has Become More And More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money When Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $210,000, while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

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Understanding Your Credit Score

Because of its prominent role in the home buying process,

it’s important for buyers to understand what a credit score is,

how it’s compiled and how to obtain their credit report.

• How interest rates affect your purchasing power

• Mortgage loan types

• Tips for first-time buyers

• How to save for a down payment

• Breaking down the mortgage application process

 

Purge Your Home of These

9 Things

Before You Move

Patti Lee Properties     Results that Move You!

A new home means a fresh start: new paint, a new bedroom, even a fresh take on arranging your old furniture.

But your new space won't feel so wonderful if it's weighed down with junk you didn't bother ditching during the move. Now's the time to purge your home—and we're not talking about just sifting through stacks of magazines while you binge on Netflix.

"Your possessions should have three purposes: function, aesthetic purpose, or sentimental value, "Pick up each item in your home, and ask yourself, 'Why do I have this item? What does this item do for me?'"

From doodads you picked up at the flea market to jewelry you never wear to a pile of untouched cat toys, there are a lot of things you should toss or donate before packing up the truck. But here are nine of the most common offenders.

1. Old towels and linens

When's the last time you bought new towels? If it's the last time you moved, turn those suckers into rags and buy something new. After years of use and hundreds of washings, there's no denying your fluffy bath towels have lost some of their plushness.

Ditch old bed sheets, too. Fitted sheets lose their elasticity over time, and exposure to sweat and oil can cause unpleasant stains.

2. Your juicer

We all have goals. Running three times a week. Cleaning every Sunday. And starting each morning with a glass of cold juice pressed from spinach, kale, ginger, and pineapple.

Don't give up on achieving your dreams—but if you've tried to make a change and found it didn't work with your lifestyle, don't hang on to the dregs of disappointment. Maybe getting up a half-hour early every morning to juice isn't for you. Assess your achievements at moving time, and donate everything that didn't work out. At least you'll have room for your next wild aspiration. Perhaps a set of dumbbells?

3. Unworn clothes

Organizing a closet before a move should be simple. A keep pile, a toss pile, and a donate pile—right? But we all have those jeans we keep around just in case we finally lose 15 pounds. Or a dress tucked deep in your closet in case you ever go clubbing again. (Never mind that the last time you were out of the house after 10 p.m. was the night your first child was born.)

Watch out for clothing you're keeping "just in case," which take up precious room in your closet. And even if you do lose the weight, or get an invitation to a bachelorette party in Vegas, you can always buy (or rent) something new—and we bet you'll love it even more.

4. Duplicates and souvenirs

Clutter accrues in the strangest places—like your mug tree or your dining hutch. You might have started out with two novelty mugs, but now you own a coffee cup from every place you've visited. Ever.

"Try to keep only one from your favorite vacation," 

Look for duplicates throughout your kitchen. Do you really need three bread pans? Or more than one cake platter?

"You should only hold on to what can fit neatly in your space,"  

5. Collections you've outgrown

One day, many moons ago, you told your mom you liked elephants. You were 12.

Your next birthday: an elephant necklace. Your graduation gift: a porcelain elephant statuette. Your housewarming gift from your aunt: an Etsy elephant print.

It's too late to convince everyone you're not a loxodonta-phile, but it's not too late to trim down your collection. And when Mom stops by and looks confused, just say, "I had to. I couldn't fit it into our new space."

6. Cosmetics and toiletries

Like most things in life, skin and beauty products don't last forever. So before you move, ditch the pile of half-used products you've amassed under your bathroom sink; that goes for skin creams, sunscreens, shaving cream, beard oils, deodorant, and even soap.

Ladies—make sure to toss the nail polish. That stuff has a shelf life of only two years, meaning you'll likely never finish a bottle before the polish gets gunky and hard to apply.

Same goes for cosmetics: For example, you should replace your favorite mascara every three months. Otherwise, you risk exposing your eye to contaminants and air particles.

7. Space fillers

Sometimes, when moving into a new home, we buy stuff just to fill the emptiness. Ugly side tables, a TV stand three shades darker than the rest of your furniture, or that annoying inspirational wall art that's long past being cool (if it ever was).

Your next home doesn't need to be a blank slate, but do yourself a favor before moving in by ditching furniture and decor you're "meh" on. And next time, buy slowly and ponder exactly what you want before plunking down cash.

8. Cords and cables

You don't know how it happened, but suddenly you have 34 micro-USB cables and seven random charging cables that seemingly belong to nothing and everything at the same time.

Save yourself from future headaches, and get rid of duplicates now—as well as anything that doesn't have a match. And take advantage of the move to sort the remaining cords and cables into an organized system.

9. Paperwork

Go through all your old paperwork, setting aside documents you should keep (tax records, closing documents, recent bank statements) and ditching everything that's no longer necessary—like old insurance policies. Create a filing system you'll stick to, since that paperwork's gonna keep coming, and promise yourself you'll go back through everything once a year.

Patti Lee Properties

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