Contract Provisions, Housing Supply, Mortgage Volume:
Learning Juggling 101
Are you actively pursuing homeownership and out looking at homes with a realtor?
If so, I'm sure your realtor has broached many topics with you already. There's a lot to know and stay informed of when buying and financing a home. It can feel like your juggling lots of things at once.
One facet of the home buying process that's of real importance is the home inspection (which occurs AFTER the contract is agreed upon). Your realtor has probably recommended that you include an inspection in any real estate contract you're considering.
That's wise, as a home inspection serves as a form of protection for you.
A home inspection includes a thorough assessment of the home's current condition. The home inspector will look for any possible defects that could prove dangerous or costly to fix and identify building code violations that may exist.
This information can prove immensely beneficial for buyers to possess. It's important, not only in the short-term as a possible re-negotiating tool with Sellers should the inspection reveal structural or more minor issues, but in the long-term, as well.
After the inspection is performed, a buyer has a checklist at their disposal. They know what issues in their home may need addressing in the future ... whether that be in 1 year, 5 years or 10. As a result, budgeting or preparation for future upgrades or repairs becomes much easier. That can prove very advantageous.
The home inspection is typically set-up and performed soon after the buyer signs their real estate contract. Doing this in a timely fashion is critically important, as most contracts contain a specified time period for the performance of the inspection.
There is another "clause" found within most contracts, as well. It also requires action be taken (typically 5 to 10 days) of contract "acceptance". That is the filing of the Loan Application if the Buyer requires Financing.
The importance and adherence to both of these contractual timelines are absolutely critical to meeting the Closing Date agreed upon by both parties within the real estate contract. This is especially true during a high-loan-volume market such as the one we're experiencing currently.
The Mortgage Application itself leads to the next and important step in the process ... the Appraisal. The Appraisal must be ordered (unless a waiver of the Appraisal is available) by the Lender.
Again, time is of the essence, as the demand for homes is currently very strong. Active buyers are finding that there is often a very limited supply of homes for viewing/sale right now.
Low housing supply is creating appraisal evaluation issues in many housing markets. It's driving a flurry of increased competition for homes in these markets.
That competition is, in turn, elevating housing prices ... or the price that buyers are willing to pay for desirable homes.
As a result, some appraisals are coming back showing values less than the contract purchase price. Appraisers sometimes find that the comparables available for their use oftentimes do not "keep up" or justify current listing/sale prices.
An "unwritten" issue cropping up increasingly often revolves around contract contingencies. I say "unwritten" because contingencies are seen so rarely in contracts right now.
That's because (again as a result of the low-inventory/high demand), Sellers don't need to offer any kind of incentives to find a buyer. But it's also true that many Sellers are simply unable to offer closing cost credits, perform repairs, or give concessions to buyers at this time.
Appraisal turnaround times have lengthened. Appraisers are extremely busy right now, as are title companies, attorneys, mortgage providers, inspectors, and etc.
Each of these issues demands that feasible client expectations be set, both for buyer and seller. They also showcase the importance of placing viable realistic dates on real estate contracts.
Today's mortgage process has many working parts. Each part should be in sync with the others for it all to work fluidly and well together.
To help their own cause and keep stress at bay, clients must remain attentive, responsive, and thoroughly engaged throughout their entire financing process. Time and timing is everything when seeking a "clear to Close".
And a "clear to Close" is the ultimate goal and prize ...
* Are you dreaming of buying or refinancing a home or investment property in New Lenox - Will County - Illinois or Wisconsin?Contact me today! I'll put my 40 years of mortgage experience and expertise to work on your behalf. I'm easily found at:Gene MundtMortgage Originator - NMLS #216987 - IL Lic. 031.0006220 - WI #216987American Portfolio Mortgage CorpNMLS #175656Direct: 815.524.2280Cell: 708.921.6331eFax: 815.524.2281
Mortgage Originator - NMLS #216987
IL Lic. #031.0006220 - WI License #216987
Gene Mundt, Mortgage Originator, 40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking: #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including: The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin.
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