Real Estate FAQ's
Frequently Asked Questions
As you ask them, I will answer them! Here are some of the most common questions I get asked and the answers to them. As new questions come up, I'll answer them here!
Did I miss your question? Click Here to ask- There's a $5 Gift Card to a Gianormous local coffee retailer in it for you if I use your question in the Real Estate FAQs!
How Long Do I Have to Own My House Before I Can Sell it?
How Long Does it Take for the Bank to Accept an Offer on an REO (Real Estate Owned) Home?
Why Do You Guys Charge so Much to Sell a House?
What About "Discount Brokerages"?
Why Should I Buy a Warranty for the Buyer?
How Long Do I Have Before My Home Gets Foreclosed?
How Long Do I Have to Own My House Before I Can Sell it?
The answer to this question isn't a very satisfying one- It depends. Your mortgage or Deed of Trust probably contains language providing for a Pre-Payment penalty, and some sales (such as homes bought from HUD as an owner occupied home) may contain restrictions in and of themselves. Typically your lender will have a provision for a "Due on Sale" clause that will also allow you to sell the property and settle the balance without a penalty- Provided you are paying off the loan with the sale, and not just paying it off early.
How Long Does it Take for the Bank to Accept an Offer on an REO (Real Estate Owned) Home?
This is another "It Depends" question- It depends on a lot of things. Each lender has it's own processes that an REO contract must go through for approval. The size and volume of loans the lender issues and services, the demand for homes in the area, the price offered and the net to the lender, the number of competing contracts the lender has received on the property- These all contribute to the amount of time a contract takes for review. Remember that the bank is looking out for itself, and wants to mitigate as much of it's losses as it can. By-in-large, it should take 30-45 days for review, however in a market where there are a lot of foreclosures and a lot of defaulting homeowners it could take longer. This timeframe holds for Pre-Foreclosure homes that are for less than the owed amount, or "Short sale", as well. The closer the net procedes to the seller your offer is to the debt the lender is owed, the faster it will move through the process.
Why Do You Guys Charge so Much to Sell a House?
Ok, a fair question. I have always felt that for most agents the fees aren't earned, either. The traditional method of paying a real estate agent a fixed comission actually works against you. You hired the agent to get you the most money for your home in the least amount of time, however there is very little incentive for the agent to do so- Every $1,000 less that your home sells for only costs them $30. That's why I use the "Pay For Results Only" system. With this comission structure, you are virtualy guaranteed to get the service you deserve and the representation you need. It provides an incentive you can clearly see for your agent to work hard for you, eliminates the practice of "Buying the Listing" (telling you it will sell for much more than market value just to get the listing, and then beating you up to lower the price), and aligns the agents goals with the your goals. For more information on the "Pay For Results Only" system, just give me a call!
What About "Discount Brokerages"?
Discount brokerages thrive in sellers markets- When the market has a lot of buyers it's very easy for a homeowner to sell FSBO and make a good deal of money at it. Discount and Limited Service Brokers do well (and can serve you well) in those markets. Conversely, it is very hard for a seller to get the attention his/her property needs on their own in a buyers market- There's just too much competition. Discount brokerages, both limited responsibility and full service make their money off of sign calls and buyer leads- They attract buyers to their clients home with advertising, however 99% of all buyers end up buying something OTHER than the home they make that initial call about- Whether its listed with a discount broker or a full priced company. The discount brokers convert that call into a buyer client and show them houses (including the one they called on if they are still interested), but typically make a full 3% buyers side commission on someone else's listing. It's not to say that they do not do their due diligence to try to sell your home, just that it is in their best interest to get as many buyer leads from your listing so they can have someone to sell other houses to.
Why Should I Buy a Warranty for the Buyer?
A home warranty is a relatively inexpensive way to entice buyers to view your property, and to consider it over an otherwise identical house. The warranty coverage depends on the policy bought, and typically covers the appliances, wiring, and certain structural and functional parts of the home (such as roofs and carpeting). It's an added bonus that can make your house stand out from the crowd.
How Long Do I Have Before My Home Gets Foreclosed?
Usually, the lender will not start foreclosure proceedings until you are 90 days past due. They have been reporting you to the credit agencies this whole time, however, and so this 90 day window should NOT be considered a "Grace Period"- Technically you are in default as soon as you miss or are late that first time. From there it is about a 60 day process from the time you first receive notice of foreclosure to the auction date. In most cases, you can stop the foreclosure by bringing the account current all the way up to a week before the auction (2 weeks or more in some states and with some lenders)- Either by paying off the arrearages or paying off the loan in full. Once you are in that last week, the only remidy that will allow you to keep the home is to pay it off in full. Once the home goes to auction, it is no longer yours- Whether it sold or not. If it did not sell to a buyer on the courthouse steps the bank gains ownership. In Washington, you then have 21 days after the auction to vacate the property.
Letting the home go to auction is a heavy ding on your credit- Credit that can effect more than just your abillity to get a loan or line of credit in the future- It will also effect what you pay for auto insurance, rental deposits, and a slew of other daily costs of living. If you are facing a situation where foreclosure is imminent, you need to act fast- Hire an agent who is a skilled Distressed Property Consultant or a Home Retention Consultant. If you act early enough, you may be able to negotiate with the lender and find a way to keep the home. If you can't keep it, you can still sell it before foreclosure and safe some of your credit rating. You may even have enough equity to walk away with some money in your pocket. Just don't wait.
Have a question that wasn't answered here? Let me know!
Information from reliable sources but not guaranteed. No two situations are exactly alike- Always seek professional council.
