Signs My Home Will Close On Time

A seller put his Phoenix, Arizona home on the market to move out of state. A buyer viewed the home and found it to be perfect for their growing family. The buyer and seller negotiated a contract to sell a home. The buyer completed inspections and found few repairs. The seller boxed up a lifetime of memories and loaded the moving truck! The home selling process appears to be going very smoothly… But wait! Will this home close on time, or are there problems ahead? Here are a few indicators to look for:

Close on time

Buyer Qualifications Reviewed – When a buyer writes a contract to purchase a home, the buyer should present a list of pre-qualifications with the contract. In Arizona there is a standard Pre-Qualification form that should be completed by the buyer’s lender. This form is loaded with information about the perspective buyer. Important are items that the lender requires from the buyer in order to start and complete the loan. Completing these items sooner will allow for a quicker close – overlooking them will certainly slow the process. How these items are managed is a clear indication of whether the home will close on time or not.

Appraisal Complete – The appraisal should be ordered within the first few days of an accepted contract. While there is no hard and fast rule for completion of the appraisal, all parties agree that sooner is better than later. The appraisal should be good news, but there could be bad news lurking. Certainly, when the buyer’s financing depends upon completion of the appraisal, a good sign that the closing of the home will occur is completing this important step.

Loan Package Submitted to Underwriter – Another big step for every home purchase is submitting the loan package to the underwriter. Included in the loan package is the title report, the completed appraisal, terms of the loan, the buyer’s application, and a bunch of documentation that none of us think about on a regular basis. The underwriter reviews the loan package for a few days and generally will give loan approval with prior to document (PTD) conditions. If this step is completed early enough in the escrow process, clearing the PTD conditions should not hold up the closing day. However, at times, the PTD conditions may require documentation not readily available, thereby delaying the closing date.

Don’t Forget About the Home Owner Association (HOA) Disclosures! –While the Arizona contract calls for delivery of all HOA information to the buyer, state law allows HOAs 14 calendar days from the time of the request to delivery to provide all necessary information. Normally, the title agency involved will make the request for HOA documents early, after contract acceptance. However, delivery of these documents to the buyer may not happen for sometime and the buyer receives 5 days to review the HOA documents. While review of HOA documents should not hold up a typical 30-day COE, it may delay shorter escrows.

Buyer Loan Docs to Title – A great sign! No matter how choppy the last few weeks may have been, delivery of buyer loan docs to title is a sign that the closing will occur in 3 days. All parties will be in a hurry to complete the last tasks of the transaction and there may be some extra drama and stress. However, be assured that closing of the home generally happens for most Phoenix Real Estate transactions.

Short Sale Exception – If you are purchasing a short sale transaction, the seller’s bank may delay the closing date for 1-3 business days in order to approve the final settlement statement. While very annoying to all parties, this is a necessary extra step for most short sales. Some listing agents and title companies are proactive here and initiate the bank approval early. If so, then you have a sign that closing will happen on time!

Do you want to learn more about how to make your home buying or selling process go smoothly? Want to know more about Phoenix homes for sale? Our knowledgeable Phoenix AZ Realtors can help find the gems in the Phoenix MLS as well as make sure that your sale goes as smoothly as it can.

Contact us at www.ThompsonGroupAZ.com or (602) 753-0177

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5 Ways to Save on Your House Sale

Save Money on Your House Sale

With the sales price being so large, few sellers stop to think about ways to minimize the costs of selling their home. Knowing, monitoring and controlling the costs during the escrow process is key to saving thousands of dollars and to receiving larger proceeds from the transaction. Here are costs to understand:

  1. One of the largest costs is commissions paid to the real estate agents. Commissions vary from 5%-7% of the sales price depending on the type of real estate transaction. While lower costs may seem like a winner, many times you get what you pay for with an agent. With so much riding on the selling price, a real estate agent should bring great service, a solid marketing plan and sharp negotiating skills to the table. If your agent is bringing less to the table, you will see a lower sales price.
  2. With every home sale, home owners are required to pay the Owner’s Title Policy and to share in the escrow fee paid to the local title/escrow company. While the fees are not negotiable, the title/escrow company used to process the transaction is negotiable. All title/escrow companies publish their fees in rate books which are readily available to review and compare.
  3. Do you live in a Home Owners Association (HOA)? If so, then your HOA may charge a transfer fee, disclosure fee, or capital improvement fee. Few homeowners understand what their HOA will charge them for the transaction – and charges may run from $500-$2000. A quick phone call to the HOA should clarify what fees are charged. While these fees are non-negotiable with the HOA, there is the possibility of negotiating and sharing the cost of these fees with the buyer for your home.
  4. In any real estate transaction, a Home Warranty is considered a must purchase for the new buyer. The cost ranges from $325-$600 and is a negotiated item payable by the buyer or the seller. Many times home sellers are requested to pick up the cost of a Home Warranty for the buyer. However, the cost is negotiable.
  5. Are you in an area where 1st time home buyers are known to be moving? If so, you may want to prepare yourself for requests to contribute to the buyer’s loan costs. These contributions are generally up to 3% of purchase price or more. The contribution covers appraisal fees, A.L.T.A. title policy, impound accounts, origination fees and other loan costs. While the contribution to buyer loan costs can be very important to getting a home sold, stronger buyers rarely need such assistance.

Do you want to learn more about ways to control your selling costs and get the most money from the sale of your home? Contact us at (602) 753-0177 or www.ThompsonGroupAZ.com.

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Does Your Agent Understand Short Sales?

In most situations, a well-planned short sale of a home has a lot of advantages over foreclosures. Indeed, a close look at the Phoenix MLS shows that there are still plenty of short sales among all Phoenix Homes for Sale. However, a short sale is not to be taken lightly — preparation and experience is essential! Among the important questions to consider when pursuing a short sale is the big question: Does my Realtor understand short sales?

To help you evaluate how prepared your Realtor is for handling a short sale, have a discussion with him or her about the short sale process, and be sure to ask lots of questions. If you don’t hear the answers or the knowledge and familiarity that you’re looking for, be prepared to keep looking for a Realtor that’s equipped to help you.

  1. Who is the service company and what do they do in the process? In general, the service company of the mortgage is the name on the mortgage statement you receive every month. Bank of America, Chase and Wells Fargo are common service companies. In most cases, the service companies are only in charge of processing the file and have very little to do in the decision-making process and negotiation of the sale itself.
  2. Who is the investor? Fannie Mae, Freddie Mack and Ginne Mae tend to be the investors of the majority of loans. Large service companies such as Bank of America, Chase and Wells Fargo may also be an investor on a mortgage. The investor is usually the decision- maker on each loan and has specific guidelines to follow in negotiating a short sale. Experience in negotiating with different investor guidelines is essential experience for a Realtor to have in order to have a successful close of escrow
  3. Who is the MI Company? Not all loans have MI (mortgage insurance), but some do. In the event that there is MI on a loan, you be certain that the MI Company is going to negotiate with you (the seller) before allowing a close of escrow. The MI Company is generally covering the loss in the short sale and paying out the investor for the loss on the mortgage, So, the goal of the MI Company is to reduce the lost payout as much as possible.
  4. How will each be negotiating with me? This is a great question for an agent. Negotiating with service companies, investors and MI Companies is not like negotiating a normal purchase contract. The process is bureaucratic, paperwork-intensive, and detailed. Experience really pays here and a good Realtor will know how to get it done and cost you very little at closing. However, a lack of experience and less-than-thorough paperwork by your agent could result in you writing a large check at closing, or worse, a foreclosure.
  5. What are the potential tax consequences? In every short sale, there are potential tax consequences that a seller must deal with. Asking your CPA or tax advisor about your particular situation and possible consequences is a very important part of planning for your future. A Realtor should have some general knowledge of the potential consequences as well as a good reference for you to get further help, but should also encourage you to discuss with your CPA or tax advisor.
  6. What are the potential liabilities after closing? Most loans are written as “non-recourse”, meaning that the lender will not be able to pursue you in the future for a loss incurred. However, some loans are recourse loans in which the financial institution may choose to pursue legal and collection avenues for the loss. When working with a recourse loan, there may be future liability and it is wise to consult an attorney about the situation.

Our Phoenix AZ Realtors have the short sale knowledge and experience to help you succeed – contact us at www.ThompsonGroupAZ.com or 480-776-5214.

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Purchasing a Home: How Much Can I Afford?

Before going to look for that perfect home, before writing contracts, before considering all the fun upgrades in the home, one important question needs to be asked, “How much can I afford in a new purchase.” Whether you have a stash of cash in the bank, or a very tight budget, most loan officers are going to need a little information before they can give you a good answer.  Here are a few important items to think over and have in mind when you speak to your favorite loan officer:

  • Down Payment – How much do money do you have saved for a down payment? Of the money you have saved, how much do you want to budget toward a home purchase.  There are FHA loan programs where the down payment is as low as 3.5% of purchase price. While these are great loan programs for making a home purchase, these programs also require mortgage insurance and result in a higher mortgage payment. Other programs that require 20% of purchase price for down payment are available.  These loan programs do not require mortgage insurance. Generally, the higher your down payment, the better the loan program is for the purchaser, because the bank is taking less risk on mortgages with higher down payments.
  • Closing Costs of the Mortgage – Every mortgage has closing costs that range between 2-4% of the mortgage loan amount. That could be $4,000 in closing costs on a $200,000 mortgage. The amount of closing costs varies from lender to lender and different loan programs. Closing costs may also be paid by the seller, allowing a buyer to keep that cash in the bank. If closing costs are paid by the seller, the loan amount tends to be 2-4% higher and the mortgage payment will reflect that higher loan amount.
  • Interest Rates – Currently mortgage rates are under 4.5% on a 30-year fixed mortgage.  While this rate is higher than the lowest interest rates of the past few years, this rate is still a great rate for a mortgage. As the interest rate rises, the amount a homeowner is able to borrow goes down.
  • Property Taxes – Property taxes are generally paid through the mortgage payment and divided into 12 payments. Typically, property taxes are $1,200-$1,800 annually. The result is that property taxes will add $100-$150 to a mortgage payment.
  • Home Owner’s Insurance – Costs of insurance runs around $40-$60 per month. Costs vary depending on the company you choose, the amount of the policy, and any additional coverage you want to add to that policy.
  • Mortgage Payment – With all this information, a great loan officer is going to be able to calculate what you are able to afford for a purchase price on a home. The loan officer is also able to calculate what your monthly mortgage payment will be. If you feel the mortgage payment is too high, then it is possible to reduce the purchase price down to a payment that is more affordable.

So… are you:

  • Tired of just reading and talking about a new home purchase?
  • Itching to get started finding that special home?
  • Ready to find out how to get a great deal?

…then the Thompson Group is ready to help! Reach us at 480-776-5214 or www.ThompsonGroupAZ.com to get going and find your new home.

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Experience Matters – Questions to Ask Your Agent Before Selling

All our clients have presented us with unique situations in the past when looking to sell their Phoenix Arizona Homes. Whether moving out-of-state to take a new job, hoping to buy a bigger home with a pool, needing to be in a new school district, or looking to downsize to a home that is more manageable, our clients all had something very important in common. Each had future plans – plans that depended heavily on how the logistics of the sale were handled and the financial results of the sale.

 Marketing and Selling Homes is Serious Business.

A well planned and executed sale of a home allows the homeowner to move forward with their next phase of life. However, mistakes may cost thousands of dollars and hours of stress when escrows are canceled. Nothing may be more important in the transaction than the knowledge and experience of the agent giving you advice. So, here are a few good questions for you to ask your agent:

  • What do you know about the area? At times, knowledge of the area can be the key to selling a home. Buyers that are new to the area need to know information about schools, movie theaters, shopping and more. An agent who lives in the area can help buyers identify how they will enjoy the area –  and many times, the home will sell quicker.
  • How do you market my home? Believe it or not, some agents think that ordering a “for sale” sign and putting your home in the Phoenix MLS is how to sell a home. This is only the beginning! Great agents should be able to deliver to you a written marketing plan tailored for the Phoenix Real Estate market along with success stories from using that plan.
  • How much are the costs of selling my home? In order to plan for the future all homeowners with Phoenix Homes for Sale need to know the amount of money they will have after the sale of the home. Great agents should be able to estimate the cost of real estate commissions, title fees, loan costs, repair costs, and property taxes.
  • When will the buyer’s loan be approved? Without loan approval, the sale of the home cannot close escrow. In tracking a lender’s process, a great agent should know how to use the LSU (Loan Status Update) form, what “PTD” conditions are, and what is the time needed for a lender to get loan documents to title after full loan approval. Being able to track the lender’s progress is essential for a seller to know whether they will close on time or not.
  • What is breach of contract and how do you handle this? In the Arizona purchase contract, the seller is unable to exit the contract while the buyer retains over five  exits from the contract. However, if the buyer is in breach of contract, then the seller may exit the contract. Breach of Contract occurs when the buyer takes actions that are contrary to the written contract. This is a serious situation that experienced agents should have a plan to handle.

Do you want to learn more about how to make your home-selling process go smoothly? Our knowledgeable Phoenix AZ Realtors are here to help ensure just that. Contact us at www.ThompsonGroupAZ.com or
(480) 776-5214.

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Signs My Home Will Close On Time

A seller put his Phoenix Arizona home on the market to move out of state. A buyer viewed the home and found it to be perfect for their growing family. The buyer and seller negotiated a contract for the sale of the home. The buyer completed inspections and found few repairs. The seller boxed up a lifetime of memories and loaded the moving truck! The home selling process appears to be going very smoothly… But wait! Will this home close on time, or are there problems ahead? Here are a few indicators to look for:

  • Buyer Qualifications Reviewed – When a buyer writes a contract to purchase a home, the buyer should present a list of pre-qualifications with the contract. In Arizona there is a standard Pre-Qualification form that should be completed by the buyer’s lender. This form is loaded with information about the perspective buyer. Important are items that the lender requires from the buyer in order to start and complete the loan. Completing these items sooner will allow for a quicker close– overlooking them will certainly slow the process. Management of these items is a sure sign of whether the home will close on time.
  • Appraisal Complete – The appraisal should be ordered within the first few days of an accepted contract. While there is no hard and fast rule for completion of the appraisal, all parties agree that sooner is better than later. The appraisal should be good news, but there could be bad news lurking. Certainly, when the buyer’s financing depends upon completion of the appraisal completion, a good sign that the closing of the home will occur is completing this important step.
  • Loan Package Submitted to Underwriter – Another big step for every home purchase is submitting the loan package to the underwriter. Included in the loan package is the title report, the completed appraisal, terms of the loan, the buyer’s application, and a bunch of documentation that none of us think about on a regular basis. The underwriter reviews the loan package for a few days and generally will give loan approval with prior to document (PTD) conditions. If this step is completed early enough in the escrow process, clearing the PTD conditions should not hold up the closing day. However, at times, the PTD conditions may require documentation not readily available, thereby delaying the closing date. At this point all parties should have a clear sign as to when the closing will occur.
  • Don’t Forget About the Home Owner Association (HOA) Disclosures! –While the Arizona contract calls for delivery of all HOA information to the buyer, state law allows HOAs 14 calendar days from the time of the request to delivery to provide all necessary information. Normally, the title agency involved will make the request for HOA documents early, after contract acceptance. However, delivery of these documents may not happen for 19 days. As the buyer receives 5 days to review the HOA documents before closing, the delivery of these important documents may be a sign of an on time or late closing.
  • Buyer Loan Docs to Title – A great sign! No matter how choppy the last few weeks may have been, delivery of buyer loan docs to title is a sign that the closing will occur in 1-3 days. All parties will be in a hurry to complete the last tasks of the transaction. However, be assured that closing of the home generally happens on most Phoenix Real Estate transactions.
  • Short Sale Exception – If you are purchasing a short sale transaction, the seller’s bank may delay the closing date for 1-3 business days in order to approve the final settlement statement. While very annoying to all parties, this is a necessary extra step for most short sales. Some listing agents and title companies are proactive here and initiate the bank approval early. If so, then you have a sign that closing will happen on time!

Do you want to learn more about how to make your home buying or selling process go smoothly? Want to know more about Phoenix homes for sale? Our knowledgeable Phoenix AZ Realtors can help find the gems in the Phoenix MLS as well as make sure that your sale goes as smoothly as it can. Contact The Thompson Group at (480) 776-5214.

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