Joe Kapell's Blog
If you’re thinking about buying a home, you’ve probably heard a lot about closing costs. Closing costs can come at a hefty price- up to 5% of your home’s purchase price. When that amount must be paid up front, you need to make sure you have a sizable amount of cash on hand.
There’s many different kinds of fees included in the closing costs. Your lender will give you an estimate of what your closing costs will be, but you may not know what any of the terms that are included actually mean.
The Loan Origination Fee
This is the fee charged by your lender that covers the administrative costs that are associated with creating and processing a mortgage. This could also be called an underwriting fee.
Title Search Fee
This is how much the title insurance company charges to perform research on the title of the home. In some cases, the title may have some issues associated with it, so this research is to protect you. There’s also title fees known as lender’s title insurance and owner’s title insurance. You need to have lender’s title insurance, but owner’s title insurance is completely optional.
Credit Report Fee
This covers the obtaining and review of your credit report.
There’s also a fee when it comes to reviewing your mortgage loan application.
This fee covers the appraiser who is chosen by your mortgage company in order to assess an accurate value of the home.
Tax Monitoring Fee
This fee supports tax research on the home to determine if property taxes have been paid.
The property survey covers all aspects of the property bounds including gas lines, roads, walls, easements, property improvements, and encroachments.
The attorney fees will cover all of the document reviews, the agreements, and the escrow fees.
When you close on a home, your entire first year of home insurance payments must be made at the time of closing. If you have bought your home with an FHA loan, you’ll need to pay mortgage insurance premiums at closing as well. You’ll also need mortgage insurance payments if you put less than a 20% down payment on the home.
Escrow Property Taxes
The lender requires that you pay your property taxes up front. This money will be held in escrow and the taxes paid from there.
As you can see, there’s a lot that goes on during the closing of a home. Make sure you have some water handy, it’s going to be a long process! Understanding what will happen at closing when you buy a home can help you to avoid any surprise fees or financial burdens.
If you plan to attend an open house, it usually pays to be prepared. That way, you'll know exactly which questions to ask during an open house and can ensure that you can gain the insights that you need to determine whether a residence is right for you.
Now, let's take a look at three key questions to ask a listing agent during an open house.
1. Why is this home for sale?
Although a home listing provides plenty of information about a residence, it is unlikely to explain why a homeowner is selling his or her house. Thus, you should use an open house to find out exactly why a home is for sale.
In many instances, a listing agent will be honest and forthright about why a homeowner has decided to add his or her residence to the real estate market. Once you receive an answer to your query, you can better understand whether a house matches your expectations.
On the other hand, if a listing agent hesitates or shies away from your question, you should be skeptical. At this point, you should continue to dig for more information about a residence to learn about any potential flaws.
2. Are there any home problems that I need to know about?
An open house enables you to get an up-close look at a residence. Furthermore, the event allows you to find out about a residence's pros and cons from a listing agent.
Ask a listing agent about any home problems – you'll be glad you did. The listing agent should be able to provide you with plenty of insights into a home's condition, ensuring you can make an informed decision about whether to submit an offer.
A listing agent is likely to be honest with you about any problems with a house. By doing so, this agent will reduce the risk of a homebuyer later rescinding an offer after a home inspection.
3. Have there been any offers on the house?
It is important to find out if there is any competition for a house, especially if you discover your dream residence. Thus, during an open house, you should ask a listing agent if any offers have been submitted on a residence.
If a listing agent responds "Yes" to your query, you may want to act fast to submit a competitive offer on a house. Because if you wait too long to make an offer on your dream residence, you risk losing this house to a rival homebuyer.
Lastly, if you need help getting ready for an open house, you should collaborate with a real estate agent. This housing market professional can provide deep insights into a residence before you attend an open house. Therefore, a real estate agent will help you take the guesswork out of getting the most out of any open house, at any time.
Want to optimize the value of an open house? Ask the aforementioned questions, and you can get the information that you need to fully evaluate a residence.
After a home seller accepts your offer on a home, the next step usually involves a home inspection.
At this point, you'll hire a home inspector who will walk through the home you'd like to buy and offer expert insights into the residence's strengths and weaknesses. Then, you'll be able to assess potential issues with a home and determine whether to move forward with a home purchase.
A home inspection can be stressful, particularly for a first-time homebuyer. Lucky for you, we're here to help you take the guesswork out of home inspections.
Ultimately, there are many questions to consider after a home inspection is completed, including:
1. What did the home inspection reveal?
A home inspection offers unparalleled insights into a residence. It enables you to look beyond a house's surface and find out whether major repairs will be required both now and in the future.
Hiring an experienced home inspector is paramount for homebuyers. With an experienced home inspector at your disposal, you'll be better equipped than others to identify "hidden" problems within a house.
Also, don't forget to review a home inspection report closely. With this information at your disposal, you'll be able to understand whether a residence meets your expectations.
Be sure to consider the long-term value of a property as well. Remember, a home that you plan to purchase should be able to serve you well for years to come. But if you encounter myriad home issues during a property inspection, you may want to consider rescinding your offer on a residence and restarting your search for the ideal house.
2. Are there major home issues?
As a homebuyer, it is important to be able to identify the differences between major and minor home issues.
For example, if there are tiny cracks and chips in the paint on a kitchen's walls, these issues are minor. In fact, you may be able to repair such issues quickly and effortlessly.
On the other hand, an old, inefficient furnace can cause major headaches. Without a properly functioning furnace, you may struggle to heat your home in winter. Meanwhile, it may cost several thousand dollars to replace this furnace.
If you encounter problems with a residence during a home inspection, consider the costs associated with these issues. By doing so, you'll be able to determine how much you may need to spend to correct such problems and can proceed with a home purchase accordingly.
3. What should I do next?
An informed homebuyer will be equipped with the knowledge and insights needed to make a great decision.
Consider the problems that were discovered during a home inspection. If you can fix home issues without having to commit substantial time and resources to complete various home maintenance projects, you may want to consider moving forward with a home purchase.
If you encounter major home issues, you can always ask a home seller to perform home repairs. Or, you may want to remove your offer on a home altogether.
Working with a real estate agent is ideal, especially for homebuyers who want help with home seller negotiations. With assistance from a real estate agent, you should have no trouble determining how to proceed after a home inspection.
Real estate market data is readily available to home sellers across the United States. With this information at your disposal, you should have no trouble maximizing the profits from your home sale.
Now, let's take a look at three real estate market data that every home seller needs to check out before listing a residence.
1. Prices of Comparable Houses
Let's face it – determining a competitive price for your house may prove to be difficult, regardless of your home's age or condition. Fortunately, if you analyze the prices of comparable residences in your city or town, you can better understand how your house stacks up against the competition and price it appropriately.
Furthermore, it may be beneficial to conduct a home appraisal prior to listing your house. This appraisal enables a home expert to assess your house both inside and out. Then, you'll receive an appraisal report that contains a property valuation, which may help you determine a competitive price for your house.
2. Prices of Recently Sold Houses
Are you preparing to enter a buyer's or seller's market? Review the prices of recently sold houses in your area, and you can find out whether the current housing market favors buyers or sellers.
If home sellers are receiving offers at or above their initial home asking prices, now may be an ideal time to list your residence. Thus, you may want to add your house to the real estate market sooner rather than later to capitalize on a housing sector that likely favors sellers.
Conversely, if home sellers are receiving offers below their initial home asking prices, you may want to allocate significant time and resources to find ways to improve your house. Because if you enhance your house's exterior and interior, you may be able to help your house stand out from the competition and increase the likelihood of a profitable home sale.
3. Average Amount of Time That a House Is Listed
Check out how long houses stay on the real estate market before they are sold – you'll be glad you did. With this housing market data in hand, you can assess the pulse of the real estate market and map out your home selling journey accordingly.
If you need help collecting or analyzing real estate market data, there is no need to worry. Hire a real estate agent today, and you can gain the insights that you need to make informed decisions throughout the home selling journey.
A real estate agent is a housing market expert who is happy to help you in any way possible. He or she will provide recommendations about how to price your house and improve your home's interior and exterior. Plus, a real estate agent is available to respond to any of your home selling concerns or questions, at any time.
Ready to list your home? Review the aforementioned housing market data, and you can obtain deep insights into the real estate sector prior to selling your house.