Category: Real Estate Terms

Word of the Week: Appraisal

Why having an appraisal done on a home is a valuable tool

JSRealty4U Phone AppraisalBuying a home is a busy, often confusing time. Especially when the Realtors and Lenders start throwing terms around. And while some of the words sound like fancy names for the same thing, that’s not always true. Often, the Home Inspection can get confused with an Appraisal. Yes, someone is coming to your home to look, poke around, and take notes about the what they find. But the Inspector and the Appraiser are two very different individuals, performing two very different tasks.

APPRAISAL
noun
A formalized procedure that involves collecting and analyzing facts necessary to estimate the value of real property.

Property Value Tablet JS RealtyProperty value is based on a number of factors, such as location, amenities, structural condition, and recent sales of similar local properties. The appraisal process is done by an Appraiser. They will perform a walk-through of the property, and note anything that can potentially alter the home’s value. For example, if the home has a swimming pool in the backyard, but swimming pools aren’t popular in the area, it might not add much value to the property. In some cases, it may even detract from it.

The appraiser’s report will contains the appraiser’s opinion of value and the factual basis for that opinion. Appraisal reports range from fairly simple boilerplate reports to lengthy complicated narratives, depending on the type of property being appraised and the client’s needs. The appraiser will give final report to the lender, who is required to show it to the buyer. Make sure to obtain a copy for your own records.appraisal jsrealty4u real estate

The JS Realty Team @ Samson Properties is well versed in all facets of the buying and selling process. If you are in the market to buy or sell a home, please contact us today! We proudly offer a no obligation, free home analysis and consultation.

Documents Needed for a Mortgage

What documents are needed for a mortgage loan approval?

Years ago there was actually a no documents loan process for certain types of loans. Those are not applicable in today’s world of mortgage lending. Today we’re providing you with a list of documents that are needed for final loan approval. Some documents are required whether the loan is for a purchase or a refinance; others are pertinent to a specific type of loan.JS Realty documents sign pen woman

Documents needed for either a purchase or refinance are as follows:

  1. Most recent pay stubs, showing a 30-day period
  2. Past two years W-2 forms and/or 1099’s (if self-employed)
  3. Signed Federal Personal Tax Returns for past two years
  4. Signed Federal Business Tax returns if applicable
  5. Asset statements for a 2 month period, or most recent quarterly statement. This should include any and all of the following and must include ALL pages.
    • Checking
    • Savings
    • Stocks
    • Bonds
    • Mutual funds
    • Money Market
    • 401 K’s
    • IRA’s
  6. If the property is or will be held in a Trust, provide Trust documentation
  7. For Investment properties:
    • Lease agreement for rental properties
    • Mortgage statement
    • Property tax bill
    • Homeowner’s Insurance Policy
    • HOA or Condo fees, if applicable
  8. Hazard Insurance (homeowner’s insurance) Policy
  9. Complete Divorce/Separation Agreement /Property Settlement agreements, if applicable
  10. School Transcripts and Diploma if you are a recent graduate
  11. Contact name and phone number for Verification of Employment

For VA loans, the following is required:

  1. VA Certificate of Eligibility
  2. Original statement of service or DD-214

For Purchases only, we need the following:

  1. Ratified Sales contract
  2. Copy of Earnest Money Deposit AND bank statement showing the check has cleared your account
  3. Name, address and phone number of landlords for past 2 years if currently renting
  4. Sales Contract for existing home if selling and vacating to purchase new home
  5. Settlement Statement from the sale of current residence if vacating to purchase new home

For Refinances only

  1. Copy of most recent mortgage statement
  2. Copy of Owner’s Title Policy or settlement statement indicating that you have owner’s title insurance
  3. Copy of existing Homeowner’s Insurance Policy

Whether you’re purchasing or refinancing a property, you can download a copy of this List of Documents to help aid in your search for a loan. This list will be helpful to both you and your Lender as you work through the processing of your loan.

SHORT SALE VS FORECLOSURE

If you are having to decide whether to Short Sell or let the bank Foreclose on your home, it’s pretty obvious that times are tough. You’re having to make some big decisions that will affect your future for a significant amount of time. Making the right choice for yourself and your situation will be key. The best place to start in knowing what is right for you is to understanding the difference between a short sale and a foreclosure.

SaleSHORT SALE
To keep it simple, it means the act of selling short. In real estate terms it means that the borrower owes the lender more money for a property then they are able to get by selling it to the open market. For example, say you owe $300,000.00 for your property but the market says the property is only worth $250,000.00. This means you would be “short” $50,000.00 that you owe. Unless you have that amount laying around and are willing to pay the bank the $50,000.00 that you are short, then you are going to need to ask the lender if they are willing to allow you to sell your property as a “short sale” and forgive you the $50,000.00, plus closing cost that you owe.

Sale JSrealty4uFORECLOSURE
This is the process of taking possession of a mortgaged property as a result of the mortgagor’s failure to keep up mortgage payments. If you can’t make your payments, the bank has come to take back the property to foreclose on it. This will mean you need a new place to live – more than likely sooner than later. Typically a big life event or change is in process, and this situation is not ideal.

So how does a short sale or foreclosure affect you long term, and what does it mean with regards to home ownership and credit in the near future? What about long term?

Below is a chart that shows the “basics” of the amount of time either of these options could affect you. Lending rules change regularly and everyone’s situation is different, so for exact information about how either of these may affect you, we recommend consulting with not only your realtor, but a lender too.

JS Realty Short Sale Years Chart

All in all, you really don’t want to have to face either of these situations, but as we all know, life happens. So, if you find yourself in a tough situation, it is key to contact a Realtor immediately and ask for some direct guidance on how to navigate what lies ahead.

The JS Realty Team specializes in short sales and we have a proven track record of success! If you or someone you know needs help, contact us! We are happy to help in any way that we can.

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The JS Realty Team – not only serving Brambleton, serving all of Northern Virginia

GETTING KEYS TO YOUR NEW HOME

You searched for the right home – and found it! You got the home under contract and worked through the entire Home Buying Process to bring you to the day you have been looking forward to: Settlement Day! You worked hard and you want the KEYS to what is yours. So when do you get the keys to your dream home?

JS Realty Calendar Red Moving DaySeems like this would be a pretty easy question to answer, but it really depends on the state that you are closing in, and how that state handles defining the term “settled”, or when escrow has occurred. Most often this has to do with the way the money is funded and disbursed, and how the Deed (the paper work that deems you are the owner of the property) is recorded and recognized in your state. Since we are located in Virginia, we can tell you exactly how it is dealt with here. Then you can prepare for the other BIG day – MOVING DAY.

Typically, keys are given after verification that the funds have been delivered to the title company and all of the required documents are signed by both Seller and Buyer. At that point, the Seller will pass over ownership of the property and provide the Buyer with the keys to the property. Hooray! The moment has arrived and you are now the lucky owner – and key holder – of your dream home!

JS Realty Champagne Glasses Celebration

There are occasions, however, when getting the keys and moving right in is not possible:

The Seller needs to stay in the home. Logistically, it can make sense for JS Realty rental agreementthe Seller to sell their home and then buy their next home. Physically, though, this can be a real challenge. Offering the Seller to stay a couple of extra days after settlement could be just what they need to make selling their home to you easier. In this case, you (the Buyer) will be offering a “rent back”. This is done through a signed agreement (a Post-Settlement Occupancy Agreement) that states they will stay in the home for a specified period of time, for a certain amount of money, and will be exiting the property on a specified date.

JS Realty Moving Boxes TapeSo does this mean you get keys or not? In most cases the Seller will agree to give you one set of keys with the understanding you will not need to access the property until the specified date that they will be exiting the property. Once they have exited the property you will be able to re-inspect the home and take possession based on the terms in which you both agreed to. This is pretty common and often occurs with little to no issues.

The home is vacant and you want to move in early. Is this even possible? JS Realty Kids Thumbs Up DownTechnically it is, however we often do not recommend it due to many various risk factors that could make this a bad idea for both the Buyer and the Seller. There is a possibility that something unforeseen happens and the deal does not go through at the last minute. Or worse, if something tragic happens to the home while the Buyer is occupying it and the Seller is still the owner. This would create a potential insurance nightmare. The reasons this could be a bad idea are numerous, however if you and the Seller are prepared to face these risk and are able to come to mutual agreeable terms, this is an option and does occur from time to time. It would be similar to the “rent back” method and it is called a Pre-Settlement Agreement.

“Key” things to remember for Settlement Day:

Utilities: Turn the utilities on in your name the day of settlement to prevent a them from possibly being shut off. Remember: utilities cannot be turned on over a weekend.

Deliveries: Do not schedule to have anything delivered or done to the home the JS Realty Watch Deadline Man Businessday of the settlement in the event something unforeseen causes a delay.

Be Prepared: From time to time, Settlement Day can run longer than expected. However if you plan for extra time in advance, it can make the day run a lot smoother and less stressful than if you are trying to get to an important work meeting directly after. We hope for the best, yet are prepared for the worst.

Accept the keys and take ownership of your dream home!

JS Realty Happy Couple New Home

The JS Realty Team get deals done and homes get purchased every day! If you’re ready to buy or sell a home, contact us today!

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The JS Realty Team – not only serving Brambleton, serving all of Northern Virginia.

WHAT IS A SHORT SALE

JS Realty empty pocket shortWhat does “Short Sale” really mean?

In Real Estate terms it means that the Borrower owes the Lender more money for a property than they are able to get by selling it to the open market. Hence the term, “short sale”.

Let’s break it down. Say you owe $300,000.00 for your property, but the market says the property is only worth $250,000.00. This means you would be “short” the $50,000.00 that you owe.

If you need to sell your property, there are two options available to you:

Option 1 – Pay the Lender. If you happen to have the amount you are short and are willing to do so, you can just pay the bank what you owe.

JS Realty short sale debt eraseOption 2 – Sell Short. This option requires you to ask the Lender if they would be willing to allow you to sell your property as a short sale and forgive you the amount you owe, plus closing cost.

We have helped our clients both Sell and Buy Short Sales. If you need help buying or selling, contact us today and we can get started!

JS Realty Free home analysisThe JS Realty Team – not only serving Brambleton, serving all of Northern Virginia.

CONTINGENCY – WHAT DOES IT MEAN?

JS Realty puzzled confused woman problemreport desk frownYou make an offer on your dream home and within your offer there are several areas that you fill in that reference the word “contingency” – what does this mean, and why is it important?

 

CONTINGENCY
kənˈtinjənsē/
noun

A  future event or circumstance that is possible but cannot be predicted with certainty.

The contingencies you will encounter most in Real Estate are the home inspection contingency, financial contingency, and the appraisal contingency.

The most common contingency is the home inspection contingency. This contingency basically states that if, at any time during the home inspection process you and the seller are not able to reach agreeable terms, Security JS Realtyyou are allowed to void the contract and receive your earnest money deposit back without penalty. Essentially, these contingencies are there to protect YOU – the consumer – in the unforeseen event that something is not going well with the purchase of the home.

What if you make an offer but the seller finds that your financing contingency is just too long? Why do they care?

JS Realty Time Woman Upset Clock PromptFrom the Seller’s prospective all of the contingencies are a risk, and if you make the contingencies too long or to aggressive, you risk turning the Seller off in regards to your offer. Most Sellers are looking for short timelines and to secure the strongest offer they can get. So the bottom line is, keep your contingencies to a reasonable and attainable limit, protect yourself, but also help instill confidence and security within your offer to the Seller.

Happy Couple Keys Home JS RealtyBUYER TIP: If you are bidding on a home with multiple offers, sometimes it can help to shorten contingency periods – or waive them altogether. You may not necessarily have to pay more money, and you may win by just being more flexible!

If you are looking to buy or sell a home, or need help navigating or negotiating a contingency, contact us today – we would love to help!

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The JS Realty Team – not only serving Brambleton, serving all of Northern Virginia.