Archive for Selling A Home
Closing Costs Clarified
How much closing costs should a home buyer expect to pay? Closing costs average 5% of a home’s purchase price.
Closing Cost Estimates
Looking for the exact amount? Lenders are required to disclose all closing costs within three days of when a buyer applies for a mortgage. The forms used to list closing costs have been standardized and simplified. The new Good Faith Estimate (GFE), circa January 2010, helps buyers shop and compare costs from different lenders. Lenders are held accountable to ensure that all costs, even title fees, on the Good Faith Estate match the final numbers on the Settlement Statement (HUD-1).
Who Pays What
While Tampa area home sellers pay for the owner’s title policy, commissions and state doc stamps on the deed, buyers are responsible for: lender fees, the lender’s title policy, doc stamps on the note, home insurance, pre-paid taxes, and prorated CDD / HOA fees. See this RIS Media report on new HUD & RESPA regulations.
Buyer Costs Will Increase
If the amount of cash required to close is an issue, potential home buyers may want to act now. Tampa home sellers can still pay up to 6% of a buyer’s closing costs, but those days are numbered. New FHA guidelines will be phased in over the coming months that will reduce seller contributions to 3% most likely, and will increase the financed Mortgage Insurance Premium (MIP) by a half percent. We expect to see loan costs increase in the coming months as: lenders require larger down-payments (6% up from 3.5%), tax credits expire, credit requirements tighten, and interest rates increase from historic lows.
To take advantage of this historic buying opportunity, contact Team Bohannon at Coldwell Banker today at (813) 979-4963.
“I am Not a Lead” – The Privilege of Serving
Ran across this manifesto last year and was impressed. Spoke to Marc Davison of 1000 Watt Consulting and enjoyed his thoughts on the real estate business and the mindset that traditional agents have about ”leads”. Rather than relying on technologies that de-personalize or attempt to automate “lead response”, Realtors should focus on listening, absorbing and responding with accurate information. This is not about us, it is about the client. The fundamental approach should be to provide high-value, relevant information that is aligned with a client’s goals. One can only build a lasting relationship by treating individuals with respect. Realtors seeking to create “raving fans” and a durable competitive advantage must connect at a deeper level over an extended period of time to earn the privilege.
Social Media Presentation
We are witnessing the birth of social media. Why do we care? Team Bohannon’s goal is to maintain and strengthen our client relationships by delivering high-value, relevant content more quickly. Most people buy a home once every seven years, but most Realtors do not stay in touch with past clients for seven years. We use social media to meet clients where they are online. We want to understand our clients online behavior, what and whom they value, and how they might use social media in the context of real estate.
In researching the use of social media in real estate, I came upon this general presentation that offers a helpful look at “Understanding You Customer’s Social Behavior” posted by the Altimiter Group from the other bay area:
Don’t Get Soaked By Flood Insurance
We almost had a 300K short sale transaction fall apart at the last moment over flood insurance. The current owner was paying $1600 per year and the quote for the buyer’s insurance was $6000 per year because this older home was located in a Pinellas County flood zone that had recently changed. The high cost would have impacted the buyer’s loan ratios and willingness to buy. Flood insurance is not assumable if less than 6 months remain on the policy. The heroic efforts of everyone involved resolved the situation when we discovered the home was grandfathered into a different classification because the building permit was issued before the flood zones changed.
Why You Need Flood Insurance
Anywhere it rains, it can flood. While coastal areas have a higher risk of flooding, inland areas may also have a topography that is prone to flooding. Lenders insist on flood insurance if a property is located within certain flood zones to protect their collateral – the home. Most newer subdivision must be built at elevations above sea level and do not require flood insurance policies.
Elevation Certificates
If your lender and/or insurance agent claim that your home is in a flood zone, we may be able to obtain a Federal Emergency Management Agency (FEMA) elevation certificate, or flood certification, to verify that a home is above sea level and therefore may not need flood insurance. FEMA Flood Elevation Certificates are done by licensed Florida engineers in order to determine how much Flood Insurance a homeowner will have need. Sometimes flood zone classifications are incorrect. Even if a home in located within a flood zone, it may be grandfathered into a different classification. You might also perform a flood risk analysis to see how your home compares to FEMA’s risk assessment.
Flood Zone Maps
Flood-hazard maps have been created to show different degrees of risk for each area. FEMA updates digital flood maps and revises flood zones to offer up-to-date risk assessments. Click these links for Hillsborough County Flood Hazard Maps, Pasco County Flood Zones or general information from the Southwest Florida Water Management District about the watershed and the floodplain. See Flood Insurance Guide and consult flood insurance providers for more information.
If you are looking for an agent who has been in the trenches dealing with these issues for years, look no further. We have an experienced team, a repeatable contract-to-close process and an automated transaction management system to provide the peace of mind you deserve. Contact Doug or Dale Bohannon at (813) 979-4963.
Appraisal Valuation Issues Persist
Many home sales have fallen apart due to home valuation issues. Rapidly changing home prices and evolving regulations have impacted appraisals. We have seen buyers wait 6 months for a successful short sale approval only to have their hopes dashed by a low appraisal from their own lender. We have seen sellers move out of their homes and commit to other properties only to see the sale fall apart due to a low appraisal. Don’t let a questionable appraisal derail the dreams of your family.
Why Appraisals Are Important
Home loans are contingent upon appraisals. Lenders need to determine the underlying value of a home before agreeing to make a loan. The purpose of a Residential Appraisal Report is to develop a credible opinion of the value of the improved subject property as defined by the Uniform Standards of Professional Appraisal Practice. The report contains supporting data, a final opinion of value, photographs and comments on market conditions.
A Conservative Approach
The melt-down in the mortgage markets caused many lenders to appoint Chief Risk Officers and take measures to limit the overall risk inherent in their loan portfolios. As lenders analyze their risk profiles, they may be hesitant to fund another Florida loan unless the appraisal valuation is very conservative. Once the appraisal is complete, it may need to go through underwriting, a lender’s appraisal review committee, and the PMI company for approval. A bank’s appraisal standards may penalize the valuation by 10% in areas with soft or declining market conditions. They may request two appraisals on a subject property, or may require buyers put between 10-20% down.
The Impact of HVCC
The Tampa Bay area has many excellent appraisers who face a rapidly changing business landscape. The HVCC (home value code of conduct) is a Fannie Mae and Freddie Mac requirement that prohibits a lender from choosing the appraiser – either directly or indirectly. The rule is designed to shield appraisers from any pressure to hit the values needed for the sales contract. Lenders now place orders for appraisals with Appraisal Management Companies who retain a sizable percentage of the appraisal fee for overhead. The actual appraisers may receive less than half of the appraisal fees they collected in the past. As a result, many experienced appraisers have left the business. We have seen the proliferation of “appraisal mills” who send appraisers from as far away as Lakeland who lack knowledge of local builders and neighborhoods. Appraisers who commit to lower fees and faster turn around times are winning more business, but they are more likely to produce problem reports. While there are many qualified and excellent appraisers in the area, this new middle-man has caused home valuation to be more of a wild-card. While the US Senate is discussing changing HVCC regulations (see H.R.4173, the Wall Street Reform and Consumer Protection Act of 2009), the law remains in effect. Once an home has been appraised, challenging the valuation has become nearly impossible.
FHA Appraisals
As the average sales price of Tampa Bay homes has fallen, a greater percentage of homes now qualify for FHA loans. Appraisals on FHA loans pose a significant risk for a homeowner, as an FHA appraisal will set the value of the home for anyone else using an FHA loan for 6 months. Appraisals using the Fannie Mae 1004 form and Freddie Mac 70 form, also known as the Uniform Residential Appraisal Report (URAR), are stored in a database for 6 months and must be used for any buyers during that period. New FHA regulations similar to HVCC have been implemented by the government-sponsored enterprises (GSEs) to ensure appraiser independence. The Department of Housing and Urban Development (HUD) has implemented ML-28, whereby FHA-approved lenders are prohibited from accepting reports prepared by appraisers who are selected, retained or compensated in any manner by a lender or mortgage broker. An appraiser will contact the listing agent for access to the home and a copy of the contract. While Realtors should not attempt to apply pressure, we can provide background information about the neighborhood, builders and comparable sales. Agents can communicate knowledge about the condition or circumstances of recent sales that may impact values. We can suggest near-by homes or neighborhoods with similar characteristics. Realtors can also convey information about pending sales, active listings and the absorption rate. Team Bohannon also details any upgrades to the subject property that help justify the sale price. And finally, we describe the marketing of the property and disclose multiple offer situations. The best practice is to communicate this information the day before the appraisal to allow time for comparable selection, planning and photos before the appraisal.
Realtor’s Role
Experience is a hard teacher. Don’t let your Realtor obtain on-the-job training at your expense. The average Realtor completes less than 4 transactions per year and may lack the experience required to manage the appraisal process. Contact Team Bohannon for an experienced team, a repeatable contract-to-close process, and an automated transaction management system to provide the peace of mind you deserve.
Why Buy Now – The Impact of Waiting
Business Week has an article that makes a case for buying now based on low interest rates. The article discusses the financial impact that interest rates have on the cost of buying and paying off a home. “Every quarter-point change in interest rates is equivalent to approximately $6,000 for every $100,000 borrowed over the course of a 30-year fixed.” If you are waiting for Tampa Bay home prices to fall further, click here for the article.
Here is a quick excerpt:
You would like to own a $240,000 home. However, even though home prices have steadied, you may be thinking you can get another $5,000 or $10,000 discount if you wait (never mind the $8,500 or $6,500 tax credit due to run out next spring). Or you may be waiting for the news to tell you the economy is “more stable” and it’s safe to get back in the pool. In exchange for what you may think is prudence, you will risk paying $50,000 more per point in interest rate changes between now and the time you decide you are ready to buy. And you are ignoring the fact that according to the Case-Shiller index, home prices in most regions have been trending back up for the last several months.
If you are someone who is looking to buy or upgrade in the $350,000-to-$800,000 home price range, and many people out there are, then you’re borrowing $300,000 to $600,000. At 7%, the $300,000 loan will cost just under $150,000 more over the lifetime, and the $600,000 loan an additional $300,000, if rates move up just 2% before you pull the trigger.
What I’m trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home. If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime. full article.
Team Bohannon Moving Concierge
Are you looking forward to living in your new home but dreading the thought of packing? Moving to a new home can be a smooth or a stressful experience. To assist our clients, Team Bohannon has invested in the MaxAvenue Moving Concierge™. This value added service provides you with a personal moving advisor and offers direct access to a trusted network of moving experts.
The MaxAvenue Moving Concierge™ provides:
• Complimentary move management service
• Discounts up to 62% off van line prices
• Single point of contact
• Multiple, competitive estimates for client choice
• VIP service for a hassle-free move
• Personal assistance from moving industry experts
• Multiple bids from national moving companies
• Guaranteed Not-to-Exceed estimates
• Free full replacement coverage up to $75,000 with no deductible
• Significant time and money savings
• Peace of mind!
©MaxAvenue 2009
How to Use the MaxAvenue Moving Concierge™
Step 1: Contact
Initiate the call to the MaxAvenue Moving Concierge™ at 800.350.5418.
Step 2: Needs Analysis
Identify move dates, concerns, shipment profile and other important requirements.
Step 3: Educated Referrals
The proprietary Match, Track & Move™ system identifies the best van lines for your move.
Step 4: In-home Estimates
The MaxAvenue Moving Concierge™ assigns the best matched van lines to schedule free, in-home estimates.
Step 5: Van Line Selection
Estimates are audited by MaxAvenue Moving Concierge™ to ensure your needs are met.
Step 6: Manage the Process
Your concierge notifies the selected van line, confirms the details and verifies your VIP status.
Step 7: New Beginnings
Your concierge follows up with a satisfaction survey to verify the performance of the movers for future reference.
For more information on the MaxAvenue Moving Concierge™, contact Team Bohannon at Coldwell Banker (813) 979-4963.
The MaxAvenue Moving Concierge™ is a trademark of MaxAvenue® and is used with permission.
Home Buyers Beware: Avoid these 12 Unpleasant Mortgage Surprises
Don’t be left at the alter without a loan! The Tampa real estate market is seeing a high percentage of transactions fall apart during the contract process due to financing issues. One thing we have learned over the years holds true: “Promises and personalities do not ensure success, process does”.
To avoid the pitfalls below, Team Bohannon used a Home Buying System to ensure the lender has the processes, performance guarantees, and communication in place to protect against these 12 Unpleasant Mortgage Surprises.
- The loan program you were quoted is no longer available.
- The loan was not locked interest rate floated above your approved rate.
- The Good Faith Estimate doesn’t match the final fees.
- Closing Costs were not estimated based upon local customs.
- Neighborhood CDDs were not figured into closing costs.
- The home does not appraise for the purchase price.
- The appraisal is late.
- The loan isn’t approved on time.
- Unreasonable last minute requests for buyer documentation.
- Underwriters do not approve financing at the last moment.
- Contributions toward closing costs are disallowed at the last moment.
- The company goes out of business during the transaction.
- Key personnel leave the company delaying the approval process.
- The conditional loan commitment was mistaken for a full loan approval.
When a lender examines your credit, they are assuming that your credit score will not drop between initial preapproval and final underwriting. They are also assuming that you will not be making any major purchases such as furniture or cars in between contract and closing.
What steps can you take to avoid these issues? For starters, do not make the mistake of selecting a lender based solely on the interest rate or by passing acquaintance. As part of our value added services, we walk you though qualitative and quantitative comparisons of loan options for your new Tampa Bay home. While we cannot control every company and person involved in the loan approval process, our Home Buying System is designed to pro-actively manage all the variables that could signal trouble.
For the quantitative analysis, our system uses the a Lender Comparison Matrix to analyze the Good Faith Estimates (GFEs) from leading lenders. The LCM provides a detailed costs comparison that can help uncover hidden costs. This organized and systematic process helps remove the guesswork and select the best loan for your overall goals.
For the qualitative analysis, we focus on the track record and business practices of the loan officers and their lending institutions. Low interest rates are great, but can they deliver on time, without surprises, and will they call you back? Is the processor and underwriter based locally, or are you at the mercy of a far off processing center? How much knowledge and experience does that loan officer have? What are the chances the company will still be in business by closing, or the contacts will still be at the company?
Contact Team Bohannon at Coldwell Banker today at (813) 979-4963 for a information on obtaining the best loan.
What is a Real Estate Team? Why Should I care?
Who & What is “The Team”?
You might be wondering “what is a Real Estate Team”? Why should I care? Realtors who provide goodservice can expect to see business grow. Like any small business, there comes a time when the business grows to a point where one person can no longer do everything. At this point, Realtors must decide how to proceed: attempt to maintain service levels all by themselves, or hire a team. Traditional Realtors operate as solo agents, while others form teams – or quasi operating companies. Regardless if you select a traditional Tampa Realtor (solo practitioner) or a team, you will have one primary point of contact responsible for fulfilling your goals. Here are the differences below should matter to you:
A Real Estate Team, as run by Team Bohannon:
- has multiple agents working together
- has a staff to implement marketing plans
- has administrators oversee details between contract and closing
- has “specialist” for various aspects of the real estate business
- utilizes systems to achieve predictable results & service levels
- allows agents to grow “as a business” rather than “as a craft”
- pools resources and spend money on marketing
- has meetings, business process and accountability
- has employees, benefits, budgets, and financial planning
- ensures someone is available 7 day per week
- allows agents to achieve life/work balance.
- can do several things at once: show homes, implement marketing plans, provide feedback on showings, update a market analysis, handle negotiations, review inspections, follow-up on financing, meet appraisers, manage contracts, and attend closings.
Traditional Agent/Solo Realtor
- is kind of like a “one-man-band”
- can quickly become very busy and overwhelmed
- faces major time pressure to do multiple things at once
- has a challenge maintaining service levels at times
- must have diverse skills: sales, marketing, administrative, clerical, creative
- cannot realistically work 7 days a week, every week
- are more subject to burn-out
- will leave town and take vacations or be unavailable at times
- must do several thing at once: show “out of town” buyers homes, implement marketing plans, provide feedback on showings, update a market analysis, handle negotiations, review inspections, follow-up on financing, meet appraisers, manage contracts, and attend closings.
Using Systems Properly
We know that great systems poorly executed will fail to deliver results. We have learned a few lessons en-route to selling over 4,100 homes in the Tampa Bay area. We rely on a team approach to ensure our systems produce world-class service at every phase of the transaction. There are over 125 steps, exponential variables, and several companies that must communicate and execute in harmony to close a transaction on time. The team implements systems to coordinate the timelines, escrow, inspections, repairs, survey, warranty, appraisal, financing, home insurance, title and other aspects of the closing. It has taken years to assemble a team and align the right people with the right skills to run the system. If turbulence arises, you can have the confidence to know that we have encountered the situation before and have an alternate flight plan. The system and the team allow us to deliver a predictable level of service that you can feel confident in when recommending us to your friends and family.
The Extended Team: Business Management Team & Vendors
Every team has a coach. Although we have been in business for decades, we have found value in consulting a Business Coach for process audits, new ideas and continuing education. Our coach brings ideas from top experts in the real estate, marketing and technology fields from around the country. We discuss best practices and key books such as: The Speed of Trust by Stephen M.R. Covey. Our business management coach helps us keep the focused on building long term relationships that form the foundation of world-call service and durable competitive advantage.
As your Value Added Real Estate Experts in Tampa, we work closely with lenders, title companies, inspectors, movers and an array of home repaid vendors. We cultivate relationships with qualified vendors that are in alignment with our mission. We look for experienced vendors with high standards of performance. In some cases, we have negotiated special discount for our clients. We rely heavily on satisfaction surveys to monitor 3rd party vendor performance.
Call today to sepak with Team Bohannon at (813) 979-4963.
11 Reasons to List Your Home During the Holidays
Thinking about selling your home? Here are the top 11 reasons to list now.
1. People looking for a home during the holidays are more serious buyers.
2. Serious buyers have fewer houses to choose from during the holidays.
3. Homes often show better when decorated for the holidays.
4. Buyers can be more emotional during the holidays.
5. Buyers may have more time to look for a home during the holidays.
6. Many people want to buy before the end of the year for tax reasons.
7. January is traditionally the month for transfers.
8. Families may want to move by January for the new school semester.
9. You can still restrict showings during your personal family events.
10. You can sell now, but delay closing until early next year.
11. By selling now you have an opportunity to buy during the Spring, when many more homes are on the market.
Bottom Line
By listing now, you may have fewer actual showings, but more qualified and motivated buyers. You have less competition, resulting in a quicker sale and a better price for you. Contact Team Bohannon at Coldwell Banker to learn how you can get 5%-15% more money for your home (813) 979-4963.
