Monthly Archives: April 2009

Many Buyers Check Out Schools and Neighborhoods

Many times, buyers ask me about about schools and neighborhoods. In the state of Pennsylvania, Licensed Real Estate agents are not permitted to speak their opinions about neighborhoods and schools. If you have children, of course, evaluation the schools will be important.

There are several ways that you can evaluate a neighborhood. One is to talk to the neighbors. You can actually find out more than info about the neighborhood by talking to the neighbors. You can also find out things about the previous owner and even some history and facts about your home your are thinking of buying. Another suggestion is to visit your local police station or look online for crime statistics and check registered sex offenders.

One thing I know my father did when I was a kid, when moving across town, was go and sit on the front step for an hour (the house was vacant) and listen for traffic patterns and different activities in the area. Try visiting at different times of the day and week to get a good sampling of neighborhood activity.

You can evaluate the schools online or even go to the school itself. I had a buyer actually go to several school districts and observe. A good thing to do is check out the school test scores, class size, special education opportunities and student-teacher ratios. Also, see if you can talk with other parents about the school district’s strengths and weaknesses.

Here are some resources to help you with your research.
Pennyslvania School Rankings

How Low Can They Go?

Mortgage rates hit another all time low today! It is one of the best times ever to buy. Don’t pass up this moment in time. If you are not sure if you can qualify for a loan, at least talk to a loan officer and see what your options are. You never know.

“Just one week after 30-year mortgage rates fell to a record low of 4.85 percent, the average dropped even further to 4.78 percent this week, Freddie Mac reported.

Refinancing activity has picked up because of the low rates, and the Mortgage Bankers Association says approximately 80 percent of mortgage applications came from borrowers seeking to refinance.”

– Source: Boston Globe (04/03/09)

What are Some Things to Know About Foreclosed Properties?

I have investors that I sell properties to, to either flip to resell or to rent out. Some of these investors know just what they are looking for. They don’t hem and haw – it is either yes or no. I want it or I don’t. Often times these are homes that have been foreclosed on by banks.

I have other buyers who want to get into the action but are not sure on how to go about purchasing a foreclosed home. There are a few things that you should inquire about if going that route.

1. When is a good time to buy a foreclosure?

A: This varies market to market. You should check with your real estate professional. I have seen several good deals in recent weeks. These deals will not last if they it is are good. So if you are serious, don’t hesitate.

These deals will not last if they it is are good

2. As a buyer, what is the first thing I need to do?

A: A buyer should always be pre-approved if getting a loan. If you own a home already, you must keep in mind that banks and mortgage companies will treat this as an investment property because it is a second home. In this case, it will be more difficult and more expensive to purchase than if it was a home that you would be living in. Also, due to this being considered an investment, you will most likely pay a higher interest rate and need to put down a bigger down payment.

If you are paying cash, most bank owned properties will want verification of funds from your bank. All you need to do is have your bank write a letter that you have the funds in the amount of your offer price.

3. How can I tell if this foreclosure is a good one to buy?

A: There are many things to check and buying a property like this can be tricky. Sometimes there are unpaid liens against the properties, including an unpaid mortgage, lines of credit, back taxes, municipal liens, and more. “Any or all of these financial obligations could become your clients’ responsibility when they purchase a property in foreclosure. Unless the property goes through a foreclosure auction and becomes a bank-owned REO, the outstanding foreclosure liens and fees could be simply transferred to the new owner—your clients.” – According James J. Saccacio is chief executive officer of RealtyTrac.

Another tricky thing is getting the property inspected (one thing that you should always do on any property). Sometimes the utilities are off and sometimes the buyers may have to assume responsibility if they are turned on for inspections – such as if there is a water leak, etc. . .

4 What costs are involved in buying a foreclosure?

A: A buyer will make a quicker profit if paying cash. In some cases the transaction can also have a faster closing. Obviously if you pay cash, and have it rented right away, it is almost pure profit except for insurance, taxes and any regular repairs. Keep in mind that just because it is a cash offer, does not mean that the seller is going to necessarily take less. They still do want the amount they want whether it is cash or a mortgage.

In the state of Pennsylvania, your agent is required to give you the estimated costs of closing at the time of writing up your offer, so that will help you get an idea of what you will need to take to closing. Even when paying cash, you will still want title insurance to protect you from any unpaid liens that may pop up down the road.