Realtor Tips – Page 3

What Are Jumbo Home Loans?

December 19, 2017 By Deborah Ward

With the housing market improving and home prices rising larger homes are becoming hard to get with a standard mortgage. Your Realtor may have mentioned a jumbo home loan, but you aren’t sure what that is.

A jumbo mortgage

Simply put, a jumbo mortgage is a loan to purchase a home that is in an amount that is larger than the limits set by the government. Conventional mortgages have limits as to how much it can be.

This is because mortgages are commonly bought and sold on secondary markets, and are backed by FNMA (Fannie Mae) and FHLMC (Freddie Mac). If a mortgage is over those limits, Fannie Mae or Freddie Mac will step in and back the mortgage. The current limit is $453,100, with a few exceptions as to locations where it could be higher.

Conventional formats

Most mortgage companies offer jumbo loans in the conventional formats like fixed rate or interest only loans, and these have LTV or loan-to-value limits too. Jumbo loans typically have an 80% or 90% loan-to-value limit on the loans.

This is because they need to be sure the risk is minimized as much as possible since there is no federal backing. They usually carry a higher interest rate; usually .25% to .50% higher than that of a conventional loan.

They aren’t impossible to get, and with the easing of restrictions as the market grows. And if you need that bigger home, the risk may be worth the reward.

Finding a great lender

When you get up into the Jumbo loan prices, having a qualified lender becomes even more important. If your lender is used to working within the framework of FHA loans, they may not have the resources to find you the best Jumbo loan to fit your needs.

Additionally, you may be looking at putting down a significant amount of cash or even using some private money in addition to the loan and as such your lender needs to know how to get that kind of complicated loan to the closing table.

Many of the properties we sell here in Tampa Bay fall into this Jumbo loan category and we have a list of lenders who we feel do a great job with our clients. Please contact us if you would like a great referral or to talk about purchasing a Jumbo loan property today!

Should You “Test The Market” With A High Price To Start

December 12, 2017 By Deborah Ward

It sounds like a good strategy, “test the market” by asking a high price for your home. I mean, what harm could it do and you could even luck out and get asking right? Well, not so fast. It’s not a good strategy and here’s why.

Who will and won’t see your home?

For one thing, when you “test the market” the people who can actually afford your home at the right price won’t even see it. Most people start searches online but even if they start with a Realtor, the searches the Realtor does won’t include your home. Those that do see it won’t be interested. Your home will be too small or not what their price range usually offers. Of course, that means you won’t be getting any offers. Unfortunately, your neighbor who is also selling will. Your overpriced home makes their correctly priced one look good. Not to mention that the first few days your home will be on the market are the golden ones. Most deals are made then.

Remember today’s buyers are very savvy

People know what a home is generally worth. They do their homework. They also will be less likely to want to try and negotiate a deal. If they even see the listing. That means your home is sitting and a stale house doesn’t sell for asking, or even for less than the true market price. It’s true. When you lower a price because you asked too much to begin with, those who are interested will demand a bigger discount and more concessions.

What if you do get an offer?

So let’s say you actually get a bite at your first price. Guess what? The house won’t appraise at the high price and the buyer won’t get a mortgage. No mortgage, no sale.
Oh, and if you find a Realtor who thinks it’s a good idea, find a different one!

What Are Declaration of Covenants, Conditions and Restrictions, or CC&Rs

November 21, 2017 By Deborah Ward

If you have been house hunting you probably have looked at a home with a Homeowner’s Association. That means that the home is subject to a Declaration of Covenants, Conditions and Restrictions better known as a CC&R. Don’t take this lightly.

A CC&R is part of the deed to the property and is enforced by the Homeowner’s Association

They are initially set up to protect property values and in practice many do. However, many
become dictatorships that decide everything from your house color, to how many cars you can have parked there, to whether you can have pets and how big they can be to even whether you can decorate your home for holidays. Unreasonable or not, take them seriously. People have lost their homes because of HOA’s and the CC&R’s in their deed.

The CC&Rs that are part of the deed are easily skimmed over at settlement

You are signing so many things so paying attention to them can be a pain. Your Realtor should tell you ahead of time that you’re buying a property subject to them so ask to see them ahead of time. Read them very carefully or have your attorney review them. They will state explicitly what, as a homeowner, you will and will not be allowed to do.

Don’t be caught short

The rules enumerated in the CC&R are enforceable by the HOA Board, but they can’t stop the behavior. For instance, if your neighbor gets a great dane puppy and the CC&R limits the size of dogs to under 60lbs, they can’t make the neighbor get rid of the dog or move. What the can do is assess fines against that homeowner. If they remain unpaid the HOA can then get a lien against the home. A lien can be enforceable in court all the way to foreclosure. You may not think it will happen, after all you have a mortgage that will take priority to any lien. Think again. As long as the HOA pays the mortgage off from the proceeds of the sale of the foreclosed property, they can do it.

Before you buy

Before you buy, or even make an offer, review the CC&R. If the terms are acceptable, great! If not, look elsewhere. The rules aren’t going away and you will be subject to them if you buy the property.

What Are Sinkholes And How Do They Affect Property Values?

November 14, 2017 By Deborah Ward

Sinkholes can be a scary thing. They happen in areas where the rock below the surface is limestone, carbonate rock, salt beds, or rocks that can naturally be dissolved by the groundwater circulating around and through them. They can occur slowly or seemingly overnight, but having a home in an area where they are common can be nerve wracking.

Dissolving rock

So what happens with the dissolving rock is that spaces open up where rock used to be. Typically those spaces fill with water which helps hold up the land above them.

However, if that water is removed, like when a well is drilled and the water used, there isn’t anything holding up the land. Then it collapses and forms a sinkhole.

Sinkholes can be fixed

Sinkholes can be fixed, and there is nothing wrong with buying a home that has been affected. As a buyer you should just ask to see the documentation of the repair.

However, having had a sinkhole will affect your property value if you are a homeowner.

Generally, a repaired sinkhole property vs. a property that has never had a sinkhole will have about a 7%-10% difference in market value. Your best bet is to have your Realtor do research on other homes in the area comparable to yours and see how sinkhole remediation affected their value.

Is the property insurable?

The other thing to think about is whether your home, or the home you are looking to buy is insurable. You need to be able to get homeowners insurance in order to get a mortgage.

In Florida the biggest insurer for homes affected by sinkholes is Citizens, and their requirements to insure a property have conditions attached. They, and probably most other insurers will need to know if the sinkhole claim was paid below, at or above policy limits; the original Engineering Findings Report; and the original Engineering Completion Report which will document the repairs and that they were done to the Findings Report; and documentation of the cosmetic repairs.

All of this will affect your homes value and probably not for the better.

5 Tips For Buying A Golf Course Home

November 7, 2017 By Deborah Ward

You’re looking for a new home and you’re considering maintenance a golf course home. They seem like a dream, but can they really be a nightmare? Here are the good, the bad and the ugly of owning a golf course home.

Deed restrictions and HOA

First and foremost, a golf course community will have deed restrictions and a homeowners association. That means what you can do with your home and property is subject to the restrictions and the HOA.

In order to maintain a certain look and feel of the course, house exterior paint colors are limited and putting things in your yard like a swing set or sandbox are usually a big no no.

Think you’ll be able to get away with it? Think again. Those golfers paying for the privilege of using the course will probably complain to the community or HOA if they see something is amiss. That may be a big deal for you either way, so be sure to ask about it before buying.

Not for community use

Along with those deed restrictions, be aware that during off hours the actual course and cart paths are not for community use. You can’t walk, jog or bike on cart paths or the greens. Letting your dog run on the fairway is really not ok. If space to do those activities is important to you ask about community space set aside for them.

Course maintenance

Those gorgeous grass courses need constant maintenance. Course management won’t inconvenience their bread and butter, the golfers paying to use the course. So all that grass is cut very early in the morning, most likely before sunrise. That means that the groundskeepers are out on golf carts and riding mowers with headlights. If a bedroom window faces a green, those lights will shine on through. And while the golf carts may be quiet electric ones, the mowers certainly aren’t.

Cart paths are a reality that can be a distraction

The path for golf carts will run along one side of the fairway from tee box to green. If that’s behind your home, you’ll see them all day. So remember that if the home you are looking at is less expensive than others in the same community, there are probably cart paths close by. Those greens and tee boxes are also a gathering place for golfers. That means you will hear conversations and laughter and see a lot of rather loud clothing.

Fun Facts About Real Estate Home Sellers

October 31, 2017 By Deborah Ward

Did you know that knowing demographic information about whose home you are buying can help you get the best deal for the home you want? According to the NATIONAL ASSOCIATION OF REALTORS® 2016 white paper entitled “Profile of Home Buyers and Sellers” spells out the characteristics of home sellers from June 2015 through June 2016.

So what are those statistics?

Well how about that the typical home seller was 54 years old in 2016, or that sellers typically lived in their home for 10 years before selling.

Want more? How about that recently sold homes were on the market for a median of 4 weeks or that only 8% of recent home sales were FSBO sales and that it was the lowest share recorded since the NAR report started in 1981.

Let’s also not forget that 89% of home sellers worked with a real estate agent to sell their homes, The smart ones anyway!

Common reasons for selling

The report also talks about the most common reasons for selling. The first most commonly cited reason is that their current home is too small. The next is a desire to move closer to friends and family or a job relocation.

Some cool fun facts about price

The median final sales price for recently sold homes was 98% of the final listing price and those homes were on the market for an average of four weeks.

You know what else? 36% of all sellers offered incentives to attract you, the buyer. Those home sellers sold their homes for a median of $43,100 more than they purchased it. One of the better reasons to own a home! It nearly always makes you money in the long run.