Ayelet Gilad

Alpharetta Living, Real Estate and Community


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The Misconception About Closing Costs

Closing cost are the fees assocaited with the closing of the mortgage and unlike most people mistakingly think, they are the sole responsibility of the buyer, and not the seller’s responsibility. This misconception stems from the fact that as part of the negotiation of the deal, the seller pays for the closing cost. Indeed, more than 75% of the transactions last year had the closing costs paid by the sellers (in various %).

Basically, the closing costs are a cash amount, that together with the down payment, the buyer needs to “bring to the table” Often, an offer on a house will include the request to cover (partially or fully) the closing costs. If the seller agrees to this concession it means less cash for him, as this will come out of his net amount, and for the buyer it means – less cash to bring to the transaction.

If you have the cash, my advice would be to pay for the closing costs yourself, as it means that you can give a “clean offer”. This is of great importance in today’s market, which is becoming more and more seller’s market and you and your offer may be competing with other buyers & offers.

Need more info? Don’t hesitate to contact me for a free consultation! I’m always here to help!

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The Real Estate Transaction: What Could Possibly Go Wrong?

Spring is officially here, which means houses will start popping up on the market like flowers! Just in time for that, I wanted to share this great info with you and what can possibly go wrong. As I said many times, buying  a house is a very emotional and stressful process. Reduce some of this stress by choosing a great agent to be your partner in the process. I’m always here to help so start today by contacting me!

So remember – “Anything that can go wrong will go wrong.” While Edward Murphy was referring to the use of new measurement devices, his rule can be aptly applied to the real estate transaction without a hiccup.

From the very first step – getting preapproved for a mortgage – to choosing a real estate agent to the close of escrow, the process is full of pitfalls.

If you’re considering the purchase or sale of a home, it’s a good idea to know what could go wrong during the process. While some problems are hard to anticipate, others happen with enough frequency that they offer lessons, allowing you to become informed and, hopefully, help you to avoid some of the biggest problems.

Choosing a Real Estate Agent

Your real estate agent is the driver of the transaction. As such, he or she will steer the transaction around common roadblocks and avoid certain pitfalls. That is, if you choose the right agent.

What happens if you don’t? Several things:

  • Your house may not be priced properly.
  • Your house may sit on the market longer than it should.
  • If you’re buying, you may end up paying more than you should.
  • A complicated transaction, such as a short sale, may have details that are allowed to fall through the cracks.

 

Avoid these potential problems by hiring an experienced real estate agent. When selling your home, your first concern is getting the most money for the home. An agent familiar with the area is much better able to determine market value than one from outside the area.

An agent with proven marketing capabilities will get your house in front of more buyers than an agent who hasn’t a clue about marketing. If you own a specialized home, such as a luxury home or beachfront property, or you are performing a short sale, you need an agent experienced in these types of sales.

When purchasing a home, you need a savvy negotiator in your corner – an agent who can go to bat for you and get you the best possible price on the home.

Give me a call today for your free consultation at @ 404-245-7172 

Counteroffers

The offer to purchase is a document full of potential pitfalls. Some of these include:

  • Price.
  • Insufficient earnest money.
  • Inappropriate closing date.
  • Requests for personal property.
  • The buyer isn’t preapproved for a mortgage.
  • Requests for repairs or allowances.

 

Of course, there are many, many more, but these are some of the most common. These problems are typically addressed via a counteroffer. This document says to the other party, “I accept the offer as long as the following conditions are met.” This is the nuts and bolts of negotiating, and it’s fraught with perils.

If you’ve done a good job of carefully selecting your real estate agent, this is the time to rely on him or her for advice. The decisions are ultimately yours to make, but expert advice should be considered.

Home Inspection

The home inspection presents another opportunity for a deal to fall apart. Home repairs can be costly. Some can make you want to walk away from the deal. If you decide to remain engaged in the process, you’ll need your old friend the counteroffer to request repairs or a reduction in the price of the home to allow for the cost of repairs.

Appraisal

When markets change rapidly, appraisals become more challenging. When home prices began to stabilize after the latest recession, for instance, appraisers had nothing to base home values on but the depressed recession prices. Foreclosures particularly drag down values, and many homes aren’t appraising for as much as homeowners and their agents expect them to.

If you’re the seller or buyer of a home that doesn’t appraise for the purchase price, your options include:

  • Reducing the price.
  • Raising the amount of the down payment.
  • Challenging the appraisal.
  • Walking away from the deal.

 

Closing

Lots of things can go wrong at closing. Some of the most common events are:

  • The lender pulls a soft credit report and finds that the buyer has made some large purchases, changing his income-to-debt ratio to the point where he no longer qualifies for the mortgage.
  • Your paperwork is delayed by the lender and your attorney pushes the closing to another day.
  • The funds don’t arrive.
  • One of the parties is unhappy with the information on the HUD-1.

 

Not every real estate transaction has problems. In fact, most sail along smoothly. While it’s hard to hold your excitement in check, the best time to let it loose is when your agent hands you the keys to your new home.


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Most Common Things That Can Go Wrong When You Buy a House – no. 4 – Title Problems

The title if a formal document that serves as evidence of ownership.  When you purchase a house, the seller has to transfer a clear and markable title without any restrictions so first you will be the legal owner of the house and the land it sits on; and second, so you can sell it afterwards without any trouble.

As part of the closing process, the transaction attorney check the title to see if there the title is clear. Some of the issues that may arise with the title are:

  • Liens  are a hold on the property due to debts for federal and state taxes, home owners association fees etc.
  • Missing signauture on the deed
  • Missing documents
  • Encroachments due to a neighbor that extended their garage on the property or due to a survey mistake

There are a whole milieu of title problems that may come to the surface when the title is checked.

To solve any type of issue, the closing attorney will work with the title insurnace company (if applicable)  or the seller will have to pay out-of-pocket to resolve the issues, which can be very costly.  The best way  to protect yourself is to buy an owner title insurance when you purchase a home. This way, if anything arise, even 10 years later, you know that you are covered and the title insurance company will handle and solve the issue.

Have questions about home title? Contact us and see how we can help!