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Be Careful To Check Your Lender’s Mortgage Loan Costs

Mortgage Loan Costs

Lender Bait and Switch Practices

I have clients who’ve recently worked with some of my non-preferred lenders, and I found some of their practices to be questionable. 

When a buyer starts working with a lender, they’re required to give them a disclosure of all mortgage loan costs so they know their interest rate and estimated closing costs. Throughout the lending process (you may change the rate or loan program you’re looking at), you’ll see subsequent copies of these numbers. Sometimes, though, lenders don’t review these numbers with you, so you need to look very closely and make sure you understand them. The last thing you want to do is get to the closing table and see a numbers that don’t make sense or that you were not expecting.

You should consider your Realtor a trusted resource throughout the process and have them review these documents as well. We do it all the time for our clients. Ask your lender to review these documents with you to make sure you understand them. If anything, you should get to the closing table and be delighted to discover that what you’re supposed to pay is significantly less than what you expected. 

“The last thing you want to do is get to the closing table and see a bunch of numbers that don’t make sense.”

So, please check your numbers closely to make sure the lender is not all of a sudden charging fees you weren’t aware of, like a fee to buy down your interest rate. 

This is exactly the kind of thing we at Real Estate Experts do to help our clients, so if you’d like to know more about this topic or have any questions, don’t hesitate to contact us.  We would be happy to help in any way possible.    

Related Videos:

Should You Put More Money Down On A House?

How To Avoid Paying PMI Upfront

Should You Escrow Taxes and Insurance?

Should You Pay Your Mortgage Monthly or Bi-Weekly?

What Do Buyer Agents Really Do?

What do buyer agents really do? To give you an idea, I made a list of every task we take care of from the beginning of the home sale process to the end. Between meeting a new client and handing them the keys to their new home, there are 60 items on this list (some of which we do repeatedly).

What Do Buyer Agents Really Do?  My list:

  1. Buyer needs assessment
  2. Explain Agency – how Realtors work with buyers and sellers
  3. Explain commissions and how Realtors earn their money
  4. Explain the Offer to Purchase and Contract and how to construct a competitive offer
  5. Set up auto search in MLS
  6. Give buyer access to the best search Apps
  7. Monitor MLS
  8. Recommend three lenders for buyer pre-approval
  9. Get pre-approval letter or proof of funds
  10. Help with loan process
  11. Preview properties
  12. Show properties
  13. Promptly return phone calls, email and text messages
  14. Send MLS documents on every property of interest
  15. Research tax information and history of all properties of interest
  16. Prepare a Competitive Market Analysis on every home of interest
  17. Explain the good, bad and ugly of every home visited
  18. Be a repair expert – know what you are looking at
  19. Set expectations throughout the entire process
  20. Be a local expert
  21. Know the market
  22. Explain the details of how real estate transactions work
  23. Advise buyer on most competitive offer based on the situation
  24. Write offers
  25. Review offer with buyer before sending
  26. Negotiate offers (you can write 10 offers per buyer)
  27. Deliver Due Diligence money to the listing agent
  28. Deliver Earnest Money to the closing attorney
  29. Get ALL necessary legal paperwork in appropriate office tracking system
  30. Get Restrictive Covenants
  31. Schedule inspections
    1. Home Inspection
    2. Termite Inspection
    3. Radon Inspection
    4. Well Inspection
    5. Septic Inspection
  32. Attend Inspections
  33. Schedule Follow Up Inspections
    1. Structural Engineer
    2. HVAC
    3. Plumbing
  34. Get Repair Estimates
  35. Negotiate Repairs
  36. Set up Closing with Closing Attorney
  37. Make sure the lender orders the appraisal
  38. Order Survey
  39. Order Home Warranty
  40. If negotiate compensation instead of repairs get to attorney and lender
  41. Make sure buyer gets home owners insurance
  42. Make sure buyer transfers utilities
  43. Schedule re-inspection to check repairs
  44. Attend re-inspection
  45. If repairs are not done, get repair list in writing to listing agent
  46. Make sure buyer is attending closing
  47. Get power of attorney if buyer is not attending closing
  48. Check buyers marital status, if divorced or separated make sure buyer has a Free Trader Agreement
  49. Make sure buyer has received the Closing Disclosure on Time
  50. Coordinate with Lawyer & get closing numbers
  51. Review closing numbers with buyer
  52. Correct closing numbers with attorney and lender
  53. Schedule final walk-through before closing
  54. Attend final walk-through
  55. Negotiate anything necessary at end to protect buyer 100%
  56. Get client closing gift
  57. Attend closing
  58. Close out file at office
  59. Enter closing numbers in office tracking system
  60. Initiate all post-closing client follow-up

In today’s competitive marketplace, we may write as many as 10 offers for a client. Sometimes people go under contract, start the repair process, and then for one reason or another, the contract is terminated. After that, you have to start the process all over again.

Our job goes way beyond just opening doors for people. We have to be knowledgeable about every detail of the real estate process, the market itself, and various areas and neighborhoods. On top of that, we have to know how to negotiate. One of the most important aspects of the home sale is the repair process, so we have to know excellent inspectors we can rely on and contractors who can give reliable repair estimates. Most Realtors will tell you that they’re basically general contractors because we’re so involved in every part of a home’s repair.

All of these details are being managed (with the help of the lender and closing attorney) so we can get the best of everything for our clients—the best home, loan, homeowners insurance, repairs, etc. A good buyer’s agent will go above and beyond for their client throughout the home sale process. Additionally, while we’re working with our clients, we have to manage our business and marketing. After all, if we don’t have any business, we can’t do business.

At Real Estate Experts, It is All About You!  Please read our reviews to hear what out clients have to say about us.

Net Zero Energy Homes Cost Less Overtime

Net Zero Energy Homes Cost Less Overtime

Contrary to popular belief, net zero-energy homes offer exceptional affordability and sustainability when compared to their traditional counterparts. To understand this, you need to look not just at the cost of the home as built, but the total cost of ownership.

Net Zero Energy Homes are built to high energy efficiency standards and are combined with systems like active solar.  These homes do cost more to build.  Some sources say the added cost is 5-10% more than a traditional code-built home.  The Rocky Mountain Institute recently released new data indicating that the cost differential is narrowing.  They specifically state, “The margin is closing due to performance improvements in the building shell and heating equipment.  Zero energy ready homes cost 4% more than a code-built home and the addition of solar panels brings the increased cost of a net zero energy home to 8%.”

The increased price for these homes is recouped over time.  Net Zero Energy homeowners have lower utility bills and these homes cost less to maintain.  When you look at these homes from this perspective, it refers to the total cost of ownership.  While the price tag may be higher, because the costs are lower over time and energy prices rise over time, owners of net zero energy homes come out ahead.

Little to No Energy Costs

 Net zero energy homeowners

Net-zero homes use renewable and sustainable energy, like active solar, to power appliances, outlets, lighting, and more. In turn, homeowners avoid utility bills beyond the minimal charge to be connected to the grid for back-up power. Additionally, according to the Zero Energy Project, homeowners of net zero energy homes have lower operational costs.  Overall, owning a net-zero home can completely offset an entire year’s worth of electricity expenditures.

Reduced Maintenance Costs

Net zero energy homes reduce maintanance costs

Over time, ongoing maintenance expenditures can add up, costing homeowners thousands of dollars. These include radon-mitigation spending, mold removal, structural damage, and more.  Zero-energy homes, on the other hand, use state-of-the-art, durable materials that reduce and even eliminate many of the issues that traditional homeowners face. When combined with other attributes, “even when zero energy homes cost 4 to 8% more than a comparable standard home, they will cost less to own.” Homeowners can save thousands by avoiding heavy maintenance costs alone.

Higher Resale Valuations

 Solar Panels Increase Home Values

Net zero energy homes are a good investment.  Because they are built to very high standards, these homes hold their value.  Homes with Home Efficiency Ratings (Hers) can sell for at least 2% more in value.  Net Zero Energy Homes have Hers scores of “0”.  These homes add 3-5% more in value over conventional homes.

The Solar Energy Industries Association states that, “homes with solar systems, on average, add $15,000 in value.”

Zillow’s research indicates that adding solar does increase the value of a home.  Not only is the demand for highly energy efficient homes increasing, “the installation of solar panels not only reduces monthly energy bills, it can potentially increase the homes value by 4.1% compared to homes without solar.”

Should a homeowner decide to sell their net zero-energy home, they can expect a higher ROI than traditional homes. That’s because the home’s construction methods and energy-saving systems and solar panels are factored into the price at the time of sale. According to the Zero Energy Project, “increasingly buyers are looking for homes that are airtight and well-insulated with low energy bills and, increasingly, realtors are finding that energy efficiency features positively affect the value of a home.” Subsequently, prospective buyers associate zero-energy homes with high quality and savings, driving the resale price higher for sellers.

Valuable Tax Incentives

Ask any homeowner, and there’s a high likelihood that taxes are one of their most significant ongoing expenses. In an effort to encourage environmentally responsible home building, states like North Carolina feature exclusive opportunities like solar rebates from Duke Energy, lower interest loans, and various city, town, and federal rebate and tax credits. As a result, individuals who build net-zero houses may qualify for multi-thousand dollar savings.  The best source for finding these incentives is DSIRE, the Database for State Incentives for Renewables and Efficiency.

Jodi Bakst, Broker Owner of Real Estate Experts, is known for her knowledge of green,  high performance homesReal Estate Experts is proud to announce its first development project; Array, North Carolina’s first 100% net-zero energy community located in Orange County North Carolina. For detailed information about this 12-lot neighborhood with 56% open space, a beautiful pond, walking trails and a community garden, visit the Array website.

If you’re interested in building a sustainable home, please reach out to Jodi Bakst by emailing [email protected] or calling (919) 697-5014.

Thank you for reading, and we look forward to hearing from you!

Q: What’s the Latest Update for Our Real Estate Market?

Here’s what the latest numbers have to say about our real estate market.

 

The real estate market has been on quite a ride this year. As soon as people started getting adjusted to living in a COVID-19 world, the market started to heat back up and it has not slowed down.

 

Compared to what we saw in October 2019, the numbers show that for October 2020:

 

  • Closed sales are up 28.%
  • Inventory is down 48.3%
  • New listings are up 7.3%
  • Median sale price is up 7.1% to $300,000
  • Average sale price is up 9% to $350,761
  • Average days on market is down 37.5% to just 20 days

 

What I really want to focus on is inventory. It’s down in every market in the Triangle Area. There are less than two months of inventory in Wake County, and slightly more than one month in Durham and Cary. Overall, the Triangle Area has just 1.2 months of inventory. 

 

We clearly have a severe lack of supply that can’t keep up with our demand. There’s no indication that interest rates will creep up anytime soon, which will keep demand just as high.

 

Just because it is a seller’s market doesn’t mean that you don’t need to be positioned properly to sell for top dollar. That’s our job at Real Estate Experts: To do everything we can to position you properly for the market so you get the best return on your bottom line.

 

If you have any specific questions or real estate needs we can assist with, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.

Q: Not In Favor of Raising Insurance Costs?

Q: Not In Favor of Raising Insurance Costs?

Homeowners insurance rates may go up by a quarter; here’s how to take action.

The day before I recorded this video, I found out that the North Carolina Insurance Commission is considering a proposal to increase homeowners insurance rates by 25%. That’s a pretty sizable jump. If you’re not in favor of this proposal, the best thing to do is to email Commissioner Mike Causey. In fact, on Thursday, December 10, there will be a public meeting to discuss this issue. 

The easiest way to email the commissioner is to visit the North Carolina Homeowners Alliance website, where there’s a form for you to fill out. (If you want to personalize the message by adding your own thoughts, you’re able to do so). When finished, just hit the submit button. 

I hope you found this video to be informative. If so, please hit the “Like” button on YouTube and subscribe to my channel for more great content. Don’t hesitate to give me a call or send an email if you have any questions or real estate needs. I’m here and ready to help!

Array Sustainable Living Covered On WCHL

Array Sustainable Living Covered On WCHL

 

Array, North Carolina’s First Net Zero Energy Neighborhood, being developed by Real Estate Experts, was covered on the local news on November 27th on WCHL.  Click here to listen to the story.

One Chapel Hill resident is working towards building North Carolina’s very first net-zero energy neighborhood.

Jodi Bakst is the owner of Real Estate Experts in Chapel Hill. Since the start of 2019, she has been hard at work developing North Carolina’s first 100 percent net-zero energy residential community in Orange County.

Bakst is developing Array, a 12-lot neighborhood located on 60 acres of land off Orange Grove Road just minutes west of downtown Carrboro and Chapel Hill. Bakst said creating an energy-efficient neighborhood in Orange County is ideal and timely for several reasons.

“I think that the location of this property being in Orange County – you have a preponderance of people that really do care about the environment and care about living sustainably,” Bakst said. “Then from a timing perspective, with the way that things are going with respect to climate change, and how fast things are moving in a negative direction, this is the perfect time for the residential building industry to show people that it is possible to build a home with a significantly reduced carbon footprint.”

According to the U.S. Department of Energy, buildings consume 40 percent of the nation’s energy and 25 percent of the nation’s freshwater.

Bakst said Array’s net-zero energy homes will produce as much energy as they consume as well as meet aggressive targets for water conservation and indoor air quality. Each house will also be third party certified based on the National Green Building Standards.

“The houses that we’re talking about in Array, which are very achievable to build, are about 90 percent more efficient than a standard code-build house,” Bakst said. “What makes it net-zero energy is when you add in the solar.”

According to Array’s website, PV solar panels will be specifically sized for each energy-efficient home in the Array neighborhood. Array’s 12 lots are positioned with a north-south orientation to make maximum use of the sun and its natural energy.

In addition to solar panels, Bakst said these homes will also have continuous insulation to keep utility costs even lower. While initially more expensive to build, she said these homes are more economical in the long run.

“You do spend more money upfront but you’re spending less money to maintain your house,” Bakst said. “You have almost zero energy costs. With the net-zero energy model, there will be net metering. So each house will be tied to the grid with Duke Power, but the excess energy that you’re creating goes to the grid for storage and then for peak times for peak demand – when you need more energy – it [the energy] gets called back from the grid.”

Bakst said Duke Power will charge $14 dollars a month for each house to be connected to the grid, and that will be the sole utility cost. Other standard utilities like water and sewer will come at no additional cost as a well and septic system will be built into the neighborhood.

While net-zero energy houses are being built sporadically, Bakst said the Array neighborhood will be one of the first of its kind in the whole country. Right now, she has one of the twelve Array lots reserved. Bakst said she hopes to get the storm water and erosion control permits approved by January – the next step into making her net-zero energy neighborhood a reality.

For more details about the Array neighborhood, click here.

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