Real Estate Purchase Agreements: 7 Things Home Buyers Must Check

real estate purchase agreements

Every home sale starts with a real estate purchase agreement—a legally binding contract signed by home buyers and sellers that confirms that they agree upon a certain purchase price, closing date, and other terms.

While the forms and wording vary across the country (LawDepot.comoffers free purchase agreements for each state), there are certain words common to all that you’ll want to have down, cold. Why? Because they spell out crucial info such as how much money you’re paying, when you pay it, under what conditions you can back out of the deal, and more. Here are seven terms you are likely to come across in a real estate purchase agreement, and why you need to check these provisions carefully before you sign on the dotted line.

1- Earnest money
What it is: Checking the home’s purchase price on your contract is par for the course, but you also have to cough up some money immediately, in the form of an earnest money deposit, or EMD. That’s the cash buyers commit to completing the sale to show sellers they’re serious. The amount of the deposit is negotiable between both parties, but is usually about 1% to 2% of the purchase price. Once an offer is accepted, the money is typically held by the seller’s broker or a title company, to be used as a credit toward the buyer’s down payment and closing costs.

Why it matters: In an aggressive seller’s market, many homes receive multiple offers. One way to make your bid stand out is to offer a slightly higher EMD (think 4% to 5%) to catch the seller’s attention, says Washington, D.C., metro real estate agent Robyn Porter. That being said, “Many buyers want to make the smallest deposit possible, to limit their risk of loss,” says Bruce Ailion of Re/Max Town and Country in Atlanta.

The caveat: If you back out of the transaction for any reason or contingency outlined in the purchase agreement, you get your earnest money back (more on contingencies next). However, if you decide not to buy the house for any what-if that is not included in the agreement, the seller can keep the earnest money.

2- Contingency
What it is: “A contingency in a deal means there’s something the buyer has to do for the process to go forward, like selling a property they already own,” says Jimmy Branham, a real estate agent at the Keyes Company in South Florida. Contingencies can also include a home appraisal, home inspection and mortgage approval.

Why it matters: Contingencies protect you by giving you the ability to back out of the sale if something goes wrong, typically without losing your earnest money deposit, says Kathleen Marks, a real estate agent with United Real Estate in Asheville, NC. But all contingencies have deadlines that must be met in order for the transaction to chug along.

3- Settlement date
What it is: The settlement date, or “closing,” is the day when all involved parties meet to make the sale official. Buyers and sellers typically negotiate a settlement date that is mutually agreeable.

Why it matters: When choosing a settlement date, make sure you’re giving yourself ample time to fulfill the home inspection, appraisal, and any other contingencies. If you don’t meet your obligations to the purchase agreement by the settlement date, you could be considered “in default” and potentially lose your deposit, says Washington, D.C.-based real estate agent Katie Wethman.

4- Possession date
What it is: The possession date is the day when buyers can move into their new home. Sometimes home buyers take possession of the home on the day of closing, and sometimes they agree to wait days or weeks after closing. Generally though, 30 to 45 days is the most common time frame.

Why it matters: The possession date is negotiable, and it can affect the strength of your offer. For instance, if the seller needs a few extra months to find a new place to live, offering a 60-day possession date could make your bid more attractive. Alternatively, some sellers allow the buyers to move in before settlement; this may occur if the house is already vacant.

5- Escrow
What it is: Escrow is a secure holding area where important items (like the earnest money check and contracts) are kept safe until the deal is closed and the house officially changes hands. Although customs vary by state, the escrow holder is usually someone from the closing company, an attorney, or a title company agent.

Why it matters: The purchase agreement states whether the buyer or seller (or both) pays escrow—with the fee for this service typically totaling about 1% to 2% of the cost of the home. If you try to back out of the deal without a legitimate reason, you will forfeit your portion of the escrow money to the seller.

6- Delivery
What it is: When buyers and sellers sign a purchase agreement, they must agree to an accepted form of communication during the transaction as defined by the terms under “delivery,” says Marks. In today’s day and age, email is generally an acceptable method of communication, but some people (say, older buyers or sellers) still prefer snail mail when receiving important documents, like the release of a home inspection contingency.

Why it matters: Your buyer’s agent must abide by the terms of the delivery when communicating with the listing agent or seller. If documents aren’t delivered properly, it could delay or even void the contract.

7- Home warranty
What it is: In a nutshell, a home warranty is a policy that covers the cost of repairing many of a home’s appliances if they break down. Basic coverage starts at about $300 and goes up to $600 for more comprehensive plans.

Why it matters: Many home sellers will offer to pay for the first year of a buyer’s home warranty to entice buyers to bite, especially if the appliances in the house are old and/or it’s a buyer’s market. However, this must be written into the purchase agreement.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

8 Times In Which Bargain Hunting For A Home Can Backfire

Bargain Hunting Backfires

Everybody loves a bargain. But getting one handed to you, gift-wrapped, in this housing market? Fat chance.

Limited inventory has boosted prices, and in many cities, sellers have the big end of the stick. It’s rare to see buyers scoring a fabulous house in a desirable neighborhood for thousands of dollars under asking price.

So to save some cash, you might feel compelled to make some compromises, try to negotiate, and look for the hidden bargains.

But beware of taking your thriftiness too far—because you just might regret it. Read on for eight times bargain hunting can actually backfire.

1. Working alone instead of with an agent
Thinking of just doing this thing on your own? Don’t.

“When we talk to clients about the deadly mistakes home buyers make when purchasing a home, No. 1 is buying a home without representation,” says Brian Cournoyer, a Realtor® with DeSelms Real Estate in Franklin, TN.

First, it’s important to know that you won’t save anything by skipping the buyer’s agent, because that cost isn’t on you. Typically the seller pays the commission for both the seller’s agent and the buyer’s agent.

And if you consider yourself a master negotiator, or think you can search for homes just as well as the next guy, know this: Agents have a host of training and tools designed to find the right properties and get you the best deal.

“Everyone thinks they can go online and pull up comps, but they don’t have access to all the real-time information that agents do,” Cournoyer says.

2. Assuming you can get a deal on a short sale
OK, so most sellers are in the driver’s seat. But what about sellers who need to offload their home fast? There’s gotta be some of those out there, right?

Jen Birmingham, a Realtor® with Coldwell Banker in Petaluma, CA, says one of the biggest mistakes she sees is people counting on short sales to snag a bargain.

“Because home values are way above where they were when a lot of people were underwater, short sales are few and far between right now,” she says. “Buyers need to know that what was working six years ago is no longer applicable.”

3. Making big compromises just to score a deal
Buying a home that doesn’t have enough bedrooms, is located two hours from your work, or needs a mountain of money to make it livable is no bargain, even if its list price is far below your budget.

The trouble is, in a hot market, buyers often ignore these blazing-red flags, Birmingham says.

“What I see is a lot of people wanting so desperately to get into the market that they’re willing to make compromises that may have originally been deal breakers,” she says.

Think carefully about your must-haves, and do your best to stick to the list.

4. Hiring the cheapest inspector, or none at all
While it might seem economical to skip a professional home inspection, be aware that what you save now you’ll probably pay for later, Cournoyer says.

In older homes, an inspector can discover problems such as termite infestations or crumbling foundations. Even for new builds, it’s wise to hire a pro who can spot material defects or unfinished work in out-of-the-way areas such as crawl spaces or roofs.

“For instance, we have some pictures taken by an inspector that we show clients, where builders left a sheet of 4-by-8 plywood over the top of the chimney,” Cournoyer explains. “If we hadn’t had that inspected, this house may have burned down when they built their first fire.”

And there’s a double whammy: Forgoing an inspection also means you lose the ability to renegotiate if, say, you notice evidence of a leaky roof during the final walk-through.

5. Requesting an endless list of inclusions
Back when buyers held court, sellers routinely ended up including major appliances and other household goods in the contract. Anything to seal the deal, right? Well, those days are long gone, Cournoyer warns.

“Buyers tend to lose touch with reason a little bit, and think they should get everything,” he says.

Want to win that house? Make your asks equal to the price you’re offering.

“If you want to offer up a whole ton of money, you can be a little more high-maintenance,” Cournoyer says. “But when you’re out there searching for a bottom-of-the-barrel deal, you’d better just be asking for the house and that’s it.”

6. Insisting on unreasonable repairs
Certainly, if the home inspection turns up a major issue requiring immediate attention, buyers should ask that a repair be done prior to closing. But don’t assume a seller needs to revamp the entire property or make cosmetic changes.

“I had an experience recently where the buyers wrote out a huge laundry list of requests for the seller,” Birmingham recalls. “It was a really nicely flipped property, yet the buyers were still asking for more customization. The seller had put on a new roof, and they wanted two skylights installed.”

When Birmingham suggested this could anger the seller and limit their chances of getting the home, the buyers wouldn’t budge. Guess what? They didn’t get the house.

“The seller had three other offers, and didn’t want to deal with my buyers because their demands were so off the wall and unrealistic,” she says.

7. Making a lowball offer on a home that’s been languishing on the market
Some buyers figure that any listing that’s been up for more than a couple of weeks must have a desperate seller behind it. But, Birmingham notes, a low offer will not only cost you credibility in the seller’s eyes, but could also spark a bidding war.

“Usually when a house is on somebody’s radar as a bargain, there’s somebody else that has the same feeling at the same moment,” she explains. “So you’ll usually still be in competition in a multiple-offer situation.”

Speaking of which…

8. Employing the wrong strategy in a multiple-offer situation
When you’re one of many offers on the table, it’s important to stand out in a positive way, Cournoyer says.

“Agents have a few tricks we can put in the offers that help us rise to the top of the pile,” he says. “Yet we see buyers who don’t submit clean offers—making (contingencies) on a home sale, for example—which clutters up a contract.”

Birmingham agrees that ignoring your agent usually means missing out on a house.

“In most situations, if the house is priced properly, a good Realtor is communicating with the listing agent about how many offers are coming in,” she explains.

“Buyers really have to be ready to step up with an above-asking offer if they want the house,” she adds. “Sometimes, it takes a few losses for buyers to understand that process.”

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Self-Directed IRA: 7 Types of Real Estate Allowed For Investors

Self-Directed IRA for Real Estate

A Self-directed IRA is the only retirement account that allows investors to pursue alternative investments. Among those alternatives, the most popular is real estate: a broad asset class that includes many different investment opportunities. Self-directed IRA investing offers great tax advantages to real estate investors, though the exact benefit will depend on the type of account used.

When investing through a self-directed IRA, your real estate investment options are nearly endless. Choose between rental properties (both residential and commercial), undeveloped land, fix-and-flip opportunities, and more. In this article, we will describe some of those opportunities by exploring seven types of real estate that can be held in a self-directed IRA:

1- Single-Family Homes
Single-family homes are the most common type of residential property, and the most common type of real estate found in self-directed IRAs. These properties can be the key to both short-term and long-term retirement strategies, with tenants bringing in regular rental payments to help boost savings.

2- Multi-Family Units
Multi-family units, such as apartments or condo complexes, are similar to single-family homes in that they can bring in regular rental income; however, because multi-family units are larger and bring in more tenants, they have greater potential to boost your savings. They can also require more maintenance, on the other hand, so be sure to consider all the angles before choosing an investment opportunity.

3- Commercial Property
From retail to office buildings, it’s all possible. If your self-directed IRA doesn’t have enough cash for these types of investments, your IRA can even apply for a non-recourse loan or partner with other funding sources. Commercial property is a broad category of real estate investments which includes anything from a grocery store or an office building to even a baseball field. This type of investment is another way to generate rental income over the long term.

4- Mortgage Notes
An indirect way to invest in real estate with a self-directed IRA is by funding mortgage notes. You could use your savings to be a real estate lender and help others purchase homes while also bringing in a profit for yourself. You set the terms of the loan, including time frames and interest rates. The payments will go directly to your retirement account.

5- Undeveloped Land
Undeveloped land offers great potential, acting as a blank canvas for investors to build their dreams. While this may not be a great choice for generating immediate rental income, these properties can be developed to produce a profit, sold to developers at a profit, or even sold to the government for use by the state.

6- Offshore Real Estate Investments
There are many benefits to investing offshore with an IRA. There are also things to consider, such as performing the proper due diligence and educating yourself not only on the tax laws in the United States, but the tax implications and transaction process in the country where you are investing. The U.S. government has created laws regarding offshore investing. For more information, consult a financial professional or tax advisor about real estate transactions and banking outside of the U.S.

7- Real Estate-Owned Properties
If a property has been foreclosed and taken back by the bank, it is referred to as real estate owned, or REO. In today’s real estate market, your Real Estate IRA can take advantage of purchasing distressed properties. Some real estate investors buy at foreclosure auctions; others buy REO properties directly from the bank. Have the property inspected by a professional to determine condition, as many REOs are sold “as-is.” You want to avoid any surprises.

A self-directed IRA provides the opportunity to save money for the future on a tax-deferred or tax-free basis. They also allow you to benefit from a variety of alternative investments not available through traditional retirement accounts.

Are you ready to grow your business by giving your clients more investment opportunities? Would your clients jump at the opportunity to invest in real estate tax free? Learn more about how self-directed IRAs can help you grow your business.

Before you invest in this business sector using your IRA, it is best to consult with your investment, legal and tax advisor. Entrust does not endorse or recommend any of these investments. Proper due diligence by you, the IRA holder, is recommended before entering into any transaction.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Buying A Home: 6 Things You Must Do Before Becoming A Homeowner

Home buying tips

Buying a home is a huge investment—probably the most significant purchase of your life. It’s not something you should do without preparation.

Before you start on the road to homeownership, make sure you are ready. Do these 6 things:

1-Improve your credit score.
A high credit score snags you the best deals. “Below 660 or 680, you’re either going to have to pay sizable fees or a higher down payment,” says Barry Zigas, director of Housing Policy for the Consumer Federation of America.

A score of 700 to 720 can get you a good deal, and 750 and above can garner the best rates on the market.

Pull your credit reports and make sure you’re not penalized for old, paid or settled debts.

Stop applying for new credit a year before you apply for a mortgage. Keep the moratorium in place until after you close on your home.

2-Figure out what you can afford.
There are various ways to determine how much house you can afford. If you’re using an FHA loan, your monthly payment can’t exceed 31 percent of your monthly income. The FHA will let you go higher under some circumstances.

For conventional loans, home expenses should not exceed 28 percent of your gross monthly income, says Susan Tiffany, retired director of Personal Finance Publications for adults for the Credit Union National Association, or CUNA.

Use Bankrate’s calculator to figure out how much house you can afford. Add to that other housing expenses, such as taxes, insurance, and utilities. Then, bank the difference between that total and what you’re paying now.

3-Save for a down payment and closing costs.
You’ll need to save between 3 percent and 20 percent of the house price for a down payment. Your credit history and loan terms help determine how much you’ll need to come up with.

For example, with an FHA loan, the down payment requirement can be as low as 3.5 percent. You’ll need a credit score of at least 580. Home loans backed by the Department of Veterans Affairs, or VA, require no down payment.

Another cash expense will be closing costs. The national average for closing costs for a $200,000 mortgage is $2,084, according to Bankrate’s latest survey.

If a big down payment is a hardship, look for down payment assistance. Search online using the city name, the county name and keyword combinations such as “down payment assistance,” “first-time homebuyers” or “homebuyer’s assistance.”

Down payment assistance often is based on location or reserved for particular buyers, such as first-time buyers. In a buyer’s market, you can negotiate to have the seller pay a portion of the closing costs.

4-Build a healthy savings account.
Building up your savings—not just for a home—is very important. Your lender wants to know that you’re not living paycheck to paycheck. If you have three to five months’ worth of mortgage payments set aside, you’re a much better loan candidate. Some lenders and backers, like the FHA, will give you more latitude on other criteria if they see that you have a cash cushion.

That money will also help pay for maintenance and repairs of the home. Most repairs are sporadic, but big-ticket fixes such as a new roof or water heater can come up suddenly and drain your budget.

A good rule of thumb is to assume that you’ll spend 2.5 to 3 percent of your home’s value each year on upkeep and repairs. If you buy a $250,000 home, aim to save $520 to $625 per month.

5-Get preapproved for a mortgage.
Before you start house shopping, you should get your financing in place.

“The No. 1 thing is (homebuyers) better have everything in order,” says Dick Gaylord, of RE/MAX Real Estate Specialists in Long Beach, Calif., and a former president of the National Association of REALTORS®.

Gaylord says you should get a mortgage preapproval “before you walk through the first house.” Otherwise, “How do you know how much you can afford?”

6-Buy a house you like.
Short-term homeownership can be expensive, depending on how much you put down and what it cost you to sell your old house and move.

To get a home that will make you happy, don’t count on a quick purchase. Step back and make certain the house you’re considering is one that will fit the needs of you and your family.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Buying A Home: Prepare For A Competitive Spring Home-Buying Season

home buying in the spring

With housing inventory far lower than demand and mortgage rates poised to rise, it’s going to be a competitive market for home buyers this spring.

If you’re looking to buy a home this season, here’s how to prepare yourself to enter the fray:

1-Get your financial house in order.
Unless you plan on paying for the home in cash, you’ll need to apply for a mortgage. No matter how streamlined the process is, you’ll still need to gather a significant amount of documentation to give an accurate financial picture to the lender.

Before you even begin home shopping, look at your credit report to make sure there are no errors that could affect your score. Also, pay off any delinquent bills and reduce any other debts you owe so that your debt-to-income ratio (DTI) is favorable. Use a calculator to figure out your DTI and see if you need to make changes. Your goal is to look as attractive to lenders as possible so that you are you approved and can get the best rate on a loan.

2-Make sure you’ll qualify for a mortgage.
In order to get a mortgage, lenders want to know you’ll be able to meet your monthly obligations no matter what. This means they’ll ask to see your entire financial situation including employment history, salary, savings, investments, debts and anything else that makes up your net worth. Use a prequalifying mortgage calculator to get an idea of what size loan is right for your needs.

Even if you think you’re a strong candidate, never assume you’ll automatically qualify with the first lender you contact. Lenders’ guidelines have become stricter since the housing crisis of 2008, and you could lose out on the home you want if you can’t close on a loan. “Sometimes one deficiency can be offset by another strength. For example, if you have a higher DTI ratio, saving up enough to put a bigger down payment can help,” says Bill Banfield, executive vice president of Capital Markets for Quicken Loans.

3-Choose the right REALTOR®.
Unless you’re a seasoned pro, having a REALTOR® on your side can make a big difference.

“An experienced agent will know what could happen that might make a deal fall apart and how to keep that from happening,” says Dori Summer, a real estate agent with Keller Williams Realty in Coral Springs, Fla.

Making an offer on a home in a competitive market can require more than just a willingness to pay the price. If a seller has to choose between multiple buyers, they’re likely to choose the one that’s coming to them with the best overall package. A good agent will present your offer along with other information, including your ability to get a loan, how much you’re able to put down and anything else that might make you more appealing than someone else vying for the same property.

4-Be prepared to pay the price.
Home prices in close to two-thirds of the housing market are at an all-time high, according to a February 2018 report by the National Association of REALTORS®.

“Sellers in this current market get at least 95 percent of their asking price,” says Samona Rosenberg, a licensed real estate agent with Stein Posner Real Estate Services in Boca Raton, Fla.

If you see the house you want and you know it’s in your budget, it may not make sense to hold out to see if the price will drop.

“The best properties all have multiple offers,” says Erik Williams, a REALTOR® with Keller Williams Realty in Cambridge, Mass. “If it’s a desirable property, it’s desirable to buyers. The people that I see get places under agreement are the most prepared people and the most aggressive.”

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Homeowners Association (HOA): Pros/Cons All Buyers Should Consider

Homeowners Association (HOA)

Modern Townhouses

Home shoppers weigh a laundry list of factors before purchasing a single-family home or condo. Location, price, size, and style are all taken into consideration. But for some, a home in a community with a homeowners association, or HOA—a board of residents who help ensure that your community looks its best and functions smoothly—could either sweeten the pot or be a major deal breaker.

“I have had clients who specifically want this type of situation, and others who refuse to buy in a community that has one,” says Bill Golden, an independent real estate agent with Re/Max Metro Atlanta Cityside.

Want to know what makes buyers swing one way or the other? The following insights will illustrate the best and worst qualities of HOAs and help you decide if living in this type of community is right for you.

Pro: HOAs maintain the common areas
Your community’s HOA will be responsible for handling all maintenance of common areas and repairs for the amenities outside of your home. It’s perhaps the biggest perk of living in an HOA community.

“Based on maintenance fees collected, an organized HOA maintains a comfortable balance in their fund to offset maintenance costs or unexpected issues that need to be fixed,” says Drew Scott of HGTV’s “Property Brothers” and co-founder of Scott Brothers Global.

An HOA’s level of involvement varies and might depend on the type and size of the community.

“The HOA will take care of the common areas like the pool, clubhouse, walking paths, or other amenities that provide value to the residents,” says Mark Ferguson, a Greeley, CO–based real estate agent and investor.

Con: You have to pay recurring HOA fees
If you move into an area with an HOA, membership is mandatory and so are the monthly or annual fees.

“The fees can change, based on decisions that you don’t have total control over,” Golden says. “Fees can also be a detriment to resale if potential buyers don’t want that extra cost in addition to their house payment.”

So, how much can homeowners expect to pay? It varies depending on your location and how expensive your house is.

“It also depends on the amenities offered by the neighborhood, but, for example, in the Trussville/Birmingham, AL, area, annual HOA fees could range anywhere from $300 to $1,200,” explains Patrick Garrett, real estate broker at H&H Realty in Trussville, AL.

The listing agent will be able to tell you exactly how much HOA payments will be.

Pro: HOAs help keep uniformity
Each HOA has its own declaration of covenants, conditions, and restrictions, or CC&Rs, which explain what homeowners can and cannot do—this includes streamlining the appearance of each property.

“Your neighbors can’t paint their house bright purple or put an unsightly addition on the front of their house,” Golden says. The CC&Rs make sure “the community retains the look and feel of the way it was built.”

Other common no-nos are parking vehicles on the lawn or keeping inoperable vehicles in the driveway.

“You won’t have to worry about that one neighbor that has decided to let his front yard grow into a wild jungle,” says Golden.

“Ultimately, the HOA helps the homes within the neighborhood retain their value,” Garrett says. “When there are rules and guidelines governing how homeowners should keep their property’s appearance, it helps keep the neighborhood looking desirable for the consumers perusing the neighborhood in search of a new home.”

Con: There’s a lot of red tape
Building that new second-floor addition will be especially difficult in an HOA community. Why?

Any exterior modification—even a minor one like a play area for your kids—has to be approved by the HOA.

You must submit plans describing the height, colors, location, shape, and materials to the HOA board for approval. “This can really slow down the process or limit the type of work you can do,” Scott says.

Ferguson says the approval process can be downright unreasonable. “It once took my HOA nine months to approve a basketball hoop that had already been approved by them for the previous owners,” he says.

Pro: HOAs mediate problems on your behalf
An HOA can also reduce conflicts and unpleasant exchanges. If your neighbors haven’t cut their lawn in several weeks, or decide to turn their driveway into an auto repair shop, you don’t have to confront them because the HOA will. When anyone is engaged in activity that violates the CC&Rs, the HOA sends a friendly notice and follows up with a stern warning.

Con: They can be overbearing
Remember those CC&Rs? While they come in handy for preventing rowdy college students from moving in, they also might be off-putting for homeowners who like their autonomy.

“Many folks believe that buying your own home should give you the freedom to make the changes you want to make and express your own individuality,” Golden explains. “They don’t want decisions about their own home made by a committee.”

HOA-mandated restrictions can be set on swimming pools (e.g., in-ground swimming pools can be built in the back of the house, but above-ground pools are prohibited), pets (e.g., they are allowed, but they can’t be bred or kept for commercial reasons; livestock or poultry are not allowed without permission), and rentals (e.g., you might be prohibited from renting out rooms or the entire home). In extreme situations, some HOAs can evict the tenant and hold the homeowner responsible for any eviction costs or any damage caused by the tenant.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Home Shopping: 3 Things You Should Pay Attention To And 3 To Ignore

 

Home Shopping Tips

Home shopping? Congrats! Buying a home is one of the most rewarding — albeit at times exasperating — things you’ll do in your life. By the time you’re ready to buy, you likely have a sufficient grasp on the basic necessities: a solid foundation, a roof that doesn’t leak, wiring that won’t cause your new home to spontaneously combust, and so on. But what about the other stuff you should be mindful of? You know, the considerations not covered during your home inspection?

These more personal assessments may not be as “dear-god-get-me-out-of-here” detrimental as a crumbling foundation, but they could likewise affect your quality of life for the foreseeable future. So here are a few things to watch for, as well as the ones you shouldn’t sweat.

3 Things to Pay Attention To

1. The amount of natural light
Unless you’re particularly partial to living like a cave-dweller, you want your home to have ample natural light. Besides making everything inside look better, it just makes you feel better. Yet this is often glossed over by some buyers during the house hunt. If you have your sights set on a house, schedule viewings at different times of the day to get an accurate picture of the natural light situation.

If you need secondary motivation outside of how beautiful natural light is, consider this: The amount of natural light in your home could indicate bigger (read: more costly) issues. Too little and you may have to add or modify existing windows, which could run upwards of $15,000.

2. The driveway and parking situation
You may be thinking, “Really? The driveway?” To which the answer is, “Yes. Really, really.” The dimensions of your driveway could very well determine how quickly your new-home infatuation fades. It may seem silly in the grand scheme of things, but consider your parking spot like an extended part of your entryway. If the drive is too narrow, you’ll spend countless hours playing musical cars to squeeze vehicles in. Alternately, if it’s too long and you live in an area prone to snowdrifts, you may never want to leave home during the winter months. Street parking may seem like a viable option, but some cities have strict regulations regarding visitors and even overnight parking. Be sure to ask!

3. The neighborhood
This is the epicenter of the house hunt for many people for one readily apparent reason: You want to like the area where you live. But there are a few less obvious things to consider before you hit the local coffee shop in preparation for your first early Saturday open house. Are there ample sidewalks in case you want to take a leisurely stroll or go for a bike ride? Is it in close proximity to public transportation? If you have kids, there’s little doubt you looked into the local school district. Even if you don’t, though, keep in mind a better school district equals a better resale value. And, finally, read any HOA documents before you sign on the dotted line. It will be tedious beyond belief, but doing so will alert you to restrictions, bylaws, and other issues that could be unwelcome surprises down the road.

3 Things to Ignore

1. The seller’s style
Don’t let that Day-Glo paint in the kitchen be a deal breaker. For that matter, don’t let any paint color put you off of a home you like. You can always repaint and, let’s be honest, what first time home-buyer doesn’t want to hand-pick their own hues anyway? Similarly, if the seller’s fuzzy toilet seat cover stresses you out, don’t worry — they’ll take it with them when they go. It can be hard to envision your stuff in a home that currently clashes with your personal style, but try to remember decor is easily changed and offers you the opportunity to tailor things to your own tastes.

2. Clutter
Hey, life is busy, you know? Sometimes a seller just can’t find the time to pack up the plethora of tchotchkes littering their living room before a showing. Cut ’em some slack (selling is just as stressful as buying) and think outside the box. Just bring a tape measure to make sure there actually is enough room for your belongings and focus on the condition of the house as opposed to its clutter.

3. Unsolicited opinions
You’ll soon find that everyone and their brother has an opinion about your potential new home, from the color of its exterior to the quality of the finishes inside. If you feel as though a particular piece of unsolicited advice may be helpful, by all means, cull that wisdom. Fortunately, though, you can simply ignore anything else. You’re the one who’ll be living there and paying the mortgage. Ultimately, the only person you need to please when you pick your house is you.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Buying A Home 2018: Purchase In Winter Or Wait Until Spring?

Buying A Home 2018

The New Year has arrived, and if you’re looking for a house, you might be down to the wire. Should you go all in and purchase now or wait until the spring?

There are multiple things to consider before purchasing a house; location, square footage, and style are just three of the many factors. Whether or not to buy a home during the winter or wait until the spring is something to consider, as well. Here are six reasons why it might be beneficial to buy before the flowers start to bloom.

You Face Less Competition in the Winter

Most Americans look for houses in the spring and buy in the summer. Approximately 50 percent of all homes are sold during the summer months. Why? Well, many people prefer to close on a home purchase and move when the children are out of school. That way, they’re established in the new house by the time the new school year starts. Many people also prefer to look when the weather is warmer and there is more daylight in the evening.

As a result, if you purchase in the winter, there will be less competition. Fewer buyers will be out there looking, so you’ll likely face less of a bidding war. Many people also want to close during the winter, as the spring market starts very early in the year.

Sellers Are Likely to Be Motivated

Because the majority of buyers purchase in the summer, sellers may be more motivated in the winter. This is especially true if they need to be out of the house due to a job relocation or other consideration with a specific time frame. A motivated seller is good news for a buyer. You can get them to sweeten the deal, either by coming down on the asking price or throwing in some goodies.

Does it look like the stove or refrigerator may need replacing soon, for example? You can ask the seller to purchase a new one as a condition of your purchase. The same goes for a number of other things you might have to upgrade or replace soon.

Interest Rates Are Likely to Rise Next Year

Interest rates, of course, have a large impact on your house payments. The higher the interest rate, the higher the payment will be. While the direction of interest rates is never certain, many observers think that interest rates will rise some time next year. The U.S. Federal Reserve, the government body that sets interest rates, meets several times per year. Not only that, but they meet multiple times a year and tend to hike interest rates in a strong economy to prevent inflation. They could raise interest rates several times next year. In other words, the sooner you buy, the lower the interest rate you can lock in is likely to be.

Housing Prices Are Climbing

In general, housing prices have been climbing steadily over the past several years in most areas of the country. That trend is expected to continue, fueled by the strong economy. If it does, housing prices are likely to be higher by the spring.

Each region and area varies, of course. It’s always wise to check the direction of housing prices in the location you want to buy in by contacting your real estate agent.

Inventory Shrinks in the Winter

Because fewer people look in the winter, many real estate agents and sellers act accordingly. They remove houses from the listing market in the winter, waiting for spring to come. There are approximately 10 percent fewer houses on the market in the winter.

You may have fewer housing options if you’re looking in the winter, but you can ask your real estate agent if they know of any homes that were on the market but withdrawn by sellers. If the sellers are planning on putting their homes on the market as spring approaches, you could be the early bird.

Should you purchase a home now or wait until it starts to get warmer outside? There are many things to think about. The decision depends on what is best for you and the home of your dreams. Happy hunting, in whatever year you choose!

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Home Buying: 6 Big Ways To Completely Botch The Purchase Process

The Home Buying Process

When home buying, don’t botch the purchase process.

We all make careless mistakes, accidentally undertip the waiter, lock our keys in the car, wear white after Labor Day, or press “send all.” It happens to the best of us.

But some little mistakes can create big problems, like when you’re buying a home.

A house, after all, is a huge purchase; the stakes are extremely high. With that kind of money on the line, you’d better be darn sure you can navigate the home-buying process without a hitch. And avoid self-sabotage!

To help you out, we’ve pinpointed six common ways home buyers botch their property-purchasing prospects so you can sidestep these snafus at all costs.

1. Flying solo
If this isn’t your first time on the home-buying merry-go-round, you might think: Why hire a real estate agent to hold your hand? Well, first, let us remind you: It’s generally free to use a buyer’s agent, because the seller typically pays the commission for both the seller’s agent and the buyer’s agent. And whether it’s your first home or your fifth, you probably want a professional to help guide you through the often-tricky process of writing an offer, negotiating with the seller, and making sure the deal is up to snuff.

Without an agent, you’ll soon be drowning in paperwork and at risk of making a whole bunch of costly mistakes, warns Jennifer Baxter, associate broker at Re/Max Regency in Suwanee, GA.

To find a real estate agent in your area, use online tools such as realtor.com®’s Find a Realtor search, which will give you useful info such as the Realtor®’s number of years of job experience, number of homes sold, and the price of homes typically dealt with.

2. Saying too much—and undercutting your negotiating power
Be careful what you say when you’re viewing a property at an open house or home showing, Baxter warns. For instance, if the listing agent hears you say to your spouse, “I love this house, and it’s way under our budget,” the seller might try to play hardball when you try to negotiate on price. Keep private conversations private.

3. Waiting too long to make your earnest money deposit
The sales contract will specifically state when you need to cough up the earnest money deposit, which is cash you provide upfront to show the seller that you’re serious about buying the property (the typical amount is 3% to 5% of the sales price of the house).

How much time you have to provide the deposit can vary by state. For example, in Virginia the deposit must occur within five business banking days after ratification unless otherwise agreed to in writing by both parties.

“If you don’t turn in the EMD in accordance with the contract, the contract is void,” says Baxter.

Read: You can kiss the home goodbye if you dillydally for too long.

4. Not bothering to read property disclosures
Even if you plan on having a home inspection, you should still read the home seller’s property disclosures in full, advises Seth Lejeune, a real estate agent with Berkshire Hathaway in Collegeville, PA.

“Property disclosures can be long, but that’s where you’re going to find whether the seller knows if there are any pre-existing issues with the house,” Lejeune says.

Most home buyers will receive a property disclosure statement after their offer has been accepted, says Atlanta real estate agent Bill Golden.

Look for major issues like a faulty foundation, leaky roof, HVAC issues, or pest or mold infestations. If you spot something on a disclosure statement that you don’t understand or that raises concerns, have your real estate agent bring it up with the listing agent. The seller might have an explanation that puts you at ease (e.g., “We had bedbugs back in 2012 but hired an exterminator and have been free and clear ever since”). But if the issue makes you seriously question whether you want to move forward, this could be an opportunity to renegotiate the sales price to compensate for the added risk you’re taking on buying this home.

5. Damaging your credit score while you’re under contract
Unless you’re buying a house with all cash, you mortgage still has to go through underwriting to get approved. Since this process typically happens shortly before closing, you don’t want to do anything while you’re in contract that’s going to hurt your credit score. That includes buying a car, boat, or any other large purchase that has to be financed.

One less obvious mistake, however, is applying for a new credit card. Doing so—even for a store credit card like Target’s or Macy’s—triggers a hard inquiry on your credit report, which can ding your score by up to 5 points, says Beverly Harzog, a consumer credit expert and author of “The Debt Escape Plan.” That might sound like a small hit, but it could make a big difference if you’re on the cusp of qualifying for a mortgage.

6. Trusting a verbal agreement
“Some home buyers don’t realize the importance of putting everything in writing,” says Baxter. Unfortunately, that can come back to bite you, hard. For instance, let’s say a seller promises he’ll replace the water heater before closing. Well, if it’s not agreed upon in writing, the seller isn’t required to do it.

“I see this issue come up a lot when people buy new construction” and don’t use a buyer’s agent, says Baxter. “The builder’s agent is always looking out for the builder’s interests.”

This is another reason why you should work with a buyer’s agent rather than trying to muddle through this alone.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Buy A Home During The Holidays: 5 Surprisingly Smart Reasons To Do So

Buying During The Holidays

Buy A Home During The Holidays?

Turkeys and tinsel, dreidels and pumpkin pie. Yes friends, the holidays are here again, and it’s a perfect time… to buy a house?

OK, we know you’re busy enough planning family feasts and much-needed vacations while dealing with blustery weather, but hear us out. While it might seem counterintuitive to put a big-ticket item like a home on your holiday shopping list, it really does make sense.

Don’t believe us? Check out these surprisingly smart reasons to let everyone else hit the mall to buy half-off sweaters while you make the purchase of a lifetime: a new house to ring in the New Year.

1. Less competition from home buyers
Most buyers take the month off to celebrate the holidays, attend parties, host out-of-town guests and, quite frankly, avoid trudging around in inclement weather to look at houses. Or, maybe they’ve heard that this is a lousy time to buy a house. Whatever the reason, shopping for real estate at a time when fewer buyers are in the market can pay off big.

That’s because competing with multiple offers is one of the most stressful parts of the home-buying process, says Brian Wasson, a real estate broker with Center Coast Realty in Chicago.

2. Motivated (OK, desperate) home sellers
The December seller is likely to be serious and motivated—and therefore more open to negotiation. So what you might lack in choice of available homes could be balanced out by dealing with a more flexible seller.

Most sellers have a compelling reason for putting their house on the market during the holidays. (Let’s face it: It’s no holiday party for them to have strangers wandering through their house.) They might be facing a relocation and want to get their kids settled before the new term. Or they might just be feeling some stress if they listed their home in the fall and it’s still languishing post–Turkey Day, making them just a little more desperate and anxious to deal.

Many sellers might also want a contract in hand for tax advantages. If it’s a rental property on which they incurred a loss, they are likely to want to take the deduction this calendar year, Wasson says.

Another tax-related reason: If sellers are likely to make a hefty profit and have a salary raise set to kick in on Jan. 1, they might be subject to a higher capital gains tax on their home sale in the coming year. In this scenario, sellers may want to unload a property before the new year.

Sellers are exempt from paying capital gains tax on the first $250,000 in proceeds from a home sale for a single person, or $500,000 for a couple. After that, the capital gains tax kicks in, based on their income bracket.

3. Tax advantages
In case you weren’t aware, the tax benefits go both ways, notes Realtor® Al Cannistra with Texas Premier Realty in San Antonio. If you buy now it can help you save in April and beyond. Homeownership brings numerous tax perks, from deducting mortgage interest to property taxes. (Update: The House of Representatives just passed its version of the GOP proposed tax plan, which would cap the property tax deduction at $10,000. The House bill also would only allow homeowners to deduct the interest on mortgages up to $500,000, down from the current $1 million.)

Some states also might have a homeowner’s tax exemption, says Cannistra: “If your state does, closing the deal by Dec. 31 rather than waiting for the first week of the new year can make a year’s difference in whether or not you get that valuable tax savings.”

Also, many closing fees are tax-deductible if you itemize—although you should always double-check with your accountant about any tax questions.

4. A realistic picture of the house
What house doesn’t look amazing in the typical spring buying season, with newly planted flowers and plenty of sunlight streaming through the windows? Checking it out during the miserable winter season, on the other hand, might give you a more accurate idea of what you might be living with the rest of the year.

In addition to seeing the house, warts and all, you can check for issues that you’d notice only during cold weather.

“Maybe there’s a bedroom in the home that doesn’t get sufficient heat, or the front door gets jammed in icy conditions,” says Wasson. “Inspectors are less likely to catch these issues with the home when they check them out of season.”

Of course, don’t forget that issues that crop up more during summer will be less accessible—such as how well the air conditioning works or what the roof really looks like under all that snow and ice—so make sure that your home inspector does a thorough job on those fronts, too.

5. Greater accessibility to professionals
“Since December is usually a slower month all around, you will have easier access to movers, inspectors, and mortgage brokers,” says Jennifer Sommers with Sotheby’s International Realty in Boca Raton, FL.

In addition, motivated real estate agents will bend over backward to provide service with fewer client demands and will share your desire to get it done and in the books before the new year rolls around.  Ditto on your mortgage broker, who is bound to speed your closing through.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com