The Advantages of a Pre-Approval

The decision to purchase a home can be an exciting but sometimes confusing undertaking. When beginning your search for the perfect home, there are a number of factors that you will want to consider. Whether you are a first time buyer or already own a home and want to move up, getting pre- approval for your mortgage is a necessary and time saving step. Here are some of the benefits of getting pre-approved!

Know Your Budget!

Getting pre-approved means that you will have a clear picture of the credit you have available to you to purchase your new home, as well as your price range. This will prevent you from spending time looking at homes that may be out of your budget and perhaps getting attached to a home that you cannot afford. It means that if you find the home that is right for you, it can more easily become yours!

Close Quickly

pt_18_28420_oGetting pre-approved for your mortgage means that you can act more quickly once you find the home that is right for you. The process of getting the mortgage approved is generally the longest and most complicated process in any home purchase. It requires verification of your income and employment, an evaluation of your credit reports, and the completion of a loan application. Having this step completed can save weeks of time in the closing process. Pre-approval also means that you have an advantage should a bidding war begin. The seller can be confident that you can afford the bid you are making and that you can move quickly to finalize the sale.

Overall, there are a number of benefits to getting pre-approval for your mortgage before beginning the search for your new home. Most importantly, it can give you peace of mind in knowing that you are ready and able to make the commitment to homeownership, and that you are not wasting your time in looking at properties that you may not be able to afford.

Pre-Approval vs. Pre-Qualification

There is a major difference between a pre-approval and a pre-qual. When a lender pre-qualifies you, they don’t dig too deep into your financials and could easily miss something that could greatly affect your ability to purchase a home. When you get pre-approved, the lender digs deep to get a really good idea of your financial status. Most sellers require that you present a pre-approval letter from your lender when you submit an offer, and most won’t even consider a pre-qualification because it is so vague.


Looking to buy or sell a home in the MetroWest area? Real estate agent Robert Brown of RE/MAX Executive Realty services areas such as Hopkinton, Hopedale, Milford, Upton, Mendon, and many more. To learn more about MetroWest real estate agent Robert Brown, please visit the Meet Your Agent page on SellMyMetroWestHome.com

Homes for Sale in Hopkinton, MA | Real Estate Agent in Hopkinton, MA
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Behind the Scenes of a Successful Real Estate Transaction

From the Desk of Attorney David W. Lima

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It takes a team to successfully close a real estate transaction. Whether a sale or purchase, a transaction will close smoothest when the realtor, loan originator and real estate attorney work seamlessly together and with the mutual client. Each professional has their own work to do on the transaction, although frequent communication and co-operation with the other two professionals is essential. I’d like to take you behind the scenes of the real estate transaction from my perspective, the real estate attorney.

Whether representing a seller or buyer, my first task is to verify my employment by the client. My introduction to the transaction might occur in one of many different ways. Often, it is by referral from the realtor. I must contact the client and summarize the work I’ll perform on the file and disclose my fee. If the client is an estate or corporate entity, I must also confirm the person I am speaking with has the authority to choose and hire me as the closing lawyer.

Once hired, my paralegal will open a physical file and start a closing information sheet and action log. To complete this task, I want to get as much information as possible as quickly as possible. This includes obtaining the accepted offer and deposit check. The realtor and client are the best sources for this information. Then, the process of preparing for closing can begin.

When representing a seller, it is my job to generate a purchase and sales contract (P&S). While the Offer provides the essential terms of the transaction, the purchase and sales contract will add the detail. After drafting the P&S, I must review it with my client, the seller. The seller must understand the terms of the contract and it is my job to clarify uncertain terms. There are revisions to the standard contract which every competent real estate attorney will want to make. I don’t waste time. My form contains that language from the outset. After reviewing the contract with my client, the P&S is sent to buyer’s attorney, who might still request some revision. After a final document is negotiated between attorneys, the buyer will sign it and provide their deposit check. Then, the seller signs the contract.

At this point, I will obtain the seller’s forwarding address, a copy of their identification, social security number, mortgage account information and written authorization to obtain a payoff. My office will draft the deed by which the property will be conveyed to the buyer and a power of attorney (POA). Most sellers don’t wish to attend the closing. The POA enables me to sign the closing documents on their behalf. The POA and deed are signed by the seller in advance of closing.

If there are issues with the title, I’ll work with the seller to resolve them prior to the closing. Sometimes, they are as easy to fix as recording a mortgage discharge or death certificate. Some issues, such as an addition built on a neighbor’s land are more involved.

A week prior to closing I’ll obtain the mortgage payoffs and provide them to the lender’s attorney along with my fee and other items provided by the client or realtor such as oil adjustments, smoke/carbon monoxide certificates, final water and sewer bill, realtor commission statements and if a condominium, a 6d Certificate indicating there are no outstanding condominium fees. If the property is a multi-family, I’ll give notice of sale to tenants, obtain estoppel certificates from tenants, and arrange for a transfer of security deposits and an adjustment for rents.

If the seller is a corporation, I will check to see if a Certificate of Good Standing obtained from the Secretary of the Commonwealth of Massachusetts has been recently recorded. If not, I’ll order one for recording at closing. The buyer/lender’s attorney will want one to show the corporation has authority to transact business in the Commonwealth.

I will also review the settlement statement with them prior to closing. This can be done in my office or over the telephone.

At closing, I’ll sign all of the common, necessary documents required by buyer and their lender. I’ll provide the deed and POA and collect my client’s proceeds check to deliver to them after the transaction is recorded at the registry of deeds later that day.

When I represent a Buyer, the same information gathering occurs. I also must provide them a summary of what I will do for them and what the legal fee will be. Most buyers don’t realize they can have an attorney represent them handling the P&S and have the same attorney do their lender bank work. Some attorneys will charge more for the individual representation. I don’t charge for the individual representation when I am doing the buyer’s lender’s work and getting paid for it. To save my client, the buyer, money, it’s important to obtain the assignment to do the lender work as soon as possible. This is called a ”title order.”

Once I have a title order, my paralegal will data entry the information for the transaction into my closing software program. This information includes buyer, seller and lender names, addresses, terms of the transaction and loan and the numbers as they are obtained from the lender, realtor, town and seller’s attorney. At this time, she’ll order a Municipal Lien Certificate from the town which will show what municipal liens are on the property. These must be cleared at closing: a title examination from my examiner at the registry which involves a look at all documents affecting the property over the last fifty years with provision to me of copies of relevant documents; and if not a condominium, a plot plan which shows the boundary lines of the property and location of buildings on the lot.

At the outset, I diary the closing date and importantly, the date by which financing can be obtained. If the finance contingency date arrives and the lender has not issued a commitment, I’ll need to work with the selling side to extend the finance contingency date. If missed, the buyer’s deposit might not be refunded if the loan is not committed.

My paralegal will draft a legal description of the property for attachment to the mortgage and a Homestead Declaration for the Buyer. If the seller has no attorney, we will draft the deed for a small fee. She’ll confirm the spellings of names and the property address and the parties‘ marital status. I’ll discuss the deed tenancy options available to the buyer, and together we’ll make a selection.

After the loan commitment is obtained, I must provide the lender with a title report indicating that title is free of issues and the steps necessary to place good title in the buyer and a first lien on the property with the lender. I’ll also give them the tax information so escrows can be determined, and a statement from my title insurance company that says I can write a title policy to the lender. I’ll also obtain the buyer’s insurance binder and provide it to the lender.

A week prior to closing we’ll schedule a time and location for the closing. For the seller, I’ll remind them to bring photo identification, evidence of repairs called for in the purchase contracts, alarm codes, keys and garage openers, the deed, Smoke/carbon monoxide certificate, final water/sewer bill paid and if a condo, the 6d certificate. I’ll ask the buyers to bring photo identification, a certified check for monies due to close, and their insurance binder.

A day prior to closing, the lender will email me the closing instructions and their documents. I must complete the documents, add my documents and using the instructions prepare the settlement statement. Once the settlement statement is done, I’ll email it to the lender for approval first, and then to the parties. I’ll explain the settlement statement to the parties in advance of meeting.

On the day of closing, after the papers are recorded, we’ll begin post-closing work on the file. I’ll prepare the title policies for the lender and owner, scan the closing package for my records, overnight the lender the originally signed documents and diary.

Then, we start again for the next client.

The Short Sale Process – From the Desk of Attorney Uliano


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The ability to successfully sell your home or investment property is often a function of the real estate team (real estate agent and attorney) that you assemble to ensure the property is effectively marketed and your interests are protected. This team becomes exponentially more critical when dealing with a short sale, which occurs when your property is worth less than what you owe on the property, requiring your lender’s written authorization to sell it. The following is a brief overview of what this process entails and should highlight the need to employ an experienced team to assist you and your active involvement throughout the process is critical.


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Though discussions with both your agent and attorney will precede the active marketing of your property, the process itself really begins at the moment you accept a Buyer’s Offer. From that moment forward, your team will begin compiling all of the requisite documents that the short sale lender will use to review the file and render a decision which, if all goes smoothly, could be anywhere from two to three months to issue the short sale approval letter with the actual sale taking place within one month thereafter.

During this three to four month process (or longer depending on various factors), lender will be looking to establish essentially two things. First (establishing the hardship), they want to know if you are experiencing a hardship that requires your relocation or confirms your inability to continue to pay your mortgage, thereby necessitating the short sale of the property. Second (establishing the value), they will want to confirm that the amount of money you are offering them is sufficient for them and/or the underlying investor to permit the short sale.

Establishing the hardship and value are two rather straight forward things in theory, but the practical reality is that these two simple things entail a maze of red tape surrounding document collection, review, revision, and updating, with stringent timelines, and coupled with negotiations between multiple parties, all with different and often opposing guidelines.


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First, you will have to supply information regarding your finances (paystubs, bank statements, tax returns), the particular transaction (Offer, draft HUD-1 Settlement Statement), and the marketing of the property (MLS Listing Sheet, Listing Agreement).

Second, the information will be reviewed at varying levels of scrutiny based upon both what lending institution is servicing the loan and the method the individual within that institution uses to examine the information. Concurrently, the Broker Price Opinion (“BPO”) will be ordered and received, which will establish the fair market value of the property from the lender’s perspective.

Third, they will give us a counteroffer to either increase the purchase price, negotiate standard Closing fees that Sellers are ordinarily responsible for paying, or both of those things simultaneously. It is at this stage that we will finally be able to ascertain our likelihood of obtaining a short sale approval and under what terms. Finally, once the purchase price and Closing costs are agreed upon, the lender will pass the short sale file to management and/or the investor for final review and either issue an approval or denial of the short sale request.

If there are additional lien holders (a second mortgage or other lien on the property), the same steps are followed with respect to those additional liens with the added difficulty of getting two or more lien holders to agree with each other and within the timelines necessary to consummate the transaction. There are no limits to the amount of liens there may be and, for each additional one, the difficulty of successfully negotiating the short sale increases.


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Your success rests upon multiple factors but fully explaining all of those factors here is impractical. What is most important to understand is that, despite the level of difficulty and complexity, short sales CAN BE and often ARE successful. Surrounding yourself with competent and experienced real estate professionals to assist you in this matter dramatically increases your odds of achieving that success.

Have a question? Contact the Sell My MetroWest Home Team for more information.

Buying a Home in MetroWest MA – Attorney Joseph Uliano

The Home Buying Process

As purchasing a home will be the most significant investment most of us will make, the transaction is one that naturally entails a measure of stress and uncertainty. Once your future home is identified, the team that you have selected to aid you in consummating the transaction (your agent, attorney, loan officer, and their respective staffs) will work diligently to ensure a seamless, efficient, and as stress-free a process as possible. For most, and certainly for me, stress reduction in this type of situation is a function of being aware of the process and being kept informed at all times. To that end, the following is a brief overview of the home buying process from the moment the Seller accepts your Offer until you walk into your new home.

Hopefully, prior to Offer acceptance, you have identified your attorney and lender. Most people would not know in advance who they would use for these services and that is just one of numerous roles your agent can play in this process. They have experience with a wide array of providers they can recommend and have established teams of professionals they are comfortable with and know will provide you with excellent service. Please use them as a resource.

 

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Once your Offer is accepted, you will then have the subject property inspected while your attorney works with Seller’s counsel in negotiating the Purchase and Sale Agreement (P&S), which expands upon the terms agreed to in the Offer and clearly identifies the obligations of the parties. Inspection items that may arise will be incorporated into the P&S and you will review the final version of that with your attorney before signing to ensure all you anticipated is part of the transaction. This all typically happens within 10-14 days after the Offer acceptance.

The fully signed P&S is provided to your loan Officer along with your financial information, and the appraisal is ordered to confirm the market value of the property as your lender works towards granting you a loan commitment by the date referenced in the Offer and P&S. Concurrently, your attorney, if they also represent the lender (which is preferable from a cost and efficiency standpoint), will being reviewing the title to the property to ensure that you will receive good, clear, and marketable title. The financing takes between 3-4 weeks depending on the type of loan you are obtaining and the title exam portion occurs relatively quickly.

 

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Once your loan commitment is granted and once your lender gives what is called a “clear to close” to your attorney, the Closing time and location are scheduled with all parties. You are then provided with the final costs and fees associated with the purchase in the form of the final HUD-1 Settlement Statement (a day or so prior to Closing) for you to review and compare with your Good Faith Estimate, which would have been provided to you at the beginning of the process and outlines the anticipated costs you would see on the HUD. You will have the opportunity to revisit the property prior to Closing to ensure it is being delivered to you in the physical condition it was promised and then proceed to the Closing table. The Closing itself takes approximately one hour and, once the Deed from the Seller to you is recorded at the Registry of Deeds, the home is finally yours!

There is obviously much more that goes into the process and it is therefore important to surround yourself with a qualified team that will be your guide and that you are free to contact at your leisure with any questions or concerns along the way.

 

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Evaluating Multiple Offers When Selling a Home

INTRODUCTION

Receiving an offer on a home is great. Receiving MULTIPLE offers is exciting!

We approach this situation realizing it could be more taxing on the Seller than us. The process of selecting the right offer is very important. An offer on the table today could be gone tomorrow. This article outlines some simple rules and steps we take when evaluating any offer.

Evaluating an offer is a mixture of Art and Science. The Science is the full process we employ. The Art is being *alert* during the process and uncovering things that just don’t feel right.

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GROUND RULES

Here are a few ground rules I like to keep in mind and sometimes share when presenting the offers to my Seller.

Rule #1 – All offers are Negotiable

Remind the Seller we still have 3 options for every single one of their offers:

  1. Accept the offer
  2. Reject the offer
  3. Counter the offer

 

Rule #2 – Keep a Poker Face

Selling a home is an emotional experience. The Sellers can have deep feelings for their home – either positive or negative. Maybe they raised a family in the home. The Seller may be moving as a necessity of their financial status.

The Buyers may ask the Seller to leave certain personal possessions in the home. The Buyers may make comments seen as criticism (style, design, or condition of the home). Review the original objectives of selling the home and revisit them to make sure the best decision is reached for them.

Rule #3 – Be sensible when a “good offer” comes in versus a “perfect offer”.

Sometimes, the first offer is the best offer. Most Sellers have a “perfect offer” in mind – and this is good. We also need to remind ourselves “an offer on the table today – may be gone tomorrow”. We are not suggesting the Seller settle for less. We are suggesting that receiving an offer exactly aligned with your objectives may not always be possible. We suggest the Seller accept a “good offer”.

SIMPLIFIED PROCESS IN STEPS

1. “Which offer is the highest?”

This is the question I hear most often – and it is a fair question. I want to get the most amount of money I can for my clients. Let’s look at some other important considerations.

2. “Why does this buyer want to buy this house?”

Evaluate the emotional commitment of the buyers. Call the Buyer’s Realtor and ask several questions.

– Why do they want to buy this home?
– What is it about the home do they like?
– Do they work nearby?
– Do they have family nearby?
– Where do they live now? Do they need to be in the home at a certain time?
– How would the potential Buyer handle simple Home Inspection issues?
– Are they selling a home and they need to move right away?

… and so on. A buyer that needs to be in the home is a motivated buyer and is more likely to close.

3. “Will this Buyer will actually make it to the closing table?”

What good is the highest offer if they cannot get financing? Are they offering a substantial deposit?

Sometimes the weakest buyer will offer the highest number. Speaking with the Loan Officer will reveal a great deal of information. Did the Loan Office collect all the required documents for pre-approval? Did they just write something quickly on merit of the Buyer without actually looking at the Buyer’s financial information?

Another strong sign is the deposit at offer acceptance and at Purchase and Sales Agreement (P&S). Are they bringing $500 with the P&S or are they bringing 20%?

4. Look for a Quick Home Inspection

The standard is probably 10 days. We would like to see 5 days. If the buyer is going to be problematic at the Home Inspection, we want to know right away.

5. When do they want to close?

Do they want to close in a timeline that meets the Seller’s goals?

6. Other Terms

There are some standard terms such as Mortgage Contingency and Home Inspection, or possibly having the ability to sell the home they’re in. If they need to sell the home they are in, this is a big concern and will be looked at much more closely. What are the Mortgage Contingency dates? Are they stretching out the Mortgage Contingency as much as possible? This can delay the Selling process and is a sign of a potential issue with the Buyer’s ability to obtain financing.

Do they want to keep some personal possessions there? Are they asking for improvements or maintenance items to be taken care of? Look at these other terms and see what downstream concerns they may cause.

CLOSING

Evaluating and selecting one of many offers is exciting, but does present some careful examination. By using a consistent proven process, we can help the Seller with this very crucial step of the home selling process. Please contact us if there is any way we can help you buy or sell a home.