With the end of the year upon us, we wanted to share some of the popular questions homeowners and soon-to-be homeowners were pondering. If you have a question, you can always call or e-mail us anytime!
Due to the low mortgage rates an lack of homes on the market, Multiple offers has been a popular term. When you have more than one interested party who submits offers on a particular party. The seller will have to review all of these offers and negotiating with most as a good negotiator should do so, but this does not mean that the particular person you are dealing will do so. This may not always be possible as we have personally seen upwards of 30 offers in on one property!
I recommend to my buyers to put in their best and highest offer, then use the investigatory period to review the property and lower the offer price to what is fair or cancel the agreement. This helps to get your offer accepted and use the contingency period to negotiate, rather than the other way around where you negotiate before acceptance of your offer.
Short Sales & REO’s
What is a short sale? It’s when a seller facing the threat of foreclosure enters into an agreement with their mortgage lender to accept less than they owe on the property, in exchange for avoiding foreclosure. An REO is a property that goes back to the mortgage company after an unsuccessful foreclosure auction.
Here are a few things to keep in mind when considering either a short sale or REO property.
1. Time to close. The short sale process takes time, and requires a lot of patience on the part of the buyer. If you’re in need of a quick settlement, then a short sale is probably not going to be a good option for you under most circumstances. REOs, on the other hand, can settle relatively quickly.
2. A short sale or bank owned property might not be a great bargain. When preparing to make an offer, a potential buyer needs to look at what comparable properties in the area are worth, along with the cost of any needed repairs.
3. Short sale and bank owned properties are sold as-is, meaning the buyer is responsible for any repairs. Your offer should include an inspection contingency that allows you to terminate the sale if the inspections reveal unanticipated damages.
4. Seek council. It is highly recommended that you seek agent or legal council if you’re purchasing either a short sale or bank owned property. Since these transactions are typically more complex in nature, having a professional on your side can be invaluable.
Credit scores, along with your overall income and debt, are a big factor in determining if you will qualify for a home loan, and what loan terms you’ll be able to qualify for.
Here are five factors that decide your credit score:
1. Payment history. Whether you paid credit card obligations on time.
2. How much you owe. Owning a great deal of money on numerous accounts can indicate that you may have over- extended yourself.
3. The length of your credit history. In general, the longer the better.
4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay promptly.
5. The types of credit you use. Generally, it’s desirable to have more than one type of credit–installment loans, credit cards, and a mortgage, for example.
When getting pre-qualified, be sure to ask for a copy of your credit report and carefully review it for any errors. According to some surveys, 75 percent of consumers have errors in their report that affect their scores, and 25 percent have serious errors that might result in credit denial.
Your credit report will offer the biggest clue as to why your credit scores are down. If you’re currently using an accountant, ask them for further guidance. You may also be able to get some answers from the mortgage professional that performed your pre-qualification. Once you have an idea of what is holding your scores down, the quicker you can move to repair your credit and make that purchase.