During a recent interview with Jason Jenkins from First Place Financial in Grand Rapids, Michigan I was reminded of the gaping differences in lender costs. Jason really re-enforced the fact that lenders are not all created equal, nor are closing costs or pre paid fees.

When you are securing financing to purchase a home, not only will you want to consider the type of service you will be getting from your lender, you will also want to get very specific about closing and pre paid costs.

Many people think that closing and pre paid costs will be covered by the sellers without realizing that this is almost always capped to a percentage of the purchase price. This cap can vary depending on the loan type.

For example, FHA currently allows the seller to pay up to 6% of the loan value in closing costs. However, this can change at any time and there have been regular discussions that this will reduce to 3% in the future.

Allowing even less seller paid expenses are conventional mortgages. These loans only allow sellers to pay 3% of the loan value in closing costs.

Crunching these numbers, one will quickly come to realize that if buying a 50,000 home, 6% of seller paid closing costs may not cover all of the costs, much less at 3% with a conventional loan.

To help buyers get a general idea of costs involved with closing their mortgage we have included a basic estimate loan cost checklist below this post. Again, this is just an estimate; costs vary by time, lender, and loan type.

In addition to asking your lender about the items listed below, be sure to ask about any additional fees. When you have found a home you would like to put an offer on, a Good Faith estimate is in order to make sure you are able to cover all your cost for that particular home.

Jason’s Estimated Closing Cost Check List:

$350 Appraisal- for evaluation of value
$650 Processing/underwriting Fee- Charge for bank to process loan approval
$35 Credit Report- Run to determine credit worthiness for approval
$200 Title Company Closing Fee- Charged by title company to close loan
$580 Title insurance- This fee varies based on loan amount and insures against liens
$11 Flood Certification to verify home not in flood zone
$59 Recording fee- Records mortgage with municipality in which home is purchased

$1885 Total

Not included is Broker Fee and home inspections. Home inspections are the client's option while Broker fees are normally mandatory. To help our clients save money at closing, The Gordon Group does not charge a Broker Fee even though this does come out of the commission we earn on the sale of the home.

These costs are not all the same; when interviewing Real Estate agents ask what they charge.

"Pre-paids" are based on the annual property taxes for the home and the homeowners insurance secured by the borrower. We currently collect the following for escrow account set up

9 Months of the Summer Bill
3 Months of the Winter Bill
2 Months of the Homeowners insurance.

Optional pre-paids

Home inspections: Price varies per inspector and depends on what you decide to have inspected. Generally inspections start at  $250.00.  Although an inspection is optional, I highly recommend having this done.

Most home inspectors will want to be paid at time of service.

Home Warranty - Price varies depending on the one you select - these usually start at about 395.00

**** Reminder this is just closing cost and pre-paids and if not negotiated by your Realtor to be paid for by seller – these charges are addition to the down payment for the loan.

I have been using email for business for nearly 30 years now.  I remember when it was installed at our office.  It was a big deal!  My boss at the time was in awe of all the new technology and wanted everything he could get his hands on. 

After it was installed he had a mandatory class for all of us, to learn how to e-mail and the proper way to use it.

Today – we have instant messenger – texting – Facebook messages, so many forms of communications where the shortening of words and sentences is expectable.  So many times I see this form of communication transferred to an email. 

I do not think some people realize how this can reflect on your professionalism to others by the way your conduct yourself in writing an email.

So lets looks at some things that can help us better ourselves when writing an e-mail.

Subject line – This should sum up the topic – short and sweet

            Many will file the email – you want the receiver to be able to refer to the email easily at a later date.  If the subject has changed – change the email subject line.  Yes we all like to hit reply for the ease of email mailing, but make sure your subject really reflects the topic.  Clean up the past conversation if it does not apply to the current conversation. 

            For those of us who use on line services such as e-fax to create a document in PDF form to email, clean up the body of your message please.  This is very confusing to the receiver.  Your email should only show your written content and the attached document. Not all the “junk” that comes with it.

            CC – still means Carbon Copy – this is someone you are coping as an FYI – The person receiving the CC is NOT the main contact and therefore should only reply if asked to. 

            If you receive an email that really does not require an answer – sending docs to another person is a good example, let the sender know you received them.  Today so many e-mails get spammed, a simple – Thank you or received will do. And do it right when you receive the email.  It takes 2 seconds!

            Blind copy – well I think this is rude.  It is like telling secrets. 

            If you receive an email that does require a reply from you and you do not have time to address it, send a quick note, I received your email, thank you, I will reply by ___________________ and then make sure you do reply by then.  Do not let the sender left hanging, wondering and waiting.

            Re-read the email several times to make sure you respond to all that is asked of you.  If there are 3 questions there should be 3 answers.  If you have answers to only 2 of the questions let the person know when you will get the last answer back to them and that you are working on it.  I have learned to write questions as a questionnaire due to the fact people just do not read everything.  This helps me get the response I need. 

            If an email was sent to a group of people and required action from all, then reply to all.  You should not only read the email but pay attention to whom all received it.  However the sender should address everyone who is receiving the email.  IE: Good morning John, Steve and Paul.  Do not over use the reply to all, make sure everyone really wants to hear your reply – use good judgment.

            Re-read your email before you send it, spell check it, do not use email for conversations that would be better served by a personal phone call. 

            Use proper spelling, grammar and punctuation – do not write in capital letters.

            Happy e-mailing all!

This is a great blog - even if your home is not on the market you an help the sales in your neighborhood by keeping up your own house - to help the sales in your neighborhood and keep values up!  I have had buyers not buy a home due to neighbors yards.

So you know you are going to sell your home – this may be a long term or a short-term goal, but the same rules apply.

It is still a buyers market, and by all means do not underestimate the buyer.  They are smart, savvy and know the right questions to ask.  1^st time homebuyers have watched, read and learned over the last 5 years and not as eager to jump into a home buying situation without knowing the facts.

What are the facts? 

·      How old are the windows

·      How old is the furnace

·      How old is the water heater

·      Is the electrical up to code

·      Has the plumbing been updated

Updated – what does this mean?  Well it does not mean 15 years ago!  Just because it is in working condition, it does not mean it is okay.  As buyers will get the home inspected and they will find the answers to these questions even if you do not provide them in the sellers disclosures.  If the buyer realizes all of these things will have to be upgraded or replaced in the next 5 years – this will weigh heavily in their decision to buy or not to buy.

The most common loan for a homebuyer is FHA or in Michigan many are using MSHDA – they both have the same guidelines.  No peeling paint, mechanics up to code etc.…….. So even if your buyer wanted to still buy the home the lender will not approve it. 

Many sellers say, okay I will do these upgrades at point of sale.  Not a good decision.  If you will do it for the sale, then just do it.  It gives the home a negative feeling knowing it has not been done yet.  Many people cannot see past the repairs and gives the feeling of an un-cared for home – buyers like to buy a home that was loved and cared for. 

Selling a high-end home?  The rules above still apply, but you better offer some WOW factor to the home.  I have seen homes listed for 350,000 or more and have not been updated in sometime.  Jumbo loans are not as easy to get now, and these buyers are not going to pay “full” price for a home that needs updating.  (Full price meaning when you comp the neighborhood, square footage, # of beds and bath suggest a certain price) If they estimate 100,000 grand of updates they will want to pay full price less the amount of upgrades needed.  I have seen prime location properties sit, due to the amount of upgrades are needed – selling price based on location.  Location is still a factor (big factor) but not the only factor in today’s market.

If you are selling a home in Grand Rapids, Michigan for over 500,000 – ask yourself, what WOW factors does your home offer.  What makes your home stand out?  Okay you have a great view, but what else?  Solid 6 panel doors? Energy efficient windows? Granite and tile through out? Updated paint colors? Kitchen cabinets – are they updated or in good shape?  When I tour these homes with buyers, we look at these things.  You need to stage and update your home to tickle and please all the senses!

Sight- The home has to be staged and pleasing to look at.  If the home is vacant – have it staged with furniture. Keep light bulbs replaced if they burn out.  Clean finger prints off of everything, clean windows. The front door - is it warn and looks very used, then replace it or fix it. 

Smell- more and more people are responding to smells, do not use candles or air freshener.  It just makes the buyer think you are covering something up, and they may be allergic.  Get that musty smell out of the basement. Clean the home head to toe; the best smell in the world “a clean house”.  If you bake cookies before an open house that would be good too!

Hearing- soothing jazz music in the back round would be nice.  I showed a home once that had speakers wired through out the home, listening to the light jazz was not only relaxing but highlighted this particular feature.

Touch- Do the kitchen cabinets, door knobs, Light switches, built in’s feel smooth and clean.  Buyers are going to touch these item’s they better feel good.  Replace them if you need to.  I had buyers fall in love with a home till they started opening the kitchen cabinets, years of cooking grease was built up on these cabinets.  Nasty feeling – my buyers lost interest.

Taste- Well nobody is going to taste your home, but your taste in paint colors may not be generic enough. If you like bright colors you can have this feature again in your new home.  You need to serve the masses, so neutralize your home.  Yes, the buyer may change it again when they move in, but it will not feel like they need to do it right away.  Paint can also show off architectural features, so do not make everything one color, consult with a Realtor or a home stager to get an idea of the best use of paint before you go for it.

Some of these changes will increase the value of your home, and some will not, but will make your home more desirable to the buyer and make your home stand out from the crowd, and yes there is still a crowd of homes to be sold. 

This info is for Michigan and homes listed on the local MLS in Grand Rapids - every market is different and I urge you to consult with an agent in your market center for what is common in your area.

So you are ready to buy a home and really like the home you saw; listed as a short sale.  However, you realize the redemption period is up soon, so you are thinking maybe I will wait till the bank owns it - I can get a better deal then!  Lets discuss why this may not work to your favor:

If you are an owner occupaint home buyer - meaning YOU are buying the home to live in (not an ivestment property) you may not be the best buyer for the bank when they do list the home.

Pro's to buying a home in short sale status:

A. In most cases the home is not vacant and being taken care of - a vacant home with no one taking care of it, is very hard on a house.

B. If an offer is excepted by seller from you - you are the only buyer the bank is dealing with. In Grand Rapids and listing on the local MLS we must pend the sale and except no other offers while waiting for the bank to except or decline.

C. If listed at a lower price (which it may be) when listed as a bank owned - you may compete with many people (investors) for the home.  Investors usually have cash and cash is better and you may loose if trying to go FHA, VA, MSHDA.  We just won one with cash and we were not the highest bid. If the cash offer is reasonable, the bank may choose them over you due to the ease of the transaction.

D. If the home is close to the end of it's redemption period, the wait for an answer will not be as long.  (in Michigan 6 months unless it has acreage)

E. Bank owned is sold "AS IS" they make no repairs and if you are using an FHA, VA or MSHDA loan, the home needs to qualify, no peeling paint, everything in working condition ETC.........so once bank owned it may not even be an option for you to buy. If the home owner is still living in the home they may work with you to get the loan ready.

F. It may cost more to buy a bank owned - fee's could be hgher.  Banks sometimes will not pay for certain items (especially if a cash deal) and may have added cost that you would not find if buying as a short sale.

G. There is no guarantee when the home will be re-listed as a bank owned.  Many banks are sitting on their owned properties. Again a home that is sitting vacant deteriorates much faster then if it was being lived in.  This home that once was real nice, may sit for 6 months - plumbing and utilities turned off, which sometimes is not done correctly and when the painful process of getting them turned back on we find we now have issues.

Me- my personally feelings - I am really not wanting to see vacant homes sitting around in my market center.  It is not good for anyone.  Not good for the house, not good for the neighborhood, just not good! 

So if you have fallen in love with a home that is listed as a short sale, make sure you have a buyers agent that knows all the right questions to ask of the seller, and if it looks like there is a shot that the bank will look at a short sale, go for it!  It may be very much worth it!

My husband I went shopping for a new home about a year ago.  I think every agent should have to do this every 5 years as a reminder - what it is like to shop for a home for your self.  It was a great reminder to me, feelings of leaving my home I have lived in for about 9 years, plus how I felt looking at possible homes for us to purchase.  Which I have to admit is a different feeling then looking at a home as an agent - getting ready to list.  

The end of the story is we too bought a bank owned home and are now renovating it. As homes selling as move in condition (price wise) was not really move in condition for us.  Me a Realtor and My husband an Engineer - we are very hard people to please.

Durning our very lengthy search - much to my surprise - was the impact of the interior doors had on us.

We toured this one home, and fell in love with the house (just did not like location) but the interior doors were AWESOME!  Solid, beautiful and little piece of art.  Now this home was over the top with interior features.  But after viewing this home, we started noticing interior doors on other homes.  

Some were weak, hollow and the door knobs needed to be replaced.  Sometimes you get a feeling for a place, but you do not know why.  But, I realized this is the one feature of the home EVERYONE touches.  It can have either a negative or positive impact on the perspective buyer and they not even know why.

We all know the rule, replace or paint the front door - The “Red Door” effect.  I am going to take this one step further and say look at all your interior doors - closet doors as well.  How do they feel when you open them.  Are they feeling solid and secure.  Have you cleaned every door knob off so when buyers touch them they are clean and smooth to the touch?

The sense of touch is huge.  A snip it from WEBMD - Our sense of touch profoundly affects how we view the world and other people, influencing thoughts and behavior, new research indicates.

So while getting your home ready to put on the market - go through the home and get those doors ready for some activity!  

If you have been following me for a while, you will know I am a big fan of renovation loans.

I love that 1st time home buyers can buy low and roll in needed repairs  to a loan to make a home sustainable in return improving/stabilizing the value of a neighborhood.  Makes me very happy!

Till now these loans, have been a lot of work, many hoops to jump through, delayed closings......... just very hard to assure closing dates, which is needed when buying a bank owned.  And so much up front work, that the home buyer, that can not take off work to get everything donee that is needed for the loan; many would just say for get it!

2011 is a new year and lenders are very excited about the FHA 203k streamline!

Much easier to do these loans now, no delayed closings.  

Many bank owned homes need repairs, many 1st time home buyers are wanting to use a FHA loan.  The 2 do not go together unless using a FHA 203k loan.  

The city of Grand Rapids has a Down Payment assistance program up to $5,000.00 - now if I can only get them all to play together.........we could really move some bank owned homes!

So if you are a home buyer thinking of buying a home that needs some work, you owe it to yourself to check out this program this year.  If going in for your pre-approval ask your lender if they offer this program and get an explanation.  It is good to know your lending options when shopping for a home, it will make your shopping experience more pleasurable and your agent will thank you, as he or she will know what to look for.

If you are in the Kent County area and needs some referrals for lenders with this program feel free to contact me, I will send you a list of some good lenders in our area, who can assist you.

Sometimes I wish the banks would allow the Short Sale listing agent the opportunity to sell the home as a REO.

I have about a 70 percent return rate on short sales.  Even though I am certified as a short sale agent, I do not do a lot of marketing for this kind of business, but I do list them.

Usually it is a referral of a past customer or friend; is how I get these listings.  I do try everything in my power to get it sold, and market it just like any other listing.  I work very hard to get them to the closing table.

However if the bank/investors bottom line is more then the market value, I loose.  It is not because I did not have offers.

So I was checking on a couple of homes I had listed as short sales, and I did not get them sold, as I always wonder what the difference is from their bottom line for a short sale VS what they will list as a bank owned. I know I should not do this, as it is always salt in the wound!

Today, I found 2 that are listed for so much less then what they would take as a short sale.  One was so low, it listed and sold in no time!

Well I can do that!  List low and sell!

With this particular home I had a ton of showings, so I am interested to know ( and probably will never know) is the buyer a person who came through the home with their agent to preview.  It sold so fast it makes me think it was.

It would great if the bank/investor would give the option to the agent who worked so hard to get it sold as a short sale the option to list as a REO.  You know business to business respect and all!

So wondering if any agents out there has tried to solicit this business, and if you were successful?

Now that lending has gotten more difficult and credit scores (in my opinion) have gone crazy.  Land contracts seem to be on the rise.

I really worry about these for several reasons.  I am sure there are people who have done them successfully, but I am still shying away from them.

What I worry about:

• That the owner of the property has a loan for the property and in his loan agreement is states he can not do this
• That the owner of the property does not keep up his own mortgage payments - therefore goes into foreclosure
• That the owner of the property does not keep up on his payments for property taxes
• That the agreed purchase amount is not what the property will appraise for when ready to buy the home
• The the buyer never gets credit ready
• That the buyer does not take care of the property like they should

I rarely use the hand held telephone book anymore, in fact I believe the last one I got delivered to my house I threw away!

I google everything!  

If you do not have a website I am probably not going to call you.  Even if you were referred to me.  The advantage to me as a consumer, to be able to google you first is; I get a chance to know you and your company a bit to see if you offer the services I am looking for. 

If you have a current blog up and running I get to know YOU a bit better before calling. 

On a personal note, I know how hard I work to keep up my on line appearance, so I respect and give credit to others that do the same. 

So when I go to call a Real Estate service provider (or any other service provider) and google them to find contact info and can not find it, it discourages me, and most times move on to the next person.

So you say you have a website with all your info, so you are good.......... well, what about your blogs?  Unless you have GREAT SEO on your website, what I am finding is Active Rain, Facebook, Linked In ......etc, have way more google juice (SEO) then most websites.  

I know if you google my name, active rain comes up 1st!  So, I really keep my profile up to date here, with all of my contact information.  Facebook seems to be 2nd when searching my name........

It surprises me how many do not have a phone number on the FB profile.  I have Realtors tell me this is for security reasons, but do you not hand out your card to everyone you meet with your phone number?  Do you not advertise in the paper with CALL ME"? I am pretty sure at least your companies phone number is going to be on their website, so at least use that one.  

So google your name, what sites come up first?  Is all your contact info on there and easily found?  

Come on, I really do want to call you, I just can not find your phone number!