Important Facts About FHA

1. A Borrowner can obtain financing while still in a Chapter 13 bankruptsy
2. Utah Housing (through the FHA program) will finance up to 103% of a home's value. In other words, you can finance most of the time, everything, no down payment is needed, and even closing costs.
3. Sweat Equity is allowed for new construcion.
4. Screens on windows are no longer required.
5. Termite inspections are no longer required unless specified by the appraiser.
6. Non-occupant co-borrowers are allowed.
7. All money to close is allowed to come from a gift.
8. New, temporary loan amounts in Salt Lake County were increased to $729,750

Walk-Through Inspection

I strongly recomment to do the walk-through inspection. How this inspection different from other ones? Before Settlement, Buer may, upon reasonable notice and at a reasonable time, conduct a "walk-through" inspection of the Property to deterime only that the Property is "as represented", meaning that the items referenced in Section 1.1, 8.4 and 10.2 ("the items") respectively present, repaired/changed as as agreed, and in the warranted condition.

In other words: it is your last chance as a buyer to check if everything which was agreed to stay with the house stays, that all repairs agreed after inspection-repaired and most importantly 10.2 items in working order...

Suggestion: If you a seller, meet your buyers at the home prior to going to the Title company to sign paperwork. This is the last time to find out problems, the seller are usually wrapping up moving, and you should have a good feel for te home at that time. As a seller, I would put a banner "Welcome Home Smith Family", get a small gift...

Inspection Deadline should be 20 days before Settlement

Why?- If Buyer provides written objections to Seller, Buyer and Seller shall have seven calendar days after Seller's receipt of Buyer's Objections (the "Response Period") in which to agree in writting upon the manner of resolving Buyer's objections.

Except as provided in Section 10.2, Seller may, but shall not be required to, resole Buyer's objections. If Buyer and Seller have not agreed in writting upon the manner of resolving Buyer's objections, Buyer may cancel this Contract by proving written notice to Seller no later than three calendar days after expiration of the Response Period.

A mejore problem arises when the agents alloq a contract to be written where these dates actually extend beyound the settlement deadline. That is why it is better to have Inspection Dealine at least 20 days before Settlement.

"As-Is" vs. 10.2 modified.

Please never forget, regardless of the type of the sale, the seller must disclose material defects of the property that they know about.

So, what the difference "As-Is" and 10.2 modified? In an "as-is" sale, a seller property condition disclosure form is filled out. The seller disclosures what is known, and section 10.2 applies. In this case, the Buyer will most likely find out either in the inspection or on the seller dicsloures that there are some problems, and the seller knows about it, and will not do anything about it. The price better be right to compensate for it. When "as-is" property is advertised, buyer often concern that they would not have right to inspection, and would need to purchase the house as it. It is not true, you have a right to inspection, you may not have a right to request sellers to fix these problems. In "as-is" sale correct as-is addendum must be used.

In a situation of modified 10.2, seller only fills out the addendum, and some or all sections of 10.2 are removed. It is not enough to advertise the property "10.2 removed" as you can sometimes see on the lising. Buyer need to agree to this addendum. So, the biggest difference is whenever some or all items of 10.2 are removed, seller does not warrant them anymore.

Appraisal Condition

To continue talking about Real Estate Purchase Contract:

As I mentioned before if you are a cash buyer, appraisal is optional tool for you. Otherwise, appraisal is a required continguency by your bank.

Keep in mind, however, that the bank role is to determine if the value of the property is not less than the Purchase Price. In other words, appraiser works for the bank and cares about banks' rights. Let's say if you know the property's value you are buying is way over the purchase price, most likely unfortunately, appraiser will not disclose this to you for this particurlar reason. You have a right for your own information purposes, invite appraiser who would be working for you.

I do not agree with some appraisal's rules. At the same time, though, I would like you to be aware of them.

If the Appraisal Condition applies and the Buyer receives written notice form the Lender that the property got appraised for less than the Purchase Price (a "Notice of Appraised Value"), Buyer may cancel the contract by proving this copy of such written notice no later than 3 days after receipt.

Date plus three days warning notice is exact as in Inspection Section. So, please see explaination in previous dates of this blog.

What is better to do inspection or appraisal first?

I would say inspection:

You can determine if you like the property, and if everything is fine in the property to start talking about it seriously. Usually, the inspection would cost cheaper if you pay on the spot to your inspector.

If Appraisal is completed, the appraisal fee would be included in your closing costs. And, by changing your mind, some mortgage companies will charge you not only appraisal fee, but cancellation fee as well.

Tips for Buying at Auction--April 3, 2008

Ben Anderson, a real estate auctioneer and member the National Auctioneers Association, predicts auctions may make up as much as 15 percent to 20 percent of all real estate sales given nationwide foreclosure rates. Traditionally, auctions represent just 8 percent to 10 percent of such sales.Here are his tips for buying at auction:

Conduct due diligence in advance of the auction. Inspect the property. Review any available documentation, such as previous inspections, appraisals, and seller disclosure statements.
Review the title search. The seller's representative usually requests this at the time of the listing.
Arrange for financing. Clarify with the lender the qualifications and the amount available for a loan.
Know the market. Check comparable properties and what they have sold for, and analyze nearby listings.
Review the terms and conditions of the auction. Before auction day get a copy of the purchase agreement and the auctioneer's terms and conditions. Read and understand them.Source: Denver Post, Christian Toto (03/16/08)

Financing...

Before you start looking at Salt Lake City homes, it’s a good idea to know how you will finance the purchase of your new home and how much of your own money you will need to accomplish this. Keep in mind that the better your credit is, the less you will need in most cases.
The costs are listed below:

• Down Payment : Most houses are bought with 0% to 20% down. There are many loans for a variety of needs. If you put 20% or more down, there is no private mortgage insurance.
• Closing Costs : Closing costs and prepaid taxes & insurance will typically be another 2%-4% of the purchase price. However, the Buyer can negotiate with the Seller to pay for the Buyers closing costs and add them to the price of the house. The lender allows this, so the Buyer usually doesn't need to save this amount to buy a home.
• Inspections: A home inspection will cost $300 or more and is worth it. The Buyer should plan on paying for this at the time of inspection.

Other concerns for down payment:

• Your Credit: If your credit is good you will have more options.
• Once you’ve saved some money, what other things beside the purchase of real estate will you need that money for?
• The type of house you are buying (If you're buying a fixer-upper, you'll need money to fix it after you buy it)
• 20% down. No private mortgage insurance (PMI) if you put 20% down. This matters more if you will be staying in the house for a long time. However, it usually makes sense to buy homes with little down if the price of real estate is going up, and try to eliminate the PMI later as a result of your appreciation
.• Interest rate. Some low down payment (0% down) programs have higher interest rates, but many are quite competitive.