After the Offer - 30 Days to Homeownership - 4/27/09


Published on

After the Offer - 30 Days to Homeownership - 4/27/09

Published in: Economy & Finance, Technology
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

After the Offer - 30 Days to Homeownership - 4/27/09

  1. 1. After the Offer – 30 Days Until Ownership A Complete Guide to what happens after the offer is accepted <ul><li>Thank you for attending </li></ul><ul><li>We will begin in a moment </li></ul><ul><li>Class Scheduled to begin at 5:30pm </li></ul><ul><li>Homeownership Educator </li></ul><ul><li>Scott Schang </li></ul><ul><li>Branch Manager </li></ul><ul><li>Broadview Mortgage Corporation </li></ul><ul><li>1-866-667-6724 </li></ul>
  2. 2. After the Offer – 30 Days to Own <ul><li>The Purpose and Goals of this Class </li></ul><ul><li>Purpose: To Create and Empower Homeowners </li></ul><ul><li>Goal: Introduce you to the buying process after the offer is accepted and demystify the steps to buying a home </li></ul><ul><li>Goal: Educate you about the time lines and coordinated efforts of everyone involved in the home buying process </li></ul><ul><li>Goal: Empower you with the ability to understand the process and reduce “surprises” throughout the purchase of your home </li></ul>
  3. 3. After the Offer – 30 Days to Own <ul><li>Topics we will cover </li></ul><ul><li>A Brief Overview of the home buying process </li></ul><ul><li>The Players: Who’s working on your purchase? </li></ul><ul><li>The Timeline: what needs to take place and by when </li></ul><ul><li>The Contingencies, Who needs to do what by when? </li></ul><ul><li>What can go wrong, why, and what options you have </li></ul><ul><li>The Home Stretch – “It’s not over ‘till it’s over” </li></ul>
  4. 4. After the Offer – 30 Days to Own <ul><li>Ask Questions throughout presentation </li></ul><ul><li>You may type questions in at any time during the presentation – Questions box on your screen </li></ul><ul><li>Homeownership experts are standing by to answer your questions during the presentation </li></ul><ul><li>This is an interactive learning environment. You will get the most value by having your specific questions answered </li></ul><ul><li>The only dumb question is the one you don’t ask </li></ul><ul><li>Write this number down in case of technical difficulty </li></ul><ul><li>1-866-667-6724 </li></ul>
  5. 5. After the Offer – 30 Days to Own <ul><li>Overview of the Home Buying Process </li></ul><ul><li>Offer is accepted </li></ul><ul><li>Escrow is Opened </li></ul><ul><li>Inspections are completed </li></ul><ul><li>Loan approval is Finalized </li></ul><ul><li>Loan documents are drawn and signed </li></ul><ul><li>Loan funds / Loan records </li></ul><ul><li>Close of escrow – purchase complete </li></ul>
  6. 6. After the Offer – 30 Days to Own <ul><li>Overview of the Home Buying Process </li></ul><ul><li>Two ways you can receive acceptance of your offer </li></ul><ul><li>Verbal Acceptance </li></ul><ul><ul><li>Common with short sales and foreclosures </li></ul></ul><ul><ul><li>Seller’s agent relays “verbal” acceptance by seller </li></ul></ul><ul><ul><li>Contract is accepted by loss mitigator on behalf of selling bank, still requires “final” signatures – red tape </li></ul></ul><ul><ul><li>Escrow is opened, process starts, pending executed contract </li></ul></ul><ul><li>Fully Executed Contract </li></ul><ul><ul><li>Both buyer and seller signatures are on “final” purchase agreement </li></ul></ul>
  7. 7. After the Offer – 30 Days to Own <ul><li>The Players – Who they are </li></ul><ul><li>Who’s working on your purchase? </li></ul><ul><ul><li>Seller’s Agent </li></ul></ul><ul><ul><ul><li>Transaction Coordinator </li></ul></ul></ul><ul><ul><li>Your (Buyer’s) Agent </li></ul></ul><ul><ul><ul><li>Transaction Coordinator </li></ul></ul></ul><ul><ul><li>Escrow Company </li></ul></ul><ul><ul><ul><li>Escrow officer / Assistants </li></ul></ul></ul><ul><ul><ul><li>Title Company / Representative </li></ul></ul></ul><ul><ul><li>Lender providing financing for your purchase </li></ul></ul><ul><ul><ul><li>Loan Officer </li></ul></ul></ul><ul><ul><ul><li>Loan Processor </li></ul></ul></ul><ul><ul><ul><li>Loan Underwriter </li></ul></ul></ul>
  8. 8. After the Offer – 30 Days to Own <ul><li>The Players – What their roles are </li></ul><ul><li>Seller’s Agent </li></ul><ul><ul><li>Responsible for communicating the terms and interests of the seller to escrow and buyer’s agent </li></ul></ul><ul><ul><ul><li>Provides escrow and title information to buyer’s parties…ie – Agent, Lender </li></ul></ul></ul><ul><ul><ul><li>Responsible for “seller’s side disclosures” </li></ul></ul></ul><ul><li>Your (Buyer’s) Agent </li></ul><ul><ul><li>Responsible for communicating with Seller’s agent to receive all seller disclosures and make arrangements for entry into property for inspections / appraisal </li></ul></ul><ul><ul><li>Orders home inspection </li></ul></ul><ul><ul><li>Responsible for communicating to you status of process </li></ul></ul>
  9. 9. After the Offer – 30 Days to Own <ul><li>The Players – What their roles are </li></ul><ul><li>Escrow Company </li></ul><ul><ul><li>Third party coordinator of all contracts, reports, monies, addendums and instructions by all parties involved </li></ul></ul><ul><ul><ul><li>Collect and hold deposit / earnest money </li></ul></ul></ul><ul><ul><ul><li>Collect and hold down payment </li></ul></ul></ul><ul><ul><li>Order the preliminary title report from title company </li></ul></ul><ul><ul><li>Title Company researches “chain of title” to establish free and clear rights to ownership of property </li></ul></ul><ul><ul><ul><li>Insurance provides guarantee clean title </li></ul></ul></ul><ul><ul><li>Ensures that the instructions laid out in the purchase contract and the terms of the loan approval are all met </li></ul></ul>
  10. 10. After the Offer – 30 Days to Own <ul><li>The Players – What their roles are </li></ul><ul><li>Lender providing financing for your purchase </li></ul><ul><ul><li>Loan Officer – Communication of terms, conditions and status of loan approval to you, your Agent and any other parties that wish to be in the loop </li></ul></ul><ul><ul><li>Responsible for coordinating all communications and needs from Loan Underwriter and Loan Processor to you for the purposes of final loan approval </li></ul></ul><ul><ul><li>Loan Processor - Communicates with escrow, title, loan officer, buyer, seller’s agent, buyer’s agent to coordinate the receipt and delivery of required documents required for loan </li></ul></ul><ul><ul><li>Loan Underwriter – Receives and reviews all contracts, addendums, inspections, appraisal, income and asset documentation, credit profile for compliance with underwriting guidelines of the loan you have applied for </li></ul></ul>
  11. 11. After the Offer – 30 Days to Own <ul><li>Time Line for the Buying Process </li></ul><ul><li>Escrow period establishes closing date </li></ul><ul><ul><ul><li>30 days is normal </li></ul></ul></ul><ul><ul><ul><li>Longer or shorter is possible and common if all parties agree </li></ul></ul></ul><ul><li>Contingency Period </li></ul><ul><ul><li>17 days for financing / Appraisal - default </li></ul></ul><ul><ul><li>10 days for inspections – default </li></ul></ul><ul><li>Finalization of Financing </li></ul><ul><ul><li>Prior to documents (PTD) conditions approved - ASAP </li></ul></ul><ul><ul><li>Lender draws loan documents to be signed – 24-48 hours </li></ul></ul><ul><ul><li>Buyer signs loan docs – back to escrow/lender - 24 hours </li></ul></ul><ul><ul><li>Loan docs reviewed – 24-48 hours </li></ul></ul><ul><ul><li>Prior to funding (PTF) conditions met - Funds 24-48 hours </li></ul></ul><ul><ul><li>Record loan – Next day usually – 24 hours </li></ul></ul>
  12. 12. After the Offer – 30 Days to Own <ul><li>The Contingencies </li></ul><ul><li>Contingency Period establishes time line for performing certain requirements of purchase contract </li></ul><ul><li>If the result of a contingent action causes you or seller to back out of purchase – all monies would be returned and both parties would be held harmless </li></ul><ul><li>California Association of Realtors 8 page purchase contract keeps contingencies in place until close of escrow unless otherwise specified or released </li></ul><ul><li>A buyer that makes a “contingent offer” means that they must close on the sale of existing home prior to closing on new home – not as attractive to sellers </li></ul>
  13. 13. After the Offer – 30 Days to Own <ul><li>The Contingencies </li></ul><ul><li>17 days for financing / Appraisal – Default </li></ul><ul><ul><li>Lender is responsible for placing appraisal order </li></ul></ul><ul><ul><li>Appraisal is ordered on day of approval - $350-$450 </li></ul></ul><ul><ul><li>Typical turn around is 3-5 days </li></ul></ul><ul><ul><li>Received and reviewed by lender – 24-72 hours </li></ul></ul><ul><li>10 Days for optional buyer Inspections </li></ul><ul><ul><li>Buyer’s Agent is responsible for disclosing to buyer options and rights for performing inspections on property </li></ul></ul><ul><ul><li>Home inspection is recommended at very least - $250-$350 </li></ul></ul><ul><ul><li>Buyer is responsible for choosing to perform non-required inspections – Agent can refer professional services </li></ul></ul>
  14. 14. After the Offer – 30 Days to Own <ul><li>New Changes in Appraisal Guidelines </li></ul><ul><li>Home Valuation Code of Conduct - May 1 st , 2009 </li></ul><ul><ul><li>Fannie Mae & Freddie Mac Loans only for now </li></ul></ul><ul><li>Appraisal must be ordered by third party person not directly involved in the transaction and whose compensation is not directly or indirectly tied in to the close of transaction </li></ul><ul><li>FHA has not enforced a similar policy as of yet </li></ul><ul><li>Lender (not broker or loan officer) is responsible for placing appraisal request </li></ul>
  15. 15. After the Offer – 30 Days to Own <ul><li>What Can Go Wrong </li></ul><ul><li>Many things can happen that would cause the purchase to go “sideways” </li></ul><ul><ul><li>Some you can control / Some you cannot control </li></ul></ul><ul><li>Financing challenges </li></ul><ul><ul><li>Changes in your employment </li></ul></ul><ul><ul><li>Changes in your reserves / funds to close </li></ul></ul><ul><ul><li>Personal Liens, judgments, levys that “pop up” </li></ul></ul><ul><li>Inspection challenges </li></ul><ul><ul><li>Appraisal uncovers health or safety issues </li></ul></ul><ul><ul><li>Appraisal determines value is lower than sales price </li></ul></ul><ul><ul><li>Home inspection uncovers extensive challenges to condition </li></ul></ul><ul><ul><li>Pest/termite, Hazardous materials, other inspections uncover conditions which are not appealing or acceptable </li></ul></ul>
  16. 16. After the Offer – 30 Days to Own <ul><li>What Can Go Wrong </li></ul><ul><li>Many things can happen that would cause the purchase to go “sideways” </li></ul><ul><ul><li>Some you can control / Some you cannot control </li></ul></ul><ul><li>Preliminary Title Report </li></ul><ul><ul><li>Title search uncovers liens, zoning challenges that would create challenges with providing insurance </li></ul></ul><ul><li>Condominium Projects </li></ul><ul><ul><li>There can be challenges with financing for certain condominium projects if the following are present: </li></ul></ul><ul><ul><ul><li>More than 40-49% non-owner occupied </li></ul></ul></ul><ul><ul><ul><li>Certain cases of litigation against HOA </li></ul></ul></ul><ul><ul><ul><li>High % of HOA dues delinquent </li></ul></ul></ul>
  17. 17. After the Offer – 30 Days to Own <ul><li>What options you have </li></ul><ul><li>Depending on the challenge – there are options </li></ul><ul><li>Financing challenges </li></ul><ul><ul><li>Communicate with your loan officer and act quickly to produce documentation/paper trail to explain discrepancies </li></ul></ul><ul><ul><ul><li>Employment gaps, changes of employers / pay </li></ul></ul></ul><ul><ul><ul><li>Reserve documentation if funds move often or are difficult to source – large deposits are red flags </li></ul></ul></ul><ul><ul><ul><li>It NEVER pays to be elusive with your loan officer </li></ul></ul></ul><ul><li>Inspection challenges </li></ul><ul><ul><li>You may have just saved yourself lots of time and money by performing thorough condition inspections – back out </li></ul></ul><ul><ul><li>Go back to seller and ask to have conditions cured to proceed with purchase of home </li></ul></ul><ul><ul><li>Value comes in low – Most lenders will reduce sales price </li></ul></ul>
  18. 18. After the Offer – 30 Days to Own <ul><li>What options you have </li></ul><ul><li>Depending on the challenge – there are options </li></ul><ul><li>Preliminary Title Report </li></ul><ul><ul><li>There’s not much you can do as a buyer to resolve title issues </li></ul></ul><ul><ul><li>Have seen subordinate liens pop up – seller or buyer may resolve issue of compensation to lien holder </li></ul></ul><ul><ul><li>Title company typically will try to find resolution to challenge </li></ul></ul><ul><ul><li>Title company ultimately determines whether or not they will insure against clouds and insure as free and clear title </li></ul></ul><ul><li>Condominium Projects </li></ul><ul><ul><li>Lender decision – challenges with condominium projects affect the salability and insuring of mortgage on secondary market </li></ul></ul><ul><ul><li>Some lenders have higher tolerance for risk than others </li></ul></ul>
  19. 19. After the Offer – 30 Days to Own <ul><li>The Home Stretch </li></ul><ul><li>It ain’t over ‘till it’s over – Anything can pop up at almost anytime – Don’t be alarmed – it’s normal </li></ul><ul><li>Challenges are common – fatal challenges are NOT </li></ul><ul><li>Communication is key – make sure you ask your agent and loan officer “Ok, what’s the next step and when can I expect to see it completed?” </li></ul><ul><li>Manage your expectations based on actual events and not on anticipated results – you’ll sleep better at night! </li></ul><ul><li>Do not push your loan officer or agent to give you answers or status when you don’t like their first answer – trust that they are keeping you informed </li></ul>
  20. 20. After the Offer – 30 Days to Own <ul><li>Wrap up and Take Aways </li></ul><ul><li>Demystifying the process is a huge step toward being in control of the process </li></ul><ul><li>Do not let “fear of the unknown” cause undue stress educate yourself about the process, manage your expectations </li></ul><ul><li>Since the communication and the experience of your professional team are so vitally important to the home buying process – make sure you take your time, do your homework and purposely choose a qualified “team” </li></ul>
  21. 21. After the Offer – 30 Days to Own <ul><li>Wrap up and Take Aways </li></ul><ul><li>Broadview Mortgage Corporation is a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs </li></ul><ul><li>We are more than happy to be your “second opinion” if you are already working with someone </li></ul><ul><li>We are more than happy to refer you to a qualified Real Estate Agent that we have interviewed and worked with – Shares our values </li></ul>
  22. 22. Hiring an Agent – Finding Deals <ul><li>Wrap up and Take Aways </li></ul><ul><li>You will receive a “Thank you” email with links to the information we’ve talked about here today including </li></ul><ul><ul><li>Copy of power point presentation </li></ul></ul><ul><ul><li>Secure on-line loan application </li></ul></ul><ul><ul><li>Links to all the topics we discussed in class </li></ul></ul><ul><ul><li>Dream Home Finder request </li></ul></ul><ul><ul><li>Link to detailed information about the Tax Credits </li></ul></ul><ul><ul><li>Link to information about the CAR Mortgage Protection Program </li></ul></ul><ul><ul><li>A schedule of all upcoming classes </li></ul></ul>
  23. 23. Upcoming Homebuyer Classes <ul><li>A First Time Home buyer’s Complete Guide to Credit, Qualifying and Completing the Loan Application </li></ul><ul><li>A Complete Guide to Buying Foreclosures and Short Sales </li></ul><ul><li>A Complete Guide to Closing Costs and the GFE </li></ul><ul><li>A Complete Guide to the CalPERS Home Loan Program </li></ul><ul><li>Five 100% Financing Loans You Should Know About </li></ul><ul><li>A Complete Guide to FHA Purchase Loans </li></ul><ul><li>A Complete Guide to the CalSTRS 8017 </li></ul><ul><li>A Guide to Hiring a Real Estate Agent and finding the best deals </li></ul><ul><li>Check back often for upcoming classes </li></ul>
  24. 24. Thank You for Attending If you enjoyed this class – Tell a friend  <ul><li>Your input is Valuable </li></ul><ul><li>Please complete 2 question survey when you log off </li></ul><ul><li>For more information </li></ul><ul><li>1-866-667-6724 </li></ul><ul><li>Homeownership Educator </li></ul><ul><li>Scott Schang </li></ul><ul><li>Branch Manager </li></ul><ul><li>Broadview Mortgage Corporation </li></ul>