How Do I Evaluate An Offer?

 

Well, as this story shows, there’s more to an offer than the price tag. Factors you should consider:

  • Is this offer at, near or above my asking price?
  • Are there clauses and additions in their offer that change the terms and final price substantially?
  • How long since I had another offer, or expect another offer? Can I wait?

Remember every month you’re probably still paying mortgage, taxes and insurance. If you have several offers… remember that an offer isn’t a completed sale.

Compare the risk and likelihood of a completed sale for each buyer including things like “contingencies”, where your sale depends on their sale. and whether they’re pre-approved for the offer they’re making.

Remember you have three options for an offer – accept it reject it or prepare a counter-offer that improves the terms for you in some way.

What Details Can I Ask Brokers In Advance?

 

This video tells you what any real estate professional would tell you. Ask them:

  • How long do homes in my neighborhood currently stay on the market?
  • How would you price my home?
  • What data did you use to arrive at that price?
  • How would you market my home?
  • What activities would you expect of me to market my home?
  • How will you handle representation if one of your buyers is interested in my home?
  • May I speak with sellers you’ve recently represented?
  • How long a period would you want on a listing agreement for my house?

It’s best to ask these questions, and be comfortable with your choices before signing a listing agreement.

What Is A Counter-Offer?

 

The video puts this in more visual terms, but basically, a seller can respond to a buyer’s offer with changes – a “counter” – that improves the terms.

You need to put yourself in their shoes and construct a modified offer that you think they might take that meets more of your needs. Then it’s their turn – accept, reject, or construct yet another counter.

It’s an efficient market process, but beware: clauses and costs matter. Your broker should be closely involved in constructing a counter. Successful bargaining is best done with a win/win approach where each side is meeting their biggest needs and compromising others to reach an agreement.

Remember that outside conditions like interest rates, and supply and demand, will keep evolving so you’ll need to be patient but decisive to craft an counter-offer that works for both sides.

What Types Of Closing Costs Are Associated With FHA-Insured Loans?

 

While this video simplifies things to help you remember, except for the addition of an FHA mortgage insurance premium, FHA closing costs are similar to those of a conventional loan.

As of 2013, the FHA requires a single, upfront mortgage insurance premium equal to 2.25% of the mortgage to be paid at closing (or 1.75% if you complete the HELP program).

This initial premium may be partially refunded if the loan is paid in full during the first seven years of the loan term.

After closing, you will then be responsible for an annual premium – paid monthly – if your mortgage is over 15 years or if you have a 15-year loan with an LTV greater than 90%.

What Are The Steps Involved In The FHA Loan Process?

 

The video puts this in more visual terms, but with the exception of a few additional forms the FHA loan application process is similar to that of a conventional loan.

With new automation measures FHA loans may be originated more quickly than before. And, if you don’t prefer a face-to-face meeting, you can apply for an FHA loan via mail, telephone the Internet, or video conference.

How Do I Choose The Best Loan Program For Me?

 

The video puts this in more visual terms, but your personal situation will determine the best kind of loan for you.

By asking yourself a few questions, you can help narrow your search among the many options available and discover which loan suits you best.

  • Do you expect your finances to change over the next few years?
  • Are you planning to live in this home for a long period of time?
  • Are you comfortable with the idea of a changing mortgage payment amount?
  • Do you wish to be free of mortgage debt as your children approach college age or as you prepare for retirement?

Lenders can help you use your answers to decide which loan best fits your needs.

What Costs or Fees Are Associated With Loan Origination?

 

Yes, loan origination involves costs and fees. As you’ll see in the video, when you turn in your application you’ll be required to pay a loan application fee to cover the costs of underwriting the loan. This fee pays for the home appraisal a copy of your credit report and any additional charges that may be necessary.
The application fee is generally non-refundable.

What Is RESPA?

 

RESPA stands for the Federal Real Estate Settlement Procedures Act. This video tells you about it all.
RESPA requires lenders to disclose information to potential customers throughout the mortgage process. By doing so, it protects borrowers from abuses by lending institutions.
RESPA mandates that lenders fully inform borrowers about all closing costs, lender servicing and escrow account practices and business relationships between closing service providers and other parties to the transaction.
For more information on RESPA, visit HUD.GOV or call 1-800-569-4287 for a local counseling referral.

What Should I Look Out For During The Final Walk-Through?

 

Well, as this story shows, this will likely be the first opportunity to examine the house without furniture giving you a clear view of everything.
Check the walls and ceilings carefully as well as any work the seller agreed to do in response to the inspection.
Any problems discovered previously that you find uncorrected should be brought up prior to closing. It is the seller’s responsibility to fix them.

What Makes Up Closing Costs?

 

What you’ll see in this video is, there may be closing costs customary or unique to a certain locality but closing costs are usually made up of the following:

  • Attorney’s or escrow fees (Yours and your lender’s if applicable)
  • Property taxes (to cover tax period to date)
  • Interest (paid from date of closing to 30 days before first monthly payment)
  • Loan Origination fee (covers lenders administrative cost)
  • Recording fees Survey fee First premium of mortgage Insurance (if applicable)
  • Title Insurance (yours and lender’s)
  • Loan discount points
  • First payment to escrow account for future real estate taxes and insurance
  • Paid receipt for homeowner’s insurance policy (and fire and flood insurance if applicable)

And any documentation preparation fees.