What to Expect When Buying a Home: Please, please just give us the keys!

by seacoast_ashley 25. September 2015 07:41

 

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If you have been following along on our family adventure, you already know that moving and buying our new home has faced some unique circumstances. My family and I are located in the US, the seller of our soon-to-be home is based in the United Arab Emirates. This meant that throughout the buying process our agent had to be knowledgeable on the longer than usual buying process. It meant that my family had to practice patience, because any communication with the seller resulted in a longer than usual response time.


My family and I had succeeded. We had a closing date! We set up utilities, changed our mailing addresses, and contracted various businesses to begin renovations (all for a closing date start date).  We should have closed and been happily nestled into our new home within 3 weeks of close. There was a bubble of excitement bobbing over all of our heads.


The night before the closing date, I carefully coordinated outfits for our family of five to pop against the purple front door of our new home. We would head from the attorney’s office and head straight to the house for a quick sweet family pic. As soon as the last sock was placed on the last set of clothing my husband and I received a text....a very disappointing text. Our agent needed to speak with us asap.


BAM! The happy bubble had burst. Closing would be pushed back a week. The sellers had not properly signed the deed. We are a pretty "roll-with-it" family, so after a few muffled curse words (the kids were all in bed) we accepted that life would happen and we would go on.


Cue closing date Number Two. This time I decided to save myself some laundry time and just go with our regular everyday clothes. Cue call Number Two. Again, the closing would be delayed. The deed, which we were now assured had been re-signed, had not arrived as promised. There was talk of the sellers being on holiday, taking a special trip to London because the legal process is smoother there, and long courier times. I really am not sure what the details were. All I knew was that once again I was going to have to call all of the contractors and reschedule. The I was going to have to tell three children under the age of 7 years that our day was not going to include going to the new house. I was crushed.


My husband and I stayed up late that night. We went through every possible scenario, and decided that if the house did not close on the next scheduled date we would have to walk. We were both paranoid that there was something bad going wrong, despite the assurance from our agent that this was not terribly uncommon when dealing with overseas sellers.


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The Door looks red here, but I assure you it is a very interesting shade of purple...


Closing date Three...YES! WE BOUGHT A HOUSE!!!! And the kicker, our awesome agent was able to negotiate our first full month of bills paid by the seller due to the long delay! Our family skipped the matching outfits. We drove to the house and played in the yard. We walked around and guessed at where Santa might leave Christmas gifts. We introduced ourselves to neighbors through the fence posts. We were a family who was finally home. Memories multiplied, and all was right with the world.


Tell us about your home-buying experiences! Did all go smoothly, or were there hurdles to jump along the way? You can join the conversation on our Facebook page

https://www.facebook.com/seacoastrealty


Ready to jump into the home-buying adventures? You’ll need a rockstar agent, like my own, and you can find one here

http://www.seacoastrealty.com/



What to Expect When Buying a Home : You Are Under Contract, Now What?

by seacoast_ashley 31. August 2015 07:50

 

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As you know from previous blog posts, my family is finally under contract. After some negotiating and lots of luck we are able to start the final jog to the closing table. There is so much that happens after your realtor exclaims,  “Congratulations! Your offer has been accepted!”

 

No two real estate transactions are ever the same, and our situation has to be one of the most unique I have ever been a part of. My family (“the buyers”) are located in a hot market in North Carolina. The Sellers are located overseas...with a 12-hour time difference. This resulted in every required document, every question, and every interaction taking a full day longer to complete. To say that this has been a bit nerve-wracking would be a gross understatement.


As soon as we were informed that we were under contract, we began the process to secure our mortgage. Since the decline (or bust, if you will) of the Housing Market (beginning in 2007 and hitting lows in 2012), getting a loan has required more documentation, qualifications and time. We spent no less than one week just searching files, requesting documentation, and combing through bank statements to determine where every dollar had come from, and where it had gone. For the most part, I would say kids. Kids are where all the dollars go!


Every time that we thought we had absolutely everything the Underwriter would come back to us, requesting yet another document. Around midnight on a random Wednesday night, we swore (for the 1,000th time) that we would never lose track of a penny again! My advice? Do a quick Google search or contact a mortgage broker before you even intend to apply for a loan, start a list of everything that you may potentially need, and start finding that stuff stat! It will save you so much time and frustration.

 

Our house was being sold “as is” but we still wanted to have a home inspection completed. I suggest that you ALWAYS have one. We needed to know that the bones of the house were good and that the house was safe for our family. We also didn’t want any $20,000 surprises after we move in.


If at all possible, go to the inspection with your Inspector! Our guy was great, and was one of about 4 recommended by our realtor, friends, and family. We spent almost 5 hours looking into every nook and cranny of the house. After finding all of the “issues” we walked away knowing exactly what kind of renovations and repairs we were facing.


This allowed for us to determine what we could afford to do before moving in. For us, new windows, kitchen floor, a small plumbing job, and a minor roof repair are the priorities. Not too bad for a home built in the 1960s. In addition to walking through explaining what the issues were, our inspector sent us an extremely detailed report (complete with pictures) of everything that he found and noted as an issue. This will come in handy as we check off the smaller issues over time. Our inspector charged us (The Buyer usually pays for the Inspection) around $1000. I think that this is the most important money that will be spent on our house.


As the mortgage documents rolled through the approval process, the Lender scheduled an appraisal. Most common loans will require an appraisal to determine that the house is, in fact, worth the loan amount. Our lender scheduled the appraisal and we were not present for it. An appraiser will pull comparable homes for sale (“comps”) or recently sold homes in the area. He/She will compare all aspects from the condition, square footage, number of rooms, use of space and will adjust the home value accordingly.

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We were cruising right on to the closing date...until we weren’t. Remember that fun little fact from the beginning of this post that the sellers lived overseas? With flexibility and patience it mattered very little...until now.


Find out how our closing has been effected by working with a seller so far away. And, find out if we even make it to the closing table. It will be a surprise for all of us, as we haven’t made it just yet!


What are some of the hurdles that you have jumped when closing on a home? Have you ever passed on an inspection? Join the conversation on Facebook

https://www.facebook.com/seacoastrealty

What to Expect When Buying a Home: You’ve Found “The One”

by seacoast_ashley 14. August 2015 09:08

If you read last week's blog post, you already know that I have studied, gotten a pre-approval letter, and started the home search. Back in my youth (before time got scarce and kids got plentiful), I loved the search for the perfect house. In all honesty, I still do, but the lazy Saturday mornings of driving to open houses at a whim are gone. Our search has been warp speed. We pack snacks, drinks, coloring books, diapers and plan our route like a trip to Europe.


We had three areas that we wanted to zone in on. All of them offered up great schools, walkability to parks, and the most important factor were in our budget...not a penny over! In total we looked at about 10 houses before we found the one. We knew when we walked in that this house would need work, but we also knew that the location and the house layout were perfect for our young family.

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This is the kind of work I’m talking about here. Anybody know a good tree service?


Because the city that we moved to is experiencing  quite a rebound from the housing market crisis in previous years houses were selling fast. In many cases they are selling above the list prices with multiple offers. We had to make a move, and we had to do it fast. As soon as we viewed the house and buckled everyone into their seats, and passed out waters, and found pacifiers we talked. We drove the neighborhood again, we speculated on what kind of neighbors lived on the street, and then we called our real estate agent and told him that we wanted to make an offer to purchase.


Acting on our Realtor’s advice, we offered full asking price. We asked for closing costs, and the offer would be contingent on our financing and home inspection. Here is where things slowed down, and the dream felt like it was going to die.


As soon as we walked into our rental condo, we started “signing” all of the necessary paperwork. Our realtor was able to prepare and send all documents online. This was extremely helpful. He looked through the documents and informed us that he was submitting the offer. We waited...


At 10pm our realtor called. The seller actually lived overseas, so all offers (and there were a few others) would be held until the following morning and submitted to the seller at the same time. Yikes! 2 days passed and we were freaking out! How long was an offer good for? When would we hear back? Would we hear back? Could we make other offers? The number of questions that our Realtor had to answer was downright embarrassing!  By the end of the third day we were informed that the sellers chose another offer. The house was “under contract.”

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Dreams of the kids coming down these stairs on Christmas...dashed.

My family experienced a strange sort of heartbreak knowing that we were still house hunting. In the short time (not even a week) since seeing the house, we had started to picture our life there. We were so in love with the neighborhood that it seemed like every other neighborhood was not as good. We knew that we would continue looking in this neighborhood, but we also knew that most things that came on the market in this area went under contract super fast, and for more money than we had to spend. I actually cried.


Two weeks later, our luck changed! Our realtor called us one evening to inform us that the contract had fallen through, and that the seller would be putting “our house” back on the market! We immediately told our realtor to resubmit our offer, to take out the closing cost, and to add an extra $1000 to the offer. This would be the strongest offer that we could make, and we did not want to lose out again.


Two nail-biting days later, we were under contract. Our offer to purchase had been in competition with 3 other, but the tweaks to the offer were enough to sway the seller. The kids went to bed talking about their new rooms and my husband and I poured a glass of celebratory wine!


The next morning the drive to close on this house kicked into high gear. There were papers to be signed, inspections to be lined up, loans to qualify for. You can read all about those things on the blog next week!


How did you know that you found “the one”? Did you have to jump through many hoops to make it your own? Let us know on our Facebook page!

https://www.facebook.com/seacoastrealty


If you haven’t already found your dream home, we can help!

 

http://www.seacoastrealty.com/

What to Expect When Buying a House: The rent is too high and the rates are too good...decisions, decisions

by seacoast_ashley 6. August 2015 15:32

 

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After selling our home for a move across the state, my husband and I wondered if now was the right time to buy a home? We had to move quickly, due to a job start date as well as a super-quick sale of our home. Upon arriving in our new town we set up camp in a rental with our three children and started researching.

The very first thing that we did, upon the advice of various realtors and lenders, was to make sure that our finances were in good order. No matter our choice to buy or rent, we needed to be able to understand where our debts stood and how much we could afford. By ensuring that our credit scores were good and that all open accounts were in good standing we were able to move forward.

The decision to buy was made pretty quickly. Our family was going to stay in the same home for the duration of elementary school (at least) for three children, so we knew this will be a 5-10 year move. Mortgage interest rates were at historic lows. And possibly the biggest factor for us was that rent would be just as expensive as mortgage payments and in most cases even more because of the size of our family! Buying was a no-brainer for us.

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After making the first of what would end up being hundreds of decisions, the first person that we contacted was our long term mortgage broker. We had worked with him on all of our previous loans, and it felt comfortable going back to him for guidance. Our broker was able to speak with us about income, assets, debts, etc. He then gave us a general idea of what we could afford and a loan pre-approval letter in the event that we found something we wanted to put an offer on.

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With pre-approval in hand we began casually driving around neighborhoods looking for the perfect spot. We scoured the Internet for neighborhood reviews, school reviews, etc. We joined forums for our new town. We reached out to anyone from our past that now lived in our new city. I’m pretty sure that at some college somewhere I have earned a doctorate in all things “new city.”

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The research could have been a full-time job and without local knowledge of the area we were swimming in a sea of confusion! This is where a relocation specialist came in very handy! A relocation specialist was able to answer some of our questions and then refer us to a local realtor.

http://www.seacoastrealty.com/relocate/

Our realtor was able to assist us in narrowing our search. The market is hot in our new city, and we needed to focus to be able to play the real estate game! We chose three areas to focus on. I drove those areas in the morning, afternoon, and night to get a feel for the traffic, neighborhood activity, and the kinds of people that would become our neighbors.

All of the above steps were imperative in our quest for the perfect home. After completing the steps above we were confident walking into each showing that if we loved the house we could quickly make our offers. The future was coming and coming fast! Check back to see what happened when we found our dream home!

How did you make the decision to buy or rent? What were the big factors in choosing where to look? Who was imperative to you starting your search?

Join the conversation on our Facebook page

https://www.facebook.com/seacoastrealty

What is the No. 1 Tip for Home Buyers?

by seacoast_ashley 20. August 2014 05:33

What is the No. 1 Tip for Home Buyers? Our very own Wilmington agent, Jessica Edwards shares her advice via Coldwell Banker Real Estate LLC!

http://blog.coldwellbanker.com/1-tip-home-buyers/

 

 

 

Buyer Tip: Change the Locks After Closing

by seacoast_ashley 16. February 2014 10:50

Change Locks on HomeAfter months of looking at homes in Southeastern North Carolina, making an offer on your favorite, doing your due diligence, and (finally!) signing the purchase papers at the closing table, you have a new home! Now, you’re ready to move in and make it all your own! You’ve got paint colors in mind, new furniture to assemble, pictures to hang, dishes to unpack…But don’t let your excitement get away from you. You still have one very important thing to do – change the locks!

It’s very important that you install all new locks on your new home. Most sellers won’t try to enter a home after they’ve sold it, but not everyone can be trusted. You have to take into consideration that they may have given a key to someone else at some point during their ownership – a neighbor, a contractor, babysitter, etc. You just never know who might have ill-intentions. So, it’s best to change the locks the day of move-in. After all, you don’t want to be always wondering, “what if?”

If changing the locks is one hassle you don’t want to have to deal with on the day of move-in, hire a locksmith. Your Sea Coast agent can refer you to a reputable one. Don’t have an agent? Find one today!

Meghan Riley

What are Seller Concessions?

by seacoast_ashley 2. February 2014 06:16

Seller ConcessionsWhen a buyer purchases a home with a mortgage, they are required to pay a certain amount of closing costs on top of the actual purchase price of the home. Some buyers discover during their home hunt that they have enough money saved for a down payment, but not for the closing costs. Rather than wait to save more money to purchase a home, they’ll request the seller to pay these closing costs. This monetary contribution is called a seller concession or seller contribution and is only applied to closing costs.

Why would a seller agree to pay concessions? It’s really an accounting game as no cash actually exchanges hands. The concession is added onto the purchase price of the home. If the home costs $200,000 and the closing costs are $8,000, the purchase price becomes $208,000. Then, the $8,000 concession is deducted from the seller net proceeds on the HUD-1 Settlement Statement and given back to the buyer. But the seller concessions must be agreed upon at the time the contract is signed, because adding them in later can be a hassle.

Why wouldn’t the seller agree to pay concessions? The appraisal may not compensate for the extra money. Without the concessions, the home would have to appraise at $200,000. With the concessions, it would have to appraise at $208,000. If it doesn’t appraise that high, the deal falls apart. The lender will not loan for more than the home is appraised at. That’s why it’s important to not ask for seller concessions unless you are sure it has a chance of appraising at the elevated contract price.

It’s also important to note that some loan programs have limits on the amount of concessions a seller can pay. Currently, FHA will allow the seller to contribute up to 6% of the price, VA will allow up to 4% of the price, and conventional will allow up to 3%. USDA has no cap. But this may change. Always verify with your mortgage consultant how much the seller can contribute before finalizing an offer.

If you have any questions about seller concessions, ask your Sea Coast agent. Don’t have an agent, find one today.

Meghan Riley

What is Included in the Closing Costs?

by seacoast_ashley 2. February 2014 05:34

When you obtain a mortgage, you need to pay fees - charged by lenders and third parties – related to the purchase of the home. These fees are called closing costs and are included on top of the cost of the home and down payment.

Closing Costs - House Calculator

Here is a list of common closings costs:

  • Credit Report Processing Fee
  • Loan Origination Fee (for processing loan paperwork)
  • Costs of Inspections (Termite, Home, etc.)
  • Appraisal Fee
  • Survey Fee
  • Property Taxes
  • Private Mortgage Insurance
  • Prepaid Interest
  • Prepaid Insurance
  • Discount Points
  • Title Insurance
  • Title Search
  • Escrow Deposit
  • Notary Fee
  • Courier Fee
  • Wire Fee
  • Underwriting Fees
  • Government Recording Fees

Closing costs typically run about 2-4% of the purchase price. So, if you purchase a home for $300,000, closing costs will run between $6,000-$12,000.

Within 3 days of applying for a loan, lenders are required by law to give borrowers a Good Faith Estimate (GFE). The GFE will list all of your closing costs, but these may change by the time of closing. Legally, they are allowed to change by 10%, so it’s important you take that into account when budgeting your purchase.

Before you sign the papers on your home, you will receive a HUD form that lists all of the fees to be paid. If the closing costs are higher than you expected and can afford, you can walk away from the deal. But, be warned, you will likely lose money, especially your earnest money.

If you are concerned about paying extra out of pocket for the closing costs, there are mortgage programs that do not require you to pay them. In this case, the lender will either raise the interest rate or fold the costs into the total purchase price of the home. Make sure you discuss this with your mortgage consultant.

If you have any questions about closing costs, ask your Sea Coast agent or mortgage consultant. Don’t have an agent, find one today.

Meghan Riley

What is Earnest Money?

by seacoast_ashley 26. January 2014 07:31

Writing Earnest Money CheckWhen a home is under contract, it’s removed from the market. This is good for the buyer, because it gives them time to do their inspections and due diligence without the threat of another buyer snatching the home out from under them. However, it can hurt how well a home sells by preventing other buyers from seeing it; therefore, a frivolous buyer can be a waste of time and money for a seller. When you sign a contract to buy a home, you make a deposit on that home. This is called an “earnest money deposit”, because it shows you are earnest or serious about buying the home. Many sellers won’t accept an offer without a deposit.

Depending on demand and the price of the home, earnest money can be up to 3% of the contract price. In Southeastern North Carolina, $1,000 to $2,000 is quite common, but your real estate agent will advise you on the most appropriate amount. Once the due diligence period is over, the earnest money is applied to your down payment and closing costs.

When you make an offer on a home, the earnest money is included in the contract, but the check is not deposited until the offer is accepted. The listing brokerage or closing attorney holds the money in their escrow account until the due diligence period is over or the buyer terminates their offer according to the guidelines outlined in the contract. If the buyer does not follow these guidelines and the contract falls through, the seller will receive the earnest money; however, if the buyer follows the guidelines and terminates the contract, the earnest money is returned to them.

Have questions about the earnest money check? Ask your Sea Coast agent. Don’t have an agent, find one today.

Is “REO” and “Foreclosure” the Same Thing?

by seacoast_ashley 26. January 2014 06:42

If you’ve been looking at listings online, you may have come across the abbreviation REO, which stands for Real Estate Owned [by a bank, credit union, etc.]. This is often used in connection with foreclosures. So, you may be wondering if an REO and foreclosure are the same. When searching for homes to buy, the simple answer is “yes”. They sell under basically the same conditions.

Foreclosures are properties (homes or pieces of land) that are currently going through a Coldwell Banker Foreclosure REOlegal process in which the lender has taken over control after the borrower did not make payments. At this stage, the lender tries to sell the home (or land) to recoup their losses. This can be done through an auction or traditional listing in the local MLS. Either way, the foreclosure process reaches its final stage when 1) the home sells and becomes the responsibility of that new owner or 2) the home fails to sell, becomes an REO, and is the lender’s full responsibility. So, basically, an REO is a home in the final stage of foreclosure.

Banks, credit unions, etc. are not in the business of being landlords and having a property on the books can look like mismanagement to shareholders, so they are usually very motivated to sell. That’s why foreclosures are often listed at the lowest price in the neighborhood or in comparison to similar homes.

Conditions of foreclosures vary from good to rundown and existing damages may or may not be repaired by the lender before the home goes on the market. Foreclosures sell “as-is”, so a low price doesn’t guarantee a good deal. They may need some work and aren’t always the best option for buyers who need something move-in ready. Of course, it’s a case-by-case or house-by-house scenario.

If you’d like to know more about foreclosures and REOs, ask your Sea Coast agent. If you don’t have an agent, find one now.

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