Monthly Archives: March 2016

Mar 31

Just What Exactly Is A Closing?

By Antoinette Johnson | Uncategorized

In light of the home buyer workshop that we are having this Saturday, I thought I would talk about what exactly a closing is.  As the name suggests a closing or settlement happens at the very end of the home buying process.

Closings as I am sure some of you know involve loads of paperwork, including the deed, which grants legal rights and is signed by the seller and given to the buyer. The deed will then be registered with the city or county in order to protect the ownership rights of the new owner. Keys are also given from the seller to the buyer. Finally, the seller will get a check for the net proceeds of the transaction; the sales price minus closing costs and what they owe on their original loan, if anything.

The details of the financial transactions that occur at closing are summarized in a document known as the HUD-1 Settlement Statement.

As a home buyer, your real estate agent and loan officer should provide plenty of coaching on what to bring to your closing. In most cases, you’ll need:
1. The big check. A cashier’s check (not a personal check) for the total amount due on the HUD-1 Settlement statement. This includes your down payment and closing costs.
2. Your checkbook. You’ll want to be able to cover any last minute changes (although hopefully there won’t be any). You may also need to cut the seller a check for items that aren’t included in the settlement, such as any heating oil left in the tank.
3. Your full attention. There are a lot of intimidating legal documents to sign at a closing, and it’s important not to glaze over. Do take the time to read before you sign. Don’t be afraid to ask for clarification if there’s anything you don’t understand.

I have found that no one really wants to ask what really happens at settlement or what closing costs are so I thought a post about it would be beneficial.  If any of you have any questions or settlement stories please feel free to write them in the comment section below!

 

Mar 24

Home Buyer Workshop!

By Antoinette Johnson | Uncategorized

My brokerage is having its first Home Buyer Workshop of the New Year and I wanted to invite all of you to attend. It is being held this Saturday, April 2nd @ 10 a.m. at our office.  The office address is 10461 Mill Run Circle, Owings Mills, Maryland 21117.  Buyers who attended the workshops last year definitely received a lot of information not only about what I do as a Realtor but also about the financial side.

This Saturday we will talk about the:

  1. Loan Qualification Process
  2. Grant Programs
  3. Home Shopping Process
  4. Offer Submission
  5. Owner Responsibilities

Anyone who comes will also be able to get On-Site Pre-Approvals as well as First-Time Buyer Incentives and Discounted Title Services.  You can call 410-205-1360 to register and use the code Approved to get a free one-on-one consult! I really love meeting people in the community and giving back so this really is one of my favorite things that we do every year. I look forward to meeting some of you on Saturday and if you can’t come this Saturday don’t worry because we will be having one every month for the entire summer!

Mar 14

Lets Go Over Earnest Money Deposits

By Antoinette Johnson | Uncategorized

In an ideal world, if you found the home of your dreams, you and the owner could sign a purchase contract, followed by a handshake and, later, your down payment. In the real world, in order to prove your offer to purchase a property is “earnest,” or “in good faith,” you need to put money on the table as soon as the ink of your signature dries on the purchase contract.

This earnest money deposit is a fraction of your down payment which indicates the buyer’s intent and willingness to execute the agreements laid out in the contract with the seller. The buyer usually pays it in the form of a personal or certified check issued to the real estate brokerage of choice. The deposit will be held in an escrow account, a type of trust fund controlled by both the seller and the buyer, until you successfully complete the closing.

Earnest payment amounts vary widely. The attractiveness of the home’s sales price, the level of interest others have expressed in the property, and how quickly a prospective buyer can move from contract to closing can all influence the sum a seller may request as an earnest money deposit.

Once the seller and the buyer both have signed the contract, the buyer should issue a check for his earnest money deposit to an escrow account, which is held by a real estate brokerage. That means you make out your check to a real estate brokerage, not an individual.

State real estate laws strictly regulate how real estate brokers conduct and manage these separate, professional escrow accounts. Brokers are not allowed to deposit any earnest monies in their own business bank accounts.

Nevertheless, make sure to request a receipt for any earnest money handed over to a real estate agent or a brokerage. It should come in the form of a copy of the check on the brokerage’s letterhead along with a signature of the person accepting the check’s delivery and the date and location the check was received. If you’re in a hurry to close on your purchase, be aware that a quick closing date requires a certified check for earnest money.

It’s important to know that this earnest money deposit is not an extra cost of buying a home. It will be credited towards the down payment at closing, and in case it exceeds your mortgage down payment, you will receive the balance at closing.

As always I hope this post helps answer some questions you might have had about the earnest money deposit! Feel free to leave stories or ask questions in the comment section below.

Mar 04

More Real Estate Tips For Buyers And Sellers!

By Antoinette Johnson | Uncategorized

Hey Guys! I try to use my experience in Real Estate to help you avoid some of the most common pitfalls that customers encounter during a Real Estate Transaction.  This article will be similar in that I will outline some key points that both buyers and sellers can benefit from!

1. Sellers: Know Your Hand But Don’t Over Play It

If you set a price from 5% to 10% above the market, you’re more likely to get an offer close to your home’s real value than if you start much higher and force your listing to go stale. However, if your home has better qualities than area comps, you have a bit more latitude.  Try to look at your house logically instead of emotionally!

A sale contingent on the buyers selling their home is reasonable but only with a contractual escape for you, often called a “kick-out” clause. That gives you the right to continue marketing your home. If a less-encumbered bid comes in, you then offer the initial buyers a set time of 48 or 72 hours to withdraw their contingency.

2. Buyers: Know The True Cost of Home Ownership

 

When is a $250,000 house not a $250,000 house?

Answer: Always! Consider all of these and other closing costs when buying:

  • Origination fee: On a $200,000 mortgage for a $250,000 home, assuming 3.5% interest and no points, you’d pay the lender about $1,800.
  • Home inspection: Even if the mortgage insurer doesn’t require one, get one for peace of mind.
  • Property taxes: You’ll usually pay a few months upfront.
  • Appraisal: The bank will need to determine how much the place is really worth.
  • Private mortgage insurance, or PMI: This depends on your down payment and credit rating.

Other pre-occupancy costs should include home insurance, title insurance and deed-recording fee, and possibly title insurance, survey costs, credit report fees, flood insurance and homeowners association dues/insurance.

On that $250,000 home, allow an extra $5,000 or more atop the sale price.

3. Buyers: Look For Up And Coming Neighborhoods

This might seem obvious but a home is an investment, of the biggest investments that most people make in their lives.  With that being said you should invest in a neighborhood where you see growth!

Things to look for include proximity to a new or resurgent business center, the addition of a major employer, a light-rail station, a city cleanup initiative, young people moving there, crime watch and other neighborhood groups being formed, multiple renovations underway and other up-and-coming neighborhoods abutting it.

New retailers, restaurants and other commercial tenants are also a good sign. Research by RealtyTrac shows that homes in ZIP codes that have a Trader Joe’s grocery store appreciated 40% on average since the homes were last purchased. Homes with a Whole Foods nearby appreciated 34% on average.  An example of this would be the Wegmans that is coming to Owings Mills. This will most certainly have a positive effect on the housing market in the area!

 

4. Sellers: Know Your Houses Selling Points

Upgrades rarely pay for themselves, but there are 2 spaces that can make or break a home sale: the kitchen and master bath.

Because kitchens are the heart of the home, or the “new living room,” make yours homey. Hide the coffee maker and toaster. Add simple decorative touches to the wall behind the sink.

Sure, new granite countertops and appliances are optimal, but new hardware for cabinets, new faucets, new lighting fixtures and fresh (neutral) wallpaper are inexpensive touches that carry weight. Thoroughly scour and depopulate the fridge and take magnets off it, please.

For bathrooms, always display a sparkling bathtub and commode. A new tub liner, or “shell,” can make that marred tub look like new and save you from replacing it.

A new faucet, new lights, fresh caulking, a new towel rack or new mirror may be in order. Clean out the medicine cabinet. Of course, this doesn’t mean you shouldn’t declutter, depersonalize, paint and scrub the rest of your space, too.

Some of this I have mentioned before in previous blog posts but it never hurts to repeat good advice! I also want to stress that your Realtor should be advising you on all of these things and more so make sure that they bring all of this up.  As always please feel free to leave tips below or even topics that you would like me to talk about!