Andy Weiser Fort Lauderdale Realtor Blog

What Selling “As-is” Means For Buyers

Selling a home as-is can mean a bunch of different things depending on who you are. If you are a seller then it can be a path of least resistance where you don’t have to run around fixing up the place and incurring expenditures. If you are an investor than this may be a trigger that a good opportunity may await while the average buyer may see it as a red flag.

What Does “As-is” Mean?

When a home is listed as such it essentially means that the seller is selling the home in the current condition that it is in and will make no repairs or improvements before the sale. This also means that buyers should be prepared to not ask or negotiate for any credits to fund any necessary repairs. In some instances it could be that a homeowner is listing it in “as-is” condition as they do not have the funds available to make any improvements or repairs. Finally, another situation is that a home may have gone into foreclosure and is currently owned by a bank or may have been left to relatives if they have passed. In these cases the owners are far enough removed where they would not be armed to make such repairs.  However, just because it may be listed “as-is” does not mean that a listing agent can avoid disclosing any known defects of the home. Sellers will still need to disclose known problems and the buyer can still make the deal contingent on a home inspection.

The Good And Bad About As-Is

If a home is “as-is” then it is implied that it needs significant improvement and all buyers should not be looking for the seller to be doing any repairs prior to sale. Typically the list price will reflect the condition of the home and sellers may even accept lower offers in these cases where it is worth it for a buyer or investor to make the purchase. In particular, an investor’s interest will be piqued when a home is listed this way. In cases of a home needing such significant repair that obtaining a mortgage could be problematic, sometimes they are listed as “cash offers only.” Cash buyers typically leverage their buying power by offering a fast sale with no mortgage red tape in exchange for a lower purchase price. The big caveat to any buyer is that anything could be wrong with these properties where a significant amount of capital investment is required.

In the end a buyer should still do their due diligence and proceed with a home inspection so that they know exactly what the home needs for repair regardless of the seller not participating in them. Inspection contingencies can still be added into the deal to cover you and you never know what sellers may negotiate on a selling price depending on inspection results!

 

When Can A Seller Back Out Of A Deal?

Buying a home these days in today’s market conditions can be stressful due to the tough competition. Most buyers are focused on what they can do and how much they can offer so that they can beat out the competing offers and win the sale. However, as rare as it can be, not many buyers are thinking about if the seller may back out of the sale on their end and if that is even possible. Should a buyer withdraw for a reason that is outside of their contingencies they are likely to lose their earnest money deposit which can be significant, but what consequences are there for sellers if they back out? Here is a closer look.

Why Sellers Back Out

While there may be several reasons why a seller may decide not to sell, the primary or more common one is if they cannot find a good enough replacement home. There are instances where a seller may be less than ethical and choose a better offer that comes along afterwards. However, this doesn’t mean they cannot without repercussions.

When Sellers Can Withdraw

There are instances where the seller can safely back out without penalty. They include:

-Contract has not been signed yet. 

-Contract is within the review period. This is typically a few day period where buyer and seller attorneys have the chance to review the contract. 

-Seller planted an escape clause in the contract. This is commonly known as a contingency such as them to find a suitable new home first for example.

-Buyer does not follow contract terms. Each contract has specific terms, dates and conditions especially for the buyer to follow. For example if the buyer does not secure financing within the agreed upon time frame that can be an out.

-Buyer makes requests beyond seller’s willingness. This can happen upon the home inspection. It could be that the buyer requests a list of things to do where the seller decides to simply not do any of them. The buyer at this point will either accept that no work will be done or agree to disagree with the deal getting canceled. 

When A Seller Cannot Back Out

Once the contract is signed and you are past the few day attorney review period then it is hard for a seller to back out aside from the above mentioned reasons. Should a seller flake on the sale, laws do protect buyers enough so that they could take the seller to court to force the sale to go through or sue for damages for the breach of contract. The issue here is that if a buyer takes this route it will take an investment of time and money to process. Most will just let it go and move on with their plans buy another property. 

Top Tips For Crafting Your Best Offer

The temperature of today’s real estate market is hot and it certainly has proven to be one in favor of sellers. We continue to see increasing prices and slim inventory making bidding wars a common thing. If you are planning on buying this fall then you will want to heed this advice on best positioning as you get close to making an offer on your next home. 

Define Your Budget

Especially in a competitive market where offers are abundant and bidding wars happen it is a wise idea to know your limits. First and foremost it is imperative that you work with a lender and find out just exactly how much you will be pre-approved for. Then you will know what your maximum amount is that you can raise your offer to. 

Act Quickly

The vast majority of homes for sale will be on the market for less than one month these days. That means you must be ready to view all homes that come on the market within your search criteria and act quickly should you decide to submit an offer to purchase. In today’s market conditions you don’t have the luxury of taking several days to ponder the possibility of placing an offer on a home.

Work With a Real Estate Professional

Having a professional and seasoned agent’s guidance especially in a market like today is your key to success. Emotions can run strong so you want to work with the facts that a local real estate agent can provide. These things include current market values, recent sales trends such as list to sales price ratios and buyer demand. Arming yourself with this knowledge will help you make the best offer with the least amount of regrets. 

Cater to Seller’s Needs

When you craft your offer it is smart to keep both your and the seller’s interest in mind. Working with an agent you can decide to play with things like dates and contingencies that may work best for both parties. You don’t want to get yourself in a position where you may make too many sacrifices that may come back to haunt you later on! 

Top Mistakes New Homeowners Make

 

When you first become a homeowner for the first time there can be a learning curve. It is a new routine to get used to, there may be projects that you want to start and you need to learn how to make joint decisions should you be co-purchasing with a significant other. Here are some of the top mistakes new owners make so you can learn what not to do. 

Hiring the wrong repairman

This may sound silly at first but if you don’t hire the person you need the first time it can cost you more in the end. One of the best places to start with repairs is to speak with friends or neighbors in the area. Explain what is going on as they may have had a similar issue. They may even help provide you with a contact they used. Most contractors have a high hourly rate so you don’t want to hire someone who cannot ultimately fix your problem.

Failing to get references

Before you hastily google someone to help fix your problem, make sure you get some references. Just because they are online doesn’t mean they are reputable! Reach out to friends, neighbors or even ask for recommendations on social media. Find out what experiences were like exactly with people you know who used them.

Not creating budget

With a new home comes new expenses. There may be things you may not have considered like HOA fees, regular maintenance fees and even property taxes. Asking for receipts or utility bills from the previous owner along with speaking with a real estate professional such as myself are great resources for this kind of important information.

Home improvements too soon instead of routine maintenance

It can be very tempting to want to make some costly changes to the home as you are very excited in the beginning. However, you want to make sure that you have a good grasp on your routine expenses of simply owning the home and properly maintaining it. Once this is done and once you have lived in it long enough then you can see if you still want to do these improvements you first had in mind. Sometimes once you live in a home for a while your list of desires for improvements can change.

Not discussing projects with significant other

Introducing homeownership into a relationship is a whole set of new things to deal with. Now there are shared expenses, shared thoughts of improvements and shared ideas of how to set up the home. It is important to keep communication open before you embark on making any decisions. Be sure you are on the same page or can make the necessary compromises where every move works for everyone involved. 

Moving Tips For Getting Settled Quickly

Once you have closed on your new home then the final step is to grab your new keys and move in. While you may have some help with movers, friends and relatives to put everything away in its place, it can take a while for the space to feel like a home. Here are some tips for getting your new home all set up quickly. 

Plan Utilities Ahead

Don’t wait until you move to line up all of the services that you will need in your new home. Schedule your internet, utilities, trash and any other services that you will be needing ahead of your move in. Most companies will have a flexible schedule to book things once you have taken possession of the home. Don’t forget to change your mailing address online too!

Create a Playlist

Studies have shown that music can help motivate people which is certainly helpful when moving. Make a playlist ahead of time so that when you are putting away your dishes and unpacking miscellaneous boxes then you have a boost in your step to keep things going. 

Unpack in Order

It pays to be organized and think ahead when you are packing to move. Many people will pack similar things together and simply label boxes with a room name or perhaps reference some major items inside. However, take it one step further and number the boxes in order of how they should be unpacked. Box number 1 should be opened right away while box number 3 may be dealt with later and can be left in the garage until you have more time.

Recharge

Moving quickly and efficiently is great but planning out some breaks will help reward and recharge. For example if you can plan on having that pizza with everyone who helped you move for dinner then you can have that to look forward to and will help keep you going. Maybe you can even enjoy it out on your new patio or screen room!

Recruit Friends

More hands will always help move faster. If you can plan a move during the weekend or save part of it for then, then you will probably have a better chance of getting help from your friends. You could have movers help with the bulky items then your friends could help with some of the more manageable boxes. Whatever you decide make sure you are clear on what you are asking them for and be sure to reward them with dinner or the like. 

 

What Exactly Is A Jumbo Mortgage?

The process of applying for a mortgage can be an overwhelming time as you collect all of your necessary documents, weigh out financing options and plan out your home purchase details. Thinking about committing to a mortgage can get you a bit nervous in general but hearing the term ”jumbo mortgage” can sound even scarier. So what is a jumbo mortgage? Let’s discuss what they are exactly and who they are for.

The definition of jumbo mortgage

Simply put, a jumbo mortgage is a home loan that exceeds the conforming amount set by the Federal Housing Financing Agency (FHFA). “Conforming” really means that the loan meets the requirements for purchase by a government backed entity like Fannie Mae or Freddie Mac. Jumbo loans can have attractive interest rates but can come with higher risks for the lender which in turn means they may have more strict requirements for the borrower.

Jumbo mortgage conforming limits

While this may be subject to change each year, the conforming limit for a single-family home in this year of 2021 is $548,250. This number also may be adjusted in some areas where housing prices are far higher than average. FHFA sets these baseline amounts each year by evaluating average home values in the United States with new loan limits that are shared by year’s end for the upcoming year. 

How to qualify for a jumbo mortgage

The average person can qualify for a jumbo loan only with slightly different or perhaps more strict criteria. First, while a good credit score is important for any loan, jumbo loans are typically obtained by those with a score of 700 or more. A debt to income ratio of 36% or so is also a typical guideline. Finally, while you may find different programs in different areas you should plan on putting at least 20% down unless you qualify for a Veterans Affairs (VA) loan. 

Loan rates and benefits

While you may think that with the higher risk there would be a higher rate that is not the case. Typically jumbo mortgage rates can be found for slightly lower than your average, standard 30-year fixed rate mortgage. The other good thing is that the mortgage interest deduction still applies so anyone looking to take advantage of this benefit on their income taxes may do so. Check with your accountant on just how much you can deduct depending on your status and how you file as amounts will vary if you are single, married and filing separately or jointly.