HOME BUYER SEMINAR (POST 6) - HOW MANY TIMES DO I NEED TO GET MY WALLET OUT?

We're not talking about downpayments or closing costs here, but instead, “How Much Will it Cost Me Between Writing an Offer and Closing on My Home?” Even if you are thinking you have a zero down loan, you still need to have some available resources to get started.

I operate under the “no surprises” rule, so lets go over how many times you may have to get your wallet out, during the closing process:

Earnest Deposit: An earnest deposit is written into the offer to purchase. It’s also known as your “good faith” deposit. It shows the seller that you are a serious buyer, and is held in our RE/MAX trust account from the time your offer is accepted until closing. The most common amount is close to 1% of the purchase price of your home. A $120,000. home, would likely have a $1,000. deposit. A $275,000. home may have a $2,000. – $2,500. deposit. If you have a specialty loan and have limited funds, we can sometimes get by with a $250. earnest deposit. We will offer what you want and see if the seller will accept it. Your Realtor will need to have this money within 2 days after you are officially under contract with an accepted purchase agreement. Your check will be deposited – not just held. This is not an ADDITIONAL cost to home buying, as this money will be applied directly to the purchase price of your home at closing.

Inspection: If you choose to hire an Inspector you will contract with them “outside of closing”. This simply means that this transaction is not a part of the closing process. You schedule the inspection and pay the inspector directly for his services. Generally inspections cost $300. – $400. and are payable at the time of the inspection. If you choose to have your inspector conduct additional tests such as water tests, radon tests, etc. you will be charged for those additional fees.

Specialty Loan Requirements/repairs to the home you choose:
Depending upon the loan you are getting, the home may have to meet certain structural requirements. You could be responsible for correcting any deficiencies prior to closing on the home. (I know, it seems odd to be doing repairs on a home that you don’t own yet, but this is just the way it is sometimes!) Obviously we attempt to minimize these items and discover them as early as possible. A common requirement is that you could have to install a GFI electrical socket, or put a railing on a stairway. So you could need to have the financial wherewithal to accomplish these repairs. These fees could be any amount, but I've most often seen pretty minimal requirements so in general estimate: $100.

Lender Application Fees: Your lender oftentimes will require an application fee that is likely to be around $300. Ask about the possibility of this fee when you first meet with your lender.

Utilities: Sometimes a utility company could require a deposit or establish account fee. Most often these will show up on your first bill, so may not be an issue up front.

Insurance: Generally your lender will require that your annual home owners insurance be paid up front and that you bring in a rider showing that you have your policy in place and that it is paid for. Inquire more about this with your lender. Insurance costs are all over the map, I would estimate that a starter home could possibly have insurance costs as low as $300.

NOTE: It is difficult to estimate fees that could vary based on the prices of homes, various lender policies, and your own choices. This is intended to let you know about the existence of these fees rather than estimate the amounts -- but, it sure is better to know ahead of time that you're going to need some cash up front.

No surprises, right? ~ Liz

Spring Into Home Maintenance

Six features that need most attention

Spring is always an ideal time to be checking the exterior of your home and catching up on any maintenance items that have come to light since last summer. As always, maintenance begins with a stroll around the house and a careful examination of its condition. Take a tablet with you, make some notes as you go, and then sit down and work up a list of things to take care of -- sort the list in order of the most pressing items first -- and then list the tools and materials you'll need for each task. By sorting and organizing your list in this manner, you can take what may sometimes be a long list of projects and make it a lot easier to undertake.

THE ROOF
Roof damage is an obvious area of concern. You'll want to actually go up on the roof so that you can make a thorough and careful inspection of several different things, so if you're not comfortable with the height or steepness of your roof, consider hiring an experienced, licensed roofing company to do the inspection for you.
As you walk around the roof, look for missing or loose shingles, including ridge cap shingles. Examine the condition of the flashings around chimneys, flue pipes, vent caps, and anyplace where the roof and walls intersect. Look also for areas of overhanging trees that could damage the roof in a wind storm, as well as buildups of leaves, pine needles, and other debris. If you have roof damage in a number of areas, or if the shingles are of an age and condition that makes patching impractical, now may be the time to consider having the entire roof redone. Also, remember that if the shingles have been damaged by wind or by impact from falling tree limbs or other items, repair of the damage may be covered by your homeowner's insurance.

SIDING
Siding can suffer damage from exposure to sun, wind and rain. As you work your way around the house, you'll want to look for areas of siding that may be loose, cracked or sagging. In the case of plywood siding, look for areas of delamination -- separation of the layers of plywood -- or for an overlap seam that may be working loose.
In addition to examining the siding, check the condition of any wood trim, and the condition of both paint and caulking. Peeling or missing paint will need to be spot primed and painted, and the caulking around windows, doors, and trim may need to be cleaned out and replaced to prevent moisture and air from creeping into open gaps.

GRADE
Heavy snow and rain can often cause the soil around your home to move -- washing away in some areas and piling up in others. This type of alteration in the grade levels around your home can result in drainage problems and potential damage to your home, so look for areas of water staining on the concrete, or dirt or water stain patterns on siding -- if they're present, plan on moving and contouring some soil to redistribute the drainage patterns.

FENCES
Ground water can play havoc with fences and gates as well -- soft, wet soil allows fence posts to loosen up and eventually sag or fall over. Check fences by wiggling the posts to see if there is movement -- if there is, plan on removing soil around the base of the posts and pouring additional concrete to reinforce them. This is also the time to check the condition of fence boards and the condition and operation of gates.

SPRING CLEANING
Once you've completed your examination of these and other areas of your home's exterior and completed any necessary repairs, spring is also the ideal time to undertake a good exterior cleaning. In addition to gutters and roof, remove and store your storm windows and clean your windows; use a broom or water to remove cobwebs and dirt from under eaves, as well as on siding and exterior doors; pressure wash patios and walkways (pressure washers can be purchased or rented); and care for exterior wood decks.

SMOKE DETECTORS
Every spring and fall, you want to check your smoke detectors. Replace the batteries, clean the covers, and test the detector's operation before it's too late. If you have gas-fired appliances in the house, including a water heater, now is also a great time to consider adding a carbon monoxide detector. CO2 detectors are inexpensive and easy to install, and are available at most home centers and other retailers of electrical parts and supplies.