Best Way to Understand Closing Costs

Best Way to Understand Closing Costs

Federal law requires lenders and mortgage brokers to give you a booklet within three days of applying for a mortgage loan.

It’s called Shopping for Your Home Loan, and it’s a well-written guide in plain English.
Download the pdf to your computer or ipad, and consult it as you move through the Homebuying process. It can help you become familiar with a number of important things:

  • how interest rates, points, balloon payments, and prepayment penalties can affect your monthly mortgage payments.
  • Important information about your loan after settlement, including how to resolve loan servicing problems with your lender, and steps you can take to avoid foreclosure.
  • After you have purchased your home, identify issues to consider before getting a home equity loan or
  • refinancing your mortgage. Finally, contact information is provided to answer any
  • questions you may have after reading the booklet.
  • Glossary of Terms in the booklet’s Appendix.

RESPA is a federal law that helps protect consumers from unfair
practices by settlement service providers during the home-buying and loan process.

 

Read Guide to Settlement Costs

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4 Biggest Complaints about Brokers

4 Biggest Complaints about Brokers

The Colorado Real Estate Commission (CREC) says complaints about brokers are increasing as the market heats up.

They tell us that most complaints with brokers and mortgage lenders have to do with “transaction management”, while complaints against appraisers are usually about value.  Here are the most frequent complaints about brokers:

1. Practicing with an expired or inactive license. You must have an active real estate license to perform the duties for which a license is required.
2. Dates and deadlines. We receive numerous complaints about real estate brokers missing deadlines and we have seen an increase in the number of complaints that involve the loss of earnest money.
3. Failure to disclose adverse material facts. Unfortunately, this is not a new type of complaint and substantiated violations of this law do not bode well for one’s license. Disclose, disclose, disclose.
4. Failure to provide your clients with executed copies of the contract documents and to keep them appraised of the transaction. We receive a lot of telephone calls and complaints from consumers who are in the process of buying or selling real property and they are oblivious to what is actually occurring in their transactions. Whether the real estate broker is a single agent or transaction broker, keeping the client informed is part of exercising reasonable skill and care.

The CREC is charged with protecting the public, and what they’re doing is asking brokers to pay more attention to these details. And remember, you’re vicariously liable for the actions of your agent. As a consumer you can be forewarned by this: disclose fully what you know about the condition of the property (and make sure it’s in writing); make sure you pay attention to deadlines and understand what each one means; get copies of all documents and discuss with your agent; stay in touch with your broker — take the initiative if they’re not calling you often enough.

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David a 5-Star Pro in 5280 Magazine!

David a 5-Star Pro in 5280 Magazine!

 Five Star Professional will recognize me in an upcoming issue of 5280 Magazine.

Five Star Professional administers a survey, by mail and phone, to recent homebuyers. Clients of real estate agents may also submit evaluations online. Each respondent is asked to evaluate only real estate agents with whom they have worked and evaluate them based upon ten criteria: customer service, integrity, market knowledge, communication, negotiation, closing preparation, post-sale service, finds the right home, marketing of home, and overall satisfaction.

David Halterman, Denver Real Estate Broker

“We are pleased to inform you that you have been named a 2013 Five Star Real Estate Agent. Congratulations on reaching a level of excellence achieved by fewer than 7 percent of the real estate agents in your area.

You are being recognized by the largest and most widely published real estate agent award program in North America. Your selection is the result of a rigorous research process that included a regulatory and consumer complaint review, and an evaluation of objective criteria associated with real estate agents who provide quality services to their clients.”

Read more about 5-Star Professionals . . .

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Top 10 Real Estate Search Sites 2013

Top 10 Real Estate Search Sites 2013

According to data from Alexa Traffic Rank and Compete.com, the “top” (most used) search engines are a couple of 2nd-tier engines from years past: Zillow and Trulia.

All of the top search sites use information aggregated from Realtor.com, which comes in 3rd for traffic and unique visits.

Here’s the list. Read more details at List of Search Engines.

Top 10 Real Estate Search Engines 2013

Top 10 Real Estate Search Engines 2013

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Buy a House with Your IRA

Buy a House with Your IRA

Self-directed IRA’s — too good to be true?

This is not for everyone, but what it boils down to is that if you have a lot of money in an IRA and want to expand your investments beyond ordinary securities, a self-directed IRA can help you do what you want with your money – including buying real estate.

Difficult times have caused many people to look at alternative ways to save for retirement, and if you like owning real estate and think the long-term returns are likely to beat securities, this could be a good way to invest your IRA.

There are lots of rules, and you should be aware of what you can and can’t do with your IRA’s real estate.  For example, you or any immediate family members can’t live in it or get any rental income from it directly. Additionally, all repairs, management and property tax costs must be paid with the IRA’s funds – you’ll need to use a management company.  You can’t even make repairs by yourself without your own “sweat equity” being considered a contribution to the account.  So get expert tax advice and educate yourself prior to getting started.

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Appraisals: Still A Problem

Appraisals: Still A Problem

Brokers say Appraisals cause problems with 35% of sales

Wow. Appraisal issues continue to be a problem according to the latest Realtors® Confidence Index Survey.  Realtors® surveyed said delays, lower sales prices, or cancellations occured in 35 percent of recent transactions.

appraisalsDoes that mean you have a 1-in-3 chance of experiencing some kind of appraisal-related “glitch” in your home sale?  Sounds that way – especially in Colorado with the new inspection disclosure requirements.

Looking at the pie-chart, and assuming you’re not one of the lucky 65%, you’d probably prefer a delay over either a lower sale price or a cancellation.  Start by setting realistic deadlines and do your homework in advance of the appraisal.

3 ways to Do it Right:

1.  Pick a realistic “Appraisal Deadline.”  Buyers aren’t expected to order the appraisal (it’s expensive) until after the inspection (expensive) is completed and resolved in writing.  That could easily take 7-10 days. After the appraisal is ordered, lenders are telling us it will take 5-7 business days to “get it back.”  And that’s when the lender sees it, and you know if you have any problems. So don’t make the mistake of creating an unrealistic “deadline” which could make the contract easily voidable.  Bottom line: give it 3 weeks minimum.  Then if there’s work to do, you’re more likely to have delay and not a cancellation.

2.  Write the Inspection Resolution on a separate Amend/Extend form.  The objection form isn’t meant to be part of the contract, and
it is not within the normal scope of work of an appraiser to perform an inspection of tangible property and tangible property components in the manner comparable to an engineer, home or building inspector. (DORA, Colorado Board of Real Estate Appraisers, Nov. 19, 2012)

3.  Do a good job selecting and analyzing comps to support your value. This will not only result in a faster and higher sale, but comes in handy later:  appraisers really do appreciate useful corroborating information from the brokers.

 

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