Front Porch News – A Quarterly Newsletter by Verrado Realty

Read the latest news and learn how the market is performing in Verrado.  As the real estate company at Verrado since the beginning, we are happy to provide information on the community, real estate market, and individual home valuations with you.

Verrado Fall-2014

Real Estate Terminology

By Amy Hayslett, Realtor with Verrado Realty

The process of buying or selling a home can be confusing. Realtors for that matter seem to have their own language, sometimes adding to the confusion. Of course, having a great Realtor who takes the time to explain the process step by step is crucial to a successful transaction. Buyers and sellers can also help themselves by getting educated with some basic Real Estate terms. Here are some important terms to know and understand the next time you are ready to buy or sell a home.

Multiple Listing Service (MLS) – a local or regional service that compiles available real estate for sale by member brokers along with detailed information brokers and agents can access online.

Active vs. Under Contract Accepting back up offers – Homes listed as Active are available for sale and do not have a signed contract between buyer and seller. A home listed as Under Contract Accepting back up offers is one with a signed contract between buyer and seller but the seller wishes to consider back up offers. Often times, these contracts have a contingency such as when the buyer needs to sell their existing home.

Pending vs. Closed – A Pending Sale is one in which buyer and seller have a contract. A Closed Sale is one where the property has conveyed from seller to buyer and the transaction has recorded.

Pre-qualified vs. Pre-Approved – A pre- qualification is when a lender makes an informed estimate of a borrower’s ability to qualify based on limited documentation. A pre-approval indicates the buyer has completed a full loan application, the borrower’s credit has been checked, and the borrower has provided detailed financial information which an underwriter has reviewed and approved. It is beneficial to use a local lender who can provide a pre-qualification using the Arizona Association of Realtor Prequalification form referenced in the Arizona Association of Realtor Purchase Contract.

Signing appointment vs. Closing Date – Before closing escrow both Buyer and Seller need to have an appointment to sign the final closing documents. This appointment is often referred to as “the closing”. Close of Escrow will not occur until both buyer and seller have signed and the transaction has recorded. While signing and close of escrow can happen on the same day, it could take several days to close. Sellers are responsible to keep all utilities on until the home has Closed Escrow. Buyers should understand that in most cases they cannot take possession of the home prior to the close of escrow.

Real Estate terminology can be confusing to buyers and sellers. Having a good Realtor to guide you through the process and explain these and other terms will help to reduce stress and lead to a smoother transaction.

A Great Time to Be a First Time Home Buyer or Boomerang Buyer

By Katie Remwolt – Verrado Realty

Would you like to be a first time home buyer, grab part of the American dream and build wealth over time by doing so? More home loan options and opportunities are available for new homeowners and boomerang buyers (those who had foreclosure or short sell homes three or more years ago) than ever before. These loans range from zero down payment options to flexible qualifying programs that require less-than-perfect credit. Some programs even accommodate recent grads without an extensive job history. With that being said, buying your first home can be challenging. What features are must-haves, and which are someday dreams? What do you need to do to qualify for a loan? Here are some great tips:

  1. Make sure your credit is in good shape. The better your credit score, the better your chance is of getting a lower-rate mortgage. Check your credit report for mistakes and for any credit problems you can correct. You can get a free report from each of the three credit bureaus once a year at annualcreditreport.com.
  2. Work with a REALTOR® who’s a buyer’s agent. A buyer’s agent will advocate and negotiate for you.
  3. Learn about the neighborhoods you’re interested in. How do the schools rate? A REALTOR® can help you with these things and help you target your buying interests. For instance, what tops your priority list? Short commute to work? Lots of land? Three bedrooms? A community governed by a homeowners association?
  4. Estimate your budget. Besides the down payment, which could range from 0% to 20% depending on your circumstances, you’ll want to plan for costs such as:
  • The appraisal (about $300 to $600). It estimates the property’s value at a point in time. It lets you and the lender know how the sales price compares with the appraised value.
  • Loan origination fees. The cost of making the loan, including an origination charge, processing fee, underwriting fee, and even points on the loan. These fees are usually .05% to 1% of the loan.
  • Title insurance. Protects a buyer or lender against loss from title defects, liens, or other issues. Fees are generally 1% of the loan amount.
  • The inspection. A thorough inspection (roughly $300 to $500, depending on the property type) can reveal hidden defects, reducing your risk of incurring surprise expenses later. It offers the opportunity to negotiate for a price reduction or for the sellers to make repairs, depending on the findings.

Get prequalified. Meet with a lender to get a prequalification letter that states what you’re qualified to borrow. This lets sellers know you’re serious. To get prequalified, you’ll need to gather some paperwork for your lender. Most want to see W-2 forms verifying your employment and income, copies of pay stubs, and two to four months of banking statements. If you’re self-employed, you’ll need your current profit-and-loss statement, a current balance sheet, and personal and business income tax returns for the previous two years.

Please let us know if we can help assist you during this exciting time!