after the offer - 30 days to homeownership - 4/27/09
DESCRIPTION
After the Offer - 30 Days to Homeownership - 4/27/09TRANSCRIPT
Where homeownership education takes flight!
After the Offer – 30 Days Until OwnershipA Complete Guide to what happens after the offer is accepted
Thank you for attending
We will begin in a momentClass Scheduled to begin at 5:30pm
Homeownership Educator
Scott SchangBranch Manager
Broadview Mortgage Corporation
1-866-667-6724
Where homeownership education takes flight!
After the Offer – 30 Days to Own
The Purpose and Goals of this Class
• Purpose: To Create and Empower Homeowners
• Goal: Introduce you to the buying process after the offer is accepted and demystify the steps to buying a home
• Goal: Educate you about the time lines and coordinated efforts of everyone involved in the home buying process
• Goal: Empower you with the ability to understand the process and reduce “surprises” throughout the purchase of your home
Where homeownership education takes flight!
After the Offer – 30 Days to Own
Topics we will cover
• A Brief Overview of the home buying process
• The Players: Who’s working on your purchase?
• The Timeline: what needs to take place and by when
• The Contingencies, Who needs to do what by when?
• What can go wrong, why, and what options you have
• The Home Stretch – “It’s not over ‘till it’s over”
Where homeownership education takes flight!
After the Offer – 30 Days to Own
Ask Questions throughout presentation
• You may type questions in at any time during the presentation – Questions box on your screen
• Homeownership experts are standing by to answer your questions during the presentation
• This is an interactive learning environment. You will get the most value by having your specific questions answered
• The only dumb question is the one you don’t ask
Write this number down in case of technical difficulty
1-866-667-6724
Where homeownership education takes flight!
After the Offer – 30 Days to Own
Overview of the Home Buying Process
• Offer is accepted
• Escrow is Opened
• Inspections are completed
• Loan approval is Finalized
• Loan documents are drawn and signed
• Loan funds / Loan records
• Close of escrow – purchase complete
Where homeownership education takes flight!
After the Offer – 30 Days to Own
Overview of the Home Buying Process
• Two ways you can receive acceptance of your offer
• Verbal Acceptance– Common with short sales and foreclosures– Seller’s agent relays “verbal” acceptance by seller– Contract is accepted by loss mitigator on behalf of selling
bank, still requires “final” signatures – red tape– Escrow is opened, process starts, pending executed
contract
• Fully Executed Contract– Both buyer and seller signatures are on “final” purchase
agreement
Where homeownership education takes flight!
After the Offer – 30 Days to Own
The Players – Who they are
• Who’s working on your purchase?– Seller’s Agent
• Transaction Coordinator
– Your (Buyer’s) Agent• Transaction Coordinator
– Escrow Company• Escrow officer / Assistants• Title Company / Representative
– Lender providing financing for your purchase• Loan Officer• Loan Processor• Loan Underwriter
Where homeownership education takes flight!
After the Offer – 30 Days to Own
The Players – What their roles are
• Seller’s Agent– Responsible for communicating the terms and interests of
the seller to escrow and buyer’s agent• Provides escrow and title information to buyer’s
parties…ie – Agent, Lender• Responsible for “seller’s side disclosures”
• Your (Buyer’s) Agent– Responsible for communicating with Seller’s agent to
receive all seller disclosures and make arrangements for entry into property for inspections / appraisal
– Orders home inspection– Responsible for communicating to you status of process
Where homeownership education takes flight!
After the Offer – 30 Days to Own
The Players – What their roles are
• Escrow Company– Third party coordinator of all contracts, reports, monies,
addendums and instructions by all parties involved• Collect and hold deposit / earnest money • Collect and hold down payment
– Order the preliminary title report from title company
– Title Company researches “chain of title” to establish free and clear rights to ownership of property
• Insurance provides guarantee clean title
– Ensures that the instructions laid out in the purchase contract and the terms of the loan approval are all met
Where homeownership education takes flight!
After the Offer – 30 Days to Own
The Players – What their roles are
• Lender providing financing for your purchase– Loan Officer – Communication of terms, conditions and
status of loan approval to you, your Agent and any other parties that wish to be in the loop
– Responsible for coordinating all communications and needs from Loan Underwriter and Loan Processor to you for the purposes of final loan approval
– Loan Processor - Communicates with escrow, title, loan officer, buyer, seller’s agent, buyer’s agent to coordinate the receipt and delivery of required documents required for loan
– Loan Underwriter – Receives and reviews all contracts, addendums, inspections, appraisal, income and asset documentation, credit profile for compliance with underwriting guidelines of the loan you have applied for
Where homeownership education takes flight!
After the Offer – 30 Days to Own
Time Line for the Buying Process
• Escrow period establishes closing date• 30 days is normal• Longer or shorter is possible and common if all parties
agree
• Contingency Period– 17 days for financing / Appraisal - default– 10 days for inspections – default
• Finalization of Financing– Prior to documents (PTD) conditions approved - ASAP– Lender draws loan documents to be signed – 24-48 hours– Buyer signs loan docs – back to escrow/lender - 24 hours– Loan docs reviewed – 24-48 hours– Prior to funding (PTF) conditions met - Funds 24-48 hours– Record loan – Next day usually – 24 hours
Where homeownership education takes flight!
After the Offer – 30 Days to Own
The Contingencies
• Contingency Period establishes time line for performing certain requirements of purchase contract
• If the result of a contingent action causes you or seller to back out of purchase – all monies would be returned and both parties would be held harmless
• California Association of Realtors 8 page purchase contract keeps contingencies in place until close of escrow unless otherwise specified or released
• A buyer that makes a “contingent offer” means that they must close on the sale of existing home prior to closing on new home – not as attractive to sellers
Where homeownership education takes flight!
After the Offer – 30 Days to Own
The Contingencies
• 17 days for financing / Appraisal – Default– Lender is responsible for placing appraisal order– Appraisal is ordered on day of approval - $350-$450– Typical turn around is 3-5 days– Received and reviewed by lender – 24-72 hours
• 10 Days for optional buyer Inspections– Buyer’s Agent is responsible for disclosing to buyer options
and rights for performing inspections on property– Home inspection is recommended at very least - $250-
$350– Buyer is responsible for choosing to perform non-required
inspections – Agent can refer professional services
Where homeownership education takes flight!
After the Offer – 30 Days to Own
New Changes in Appraisal Guidelines
• Home Valuation Code of Conduct - May 1st, 2009 – Fannie Mae & Freddie Mac Loans only for now
• Appraisal must be ordered by third party person not directly involved in the transaction and whose compensation is not directly or indirectly tied in to the close of transaction
• FHA has not enforced a similar policy as of yet
• Lender (not broker or loan officer) is responsible for placing appraisal request
Where homeownership education takes flight!
After the Offer – 30 Days to Own
What Can Go Wrong• Many things can happen that would cause the
purchase to go “sideways”– Some you can control / Some you cannot control
• Financing challenges– Changes in your employment– Changes in your reserves / funds to close– Personal Liens, judgments, levys that “pop up”
• Inspection challenges– Appraisal uncovers health or safety issues– Appraisal determines value is lower than sales price– Home inspection uncovers extensive challenges to
condition– Pest/termite, Hazardous materials, other inspections
uncover conditions which are not appealing or acceptable
Where homeownership education takes flight!
After the Offer – 30 Days to Own
What Can Go Wrong• Many things can happen that would cause the
purchase to go “sideways”– Some you can control / Some you cannot control
• Preliminary Title Report– Title search uncovers liens, zoning challenges that would
create challenges with providing insurance
• Condominium Projects– There can be challenges with financing for certain
condominium projects if the following are present:• More than 40-49% non-owner occupied• Certain cases of litigation against HOA• High % of HOA dues delinquent
Where homeownership education takes flight!
After the Offer – 30 Days to Own
What options you have • Depending on the challenge – there are options• Financing challenges
– Communicate with your loan officer and act quickly to produce documentation/paper trail to explain discrepancies
• Employment gaps, changes of employers / pay• Reserve documentation if funds move often or are
difficult to source – large deposits are red flags• It NEVER pays to be elusive with your loan officer
• Inspection challenges– You may have just saved yourself lots of time and money
by performing thorough condition inspections – back out– Go back to seller and ask to have conditions cured to
proceed with purchase of home– Value comes in low – Most lenders will reduce sales price
Where homeownership education takes flight!
After the Offer – 30 Days to Own
What options you have • Depending on the challenge – there are options
• Preliminary Title Report– There’s not much you can do as a buyer to resolve title
issues– Have seen subordinate liens pop up – seller or buyer may
resolve issue of compensation to lien holder– Title company typically will try to find resolution to challenge– Title company ultimately determines whether or not they
will insure against clouds and insure as free and clear title
• Condominium Projects– Lender decision – challenges with condominium projects
affect the salability and insuring of mortgage on secondary market
– Some lenders have higher tolerance for risk than others
Where homeownership education takes flight!
After the Offer – 30 Days to Own
The Home Stretch
• It ain’t over ‘till it’s over – Anything can pop up at almost anytime – Don’t be alarmed – it’s normal
• Challenges are common – fatal challenges are NOT
• Communication is key – make sure you ask your agent and loan officer “Ok, what’s the next step and when can I expect to see it completed?”
• Manage your expectations based on actual events and not on anticipated results – you’ll sleep better at night!
• Do not push your loan officer or agent to give you answers or status when you don’t like their first answer – trust that they are keeping you informed
Where homeownership education takes flight!
After the Offer – 30 Days to Own
Wrap up and Take Aways
• Demystifying the process is a huge step toward being in control of the process
• Do not let “fear of the unknown” cause undue stress educate yourself about the process, manage your expectations
• Since the communication and the experience of your professional team are so vitally important to the home buying process – make sure you take your time, do your homework and purposely choose a qualified “team”
Where homeownership education takes flight!
After the Offer – 30 Days to Own
Wrap up and Take Aways
• Broadview Mortgage Corporation is a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs
• We are more than happy to be your “second opinion” if you are already working with someone
• We are more than happy to refer you to a qualified Real Estate Agent that we have interviewed and worked with – Shares our values
Where homeownership education takes flight!
Hiring an Agent – Finding Deals
Wrap up and Take Aways
• You will receive a “Thank you” email with links to the information we’ve talked about here today including
– Copy of power point presentation– Secure on-line loan application– Links to all the topics we discussed in class– Dream Home Finder request– Link to detailed information about the Tax Credits– Link to information about the CAR Mortgage
Protection Program– A schedule of all upcoming classes
Where homeownership education takes flight!
Upcoming Homebuyer Classes
• A First Time Home buyer’s Complete Guide to Credit, Qualifying and Completing the Loan Application
• A Complete Guide to Buying Foreclosures and Short Sales
• A Complete Guide to Closing Costs and the GFE
• A Complete Guide to the CalPERS Home Loan Program
• Five 100% Financing Loans You Should Know About
• A Complete Guide to FHA Purchase Loans
• A Complete Guide to the CalSTRS 8017
• A Guide to Hiring a Real Estate Agent and finding the best deals
Check back often for upcoming classes
Where homeownership education takes flight!
Thank You for AttendingIf you enjoyed this class – Tell a friend
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For more information
1-866-667-6724Homeownership Educator
Scott SchangBranch Manager
Broadview Mortgage Corporation