Kitsap County Real Estate BlogRecently posted or modified blog posts in the category - Financehttps://www.homesbystrand.com/blog/Copyright HomesByStrand.com2021-04-30T16:48:34-07:00tag:homesbystrand.com,2012-09-20:5543VA Home Loans: Minimum Property and Inspection Requirements
Today we’re going to be talking all about VA loans and what makes the property eligible for a VA loan, and we are going to get started right now.
Hey everyone. Welcome back to my channel. I’m Ledeana Strand with Homes by Strand, and RE/MAX Town and Country in Port Orchard, Wa. And again, if you are interested in all things real estate related in Kitsap county, then you need to hit that subscribe button down below, and that little bell icon to be notified of my future videos, because I talk about a lot of really cool stuff! So, Today we are talking about VA loans. In a nutshell. If you are getting a VA loan because you are in the military and you are eligible for it, and therefore get to put zero down for your down payment. Does every house qualify for VA loans? No, it does not.
So, let’s go into detail about how to determine whether your home is eligible for a VA loan. In a nutshell, it has to be safe, sound and secure. The House has to be move in ready. It cannot have a broken window. It cannot have a missing stove. It cannot have a non-working furnace. It has to be secure, meaning people can’t easily break in. It means that it is structurally sound. It is safe, it is clean. It’s not a fixer upper.
The VA does not want to lend money to their service members and put them into homes that would be unsanitary, not safe, just because it’s a good deal and it would be a fixer upper. So, if it has green Shag carpeting from the 70s that’s okay. That’s a cosmetic thing that you can fix. But if it had the kitchen ripped out, that’s not going to be livable and therefore they will not loan money on it.
The roof has to be intact and have at least five years of life remaining on the roof. If it’s on its last legs, that it’s got a 25 year old roof, they’re going to say that the roof needs to be replaced in order for you to get a loan on the property. And if the seller is willing to do that, more power to you, but not a lot of sellers are gonna want to go spend eight nine 10 grand on a new roof and then move out three days later.
If you are looking at a manufactured home or a mobile home, it’s tricky. The axles have to been removed. The wheels are not there, meaning we can’t just pick it up and move it somewhere else, and it has to be on a permanent foundation, but even then it’s going to vary lender to lender. Some lenders will do it, other lenders will say no. If you’re looking at mobile homes and manufactured homes, you’re going to have to make sure you’re working with a lender that will allow that and that it’s always on a permanent foundation with straps.
If you are looking at condos, they have to be approved developments by the VA, so there is a website where you can type in the name of the community and find out if it is allowed by VA. If they don’t approve of that particular subdivision, they’re not going to loan you money to buy a condo in there. The VA also will not loan money for vacant land, so you can’t buy a parcel of land and then build a house on it or buy a manufactured home and put it on there. They won’t. They won’t loan money for raw land.
So, what properties are great for VA? Well, new construction is awesome for VA. That way we know there’s not going to be any problems or surprises. If you are walking through the house doing your initial walkthrough and you find that the stove doesn’t work, the builder’s gonna have the stove replaced, or at least have it fixed prior to the closing.
You’re not going to worry about having any problems with the house not being safe and secure. If you are looking at homes that are five to 10 years old, you’re probably going to be in good shape. So just make sure that the homes you are looking at are not total fixer uppers. Maybe they have a little cosmetic work that needs to be done, but if it’s safe, sound, and secure, go ahead and make an offer.
So now you know what type of properties can qualify for a VA loan. If this is your first time buying a house and you’ve never used your VA entitlement before, go ahead and click this link down below. I have a free download to my Ultimate Home buyers guide, which will go over what kind of a down payment is needed, what kind of closing costs are needed, all that kind of good stuff. You’re welcome to download that free of charge. I also have some great lenders that I work with that specialize in VA loans, I would be happy to share should you need one.
I specialize in working with military clients, so if you are pcsing to Kitsap County, and you want more information, just like the video you saw right now, go ahead and hit that subscribe button. Or if you have any questions, reach out to me anytime, even if you are not in the Kitsap county area, I will get you in contact with a great agent in your area. Thanks so much for watching and I will see you on the next one. Make it a great home buying and selling day!2019-09-17T15:54:00-07:002021-04-30T15:56:21-07:00Ledeana Strandtag:homesbystrand.com,2012-09-20:5544Who Pays The Real Estate Commission? Realtor/Real Estate Agent Fees
If you are looking to sell your home, then you may be wondering, who pays the real estate commission, Well ,stick around because We’re going to talk about that today, and it starts right now.
Hey everyone. Welcome back to my channel. I’m Ledeana Strand with Homes By Strand, and RE/MAX Town and Country in Port Orchard, Wa. If this is the first time visiting my channel, go ahead and hit the subscribe button below, and Click on that bell to be notified of my future videos if you want to be kept up to date on all things real estate in Kitsap County. So, who pays the real estate commission? Is it the buyer, or the seller? What about the standard commission rate? These are all great questions that sellers ask when they meet with a realtor. Here in our local area, the standard commission rate is anywhere between five and 6%, but it is negotiable, and not set in stone until there’s an agreement that’s taken place between the seller and the brokerage, and we use a contract called the listing agreement. So, let’s use the example of 5% on the listing agreement, from that 5%, the listing agent agrees to cooperate with a buyer’s agent and give them half.
So 2.5% to the buyer’s agent, 2.5% to the listing agent. It’s important to know that of the 2.5% commission rate that the listing agent gets. That’s gross commission. Out of that comes they’re split with their brokerage. Any up front costs that they incurred while listing the property, which includes advertisements, flyers, signs, putting up the signs, putting up lockboxes, etc. All that comes out of the 2.5%, then they get the remaining balance. However, Uncle Sam is hungry and they want a bite of that too. Cause remember it’s Gross Commission.
So, Essentially, as a listing agent, we’re taking on all the risks from hiring the photographer and the videographer, running ads, placing the sign on the property, printing flyers, the lockbox, you name it. We’re doing it upfront with the knowledge that when we sell your home, we’re going to get it back.
Be careful and aware of sales tactics and gimmicks when searching for your listing agent, and everyone wants your business, but some discount brokerages will offer things like 1% commission rate or a flat fee of let’s say $1,500, in these scenarios there’s a lot of things that broker just will not do, such as professional photos, videos, staging, setting appointments, negotiating with buyers, with agents, the contracts and so on.
If you want to do this and you think you could take it on, that’s fine. You just want to be upfront and know what you’re getting for the commission that you’re paying. Remember, you get what you pay for. It’s normal for some agents to discount the commission rate to try to get business. So, in the scenario of the 5%, let’s say an agent comes in and charges 4%, immediately, most sellers are going to be like, Yay, I’m saving 1%, however, where’s that 1% coming from? Chances are the 1% is going to come out of the marketing of your property. Wouldn’t you want your home to be exposed to the maximum amount of buyers so you can get the most net proceeds possible? I’m sure that you do.
Instead of trying to search for an agent that charges the least amount of commission, I would recommend focusing on what you’re getting for the commission you’re going to pay the realtor. With social media now days, you want to make sure that your agent has a very detailed, and targeted ad campaign to get your home in front of the masses. A lot of agents use social media, but less than 1% know how to do it correctly, again, you need to get your home out in front of the masses, and I can do that through very targeted social media campaigns, and that is just one of the ways that I advertise your home.
You’d be surprised when you ask a realtor, what am I getting for my commission? What they list and what they say they’re going do for you. I think that’s the better route to take. So that pretty much sums up who pays the commission and different scenarios that happen during a real estate transaction. But before you leave, and if you are ready to sell within the next 3-6 months, or you are ready now, click on the link below, to download my free Ultimate sellers guide, which will walk you through the selling process step by step. Such as what is a comparative market analysis, and how it will help sell your home fast and for the most amount of money, what is in the listing agreement, and should you stage your home, or not, picking the right realtor that is going to aggressively market your home, and negotiating, are just a few of the subjects covered in my seller guide. This guide could save you thousands of dollars. So, don’t miss out, click on the link down below in the description to download your copy.
If you still have a question, feel free to reach out to me anytime, even if you are not in the Kitsap County area, I would be happy to connect you with a great agent in your area. Thank you so much for watching my video, and I will see you on the next one. Make it a great home-buying and selling day!2019-08-16T15:56:00-07:002021-04-30T15:58:59-07:00Ledeana Strandtag:homesbystrand.com,2012-09-20:5547Earnest Money ( Good Faith Deposit) Explained & How It Works In Real Estate
When it comes to buying a home, people ask quite often, what is earnest money? Well, that is what we will be talking about today, and we are going to get started right now!
Hey everyone. Welcome back to my channel. I’m Ledeana Strand with homes by strand, and RE/MAX town and country in Port Orchard WA. I post real estate related video’s every other Thursday, and if you want to stay up to date on what’s happening in the Kitsap County real estate market, and what it takes to buy or sell a home here locally, Consider subscribing by hitting that subscribe button down below, and hitting that little bell for notifications, so you don’t miss out on anything.
So what exactly is earnest money? When you are buying a house, you want to show the seller, that you are serious about purchasing their home, by putting down a good faith deposit. Because you are basically asking the seller to take their house off the market to give you time to get financing and to do inspections, etc. So, the seller will want to see that you have some skin in the game as well. That is what earnest money does. It’s essentially a good faith deposit. Now, It is not legally required in Washington state, but to be taken seriously by the sellers, and the market that we are in currently in Kitsap County, you do need a good faith deposit. Now let’s dive a little deeper.
Now don’t’ worry, earnest money is money that is refundable to you, If you cancel during your due diligence period. And if you don’t know what due diligence is, don’t worry, I will be explaining that in one of my future video’s. Part of that due diligence period, is allowing you to do all of your inspections, for example, a home inspection, neighborhood inspection, maybe you want to check out the schools. Any inspections that you feel are necessary to help you make an educated decision on whether this is the right home for you and your family. If you find anything that’s a deal breaker for you and you end up canceling, you can get your earnest money back. But if you remove your contingencies, you’ve done the appraisal, you’ve done your inspections, you’ve gotten the green light from your lender, you’re moving full steam ahead and then you cancel, the seller would then be entitled to keep your earnest money. Because you would basically be in breach of contract.
.Something else to keep in mind, is that the more money you put down as earnest money, the more serious you look to the sellers, and in multiple offer situations that we are in now, in our local area, can mean the difference between getting the house, or having the seller go with another offer that may have offered more earnest money. But at the same time, you want to also remember that the more money you put down, the more you stand to lose as well. So how much money should you put towards the earnest money deposit? There is no hard and fast rule on this, but typically we see around 1% of the purchase and sale price. So, if you are buying a 300,000 dollar home, that would be 3,000.00. Now don’t worry, your earnest money deposit is applied to your closing costs. So, if your lender said your closing costs are going to be $6,000 ,you’ve already put down a $1,000 then the cash to bring to the closing table would only be $5,000.
When I am working with buyer’s I have a process in place to make sure that my clients are never in breach of contract. I make sure that they want to move forward with the purchase, that we have gotten the go ahead from their lender, and that the property appraised for the offer price, that we also have been able to negotiate with the seller on the inspections, and that my buyer is happy and wants to move forward. If you decided to cancel after all of that, you would lose your earnest money. As a buyer, you want to make certain that you are 100% sure you want to move forward.
So hopefully you’re working with an agent that is going to be guiding you and letting you know of those time frames so that we never put that earnest money in jeopardy. The last thing we ever want to do is have you lose your earnest money. So, there are typically three contingencies when you’re buying a house and they are listed right here. The inspection contingency, meaning we are happy with the condition of the house and the financing contingency, Your lender said Yes, that they will give you the loan, and the appraisal contingency where the property has appraised for what you’ve offered to pay for it, if not higher. If you cancel during your due diligence period, you did your home inspection, You were not happy with what you found, you are entitled to get your earnest money back. Once you move past the due diligence period, and then you decide to cancel, the seller would be entitled to your earnest money deposit.
If the property does not appraise for the purchase price, and you are not able to come up with the difference, or re-negotiate with the seller, then you are entitled to get your earnest money back. But if you do all of those things and three days before closing, when everybody’s all set too close, you say, oops, another house came on the market down the street. We liked that one better. You’re probably going to lose your earnest money. So just those are some things to be aware of.
The next questions that people ask, is when does earnest money get deposited? Your earnest money, whether you write a check or you do a wire transfer, will need to be deposited usually within 1-3 days of mutual acceptance, or however it is stated in the purchase & sale agreement. If you are going to wire the money, it is extremely important that you speak directly with your escrow company to get the proper wiring instructions. So, now you know what earnest money is. If this is your first time buying a house, check this link right up here. I did a video on how to buy your first home, and I walk through the entire process step by step. If you have any questions, or if there is anything I can help you with, please don’t hesitate to ask. Even if you are not in Kitsap county, Wa. Shoot me a message, and I will see how I can be of service to you. If you liked this video, be sure to hit the thumbs up button and leave me a comment on what video’s you would like to see, And, don’t forget to subscribe to my channel by hitting that subscribe button, and I would love for you to join the community. Thank you for watching, and I will see you on the next one. Make it a great home buying and selling day! See you soon!2019-07-09T16:04:00-07:002021-04-30T16:06:16-07:00Ledeana Strandtag:homesbystrand.com,2012-09-20:5554FHA vs. Conventional Loans
FHA versus Conventional. What is the difference? Hi, I’m Ledeana with Homes By Strand and RE/MAX Town & Country in Port Orchard, Washington. And we’re gonna get started right now. I’m going to discuss the short version because the difference of these two loans can actually get quite complicated. But my teaching style, let’s keep it on the surface and let’s get it to where you guys can immediately know the difference between the two and then you’re going to know which one that you really need to research more with your lender, of course. Alright. So conventional is a private sector loan that is not backed by The Federal Government. It has what’s called private mortgage insurance which is called PMI, private mortgage insurance. Super simple. FHA on the other hand, that is a private sector loan as well but it’s backed by The Federal Government. And it has what’s called MIP, mortgage insurance payment that is required. Alright? Now that MIP, that is insurance for the lender. That is not your insurance as the borrower. That is insurance on the loan, okay? And that is where The Federal Government says, “Hey, we’re guaranteeing that you’re “gonna get a portion of this loan back from us.” They get a percentage that they loaned, alright? And then those MIP payments that stayed for the life of the loan, that’s also your insurance per se. Now how all this gets broken down and where that money goes and how it’s spent, that’s not something that we need to be focusing on. What we want to be focusing on is what is the difference between MIP and PMI is that their both mortgage insurance. But one, is you’re paying the government and the other one is that you’re paying a third-party, okay? Now the major difference, like I just said is that MIP is for the life of your loan. So as long as you own your property and as long as you are making your payment, then you are making the MIP part of your house payment. With conventional, when you have the PMI, you can drop that insurance off once you have hit 20%, alright? So when you have paid down at least 20% of what you originally borrowed, you no longer have to pay PMI. And that’s where the biggest myth and confusion comes from, is because a lot of people think that when they get a conventional loan that they have to put 20% down at the gate. And that’s just not true. There are some conventional programs out there where you can put as little as 3% down. Now, the fees between FHA loan and a conventional loan are completely different. You’re always gonna have your lender origination fee which that lender origination fee, that’s how you paid your lender to do their job for you and to fund this loan and to broker the paperwork, alright? But then there’s also, there’s some other fees that what are called program lending fees. And those are going to be different between the two. That’s why it’s really important that if you know the surface difference between the two, then you’re really gonna know which one is gonna be the best loan option for you, not only today but long-term, alright? Because the biggest mistake that I see clients make is that they want to get into a property right now. And so they’re looking at their finances right now, which that is important, correct? But sometimes, instead of waiting a month or two and having a little bit more money to put down, they don’t realize how much money they would be saving long-term by changing the program. So that could be does your credit score need to come up a little bit more? Do you need a little bit more money to put down to where you can get into a different program? Or do you need a little bit more money so you can actually buy the interest rate down? I mean, those are all things that a good lender should be explaining to you. And these are questions and things that you need to be aware of so you know what to ask, alright? But here’s a couple of other differences that, in my opinion, are pretty vital to understand. There’s a common myth. A lot of people think that because FHA is a government-backed loan that it’s harder to qualify for an FHA when it’s actually quite the opposite. And the reason why a lot of people are confused with this is because with an FHA loan, you actually have to have two sets of qualifications you actually have to meet. You have to obviously meet the lender, the banks, the personal private guidelines, and then you also have to meet the government guidelines. Because again, if the government is going to back the loan, you can bet your bottom dollar you’re going to have to meet certain requirements in order for them to guarantee a percentage to the lender. But the great thing is, is that most everybody meets the government’s qualifications and I stress on most, alright? But here’s the thing. When the lenders know that they’re guaranteed to get a percentage of the originating amount back, when you know you’re getting a portion of that back, they’re a little bit more relaxed on that whereas, when you get a conventional loan, nobody’s guaranteeing that lender that they’re going to get any money back should you as the borrower default. So the conventional loans, those are actually the ones where the standards are a little bit higher and they’re not really hard to meet, it just takes a little more legwork as the borrower. So you have to have a little bit more proof per se. You have to be able to submit some more paperwork because again, you have one lender that’s not guaranteed to get anything and then you have another lender that’s guaranteed to at least get something. So, does that make sense? Now, we can get into the nitty-gritty of what those requirements are but I think for the purpose of this video, I think it’s really important that we just stick with the basics because your lender should be able to explain to you your own personal circumstances. So that’s why it’s really important that people understand that conventional loans are not scary. If you have the paperwork, if you can show your proof in the pudding per se, then sometimes a conventional loan is actually the best way to go because interest rates are typically a little bit lower. And why is that? Well, because when you’re paying a higher percentage rate on the FHA side, that’s also because a portion of that is going towards the government-backed portion. Does that make sense? So, it’s super simple. You just need to find a really great lender who is really able to explain what their programs are and how they differ. And that, folks, is your tips for today. And if you need a good lender, I have a slew of them. And why do I have more than one? Because every lender that has different programs that will meet different criteria. That’s why a good agent has more than one. And you can bet your bottom dollar, I’ve got just the one should you need one. That’s it for today. We’ll see you next time. Don’t forget to hit the subscribe button below and also the little bell notification down below as well, so you’re kept in the loop and up-to-date on this home buying thing. And you don’t wanna miss any important information that I’ll be sharing with you in the coming weeks. And thank you so much for watching my video. I hope to see you soon. And bye for now.2019-03-26T16:28:00-07:002021-04-30T16:30:21-07:00Ledeana Strandtag:homesbystrand.com,2012-09-20:5561Earnest Money, What is it?
Homebuyers, have you been thinking about purchasing a home and confused about what all those acronyms are such as EMD?
Hi, this is Ledeana with Homes by Strand, and EMD which stands for Earnest Money Deposit, which is the money that’s submitted to escrow once your offer has been accepted.
Now earnest money is not required, but it does show the seller your good faith effort to purchase the home. And in the market that we’re currently in, it is needed if you want your offer to be considered.
Now typically, in Earnest Money Deposit is between one and 3% of the purchase price. So if the home that you’re purchasing is 500,000, you would give between five and 15,000 to escrow.
Now my recommendation is that you wire the money to ask escrow. So if you want to speak with your escrow company on what the proper wiring instructions are, always confirm.
If you found this video helpful, please share. If you have any comments or want to know what any other acronyms mean, feel free to give me a call.
Thank you so much for watching. This is Ledeana with Homes by Strand where your dream is our passion. And I hope you have a great day.2019-01-10T17:47:00-07:002021-04-30T16:48:34-07:00Ledeana Strand