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EDUCATE YOURSELF IN THE BUYING OF REAL ESTATE

Putting It All Together in a Real Estate Purchase

First Time Home Buyer Mortgage with Washing State Housing Finance Commission

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Mortgages & Interest rates

Rent vs Buying

Buying Can Be Exciting As Well As Stressful
Buying a home is an exciting time in one's life. Making the smart move of choosing a REALTOR® is your first step to ensuring that your new home and community meets your needs. My services and experience range from financial aid to helping you find the home that best suits you and your family. For your convenience, I also provide listings by email. I pride myself on repeat business and hope you'll come to understand why. I will supply you with a list of buying clients who have utilized my services one or more times. I will leave it up to you to email or call them for their input.

What I Will Do For You
Before You Start Looking For Your New Home
Closing Costs
Foreclosure Sales
What is the Difference Between an Appraisal and a Home Inspection?
Recommendation People

More useful information is available in Essential Tips. If you need any help with the terminology in this website, feel free to consult the Real Estate Glossary

HOW TO START THE BUYING PROCESS
You enter Spokane and the word “homes” into your computer address browser; there is so much information available. How do you sift through it all?  Some people drive around for months and waste time, gas and energy trying to find a home they would love to own and live in.  With historic low interest rates, plenty of home choices available at low prices today, how can you refine that search to find what you want in a home?

  • Decide what you want and need. Start with filling out a wish list to use when viewing homes. 
  • Email or call Realtor* W. Michael Keller for his FREE assistance as your “Buying Real Estate Broker*”.  It doesn't cost you to get help on your home search with Mr. Keller. He will know the properties that are available, have a feel for neighborhoods and know where the good schools are.  He will help you navigate the details involved in the home buying process. He can save you time and heartache with his FREE email notification program.  The MLS computer emails you all the actively for sale, new listings, reduced price listings and those returning to the for sale market…all of which will fit your parameters.  Be sure to ask W. Michael to send you a home search questionnaire so that you can inform him of your wants and needs.
  • Find out what you can afford through “pre-approved”. Visiting a lender to get a pre-approval letter will help you find just the home that matches what you can afford. A seller is more likely to immediately accept your offer. Having a “pre-approval letter” to show to a seller demonstrates that you are a serious buyer. When you are ready to buy, it will shorten the time it takes your lender to complete the mortgage application process. Ask Realtor W.Michael Keller* for a recommended mortgage broker in Spokane.
  • Check This Handy Home Financing Calculators!  Whether you’re buying a home or refinancing an existing loan, we have a calculator that can help you make the right decisions! Determine exactly which deal offers the lowest monthly payments, how much home you can afford, and whether it makes sense to rent or buy, and more. http://wahomeowners.com/calculators

HOW A BUYING REAL ESTATE BROKER GETS PAID
W. Michael Keller, Windermere-Manito is a professional licensed Buying Real Estate Broker.  The word Realtor is a trademark referring to someone who's an active member of the National Association of Realtor's (NAR). In the United States, a real estate agent is licensed to help consumers buy and sell commercial or residential property.  Remember that not all real estate agents are Realtor's.  There are more than 2 million licensed real estate agents in the United States and 1200+ in the Spokane MLS, but nationally only half of them are Realtor's. The National Association of Realtors (NAR), holds its members to high ethical standards and trains them in the most effective professional practices.    

As a buying Real Estate Broker, I make my income on the buying side of the commission.  I only get paid when I assist you in the final purchase of real estate.  If I spend the time, money and effort to find the buyer a home and they do not purchase a house, I don’t get paid.  This is where loyalty comes into play. You as a buyer and myself as a buying Realtor must work together in one common goal…..locating the perfect home for your family and assisting you through the entire sale and finally the purchase.  If you were to use my services, but finalize a sale with another Realtor or a For Sale by Owner, do you realize that I will have worked for no pay?   I refuse to have my clients sign an “agency agreement” because I expect loyalty from them as they do from me.

My Realtor commission from the seller is 3 percent, which I split evenly with my Broker (50-50).  The owner who listed the home for sale is responsible for paying the entire commission and I represent the Buyer only and at no cost  If the seller offers a 6% Realtor fee, realize that the 6% does not go to me, but is split between the buying and selling brokers.  That leaves 3% for the selling side and 3% for the buying side. My broker then shares 50% of the 3% fee with me. The remaining 1.5% fee assists in paying my business expenses, since I am an “independent contractor” and receive no salary from my Broker.  After my expenses, I generally clear less than 1.2% of the seller original 6% total fee.  My expertise, experience, guidance and negotiation skills that I offer are FREE to you.  I have one of the few jobs where I work first and then I MIGHT get paid if an offer is accepted. All I ask from you as my client is loyalty.

Lease Purchase?  Stay away from them!!
Many people have heard the term lease purchase, but most people do not know exactly what a lease purchase agreement is.  A simple definition is:  Lease Purchase - A contract to purchase a home (with an extended closing date) coupled with a rental agreement.    

While any contract is negotiable for a lease purchase to have a non-refundable deposit, a time limit for the purchase date, a deductible on repairs (buyer is responsible for the first X dollars of repairs), and some even offer a rent credit where some amount of the monthly rent is applied to the buyer's down payment.

A lease purchase may be mistakenly called a lease option.  There is a distinct difference between a lease purchase and a lease option.  A lease purchase includes a written purchase and sale agreement that has been signed, sealed and delivered.  The sale must go through or there may be penalties applied to party in default.  On a lease option, the party that is renting a house (or other property) has purchased a legal right or option to purchase the property at a later date.  In a lease-option, the buyer does not have an obligation to purchase it. 

So, which is a better solution, the answer depends on what you are trying to accomplish.  Each situation is very different and requires a different approach.  It is important to understand that the goal of a lease purchase or lease option is to eventually get to a sale of a home.  Both instruments can get the buyer there but the lease purchase makes the parties much more committed up front. 

My advice is to stay away from this type of transaction and instead rent, save money, and improve your credit.  Why?  Because 90% of this transaction never come to fruition. 

How Can I Help? As Your Agent, I Will:

  • Assure that you are knowledgeable of all properties in your selected search area that meet your criteria.
  • Guide you through the entire home buying process, from finding homes to look at, to getting the best financing.
  • Make sure you don't pay too much for your new home and help you avoid costly mistakes.
  • Answer all of your questions about the local market area, including schools, neighborhoods, the local economy, and more.
  • Realize that I am FREE! My services cost you nothing. I am one of the few whose services are FREE, so why not utilize my accommodations?

Before You Start Looking For Your New Home:

  • Check your credit rating. Straighten out any errors before its too late.
  • Determine a comfortable monthly budget for your new purchase, including down payment and monthly payment.
  • Find a loan program that meets your needs and get pre-qualified (preferably pre-approved).
  • Choose a REALTOR®, Like W. Michael Keller, that you trust and who understands your needs.
  • Determine what neighborhood best matches your needs.
  • Identify important features you need your new home to have. 

Closing Costs to Expect:

  • Lender fees include charges for loan processing, underwriting, preparation and establishing an escrow account.
  • Third-party fees include charges for insurance, title search, and other inspections such as termites.
  • Government fees include deed recording and state & local mortgage taxes.
  • Escrow and interest fees include homeowner's insurance, loan interest, real estate taxes, and occasionally private mortgage insurance.
    Estimate your mortgage.
  • Supply of approximate closing costs can be obtained in advance through a request to me.
    How to calculate buyer's or seller's escrow fees.

FAQ’s about Foreclosure Sales

Contact Regional Trustee Services
616 1st Avenue,
Suite 500
Seattle, WA 98104
206-340-2550

Q) I have never bid on homes before. How do I get started?
Local newspapers carry publications of foreclosure notices. If you find a property you are interested in, make a note of the trustee’s sale number from the publication. The opening bid amounts, sale location and date information can be checked on our website using that number. Please note that foreclosure sales are cash only. You must have certified funds for at least the opening bid or you will not be able to participate in bidding.

Q) How do I determine the value of the property and decide what to bid?
In order to determine the value of a property you will need to do some homework. Appraisers, title companies and other real estate professionals can provide valuable information, sometimes for a fee.

Q) Where do I find business information?
The bid amounts are entered in Regional’s website as soon as the servicer sends us that information. From the main web page, click on “Sales List” (on the left side of the home page), click on the state you are interested, click on “View Sale List” (top right) and then input the trustee’s sale number in the search field. Their site isn't live, so as soon as we have the information it will appear on our website.

Q) What happens next if I am the successful bidder at a sale?
Once they receive the funds they will issue a Trustee’s Deed and send it for recording, with the exception of sales in California and Nevada, wee will forward the Trustee’s Deed to you to record. If you are due a refund, it will be sent within 24 hours of receipt of funds.

Q) How do I find out what is owed on the property I am interested in?
Due to Privacy Acts we are unable to release this information to you without the written consent of the borrowers of record. You might wish to seek assistance of counsel or a qualified real estate professional such as W. Michael Keller to research the property’s title and status.

Q) I found a property I am interested in. How do I go about bidding on it?
First you must be prepared with cash/certified funds at the sale location listed in our Notice. Foreclosure Sales are cash only and you must appear with certified funds for at least the opening bid or you will not be qualified to bid.

Further, it is advisable to seek assistance of counsel of a qualified real estate professional such as W. Michael Keller to research the property’s title and status. Once you have determined that you wish to bid, check the website for the status of the sale. You will need to be prepared to pre-qualify for bidding with the person conducting the sale.

Q) What if I want to purchase the property before the sale date?
The beneficiary of the deed of trust has no ability to sell the property prior to the completion of the foreclosure sale. You will have to contact the borrower and see if he/she/they wish to sell the property to you.

Q) Who do I make my cashiers check out to?
Cashier’s check can make it out to Regional Trustee Services or to yourself and endorse it to Regional at the sale.

WHAT IS A SHORT SALE ALL ABOUT?
Short sales happen when home values fall and sellers do not receive enough cash from a buyer to pay off their existing mortgages, providing lenders agree to take less than the amount owed to them.

On the surface, it may appear that a short-sale buyer is getting a good deal. Although a slim margin of short sales may be profitable for a buyer -- because there are always exceptions -- much of the time, a buyer would be better off buying a home that is not in default.

You are unlikely to hear real estate professionals tell you that it's not a good idea to buy a short sale. In part, that's because real estate professionals profit on a short sale. Everybody makes money except the sellers and buyers. Realize, too, that listing agents might push sellers to list as a short sale, because if the sellers went through foreclosure, the listing agents will not get the listing.

Here are 11 Reasons Why Buyers Might Not Want to Buy a Short Sale:

1) Sellers Paid Too Much.
If a home sold for $500,000 a few years ago and is now for sale at $400,000, that doesn't mean the buyer is picking up $100,000 of equity for free. It means the seller paid too much in a rising market and now the market has fallen. It means the seller has no equity.

2) Sellers Borrowed Too Much.
Banks that were eager to lend money in appreciating markets sometimes allowed borrowers to over-mortgage the home, meaning the borrower's loan balance exceeded the value of the property. Appraisals are subjective, and not all appraisers will place the same value on a home. Although against the law, some appraisers are pressured by banks to appraise at the amount the home owner wants to borrow.

3) Stringent Qualifications.
Inexperienced or unethical real estate agents might push a seller into considering a short sale when the seller does not qualify for a short sale. Sellers must prove a hardship and submit evidence of the hardship to the lender for approval. Some agents list homes as short sales without ever talking to the lenders or pre-qualifying the sellers.

 

4) Homes Sell at Market Value.
Lenders aren't naive or unaware of the value of a home. Lenders will insist on a comparative market analysis, known as a CMA, or broker price opinion, known as a BPO. If a lender believes a better price can be obtained by taking the property in foreclosure over a short-sale offer, the lender may hold out for a higher price. That price will be close tomarket value. Lenders accept short sales when the home is worth the short-sale price, which means market value.

5) Homes Sell "As Is".
If a mortgage company agrees to a short sale, it is most likely also paying the closing costs in the transaction. Lenders ask buyers to purchase the home in its present condition. Lenders typically will refuse to pay for:

·         Suggested repairs disclosed on a home inspection.

·         Pest inspections or work necessary to issue a clear pest report.

·         Roof certifications or roof repairs.

·         Home protection plans for the buyer.

·         Deferred maintenance.

6) Length of Time to Close.
Depending on when the Notice of Default was filed, the lender's back-log of foreclosures and how much paperwork the seller has already submitted, it could take anywhere from 12 weeks to 12 months to get a response on a purchase offer from a lender. In addition, if two lenders are involved because there are two loans secured to the property, it could take longer to satisfy the demands of the second lender.  Many times the second lender gets little or nothing in the transaction and numerous times they disagree with the amount and refuse to work with the first lender…you as a buyer are without an acceptance.

7) Lenders Can Change Conditions.
Some lenders reserve the right to renegotiate the terms of the short sale at the last minute. If the market changes, new laws pass or new information crosses the lender's desk, the lender can attempt to change the terms of the contract. Lenders generally have lawyers at their disposal, and ordinary buyers do not.

8) Lenders Discount Commission.
Generally, only lenders who have sold loans to Fannie Mae or Freddie Mac are paying traditional real estate commissions to real estate agents. The rest may want a discount. Moreover, agents end up doing two to three times the work of a conventional transaction and don't appreciate getting paid less to do more work. If you have agreed to pay your agent a certain percentage under a buyer broker agreement, you could be liable for the difference between what the lender will pay and what your contract stipulates, if your agent refuses to waive the difference.

9) Higher Buyer Closing Costs.
Because lenders rarely will pay for any extras, like a seller would be willing to do, if you want any of those extras, you will pay for them yourself. Sometimes lenders will refuse to pay for standard seller closing costs such as transfer taxes, too. If you want specific inspections, you will probably pay for them out-of-pocket.

Eleven things a Short Sale Buyer Needs To Expect TO EXPECT WITH A SHORT SALE?

Short sales happen when home values fall and sellers do not receive enough cash from a buyer to pay off their existing mortgages, providing lenders agree to take less than the amount owed to them.

On the surface, it may appear that a short-sale buyer is getting a good deal. Although a slim margin of short sales may be profitable for a buyer -- because there are always exceptions -- much of the time, a buyer would be better off buying a home that is not in default.You are unlikely to hear real estate professionals tell you that it's not a good idea to buy a short sale. In part, that's because real estate professionals profit on a short sale. Everybody makes money except the sellers and buyers. Realize, too, that listing agents might push sellers to list as a short sale, because if the sellers went through foreclosure, the listing agents will not get the listing.

Here are 11 Reasons Why Buyers Might Not Want to Buy a Short Sale:

1) Sellers Paid Too Much.
If a home sold for $500,000 a few years ago and is now for sale at $400,000, that doesn't mean the buyer is picking up $100,000 of equity for free. It means the seller paid too much in a rising market and now the market has fallen. It means the seller has no equity.

2) Sellers Borrowed Too Much.
Banks that were eager to lend money in appreciating markets sometimes allowed borrowers to over-mortgage the home, meaning the borrower's loan balance exceeded the value of the property. Appraisals are subjective, and not all appraisers will place the same value on a home. Although against the law, some appraisers are pressured by banks to appraise at the amount the home owner wants to borrow.

3) Stringent Qualifications.
Inexperienced or unethical real estate agents might push a seller into considering a short sale when the seller does not qualify for a short sale. Sellers must prove a hardship and submit evidence of the hardship to the lender for approval. Some agents list homes as short sales without ever talking to the lenders or pre-qualifying the sellers.

4) Homes Sell at Market Value.
Lenders aren't naive or unaware of the value of a home. Lenders will insist on a comparative market analysis, known as a CMA, or broker price opinion, known as a BPO. If a lender believes a better price can be obtained by taking the property in foreclosure over a short-sale offer, the lender may hold out for a higher price. That price will be close to market value. Lenders accept short sales when the home is worth the short-sale price, which means market value.

5) Homes Sell "As Is".
If a mortgage company agrees to a short sale, it is most likely also paying the closing costs in the transaction. Lenders ask buyers to purchase the home in its present condition. Lenders typically will refuse to pay for:

·         Suggested repairs disclosed on a home inspection.

·         Pest inspections or work necessary to issue a clear pest report.

·         Roof certifications or roof repairs.

·         Home protection plans for the buyer.

·         Deferred maintenance.
6) Length of Time to Close.
Depending on when the Notice of Default was filed, the lender's back-log of foreclosures and how much paperwork the seller has already submitted, it could take anywhere from three months to up to 12 months to get a final response on a purchase offer from a lender. In addition, if two lenders are involved because there are two loans secured to the property, it could take longer to satisfy the demands of the second lender.

7) Lenders Can Change Conditions.
Some lenders reserve the right to renegotiate the terms of the short sale at the last minute. If the market changes, new laws pass or new information crosses the lender's desk, the lender can attempt to change the terms of the contract. Lenders generally have lawyers at their disposal, and ordinary buyers do not.

8) Lenders Discount Commission.
Generally, only lenders who have sold loans to Fannie Mae or Freddie Mac are paying traditional real estate commissions to real estate agents. The rest may want a discount. Moreover, agents end up doing two to three times the work of a conventional transaction and don't appreciate getting paid less to do more work. If you have agreed to pay your agent a certain percentage under a buyer broker agreement, you could be liable for the difference between what the lender will pay and what your contract stipulates, if your agent refuses to waive the difference.

9) Higher Buyer Closing Costs.
Because lenders rarely will pay for any extras, like a seller would be willing to do, if you want any of those extras, you will pay for them yourself. Sometimes lenders will refuse to pay for standard seller closing costs such as transfer taxes, too. If you want specific inspections, you will probably pay for them out-of-pocket.

10) Lose Control of Transaction.
If you need to close escrow by a specific date, lots of luck with that. A short sale home closing process takes an indefinite amount of time. The seller's lender calls the shots, not the buyer nor the buyer's lender. If you are trying to close escrow concurrently with the sale of your home, it might not happen.

11) Little Seller Motivation.
When the seller discovers that the short sale effect on credit is close to that of a foreclosure, there is little incentive for a seller to cooperate with a short sale. Although sellers may qualify to buy another home in 2 years after a short sale versus 5 (with restrictions) on a foreclosure, some have no intention of ever buying another home again.

What is the Difference Between an Appraisal and a Home Inspection?
The appraiser is not a home inspector nor does he/she do a complete home inspection. An inspection is a third-party evaluation of the accessible structure and mechanical systems of a house, from the roof to the foundation. The standard home inspector's report will include an evaluation of the condition of the home's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems; the roof, attic, and visible insulation; walls, ceiling floors, windows and doors; the foundation,. basement and visible structure. 

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© 2017 The Spokane Association of Realtors. All rights reserved. Information deemed to be reliable but not guaranteed. The data relating to real estate for sale on this website comes from the Spokane Association of Realtors and the Broker Reciprocity Program.sm. Real estate listings held by brokerage firms other than Windermere-Manito LLC of Spokane, WA are marked with the BR logo and detailed information about them includes the name of the listing brokers. Listing broker has attempted to offer accurate data, but buyers are advised to confirm all items. Information last updated on 2017-06-26.