Whether Your Client Is Buying Or Selling A Home

Whether your client is buying or selling a home, the appraisal is an essential step in the transaction, so it’s important to set realistic timeline expectations. Summer is a very popular time of the year to buy or sell a home, with the sheer number of appraisals being ordered it is creating increased appraisal timelines and possibly higher “rush” prices.

Who controls the appraisal due date?

Mortgage banks set the due date for the appraisal, but this doesn’t mean the date will necessarily be met. Often, the original date must be modified, which in turn, will delay the actual closing date.

The closing date can sometimes be unintentionally delayed by the real estate agent and homeowner if they do not return the appraiser’s request for an appointment in a timely manner. We understand that a homeowner may believe that in order to increase the value of their home, the entire house must be spotless and may cancel an inspection in order to get the cleaning done. But right now, appraisers are so busy that if that one opportunity is missed to schedule an appraisal, they will fill that slot with other appointments.

How long does an appraisal take?

Everyone in the industry is currently at the mercy of the appraiser’s schedule. In the past, appraisers could perform as many as four inspections in a day. Add an additional day for writing the report and the appraisal could be completed within two or three days. Unfortunately, with today’s complex regulations and requests for additional information, this time has been stretched to up to a two to three weeks from the time of inspection to the completed report. For commercial properties, this time frame can extend to a month or more.

There is also a shortage of experienced appraisers and they are all overloaded with work. A borrower can put a rush on their appraisal costing upwards of an extra $200-300, but when there is a rush on every appraisal, the prices for a timely appraisal can get even steeper. Warn your clients that this is a possibility, but ensure them that we will all be doing our best to get them into their home as soon as possible.

How should you prepare your client?

At the beginning of the sales process, discuss the appraisal process with your client so there are no surprises. Be honest with your client about possible appraisal turn times and the costs associated with a rush order. And let them know that a spotless house won’t sway an appraiser to increase the home value.

All lenders are experiencing the same delays this summer so it’s extremely important to set realistic expectations with your client to ensure they understand how important it is to accommodate the appraiser’s schedule in order to close their financial transaction.

We are always here to help you foster your client relationships; providing top notch customer service. Call, Text or Email “The Polder Group” (520) 495-0222

What Are The Risks of Not Doing A Home Inspection?

In a competitive market where homes have multiple bids, home buyers wanting to sweeten their deal can be tempted to cut certain contingencies in order to make their offer stand out to the seller. However, the risks of waiving a home inspection contingency could be more devastating to the buyer than just losing the home to another bidder.

What is a Home Inspection Contingency?

A Home Inspection Contingency permits a buyer to enlist a home inspector to look over the home for damages before the deal closes. On the chance that real issues are found in the home, the purchaser has the privilege to negotiate with the seller for repairs or retreat from the deal totally. If a buyer opts out of the home inspection, sellers may be drawn to this offer because they can sell the home “as is” and they are not responsible for issues that aren’t obvious. But this also means that the buyer is purchasing the home “as is” and has no way of knowing what they are in for until they are the new owners of the home.

Common Home Inspections Include:

  • Structure
  • Exterior
  • Interiors
  • Roofing
  • Plumbing
  • Electrical
  • Heating and Air Conditioning
  • Ventilation and Insulation
  • Fireplaces

Inspectors don’t only look at the unseen parts of a home; they can provide an in-depth analysis which can pinpoint things that may become a problem down the road. A costly roof repair may not be necessary immediately, but it makes a big difference to know how soon it will need to be repaired or even replaced.

Warn your clients that most experts recommend always getting a home inspection. If borrowers waive the inspection, they could easily end up with a home which requires thousands of dollars’ worth of repairs. Unfortunately, by this point they won’t be able to back out or ask the seller for help with repairs.

Buying a home is a major financial undertaking. We strive to educate clients and referral partners on all aspects of a home finance to help alleviate concerns and ensure a smooth home financing process.  Call The Polder Group At Summit Funding Today!

How And When Private Mortgage Insurance May Be Canceled

Private Mortgage Insurance (PMI) is required for many home buyers who do not have the full 20% down payment to purchase a home. It costs between 0.20% to 1.50% of the balance on your loan each year, based on the borrower’s credit score, down payment and loan term. The annual cost is added to the monthly mortgage payment.

What is PMI?

PMI is insurance which reimburses the lender in the case the borrower defaults on the home loan. It also allows borrowers to refinance their home even if they do not have 20% equity. This is not the same as homeowners insurance, and this insurance does not pay the mortgage if a borrower loses their job. This is simply a way for your client to get into a home without needing to put 20% down to purchase a home.

How do I cancel PMI?

According to the Homeowners Protection Act, a borrower has the right to request the cancellation of their PMI on the day the mortgage falls to 80% of the original value of their primary residence. However, there are other important criteria which must be met to cancel PMI:

  • PMI cancellation requests must be in writing.
  • Homeowner must be current on mortgage payments with a good payment history.
  • Homeowner may have to show there are no other liens on the home (for example, a home equity loan or home equity line of credit).
  • An appraisal may be required to demonstrate the loan balance isn’t more than 80% of the home’s current value.

We are always here to help foster your client relationships and assist in their continuous education. If you have any questions, call or email The Polder Group with Summit Funding!