Mortgage Fees are Increasing for Closings After April 1, 2012

Another good reason to close on your new  home before April 1, 2012.

Congress voted in December of last year to increase the guarantee fee charged by Fannie Mae and Freddie Mac, and premiums for mortgage insurance that are charged by the FHA for new mortgage loans.

The amount of the increase that begins April 1, 2012 is equal to 0.1 of 1 percent, (10 basis points) and is approximately $10 per month for each $100,000 of the loan.

Lenders may choose to either raise rates slightly to cover this additional cost, or charge higher fees. Banks and mortgage lenders will need to implement these fees sooner for new loans, so that they are being  incorporated into loans closing on and after the deadline.

IMPORTANT: If you are in the midst of a mortgage application, go through the fine print. ASK your attorney to review it as well. This fee may be in your loan package even if you are closing prior to April 1, and NOW is the time to get it removed.

For example, if you are getting a loan of $350,000 that is amortized over  30 years, this new fee translates to $12,600 that you should not have to pay.

And a note From Judy: If you have a question about buying or selling a home in Fairfield County, and are in need of an Realtor to represent you, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

Is Your Buyer Agent Really Trying to Get You the Lowest Price?

If you are thinking about signing up with a buyers agent to represent your best interest, go ahead and test their negotiating skills first. If the agent that you are thinking about hiring to represent you can't pass your own litmus test, it will only get worse when it comes time to negotiate with another agent to get your home at the best price when that agent has better skills.

I have come across many agents who just really have no clue as to how to negotiate properly. Trust me, I don't care  if I am on the other side- their ineptness only helps my client. Harsh, but true.

One of the dumbest missteps from a number of buyer agents that I come across much more frequently than I should is right in the pre-approval letter from the buyer's bank. I cannot tell you how many times that I have seen these letters that say, "The buyer is approved for a specific loan amount". Those pre-qualification or pre-approval letters are not doing the buyer any favors, especially when they put an offer in on a house that's less than the stated amount. The buyer is then in an unnecessary predicament, because the seller's agent and the seller both know that this buyer can afford their house, and then some.  Come in with a lower than expected offer with one of these prequalification letters and your negotiations will be stunted. Completely unnecessary, and it will end up costing you money (if not the deal itself) because its worded that way.

Do you know if the agent that you are thinking about hiring habitually dots their "i's" and crosses their "t's?  Better figure that one, too. When it comes time to write an offer, that agent will be judged on how properly it is filled out. A few mistakes on that is a red flag to another agent, who probably rightfully would think that the agent is lax in their duties and follow through. Everybody has work to do to complete a transaction.  You do not want to lose out on the house of your dreams because of it.

And for heaven's sake, if the buyer agent is pushy, it's just a bad sign all the way around. Not only for you, while you are looking, but if that's the agent's style, it won't fare too well on the negotiating table with the other agent either.
 
Your buyers agent should be knowledgeable about the market, be a skilled negotiator, and as far away from pushy or combative as possible. and I just happen to know someone that fits that bill in  your area. (that's me!)

If you have a question about buying or selling Real Estate in Fairfield County, and are in need of an Realtor to represent you, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

What is Supposed to Be Included With Your Home Purchase or Sale?

Whether you are buying a home or selling a home, you can avoid completely unnecessary last minute disagreements at the closing table that can very well escalate into deal-breaking issues by understanding the difference between personal property vs. real property.

Avoid confrontation and issues by

itemizing what stays and what doesn't.

For Sellers: When you list your home for sale, you should be thinking of itemizing what "personal property" will be included in your home sale, and what commonly requested items will not be part of the transaction.

For Buyers:  When you place your initial offer on the property, make sure and itemize all of the personal property that you wish to be included in the sale. Do not assume that everything stays.

Personal Property vs. Real Property

Personal Property:

In regards to a real estate transaction, Personal property, generally speaking, is private or personal  property  or possessions that are"moveable"- that is, it can be easily moved from one location to another. Also referred to as "chattel or "personalty".

A few examples  are as follows: Any appliances that is movable and not built-in.  Blinds, drapes, curtains and curtain rods. Chandeliers, Light fixtures and/or Ceiling Fans.

Real Property
Generally, anything which is part of the land, or attached to the house and is unable to be moved, or cannot be removed without creating damage is Real property.  

The intent and manner with which an item is attached is used in determining whether an article or fixture is real or personal property. If removing the item requires pulling nails, it’s probably real property. (This does not include picture hangers). If something can be unscrewed and removed without leaving any damage, it might be a good idea to discuss this when negotiating the offer.  

A few examples of Real Property:

Built-in microwave, built-in wall oven, an air-conditioning unit that has been built into the wall, a shed on a concrete slab, or a swingset.

......and a little story

I remember conducting a final walk-through with a buyer client a few years back, and everything seemed to be in order as far as I was concerned, and then all of a sudden, my client went from bathroom to bathroom checking the house, and came to me in a near state of panic, because there was no toilet paper in the holders . He thought it was a law that owners had to sell their homes with toilet paper. No, I am not kidding. He was furious until I let him know that there was no such law on the books.

He got over it, but  something that seems so inconsequential to you it could really make life miserable for everyone involved.- and while we are on the subject of some of the smaller things, leaving light bulbs is not mandatory either.

Bottom Line: If it's important to you, put it in writing

so there are no mis-impressions or misunderstandings.

As with everything else in real estate, remember, it’s all negotiable. If there is a unique item you want included in your purchase, ask for it. If you are selling, and the chandelier in the dining room has sentimental value to you, it's best to replace it BEFORE your home goes on the market. That way it won't ever become a bone of contention.

If you have a question about buying or selling Real Estate in Fairfield County, and are in need of representation, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

 

Is a Hubbard Clause Right For Your Connecticut Home Purchase or Sale?

Current homeowners who wish to buy another home, but need to sell their home first in order to use the equity as a downpayment can wonder if they should sell the home they own first, or find the home that they wish to buy first, and then start the process of selling their home. In the case of the latter, the homeowner who wishes to purchase a new home should consider placing an offer with a "Hubbard Clause" rider.

A "Hubbard Clause" is a contingency in (or addendum/rider to ) a purchase agreement that expressly conditions the buyer's offer upon their ability to sell and close on another home or property. It is almost like a first right of refusal to purchase the property- ALMOST, but not quite. Think of it like "reserving a right to buy a particular property" while trying to sell the one you own.

While most  buyers and sellers think this just another perk for the buyer, think again. By the way, I can include a number of agents who would tell you that this is a benefit for the buyer, as well. This type of agreement actually benefits the seller much more, especially  in a buyers market.

The "Hubbard" portion of the agreement must have the following two items included in the verbiage:

1. Final Hubbard contingency sale date- That is, the deadline for the buyer to secure a purchaser for their home, so they can move forward with the sale on the home that they wish to purchase.

2. A deadline for the buyer to remove the "Hubbard" contingency if another offer comes in during this period.

There is no national standardized  form for this, nor are there generally accepted statewide forms for "Hubbard Clauses"- rather the forms which are used tend to be much more regional or generated through independent franchises.  There are a good number of agents who just do not like to work with Hubbard Clauses at all, which I do not understand, but it is what it is. I think that if an offer comes in a home where I represent the seller, that we should absolutely listen to it. It's kind of like a back-up offer without having the main one. As long as all the conditions and terms of the sale are acceptable and  we can still market the house, it would be foolish not to entertain such an offer. When I represent the buyer, and if that's the only way they feel comfortable moving forward, I believe it's my fiduciary responsibility to help them get the house that they want.

Buyers:

If your home is not already on the market, be prepared to list it THE SAME DAY that you place your offer in on the property that you wish to buy. You do not have to list it if the homeowner does not wish to entertain your offer, but  if they are willing to negotiate with you, it is of extreme importance to be ready...ready.... ready.

I have to go on record, here- this is not the most cost effective way to purchase a home. Sorry, but it's true. If this is what makes you most comfortable, I am all for that, and will do as you wish. Often times, you will end up paying a premium for the right to purchase a home in this manner,  and you may end up selling your home for less money to satisfy the Hubbard Contingency within the time. allotted.

Sellers:

I do not really see a downside to sellers as long as an acceptable Hubbard addendum allows you to continue to market the home as ACTIVE, and not change its status to anything else. (See FAQ's below)   Provisions must be made  for the instance of  another offer coming  in during the period that the Hubbard is in effect. Usually, giving a buyer 2 or 3 business days to remove the Hubbard Clause is sufficient, so if they are comfortable removing the clause, you will sell it without the contingency, or if they cannot remove the Hubbard, that you are free to sell it to another party. There are no guidelines as to price or terms for accepting another offer unless they are written into the addendum itself. You must just concern yourself with the time frame.

Hubbard Clause General FAQ's

• Hubbards may include unique terms or conditions.

• Understand that homes are shown with a signed Hubbard Clause agreement in place.

• And then, some agents will NOT show homes that have a signed Hubbard Clause

• Some buyers choose to include a Hubbard Clause because they would actually qualify for your home purchase without selling their home, and just do not want to carry two mortgages.  

• Hubbard clauses can be extended by agreement from both parties.

• Regionally, we work with binders first and then formal contracts are prepared within two weeks- Sellers may decide NOT to have their attorneys draw contracts until the Hubbard Clause is removed.  

• The buyer can withdraw their offer entirely with no penalty, unless expressly written in the contract.

• This agreement seems to be more binding  performance wise to the seller than it is to the buyer.

• And in case you were wondering, the name has nothing to do with Old Mother Hubbard, (despite the shoe)

If you have a question about buying or selling Real Estate in Fairfield County, and are in need of representation, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

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Buyers and Sellers- How to Prevent a Failed Building Inspection on Your Home

Nobody's too happy when the house doesn't pass a building inspection.  In fact, everyone has to start from square one all over again....The seller, the buyer, and both agents that are involved. Everybody begins their tasks all over again- and that should ALMOST NEVER be the case.
 
A failed inspection would only occur rarely in the market if agents educated their clients during the process.

It is extremely rare  that my clients have had to endure a failed building inspection, and that's whether I represent the seller or buyer- and I have sold hundreds of properties. ....So what makes such a big difference for my clients as opposed  to everyone else?

Education and disclosure. Those two factors will prevent over 99 percent of failed inspections.

Education:

For Buyers: Look closely at the home before you place an offer in on it. My buyer clients get a kick out of looking at houses with me, because I perform mini-inspections as we look at homes, and educate my buyers as to what potential problems there may be if any. I knock on tiles, stomp on the floors, and poke wood that looks like it needs poking.  I am not a building inspector, and do not have that specialized knowledge, but I have attended EVERY home inspection for EVERY home that I have ever sold. If some knowledge hasn't rubbed off on me to impart to my clients, then I wouldn't belong in the business. A couple of very good things result out of this practice- One, if the house doesn't pass my mini-inspection, there is no need to put an offer in on the home and spend money for an inspection that won't end up on a positive note, or, Two- the buyers make their offer knowing that there are some issues that will need to be addressed and are not blindsided by the building inspection.

For Sellers: When you decide to put your home on the market, you  pretty much have a good idea as to whether there may be issues, which could or would break a sale. Tell Your Realtor!  Once you are lucky enough to have a sale, you don't want to needlessly lose it. As a listing agent, I do that same mini-building inspection that I do for buyers when I list your home, and try to find the most common deal-breaker issues that may arise so that we can address them prior to putting the home on the market.  If I see something that looks like a specialist is needed, I'll say so. It's much easier to fix it now rather than fix it later, AND risk a sale because of it.

Disclosure

For Buyers: When buyers disclose found issues prior to the formal building inspection and adjust their offering price because of it, sellers are more likely to accept that offer given that they would have to address items with any future buyer as well. It gives the owner some peace of mind that they won't be nickeled and dimed at time of inspection, which seems to be a common occurrence these days. ( I do not subscribe to the last minute nickel and dime tactics. )

For Sellers: Disclose your known issues, or your suspected issues. By the way, it is the law. Besides that, the little items that wouldn't normally mean a thing to buyers become amplified when there are bigger issues to address, and  they can feel like there might be a lot of hidden problems that the inspector hasn't even found. What happens then is the proverbial straw that breaks the camel's back, and it's hard to keep the deal together or even renegotiate if that's the case.

If buyers have a good idea what they are getting into right from the get go, they are less likely to "walk" after a poor inspection report. They will already be aware of most of the issues. If sellers feel that the buyers have been honest with them, they are more likely to negotiate, or renogiate as the case may be.

Simply put, your agent has to have well rounded skills- marketing, negotiating, and good solid knowledge of a home and its components. You deserve nothing but the best.

When you're ready to buy or sell, contact me. It's my job to keep everything running smoothly, and especially when it gets rough- without worrying you about it unless absolutely necessary.

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