What do buyers and sellers fail to account for in a
Transcription
What do buyers and sellers fail to account for in a
G2 Real Estate | San Francisco Chronicle and SFGate.com | Sunday, March 22, 2015 EB/NB/PN/WB REAL ESTATE Equity conversion helps senior remain in home Mortgage adviser: Dominique Stevens. Property type: Singlefamily home in San Mateo. SOUND OFF What do buyers and sellers fail to account for in a transaction? Loan amount: $355,000 at 4.75 percent. Loan terms: Home Equity Conversion Mortgage. Backstory: Stevens’ client, a small-business owner, wanted to refinance her home and lower her monthly mortgage payment. The borrower and her husband had built a retail business, and they were looking forward to their retirement. However, her husband suddenly died, leaving her with the business to manage on her own. Stevens discovered her client was eligible for the Home Equity Conversion Mortgage. This Federal Housing Administration loan program allows seniors who are 62 years of age and older to halt mortgage payments forever. Stevens’ client was also entitled to receive $50,000 cash-out at closing. Stevens’ client is very pleased, for a great weight has been lifted. She can now hire a part-time worker at the store. This will free up her time to rest, visit family and enjoy her retirement years. The FHA guarantees that her home is protected for life. She will never have to pay back the loan until she moves or her heirs inherit the property. No matter how long she stays in the home, no one will have to pay back more than the loan value of the property. The loan is insured by the FHA, and the FHA will make up any shortfall if there should be any. There are no income or credit requirements. As non-taxable income, it does not affect her Medicare, Social Security or pensions. Dominique Stevens, Advantage Home Loans, (415)250-8908, [email protected] CONTACT US INSIDE The Real Estate and Open Homes sections in the Sunday editions are produced by Sentinel Media Services, a content provider, specifically for The Chronicle. Real Estate Price Point. . . . . . . . . . . . . . . . G3 Cover Story . . . . . . . . . . . . . . G4 Bill Barno Vice President of Business Development (415) 777-8875 Richard Hanner: Coordinator Maggie Creamer: Design Editor Jordan Guinn: Staff Writer How to reach The Chronicle and Sentinel Media Services Mail: Real Estate Section San Francisco Chronicle 901 Mission St., San Francisco, CA 94103 Phone: (415) 777-7047 E-mail: [email protected] Open Homes Hot Property . . . . . . . . . . . . . H1 Featured Open Homes . H3 SFGate.com 1 What it sold for: Complete listings of Bay Area home sales at www.sfgate.com/ homesales A: Purchasing a home is stressful — and stress can lead to mistakes. This is why you need a real estate agent and a housing counselor on your side. Keep in mind that your loan product is a long-term financial commitment, so you need to understand how it is going to work for you. Have your agent and housing counselor go over the specifics of your prospective loan, explaining your future options and ascertaining that the loan is affordable. Also, be sure you have a plan in place for a possible refinance down the road. An inspection is a vital part of any home purchase because it details the condition of the property. Make sure that what you will be paying, as the property’s buyer, is agreed upon by the seller. Put in the contract that you want contingencies for certain items in the inspection to be repaired. Identify anything that may allow you to renegotiate the final price — you want to buy a sound investment. Finding appropriate insurance is necessary. Sometimes insurance will cover only a certain number of claims, equating to less than the coverage for which you will be paying. In this case, your premium might be too high. Make sure you have a plan that covers needs such as replacement of personal items. Also, be sure to garner liability coverage. Vincent Alvarenga, Mission Economic Development Agency, (415) 282-3334 ext. 101, [email protected] A: When we start working with buyers and sellers, we offer them a few obvious tips. We advise buyers to have their finances in order, to obtain a loan pre-approval letter and not to make lavish purchases. We explain to our sellers why their house needs to look marketable and ask that they disclose everything they know about the property. But what happens once we are in contract? Here’s what to consider. For buyers: 1 Read the disclosures. As a Realtor, I read the disclosures, but you have to read them, too. It is your property, so you shouldn’t sign any documents without reading them. 1 Pay attention to the transaction’s deadlines: contingencies removal, closing dates. 1 Have all the closing funds together to close the transaction on time. 1 Avoid asking for credits, a price reduction or a seller’s property after removing the contingencies. For sellers: 1 Disclose all known facts; be prepared to answer questions and produce evidence, if necessary. 1 Be specific about any personal property. 1 Check the preliminary title report, and address all potential issues: incorrect names, liens, easements, boundaries, etc. 1 Leave the property in good, clean condition. Alina Aeby, Pacific Union and Christie’s International Real Estate, (415) 744-4844, [email protected] A: The power of live conversation can be underestimated in this age of technology, especially as it relates to fast-moving real estate transactions. Buyers and sellers are using technology to be faster and more efficient with communicating via text, e-mail, etc. While this does facilitate faster communication, it’s important to remember that real estate transactions can also be emotional, and technology does not always translate emotions effectively. Feelings matter, and deals come together (or fall apart) based on what is communicated or interpreted. Live conversation during transactions can quickly clear up misconceptions or assumptions faster and more cohesively than an ongoing exchange of e-mails or text messages back and forth. Tone of voice, clarity and questions that evolve based on the flow of conversation can be assessed quickly, accurately and will save both buyers and sellers lots of money and time when done correctly. Don’t underestimate the power of communicating the old-fashioned way when it comes to effective real estate transactions. Nick Granoski, Alain Pinel Realtors, (650) 269-8856, [email protected] Want to contribute to Sound Off? Send an e-mail to Jordan Guinn at [email protected]