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Understanding Foreclosures Property sold “AS IS”… what
you see is what you get, what you don’t see you get that too. Always recommend
a home inspection. A home warranty may be purchased by agents, seller or buyer.
$349 - $499
Contract Addendums - Seller will
have addendums that will need to be part of the GAR Purchase And Sales
Agreement. Ask for them up front.
Earnest Money - Ask listing agent
for requirements on earnest money. Most likely the check will be held by listing
company and has a minimum dollar requirement.
Lender - Buyer must be
pre-qualified prior to offer and a letter from lender attached to offer.
Warranty - Seller gives Limited
Warranty at closing. Recommend
title insurance.
Closing Cost - If seller is
paying any closing, verify with listing agent approved closing cost items that
seller will pay. Not all closing
cost items are paid.
Repair Escrow – Sometimes
seller will agree to give money back to buyer for repairs required by lender to
be completed after closing or finance into loan (Maximum $5,000).
Money will be held in escrow by the closing attorney.
Lender will collect additional fees for this service to include a 1% of
repair amount for overage, $250 administration fee, $125 re-inspection fee.
These fees must be collected at time of closing.
Termite Letter - All lenders
require a termite letter at closing. Be
sure to ask seller to provide one. Usually
this cost is $75.00 for report and $500-1,000 for termite treatment.
Unless you ask for this report and treatment, if needed from seller in
initial offer, the buyer will be responsible and required to provide prior to
closing to meet lender requirements at their expense.
Best And Final Offer- Sometimes
multiple offers arrive on the same property.
The listing agent will notify each selling agent to submit a “Best And
Final” offer. At this time, the
buyer will have an opportunity to revise their offer. The seller will accept or
counter one (1) offer at a time, usually the highest net to them.
If your buyer really wants the property they will need to be aggressive
in price and concessions.
Property Condition - Some
properties only qualify for conventional financing or all cash due to the
livable condition of property. When
previewing property pay attention to the condition. A list of property
conditions are listed below.
100% Financing - Some sellers
(banks, mortgage companies, various lending institutions) may or may not work
with FHA and/or 100% financing. It is best to ask listing agent upfront when
inquiring the availability of property.
FHA Financing – Lender requires
Septic Tank and Well Certification from a licensed contractor.
Average Cost $125 - $300 per inspection.
Be sure to request seller to pay and provide in initial offer.
FHA Lender Fees – Approximately
$750 can only be paid by seller or agents. Buyer
can not pay. These are part of closing cost and noted on the FHA Exhibit –
Closing – Closing documents
must be at the attorneys’ office 3 days in advance of set closing date.
Seller will choose closing attorney in most cases.
Stay on top of your lender or the next paragraph will apply.
Extensions – require prior
notice (5 days in advance of expiration) and cost approximately $10.00 - $100.00
per day. Be sure to read the
addendums for exact notice requirements and cost.
Property Conditions Some FHA/HUD Appraisal Requirements
Check List: Purchase And Sales AgreementSeller AddendumsEarnest Money Check – Made out to the Listing CompanyPre-qualified letter from Lender100% Financing – All Gift & Program FormsFHA Addendum
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Disclosure
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