What is a CMA?
Comparative Market Analysis. Your realtor will do a CMA to help determine the appropriate list price for your property by reviewing current active, sold and pending listings which are comparable to yours.
What are closing costs?
Closing costs are confusing to most people because the title company charges closing fees which are typically split 50/50 between buyer & seller. Then there are closing costs for the buyer (lender fees (loan origination, processing, credit report, tax service, funding fee, lender’s title policy, etc.), HOA (Homeowner Association) fees, tax impounds, fire/hazard insurance, recording, courier/wire fees, etc. Seller closing costs would include commissions for buyer & seller agents, owner title policy, any existing loan payoff, pest inspection, home inspection & appraisal required repairs, reconveyance fee, recording, courier/wire fees, etc. Either party may purchase a home warranty protection plan as negotiated.
Who pays closing costs?
The loan type can dictate which party pays which fees. VA loans require more fees to be paid by the seller vs an FHA or conventional loan. See typical buyer and seller paid fees as outlined in previous comment.
Once an offer is accepted, what happens?
Once we have a meeting of the minds (accepted offer) the first step is to provide the lender a copy of the contract and order a home inspection. Home inspections are mandatory, but buyers are well advised to have one. The cost is minimal (approx. $300-$500) to help minimize your risk on an expensive investment. Once the inspection and any necessary repairs are completed, the appraiser visits the property to verify value. The title company does the preliminary title report to check for clouds on title, easements, liens against the property, & verify ownership. After the lender has completed the loan process it can move to closing.
How long does it take to close a transaction?
A normal transaction takes on average 6 weeks if a loan is involved in the purchase. This allows time for all the processes to be covered.
Do I lose my earnest money if the home inspection shows an issue which makes me change my mind about purchasing?
No, a buyer has the right to withdraw the offer and keep their earnest money if issues appear on the home inspection which they aren’t comfortable with. Buyers also have the option to sign an inspection addendum asking the seller to address issues. Repairs can be negotiable.
What happens if the appraisal valuation comes in over or under the accepted offer price?
If the valuation comes in over the accepted price the buyer has instant equity! If it comes in under the accepted price we go back to negotiations. A lender will not loan on a property with a lower valuation unless the buyer wants to proceed forward and has additional cash to bring to the table. Typically, the seller reduces their price.
How long does the seller usually have in order to respond to an offer?
Most agents give a seller 48-72 hours to respond to a written offer. If the market is hot the response time can be considerably shorter.
What is involved with a well test?
Usually a private well test include nitrates, arsenic, & coliform bacteria. Nitrites are sometimes included in the test. A flow test is common to determine the gallons per minute the pump and well produce.
Why do we need to do a septic pumping & inspection?
It is required by some lenders in Idaho, however, is mandatory in Oregon. A buyer should never purchase a property without a septic pumping & inspection to make sure the septic system is functioning properly. A new system can cost thousands of dollars, so it is best to know what condition the system is in.
What is an SPD (Seller Property Disclosure)?
Law requires an SPD be completed by the seller for any residential transaction. The buyer has the right to have a copy prior to making an offer or within a specified number of days after acceptance. The SPD addresses the condition of appliances, electrical, heating & cooling, moisture & drainage, water & sewer systems, plumbing, water source, roofing, siding, and other disclosure information.
When should I contact a lender?
It is best to visit with a reputable lender who can loan in Idaho & Oregon before starting the buying process. If you are pre-qualified the agent knows your price range and can show homes within that range. An offer is considered more seriously if the buyer is pre-qualified and ready to go. In the current market not being pre-qualified can mean the difference between being accepted and losing out to other buyers who are.
Do buyers & sellers sign at the same time?
Buyers and sellers don’t sign at the same time due to confidentiality. Most of the time buyers and sellers never see each other.
Why do we close through a title company?
A title company is a neutral third party dealing with realtors, buyers, sellers, lenders, and city & county offices. They gather bills to be paid at closing, get payoff information, process preliminary title information, schedule signings, close the transaction, record, and issue checks.
What is title insurance & who pays for it?
A comprehensive indemnity contract under which a title insurance company warrants to make good a loss arising through defects in title to real estate or any liens or encumbrances thereon. The seller pays for the owner title policy and the buyer pays for the lender’s extended coverage if there is a loan involved.
Who pays for commissions?
The seller pays for the commission nearly 100% of the time.
What is a 1031 Exchange?
An exchange of like property for like property defers capital gain taxes. The money goes through a 1031 exchange company, so the seller never touches it. Exchanges have many restrictions, so you need to work with an experienced realtor who knows how to handle them.
What is a pest inspection for & who pays for it?
In this area we inspect for termites and the seller orders and pays for the inspection.