When a homeowner stops making payments on their home loan, the lender will make several inquiries to see why and try to remedy the situation. However, if the homeowner is still not making their monthly payments the lender will begin foreclosure proceedings. Shortly thereafter the owners will be instructed by the sheriff’s department to leave the property, and depending on what ‘device’ is utilized to foreclose, the lender either sells it on the open market or auctions it off on the courthouse steps. The lender may still seek recovery of the balance of the loan from the now former owner. The former owner’s credit record will be affected adversely. I have helped many people purchase foreclosed, REO and bank owned properties. Why would a home buyer be interested in a foreclosed property? Such properties are likely to be priced way below what market value should be — in other words, they can be an incredibly good deal for the home buyer. Contact me for more information.
Everything signed. All changes agreed to and initialed. The ratified purchase contract is a blueprint for what happens between the time of that final agreement and settlement. It is a process that has to be monitored and managed because there are so many other entities involved: the different settlement agent/attorneys for the buyer and seller; the lender (originator, processor, underwriter); the home inspector, the pest control and the water/septic inspectors; the appraiser; the surveyor if necessary; and possibly others (environmental inspectors, contractors, repair people, landscapers/grounds keepers, county or city officials, etc.). All these forces have to perform their function in order for the closing to take place. You hope the purchaser’s agent, if one is involved, is doing their part in keeping the purchaser on track with what they need to do to close. You, the seller, need your agent to keep your process on track too and to monitor the purchaser’s progress. This requires a lot of phone calls and a lot of running around and physically seeing that something that was supposed to be done actually got done. It is scut work. You would not consider it such as you have so much riding on it. Does it matter? What does it mean if your home doesn’t close on time? Maybe just some inconvenience. But it could amount to hundreds, even thousands of dollars if: the purchaser’s lock-in for their interest rate expires prior to closing; if moving vans and their crews are now parked on some side street waiting to unload; if you yourself are buying a new home and waiting for the proceeds of the sale of your current home to do so; and on and on.
You want to work with a real estate agent whose sense of professionalism comes from doing the right thing whether that thing is great or small. For the person relying on that professional’s service, no ‘thing’ is too small.
When an offer is made:
The offer is more than just a price. There are a number of criteria, conditions, and warranties contained in the purchase contract plus what the purchaser may be adding. We need to go over all of that to make certain it all works for you. In a very real sense the offer is like a formula, and the so-called give & take of negotiating is balancing out the elements of the formula so that both parties can feel satisfied with the final result.
Some important considerations to keep in mind:
- Is the price being offered all cash or mostly financed, and is the purchaser asking for some contribution from you towards his/her financing?
- How much earnest money is the purchaser putting down?
- Does the closing date work for you?
- Does the purchaser have to sell his/her home or sublet a rental in order to purchase your home?
- Did they submit with their offer a loan qualifying letter from a reputable lender stating their ability to make the purchase?
There are many other considerations to keep in mind when reviewing a purchase offer on your home. Do so carefully. The final result is a ratified contract.
When an offer is made:
Your home is your product and understanding its unique selling benefits is critical. This is more than just ‘3 bedrooms, 2 bathroom, 1800 fin.sq.ft., move in condition, a must see!’or any of the other euphemisms you see in home-for-sale advertising. Price has to fit the product and the location. What did other homes in your area sell for? How long on market? Were there price reductions? How do those homes compare to your home? What is the real estate market trend in your area, up or down? What is the condition of your home and how should that be reflected in the price? Did you spend a whole lot of money renovating your home way beyond the value of your neighborhood? A good real estate agent has access to recorded information in the MLS database, tax records, and other sources to help you answer these important questions.
Promotion is key. It is advertising, but remember that advertising is ‘information’. Expressing the unique selling benefits of your home and its location will ‘tickle’ the curiosity of potential buyers, maybe just several people out of hundreds, and inspire them to come look at your home. Words count! Realtor euphemisms don’t, as purchasers looking at properties quickly become jaded about homes described as: ‘must see, best buy, like new, move-in condition, honey pull over I found it, exclusive, great neighborhood, handiman special (maybe ‘knock down special’ should be used here)’, etc.
Your neighborhood or the general location of your home has unique selling benefits too. Purchasers who are not familiar with the area want some hint of what it is like. Those who are familiar may be pleased if you tell them something new
And standard sales (where the property is not in jeopardy of being foreclosed upon and is not a short sale) can be advantageous too. People who purchased their home before the housing bubble may have a lot of equity in that home. When putting it on the market for sale they can price it competitively with distressed sales. Knowing the market is what helps to discern these good buys.
The internet has made information about homes for sale available to anyone who has use of a computer. There are many internet-based ‘homes for sale’ listing services, however, the best service is still Realtor Associations Multiple Listing Service. Most of these have a public access so anyone can enter search criteria and see corresponding homes for sale. If your home is listed there, it has the potential to be seen by many hundreds, maybe thousands, of home seekers.
Finding A Home To Buy:
Central Virginia is a BIG area of the state. Albemarle, Greene, Louisa, Madison, Orange, Fluvanna, Buckingham, Nelson, Amherst , Augusta Counties… The City of Charlottesville and the towns of Ruckersville, Scottsville, Crozet, Madison, Palmyra, Lovingston, Nellysford… And lots of place names like Dyke, Nortonsville, Howardsville, Wintergreen, Belmont, Lake Monticello, Blue Ridge Shores… And many developments: Glenmore, Forest Lakes, Trailridge, Poplar Glen, Mill Creek, Lake Reynovia, and on and on.
Even if you lived here for a while you won’t know every location. But you may have a good idea about where you want to be and what you are looking for. An older home, a newer home or a historic home; renovated, a fixer-upper, or new construction; single family with a big yard or a small yard, an attached home or a condo (be careful about the latter); a farm or horse property; amenities & association fees… There’s lots to choose from and to think about.
If you are relocating here and are not real familiar with the area you will want to consider: why are you coming here (work, education, retirement), and how does that affect your decision of what type of property to purchase and its location?
Even if you already live here, let’s get in the car and talk while we’re seeing some properties. I can search for properties (listed by all realty companies & FSBO sites) based on your early assessment of what you want to buy, what you want to spend, and where you want to be. I refer to this as “doing homework”. As you see the different homes and their prices, condition and locations, you will start to refine your ideas about what you want and where you want it and what you can expect to pay for it. You will be developing a sense of the market. I can tell you a lot about the market, and I can show you the MLS sales record and the public tax record which is all very good information, but you setting your eyes on properties and locations is what makes it all real. Let’s get in the car and go see some properties.
And if you are not familiar with central Virginia, let’s cover some territory. Say you are taking a job at the university and you’d prefer no more than a 20 minute commute to work. A 20 minute driving time radius out from your work place at UVA covers a big territory. If you are unsure about where within that territory you want to be, the only way to find out is to get in the car and tour the area. And we’ll stop to see some properties along the way so you get a good idea about locations, property types and prices. Let’s get in the car and see some properties!
Most mortgage loans today are structured around the individual borrower. In other words there isn’t much of a ‘rule of thumb’ any longer. There are many different loan products that can serve a variety of needs. There are also a number of web-based and remote lenders to choose from. The choice is yours to make, but it needs to be an informed choice. Do not be lured by promises of low interest rates and low lender fees. No lender lends money for free. What is given with one hand is usually taken back with the other, and at settlement when your attorney or settlement agent goes over the HUD settlement form with you, indeed there are no application fees or discount points. Instead you will find ‘wire service fees’, ‘money warehousing fees’, ‘document processing fees’, etc, etc, etc. Indeed most loans will come with fees other than just discount points and origination fees. Ask for the “Good Faith Estimate” of the transaction. By law, this has to be close to the reality you see at the closing table. And that LOW interest rate they advertise to get you in their office… You’ll find that rate is offered only to their most qualified borrowers.
Now let me say this, there are many lenders who are honest, straightforward, hard working and well serving. I find that many of my buyer clients who are shopping around for a mortgage product end up choosing a lender not based on the rate or fees (the straight-up lender’s products will all be fairly close) but on the personality of the person they talk to. They like that lender and feel comfortable working with him or her.
And I think it is a good idea to work with a local mortgage loan lender or broker. You can walk into that person’s office and see him or her face to face. The meaning of that will only dawn on you if you deal with a web-based or distant lender. Do be aware that underwriting may take place somewhere else and you may not see or communicate with the loan processors or underwriter, but your local lender will be known to them. Also consider that a local lender wants you and I to refer future business to him or her. That person will want you and I to be happy with the service you get.
Now just a quick word of advice in the event you are planning to purchase a home in the near future: Don’t make any big purchases (i.e., a new car, appliances, trips, etc. – anything that will show up on your credit record).
If you have debt that can be comfortably eliminated, do so. Your credit report may show debt that you have already paid off. You can generally get those items removed from your credit report fairly easily.
100 per cent loans are hard to get now. You will need money for down payment and closing costs. You will also need money for an earnest money deposit, a check that you will write at the time you make an offer on a property. The earnest money is applied towards your closing costs or the sales price of the home – it works for you dollar for dollar, and you will see it reflected on the HUD statement at settlement. You can ask the seller to pay some of your closing costs, but be aware that if the price of the home is reasonable to begin with, the seller will not want to give up very much.
I can give you the names and contact information for a number of mortgage loan brokers I have worked with in the past who are excellent. Just let me know.
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DRAMATIC PRICE REDUCTION!
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