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Clermont, FL

The Art Of The Seller Financing Offer --Clermont Florida

07-22-10
Johnny Davis
Johnny  Davis: Real Estate Agent in Clermont, FL

I didn't seek out to be the "seller financing" guy in Clermont Florida, but after successfully closing several seller financing deals in 2010, I am having more and more people approach me about finding them a house or investment property where seller financing is available.

Let me clarify, I am not talking about bank owned properties where you can get financed through the bank. I am talking about properties that are seller owned and they will hold a mortgage for you.

When you finally find that property that you are interested in, here are some tips that you may find helpful when constructing your offer:

1.) Don't Low Ball. I know, everybody wants to get a great deal. However, you are asking an owner to finance you on a property that he wants to sell and not have to worry about anymore. If the asking price is $150,000, I wouldn't suggest you offer $95,000. However, it is your offer, so offer whatever you are comfortable with. I look at it this way, if you are looking for owner financing, more than likely you can't get approved for a mortgage, so you have to give a little (even if it means paying a little more than you want) to get a little.

2.) Offer a decent sized down payment. Typical real estate commissions are between 5-6%. So on a $150,000 house, just the commission alone that the seller pays is between $7,500-$9,000. Don't expect the real estate agents involved to cut their commission for you. I have in the past, but that is only when I am representing both buyer and seller. Don't forget closing costs as well. The seller will have closing costs that they need to pay. I would advise you to seek out a title company (if you use me, I will do this) and have them give you a preliminary HUD showing what closing costs are estimate to be. I would make sure that your down payment covers at least the real estate commission and the closing costs. I don't believe many sellers will want to bring money to closing in order to sell their house. More than likely, the seller will also want to walk away with a little in their pocket as well. Keep that in mind.

3.) Offer reasonable terms. Most sellers are not going to give you a 30 year loan like the bank, so I wouldn't even ask for it. However, you can ask for a 30 year term, meaning that your loan will be based on 30 years. I would also recommend that you offer a balloon payment in the 5 year range. This will give you 5 years to come up with the money to pay the loan off or get it refinanced. You may even be able to try a 7 year balloon. Remember, you want to make your offer as enticing to the seller as possible. You don't want him or her to look at it and blow you off right away.

4.) Offer a reasonable interest rate. You can get interest rates from the bank for 5%. With that information, do you think an owner will finance you for that same 5%? Probably not. I'd expect you to pay somewhere between 6-8% for seller financing. If you ask and get that 5%, that's great. I wouldn't advise you low ball under 5% though. Show the seller that you are serious and they will probably be more inclined to deal with you.

5.) Make your offer on the FAR BAR "As Is" contract. This gives you the option to do your inspections without you having to write a bunch of contingencies into the contract that may be unattractive to the seller. More than likely, the seller isn't going to pay for repairs to the house that he is seller financing for you. Seeing the "As Is" will make your offer stronger, but it also will give you some protection and options.

I hope this tips will help you purchase the home or investment property that you are looking for. Good luck!!

Lender cutting appraised values?

Richard D Ferris Florida State Certified (FHA) Appraiser: Appraiser in Clermont, FL

In a recent Fannie Mae Selling Guide update – the GSE addressed this issue of lenders who have been reducing opinions of market value:

In the past, Fannie Mae did not provide requirements concerning lenders making changes to the opinion of market value reflected in the appraisal report. During Fannie Mae’s post-purchase reviews, cases were identified where the lender had reduced the opinion of market value in the appraisal report based upon underwriter judgment, automated valuation models, or other methodology. Therefore, Fannie Mae has updated its appraisal policies to address the practice of lenders changing the appraiser’s opinion of market value and also to provide specific guidance when an appraisal is considered deficient.

Now instead of just making these based on the underwriter’s judgment or other computer aided reports – Fannie Mae is requiring that lenders go back to the original appraiser to address concerns. I love the fact that they specifically address that :

Any request for a change in the opinion of market value must be based on material and substantive issues and must not be made solely on the basis that the opinion of market value as indicated in the appraisal report does not support the proposed loan amount

This is just one more reason why the homeowner or prospective buyer should always get a copy of the appraisal! Do you think there has ever been a case where the lender just wasn’t “comfortable” with the appraised value? (AKA – we don’t like something about this borrower, so we cut the value for the appraisal and deny the loan!)

Buyers or refinancers should ALWAYS, ALWAYS, ALWAYS get a copy of the appraisal report to know the facts themselves! And here is another tip: Appraisers typically CANNOT tell you the appraised value. Since we are contracted by the lender (or through an appraisal management company {AMC} ) – we can ONLY deliver the results to the client who ordered the appraisal. We cannot disclose our findings or results to anyone other than the specific client noted on the report.

If you are looking for an appraisal or an appraisal review in the Clermont, Florida area (or sounding counties such as Lake, Orange, Osceola, Polk or Seminole) – please consider an appraisal company with experience, geographic competency, and a penchant to dig into the numbers to reveal the truth! AmcAppraisalsinc.com

Meet me for coffee!http://freedomby2.biz

Fixing Toilets Stinks!! Clermont Florida Property Management Solutions

07-09-10
Johnny Davis
Johnny  Davis: Real Estate Agent in Clermont, FL

Exit Drills Protect Your Family.

Steve Lightcap Jr.: Inspector in Clermont, FL

While fires themselves may not always be foreseeable or preventable, in many cases the injuries they cause can be prevented with a family escape plan.

Of course, one of the important steps in fire prevention is to install smoke detectors and check them monthly. But having these safety devices is not enough. According to fire experts, once a smoke detector sounds, you and other member of your household may have less than three minutes to escape. It’s critical to have an emergency escape plan and rehearse it regularly:

  • Chart the Plan: Draw a floor plan of your home, one for each level of the house. Label bedrooms, staircases, hallways, and roofs that could be used as fire escapes.
  • Survey Your Home: Check each bedroom for two possible escape routes. If you live in an apartment building, do not plan to use the elevator to escape. Make sure everyone, including children and the elderly, are able to open and fit through alternate escape routes like windows. Security bars should have a quick-release for emergencies. Consider keeping fold-away emergency ladders for upper-story windows.
  • Map Escape Routes: Use markers and arrows to mark the preferred escape routes from each bedroom. Use different colored markers to show alternate emergency routes. Chart a place outdoors for everyone to meet after they exit. Consider charting individual plans for each bedroom of the house to keep each plan neat and uncluttered.
  • Remember Guest Rooms: Chart a plan for guest rooms and areas that are used to host sleepovers and other gatherings.
  • Discuss and Practice the Plan: Hold family meetings to explain the plan. Practice the escape routes at least once a year, particularly when they involve hazardous exits, such as windows.

Families might never need to implement such a plan, but the one time they do, it will certainly be worth it. Remember, when in doubt, always consult a professional. More home safety information and maintenance information is available online at housemaster.com.

This information is provided for general guidance purposes only. Neither DBR Franchising, LLC nor the local HouseMaster® franchise warrants its accuracy and assumes no liability related to its use. Contact the local franchise office and/or qualified specialists for advice pertinent to your specific house or circumstances. © Copyright 2008 DBR. Each HouseMaster franchise is an independently owned and operated business. HouseMaster is a registered trademark of DBR Franchising, LLC.

Common Electrical Concerns

Steve Lightcap Jr.: Inspector in Clermont, FL
This information has been compiled to assist homebuyers and home owners in their understanding of the issues common to residential electric systems. All electric work should be performed by a qualified licensed electrician. In some cases, the presence of electric defects, problematic components, or antiquated systems may be an issue in obtaining homeowner insurance.

Electrical Service Issues
The use of electric appliances and devices has increased substantially since the first homes were wired for electricity. For the typical size home, 100 amps is generally considered the minimum acceptable electric capacity. For large homes or homes occupied by the typically modern family making use of many of the electric devices now available, at least 150 ampere would be more appropriate. All electric homes generally require a 200 amp service. While a certain service size may have been adequate for a particular home in the past, any renovation work or the upgrading of major appliances may necessitate an increase in the capacity of the panel and/or household service.

The service lines which carry electric power from the utility company to a house can be buried or run overhead. Overhead lines must have adequate clearance over all points on the property and the house to avoid accidental contact (ladder, poles, etc.). Tree limbs and other vegetation must also be kept clear of the lines. A damaged service line or connection presents a potential hazard. The utility is usually responsible for maintenance to the point where the line connects to the house.

Electric Panels
The main panel is the connection point between the incoming service lines and the house wiring. It typically contains a service disconnect (the main shut-off), overload protection (circuit breakers or fuses), and associated conductors (wiring). All circuits in the panel should be clearly labeled so that a particular circuit can be readily located in an emergency or for servicing needs. It is generally recommended, and now often required, that there be a main disconnect to shut down the house’s electrical system quickly and easily. If there is no main, consideration should be given to providing one, particularly if there are numerous submains or household circuits.

The rating of circuit breakers and fuses must be compatible with the connected wire. Oversized fuses or circuit breakers present a potential hazard. The standard household wire sizes are 14 AWG (American Wire Gauge) and 12 AWG; these conductors should be protected by 15 and 20 amp fuses or breakers, respectively. Multiple circuits connected to a single overload device are often found. While this practice is common, the potential for an operational nuisance or overload hazard may exist. It is good practice (and in many cases required) to have only one wire connected to an individual circuit breaker or fuse.

Grounding and Polarity
Electric continuity or bonding must be provided from all points in an electrical system to a grounding electrode (rod). Ungrounded components should be corrected. Older two-prong electrical receptacles without grounding provisions do not allow for the proper grounding of appliances. While an adapter may work in certain temporary situations, permanently grounded three-prong receptacles are recommended in locations where appliance grounding is required. In some situations, rewiring of the circuit(s) may be necessary. Another common condition, reverse polarity, occurs when the electric conductors on a circuit are reversed or improperly connected at a receptacle, or other device. While the affected device may function, the potential for electrical shock under certain circumstances exists and should be rectified. If a spot check of a system indicates improper grounding or reverse polarity in areas, the entire system should be checked as a precautionary measure.

Knob and Tube Wiring
This is the type wiring originally used in many older homes. While it may still be functional, there are likely areas with damaged insulation and other concerns. It is a two-wire system that is not compatible with modern appliances that require grounding. If present, an electrician should check all areas to determine the repairs or upgrade work required.

Aluminum Wiring on Household Circuits
While now commonly used primarily on main service lines and major appliance circuits, aluminum wiring was also used on household circuits between 1964 and the mid 1970s. The inherent characteristics of aluminum, and the wiring methods and/or materials used for household circuits, resulted in faulty connections, which created hazardous conditions. Since then, warnings about fire concerns and the development of new devices designed for aluminum led to remedial work being done on many systems. However, it is still generally recommended that all aluminum systems be checked prior to title transfer, and periodically thereafter, to determine if remedial work is required.

Federal Pacific Electric Stab-Lok System
Issues have been raised regarding the inherent safety of FPE Stab-lok panels installed in many homes prior to 1990. Concerns focus on the ability of breakers to properly trip under overload conditions and the suitability of breaker connections. Some of these panels have already been repaired; many other panels are older and are at the point where repair or an upgrade may even be needed for other reasons. In any case, it is generally recommended that FPE Stab-Lok panels be inspected by an electrician knowledgeable with the associated issues. In many cases, replacement may be recommended.

Ground-Fault and Arc-Fault Interrupters
Ground-Fault Circuit-Interrupters (GFCI) are personnel safety devices that have been required for new electric work in certain high-hazard locations (e.g., kitchens, bathrooms, and exteriors) for many years. Even if not required at construction or with completion of electric work, it is generally recommended that GFCIs be installed in all high-hazard areas. Arc-Fault Circuit-Interrupters (AFCI) are designed to reduce hazards associated with frayed wires and arcing, particularly in areas such as living rooms and bedrooms. If not present consider adding for safety. Should a GFCI or AFCI “trip,” without a readily detectable cause, the circuit in question should be checked by a licensed electrician. Regular testing of GFCIs and AFCIs using the built-in tester is recommended.

Remember, these tips are only general guidelines. Since each situation is different, contact a professional if you have questions about a specific issue. More home safety and maintenance information is available online at housemaster.com.

This information is provided for general guidance purposes only. Neither DBR Franchising, LLC nor the local HouseMaster® franchise warrants its accuracy and assumes no liability related to its use. Contact the local franchise office and/or qualified specialists for advice pertinent to your specific house or circumstances. © Copyright 2008 DBR. Each HouseMaster franchise is an independently owned and operated business. HouseMaster is a registered trademark of DBR Franchising, LLC.


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