What to Offer

What to Offer

A can help you find your dream home, but only you can decide how much you are want to offer for it. The REALTOR® can supply you with information about the selling prices and marketing time of other houses in the area.

Once you have decided the amount you are willing to offer, the REALTOR® will help you prepare a written offer. In most transactions you will offer to deposit earnest money with the escrow agent. Earnest money manifests your sincerity in making a reasonable offer and abiding by the terms of the written contract.

Contract forms

Your REALTOR® will help you write an offer using standard forms. The offer, if accepted, will become a binding contract. This document is the most important paper you will sign because it lays out all the terms of the transaction. It will contain such things as:

a legal description of the property,
any property that will be transferred with the home, (blinds, curtains, fireplace screens, etc.) the price, financing conditions and contingencies, amount of earnest money deposit, name of the escrow agent and title company, proration of insurance, taxes, and interest, fees to be paid and who pays for which, rights to inspect the property and for repairs to be made, dates of closing and possession, and what happens if either party defaults on the contract.

Inspections and warranties
Before signing the contract, take precautions to protect yourself against unseen defects in the home. An inspection by a qualified inspector or other professional can provide you with unbiased opinions about the condition of components and systems in the property such as the foundation, mechanical systems, plumbing systems, appliances, etc.

If you can, accompany the inspector at the time the inspection is conducted. When ordering the inspection, ask the inspector the approximate time needed to complete the inspection so you can reserve sufficient time from your schedule. Be sure to ask the inspector to detail the scope of the inspection. Not every inspector inspects every component in a house. For example, does the inspector inspect foundations, air conditioning and heating units, roofs, swimming pools, septic tanks, etc.? The cost of home inspection depends on the size of the home, but the price could prove to be worth it. It’s also a good idea to get a termite and other wood destroying insect inspection.

You may also want to investigate the possibility of buying a residential service contract. Such a contract is an agreement with a residential service company that certain items will be repaired by the company if such items fail to function after you move in. If you buy a new home, the builder may offer a warranty as well. Whether you buy a residential service contract or receive any other warranty, find out how claims will be processed and how any necessary repairs will be made.

Seller’s options
The REALTOR® working with you will present the contract to the seller’s agent or seller. The seller has three options: accept, reject or make a counter offer. A counter offer is a rejection of the offer with a simultaneous offer from the seller to the buyer. If a seller makes a counter offer to you, you then have three options: accept, reject, or make another counter offer. Whoever makes an offer or counter offer is giving the power of acceptance to the recipient of the offer or counter offer.

Binding contract
Once you and the seller unequivocally agree to the written terms and both of you sign, the document becomes a binding contract.

As part of the contract you may have the right to have the property inspected and certain repairs may be required to be completed. Be sure that you pay close attention as to when certain items must be completed. Otherwise, you may waive some contractual rights. For example, the contract may provide for you to deliver a copy of the inspection report to the seller within a specified time and to deliver a list of the items you require to be repaired. If you fail to provide the information within the specified time, the contract may provide that you waived certain rights.

The contract may also set out other contingencies that have to be satisfied. We cannot address all conditions and contingencies. Read the contract carefully, know its terms and comply with its requirements timely.

If repairs are required, the contract will specify who will bear the cost of the repairs, who will arrange for the repairs, and when the repairs must be made. Before you close, be sure that the condition of the property meets the required condition specified in the contract.

Chris Casmirri, Broker Assoc/Realtor® Keller Williams Elite Realty - chriscasmirri@comcast.net - www.chriscasmirri.com

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Relocation Timeline

Relocation Timeline

About one month away from your move, you’ll want a detailed checklist to make sure nothing is forgotten.

Four weeks to go:

Call moving companies for a free estimate. Cost will vary depending on distance, weight and optional services.
Look through your house to determine items to be discarded or donated to charity. Have a garage sale!
Inform schools of transfer. Make arrangements for enrollment/registration in new schools if necessary.
Most homeowner’s policies do not provide adequate coverage for moving. Check with your agent and consider purchasing additional coverage from a moving company.
Begin collecting boxes with covers if you plan to pack your belongings. You can purchase packing materials through moving companies or contact local grocery stores for extra boxes. Be sure to stock up on packing tape!
Begin consuming perishable and frozen food items to minimize waste.
Three weeks to go:

Begin packing!
Notify the post office of your new address and send change of address cards to friends, family, subscriptions and any billing companies.
Make necessary travel arrangements including interim housing and car rental. Be sure to record confirmation numbers.
Collect medical records and prescriptions from physicians. Ask for recommendations for doctors in your new area.
Place legal, medical and insurance records in a safe and accessible place.
Two weeks to go:

Arrange to disconnect utilities/services in your current residence and coordinate installation of utilities/services in your new home.
Close/transfer bank accounts and open accounts in your new city.
Take pets to the vet for immunizations. Ask for advice on moving animals.
Draw a map of your new home and where the furniture will be arranged.
Return library books and any borrowed items.
Be sure to cancel newspaper subscriptions and/or any special services you have (i.e., landscaping/lawn service, snow plow, etc.).
One week to go:

Prepare car for the trip. Check the oil, tires, brakes, etc.
Drain water from hoses.
Drain gasoline and oil from any lawn or power equipment.
Remember to pick up items sent to the cleaners or for repairs.
Days before:

Defrost and clean out refrigerator
Pack your luggage and separate any items you will need in the first days in your new home (i.e., a current telephone directory - you may need to refer to it for calls to residents or businesses in your former hometown). Label these boxes “Load Last.”
Reconfirm travel arrangements.
Reserve ample parking space for the movers and provide clear paths inside the house.
The Big Day!

Be on hand to answer any questions.
Go over your inventory with the driver.
Be sure to point out all FRAGILE items to the movers.
Check, double check and triple check to see if anything is left behind!
Do not leave the house until the movers are gone.
A Few More Moving Thoughts:

Moving your computer - Make copies of all your files and software. If possible, pack your computer, monitor, and printer in their original boxes. If not, ask a moving company for boxes made especially for computers.

Packing supplies - have 1.5″ packing tape, thick markers, packing pellets, scissors, labels, tissue paper, newspaper and blankets on hand.

Inventory - Review inventory list.

Pack photographs between sheets and blankets in boxes for added protection.

At your destination consider hooking up the TV and VCR to occupy children until the truck is unloaded.

Enjoy your new home!

Chris Casmirri, Broker Assoc/Realtor® Keller Williams Elite Realty - chriscasmirri@comcast.net - www.chriscasmirri.com

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The Offer

The Offer

When a buyer makes an offer to purchase your home, your REALTOR® will contact you promptly. The REALTOR® will scrutinize the document, review it with you carefully, and answer your questions. The written offer is important because it lays out all the terms of the proposed transaction and will become a binding contract if you sign it. The offer states the price the buyer is willing to pay and the financing terms, such as assuming your loan or arranging a new loan.

The offer may be contingent on the buyer’s selling a home first, or obtaining an inspection. Ask the REALTOR® how these terms affect you and whether the offer is reasonable and in line with the market. The offer describes the property, states who pays for which closing costs, and specifies dates of closing and possession. Along with making the offer, the buyer may place some earnest money with the escrow agent as a sign of good faith. The earnest money will be kept in an escrow account and applied to the buyer’s down payment or closing costs when the sale closes.

Your options
In reviewing the offer, you have three options: accept, reject, or make a counteroffer. A counteroffer is a rejection of a buyer’s offer with a simultaneous offer from you to the buyer. In making your decision, carefully review the figures compiled earlier to determine your net proceeds. Because the terms and estimated closing costs may be quite different from earlier calculations, you will want to discuss the possibilities with your REALTOR®. You are also encouraged to seek the advice of an attorney and a tax adviser.

Seller’s Disclosure
In most residential sales, a seller will deliver a Seller’s Disclosure Notice to a buyer on or before the effective date of a contract to purchase the property. The notice is required by law to be delivered. It provides important information about the seller’s knowledge of the condition of the property. Complete the notice to your best knowledge and belief. Your REALTOR® will most likely ask that you complete the notice at the time the listing is first taken. Copies of the completed notice will be made available to the prospects looking at your property.

Lead-Based Paint Disclosure
If your property was built before 1978, federal law requires that before a buyer is obligated under a contract to buy the property, the seller shall: 1) provide the buyer with a lead hazard information pamphlet (as prescribed by EPA); 2) disclose the presence of any known lead-based paint or hazard; 3) provide the buyer with a lead hazard evaluation report or records available to the seller; and 4) permit the buyer to conduct a risk assessment or inspection for the presence of lead-based paint or hazards. A contract for the sale of property built before 1978 must contain a statutorily prescribed Lead Warning Statement to the buyer. Your REALTOR® will provide you with the forms necessary to comply with their law and will suggest procedures to follow in order to comply.

Accepting the offer
Once you and the buyer agree on terms and sign the contract, the buyer will generally have to find a lender and apply for a loan. Your REALTOR® may monitor the loan process, which could last several weeks. During this time, your REALTOR® will also be busy coordinating other arrangements to prepare for the final sale.

Title search
As part of the process, the title company may order a survey of your property and research the title to your home, making sure the chain of title is clear. Clearing the title may require paying off liens - that is, any monetary claims - against your property. Examples are mechanic’s liens, unpaid state and federal tax liens, court judgments, and probate considerations (if a co-owner has died). The product of the title search can be in the form of title insurance, abstract of title, or certificate of title, depending on what is commonly used in your area.

Inspection and repairs
If the buyer requires inspections of your home, your REALTOR® may coordinate the scheduling of inspectors. A buyer may hire an inspector to review many items in the property such as the structural components, mechanical items, electrical systems and plumbing systems. The inspector will report to the buyer the items that the inspector finds to be in need of repair. Most likely the buyer will provide a copy of the inspection report to you and may ask you to complete certain repairs. Do not be surprised when the inspection notes some items in need of repair. An inspector is trained to see items and defects that are not obvious to you and your REALTOR®. No matter how new or well maintained a home is, an inspector may very well find some items in need of repair.

Chris Casmirri, Broker Assoc/Realtor® Keller Williams Elite Realty - chriscasmirri@comcast.net - www.chriscasmirri.com

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Art of Negotiation

Art of Negotiation

Everything is negotiable when buying a house. For some reason, most buyers either don’t believe it or don’t like it. Here’s a partial list of what’s negotiable when you buy a home:

Price
Financing
Closing costs (except where specified by financing or law)
Occupancy (When can you get the key and move in?)
Painting (Will the seller repaint a portion of or the entire house?)
Repairs (Will the seller repair the roof, plumbing, windows, etc., and what kind and quality of repairs will be made?)
Yard (Will the seller remove unwanted trees, bushes - put in desired landscaping?)
Fixtures (Which lights, fans, appliances, etc. stay and which go?)
Wall coverings (Do the drapes stay or go?)
Furniture (Will the seller include certain pieces?)
Prepaid taxes and insurance (Will the seller credit you with these?)
Negotiation gives the buyer incredible power in making a favorable transaction. It can also place him or her in a position of immense weakness. Negotiation can determine whether you get the home of your dreams…or whether those dreams end up being a nightmare.

Ultimately, how you fare when buying a home is going to be a direct result of your knowledge. The more you know, the better position you’ll be in to negotiate.

Chris Casmirri, Broker Assoc/Realtor® Keller Williams Elite Realty - chriscasmirri@comcast.net - www.chriscasmirri.com

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What You Want, What You Need

What You Want, What You Need

Here are some suggestions to help you prepare for your search.

Needs and wants list
Make a list of your needs and wants. Do you need an extra bathroom, a garage, a fenced backyard, lower utility bills? Do you want a fireplace, a short drive to work, a lakeside view, or maybe minimal yard work?

Once your list is made, go back over it and decide what is most important to your lifestyle. It may be privacy, creativity, or recreation. Decide which items are musts and which you are willing to give up. Assign each item a priority so that you will know what to look for as you begin house hunting.

Location
Deciding where you want to live may be the single most important factor in choosing a home. Location affects your day-to-day living. Location to employment centers, shopping centers, schools, major traffic arteries, and other attractions are important. Evaluate location carefully. Location of a property is one of the most significant influences on value.

Your choice of location may be limited somewhat by the price you can afford. Even so, make sure you consider such things as:

prices of properties and property taxes,

distance to work, schools, shopping, and entertainment,

proposed changes in land use such as commercial shopping centers and roads, and potential hazards such as flooding and noise from a nearby airport or highways.
Type of home and lot
A single-family detached home is attractive to a lot of people because it typically provides more living space and land area than other types of living units. Typically the detached structure permits you greater freedom (less restrictions) on remodeling, expanding, painting, and altering the appearances of the structure.

If you don’t like spending leisure time on yard work, consider garden or patio homes. These homes are set on small lots. Many garden home developments share common garden areas.
A condominium is another option. Condos and patio homes often offer shared greenbelts or membership in private recreational facilities such as swimming, golf, and tennis.

New vs. older homes
In selecting the type of home you want, consider new versus preowned homes. Preowned homes usually have established yards, and usually the neighborhood or subdivision is built-out. On the other hand, older homes may require more maintenance and need some repairs.

New homes are not without problems. Although they require less maintenance in the first few years, you may have to put in landscaping and call the builder back to correct faults. If buildings are still active in area, you may have to endure nearby construction.

Finally, consider size and style. You may already have in mind a wood-and-glass contemporary lodge with sun decks or a two-story Victorian mansion with a cozy attic. Or you won’t know what you like until you see it. Either way, your REALTOR® will listen to your preferences and help you find the right home for you.

Chris Casmirri, Broker Assoc/Realtor® Keller Williams Elite Realty - chriscasmirri@comcast.net - www.chriscasmirri.com

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Title Insurance

Title Insurance

How do I obtain title insurance and what does it cost?

Let the title company, attorney or agent handling the closing of your property know that you want to purchase an Owner’s Title Insurance Policy. When choosing a title insurer, look for a company with experience, as well as the financial strength to protect you. In most states, the insurance commission or some other governmental body controls the premiums for title insurance policies. You only pay the premium once. The cost depends upon the purchase price of the property, and your policy amount must be equal to the purchase price.

How long does my coverage last?

Once purchased, title insurance remains in effect for as long as you own your property. Title insurance adds security and peace of mind to homeownership.

Chris Casmirri, Broker Assoc/Realtor® Keller Williams Elite Realty - chriscasmirri@comcast.net - www.chriscasmirri.com

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Homeowner Tips

Homeowner Tips

You’ve done it. You’ve bought a home and now own part of The Dream. In the process you’ve also acquired many responsibilities and concerns. There are mortgage payments to make, records to keep and maintenance work to complete. Below are a few tips for the new owner.

Mortgage payments
Every month you’ll receive a statement from your lender reminding you that your mortgage payment is due, or, if you have a coupon book, you’ll have to remember to send your payment on time.

Some lenders can automatically deduct monthly payments from your checking account. This saves time and postage costs. It can also prevent the possibility of missing a payment. Ask your lender about this service.

Furnishing and renovating
You’ve just moved in. Most of your belongings are still in boxes. But you’ve decided the first thing you want to do is redo the first-floor bathroom, buy new furniture for the living room and strip the wallpaper from every wall in the house.

Stop. Put your hands in your pockets, seal your wallet, tie yourself to a chair. Don’t do anything major right away.

Acquiring a home requires some adjustment. Your mortgage payment may be higher than the rent you’ve been paying, so give yourself time to get used to the new cash regimen. Too many new buyers realize too late that they had no idea how much it costs to run a home.

The message here is simple common sense. Go for a slow, smooth transition. You’ll probably be living in this house for a good while; don’t try to do everything at once, even if you can afford it.

Papers to keep
Keep a copy of every document you signed at the closing. It’s especially important to keep a copy of your settlement form. It will be useful when you file taxes and if you sell your home. For example, the real estate taxes and loan discount points you paid as part of your closing costs are tax deductible. So, when you file taxes, refer to the settlement form to get these amounts.

In addition to the closing documents, keep all insurance records, such as homeowners and title insurance. You would need to have access to your homeowners policy if, for example, someone were to sue you because they were injured on your property. You would refer to your title insurance policy if you were to find a flaw in the title after you bought the house.

It’s a good idea to keep these important records in a safe place. You may want to store them in a safety deposit box or a bank vault in addition to keeping a copy at home.

Home maintenance
Your mortgage requires you adequately maintain your property and not allow it to deteriorate. As a homeowner, you can’t afford to sit back and postpone maintenance. You can extend the life of appliances and fixtures and avoid expensive repairs by performing routine maintenance yourself.

It’s a good idea to set up a budget for your home’s regular maintenance and unexpected repairs. You may want to budget 1 percent of the purchase price of your house to cover annual maintenance and repairs. You also may want to stick to a regular savings plan to cover essential bills, emergency repairs and large, periodic expenses such as property taxes and homeowners insurance.

Chris Casmirri, Broker Assoc/Realtor® Keller Williams Elite Realty - chriscasmirri@comcast.net - www.chriscasmirri.com

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Find the Right Mortage

Find the Right Mortgage

Time spent shopping for a mortgage is time well spent. Before you rule out one loan or another, give some thought to your particular needs and wishes. Prequalifying before house hunting puts you ahead of the game. You already know the standard of mortgages for which you qualify. The message is simple: Shop for a loan, not a lender. Hunt for the best loan - interest rate, points, processing costs, etc. Don’t pay much attention to who’s originating the loan or where it is.

First, you should review the major kinds of mortgages you may encounter. This list doesn’t explain them all, but it does contain those you will most likely see.

Fixed-Rate Mortgage (FRM)
This is the standard mortgage model. It is the oldest and most easily understood type of mortgage. Its primary attraction is that the interest rate and the amount of payment remain fixed for the life of the loan, typically either 15 or 30 years. However, if rates fall, the holder cannot benefit from the new, lower rate except by refinancing.

Adjustable-Rate Mortgage (ARM)
With this kind of mortgage, the interest rate you pay rises and falls along with other rates charged throughout the economy. Therefore, you, the borrower, assume the risk of rising rates, and you stand to benefit should rates fall.

An essential question to ask about an ARM is whether there are limits on how much your rate can be raised, both at each review and over the whole term of the loan. Without limits, known as “caps,” you’ll have no way to predict how much your rate (and thus your monthly payments) might change.

Convertible Option
FRM and ARM represent the primary options available to home buyers today. The convertible mortgage represents something of a compromise between the two. It is designed for those who want the advantages of the ARM, but also want to limit the risk of rising rates. Under this arrangement, the buyer starts out with an ARM, but has the option of converting to a FRM at specified points during the loan term. You may want to ask the lender these questions: When can you convert? How often can you consider the option? Are there any up-front fees involved? Will you have to pay more for an ARM with the conversion feature than for an ARM without it? Are there additional fees due if and when you decide to convert? Find out the lender’s conversion rate.

Graduated Payment Mortgage (GPM)
A fixed-rate GPM starts out with low payments, usually below that of a fixed-rate and possibly that of an ARM, but rise gradually (usually over five to ten years), then level off for the remaining years of the loan.

Growing-Equity Mortgage (GEM)
This option is designed for borrowers who want to pay off their mortgage as soon as possible. Therefore, the interest rate remains fixed, but the amount of the monthly payment increases according to a prearranged schedule, with the higher payments going to reduce the principal balance. This mortgage can be appealing to someone who is expecting regular income growth and wants to build equity quickly.

Fifteen-Year Mortgage
Like the GEM, the fifteen-year mortgage enables borrowers to repay their loan more quickly, which means they build equity faster and pay less interest over the life of the mortgage.

Biweekly Mortgage
Another option for people who want to repay their loans sooner is the biweekly mortgage. Instead of making a single mortgage payment each month, borrowers who choose this option make two equal payments monthly.

Federal Housing Administration Insured Loans (FHA)
Should one fail to pay, FHA insures mortgage loans made by approved lending institutions. The FHA insures a variety of mortgages, including FRMs, ARMs, GEMs and GPMs. Down payments are low - 5 percent or less. The FHA doesn’t set the interest rate on loans it insures, so you’ll need to shop around for the best rate.

The FHA limits the amount it will insure to whichever is less: 95 percent of the local average home price or 75 percent of the loan limit set by the Federal Home Loan Mortgage Corporation, a large buyer and reseller of mortgages.

Veterans Administration Guaranteed Loans (VA)
VA loans have most of the advantages of FHA loans, and then some, but they also have eligibility restrictions. They are available only to veterans of the armed services, those currently in the service and their spouses. VA loans are typically half a percent or more below market rates, and they can be obtained with no money down.

Chris Casmirri, Broker Assoc/Realtor® Keller Williams Elite Realty - chriscasmirri@comcast.net - www.chriscasmirri.com

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Finding Financing For Your Home

Finding Financing

Once a contract becomes binding, you probably will have to arrange for financing. Depending on the terms of the contract, the purchase of the home may be contingent on your being able to get financing at certain terms by a certain date.

Lenders
The REALTOR® might provide you a list of lenders. Most home buyers get loans through savings institutions and mortgage bankers and, to a lessor extent, from commercial banks, credit unions, or other private sources. In some cases, the seller may be willing to offer financing. Sellers often can offer a loan to a buyer at a competitive interest rate and attractive terms. Check on specifics.

Types of loans
In general, three broad categories of loans are available:

Private versus government loans - Most mortgage loans are made by savings institutions, banks and mortgage companies. On government (FHA and VA) loans, the government does not actually loan the money but rather guarantees (or insures) to repay the lender if you default for some reason. Generally, a lender will require you to buy mortgage insurance, particularly if you make a low down payment. This insurance may be paid at closing or added to the loan amount. VA loans require no mortgage insurance, but only qualified veterans may apply for them. Mortgage insurance protects the lender, to a degree, in the event of default.
Government loans have important advantages - they generally require a lower down payment than conventional loans and often have a lower interest rate or points. One the down side, government loans limit the amount you can borrow, often take longer to process, and sometimes have higher closing costs.

Fixed rate versus adjustable rate - On a fixed rate mortgage, the interest rate stays the same over the life of the loan, usually 15 or 30 years. That means your payment will not change except for adjustments for taxes and insurance.
Adjustable rate mortgages go by a variety of names, but basically these loans have interest rates or monthly payments that can go up or down over time. These mortgages typically start out with a lower interest rate, lower monthly payments, and lower fees and points than fixed rate mortgages. They often appeal to first-time home buyers, younger couples who expect their incomes to grow in the coming years, and people who might not have much cash for down payment and closing costs.

If you consider an adjustable rate mortgage, ask the lender to explain the terms fully. Ask about the interest rate cap; the maximum rate you will be charged no matter how high rates go in the market. Don’t confuse rate cap with payment cap. When the payment is not enough to cover interest, the excess interest is added to your principal balance, so your debt increases instead of decreases. Also ask about the index that will be used to calculate future interest rates and how index charges will affect your mortgage.

Assumable versus new loan - Some loans, particularly FHA and VA loans as well as some adjustable rate mortgages, are assumable. That means a buyer can assume an existing loan usually on the same terms as the previous owner.
Assuming a loan may save some costs and time. As the buyer, you may pay the lender a fee at closing for processing the assumption.

The true price of financing
When shopping for a loan, don’t judge the loan by the interest rate alone. Compare several items in the entire loan package, including:

Points on a low-interest-rate loan can be double those for a loan with a higher interest rate, causing you to pay more up front and in cash.

Total fees charged by the lender. Some lenders will absorb the cost of many services, while other do not, so ask in advance.

Term. In general, the longer the life of the loan and the more fixed the payment, the more you can expect to pay over the life of the loan. For example, a 30-year, fixed-rate loan will cost more in interest than a 15-year, fixed-rate loan.

Penalties. Ask what penalties will be charged if you pay off the note early. A prepayment clause could require you to pay a penalty if you pay off the loan early, such as refinancing the loan at a later time.
Loan approval process
When you apply for a loan, the lender will ask about your finances. You will already have most of the facts and figures in the financial information you compiled earlier. The process can take several weeks.

From the lender’s viewpoint, approving the loan is only part of the risk; the other part is the property itself. The lender may require an appraisal to verify that the home is worth the loan as well as a physical survey to discover any encroachments on the property. Repairs may be required. Insurance must be purchased. Verifications of employment, deposits, and other matters must be obtained. Loan documentation and conveyances instruments must be drawn and approved. In addition, the title company must research the title and arrange for paying off any liens, taxes, and other costs. All these conditions and other conditions must be satisfied before a transaction can close.

Hazard insurance
As another protection, the lender may require insurance protecting the home against hazards such as fire and storms. (Flood insurance will most likely be required if the house is in the flood plain and would be a separate policy.) Hazard insurance may be included in a homeowner’s policy that covers other risks such as theft and liability. Even if not required by a lender, it is probably a good idea for you to seriously consider all types of insurance. Discuss these issues with your insurance agent.

Chris Casmirri, Broker Assoc/Realtor® Keller Williams Elite Realty - chriscasmirri@comcast.net - www.chriscasmirri.com

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