Selling a home "as is"

bulletandpima
Thu, 15 Apr 2010 22:21:29 +0000

Dragon, I knew where you were going before I even finished reading the sentence.

I would love to say it doesn’t happen, but it does. In VA it rarely happens except for an agency that shall remain nameless (not a national co). Realtors and Mtg brokers are licensed like doctors, attorneys and teachers in the state. They can lose their license from the state board, not VAR (VA Assoc of Realtors), but the actual state for ethics. In other words it isn’t worth the risk

TIP: BUYERS


Contact your current mtg company and deal with them directly if yor are in good standing. Most likely they will cut you a deal at least on discount points.
If you are A paper 700+ credit score shop around. You automatically lose 4 pts off of your score for a mtg app., but you can apply to 100 companies in 120 days and not get anything more taken off. It is not like a car loan.
The good realtor will offer you at least 3 mtg companies. Don’t assume they are getting a kickback, just understand that not every mtg company, especially brokers, can get you to the table. The realtor is suggesting those brokers/lenders because they know historically that they get you to the table on time.


Don’t show up on that date and you are considered IN DEFAULT. The seller can sue you for the EMD and the entire cost of the house. RARE on the entire cost, but they have that right.


If you opt for your own lender/broker immediately hand over their number. Realtors spend hours on the phone with them making sure you are clearing underwriting or the appraisal. You need them to be kept in the loop.
NEVER EVER PAY FUNDING FEES, if you must make sure that the broker than gives you a loan origination discount fee to bring it to 0.
Get a good faith from the lender when you get the prequal loan. If they refuse than you need to re-think using them
Ask if the good faith is locked in, for example. You get a good faith at 5 3/4, but tomorrow it goes to 5 7/8 are you locked in at 5 3/4
Ask if the loan floats, for example, you are locked in at 5 3/4, but the rate drops to 5 1/2, are they going to float you down to 5 1/2.
Rule of thumb take the mtg rate convert it into a dollar sign and add 1. Now multiply that by the loan amt. This should be your rough ball park number for your mtg, including taxes and insurance, not PMI.
Try to always get at least an 80/15/5. This means you will take an 80% loan, and a 15% second, but 5% down. You avoid PMI which will save you a fortune. If you do this method, ask the lender to make the 15 a home equity line, because that means as you pay it off you will be able to access it for the what if scenario…vacations are not what if…HVAC is!


I always offer 3 lenders, one is our national company (RE), one is a lender and one is a broker. I give them their business cards and tell them to contact them. I contact these people to tell them to expect a call and this is their price range. I never discuss the buyers financial status, I just ask them to give me a yeah or a nay for approval purposes.

Again remember there is a difference between a lender and a broker and it is very important buyers understand the difference.

One last thing if the realtor or lender says don’t pay for title insurance RUN! RUN FAST! Title insurance is also a murky issue to buyers and sellers because it just doesn’t make sense since they have home owner insurance. Here’s the deal, the previous owner didn’t pay a bill to an HVAC mechanic for 5K, the title was cleared without catching it. The title insurance will pay for your attorneys fees to go to court, your homeowners won’t. The HVAC is a lien on the home, not the owners and that is why homeowners won’t pay for it in the most simplistic terms. Buy a brand new construction home is also a popular one. Out of the woodwork long lost sibling comes with a will and says I never agreed to the sale of the land and I still own it. Title insurance will pay for those legal fees.

Instead of trying to save money and not buy it, title insurance for the owner can be re-issued at a much lower rate, @1/3 of the cost, IF you ask the owners to find who they had the insurance with. It isn’t like going ALL-State vs Nationwide, it is a set amount and can only be lowered if it is re-issued.

A couple more days and I will have tutored you all enough to get an RE license ;)