Some mortgage terms can be confusing, none more so than the similarities and differences between prequalification and preapproval. The two terms are often used interchangeably, but they mean very different things to lenders, real estate professionals and home sellers.
Prequalifying is a rough-idea process that tells you how much money you’ll likely be able to borrow to buy a home. You can prequalify yourself on any banking or real estate-related website simply by putting your salary, type of loan you want, down payment amount and a ballpark home price into a mortgage calculator. You can talk with a lender, who will also give you a ballpark amount without a credit check.
When you apply for a mortgage loan, you’ll share your income records, the source and amount of your down payment, and your social security number so the lender can pull your credit. This is the key difference between prequalification and preapproval – when the lender is able to review your application and verify your credit standing to make a lending decision.
The lender will get back to you within three days or less with a preapproval letter stating the maximum amount of money you’re approved to borrow.
Preapproval gives you the real numbers so you know exactly how much you can spend on a home. It lends you credibility with real estate professionals and with sellers who will take you seriously as a buyer.
Prequalification becomes preapproval once you have a purchase contract on a home. Then, the preapproval is real.
For this, or any other real estate questions, you can contact me any time! I am here to help you find your dream home!
Ready or not, we are fast approaching the season for holiday entertaining – but no matter how much you enjoy the season, it can come with a level of stress. To ease the burden, home economists advise you to do as much as you can in advance. Prep for cold weather:
- Ready the plumbing – Drain the water from outdoor faucets and garden hoses and minimize the prospect of frozen water pipes in the house by using heat tape on potentially problem pipes.
- Prep for warmth – Have the chimney inspected and cleaned, and have a professional check your home’s heating system. Replace the furnace filter and consider installing an energy-efficient thermostat.
- Seal off drafts –Install storm windows and doors now. Add or replace worn weather stripping around doors and windows and caulk any gaps.
- Do the heavy cleaning – Yes, you’ll need to keep up with basic chores, but deep cleaning now, like shampooing the carpets and vacuuming baseboards and crown molding, will pave the way for easier management later.
- Check the linen supply – Be ready for overnight guests. Check your supply of bedding and towels and add new ones if needed.
- Create a stockpile of candles – Whether for the dining room table, or any place in the house, nothing adds warmth and coziness like candles. Lay in a supply now of pillar candles, tapers and candles in pretty containers.
- Stock the pantry – You won’t get caught without a side dish or a last-minute dessert if you stock up now on canned and frozen staples and baking supplies.
- Check bed and bath essentials – Put together an assortment of toilet paper, tissues and hand towels along with basic toiletries like soaps and cotton balls so you don’t get caught short when company comes. Tucking a few nice things in a basket in the guest room will make any guest feel welcome.
- Print out your Wi-Fi info– Help holiday guests connect to your wireless network by printing out a few cards to make the info readily available. Put a few of the cards in a small basket in the front hallway or in the guest room.
Contact me with any questions that you have about any of your real estate needs. My number is (618) 978-2384 or email me at Sandie@SandieLaMantia.com.
Today, Americans can shop for anything and everything online. Need groceries delivered? Order them online. Want dog food, a new wardrobe, new car, or even a mattress for your bed? If you have a computer, you can have anything you want with just a few clicks. If you’re looking for a new home, resources like Zillow, Trulia, and others offer resources for anyone wanting to move or list their homes, searching zip codes, neighborhoods, and price ranges. Since there are so many resources online you may ask yourself, “are real estate agents still important”?
Because of today’s technology, home-seekers are able to be better informed during their new home search because of the internet, but that doesn’t mean a qualified Realtor® isn’t important. Agents do more than simply unlock the door to potential, future homes and serve donuts at an open house. It’s true that the role of the traditional Realtor® of yesteryear has been transformed, but the initial home search is really only a small portion of the overall home buying process.
Before internet home-searching became available, consumers needed information on the homes exclusively from the Realtors®. Today, that information still needs to be analyzed by the real estate agents and the process of negotiation is more multifaceted than it has ever been. In today’s market, there’s usually low inventory and a high-demand, making the agent a home-seeker’s “best friend”. When a property is under contract, there’s a lot happening at the same time and a Realtor® can help keep it all straight. Realtors® help with heated negotiations, the inspection process, and dual-offer maneuvers when they happen.
As a local Realtor®, I am a fan of today’s technology because I find that my clients are better informed, knowing what they want in their new home and what they can afford. My job description is plentiful, but one of my main objectives is to keep my clients organized during the entire process, getting the best deal for their dream home. Technology is a wonderful asset to all of us, but it’s my ultimate goal to share my knowledge as a Realtor® so clients can rely on me during complex negotiations and more. Mobile apps, for example, can help keep clients organized and see homes more quickly. However; onerecent Forbes articles does state, “While the internet is replete with information, it’s the agent’s knowledge that makes the difference between mediocrity and extraordinary.”
For example, Zillow and Zestimate is more of a range for what the home may be worth. Working in the many Metro-east communities, I understand that a home’s online list price may seem a bit high, but I’ll be able to tell you why. Website’s like Zillow offer home-seekers a starting point, but they don’t know if the homeowner recently updated a master-bedroom closet or kitchen and that’s why the online listings aren’t always an accurate representation. With my network of builders, appraisers, inspectors and lenders, I know more about the homes on sale than any website search engine does.
Because of my real estate knowledge, I can help sellers price their homes right and help buyers know the best home investment for their particular needs. I do research on behalf of my clients, communicate, and listen to them…and relationship-building is something I take seriously. Want to make the most of your home search? Contact me and I’d be happy to answer questions or assist you in any of your real estate needs. My number is (618) 978-2384 or email me at Sandie@SandieLaMantia.com.
There are still home seekers that will look for that perfect new home over the holidays, with the intent of moving into their new space in the New Year. Even though it’s not the most popular time to buy or sell real estate because of everyone’s hectic schedules and cold temperatures, house hunting will still be happening. An HGTV article cites that staging your home for the holidays should be stylish and neutral, giving a vibe of the season without going overboard.
So, what do you do so your home is styled in a festive manner without making it look like a scene from “Christmas Vacation”? The following real estate tips will help, offering ideas for decorating your home and keeping your buyers in the right spirit!
Start with a clean slate. Staging your home, no matter the season, should not be overdone. And before you even unpack that first holiday decoration, make sure to clear out and clean the clutter! Take a look at your house “pre-décor”, and make sure it’s already staged, which means the extra tchotchkes and collections have been put away. If you add your ceramic Christmas tree collection to the mix without cleaning, it will surely look cluttered.
People tend to use all additional spaces in the home when they decorate for holidays, and when staging your home, this isn’t a great idea. You still want the rooms in your home to look as spacious as possible, which means limiting the holiday décor. If you think you may miss your 20 Santa figurines, keep in mind that with a little staging strategy, you’ll be celebrating your nextholiday in a new home…and you can decorate in any way you like!
Holiday flair should be cozy and coordinating. Items like a crystal bowl with pinecones or an evergreen wreath can really spruce up your house. It’s best to also match your existing décor with your holiday style. If you have a dining room painted in a soothing sky blue, stay in harmony with it by opting for white snowflakes or silver-toned ornaments and table coverings. Adding red and green to the mix would clash and not complement. The traditional red and green color scheme works well as accent tones if your room has more earthy colors like forest greens, oranges and golds.
Also, tone down gaudy light displays while your home is on the market. It’s best to use simple string lighting to play up your home’s structure or draw attention to the gorgeous fir tree in your front yard.
Highlight the positive. As stated earlier, too many holiday items scattered throughout the home will distract, but if you add the right accessories in the right spots, it will accent your home’s best features. Think about placement of mistletoe in the arched doorway or displaying your menorah on the ledge of your living room’s bay window. When decorating, just make sure to not block a beautiful view or place cheap-looking window decals that may distract the home buyer from your lovely backyard’s vista. Own a custom fireplace? It may be best to not place 6 personalized stockings over it, taking away from its architectural details.
Neutrality is key. When trying to sell your house, it’s best to leave the life-sized Nativity scene in storage this year as well as multiple blow-ups in the front yard like snow globes with a Santa. Because you want to attract any type of home buyer, it’s best to keep low key décor that isn’t overly religious. You also want to make sure the front yard is safe and not scattered with extension cords to activate the Christmas inflatables. An example of neutral décor may include nutcrackers, reindeer and snowmen.
Trim the tree. If a Christmas tree is in your holiday décor plans, make sure the tree fits your space nicely and not overwhelm it. Have a small living room? Use a skinny tree to save space. When your house is on the market, it also may be best to use cohesive ornaments instead of the mismatched, homemade ones your children made in school. Although those ornaments are sentimental, homebuyers will not understand their significance. Instead, set the stage for a perfect holiday in your home with a tree that looks tailored and tasteful.
Have questions about purchasing a new home in the Metro-east or selling your existing one during the holiday season? Contact me for all of your real estate needs at (618) 978-2384 or email me at Sandie@SandieLaMantia.com.
There are a number of different things you can do as a homeowner to winterize your home. Where we live, we can experience the mildest of winters one year and a bitterly cold mix of winter storms and below zero temperatures the next. It’s always a good idea to prepare for the worst, so here are some simple ways you can winterize your home in the next month to make sure your home is safe and sound.
Have a winter storm kit prepared. A home safety kit is a good idea, no matter the weather. The experts recommend having a container filled with food, bottled water, and other supplies that will last up to 72 hours in the event of an emergency. Some companies even offer pre-made kits! If a big ice storm hits and the roads become too treacherous to travel on, you’ll be glad you took some time to make a storm kit. It’s also beneficial to have one on hand just in case you lose power because of storms taking out power lines.
Trim trees in your landscaping. If you live in a wooded area and there are tree branches next to your home’s roof, windows, or electrical lines, it’s a good idea to trim them now. Keep in mind that ice and snow will weigh branches down even more, so there is definitely potential for damage to your home or landscaping.
Smoke and carbon monoxide detector check. Unfortunately, the winter months have an increase in home fires and cases of carbon monoxide poisoning because people are running their furnaces more often. Keep your loved ones safe and make sure your detectors have new batteries and if one isn’t working properly, change it out.
Fireplace chimney inspections. When was the last time you had your chimney cleaned or inspected? Visit www.csia.org for information on chimney safety and to find a certified chimney sweep. Cleaning your chimney each season is just one more safeguard against house-fires.
Install proper doors and windows. The better your windows and doors, the better your energy efficiency will be. Storm doors and windows also can be beneficial, and some tax credits are even available. If you can’t afford new windows, doublecheck your insulation around doors and windows and use blinds and shades to help keep the cool weather out.
Check your heating and cooling system. There are many qualified HVAC businesses in our area, and it’s important to have your furnace inspected annually by a dependable technician. It’s also a good idea to have your home’s ducts cleaned and inspected for any leaks and to regularly change your furnace’s filter throughout the winter months. A professional HVAC technician will be able to assess your existing system and help you determine what may need to be done before the cold weather hits.
Reverse ceiling fans for better circulation. Using your ceiling fans in the winter helps to keep your house warm. On typical ceiling fans, there are switches to reverse the flow. This pushes warm air downward and helps it to recirculate throughout the rooms in your home. When warmer weather is upon us, don’t forget to switch the direction again.
Keep your house colder. Set your thermostat a few degrees cooler and you’ll be pleased at the lower energy bill. Wearing a sweater or layers while at home is one of the easiest ways to save money during the winter months on your utility bill.
Other things you can do as a homeowner to prepare for the cooler weather is to bring outdoor patio furniture and accessories inside for storing, also bringing any plants and flowering trees inside before the first frost. Another good idea is to clean and winterize any outdoor equipment like lawn mowers and trimmers, inspecting any of the winter tools you have during the process.
Even though there are still plenty of nice days ahead, winter will be here before we know it. A little planning will ensure that your home will be ready for the colder weather and you’ll be more comfortable, too. Have questions about living in the Metro-east or need some tips about home ownership? Contact me for all of your real estate needs at (618) 978-2384 or email me at Sandie@SandieLaMantia.com.
In the second part of the series, It’s Time to Start Thinking About Beautifying Your Yard, Tony Range, horticulture supervisor for the award-winning and beautiful St. Louis Zoo, shared some best practices with me. Tony and I visited recently to discuss tips for homeowners wanting to add beauty and interest to their outdoor spaces at home. Our meeting was fun and informative as we chatted about proper planting techniques, native plants, and how to create stunning landscapes based on any given surroundings.
The St. Louis Zoo is a well-known and beloved attraction in our area, but did you know that it also houses its very own greenhouse? Thousands of plants are grown at the greenhouse and are displayed throughout the park May through October. Next time you visit the zoo, make sure to pay attention to the brightly colored plants and flowers scattered along the zoo’s pathways and inside the buildings, creating a lovely atmosphere for visitors and for the animals calling the zoo “home”. Enjoy the Q & A below from our recent visit!
Now that it’s spring, it’s the perfect time to beautify your home’s outdoor landscaping. What tips would you give homeowners about the use of plants to enhance their home’s appeal?
Many of us are running out to purchase annuals, hanging baskets and more for our homes now that the weather is warming. I think what most people don’t realize is that once the plant leaves the greenhouse and goes to a nursery, they can quickly become nutrition deficient. In the greenhouse, plants are treated with nutrients to keep them healthy. Once they transition to a store and then to a home, within a couple weeks of constant watering and no nutrients, their soil is leached. Plants are hungry and need more than just tap water to flourish and survive.
Nutrient-rich plant food like Miracle-Gro™, added at least once each week to your plants, will help them grow. Today, there are even slow release fertilizers on the market with Terra-Sorb (a water absorbing gel) which offers a slow-release fertilizer for your plants and flowers. Terra-Sorb doesn’t dry out as quickly and is another way to ensure that your beautiful hanging baskets and potted plants continue to impress neighbors and friends throughout the season.
Also keep in mind, dirt is what you sweep up off of your floors whereas soil is a living, breathing entity full of microbial activity, teaming with life. Without a good, healthy soil we would have nothing to sustain our daily lives.
Are there any plants you would recommend based on our planting zone in the Midwest and which ones prefer sun or shade?
There are many plants that I love and recommend! Dragon Wing Begonias tolerate heat and the sun quite well, Silver Falls Dichondra like sun or shade and are easy to maintain, and the Dazzler Merlot Mix Impatients are shade tolerant, lovely and landscape friendly. Just keep in mind that annuals, like petunias, are tropical by nature and are typically heavy feeders, requiring fertilizers to flourish.
A tip I also like to offer is that around July 4th, it’s best to cut back those petunias you may have purchased on Mother’s Day about a quarter or half of the way. This will flush the new growth out, and you’ll love the results. Simply “pinch” to the leaf nodes. Also, when purchasing 6 packs of the plants from your local nursery, steer clear of the ones that are “tangled up”, long and misshapen. Pulling and unwinding their delicate foliage and roots is very damaging, so it’s best to find the packs that are short and tidy.
As a Realtor®, I see a lot of homes with neglected landscaping. Any suggestions that you can make to convince them that curb appeal is important?
I recommend choosing plants and plant materials scaled to the home. Not all landscaping needs to be elaborate. When planting, if the homeowner follows some basic rules, the landscaping undertaking can be fun and can really enhance their home’s curb appeal.
For instance, planting perennials in groups of 5’s and 7’s offer a bigger visual impact. When planting in groups, you’ll be happier with the overall look. Shrubs, Knockout® roses and more work best in groups of three. Even planting a Juniper, for example, should be spaced out and if you plant one in your landscaping, think about planting another one in a different section. The rule of thumb is to never plant just “one” of anything.
I like to think of plants for landscaping as notes on a musical scale, stagger the plants and always place them in groups for an impactful and beautiful display!
What are some other tips you’d like to share with our readers?
Play off the landscape with the use of limestone boulders and other types of hardscape. If you’re lucky enough to find a boulder with moss naturally draped on it, it will be a beautiful and unique addition to your curb appeal. I recommend the use of hardscapes in the winter months, trees with interesting branching habits, evergreens, birdfeeders and ornamental grasses. The Taylor Juniper is a tree that I love, with a striking appearance, growing to about three feet wide and up to twenty feet tall. Also, Blue Spruce “Fat Albert” lends a colorful blue tone to the winter landscape.
The importance of feeding and grooming your landscape plants and flowers can’t be stressed enough. Adding fertilizer is a key component to a lovely yard with curb appeal. Treating your plant’s root system with care also plays a key role in their health. At the zoo, when construction and maintenance is happening amongst the landscaping, I always let the crews know how important it is to go around the plants and trees. Disrupting the roots is much like cutting off an arm or a leg for us – they need their roots intact because it provides important nutrient and water uptake along with structural stability.
Tony Range is a horticulture supervisor at the St. Louis Zoo and also a contributing author for STLZOO Magazine. I appreciated the time he took out of his busy schedule to offer planting and landscaping tips for homeowners.
If you or a loved one is in need of a licensed Realtor®, contact me for all of your real estate needs at (618) 978-2384 or email me at Sandie@SandieLaMantia.com.
As winter becomes more of a memory and the weather turns to sunnier days, it may be time to take a peek at your landscaping and start the plans for beautifying your yard. Does it require some TLC? Not sure what it may need to become that beloved, family-friendly space again? I can help! My next two articles will be highlighting yard beautification, including an interview with Tony Range next month. Range is the lead horticulturist for the St. Louis Zoo and will offer his suggestions on how to maintain a yard that will be the envy of your neighbors, all season long.
If you are looking to enhance the overall look of your home, a beautiful, outdoor living space also increases the value of your home. A relatively recent and increasingly popular trend for homeowners is the creation of a backyard retreat, turning a home into a wonderful place for entertaining, hanging out and enjoying when the weather is inviting and the days are longer.
Homeowners who add a deck to their property or enhance their custom deck prior to selling, usually recover the cost in the sale of their home. Decks that need repairs or seem neglected can often turn away buyers because they will see additional expense and future maintenance projects. If you have a deck, it may make sense to paint or re-stain it, add some new, brightly colored cushions to your outdoor furniture, and display some potted plants and flowers. Investing in your deck and outdoor living area also adds additional space to your home, making it appear larger for potential buyers.
Even if you own a home with no future plans on selling it, Consumer Reports indicates that today’s consumers are thriftier and stay home more to entertain and to spend family time. Homes with outdoor living spaces are cited as one of the most appealing ways to spend a nice evening with those you love! When weather is prime, many clients love the idea of “outdoor living rooms”. Turn off the iPad and head outdoors to toss a Frisbee in the backyard, sharing stories of the day with your kids. When you invest in your backyard, you are investing in so much more: time with family and friends.
Another way to enhance the beauty of your yard and create a more welcoming atmosphere for your guests is by adorning your entrance, driveway and more with assorted annuals and perennials. Flowers like Petunias, Snapdragons, and Knock out Roses are great additions to your landscaping. A Southern Living article cites putting a low fence between your house and the street to give an illusion that your house is farther away from the road than it truly is andit’s also a great space for planting flowers and vines.
If you have unsightly structures in your yard and you’re not sure how to hide them, strategic planting can help! Some sheds, garages, outdoor work spaces and utility boxes in subdivisions can be less than attractive. Adding window boxes and flowers to work sheds, setting attractive planters filled with flowers atop structures, and placement of potted ferns can be great additions to your outdoor ambience. Incorporating plants and flowers close to the structure, and incorporating planters onto the walls of the structure will make it seem like a seamless accompaniment to your landscaping.
As a licensed Realtor® it’s my goal to help make your real estate dreams come true, offer tips to enhance your home’s beauty, and share my knowledge of our local market. The real estate process can be daunting, but it doesn’t have to be with my guidance! And don’t forget – next month’s blog will offer additional landscaping tips from Tony Range, St. Louis Zoo horticulturist. In the meantime, you contact me for all of your real estate needs at (618) 978-2384 or email me at Sandie@SandieLaMantia.com.
The real estate industry is bustling in the spring months, beginning as early as February! With even the thought of temperatures rising, people in the market for a new home or looking to sell begin to become motivated. Homes are hitting the market and in our area, if the home is priced right, they can have an offer that same day. If you are looking to make a change or looking for your next “home sweet home”, Spring can be a perfect time to find the perfect match.
We’ve focused on tips to sell your home in the past, but if here are some Spring time tips for buyers in real estate.
Hire a real estate professional to help in your next real estate adventure. In today’s market, a professional Realtor® is experienced in many, many transactions. If you want to find a home in your ideal location, using a Realtor® can make your entire buying process easier. A Realtor® does a lot, going beyond just the home search. We help with contracts, negotiations, inspections and any other unforeseen obstacles that may pop up. An agent understands trends in the market today and can help you navigate this fast-paced buying/selling season. Keep in mind that it costs nothing to hire an agent because the seller of your new home will pay the commission.
Pre-approval for a home mortgage helps.
So, your budget is prepped and ready to go. If you know exactly what you can spend and what you may consider a “comfortable” budget for that next home, you’re heading in the right direction. You can also meet with a mortgage specialist to determine an accurate budget for that new home, and then take steps to obtain loan pre-approval. Of course, it’s okay to go to open houses and scan the web for homes for sale, but there are benefits to getting a pre-approved loan. When buyers are already pre-approved, sellers are more likely to take notice of an offer because they know you are serious at making a purchase.
Know what you want in a new home.
If you are ready to buy, it makes sense to sit down with family members and discuss your needs as well as your wishes. Whether it’s finding a new home in a certain school district or having an unfinished basement so you can add your personalized touch, what you want in your new home should be listed and prioritized. We’ve all watched House Hunters on HGTV when a couple can’t seem to agree on their perfect home! One wants a big back yard in the outskirts of town, while the other wants no yard in an urban environment. When buying a home, you should have a strong understanding of your requirements, and if there’s any conflict among other family members make sure you rank them in order of importance.
Keep in mind, it’s helpful to be flexible because your wants may shift based on availability in the market, market trends and budget, but the better you understand the most important features you desire of your new home, the smoother this process will be.
Be prepared to compete when buying a home.
In today’s market, it’s not unheard of that buyers compete for their dream home. You may need to prepare yourself to either back down during negotiations or pay more than you had originally anticipated paying. Bidding wars have been on the rise for a while. By working with your agent, you can think of unique ways to stand out from the other buyers, going beyond just price. Maybe you offer the sellers an extra week to move out? Or honor other stipulations when looking to close the deal? I can help you find ways to create incentives when making an offer on your next home.
If it’s time to buy or sell that new home, I can help! As a licensed Realtor® it’s my goal to help make your real estate dreams come true, sharing my knowledge of our local market as well as offering recommendations during the real estate process. Now is a great time to buy a house that your entire family will love! Contact me for all of your real estate needs at (618) 978-2384 or email me at Sandie@SandieLaMantia.com
As a Realtor®, it’s my job to find the perfect home for my clients. Over the years, I’ve learned helpful tips in regards to real estate for beginners that I like to share. Whether you’re a buyer, seller or both, here are some things that will come in handy that many Realtors® wish you already knew.
The Preapproval Letter is Just the First Step. Keep in mind, the preapproval letter is just the start of the process. Before closing, a lender re-examines a prospective buyer’s finances which also includes recent credit history. If numbers have changed (decreased due to salary or spending) the applicant could end up with a higher interest rate or even lose the loan. It’s best to continue frugality in your spending even after you’ve been preapproved for the mortgage. Homebuyers sometimes want to start buying, running up credit cards for their new home. What this means: it’s best to not open new loans or increase your credit spending.
Selling a house can take longer than you think. The selling process can take time and it’s important to have realistic expectations on the timeframe for selling a home. Different markets and different home prices move at different speeds, so you can’t always base your schedule on what happened to a friend in a different neighborhood or state. Negotiations after an offer can take 24-72 hours, and typical closing preparations can take 30-45 days. I can help price your home for the right amount so that the entire process flows smoothly and in a realistic timeframe.
“Buyers” may not all be able to buy. Just because you have an open house with many, many people walking-through, it doesn’t always mean the buyers are ready to purchase. Keep in mind, people walking through homes during an open house may all be at a different stage in their home search. It’s true that pre-qualification letters are used to confirm buyers have good credit and give salary information, but a serious buyer will have already applied for a loan and the bank has verified their finances, giving a specific dollar amount to the loan. Most agents will also call the lender and verify the buyer is pre-approved for that amount. If a buyer has already applied for a loan, they are ready to make that move into a new home.
It’s the whole package. Buyers need to walk through a home and feel good about what they are seeing, and that even includes the home’s smell. As a buyer, it’s also important to look at the new space and be able to imagine your own personal style in the prospective home’s layout. For sellers, it’s always beneficial to pay attention to the little things. Clean carpet, a fresh-smelling home, and lack of knick-knacks around the house really does help sellers present their home in a more desirable manner for buyers…and buyers will notice.
As a buyer, think about your needs for today and long term. Buying a house can be a big financial commitment, and as a buyer it’s important to think about your long-term plans when searching for a new home. Are you planning on staying at your current job or is there a chance you may relocate? Will you be starting a family soon? Depending on the market and the terms of your mortgage, you may not actually pay down any real equity for several years. Keep this in mind if you aren’t sure about the prospective new home fitting within your long-term needs. If not, you may want to keep looking.
If you aren’t entirely sure of the details necessary to get your house “showroom ready”, I can help. As a licensed Realtor® it’s my goal to help make your real estate dreams come true, sharing my knowledge of our local market as well as offering recommendations during the home buying or selling process. Now is a great time to buy! Contact me for all of your real estate needs at (618) 978-2384 or email me at Sandie@SandieLaMantia.com.
Are you familiar with the term “escrow”? It has several meanings in real estate, but the most simplistic definition is that an escrow account is set up for you by your lender to pay for homeowner’s insurance and property taxes when home ownership costs are due during the course of any given year.
Basically, escrow is when an impartial third party holds on to something of value during a transaction, and in the case of real estate, buyers write an earnest money check when making an offer that is then placed in escrow. The impartial third party holds on to the check until the buyer and the seller negotiates a contract to hopefully close the deal. When in escrow, the buyer and the seller can’t touch the money. It’s in a sort of “real estate limbo”.
The reason the check is handled by a third party is to protect both parties involved. If you put down earnest money and that money goes directly to the seller, what if the seller decides to hold the earnest money as a way to negotiate? When the money is in escrow, you know that everyone involved in the transaction is treated fairly and gets what is due at the same time.
When talking with your mortgage lender, the term escrow will come up again. Terms like escrow, impound or reserves may come up. All terms mean the same thing: they are funds held by the lender to make payments for your homeowner’s insurance and property taxes. Another term, prepaids, is money collected in advance for bills to make sure there’s enough money on hand to pay when due.
What’s escrow and closing mean?
When the agreement has been made and the purchase is complete, the term “closing of escrow” will be used. Closing officers or escrow officers will sit with you and oversee the final paperwork and make sure the transfer of funds happens smoothly. During the closing, the officer wants to make sure the recording of deeds, money disbursement and all paperwork has been properly signed and recorded. The closing process does take a little bit of time, but it’s important that all conditions are met to make sure the transaction is accurate and complete.
When does a hold-back of funds happen?
Sales can still be completed with a transfer of ownership when funds are still in escrow. One example of this is if you’ve made an agreement with the seller to stay in the house for an agreed upon amount of time while their new home is completed. When participating in this “rent back” agreement, a real estate agent will advise you to have the escrow agent hold back some of the seller’s proceeds until vacating the premises entirely. The reasoning? Your new home should be left in the condition specified in your real estate contract with no damage, etc.
Sometimes during a final walk-through of the new home buyers find something wrong. Also in some cases, work cannot be done prior to the move-out date. If this happens, it’s a good idea to keep money in escrow to help with the expense. Hold-back of funds is also used in new construction, keeping money in escrow until work is completed and the paperwork is signed.
After escrow is closed and all funds have been distributed, the buyer and seller will receive a final closing statement and completed documents in the mail. Make sure the statement is reviewed carefully and if you see anything incorrect or have a question, contact the closing agent as soon as possible. Next, file the statement with all of your other important papers. When tax time comes, you’ll need to have the documents easily accessible for income tax return season.
Let me help you with your next home adventure! As a licensed Realtor® it’s my goal to help make your real estate dreams come true, sharing my knowledge of our local market as well as offering recommendations during the home buying or selling process. Looking for a new home in 2018? Contact me for all of your real estate needs at (618) 978-2384 or email me at Sandie@SandieLaMantia.com.