'Deal's Not Done' With Just a Signature

By Dian Hymer (Inman News)

For most buyers, finding the right home to buy and successfully negotiating the purchase is the most arduous part of the home-buying process. When you've made it that far, it's cause for celebration. However, the deal's not done when the sellers sign the contract.

Although real estate customs and practices vary from one area to the next, there are certain basics that must be dealt with before you can call the property yours. Ask your real estate agent to provide you with a written summary of the critical contract dates that you need to be aware of, as well as the names and phone numbers of the various service providers you'll be working with.

One of the first things to occur after the contract is accepted is that the buyer's deposit money is put into an escrow or trust account pending the closing. The check is cashed, so make sure that you have enough money in your bank account to cover the check. If not, let your agent know that you need to transfer funds before the check is cashed.

Most contracts include contingencies that must be satisfied for the sale to go through. The most common contingency is an inspection contingency. As soon as possible you should arrange for a home inspection and any other inspections that are indicated. The purchase contract should specify how many days you have to complete inspections. It's often within seven to 14 days of contract acceptance.

Also plan to get estimates to repair any significant defects. This will help if there are further negotiations with the seller based on inspection findings.

While completing inspections, you should also be working on your financing and lining up insurance coverage for the property. A lender won't issue a mortgage unless you have insurance coverage to protect the lender's interest in the property.

Recently, some buyers have had difficulty arranging insurance. So, don't wait until the last minute. If you run into problems, find out who currently insures the property for the seller. This insurer might be willing to cover the property for you.

For more information and to view recent property listings, please visit www.byownermls.com.

Closing Costs Expected When Purchasing Your Home

• Lender fees include charges for loan processing, underwriting, preparation and establishing an escrow account.
• Third-party fees include charges for insurance, title search, and other inspections such as termites.
• Government fees include deed recording and state & local mortgage taxes.
• Escrow and interest fees include homeowner's insurance, loan interest, real estate taxes, and occasionally private mortgage insurance.

For more information and to view recent property listings, please visit www.byownermls.com.

Why a Home Inspection???

by Robert Irwin, (www.robertirwin.com)

Home sellers across the country are almost always faced with buyers' demands for a professional inspection of their home. Many sellers resent this. They feel their home is their castle and they don't like the idea of someone poking around in it. Further, an inspector might turn up something that would cause the buyers to reduce their price, or even back out of the deal. So, why should a seller allow a professional home inspection?

In reality, I don't know of any laws that require professional home inspections. Rather, the demand for it by buyers has come about because of abuses that have taken place in the past. Years ago sellers might plaster over cracks in walls and foundations that could indicate structural damage. They might paint over telltale signs of water damage in basements. They would only show the home in the summer dry season when leaks in the roof weren't evident. In short, the game was "caveat emptor," let the buyer beware.

However, as prices on properties skyrocketed over the past 25 years or so, buyers began to hit back. Their argument was that a property with an undisclosed defect wasn't worth the full price they were paying. Rather, it was worth less. They sued sellers and agents over this and the resulting litigation led to disclosure requirements for sellers' and buyers' inspections by professionals to help assess a property's true condition.

DON'T FRET ABOUT INSPECTIONS

Whether you are selling through an agent or by owner, the buyers will want a professional inspection of their home. This is actually to your advantage. (If the buyers don't request an inspection, I suggest you insist they have one!)

The reason is your liability for an unknown defect. If buyers hire and pay for their own professional inspector to come in and check over the property and he or she doesn't find anything, it's much harder for that buyer to later come back after the sale and say that there was a defect that makes the property worth less (and demand that you pay to have it fixed, pay damages, or take the property back). You can always say, "If your inspector didn't find it, how should I know about it?"

Of course, inspectors generally only can see accessible areas, which is very limiting. And having an inspection does not relieve the sellers of disclosing any known defects. Nevertheless, a professional inspection goes a long way toward helping to protect you, the seller.

TIP

Beware of buyers who use an inspection to try to force you to lower your price. Sometimes an inspection will reveal a few cracks in the foundation or perhaps a few leaks in the roof. Suddenly, the buyers want you to lower your price tens of thousands of dollars to compensate them for these defects.

Don't panic. Call in an engineer to assess the cracks, a roofer to check it out. It might turn out to be nothing, or at the most, something that can be repaired for a few hundred dollars. Sometimes you can fix it yourself, or give the buyer a sum of money to cover repairing it after the sale.

What you need to be wary of are buyers who aren't really interested in getting the problem fixed, but who just want to use it as a wedge to get you take a huge chunk out of your price. Sometimes it's better to find a better buyer.

ABOUT ROBERT IRWIN

Robert Irwin is the most prolific real estate writer in America having produced over 100 published books in the field. His TIPS & TRAPS McGraw-Hill series has sold well over a million copies and his FOR SALE BY OWNER KIT and FIND IT, BUY IT, FIX IT and other books have been strong sellers for Dearborn.

For more information and to view recent property listings, please visit www.byownermls.com.

Cosigning a Loan?

What would you do if a friend or relative asked you to cosign a loan? Before you answer, make sure you understand what cosigning involves. Under federal law, creditors are required to give you a notice that explains your obligations.

The cosigner's notice states:

* You are being asked to guarantee this debt. Think carefully before you do. If the borrower does not pay the debt, you will have to. Be sure you can afford to pay if you have to, and that you want to accept this responsibility.
* You may have to pay up to the full amount of the debt if the borrower does not pay. You may also have to pay late fees or collection costs, which increase this amount.
* The creditor can collect this debt from you without first trying to collect from the borrower.* The creditor can use the same collection methods against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt is ever in default, that fact may become a part of your credit record.
* This notice is not the contract that makes you liable for the debt.

* Laws in your state may forbid a creditor from collecting from a cosigner without first trying to collect from the primary debtor.

Cosigners Often Pay

Studies of certain types of lenders show that for cosigned loans that go into default, as many as three out of four cosigners are asked to repay the loan. When you're asked to cosign, you're being asked to take a risk that a professional lender won't take. If the borrower met the criteria, the lender wouldn't require a cosigner.

In most states, if you cosign and your friend or relative misses a payment, the lender can immediately collect from you without first pursuing the borrower. In addition, the amount you owe may be increased by late charges or by attorneys fees if the lender decides to sue to collect. If the lender wins the case, your wages and property may be taken.

If You Do Cosign

Despite the risks, there may be times when you want to cosign. Your child may need a first loan, or a close friend may need help. Before you cosign, consider this information:

* Be sure you can afford to pay the loan. If you're asked to pay and can't, you could be sued or your credit rating could be damaged.

* Even if you're not asked to repay the debt, your liability for the loan may keep you from getting other credit because creditors will consider the cosigned loan as one of your obligations.

* Before you pledge property to secure the loan, such as your car or furniture, make sure you understand the consequences. If the borrower defaults, you could lose these items.

* Ask the lender to calculate the amount of money you might owe. The lender isn't required to do this, but may if asked. You also may be able to negotiate the specific terms of your obligation. For example, you may want to limit your liability to the principal on the loan, and not include late charges, court costs, or attorneys' fees. In this case, ask the lender to include a statement in the contract similar to: "The cosigner will be responsible only for the principal balance on this loan at the time of default."

* Ask the lender to agree, in writing, to notify you if the borrower misses a payment. That will give you time to deal with the problem or make back payments without having to repay the entire amount immediately.

* Make sure you get copies of all important papers, such as the loan contract, the Truth-in-Lending Disclosure Statement, and warranties, if you're cosigning for a purchase. You may need these documents if there's a dispute between the borrower and the seller. The lender is not required to give you these papers; you may have to get copies from the borrower.

* Check your state law for additional cosigner rights.

For more information and to view recent property listings, please visit www.byownermls.com.

May/June 2007 Market Watch

From the Florida Realtors - www.floridarealtors.org

National existing home sales:
* -2.6%
National existing home median price
* $212,300
National (Freddie Mac) mortgage rate
* 6.42%
Florida existing home sales:
* -26%
Florida existing condo sales:
* -19%
Florida existing home median price:
* $237,800
Florida existing condo median price:
* $215,500
Florida consumer confidence:
* 86

For more information and to view recent property listings, please visit www.byownermls.com.

Helping those facing foreclosure is better than dealing with effects

Posting author by Michelle Singletary
Washington Post Finance Columnist (April 30 2007)

WASHINGTON · Home foreclosures are up, in part because of defaults on riskier subprime loans, putting many communities at risk. But, if past surveys continue to prove true, many financially troubled homeowners will never contact their lenders to work out a way to keep their homes.

Foreclosure filings, which include default and auction sale notices and bank repossessions, were up 7 percent in March from the previous month, and up 47 percent from a year ago, according to the Web site RealtyTrac, which follows foreclosures.

California, Florida, Texas, Michigan and Ohio had the most foreclosure filings, accounting for 50 percent of the nation's total foreclosures, RealtyTrac found.

RealtyTrac says that when you exclude mortgage defaults among subprime borrowers -- typically people with past credit issues -- foreclosure filings nationwide are at normal historic levels. However, if foreclosure activity continues to accelerate, we could see "widespread consequences" for all of us, RealtyTrac concluded.

Some steps have already been taken to help people in danger of losing their homes. Neighborhood Assistance Corporation of America, a housing advocacy group, said it has received funding from Citigroup and Bank of America to assist borrowers in refinancing $1 billion in mortgages. Freddie Mac and Fannie Mae, two of the nation's largest mortgage investors, announced plans that would help lenders refinance subprime mortgages held by strapped homeowners.

For more information and to view recent property listings, please visit www.byownermls.com.

Enhancing Your Home's Curb Appeal

Once you have identified and addressed your trouble areas, you can then focus on items that enhance your homes curb appeal. Even with a limited budget your can greatly enhance your homes visual appeal by focusing on a few key areas. Items you may consider include:

• Adding colorful seasonal plants to existing flower beds.
• Purchasing new house address numbers and mailbox.
• Installing a new door with glass inserts.
• Placing a new welcome mat and a grouping of potted plants at the entrance.
• Installing lighting along your driveway or sidewalk.

Photographing Your Home's Curb Appeal Make sure the photographer takes the best pictures. Great pictures of your home increases your changes of a successful sale. According to the National Association of Realtors, 70 percent of home buyers view a home for the first time from a picture on the Internet. Most Internet shoppers will skip listings with no pictures, and many will skip listings that only have a few pictures. If a picture is worth a thousand words, then what is 20 or more pictures worth?

Here are few tips from professional real estate photographers:

• Make sure your lawn is mowed and edged.
• Remove cars, pets, and toys before shooting.
• Request shots from multiple angles and levels.
• Find angles that show most of your property without looking cluttered or untidy by the surrounding landscape. Relay this information to the photographer.
• Include as much as of the front lawn and landscape as possible. If your lawn or landscape is not at its best, request the photographer shoot from an angle that includes more sky.

For more information and to view recent property listings, please visit www.byownermls.com.

Real Estate Market Watch for June 2007

Stricter lending standards and a decline in a subprime mortgage originations have contributed to somewhat lowered expectations for existing home sales in NAR's latest housing market outlook, compared with its earlier forecasts.

• Existing-home sales are likely to total 6.29 million this year and 6.49 million in 2008, compared with 6.48 million last year.
• New-home sales, projected at 864,000 in 2007 and 936,000 next year, will be lower than the 1.05 million recorded in 2006.
• Housing starts should total 1.46 million units this year and 1.52 million in 2008, down from 1.80 million last year.
• The national median existing-home price is forecast to slip 1% to $219,800 this year, and then rise 1.4% in 2008. The median new-home price is expected to be essentially unchanged at $246,400 in 2007, and then rise 2.2% next year. "If it weren't for a favorable economic backdrop, housing would probably have a hard landing," says NAR Senior Economist Lawrence Yun. "As it is, we see this as a soft landing with home sales rising gradually in the second half of the year and prices recovering a bit later."

For more information and to view recent property listings, please visit www.byownermls.com.