They say it is a difficult time to buy a house. You'll hear it on the news, and see it in the paper. However, if your credit isn't too bad, now is a great time to buy. On the Eastern Shore of Maryland, our market is saturated with properties for sale. This gives buyers the opportunity to pick from several homes and makes it able for them to negotiate the price.
When several homes are on the market, it gives buyers purchasing power. Sellers know that they have to either have an incentive, such as closing cost help, to lure in the buyers. One seller may offer a Home Warranty, while another offers $10,000 closing cost assistance.
If you are out looking at homes to purchase, make sure to use your buying powers.
If a home is well underpriced, don't delay, it won't last long. This is another way sellers are trying to lure buyers to their home.
Look up their tax record, you can easily see what they paid for the house. This will help you decide whether to make a higher or lower offer.
Showing posts with label closing costs. Show all posts
Showing posts with label closing costs. Show all posts
Tuesday, April 24, 2007
Saturday, November 25, 2006
Negotiating Closing Costs
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negotiating those closing costs
How to negotiate your closing costsBy Holden Lewis • Bankrate.comShop around before choosing a mortgage lender, but don't stop there. When you receive your good faith estimate of closing costs, or GFE, the negotiation hasn't ended.The lender or mortgage broker is required to give you a GFE within three working days of accepting your loan application. The GFE comes in the form of an itemized list of estimated closing costs for everything from the lender's fees to the appraisal charge to the title insurance premium to a partial month's interest payment.The lender or broker charges some fees, and third parties charge others. The first step is to find out which are loan origination fees and which are third-party fees. Don't guess. Ask the lender or broker.The big money question"Say, 'Please explain to me what those fees are,'" says Jessica Cecere, director of the Consumer Credit Counseling Service in West Palm Beach, Fla.Simple advice, but a lot of loan applicants don't follow it.On the GFE, fees are categorized by numerical codes ranging from the 800s to the 1300s. Most of the negotiable lender-charged fees are in the 800s: application, origination, commitment, loan discount, broker, tax-related service and underwriting fees.Keys to lower closing costs:•Ask for a justification for each lender-charged fee.•If the lender charges an application fee, ask if it will be credited toward closing costs.•If the lender charges an underwriting fee as well as a processing fee, ask for details of those services. Maybe you'll find a fee that can be waived or reduced.•Recognize that some items are non-negotiable: taxes, city and county stamps, recording fees, prorated interest and reserves. On the GFE, these items are in the 1000s and the 1200s.Third-party feesFees charged by third parties are trickier to negotiate. A few third-party fees pop up in the 800s section of the GFE: those for the appraisal, credit report and inspection. The lender is supposed to pass along these charges without marking them up. Theoretically, they are negotiable and you can ask the lender to seek good deals on these three items and pass along the savings. In practice, you probably won't get a break on those services because the lender has contracted for them at a set price.You can realize some of your biggest savings by negotiating the items in the 1100s section of the GFE: title insurance, title search, title exam, attorney's fees and settlement fees. Most borrowers use a title company recommended by the real estate agent or lender. But you don't have to. You can shop for title insurance and settlement services, just as you shopped for the house and for the loan.Be prepared for resistance. Some lenders have business affiliations with title companies, and they'll pressure you to keep the title work in-house.Title insurance, settlement servicesWhere you shop for these title insurance and settlement services depends on where you live, because different places have different ways of closing real estate and mortgage transactions. In parts of the Northeast, closings are conducted in lawyers' offices. In some places, including Southern California, closings take place at escrow or mortgage companies. In much of the country, the closing takes place in the office of the agency that sells title insurance.Government regulation can limit your negotiating room. In Texas, the state sets one overall fee for title insurance, title search and settlement services, so title agencies compete on service and not price. Regulations aren't as restrictive in most other states and you could save hundreds of dollars in settlement services by shopping around."I think it's a matter of what the traffic will bear," says Bob Moulton, president of American Mortgage, a brokerage on Long Island, N.Y. He gives this tip: If you're refinancing your mortgage, and you've lived in the house less than 10 years, ask to get title insurance at a less-expensive "reissue rate."And don't forget to shop for hazard insurance -- item No. 903 on the GFE. Compare offers for homeowners insurance policies, either on your own or with the help of an insurance agent. Make sure the insurance company and settlement agent communicate with each other. You're not going to get that mortgage without proof that you have a homeowner's policy. That requirement is not negotiable.
negotiating those closing costs
How to negotiate your closing costsBy Holden Lewis • Bankrate.comShop around before choosing a mortgage lender, but don't stop there. When you receive your good faith estimate of closing costs, or GFE, the negotiation hasn't ended.The lender or mortgage broker is required to give you a GFE within three working days of accepting your loan application. The GFE comes in the form of an itemized list of estimated closing costs for everything from the lender's fees to the appraisal charge to the title insurance premium to a partial month's interest payment.The lender or broker charges some fees, and third parties charge others. The first step is to find out which are loan origination fees and which are third-party fees. Don't guess. Ask the lender or broker.The big money question"Say, 'Please explain to me what those fees are,'" says Jessica Cecere, director of the Consumer Credit Counseling Service in West Palm Beach, Fla.Simple advice, but a lot of loan applicants don't follow it.On the GFE, fees are categorized by numerical codes ranging from the 800s to the 1300s. Most of the negotiable lender-charged fees are in the 800s: application, origination, commitment, loan discount, broker, tax-related service and underwriting fees.Keys to lower closing costs:•Ask for a justification for each lender-charged fee.•If the lender charges an application fee, ask if it will be credited toward closing costs.•If the lender charges an underwriting fee as well as a processing fee, ask for details of those services. Maybe you'll find a fee that can be waived or reduced.•Recognize that some items are non-negotiable: taxes, city and county stamps, recording fees, prorated interest and reserves. On the GFE, these items are in the 1000s and the 1200s.Third-party feesFees charged by third parties are trickier to negotiate. A few third-party fees pop up in the 800s section of the GFE: those for the appraisal, credit report and inspection. The lender is supposed to pass along these charges without marking them up. Theoretically, they are negotiable and you can ask the lender to seek good deals on these three items and pass along the savings. In practice, you probably won't get a break on those services because the lender has contracted for them at a set price.You can realize some of your biggest savings by negotiating the items in the 1100s section of the GFE: title insurance, title search, title exam, attorney's fees and settlement fees. Most borrowers use a title company recommended by the real estate agent or lender. But you don't have to. You can shop for title insurance and settlement services, just as you shopped for the house and for the loan.Be prepared for resistance. Some lenders have business affiliations with title companies, and they'll pressure you to keep the title work in-house.Title insurance, settlement servicesWhere you shop for these title insurance and settlement services depends on where you live, because different places have different ways of closing real estate and mortgage transactions. In parts of the Northeast, closings are conducted in lawyers' offices. In some places, including Southern California, closings take place at escrow or mortgage companies. In much of the country, the closing takes place in the office of the agency that sells title insurance.Government regulation can limit your negotiating room. In Texas, the state sets one overall fee for title insurance, title search and settlement services, so title agencies compete on service and not price. Regulations aren't as restrictive in most other states and you could save hundreds of dollars in settlement services by shopping around."I think it's a matter of what the traffic will bear," says Bob Moulton, president of American Mortgage, a brokerage on Long Island, N.Y. He gives this tip: If you're refinancing your mortgage, and you've lived in the house less than 10 years, ask to get title insurance at a less-expensive "reissue rate."And don't forget to shop for hazard insurance -- item No. 903 on the GFE. Compare offers for homeowners insurance policies, either on your own or with the help of an insurance agent. Make sure the insurance company and settlement agent communicate with each other. You're not going to get that mortgage without proof that you have a homeowner's policy. That requirement is not negotiable.
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