The following are questions I've been getting during the past couple of months from first time home buyers. They are in no particular order, but have caused concern for my clients.
Your REALTOR(R) or your lender can go into further detail; rules and regulations might vary from State to State; tax laws might apply so you might want to talk to your accountant or attorney.
THESE ARE THE FAST ANSWERS I GIVE MY CLIENTS:
Question I: Why does Realtor.com still show the home that I am buying and have an accepted offer on as "active" for sale if, in fact, it is under a "contingency contract"?
Answer: Our MLS in Del Norte County, California only allows for three different entries when it comes to a home under contract:
1. Contingency Sale: This means that there is a contract but in order to go forward, needs to have some contingencies addressed, anything from loan approval for the buyer to disclosures by the seller. Once these have all been resolved to both parties satisfaction, the contract goes into the next stage:
2. Pending: At this stage the listing does not show up on REALTOR.COM anymore at all!
3. Sold: You may see the home as "sold" on ZILLOW later, but not on REALTOR.COM
Question II: Can we offer less on a REO listing than the asking price?
Answer: You can offer anything you like, but if you really want that home, and knowing that there are others most probably making offers (well priced homes have gone under contract within a few days), you should make your best offer the first time around. The home still needs to be appraised for the lender. That will give you a way out of the contract if the appraisal comes in low.
Question III: Why is a short sale priced so low?
Answer: Usually, the seller tries to attract multiple buyers who are willing to pay that price or more. He will then submit the highest (or "cleanest" with few contingencies, seller paying for closing costs, etc.) offer he receives to his lender, hoping that the lender will approve the short sale at that price. Often, the lender will come back with a higher price. At that point, the buyer has the opportunity to accept or reject the new price. Back-up offers are a possibility.
Question IV: Why do short sales take so long for approval?
Answer: Sometimes they do and sometimes they don't depending on the lender. I've had an extremely good track record with getting fast approvals. What does not help the process is if there are more than one lender involved (2nd and even 3rd mortgages). Sometimes the lender just wants to foreclose on the property.
Question V: Why do I need to be pre-approved?
Answer: Simply put, you need to know whether or not you can actually get a loan. And, secondly, how much you can spend. Third, when you submit an offer in this tight inventory market, your offer will not be accepted unless the seller knows you are actually in a position to buy it.
Question VI: How much down payment do I need:
Answer: This depends on the kind of loan you get. You might qualify for an FHA loan with only 3.5% down. Talk to your lender which loan makes the most sense to you.
Question VII: What about closing costs?
Answer: You will receive a Preliminary HUD-1 statement from the escrow company that will detail all your costs. What I usually suggest to my buyer is that we include in the offer seller participation in the closing costs of recurring and non-recurring items. This can save you several thousand dollars.
Question VIII: How long before I can move into my house?
Answer: We usually include a provision in the offer that we close in 45 to 60 days. Two things might prolong this:
1. If it is a short sale, to just get the approval, it can take anywhere from a week to several months to get the approval. There is no way to know.
2. If there are issues with repairs that need to be addressed, it might take extra time.
I HOPE THIS INFORMATION IS HELPFUL. IF YOU ARE A FIRST TIME HOME BUYER HERE IN CRESCENT CITY, DEL NORTE COUNTY, CALIFORNIA, I WILL BE DELIGHTED TO HELP YOU THROUGH THIS PROCESS.
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