Real Estate Information Archive

Blog

Displaying blog entries 1-10 of 88

6 Crucial Questions to Ask a Title Insurance Provider

by Amy McLeod Group


Shopping for title insurance may not be the most thrilling step in buying a house, but it is one of the most important.

Before you can own a home, or "take title" to a property, most lenders will require a title search of public property records to make sure there aren't any issues in transferring the property into your name.

 
 
 

For example, title issues can crop up due to liens on the property (say, from a contractor who did work on the house but wasn't paid), unfulfilled financial obligations such as unpaid taxes, or claims of ownership from a long-lost heir. In such cases, a home seller may not have the legal right to transfer ownership of the property.

To protect against any financial loss, two types of title insurance exist: lender's title insurance and owner's title insurance. The lender's title insurance policy pays for the expense of researching a claim and any court costs incurred as a result of any disputes they uncover.

Owner’s title insurance, meanwhile, protects you as the homeowner during any future disputes over ownership of the property.

Lenders require borrowers to purchase lender's title insurance. Owner's title insurance, however, is optional—but, given the protections it provides, buying it is a smart move. (Generally, home buyers use the same title insurance company to purchase both policies.)

Unlike homeowner insurance, title insurance is taken care of as a one-time payment that's made when (or shortly before) you close on your house.

Now that we’ve got the basics of title insurance squared away, let’s look at some of the more surprising questions you probably never thought to ask a title insurance provider but totally should. After all, as the home buyer, it's your choice which title company you decide to use.

1. What are your title insurance rates?

Although this might seem like an obvious question, some home buyers forget to ask it. And that can be a big mistake. Why? Because even though the average cost of title insurance is around $1,000 per policy—which covers all upfront work and ongoing legal and loss coverage—the price can vary widely, depending on where you live and the price of your home.

In many states, including Texas and Florida, title insurance premiums are set by the state, meaning that you’ll pay exactly the same amount no matter what title insurance company you choose.

However, some states, like California and New Mexico, do not regulate title insurance fees at all, and rates can vary widely from one title agency to another, says Rafael Castellanos, a managing partner at Expert Title Insurance Agency in New York City. If rates aren’t preset by the state, they’re negotiable.

It's advisable that all home buyers find out what a title insurance company's rates are before they choose an insurance provider.

2. What has been your most challenging title search, and how did you handle it?

Some title searches are easier to clear than others. While there’s no telling how difficult yours will be, you want a title company that can handle complicated problems.

“There are issues that we run into on residential properties that can be complex, and we have to go to great lengths to resolve them,” says Tim Evans, owner of Evans Title Agency in Troy, OH.

Ask how a title company solved their most challenging title search, and you'll gain some valuable insight—and some assurance that the company will be able to troubleshoot issues during your title search if any should arise.

3. How much experience does your title insurance attorney have?

A title company's attorney is the person who is going to determine whether you can legally take title of the property and receive title insurance. Using a title company with a seasoned attorney, therefore, is crucial.

However, “in the early 2000s, it was very common to see people forming their own title insurance agencies after just a few months,” Evans says. “Though that’s less common today, you can still run into title attorneys who have very little experience.”

4. What's your company's ratio of title claims to customers?

Because title searches can be complicated, claims are an inherent part of the business. However, some title companies are more "liberal” than others, Castellanos says, with respect to whom they will—and whom they won’t—issue title insurance.

“Some title companies pay lots of claims, which can put a lot of stress on their clients,” says Castellanos. “You want a title company that is incredibly careful and conservative.”

So, how many title claims are too many? Title insurance claim rates are approximately 5%, according to industry estimates.

As a result, here's a good guideline: If a title company has had a lot of title claims relative to the volume of their business—say, 1 out of every 10 customers—you'll want to continue your search.

5. How long does it take for you to complete a title search, on average?

Depending on the terms of your home sales contract, you may be under a tight deadline to reach settlement, warns Kimberly Sands, a real estate broker in Carolina Beach, NC.

Of course, you won't know that until you actually make an offer on a house. But, since it's a possibility, you'll want to find a title company that can conduct a title search in a timely manner, Sands says.

Typically, the whole process takes about two weeks. If a title company says that it will take significantly longer to complete a title search, using that company could force you to delay closing, which could potentially cause your whole home purchase to collapse.

6. Do you belong to any professional associations?

While being a member of a professional association certainly doesn’t guarantee that a title company is good, title agencies that belong to industry groups are often held to a higher standard, says Evans.

Organizations like the American Land Title Association (ALTA) also offer their members unique education programs, business tools, and industry certifications that will serve clients well. Moreover, membership in an industry group adds a layer of credibility for an insurance provider.

The bottom line

Title insurance can be confusing for home buyers, but it’s an essential protection of homeownership. So, in addition to asking the questions above, take time to read online reviews and talk to your real estate agent before picking your title insurance provider.

Contact The McLeod Group Network at 971.208.5093 or [email protected] for ALL your Real Estate needs! 

By: Realtor.com, Daniel Bortz


A real estate listing can tell you an awful lot about a home, beyond just the price—essential stats like the year the property was built and the price per square foot. But one of the most important numbers to be aware of is the days on market, or DOM, the amount of time the home has been listed for sale on the multiple listing service. The DOM gives you an idea of how other buyers are reacting to the property and whether it's priced high or low.

Properties with a high DOM are commonly referred to as stale listings, meaning the house has been languishing on the market for a long time. Depending on the specifics of local housing markets, experts consider that a house starts becoming stale around three to five weeks—and it usually causes one of two possible reactions. Some buyers think such homes are a bit tainted, while others believe they'll have more bargaining power and can get the house at a steal. Which is more true?

Buyer beware?

First of all, let’s dispel the myth that there’s always something wrong with the house when it doesn’t sell quickly. There are a lot of factors that could come into play.

For example, Dolly Hertz, licensed associate real estate broker at Engel & Völkers in New York, says there’s a backlog of unsold inventory in the greater New York market—both city and suburbs. Hertz says some homes have languished on these markets for two or even three years.

Shawn Breyer of Breyer House Buyers, in Atlanta, tells us he’s seen a lot of great homes that are simply overpriced.

“As homeowners progressively lower the price on the home, the perception is that something is wrong with it—and this perception sometimes keeps would-be buyers from looking at the house,” he says.

Sometimes, a high DOM may be due to factors out of the seller's control.

“Perhaps the seller accepted a contract at some point, but it fell through because the buyer couldn't qualify for financing,” says Shafaq Chawla, a real estate professional with Compass in Los Gatos, CA.

But the problem could also be the home itself. Outdated interiors or big-ticket items in need of repair can scare buyers away. Some people would never gamble on buying a house with roof damage.

“Buyers are also turned off by homes that need a new paint job, landscaping work, and upgrades to decks, floors, and appliances,” Hertz says.

Location is yet another factor that could stall a home’s sale.

“Houses on busy roads or in a flood zone typically have longer days on market,” says Sarah M. Drennan, at broker/manager at Terrie O’Connor Realtors, in Allendale, NJ.

And, of course, bad listing photos can tarnish buyers' opinion of the house before they even set foot inside.

Deal or no deal

Does a high DOM give buyers more bargaining power? Sometimes.

“Remember, market value is what a buyer is willing to pay for a home, not what a seller expects,” says Chawla. When there is no demand for the home, she says sellers and agents may be willing to accept less than the initial asking price.

“Many deals may be found by salvaging stale listings,” says Michael Kelczewski, a real estate agent with Brandywine Fine Properties Sotheby's International in Wilmington, DE. “To see if I have any bargaining power, I tend to suggest presenting a low offer to see how the seller will react.”

Just be aware: Sellers aren’t always desperate, regardless of how long the home has been on the market.

“Some are just fishing for the highest price they can get and won't sell unless they get the price that they have in mind,” says Breyer. He recommends asking your real estate broker to find out why the homeowner wants to sell, since this can help you determine if you have any bargaining power.

For example, the sellers may just be testing the market and not desperate to sell, and Drennan says they may not be willing to take less than they’re asking. However, if circumstances dictate that they have to sell the home, you’re dealing with a motivated seller and can negotiate accordingly.

Proceed with caution

Finding a house with a high DOM that actually meets all of your criteria may feel like finding a designer blouse at the bottom of a bargain bin, but don't get excited just yet. You may be able to strike a deal, but the first move is to understand why the house is overpriced.

“Is it the location, a major defect, repairs needed, or difficult sellers?” asks Breyer.

If you do make an offer, be sure to include house inspection contingencies in the contract.

“The house may seem fine, but there may be issues that are not immediately apparent,” Hertz says.

A home inspector will reveal the house's flaw that may cost you an arm and a leg to repair. But a contingency will give you the right to back out of the sale if something looks fishy.

The McLeod Group Network is here to assist in all your home-buying needs. Reach us at 971.208.5093 or [email protected]

By: Realtor.com, Terri Williams

You'd Better Ask These 5 Crucial Questions Before You Buy a House

by Amy McLeod Group


No matter how many episodes of “House Hunters” or “Love It or List It” you've watched, buying a home inevitably comes with surprises. Though a sharp real estate agent will help you navigate these hidden challenges, before you start shopping for a house, you should take account of some important things that you probably haven’t considered.

Curious what you might be missing? Here are five questions you’d never think to ask yourself but totally should before buying a home.

1. Have I checked my credit report?

When you apply for a mortgage to buy a home, lenders want some reassurance that you’ll repay them later. Of course they do! One way they assess this is to check your creditworthiness, by scrutinizing your credit report and score. Having a high credit rating or FICO score (named after the company that created it, the Fair Isaac Corporation) proves that you have reliably paid off past debts, whether they're from a credit card, college loan, or other forms of debt.

Credit scores can range from 300 to 850; in general, what's considered an excellent credit score is in the range of 750 to 850. A good credit score is from 700 to 749; a fair credit score, 650 to 699. A credit score lower than 650 is deemed poor, meaning that your credit history has had some rough patches.

The three nationwide consumer credit-reporting companies—Equifax, Experian, and TransUnion—are each required to provide you with a free copy of your credit report annually if you request it. You can order all three at once, or stagger them throughout the year, from one central source: AnnualCreditReport.com.

You should closely examine each report before you meet with a mortgage lender. Why? Because even if you're fairly sure you've never made a late payment, 1 in 4 Americans find errors on their credit file, according to a 2013 Federal Trade Commission survey. The simple truth is that creditors make mistakes reporting customer slip-ups.

If you discover errors, you can remove them from your credit report by contacting Equifax, Experian, or TransUnion with proof that the information was incorrect. From there, they will remove these flaws from your report, which will later be reflected in your FICO score.

2. Who's the best real estate agent for me?

Finding the right real estate agent to partner with can be a daunting task. A lot’s at stake, and there’s certainly no shortage of options. Should you go for a savvy veteran agent or eager newbie?

Veteran real estate agents can provide sage advice, based on the breadth of knowledge they've built up over the years. Having dealt with just about every issue that can affect a sale, they can help you navigate any complicated problems that may arise.

However, experienced agents are usually in high demand, working with several clients at once. Because their time is limited, they may not be available to show you as many homes in person, meet you for last-minute showings, or handle other pressing issues.

Rookie agents, meanwhile, bring fresh energy and enthusiasm to their job. And, because beginners usually have fewer clients than more seasoned agents, they may be able to spend more time with you than an experienced agent who's juggling multiple clients.

In short, choosing the right agent boils down to what kind of customer service you’re looking for. Learn more about the professional's with The McLeod Group Network

3. If I get a new job, am I likely to have to relocate?

Your career plans play a pivotal role in determining whether it makes sense for you to buy a house.

“Previous generations planned to get one job, keep it forever, and ultimately retire. Buying into a house because they were looking for a permanent living situation made a lot more sense,” says Chandler Crouch, broker at Chandler Crouch Realtors in Fort Worth, TX. “Now, job-hopping is prevalent.”

Indeed, according to a recent report from the Bureau of Labor Statistics, the median tenure of workers of ages 55 to 64 is a whopping 10.1 years, more than three times that of workers ages 25 to 34, who stay at a job for 2.8 years on average.

Changing jobs won’t be a big deal if your new gig is in your current city, but if there aren’t a ton of job opportunities in your industry in your area, you may find yourself having to relocate a year or two after you bought your home—in which case you may not be able to recoup the amount of money it cost you to purchase the house.

“It honestly isn't a good idea to buy a house unless you plan on staying there for at least five years,” Crouch says. If you're considering buying a house but already know you are likely to move in that time frame, remaining a renter may be your best choice.

4. Can I afford to pay closing costs?

Getting a mortgage comes with a number of closing fees, which borrowers have to pay when they reach the settlement table. These are out-of-pocket expenses that you need to budget for.

Although buyers and sellers both typically pitch in to cover closing costs, buyers shoulder the lion's share of the load (3% to 4% of the home's price) compared with sellers. So, on a $250,000 home, your closing costs could come to about $7,500 to $10,000.

Typical closing fees include the following:

  • Closing fee ($300 to $600): A representative from the title company will come to your closing to supervise the transfer of title, and you'll have to pay for the service.
  • Lender's title insurance (usually 0.5% of the purchase price): This protects your lender if something was missed in the title search. The cost depends on the size of the policy and is set by the state.
  • Title search ($300 to $600): Your lender will do a search to ensure there are no liens on the property or anything that could prevent you from purchasing it. Sometimes this will be bundled with other title fees in your closing document.
  • Wire or courier fees ($30 to $100): If documents need to be sent overnight or money needs to be wired, you'll pay these fees at closing.
  • Document recording fees for the deed and mortgage ($125 on average): Every time a home is sold, the government must record the change of ownership; this fee is typically paid by the home buyer.

Under federal law, borrowers must receive what’s called a “loan estimate” form (previously called a "good-faith estimate”) that outlines their approximate closing costs from their mortgage lender. When you obtain this information, you’ll be able to gauge whether you can pay for closing costs and truly afford to purchase a home.

5. Am I dead set on finding my ‘dream home’?

People throw around the words “dream home” a lot. (Heck, we’re guilty of it.) However, the honest truth is this: "There’s no such thing as a perfect house,” says Daniel Gyomory, a real estate agent in Northville, MI.

Some home buyers, though, have a hard time accepting this, Gyomory says, and make the mistake of holding out for their ultimate forever home.

If your list of “must-haves” is immensely long (you’re looking for great schools, affordable home prices, easy access to public transportation, good walkability, and lots of shops and restaurants) but you’re not willing to budge on anything, shopping for a house may wind up being a waste of your time.

This is why it’s important to sit down and identify your housing criteria in order to get a better picture of what it is you’re looking for—and whether that kind of home exists.

Contact The McLeod Group Network at 971.208.5093 or [email protected] to start the search for your new home! 

By: Realtor.com, Daniel Bortz

The Secret to Buying a Foreclosure That Isn't a Dud

by Amy McLeod Group


Who doesn’t love a bargain? Nabbing a great deal on a house is every home buyer’s dream. One way to make it come true is by purchasing a foreclosed home.

The caveat? Buying a foreclosure isn’t like buying an ordinary house. It’s important to understand what, exactly, a foreclosure is, how to find one, and how to pay for it.

Here are six crucial questions to ask yourself before purchasing a foreclosure.

What is a foreclosure, exactly?

When a property enters foreclosure, the homeowners' mortgage lender repossesses the house for lack of payment (i.e., the homeowners defaulting on their mortgage) and then sells it, to recoup some of its money. Foreclosed homes are sold at a public auction to the highest bidder, and the buyer can't even go inside before the purchase. If the house doesn’t sell at auction, it becomes what's known as an REO, or real estate-owned property, where the bank looks for a buyer through traditional means, like advertising the property in the multiple listing service (MLS).

Since banks are often eager to unload these foreclosure properties, they aim to break even with an asking price that's typically the sum of the remaining mortgage note, plus interest, lawyers' fees, and penalties. On average, this ends up at about 15% below the home's actual value, enabling home buyers to score a terrific bargain.

How do I find foreclosures in my area?

The best way to find foreclosures depends on where you live. (Here's where you can search foreclosures in your area.) Foreclosures might also be marked as “bank-owned” or "REO.” If you spot a home you like, contact the real estate agent on the listing as usual.

Am I willing to buy a home 'as is'?

Generally, foreclosed homes are sold “as is,” meaning that the house is being sold in its current condition and cannot be inspected for structural problems, mold, infestations, or other issues before the auction. Buyers of REO properties, though, can perform a home inspection, but the bank usually won’t fix any problems with the house or offer any kind of credit at closing.

Naturally, these conditions can be a deal breaker for some home buyers, says Cathy Baumbusch, a real estate agent with Re/Max Allegiance in Alexandria, VA. “Keep in mind that a foreclosed home sold at the courthouse is bought without warranty, and sight unseen,” Baumbusch cautions.

Read: You have to be willing to assume some risk if you’re going to buy a foreclosure.

Can I qualify for a mortgage for a foreclosure?

Financing the purchase of a foreclosed home can be trickier than getting a regular mortgage. Some lenders don't want to fund the purchase of foreclosure homes, especially if the property requires heavy-duty TLC. This forces home buyers to buy foreclosures with all cash, or to find a mortgage lender that is willing to take on some risk.

To qualify for a mortgage to buy a foreclosure, you’ll have to meet the same credit score requirements that apply when obtaining a mortgage for a traditional home.

A credit score of 620 is generally considered the minimum, says Gaurav Mahajan, vice president of residential lending at Draper and Kramer Mortgage Corp. Many lenders, though, are willing to work with applicants with lower credit scores by offering them Federal Housing Administration (FHA) loans, which are available to applicants with scores as low as 580.

Not sure what your credit score is? You can get a free score online at CreditKarma.com. You can also check with your credit card company, since some (like Discover and Capital One) offer a free credit score.

Will I have enough money left over to pay for renovations?

Often, buying a foreclosure means you’re buying a fixer-upper that may require extensive home improvements. Hidden expenses could be lurking beneath the surface, like electrical or plumbing problems. Depending on the house’s condition, you may need tens of thousands of dollars to make these changes.

As a result, you’ll want to have a good chunk of cash in your pocket after the purchase is complete, to pay for home improvements and repairs, so don’t stretch yourself too thin with your offer.

How long am I willing to wait for the sale to go through?

Buying an REO? It can take a while for the foreclosed home to be sold after the bank accepts your offer, potentially several months (as opposed to a traditional home sale, which takes about 30 to 45 days to close).

Why so long? One reason is because asset managers at banks often have backlogs of work, which can make the closing process a lot more time-consuming. It may also be more labor intensive, depending on whether there are liens on the property. Therefore, patience is key.

Bottom line? Buying a foreclosure isn’t a decision to make lightly. It takes careful planning, an honest assessment of your risk tolerance, and finding the right property, if everything is to work out in your favor. Contact The McLeod Group Network at 971.208.5093 or [email protected] to get started! 

By: Realtor.com, Daniel Bortz

5 Indications That You Could, in Fact, Afford to Buy a House Now

by Amy McLeod Group


So you're ready to ditch your landlord and the noisy neighbors who live above you. But instead of seeking out another place to rent, have you considered (like, seriously considered) buying?

For many people, purchasing a home is one of those bucket-list items—something you'll accomplish down the road—so the idea of starting the process here and now may seem out of the question. But there's a chance you're actually in a better position than you think.

Of course, every local real estate market is different, and your dollar will stretch further in certain cities. Half a million dollars in Waco, TX, will get you a heck of a lot more than $500,000 in San Francisco. Therefore, it's important to be realistic when choosing between renting or buying. In cities like San Francisco or Los Angeles, renting may make more financial sense than buying. Take a look, though, at the average home price in your neighborhood—maybe you can afford to buy after all!

Then, check out the following explanations, which will help you ponder your financial snapshot. You never know: You may be calling yourself a homeowner much earlier than you ever thought possible.

1. Your salary qualifies you for a mortgage

When determining if you can buy a house, your salary is one of the first figures you should take into account. But don't trick yourself into thinking that you can't afford a house simply because you don't make a six-figure salary! Use this quick equation from Lauren Anastasio, a certified financial planner with SoFi in San Francisco, to determine a realistic mortgage amount:

Multiply your annual income by 2.5, and then add your down payment amount to that figure. Your total amount is the max mortgage you should shoot for.

For example, if you make $80,000 a year, you're looking at a safe bet of a $200,000 mortgage, plus whatever you think you can save up for that down payment.

Anastasio says you should also take into account the regular housing expenses that come after the deal is done, including taxes, insurance, maintenance and repair, and homeowners association fees.

2. You can afford to put down at least 3%

Most first-time home buyers are intimidated by the idea of having to put down a large chunk of change. However, the traditional 20% down isn't your only option.

"The ideal down payment amount is 20% of the price of the home, because that's the minimum amount required to avoid paying private mortgage insurance (PMI). But that's not realistic for most home buyers, and shouldn't stop them from pursuing homeownership," says Candice Williams, a real estate agent with Re/Max Space Center in League City, TX.

Other paths to mortgages include conventional loans, which require a minimum of 3% down, and Federal Housing Administration (FHA) loans, which can go as low as 3.5% down. And if you're a veteran, you can qualify for a VA loan with no down payment. So take a look at your savings account and browse the home listings in your area. You might just find that your years of saving have actually put you in a position to qualify for a mortgage.

3. You have a little bit of debt

Another common misconception among first-time home buyers is that future homeowners must be debt-free in order to get approved for a mortgage loan. But don't worry—you can still buy a home even if you're still paying off your student loans.

"Lenders like to see a little debt. By paying down a car loan on time, you're showing the bank that you are a responsible borrower," says Andrew Helling, editor at REthority.com.

That being said, Williams points out that while it's fine to have current debts, first-time home buyers shouldn't be looking to add a mortgage if their current debts exceed 7% of their monthly income. That's because most lenders won't approve loans of more than 28% of a borrower's monthly income, and they're legally prohibited from handing out mortgages that are the equivalent of more than 35%.

"Either pay down those debts, or increase your income, in order to get loan approval," says Williams.

4. Your credit score is over 580

Another number lenders look at to determine your creditworthiness is your credit score. A perfect credit score is 850, and any score over 740 is considered to be great, but you don't need to fall in this range to be approved for a loan.

You can "absolutely" get a mortgage, Helling says, "as long as your credit is above 580—the cutoff for most loans—and you have enough money left over to make the mortgage payments and the debt payments."

If your credit score falls below 700, lenders will start to question whether you’re a risky investment as a potential borrower, and getting a mortgage will be more challenging. But, if your score is above 580, there's still hope in the form of an FHA loan or another type of conventional loan. The FHA requires a minimum 580 credit score (and other requirements) to qualify. Having a poor credit score means you'll probably be required to pay PMI, but the benefits of owning a home will far outweigh the negatives.

5. A starter home (if not a forever home) is within reach

Some first-time home buyers make the false assumption that the first home they invest in needs to be their forever home. But don't let that idea deter you from purchasing a modest starter home, even if you soon outgrow your new digs.

After a few years of homeownership, you will hopefully start to build equity, either through an increase in your property's value or by reducing your debt. Then, when your family expands and you need to buy a bigger house, you will have a quantifiable asset that you can use on your next property purchase.

What you shouldn't do is buy a house that you can't yet fill, hoping that your lifestyle later catches up. That can be a recipe for disaster.

"Never buy outside your means," Helling says. "Don't buy a home you can't afford, under the assumption that a promotion you expect in a few years will eventually pay the mortgage."

Contact The McLeod Group Network at 971.208.5093 or [email protected] to start the search for your new home! 

By: Realtor.com, Kristine Gill 

5 Crucial Questions to Ask Before You Buy a Fixer-Upper

by Amy McLeod Group


Thinking about buying a fixer-upper? Join the club. Blame it on the popularity of renovation reality TV or just the fact that people are searching for deals, but many home buyers are willing to purchase a property in need of major repairs. One survey by Clever Real Estate found that 67% of millennial home shoppers in the United States said they would put in an offer on a home with serious flaws that need to be fixed.

Purchasing a home that needs serious remodeling, though, isn’t a decision you should make lightly. Here are five questions to ask yourself before buying a fixer-upper.

1. What’s my motivation?

Reviving a rundown home is always a challenge, no matter how many houses you’ve flipped or episodes of “Fixer Upper” you’ve seen—and that's why it’s important to assess your motivations before you dive in, says Joshua Jarvis, founder of Jarvis Team Realty in Duluth, GA.

Simply enamored by what you’ve seen on HGTV? Newsflash: “Reality TV is not reality,” says Jarvis. “I hate to shatter people’s dreams, but there’s a lot more work involved than people think.”

 

Flipping an outdated house in order to make a profit, though, is a sound reason to buy a fixer-upper, Jarvis says. After all, home flips in 2018 returned an average gross profit of $65,000, according to ATTOM Data Solutions.

Purchasing a fixer-upper can also be a good idea if you’re looking to make a home your own without building one from scratch, or if you’re simply looking for a great deal. Indeed, people shopping for a fixer-upper can expect to spend 20% to 25% less than what they'd have to shell out for comparable homes that are move-in ready, says Dan Bawden of the National Association of Homebuilders. (Homes with serious issues—such as cracks in the foundation or a major mold infestation—can command even deeper discounts, Bawden says.)

Fixer-uppers are also good options for DIY buffs—your sweat equity will buy you bragging rights. What’s sweeter than being complimented on your kitchen and being able to say, "Thanks, I did it myself"?

2. Where am I going to live during the renovations?

Unless you’re planning to live in your new home while the renovations are underway, you’re going to need a place to stay until the house is ready. This can be a financial challenge, Bawden notes, since you have to factor in the time you'll be paying the mortgage and bills without being able to live in the home. Read: Six months of paying rent on top of your house payment can quickly eat into what you saved on your "great deal."

3. What’s my remodeling budget?

The best fixer-uppers are ones that mostly need cosmetic updates—things like kitchen and bathroom renovations, new floors, siding repair, or wallpaper removal—since major flaws can quickly eat up your remodeling budget. But, regardless of how much (or how little) work you’re going to put in, you need to have enough money to pay for the renovations.

Need help setting a budget? Have several contractors give you in-person estimates. That way you’ll have a rough but accurate idea of how much it’s all going to cost you. The caveat: You may have to pay the professional a few hundred dollars to walk through a potential home and estimate the renovation costs, but it's worth it.

4. How am I going to pay for everything?

Now that you know how much the renovations are going to cost, you have to figure out how you’re going to pay for everything. Unless you’re sitting on a mountain of cold, hard cash, you’ll need to obtain a home loan that allows you to spend a portion of money on home improvements. The good news: A home that requires major renovations can qualify for a special type of financing called a home improvement loan. There are two main types of home improvement loans.

The first is a FHA 203(k). This is a loan from the Federal Housing Administration that lets you put as little as 3.5% down. There are a couple of restrictions, though. The original foundation must remain, says Suzanne Caldeira, vice president at mortgage lending company Shamrock Financial Corp. Also, the upgrades you make cannot be “luxury” items, like adding a pool or fire pit. Third, the work must be completed within six months.

To qualify for a 203(k) loan, homeowners have to provide a bid from an approved contractor to make the upgrades they want with their loan paperwork. An appraiser reviews the home and the submitted bid, and appraises the estimated value of the home post-renovation. Once the loan is approved, the money for the renovation is put into escrow. After the work is completed—the deadline is six months—an inspector visits to determine that it's been done correctly, and then the money is released to the contractor. In the same way as with traditional FHA loans, you can pay the money back over 15 or 30 years.

The second type of home improvement loan is a Fannie Mae HomeStyle loan. It’s similar to a 203(k) loan, but it requires a down payment of at least 5%. Another difference: There's no limit to the kinds of renovations you can do, as long as everything is permanently affixed to the home and adds value.

Like a 203(k) loan borrower, you will need to hire an approved contractor and submit a bid for the project with your loan paperwork. You then have an appraiser determine what your home will be worth after the renovations. Once you've got that number, you can borrow up to 50% of that appraised value to work on the renovation. As with a 203(k) loan, the money for the renovation is held in escrow until the work is completed and inspected and is then released to the contractor. However, with the HomeStyle loan, you get 12 months to complete the renovation, instead of six. You then pay it back over a period of 15 to 30 years at either a fixed or adjustable rate.

5. Am I prepared to manage this project?

From finding the right house and negotiating a deal, to hiring contractors and securing permits, there will without a doubt be plenty of moving parts for you to oversee during this whole process. That will mean you need to ask yourself whether you have the time and the patience to manage everything.

While hiring a general contractor to oversee the renovations can help lighten the load, reviving a fixer-upper is still a huge commitment, so make sure you know what's required before you dive in.

Contact The McLeod Group Network at 971.208.5093 or [email protected] for all your home-buying needs! 

By: Realtor.com, Daniel Bortz


Once your offer on your dream home is accepted, it doesn't mean you can just grab the keys and move in. If you need a mortgage, securing this home loan takes time. The good news is that it's faster now than ever.

According to a recent three-year study by LendingTree, the length of time it takes to get a mortgage—aka closing—is an average of 40 days in 2019. That's down from 51 days in 2018, and 74 days in 2017.

And here's some good news for homeowners who've already moved in: The time it takes to refinance a mortgage is also dwindling. Refinancing takes an average of 38 days in 2019, down from 43 in 2018, and 55 days in 2017.

Home buyers should be thrilled to hear that the mortgage process is speeding up—who doesn't want to move into their new home as quickly as possible? Earlier closing times can also save home buyers money, especially if they are paying high rent or having to find temporary housing while waiting to move into the new home.

Why it takes less time to get a mortgage today

The digitization of the mortgage process is the main reason for the shorter closing times, according to the LendingTree report. The mortgage industry has become increasingly digital since the 2008 financial crisis, when companies operating in the paper-centric system of the past lost or misrecorded some details from their clients, causing problems and legal issues during the foreclosures that often followed.

Since then, some lenders have created new mobile-friendly products to speed up the mortgage-approval process. For example, Quicken Loans launched the app Rocket Mortgage in 2015 to help borrowers close earlier than the industry standard, reportedly sometimes as quickly as eight days.

Another factor contributing to shorter closing times is that mortgage volumes have been decreasing, says Tendayi Kapfidze, chief economist at LendingTree. However, he says that given the recent drop in interest rates, “that’s kind of reversed itself a little bit, but we’re still seeing shorter times than in 2018.”

The LendingTree study also found that loans for smaller amounts took longer to close. Loans of under $150,000 averaged 47 days, versus 39 days for those above the conforming loan limit, which is $484,350 in 2019.

“You'd think something being more valuable or bigger risk for the lender, they might take a little bit more time with it, but it's the exact opposite,” Kapfidze says. One possible reason is that lenders may require a more extensive appraisal for lower-priced homes, which might have some type of damage or other problem.

How to get a mortgage fast

So what can consumers do to reduce as much as possible the length of time it takes to get a mortgage? To speed up the closing process, Kapfidze urges home buyers to choose a lender with a more digital, less paper-driven process. Before signing on with any lender, ask if the company can digitally link to a borrower’s bank, the IRS, or other institution to get information to process the mortgage, since this is the key to a speedy approval.

Online lenders make it easier for borrowers to compare mortgages, and they often offer better rates and faster approvals, but they come with less customer service, so they may not work well for complex home loans. Mortgage industry experts suggest that borrowers look over the application process, check out online reviews of the company, and make sure it is registered with the Better Business Bureau before they sign up.

Here's more on how to get a mortgage fast:

Work on your credit score

Before starting the home-buying process, make sure your credit score is in check. According to the LendingTree study, consumers with higher credit scores saw shorter closing times.

People with a credit score of above 760 have an average 38-day closing time in 2019, while closings take an average of 45 days for those with scores of below 720.

Have your financial documentation in order

“A lot of the delay in closing times is just the back-and-forth between the lender and the borrower,” Kapfidze says. He suggests having all documentation well-organized and easy to access, so that it doesn’t take long to send it to the lender.

Also, make sure that all the information that you provide is accurate, he says. If a mortgage lender goes to verify something and finds a discrepancy in what a borrower provided, that can slow things down.

The exact documentation that borrowers need to provide depends on the type of loan they’re seeking, but generally, the required documents relate to a borrower’s income, assets, and employment, such as a W-2 form, pay stubs for the previous 30 days, and bank statements. Borrowers also need valid identification, a loan application, a contract for the home purchase, and homeowner insurance contact information.

Get pre-approved for a mortgage

Many loan experts urge home buyers to get pre-approved for a mortgage before they start shopping for a home, especially if their financial situation is complex. A pre-approval helps buyers better understand what type of home they can afford and can shorten closing times.

“You're going to have to go through this process at some point anyway, so you might as well get it out of the way upfront as quickly as you can,” says Hayden Hodges, a Dallas-based mortgage loan officer at U.S. Bank. “I would want to know what my ceiling is, what my conditions are, as quickly as I can, as opposed to perhaps getting into unnecessary fire drills towards the end of a transaction.”

Lenders can work quickly to get borrowers pre-approved. Borrowers can speed up the process even more by providing all the documentation needed for pre-approval, Hodges says.

Make sure you have cash on hand

Having cash available to supply earnest money and to pay closing costs can help you close faster, Kapfidze says. Some closing costs need to be paid in cash, so make sure you can easily access the funds.

“You don't want to get to closing, and it's like, ‘Hey, you need to have a $12,000 check,’ and then realizing your money's not liquid," he says.

Contact The McLeod Group Network to start the search for your new home! 971.208.5093 or [email protected].

By: Realtor.com, Erica Sweeney 


Buying a foreclosure home, also known as a distressed property, might seem like a less expensive way to get into your next place. These homes usually sell for about 15% below the home's actual value. But buying a foreclosure property isn’t always what it seems. While it may look like a bargain, it could end up being more expensive (and more trouble) than it’s worth.

“On the surface, foreclosed homes can seem awfully appealing,” says Beatrice de Jong, consumer trends expert at Opendoor. “However, costs can be extremely unpredictable, and underlying damages could make a property undesirable.”

With big risks associated with foreclosures, a buyer could end up with a money pit, rather than an affordable new home. That's why you should always budget for the worst-case scenario.

"It's better to be pleasantly surprised than to not have the funds to solve the problem," says Avery Boyce, a real estate agent with Compass Real Estate in Washington, DC.Gt Pre-ApprovedFina lender who can offer competitive mortgage rates and help you with pre-approval.

Here are some of the hidden costs you need to look out for when considering a foreclosure home.

Home repairs

Foreclosures are likely to need some work—and the list of needed repairs and renovations can be long indeed. The worst part is, you might not even have a ballpark estimate of what repairs are needed until you receive the keys.

“The bank will be limited on the disclosures they can provide regarding the condition of the home and previous repairs done," says de Jong.

In some cases, you can get a home inspection before finalizing the sale, but often, a foreclosed house is sold as is.

“Keep in mind that if the previous owners couldn’t make their mortgage payments, they likely also fell behind on regular maintenance," de Jong says. "The home may have foundation problems, need a roof replacement, and require a heavy workload to bring the home up to code."

The property could have also been sitting there, uncared for, for a while. You might have to factor in the additional costs from overgrown lawns, graffiti, weather damage, and more.

Paying too much in a bidding war

Buyers—especially those purchasing a home for the first time—should be careful to not get stuck in an expensive bidding war. Why? They could end up paying too much for a house that they can't afford to fix.

There can be a lot of competition from other eager buyers, real estate developers, and flippers.

“For damaged homes that are priced well below market value, you will probably be competing with developers who plan to rip out everything anyway, and can afford to solve big unknown problems,” Boyce says.

Steer clear of a bidding war and avoid busting your budget on a home that needs more work than you can afford. Before making an offer, set your upper limit, and stick to that number. There will be other houses later on, and it's often better to play it safe when it comes to foreclosures.

Challenges in getting funding

Even if you can get a great price on a foreclosure property, many buyers will still need a loan to help them purchase it. Before you make an offer on a foreclosure, don't bank on being able to get a mortgage.

Some lenders simply won’t offer funding for foreclosure properties. The most common reason: The house is in such bad condition, it can't pass an inspection.

“To get traditional financing, the home needs to be in really good shape,” Boyce explains. “All the utilities need to be on and testable, there can't be holes in the drywall or floors, and there can't be water inside the home.”

Plus, most banks favor all-cash offers on foreclosures because they have already lost money on the property and they don't want to end up in the same situation again.

If you can’t do all cash upfront, it is likely to help to get pre-approved, and it also helps to be willing to put down 20% or more. This way, at least the bank knows you’re serious about buying the house and paying the mortgage.

No room for negotiation

When buying a home the traditional way, the seller may be willing to negotiate on the price. You submit an offer, the seller might counter, and in the end, you could end up paying less than the asking price.

“Dealing with the bank is a more formal and corporate process than dealing with a seller, so expect limited flexibility, if any, when negotiating on the offer price,” de Jong says. “Banks are not likely to budge on the price, since they are mostly concerned with recouping the costs from their investment.”

However, if you'd like to test the waters, Boyce suggests you ask your agent to search for past sales by the bank to see whether the sale price is lower than the list price.

"That will give you some insight into whether it's worth submitting a lower offer,” she says.

Property tax increases

If, after learning about all these hidden fees, you’re still seriously considering a foreclosure, you'll be aware that some properties will need to be overhauled. And while you might be ready to put some serious cash into the project, know that there’s an extra fee associated with a major home makeover: increased property tax. Fixing the house up will increase its value, and in most places, that means your property tax bill will go up.

This may seem like a no-brainer to some seasoned homeowners, but it’s important to remember this tax increase when budgeting for repairs. Don’t get stuck going all in on a home and finding yourself strapped for cash when it’s time to pay taxes.

Let The McLeod Group Network help you find your new home !971.208.5093 or [email protected].

By: Realtor.com,  

Is Renting Right for Me?

by Amy McLeod Group


If you’re currently renting and have dreams of owning your own home, it may be a good time to think about your next move. With rent costs rising annually and many helpful down payment assistance programs available, homeownership may be closer than you realize.

According to the 2018 Bank of America Homebuyer Insights Report, 74% of renters plan on buying within the next 5 years, and 38% are planning to buy within the next 2 years.

When those same renters were asked why they disliked renting, 52% said rising rental costs were their top reason, and 42% of renters believe their rent will rise every year. The full results of the survey can be seen below:

It’s no wonder rising rental costs came in as the top answer. The median asking rent price has risen steadily over the last 30 years, as you can see below.

There is a long-standing rule that a household should not spend more than 28% of its income on housing expenses. With nearly half of renters (48%) surveyed already spending more than that, and with their rents likely to rise again, it’s never a bad idea to reconsider your family’s plan and ask yourself if renting is your best angle going forward. When asked why they haven’t purchased a home yet, not having enough saved for a down payment (44%) came in as the top response. The report went on to reveal that nearly half of all respondents believe that “a 20% down payment is required to buy a home.”

The reality is, the need to produce a 20% down payment is one of the biggest misconceptions of homeownership, especially for first-time buyers. That means a large number of renters may be able to buy now, and they don’t even know it.

Bottom Line

If you’re one of the many renters who are tired of rising rents but may be confused about what is required to buy in today’s market, let The McLeod Group Network help to determine your path to homeownership. 971.208.5093 or [email protected].

By: KCM Crew


Considering buying a foreclosed home? Any home buyer looking to pay below market value should be paying attention to foreclosure listings. But the process of buying a repossessed home is full of misconceptions—and we're here to help separate the false stereotypes from the reality.

These are some common myths that need to be set straight.

Myth 1: The house must be bought in cash

That all depends on what stage a foreclosure property is in, says Bill Gassett with Re/Max Executive Realty in Hopkinton, MA. If the home is in pre-foreclosure or “short sale,” the buyer does not need to shell out an all-cash offer.

“They can procure a mortgage just like any traditional sale,” Gassett says.

If the bank sells a property at public auction, the mortgage holder usually does require that the home is bought with cash and mortgage contingencies are not allowed in the sale.

If you don't have a lot of cash on hand but know you'd like to buy a home in foreclosure, Bobbi Dempsey, author of "Idiot’s Guide to Buying Foreclosures," suggests drawing from a line of credit obtained using current property.

When the foreclosure is a bank-owned property, Gassett says the bank is usually actively looking for an end buyer.

“The purchaser of a bank-owned property is almost always able to procure a mortgage as part of the contract with the bank,” he says.

Myth 2: Buyers forfeit their right to have a home inspection

Definitely not true! Buyers have the right to do a home inspection and ask for repairs, but banks or sellers aren’t required to make them, says Rob Jensen, broker and president of Rob Jensen Co., in Las Vegas. But home inspections are actually encouraged since nearly all banks sell their foreclosed homes in as-is condition, and want to avoid liability down the line.

“It is common for structural, electrical, and plumbing issues that pertain to the safety and integrity of the home to be repaired, but there's no guarantee,” says Jensen. “Every bank and every deal is different.” However, don't count on the bank to fix those cosmetic issues.

Jensen says paint, carpet stains, and other minor blemishes are not likely to be addressed.

Buyers considering a foreclosure should make sure the sales contract has a contingency clause that requires a passing home inspection. This way, buyers can either choose to accept any issues with the home or back out of the contract.

With courthouse sales, however, homes are sold as they are, with no inspection.

Myth 3: Foreclosure homes require huge overhauls

It's incorrect to assume that all homes in foreclosure are in shoddy condition. A large percentage of foreclosures are the result of job loss, illness, death, divorce, or even fluctuations in the real estate market, which means many of these homes were well maintained and may need only minor touch-ups.

“It quite often depends on the attitude of who last owned the property and whether or not they went out of their way to destroy the place,” says Jensen.

Myth 4: Foreclosures sell at heavy discounts

A common belief is that a foreclosure home will sell for at least half of its original value. But remember, the bank still wants to make a profit. Buying a foreclosure home can save you green, but the seller will hold out for the maximum price possible.

Home buyers often make a beeline to foreclosures because they think they can get a home for pennies on the dollar. But, Jensen says, by the time they factor in the time and renovation costs, they may reconsider.

“Foreclosures can provide opportunity to save, but you usually need time and extra cash to take advantage of it,” he says.

Myth 5: Foreclosure homes carry hidden costs

The fear of hidden costs may send would-be buyers running, but it’s not necessarily a worthwhile concern.

"A lot of the costs involved are typical for any real estate purchase—things like inspections, appraisals, transfer fees, etc.,” says Dempsey.

Yes, repairs or liens on a foreclosure can prove costly, but a home inspection will reveal any potential problems during escrow (this is where that inspection contingency comes in handy).

Also, the property deed can be researched on a foreclosed home. And, buying a HUD home or REO (or real estate–owned property) means the Department of Housing and Urban Development is required to clear the title of liens before it resells the home. Lenders will usually clear them, too, but buyers should make sure of that before they purchase.

“Generally speaking, there are not any more hidden expenses in purchasing a foreclosed home than there would be in a traditional sale,” says Gassett.

Myth 6: Foreclosures lose value faster than regular homes

Foreclosed homes actually tend to rise quickly in value. With any home, there’s no guarantee it will deliver increases, but buying a foreclosure sold below market value can provide instant equity. And any extra work done to the home can only increase the value.

“There are a variety of factors that influence home values, including economic conditions, local market conditions, and the overall condition of the property,” says Andrew Leff, senior vice president and head of strategic alliance programs at Wells Fargo in New York City.

Myth 7: Buying a foreclosure is risky

Let’s be honest. Any real estate purchase comes with risk. Gassett says the only scenario where there’s some extreme risk is when buying at auction, since you are buying the property as is. Buyers are not able to conduct a professional home inspection and often not even able to see the inside of the property. Plus, they will be inheriting whatever came with the home.

“For example, if there is a lien on the property, you could become responsible for it. When buying a home at auction, it is essential to do a title search first,” says Gassett.

Leff says buyers should be informed before entering into any type of real estate transaction. This means aligning themselves with resources that can help them navigate the purchase and financing process with confidence.

“A knowledgeable real estate agent and lender can help ensure that a buyer is making an educated decision so that the property and any resulting financing is the right fit for them,” says Leff.

Contact The McLeod Group Network for all your real estate needs! 971.208.5093 or [email protected].

By: Realtor.com, Anayat Durrani

Displaying blog entries 1-10 of 88

Share This Page

Contact Information

Photo of The McLeod Group Network Real Estate
The McLeod Group Network
Keller Williams Capital City
1900 Hines St SE #220
Salem OR 97302
971-208-5093
Fax: 971-599-5229

**Disclaimer: Amy McLeod, and her team, do not initiate, process, or service mortgages.  And provide this information only as a service.  You should confirm information here with your Licensed Mortgage Lender.