| | | |  | | | L I V E O N L I N E | | | | | | | | | | Special Series: April 22-26
Real Estate and Home Buying Live Discussions
April 22
Mon., noon ET:  Columnist and expert Barry Stone offered advice about home inspections. Read the transcript, as well as his most recent column from The Washington Post.
April 23
Tues., 1 p.m. ET:  Columnist and expert Katherine Salant offered advice about new home construction.
Read the transcript.
April 24
Wed., 1 p.m. ET:  Columnist and expert Ken Harney answered readers' questions about selecting a mortgage lender. Read the transcipt, and read his weekly column from The Washington Post.
April 25
Thurs., noon ET:  Columnist and real estate expert Bob Bruss answered questions about buying and selling real estate. Read the transcript.
April 26
Fri., noon ET:  Columnist and expert Benny Kass answered legal questions related to real estate. Read the transcript. Also, read his weekly column.
| | | | | | __Related Articles __
• The Path to Ownership (The Washington Post, March 23, 2002)
• Realty Groups Honor Top Agents of 2001 (The Washington Post, April 6, 2002)
• Figuring a Home's Price, for What It's Worth (The Washington Post, March 20, 2002)
• 2002 Predictions (The Washington Post, December 29, 2001)
• Navigating the New-House Market (The Washington Post, January 19, 2002)
• Keeping an Eye on The Builder (The Washington Post, March 16, 2002)
• The Big Deals About Housing (The Washington Post, March 28, 2002)
• Don't Forget to Ask Who Owns Building Plans (The Washington Post, April 13, 2002)
• With a Modest Budget, a Custom-Built House Doesn't Have to Break the Bank (The Washington Post, December 22, 2001)
• Superior Exteriors (The Washington Post, December 1, 2001)
• When Is a Mortgage Rate Lock Not a Lock? (The Washington Post, January 5, 2002)
| | | | |
| | | What can home buyers expect from a home inspector - besides a bill for $150-$350 (depending on size of property and/or complexity of the inspector's report)? First of all, you should require proof of membership in the American Society of Home Inspectors. Next, expect a quickly-delivered (one or two-day) written report. Expect practical returns. While you can see for yourself many flaws in a house, the practiced eye of a professional inspector can probably spot more, especially in areas not easily accessible to a home buyer. Specific information could even reduce the price of a house if the seller will agree the price has not already been discounted for defects. Possible Repairs • Serious problems (heating, roofing, plumbing) $2,000-$5000
• Medium problems (insulation, paint) $500-$2,000.
• Minor problems (electrical outlets, kitchen sink) $100-$500.
If no serious problems are found, inspection can pay off indirectly in assurance that you are making a sound investment. Many states now require that sellers provide buyers with either a residential property disclosure or disclaimer statement. Fire and Hazard Insurance Most lenders require a home buyer to provide at settlement a one-year paid receipt for a fire and hazard insurance policy, often called home owner's insurance. These policies are available from most leading insurance companies, possibly even the one that insures you car. Fire and hazard insurance provides protection for fire and other perils to your home and its contents. Title Insurance Title insurance provides protection in the event any of a number of past actions threaten the title to your property. Most lenders will require title insurance to protect their interests. Be sure to ask about an "owner's" policy as well, to protect your title. You may save money if you buy owner's title insurance at the same time as mortgage title insurance, rather than buying it separately later. As a home buyer, you may be able to save money with a "re-issue rate" for title insurance, if the property changed hands within the last several years. The title insurance may allow a lower "re-issue rate" premium because the recent title search is still valid. Consult your title attorney and insurance company. After Loan Approval After the lender approves the mortgage, the buyer will receive a "loan commitment letter" stating the mortgage amount, interest rate and length of loan term. The buyer should check it carefully, and return a signed copy to the lender or follow other specific instructions. Next, the selling and listing brokers will coordinate a settlement date. You should be sent a letter confirming the date, place, time and a checklist of everything you, as the home buyer, need to bring. Walk-Through Inspection The purpose of the walk-through inspection the date of settlement or several days prior to settlement is to determine if all conditions in the contract are satisfied. The time for the buyer to inspect and note defects for correction by the seller is during the contract negotiations and prior to signing the sales agreement. Repair or replacement items should be noted in the contract or contingent on a house inspection, otherwise most resale homes are sold in "as is" condition. It is up to the buyer to perform the walk-through inspection, not the seller, who may or may not be present. The buyer should be accompanied by the selling agent. The home seller should be sure utilities are on so that equipment can be operated. Room by Room The buyer should try all lights and switches; turn all faucets on and off, run the shower, flush toilets; turn on the furnace and central air conditioning (in the off-season, buyer should hire a professional to certify proper functioning of both heating and air conditioning); test all stove burners, oven at bake and broil; run some ice cubes through disposal to test blades; run dishwasher, washer, dryer through complete cycle; open and close all windows and doors. In short, try everything, even keys and the fireplace flue. All deficiencies should be noted, and funds may be withheld from the home seller by the settlement attorney for repairs, if seller does not correct problems prior to settlement. The selling broker will coordinate with the listing broker and seller to make repairs before settlement, if possible. Upon receipt of bills and notification that repairs are complete, the attorney will release balance of funds to the seller, if money is escrowed for needed repairs. Remember, adequately inspecting and protecting your new home can save you many headaches and lots of money down the road. Taking the Mystery out of Closing What to Expect at the Settlement Table Before you can pop the cork on your champagne and celebrate the purchase of your new home, you have to survive the settlement (or closing) process. Settlement entails a lot of paper signing, double and triple checking the details of your agreement, and the official passing of the keys (don't forget the garage keys, and electric door opener, too).  At the settlement will be an attorney or title company representative (chosen by the buyers), all buyers, listing and selling brokers and all owners. The home seller should bring all warranties on equipment and any instructions on equipment maintenance or operation. The attorney will have searched the title, provided title insurance and obtained old and new lender instructions. First, all unresolved walk-through deficiencies are resolved. With the buyer, the attorney explains the deed of trust or mortgage; the deed of trust note or mortgage note; VA, FHA or lender forms; and settlement sheets. Buyer signs all these and pays the balance of the down payment and buyer's closing costs with cashier or certified check. Closing Costs "Closing costs" have lost much of their mystery in recent years. Under the Real Estate Settlement Procedure Act, the home buyer is furnished an estimate of closing costs by the lender, in advance of the closing. In some cases some of the closing costs may be paid by the seller; this is particularly true for new housing, where the seller is the builder. Settlement fees vary widely depending on price, location and other factors, but overall the buyer's costs usually average between 3% and 7% of the sales price. Items that are usually included in the settlement fees are the loan origination fee, mortgage insurance premium, attorney fees, owner and lender title insurance, recording fees, county tax stamps, state tax stamps and the survey fee. In addition the lender will require an appraisal fee and a credit report fee in advance of the closing. A few other items, not required to be listed under the law, may also have to be paid at a closing. These include advance deposits held in escrow for real estate property taxes and insurance. The lender collects a portion of these every month and then pays the insurance and taxes when they are due. Because specific closing costs vary from area to area, and transaction to transaction, we encourage you to consult with your Realtor to determine your exact charges. Sometimes closing costs can amount to a sizable sum, but remember some of the items are tax deductible. The loan origination fee prepaid interest and property tax adjustments may be such items. Signing on the Dotted Line With the seller, the attorney explains the settlement sheets and gets the home seller's signature on them and the deed. Seller pays appropriate closing costs. If the seller's taxes or insurance have been escrowed, the seller will receive any money accumulated in the account for bills not yet due. Additionally the seller will be reimbursed for any money paid in advance and not used such as property taxes. The seller will receive these refunds at or after settlement, depending on the area. Taxes and home owner's dues or condominium fees will be prorated on a daily basis. Seller, buyer and brokers are supplied a copy of settlement sheets for their records. The house keys are passed. You are now the proud owner. Congratulations!
| ADVERTISING SUPPLEMENT TO THE WASHINGTON POST | Previous | Next |
|
