Sage Advice...Real Estate Questions and Answers

We are thinking of "downsizing" but the very concept has us flummoxed. We have so much stuff!!! Where do we start? S. and A. Campbell, West Chester, PA

So ironic that just when we don't need all the space, we have filled it all up with accumulated things. Believe it or not, there has sprung up an entire industry of "declutterers" to help people just like you. These people come into your home and help you decide what to keep, what to throw out, what to sell and even sell things or have them consigned or donated for you. Then they help you organize what is left for easy transference. I can't say enough about this service-most people are paralyzed by the idea of having to pare down and really benefit from having help. One local company that does this well is Survival Essentials-they have a positive attitude that makes the process painless.

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I have been told that I may no longer qualify for a loan because I depend heavily on overtime pay. Is that true? Q. Trainor, St Davids, PA

The rule is that overtime pay has to be averaged over a 24 month period and they use that average number as the "income". So while it is not a disqualifying factor, it may lower your purchase price a bit. Similarly, part time jobs cannot be considered towards income until they have been held for 2 years.

I always recommend that my buyers contact a couple of good lenders to be sure they have looked into all of the possible programs that may exist, since I have seen exceptions made to a lot of these "rules".

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We are trying to buy a home in your area, having just moved here from out West. We had an agent but her office unfortunately had a lot of the listings and we got uncomfortable with that. We actually lost out on a house where we were competing against another buyer also represented by an agent in that office. Our agent said that is common here in Pennsylvania. True? P. Loftus, Gladwyne, PA

Pennsylvania does permit agents to act on behalf of both parties to a residential real estate transaction, so long as there is a state-mandated disclosure. It also permits agents in the same office to be on opposite sides of the transaction. There are many good agents who work in this manner.
Another option, however, is to use a buyers agent who does not act as a "dual" or "designated" agent so that you avoid those potential issues that can arise. Home buyers who do this usually interview a few agents and ask about their policies and then have those agents show them all of the homes on the market and negotiate on their behalf.
I know that many of the western states have laws that encourage buyer agency. I found this out because I get a lot of clients from the west coast looking for an exclusive buyer agent. Agencies that just represent buyers are quite rare in these parts. I think, though, that the concept will gain in popularity over the next few years.

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This is a question we should know the answer to but don't. How long is a rate good for when you get a mortgage approval? We put an offer on a house but the seller wants to delay the closing while they find something to buy. Our agent says that we may have to pay something to hold a good rate for more than 45 days. What should we do? Mr. & Mrs. Agnew, Paoli, PA

That is a point that many people forget about when they are making an offer for a home. In the past, lenders were willing to lock rates for 45 or even sometime 60 days without any extra fees. That was usually enough time for the transaction to finalize and close.
The typical agreement of sale used in this area provides that the buyer has to apply for a mortgage of the specific type they designate in the exact time they set forth. For example, the buyers agree to apply for a 30 year fixed mortgage at an interest rate between 4.5 and 6.5 percent within 10 days of the execution of the agreement. Then the mortgage commitment letter is due so many days after that. Sellers want to know that their house is really sold, so they do not like to wait a long time to find out if the buyers are able to get the mortgage they said they would apply for. In your case, since the sellers are asking you to wait, they could pay the cost for the lender to commit for longer than the typical 30-45 days on the rate. The cost is usually a quarter of a point (¼ of 1 percent of the loan amount). But this charge has gone up recently. In New York City, for example, buyers pay up to 2 points to lock rates for more than 30 days. So it is a good idea to be sure you know what the cost will be before finalizing the offer.
The timing of a home purchase has many moving parts. The buyer may have a home to sell and the buyer of that home may have to give notice on a lease or need to be here for a job that starts some time in the future. School schedules, lender requirements, construction delays and many other things can impact the delicate balance. I always think of dominoes when I picture how all the timing needs inter-relate. It's actually amazing how many houses change hands so smoothly!