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Buying a Home? Here's a Few Tips to Consider

by The Pilgrim Team

Are thinking about buying a home in York? If so, now is the time to prepare.  Sure there’s a lot of things to consider. But if you keep these few tips in mind, it can help your buying process go smoother and help you buy the home that’s right for you.

Don’t Make Big Purchases

At least 3 – 6 months before you buy a home, it’s not a good idea to make big purchase or move your money around. This could affect your credit profile. Lenders want to see that your spending habits are stable and want to see a paper trail to get you’re the best loan possible.

Get Pre-Approved

Do you know the difference between being pre-qualified and pre-approved? It’s easy to get pre-qualified. But pre-approved means that the lender has reviewed all of your financial information and can inform you on how much you can afford. This is a huge help, as it saves you time in looking at houses you can’t afford.  But it also helps you decide the best house you can afford.

Budget

Make sure to set a budget right away.  And don’t just figure in the Home Financing payment.  Owning a home incurs costs such as maintenance, utilities, renovation, etc.  And don’t forget closing costs, as many people do.  Some people are surprised by how much the closing costs are, so work with your agent to figure out how much that will be.

Positive Housing Outlook From NAHB

by The Pilgrim Team

In last few years , it seems that we area always hearing negative news regarding the real estate market but now finally some good news is welcomed. According to National Association of Home Builders (NAHB) and Wells Fargo, for the 5thconsecutive quarter, nationwide housing is near its highest level of affordability in 19 years  Housing prices and interest rates are still low and 72.2% of both new and existing Homes for sale in york pa are affordable to families who earn $63,800 (the national median income).

According to Bob Jones, NAHB Chairman, “Today’s report is very encouraging because it indicates that homeownership continues its more than year-long trend of remaining within reach of more households than it has for almost two decades.”

“With interest rates still hovering at low levels, companies starting to hire new employees and the economy beginning to rebound, this should encourage more home buyers to enter the market and help further stabilize housing and the economy.”

The national median home price for the quarter was $175,000. The NAHB uses a rule that no more than 28% of take-home pay can be used toward housing.

As with all real estate, location is key – Indianapolis and Youngstown, Ohio led the nation in affordability – 95% affordable based on local median income, followed by Dayton, Ohio, Syracuse, New York and Grand Rapids, Michigan.

New York City remains one of the least affordable cities, regardless of income. Still, any good housing news these days is cause for optimism, and home ownership is more than just a dream for many American families whose employment picture is stable.

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Common Contingencies and Why You Need Them

by The Pilgrim Team

When you’re buying a home, you make investments along the way – everything from earnest money to appraisals, inspections, title searches and the costs to market your existing home. You may think you have all the bases covered in negotiating the terms of your contract, but deals do fall apart – some at the last minute. Protect yourself from additional loss with appropriate contingencies. Accepted contingencies give you the right to walk away from the contract with no penalty (other than some of the incidental costs mentioned above).

Most sellers avoid contingency contracts and may pressure you to move quickly and drop contingencies. But what if the property fails to appraise at the right value, or your lender fails to fund your loan? Know what you can include in your contract as a contingency and be prepared to stand firm!

The home inspection provides the opportunity to help you decide if you should walk from a tempting deal. Even properties that look well maintained and in good condition can have hidden flaws. In addition to the basic home inspection, there may be other inspections (for lead, termites, sewer and others) or areas that need to be addressed in your contract. Make sure you know what you are getting into!

The types of contingencies vary from state to state. Here are the top 10 most common contingencies and what be aware of as you make your offer>

Common Purchase Contract Contingencies

  • Appraisal. Beware of the possibility that the appraisal may come in low.
  • Loan Contingency. Your lender may fail to find your loan as requested, even if pre-approved.
  • Home Inspection. One of the top indicators of flaws in the home.
  • Lead-based Paint. Federal laws gives all buyers 10 days to inspect for lead-based paint.
  • Wood Destroying Pest Inspection. The contract should specify who pays for termite inspection and correction.
  • Roof Inspection. Make sure the roof is part of the home inspection, and if not specify a third party inspection for the roof.
  • Sewer Inspection. This can be especially important for an older home or home on a septic system.
  • Preliminary Title Report. Make sure the seller can transfer a clean title, with no unpaid liens against the property.
  • Seller Statutory Disclosures. Some states require sellers to disclose all know material facts about the history of the property.
  • Contingent on selling Existing Home. This is one of the most common contingencies, and sellers usually specify a number of days to perform.

When negotiating your offer and contract, make sure you protect your rights as a buyer and understand your state laws and other requirements necessary to close on your new home!

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Real Estate Attorneys

by The Pilgrim Team

If the purchase of a new home is in your future, you will have many decisions to make. Many home buyers may consider using the services of a real estate attorney for assistance with complicated documents and legal advise during the sale. Using a real estate attorney is a good idea, because the process of buying a house is complex, and most people find it's easiest to get through with a professional by their side.

Laws vary from state to state and some states require an attorney to create the purchase agreement and do the title search. There may be legal issues arise that your real estate agent can't answer, then you'll need an attorney's help. An attorney is also beneficial if there is any confusion or if you have questions about the documents then it is important to have an attorney look the documents over. Below are some other reasons you might want to consider using a real estate lawyer.

  • They can help protect your interests by examining all the legal documents before you sign them and can ensure that you’re not signing something that isn’t in your best interest. Always make sure you consult with a real estate attorney before you sign any legally binding documents to avoid signing a contract that can be damaging..
  • A real estate attorney is also better equipped to negotiate with the seller’s attorney; something that most buyers can’t do successfully because they’re too emotionally involved in the purchase.
  • If funds are being held in escrow as part of the sale, a real estate attorney has the authority to administer escrow. They can disburse funds as appropriate according to the terms of the escrow.

The cost of an attorney can vary, but typically the legal fees are higher when you buy than sell because the role of the buyer’s lawyer is more extensive. Most fees range from $500 to $1,500 for an average home whether you’re the buyer or the seller. You may find an attorney that will charge a flat fee for specific services and others bill by the hour. Usually, a lawyer can easily estimate costs related to a real estate transaction.

 

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Successful Negotiation Tips

by The Pilgrim Team

Having a successful negotiation and sale is what ever homebuyer and homeseller wants to achieve during the real estate transaction.. The negotiation process can be both complex and confusing for both sides. Bot the seller and the buyer want to have a fair transaction and achieve the best deal. Even if you have been thru the negotiation process before, below are some tips to help you get the most from the  transaction and walk away with what you want.

1. Time the market right. At this time, we are in a "buyers" market, where most sellers are very motivated to sell, this can give a buyer the upper hand. On the other side,  a "sellers" market, or a market where housing supply and demand are roughly equal might give the seller an advantage. If possible, you want to be in the market at a time when it favors your position as a buyer or seller.

2. Pay attention to the details. Buyers and seller pay a lot of attention to the transaction price. It is a good idea to consider other perks or benefits that can add to the overall worth. For example, if you negotiate that the roof be replaced or perhaps having the seller pay some of the closing costs this can sweeten the deal. Don't be stuck with the idea that the purchase prince is the only financial gain to the transaction.

3. Don't forget about financing. Keep in mind that there are several factors that can impact the final sale:

• Has the buyer been pre-qualified or pre-approved by a lender?  Having buyers that are "pre-qualified" or "pre-approved" are more likely to pose less risk than a buyer who has never met with a lender. This also shows the seller that they are serious about the offer and will give the seller more confidence. that they are a qualified buyer.

•If there is a low interest rate, then there will be a larger selection of potential buyers. More buyers equal more potential demand, which is good news for sellers. On the downside, high interest rates will cause buyers to be more selective or cause them to withdrawal from the market all together.

•The traditional 20% downpayment is not standard anymore. If the buyer has good credit, loans with 5 percent down or less are now widely available. Many loans where 100 percent financing are still available, although not as much as a few years back.

Negotiation is an important tool of the real estate transaction. To be a successful home seller or buyer you should have a basic understanding of negotiation methods, knowing the motivation of the other party and adapting to their style.

 

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The Importance of Title Insurance

by The Pilgrim Team

Once you purchase a home and obtain a Home Financing, you will be required to obtain homeowners insurance. However, many potential homebuyers may not be familiar with another type of insurance, title insurance. So what is title insurance and why do you need it? Once you buy a home you are given a title, it then the owner's right to possess and use the property. It may be the homeowner who is selling the home or bank with a Home Financing on the property that has the title. It is also a possibility that a third party such as a homeowners association if the dues have not been paid or even the government may also have liens against the property for unpaid taxes.

Problems with the title can limit your use and enjoyment of the property, as well as bring financial loss. It is vital to not only obtain title insurance but to also have a  title search done to protect your interest. By doing a search, it will reveal if someone other than the owner of the property owns the title. This search can be done by examining public records to look up the history of property ownership. While you can easily do your own title search, if you are obtaining a loan to purchase the property, the lender will require that a qualified third party do the title search. The title search shows not only limitations on the use of the property and rights others may have in the property, but also liens or monetary obligations that are outstanding against the property. 

Title insurance is different than the standard insurance where you are covered in case of a future event. For example, if you get car insurance you are insured in case you have an accident, you buy health insurance in case you get sick.  Title insurance is different as it covers events relating to the title that have already happened. It does not cover anything that happens to the title after the date of issuance. For example if you have liens filed against the property for taxes that you have not paid, your title insurance policy is not going to help you. But, if the lien is for taxes not paid by someone who owned the house before you, then you may have coverage under your title policy.

A title company will do a title search on the property before issuing the policy to see if there are any problems with the title. This search is done in an effort to minimize the risks of offering insurance.  Problems such as deeds, wills, outstanding Home Loans, judgements, and tax liens can be located from the search and can typically be cleared up before the closing on the property. When these problems are not cleared they will often be listed as exceptions to the policy's coverage. You would then need to decide whether the property is still something you want to purchase given the known problems with the title.

 

What is a Deed of Trust?

by The Pilgrim Team

Once you have purchased your home, one of the documents you will sign when you go to closing is called a Deed of Trust. As with some of the documents you will receive, many homeowners typically are unaware of exactly what this important document is. A Deed Of Trust is the security for your loan. It is the document that is recorded in the public records.  A deed of trust contains three parties:

•The Trustor, which is the borrower

•The Trustee, which is an entity that holds "bare or legal" title

•The Beneficiary, which is the lender


The deed of trust identifies the following:

•Original loan amount

•Legal description of the property being used as security for the Home Financing

•The parties

•Inception and maturity date of the loan

•Provisions of the Home Financing and requirements

•Late fees

•Legal procedures

•Acceleration and alienation clauses

•Riders, if any, regarding such clauses as prepayment penalties or terms of an adjustable rate Home Financing

Before you sign a Deed of Trust be sure to read all the fine print and pre-printed portions. It is a good idea to request a blank copy of the deed of trust beforehand to review. When you do go to closing be sure to make sure everything is correct before signing. Things such as the principal balance of the loan, the interest rate, and any pre-payment penalties should be reviewed for accuracy.

Locating The Right Neighborhood

by The Pilgrim Team

When searching for your new home , the Neighborhood that it is in is just as important as all the other requirements that you are looking for in a home. There are some things to look for and add to your list that can help you locate the perfect neighborhood for your needs and family.

Even before you begin your York MLS Listings, you should compile a list of what you are ideally looking for in a Neighborhood. . Perhaps you are looking for a neighborhood that has young families with children or a neighborhood that has local shops and restaurants near by. Keep in mind that you'll probably have to make compromises, so put the "must-haves" at the top and the "would- like-to-haves" at the bottom. Here are some things to consider:

  • If you have children or are you planning to have children, considering a Neighborhood that has a good school system will be something to consider. Also parks and recreation is important items to consider when researching neighborhoods.
  • If you need to commute to work, you may want to search for a Neighborhood that has access to public transportation.
  • Are you looking for a particular vibe or amenity in an area? 
  • What type of building do you like?  Single family home, high rise condominium, villa?
  • Are you looking for a Neighborhood that has shops and restaurants within walking distance?

In addition to thinking about what you do what, you should also be certain of what you do not want as well.  For example, if you are looking for a more family orientated area you will probably want to pass on neighborhoods that are close to nightlife or noisy areas. Or if you are wanting to avoid Construction you will probably want to pass on historical neighborhoods that are rebuilding or new construction areas.

The Escrow (Closing)Process

by The Pilgrim Team

Once the buyer and seller have agreed on price and terms for the sale of a piece of real estate, the escrow process begins. This can be a confusing process, especially for Homebuyers Tax Credit. Below are some key points that can help answer some questions about the escrow process.

What exactly is an escrow ?

An escrow is an arrangement in which a disinterested third party, called a escrow holder, holds legal documents and funds on behalf of a buyer and seller, and distributes them according to the buyer's and seller's instructions. In Useful Information about York PA the Listing Broker typically is the holder of the escrow funds that will be distributed at settlement.

How does the escrow (Title) process work?

The escrow is a depository for all monies, instructions and documents necessary for the purchase of the home, including funds for the down payment, lender’s funds and documents for the new loan. The duties of an Title Company include: following the instructions given by the principals and parties to the transaction in a timely manner; handling the funds and/or documents in accordance with instructions; paying all bills as authorized; closing the escrow only when all terms and conditions have been met; and, distributing the funds in accordance with instructions.

What documentation is required?

Receipt of your deposit is generally included in your copy of your purchase contract. Your funds will then be deposited in your separate escrow or trust account and processed through your local bank.

What information will I have to provide?

Typically you will be asked to complete a statement of identity as part of the necessary paperwork. Because many people have the same name, the statement of identity is to identify the specific person in the transaction through such information as date of birth, social security number, etc.

How long is the escrow (closing) process?

The entire escrow process can vary and is typically determined by the terms of the purchase agreement. It can range from a few days to several months. Typically an escrow often takes an average time of 30 to 45 days. The escrow process ends when you actually close on the home, during the closing procedure. This is when all funds are transferred accordingly, when all documents are signed, and when you get the keys to your new home.

For more information contact Pilgrim Team at Professional Realty Associates or go to www.PilgrimTeam.com

 

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The Pilgrim Team
Professional Realty Associates
2002 S Queen St, Suite 3
York PA 17403
Office: 717-757-5955
717-755-2683
Fax: 717-757-2887