What Is “Prime”?

 

The Prime Lending Rate – sometimes just called “Prime”  – is the interest rate that banks charge each other for overnight loans. Some consumer rates – like ARMs – are set in relation to Prime.

In the US, Prime is affected by the Federal Reserve lending rate to banks; historically, Prime is about 3 percent above the Fed rate.

The video shows  an example.

  • The Federal Reserve loans to Bank A at 1%
  • Bank A loans to Bank B at 4%
  • Both banks – A & B – will recalculate variable-rate loans like ARMs on that 4% Prime figure.

ARM rates are frequently defined as “% above Prime” – that gap is usually called the “margin” or “spread.” Just remember those 3 layers in Prime: Federal Reserve Bank A Bank B And finally, YOUR rate.

Closing Costs Explained Visually

 

Purchasing a home is exciting. Once escrow begins, the excitement can change to frustration, particularly if you are not ready for the closing costs that quickly accumulate.

Closing costs simply refer to the fees associated with various things associated with the escrow process in a real estate transaction. In the excitement of having an offer accepted for your dream home, you can easily lose track of the fact you are going to need to have some serious cash on hand to pay them. Many people make the mistake of only assuming they need the down payment money, and have to rush around town trying to come up with money for the closing fees.

Do yourself a favor, and discuss closing costs in advance with your real estate or mortgage person.  And watch this video to have a good mental picture of the costs that you’re likely to incur.

 

Title Insurance Explained Visually

 

What is title insurance and why should any buyer get it when purchasing a home (single family, townhouse, condo, apartment, or whatever format your home purchase takes)? Doesn’t the attorney or settlement company handling the closing see to it that you have a clear title? Isn’t this just another way for someone to siphon a few coins off a real estate transaction?

Title insurance prevents the property owner from suffering financial loss if, at any time during his ownership of the property, someone comes along who can show that they have full, or partial, ownership of the property instead.

A careful title search is done at the time property changes hands. On rare occasions mistakes are made anyway. Property can change hands in a number of ways including by deed, by will and by court action. Typically, these proceedings are recorded in different places. Searching the history of ownership to be sure nothing has fallen through the cracks is a tedious job that requires alertness, intelligence, and skill.

It is very likely that the value of your property will go up over the years. As time passes, these elements are likely to result in your home equity’s being your largest asset. Just how devastating would it be if you eventually discovered that someone else owned what you’d always thought was your home?

Do yourself a favor. When you buy a home, buy title insurance.  And watch the video to understand the essentials.

How Should I Prepare For Internet Showing?

 

Today, your first “showing” will be on the Internet – you’re watching this on the Internet, right?

Your price, listing description and PHOTOS determine whether someone will visit in person.  Consider professional staging advice or help.

Prep for photos and video just as carefully as real visits.

Ask your realtor if they use a professional photographer

If they do look at prior photos and pick someone who understands the job.

Photos should make the most of your home’s features and give prospective buyers an emotional connection that invites them to visit in person.

Help them envision their lifestyle in the house not just the counters and walls.

If your realtor recommends video, just as with  photography stage it carefully and hire a professional it will pay off.

And look over your listing when it goes live on a computer AND a mobile device to make sure it’s accurate, pleasant and compels people to show up.

Remember – your first showing these days will be on a screen.

 

How Should I Prepare The Outside For An Open House?

 

Professional “staging” may include the exterior, but if you’re doing it all yourself, try the five things outlined in this video.

1 – Landscape & lawn.

That’s the first impression; make it a good one.

Mow, prune, edge and get rid of junk!

2 – Paint And Clean!

You don’t have to do the whole house, but the front door and lintels should either be painted or cleaned.

3 – Leaks & Repairs

Small visible problems can become large mental objections and change how someone feels about your house.

Fix ‘em beforehand.

4 – Pets

Some people have allergies and concerns.

Time for Fido to visit a friend.

You weren’t including him with the house anyway.

5 – Get Fresh Eyes

Have your realtor or a friend who’s willing to be candid tell you what you missed. Or pay a staging professional for a report.

We don’t really see familiar things well – so let them be your

‘test buyer’ so you can present the best first impression to the real ones.

 

How Should I Prepare The Inside For An Open House?

 

For many homes and markets, professional help from someone in “staging” makes good financial sense.  Like this video say, check your staging options first.
If you are doing it yourself, here are 5 key tips.

One – Depersonalize.

You want the buyer to envision this house being their home?

Remove the things that make it YOUR home – photos, awards, collections, and STUFF.

Two – MOVE the stuff.

It’s tempting to shove things in closets and attics but your prospective buyer will see a much smaller house if those spaces are full.

Move it to a storage space or a friend’s garage.

Three – Warm it up.

Baking bread or cookies

adding fresh flowers

and colorful pillows and throws

are touches used by professional stagers to make a place warm without your stuff.

Four – Light it up!

  • Light sells homes.
  • Clean windows, inside and out.
  • Light bulbs all working and curtains open or even gone.

Five – Go Away.

Don’t hover – leave.

Pack for a day trip and have your realtor tell you when to return

Buyers won’t envision themselves buying if you’re around.

Depersonalize and move stuff out;

Warm it up and light it up.

Then leave and let your realtor do their job.

Which Square Footage Figure Should I Use?

 

Home size is one of the key figures used in comparisons.

But you may have different measurements to choose from,  as you’ll learn in this video, including builder, appraiser, tax records and possibly owner records.

Which one is right, and which one is best?

The official figure is the one in tax records – typically, the county.

Any other figure must be documented by a builder’s floor plan

an appraisal or an official floor plan, prepared by a company for a fee.

If your house has been remodeled and you’re planning to sell

you may want to confirm that the official record matches your actual house – and update if required.

Most lenders will require an appraisal which will verify the figures you used. So be accurate and keep records to make the most of your sale.

 

6 Selling Mistakes

 

If you’re selling, don’t do these things – take some notes from the video!
1. Don’t Sell Before The House Is Ready.

If it doesn’t present well, it won’t sell well.

2. Don’t Over-Improve

People buy houses in neighborhoods.

If yours is so “improved” that it sticks out you’re hurting your chances at selling.

3. Hire Wrong

Make your agent choice for business reasons.

Personal relationships matter, but experience and expertise will determine financial success in your sale.

4. Don’t Hide Anything

Covering up or ‘failing to mention’ real problems doesn’t work.

State disclosure laws are strict and you can be sued after the sale for anything that should have been made clear.

5. Don’t Rush

You should know about your mortgage, including pre-payment penalties your market conditions and trends and your options for your next home before jumping on the market.

6. Don’t Get Too Emotional

Your attachment to your house and your own financial needs

don’t really matter in the transaction.

If you can’t set them aside the sale won’t go as you’d like it to.

Remember – it was your home but to the buyer it’s as a house.

 

What Is An Appraisal?

 

Every house is unique; appraisers are trained and licensed for expertise in putting a value on properties.

Appraisers don’t work for the buyer or the seller;  their primary mission is actually to protect the lender who’s risking money against the home’s value.

Appraisers have to weigh factors about the property and location – including size, condition and comparable properties – to appraise its current value.

They know how to focus on conditions that affect value; dishes in the sink don’t; damage and neglect do.

Appraisals lower than the proposed purchase price can affect transaction details. The seller might have to lower the price

or the buyer might have to increase down payment or fund additional escrow.

Appraisal seems a lot like inspection, but they’re not the same.

You can think of it this way:

Appraisers report on value to the lender

Inspectors report on condition of the house and major components to the buyer.

So – expect both appraisal & inspection in your transaction.

What Does The Closing Process Involve When I Sell?

 

As this video explains, a signed sales contract doesn’t mean your house is sold. There are still financial, contractual and legal steps for both sides.

The buyer has to get financing to meet the contract terms – which includes credit checks.

The property is inspected and appraised; title insurance and escrow accounts are set up while you locate new housing, pack and move. And take care of any obligations like painting or repairs. After the contract is signed, it can take a month or more of closing steps to reach the closing meeting.

So plan on that when you plan to sell.