maryland loan officers
Due to the so called “Real Estate Bubble and Market Crash” many property values have been driven down tremendously. However, with the huge influx of buyers in some particular price ranges or locations these values are slowly starting to rise. Nonetheless, an appraiser must use the most recent comps and often times the appraisal may come in lower than the purchase price and/or loan amount. When this occurs there are two options: The seller can reduce the sales price accordingly, or the buyer can come up with the cash to offset the difference.
In most cases it’s as simple as this: Buyers don’t want to pay more than what a licensed appraiser determines the value of the property to be, so the seller will reduce the price because that’s all they can expect to sell their home for. Still, what if the seller or buyer thinks the appraisal is poorly done?
If both feel that the appraisal was poorly done than they can request a second one and then try to dispute the value with the bank providing their loan. Sometimes a second appraisal or dispute will raise the value, but not very often. If that happens and the seller refuses to reduce the price then the buyer has the option to come up with the difference in cash. For example: If the purchase price is $200,000 and the appraisal comes in for $190,000 the buyer has to come up with $10,000 IN ADDITION to the expected down payment amount. If the seller wont come down and the buyer wont come up with the cash difference, then the deal is dead.
If you’re obtaining financing for your loan then you will need to know the importance of the appraisal contingency and what exactly it pertains to. Speak with a loan officer to become more educated on all the financing steps that must be taken when buying a home. A real estate agent can help you best determine the value by running a CMA, but again, property values are rising in some areas and price ranges. As a buyer, if you feel an appraisal is low, but feel comfortable paying more than the appraisal amount, come up with the cash!
Ben White-Montgomery County Real Estate Specialist
Category : Blog
As a Realtor® who receives many inquiries from potential buyers, I often speak with people who have no knowledge of the home buying process or what it takes to buy a home. This is not a bad thing at all, for we all must be taught and educated on the process at some point.
If you are somebody who has never bought a home or obtained a home loan then you may not know how much money you might need to obtain a loan. You probably know that you need a “good” credit score and have to make a certain amount of money. Both are true, even if you don’t know the specifics. However, most people who are just getting started don’t know the down payment that will be required. Some still think a 100% loan or zero down payment is attainable. Due to the sub-prime mess and tighter oversight of the mortgage market that is now near impossible. There are some programs that may offer a zero down situation, but they have strict requirements. The most common zero down loan is a VA loan which is only attainable by past or present military personnel.
Now a days, the least amount of money you will need for a down payment is 3.5% of the sales price. This loan is a FHA (Federal Housing Administration) loan. That is why it is so common now when it was pretty much ignored during the housing bubble. It also explains why you might have heard how the Federal Housing Administrations funds were so low. It’s not just the foreclosures, but the extremely high amount of money being borrowed by home buyers. Other than the FHA loan you can obtain a conventional loan which will require 10 or 20% down. Usually the latter.
Yes we have extremely low rates right now, but your application and buying power is more scrutinized than ever. No investors want to purchase a loan that would be considered a risky loan. Your credit scores need to be higher, your down payment needs to be higher, and you must have a good “debt-to-income ratio”.
240-848-3322
Category : Blog
New home builders have slowed down substantially over the last few years following the housing bubble. Still, new home sales have been on the rise as of late and there will always be a market for new homes. Modern amenities, sparkling counter tops, and shiny hardwoods continue to draw buyers into their sales office. However, is it best to stroll into a new home sales office without a Realtor to assist you in your process?
Many buyers feel they can get a better deal without a buyers agent. This idea is similar to buyers attempt to avoid an agent altogether on re-sales, but is much more prevalent because it appears to be more “cut and dry” when buying a new home. True, they have a friendly and knowledgeable sales agent there to walk the buyer through every step, but you should never forget who they represent and what their motives are. To sell you the home at the highest price possible! Buyers may feel that there is no haggling and that everything they choose during the upgrade process is a flat rate, but that is often times untrue. New builders can negotiate and without your own representation they will feel less inclined and try to to the job given to them. Again, to sell the home at the highest price.
Adversely, when you use a buyers agent, you have someone reviewing all the recent accessible sales, talking to other builders, having a background of other new homes, and they may have previously worked with the particular builder. Most importantly, professionally negotiating the purchase. I suppose the argument made is that the builder saves money because they do not have to pay a buyers agent commission. Valid point, but it will surely offset in other areas where your agent would have benefited you. Not to mention all the work that is needed to be done. If your buying pre-construction than you have to pick everything out and all the terms are changing as you go. This can be very time consuming and stressful when you are already trying to juggle your everyday life.
New home builders will also try to entice you to work with their financing company in order to obtain the loan. They will offer incentives and closing cost help, but this is completely attainable without using their affiliated business relationship with a certain bank. You should always shop your rates with multiple loan officers and should always have a buyers agent to represent you when buying a new home. In the end, you will save more money and have someone who actually has YOUR BEST INTEREST in mind rather than theirs.
Ben White – Montgomery County Realtor® – 240-848-3322
Category : Blog