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April 16, 2021

7 Questions for your lender

Here are 7 important questions you should ask your mortgage advisor. Geared toward First Time home buyer questions, but important to anyone buying a house. Get the right mortgage loan questions and answers the first time you meet with your lender.

What questions should you be asking your lender?

Buying a home can be overwhelming, especially for first-time home buyers.

I provided a Buyer Checklist. It'll take you to it, print it out, take it with you, keep it with you, so you're doing everything that you need to do to get to the closing table. 

One of the steps is getting pre-approved for your loan.

And these are the questions you should be asking and writing down so that you can discuss it with your buyer agent.

 1-What type of loans do they offer and which one is the best fit for you and your needs? 

This is important information when you're purchasing a property because certain loans have limitations on what they will allow if the home needs repairs. 

For an example, you're looking at a foreclosed property. It has broken water pipes, it's been disclosed, but the lender is not willing to do any repairs to the property, nor will they allow the buyer to do any repairs. One of the loan requirements for FHA is the home has to be habitable. So not only are you qualifying for your loan, you need to discuss with your realtor as to whether that home you want to look at is going to qualify for your loan. 

There are rehab-type loans that are available, that you could discuss with your lender. But does that lender offer that? 

So back to the first question, what loan types do you offer, and how are they gonna benefit me? 

2-How long is the rate you have quoted me good for? 

Interest rates change daily, so in order to take advantage of a really low interest rate that is happening at this particular time, you need to get pre-approved for your loan so that the lender can lock that loan percentage in, and there's no penalties to you to take advantage of it later. 

So the timeframe in which they're able to lock in your rate is how long you have to get to closing, not to find a property.

So if your interest rate is only good for three months, you have two months to find your home at a bare minimum, because it can take 30 to 45 days to close on a loan.

3-How long is it before the loan can close? 

Mr. Lender, I have found the property I would like to buy, if I made an offer on it today, how soon could we close on it? 

4-Is going to be whether you need mortgage insurance or not?

When you're purchasing a property, you have to take into account your property taxes, how much your mortgage insurance is, how much is your homeowner's insurance? Things of that sort that you have to pay on a yearly basis. Those are numbers that have to be paid in order to protect you and the lender. But with that protection comes a hefty monthly addition to your mortgage.

Mortgage insurance is not the same thing as homeowner's insurance, your homeowner's insurance is it protects you against fire, mortgage insurance protects the mortgager if you default on your loan. Loans that are 80% or more of the value of the home, require mortgage insurance.

5- You're also going to want to ask your lender, if the mortgage insurance drops off, once you have hit 80% or less of your loan to value?

6- How much can I ask the seller to contribute towards my closing costs?

The percentage that they give you is the maximum amount that you can ask the seller to contribute towards your closing costs. And that percentage is based on the sales price. I cannot stress how important this number is to you and your realtor, because when you are ready to purchase your property, you need to know how much your closing costs are, and how much of that you can ask the seller for if you don't have enough.

Now, I will make a note here that just because they say that you can ask for up to 6% in closing assistance on the seller side, it's not likely that you're going to get 6% in my area. The average amount that the sellers are willing to contribute toward buyer closing costs is 3%. That includes banks. So foreclosures, almost all of them will offer a 3% in closing assistance, if it is an owner-occupant making the offer, you just have to make sure you put that in your negotiations upfront that you're requesting 3%.

Now. I wanna point out these are in no particular order. They are all something you should ask when you are getting pre-qualified or pre-approved for the loan to purchase your property. And the last one I'm gonna point out today is

7- How much are your closing osts and your down payment? These numbers are very, very important. 

They are important because you need to know how much you need to bring to the table. And how much of that, if any, can you ask the seller to contribute towards? So if you have not gone through the steps to get pre-approved, you're not going to know the percentage that you can ask the sellers assistance for.

Think about it, if you're making that offer and you ask for the 3% and you actually need 4 ,you may not be able to purchase the property.

 

Posted in Buying a Home
April 12, 2021

What are the best schools and safest neighborhoods in Washington County?

Questions realtors hear on a regular basis but are not allowed to answer? 

So a lot of you when you're moving into an area you want to know where is the safest place to move? 

But in real estate we are not allowed to discuss these because it can lead to steering.

What do you mean by steering? Well steering is where you talk someone into moving into an area based on an assumption. 

We all have opinions and they are not the same. Everybody has different views on different things in their lives. So in real estate if I were to tell you which school I thought was the best school, it may not be the same thing in your eyes. 

If criminal record is of concern to you then you're going to want to look up the public records to find out if the police are called on a regular basis to that area and which houses they're called to more often. Washington County Sheriff's office Crime Statistics and Maps: https://washcosheriff.com/crime/crime-statistics/

If you have a specific neighborhood that you're looking for you can pull it up and see if there are many calls for the police and what those calls are for. 

This way you can make that educated decision on what neighborhood is best for you. 

Which are the best schools? Is another question I hear a lot. 

Check out the Washington County School districts , see where their grades are and explanations of the different schools. Other resources are Maryland Schools Report Card and Great Schools Organization Scores for Public and Private Schools.

So what does that mean to you? It means your realtor is your resource. So reach out to your realtor, find out where your local school district's website is so that you can pull up the school records. Find out what the scores are and pick a school that is best for your needs.

When you found a neighborhood that you like I recommend that you drive there and you spend some time in the neighborhood, talking to the neighbors finding out what is going on in the area.  A lot of neighbors will be glad to discuss their neighborhood with you , a lot of them are proud of their neighborhood and they love to talk about it.

Posted in Buying a Home
April 9, 2021

Pros and cons of living in Maryland

Pros and cons of living in Maryland, specifically Washington County, Maryland.

Did you know that Maryland is the ninth smallest state in America? And it's been nicknamed America in miniature, due to the plethora of different parks that we have in our state because 40% of the state is covered with trees.

This leads me to our number one pro for living in Maryland is the great outdoors. We have state and national parks in abundance. So you have hiking, biking, swimming, boating, fishing, you name it and we have it.

Surrounding the Hagerstown area we have Cunningham Falls, Greenbrier State Park, Gathland State Park, Gambrill State Park, South Mountain Park, Rocky Gap and Fort Frederick State Park just to name a few. Two hours West of us we have Deep Creek Lake and about three and a half hours to the East we have Ocean City.

Number two would be the amount of beaches that are in Maryland.

We have miles and miles of beaches and don't forget to stop by Assateague Island and visit with the wild horses that run free.

Number three, Maryland gets to experience all four seasons. So if you like snow, but if you like summer this is the state for you. Our location is in an area where the temperatures don't get too extreme in one direction or the other on a regular basis but you get to experience all four seasons here.

The fourth pro for Maryland is the plethora of museums and monuments that are there to visit. It would take you years to visit all of them and don't forget to stop by the aquarium at Baltimore Harbor.

Our cons here in Washington County, of course, is going to be traffic for commuters. If you are headed East for work commuting you are going to get stuck in traffic. There's no way around it unfortunately. If you head West in the spring or the summer on a Friday, or come back on a Sunday, headed to Deep Creek, you're going to hit traffic.

For the most part in Washington County, we don't have a lot of traffic, but for commuters just be aware that Maryland does have a lot of rush hour traffic.

Number two con would be the housing prices are above the national average in Maryland. The farther West you go, of course the lower those prices are going to come down.

Just as an example, last year (2020) in Washington County our average sales price was approximately $245,000 where in Frederick County, right next door that average sales price was around $383,000.

If you're looking to rent, be aware that your average rent in Washington County is going to run you around $1,200 and in Frederick County it's going to run you upwards of $1,800 a month.

The number three Con is with higher sales prices comes higher property taxes. So be aware homeowners, you will probably have a higher property tax than you were used to if you were moving into the State of Maryland.

Number four con is the Bay Bridge. If you want visit or have to commute back and forth through the Ocean City area, you're going to get stuck in the bottleneck at the bottom of the bridge.

I also want to point out that that bridge is 4.3 miles long, it also sits upwards of 354 to 379 feet in the air depending on which direction you're headed.

If you don't like driving across bridges I would recommend you reach out to one of the people who will drive you across the bridge. That service is pretty cool, there is someone who will drive you from the beginning of the bridge to the end of the bridge and then you pick it up from there, for a fee...

Posted in Buying a Home
April 5, 2021

4 Ways to Pay off your Mortgage quicker

Today, we're discussing how to pay down your 30 year mortgage quicker than 30 years, so let's get to it. I'm Sandy Curtis with Berkshire Hathaway Bowen Realty in Hagerstown, Maryland, and today we are discussing paying down your mortgage early.

So let's discuss the different ways to get your mortgage paid down a little bit faster than you would with a 30 year mortgage.

There's obvious advice that I can give you, such as don't spend the maximum amount of money that you're pre-approved for. Just because they pre-approved you for it doesn't mean you need to spend it. Also keep in mind that it is best to try to qualify for your mortgage based on one income. So if you have a dual income house, then you want to use one of your incomes to qualify for your loan. That way if something were to happen, you would have the other income to fall back on.

Another thing to keep in mind is the more money you put down on your mortgage, the quicker it's going to be paid back. If you have credit card debt, you should pay your credit card debt down before you pay your mortgage down because your interest rate on your credit card is revolving and it is more than likely higher than what your interest rate is on your mortgage.

Living frugally can help you also, because you're not spending more money in different aspects of your life, and it gives you extra money each month to put towards your mortgage payment, in other words paying your mortgage down sooner.

So there's a few things I do recommend you do to help pay your mortgage down a little bit quicker than it normally would if you didn't follow these steps. We have now borrowed the full, maximum amount of our house, we have put a fairly large amount of money down, and we have equity in the home, but we want to pay the loan down so that we don't have that over our heads and we can live in the house without a payment due every month. That sounds ideal.

Well, how would you go about doing it?

It's going to depend on your individual needs and abilities. The first thing anyone's going to tell you to do to help you pay your mortgage down is make an extra payment every year. If you make one extra mortgage payment every year, it can knock years off of your loan and save you thousands in interest.

Let's have a look at Dave Ramsey's calculator, and show you how you can pay your loan down faster based on how much you pay. Okay, so let's say our loan amount is $200,000. Just for easier math we're gonna use $200,000 as our loan amount. Our first payment is due in January of next year, just saying, if you have a current balance, there is also a button here, the blue letters, you can click on that and use your current balance on your current loan.

This is just an example though, so we're gonna use the basics here. So our loan amount's $200,000, first payment's due in January, it's a 30 year loan, and it's at 3% interest, giving us a principal plus interest payment of $843.21. So if we were to make an extra $200 a month payment bringing our payment to $1,043.21, and we do that on a monthly basis, we would be saving $30,910.34 cents in interest, guys. That's a car! And eight years and two months off of your mortgage. That's pretty awesome. That just turned your 30 year mortgage into a 22 years mortgage, not bad.

Let's say you rent out one of your rooms and you're getting $400 a month, well, let's add that $400 to your $843 monthly payment, and that's gonna come in at $47,395.36 savings in your interest, guys. That's almost $50,000, and it cuts 12 years and nine months off of the mortgage.

That's pretty awesome, but we're not all in that position, so let's back this up and say, okay, well, I have an extra $50 each month that I'm going to make on my mortgage payment, and that $50, $50 extra a month is going to save me $10,000 in interest and cut two years and seven months off of the mortgage. That's pretty awesome.

Let's say that we have the ability to make only one extra mortgage payment. So remember, our mortgage payment, based on this $200,000 loan amount, is $843.21. We're going to do this yearly, so we have that one extra mortgage payment per year, and that is going to save us 14,033.66 in interest and cut three years and seven months off of our mortgage. That's pretty awesome.

Let's say you come into some money one year, let's say it's $10,000, and you wanted to put that towards your housing. Can you do a one-time payment? Why yes, yes you can. And how much would one payment of $10,000 save us on our original loan of 200,000? It's gonna save us $13,000, so if you put down 10,000, you're going to save an additional 13 in interest. That's pretty good guys, two years and four months off of the mortgage.

So as you can see, paying down your mortgage could be a benefit to you even if it's just a one-time payment, a monthly payment, quarterly, yearly, you choose. Just make an extra payment on your mortgage and pay that loan down a lot faster.

Now, do I recommend 30 versus 15 years on your loan? Again, it is going to depend on your individual needs and your individual goals as to where you wanna be in 15 or 30 years. However, I will note that a 15 year mortgage is going to have a much larger minimum payment due every month for that 15 years, whereas a 30 year mortgage is going to have a much lower payment due each month, and it could open you up to making an extra payment or two.

If you can afford the higher mortgage payment on a 15 year loan, but you have a 30 year loan right now, don't refinance it and pay extra to refinance when you can just put that extra payment towards your monthly mortgage payment and pay your loan down faster.

These are all things that I have picked up over the years. I am not a financial advisor so please, by all means, if you have further questions about how to save money or how to invest your money, that is a financial investor question, and I would recommend you reach out to them.

Our options are to keep your loan as a 30 year mortgage versus a 15 so you're protecting yourself with a lower monthly payment in case something were to happen, but you're living frugally and you're saving money each month to go as an extra payment towards your mortgage. So you're paying your mortgage down a little bit faster each month, and it brings years and thousands of dollars in interest off of your loan in the end.

However, I will note that if you can afford a fairly hefty extra payment each month, it might be in your best interest to look and see if it is a value to you to invest that money versus paying the mortgage off sooner. I am not a financial advisor in any way, shape, or form. I am just giving you feedback on what I have seen over the years, and maybe it will benefit you. Pay your mortgage down sooner, become debt-free, or invest towards your future. 

 

 

Posted in Buying a Home
March 31, 2021

Good Neighbor Next Door

Calling all Firefighters, EMTs, Teachers of kindergarten through 12th grade, and Police officers.

If you're looking to purchase a HUD home in a revitalization area, you could qualify for a 50% off discount.

What am I talking about? Well, let's discuss this program and how it may benefit you. 

HUD has many programs that are available out there, however, one of them I wanted to bring to your attention, because if you are a police officer, a teacher of kindergarten through 12th grade, a firefighter, or an Emergency Medical Technician, EMT, you could qualify for 50% off of a HUD owned property if it's located in one of the revitalization areas.

It sounds too good to be true, right? 50% off, are you kidding me? Well, there are some rules that you have to follow, such as you have to sign that you're going to live in the property for the next three years at a bare minimum. Technically, the discount that you're getting on the property is going to be a second lien on the home for those 36 months. If you stay there for the 36 months, it drops off and it goes away.

HUD does require you to sign as a second mortgage, but it's at 0% interest, and zero payments. They call it a silent second. Your personal loan is going to be for the 50% that you're paying for the home. The silent second is for the other 50% that is discounted off of the home.

So how do you know if you qualify for this program? Well, you're welcome to go the HUD home store website and click on the Good Neighbor Next Door link, or you can call a listing agent of a HUD property and they will be able to discuss the program with you. Keep in mind that the HUD revitalization areas are limited, so you want to make sure that you know that you're looking in the area that you want to take advantage of the program in.

To qualify as a law enforcement officer for the Good Neighbor Next Door program, you must be a full-time agent of the federal government, the state, a unit of the local government, or an Indian tribal government. You must directly serve in the locality of where the home is located.

A teacher qualifies if the person is employed full-time as a teacher with a state accredited school, public or private, that provides direct services to students in pre-kindergarten up to 12th grade. And you must also be looking for a home located in the area that you're serving.

For firefighters and EMTs to qualify for the Good Neighbor Next Door program, you must be employed by a local fire department or emergency medical service responder, unit of the federal government, a state, a unit of general local government, or an Indian tribal government. You must also be full-time employed and serve the area that you're looking to purchase the property in.

How do you find out where the properties are located? Well let's take a look at the map. Take a quick look at the map to see what area near you will qualify for the Good Neighbor Next Door revitalization area, see all that blue there? Those are the revitalization areas. You can see Washington, D.C., and Baltimore have quite a few areas that are available. Looks like there's a place in Atlantic City that qualifies as a revitalization area.

So they're looking for people who are giving back to their community and can help protect and serve that area. If you'd like more information about the Good Neighbor Next Door program, you can always comment below and I will answer it. You can also reach out to your local HUD real estate agent and ask them to help you and get more about the program.

Posted in Buying a Home
Feb. 10, 2021

How to buy a home with low income

 

How much house can I afford? Well, that's a question we hear a lot, and we're going to talk about it now. I'm Sandy Curtis with Berkshire Hathaway, Bowen Realty, in Hagerstown, Maryland, and today we're discussing how much do you need to make to buy a house?

There's a lot of factors that go into a mortgage. The three main things that are going to affect your ability to buy a home are your credit score, how much you have to put down on the mortgage, and your debt-to-income ratio.

The higher your debt, the higher your interest rate could possibly be. The lower those numbers are the better. When bankers are doing the numbers, they take your income and then they also take your outgoing bills or debt, and then they run the numbers to make sure that you fit within the criteria of the loan that you're looking at.

No more than 28% of your monthly income should be used towards your monthly mortgage payment, and no more than 36% of your monthly income should go towards your debt. So, how much of a monthly mortgage payment can you afford to pay? Well, based on the 28/36 rule.

Let's use an example of $5,000 gross monthly income. That's just a general round number. It's easy for me to remember. So 5,000 gross monthly income, where would your mortgage payment need to be to be below the percentage that it's acceptable by your lender for your mortgage payment? Let's use an example of $1,400 a month in mortgage, at a 5,000 monthly gross income. That puts you at that 28% debt-to-income for your mortgage payment. So you would want to keep your payment below $1,400 a month.

Now, where would that put us for your debt? Now, your debt includes your student loans, your personal loans, your auto loans, your credit card payments, child support, alimony, and then they divide all of that by your monthly income. So let's use the example that you have $5,000 coming in every month in gross, and that you have $1,800 in debt that you are paying out every month. Doin' the calculation on that brings us at 36% of your debt-to-income ratio. So you're gonna wanna pay those bills down sooner rather than later, because the more debt you put on there the higher that percentage is going to be, and the less likely you are going to get qualified for a loan.

The quickest way to do these numbers is to reach out to your lender and ask them to run the numbers for you. That way they know that the taxes, the hazard insurance, and your homeowners association, any other additional fees that are needing to be paid towards that property, are included in the estimated monthly mortgage payment.

Keep in mind that those numbers are the highest numbers. So it's in your best interest to keep those numbers below 28 and 36. Just because you have money every month doesn't mean that you necessarily need that fourth bedroom if there's only two of you living in the house. Keep your monthly housing bills down below 28%. Honestly, I would keep it below 25%.

And if your debt is at 36% or higher, start working on paying that debt down. The sooner you have that debt down, the sooner you can start saving money to go towards your down payment on your purchase. Keep in mind that credit scores, the higher that credit score the better your chances of a lower interest rate is going to be. The lower your debt is the better.

And the more money you have to put down on your mortgage is also going to affect your interest rate, and in a good way.

If you have mortgage lender specific questions, I do have some lenders I can refer to you, but I do recommend that you reach out to a lender and discuss those questions with them so that you get the answers that you need.

Keep in mind that there are home ownership costs that you should be saving money for in the backend. So if you've maxed out your debt to your income, if something were to go wrong in the house, you may have an issue later on down the road, which is why you wanna keep your debt below that number. Things like your utility bills, repairs, if you have an appliance that goes bad, even routine services like pest treatment. Those are all items that you should keep in the back of your mind that could be an expense to owning that home. 

Posted in Buying a Home
Jan. 12, 2021

Forbearance Extension, the Fourth One 2021

 

 

Let's discuss forbearance and the extension that just went through.

You may already be aware that there are programs out there to help homeowners that are not able to make their mortgage payment during COVID-19 to help them with a forbearance program so that they don't have to pay those mortgage payments now but they would be due at a later time.

Previously, it expired back in December of 2020, but here we are in January, and they did extend the forbearance program. FHA extended options for single family homeowners financially impacted by COVID-19. Extensions ensure borrowers can continue to seek assistance and avoid eviction and foreclosure while maintaining temporary policy flexibility for lenders and servicers.

The Federal Housing Authority, FHA, announced that it is extending the foreclosure and eviction moratorium for single family FHA insured mortgages for an additional two months through February 28th of 2021. This is the fourth extension that FHA has given to the eviction and foreclosure moratorium.

The moratorium prohibits servicers from proceeding with foreclosure or initiating a foreclosure procedure and foreclosure-related eviction actions for FHA insured, single-family, forward and reverse type mortgages, except for those that have already been legally verified as vacant or abandoned properties.

FHA encourages borrowers with an FHA insured type mortgage who can make their mortgage payment to continue to do so. Those who are struggling financially because of COVID-19 should engage a conversation with their servicer to find out what is available to them through that provider, and when I say servicer, I'm talking about the entity that you were sending your monthly mortgage payments to.

FHA does provide COVID-19 forbearance loss mitigation options to assist borrowers with bringing their mortgage current. I want to note on this, FHA does not require a lump sum payment when the forbearance program is over if your loan is an FHA type loan. 

Posted in Real Estate News
Sept. 10, 2020

What happens when your Loan Forbearance Ends?

When Loan Forbearance Ends, what happens next? Know your options before it ends! From loan modifications to short sales, what are your options when the loan forbearance you signed up for ends?

Let's talk about loan forbearance and how it affects you.

I'm Sandy Curtis with Berkshire Hathaway, Bowen Realty, your real estate resource. And I would like to talk about loan forbearance today and how it is going to affect you with the months coming. Many of you have taken advantage of the low forbearance program that was offered to you by your lender. Government backed program loans are extended until December 31st. So this is more of an informational video on how you should proceed once your forbearance program has ended. A lot of people don't realize the loan forbearance program when it ends is due in a lump some of those amount of months and what your mortgage payment would have been. But most of us do not have that kind of money sitting in the bank that we can just hand over to them. There is a reason that you took advantage of the forbearance program, and it's usually because you didn't have the funds to pay the mortgage to begin with whether that be due to a job loss or business closing, you should be contacted by your lender within 30 days of your program expiring

Because at that point, you either need to bring the account up today with all the amounts paid in full, or you need to accept one of the offers that they are able to offer you. Now, what kind of offers are you talking about? Well, usually, and more than likely it is going to be a loan modification. The ultimate goal when you are at the end of the forbearance is to qualify for the loan modification where they add the months that you missed to the end of the loan. So you would have your loan for 30 years from the day you bought it plus those extra months. So if you missed your payments for six months and you were in the forbearance program for six months, then it would tack six months. At the end of the loan. Other loan modifications may just be a reduction in the amount you pay every month, or it may be a payment program to help you bring the account back up to good standing. 

Unfortunately, if you do not qualify or accept any of these offers, it's more than likely that they aren't going to pursue a foreclosure on your property. Which is why I am bringing it to your attention now, so that you can be ahead of the game and know what your options are and you can move forward. Where it gets sticky is if you don't qualify for the loan modification that they offer you. And the reason you may not qualify can be a bunch of different options, but the main one is going to be job loss. A lot of us have lost our jobs over this period due to the COVID-19. A lot of restaurants have closed. A lot of people are at home, just wondering what's going to happen. When you fill out for the loan modification, you have to give them what your income is and what your debts are. 

So if you do not qualify in their numbers to keep the house under their loan modification, they more than likely will reject you. I recommend that everyone speak to a counselor that knows what they're talking about. When it comes to loan modifications and the forbearance program, you get to put a link below that is going to take you to the HUD website that you can put in your state and find your nearby agencies. I recommend that you speak to them. They will know what the options are. They also know what needs to be done to get you from point a to point B. The other options, if you do not qualify for the loan modification, would of course be selling the property. Of course you can only do that if you have equity in the home. Otherwise you have to look at doing a short sale. The benefits for doing a short sale I have on other videos, I'm going to leave the link up here, go ahead and watch the short-sale videos for a little bit more information on how they work. But basically you're asking your lender to take less for the house than what is owed on it. With all of that I said, I unfortunately do predict that we are going to have more short sales next year, due to the financial difficulty that a lot of people are going through. So if you or anyone, you know, is going through this and make sure that you reach out to a counselor who is knowledgeable about what it is you're discussing and a realtor who is familiar with the short sale process and has completed short sales in the past for sellers. Don't forget if you like the content in my videos, I would love it. If you could subscribe and ring that bell. So you're notified when my weekly video comes out and of course like the video.

HUD Counseling agencies: https://apps.hud.gov/offices/hsg/sfh/...

 

CARES Forebearance Fact Sheet: https://www.hud.gov/sites/dfiles/SFH/...

 

Consumers Financial Protection Bureau Guide to Success: https://files.consumerfinance.gov/f/d...

 

 

 

Aug. 10, 2020

What does HUD mean by As Is?

Hey guys, Sandy Curtis here with Berkshire Hathaway Bowen Realty in Hagerstown Maryland.

How are you doing today today?

 

Today I wanted to continue the discussion on HUD properties.

And what today's discussion is going to be is about understanding what their as-is means.

 

When HUD sells the property they don't repair them. Fannie Mae sometimes will go in and do a complete overhaul, they'll do what they need to do to get through an FHA loan type, but HUD doesn't do any of that.

HUDs properties come in a variety of conditions some are insurable. We'll discuss that at a later time, but with HUD they don't repair so they don't want anybody to repair the properties. There's a liability issue with it. So their properties are sold as is.

All right so what does that mean to you as a buyer or a buyer agent?

As is means, yeah, sure you can do the inspection and this is what we've done up to this point; so we know this is

wrong, ie the plumbing; but .... you can't repair the plumbing to do your home inspection.

 

So does that make sense? 

Basically you're not even allowed to scrape paint off of the wall. You're not allowed to paint a wall, you're not allowed to change the locks, you're not allowed to do anything physically that changes the property in any way.

There's no moving your clients items into the property before closing. Because they technically don't own the property. 

The buyers are allowed to do those home inspections because if you are able to get the electric on or the gas on or the

plumbing on, then you can do a more extensive search.

Homes that already have some damage to them and they're aware of it, you're disclosed up front. Those can go through special loan types like an FHA 203b or 203k depending on the amount of work that needs to be done to the property.

So I hope that explains a little bit more about what as is it is, because you  as a realtor could lose the ability to

sell a HUD property if you or your client goes into a property and alters it in any way. And that includes having

the gas company come back to the property and install a gas meter on the outside.

You and I probably wouldn't think that that is a physical alteration of the property but it is, it is a change. They moved the meter off before I  got the property so there was no meter.

When they called in for their inspections they physically install the meter. Can't do it.

So it can result and your buyer losing their earnest money deposit, don't want to do that. You don't want to do that a week before closing.

Certainly by any means if your client is trying to have a utilities turned on and your contract got extended but the client didn't call the utility company to say "hey don't turn the utilities on I didn't close on the house yet. It's not mine" Wait a week because, they go in they change it, the field services company or the agent goes through the property and does a final walk through for the client and they see somebody altered the house they have to report it and HUD can come after your buyer, cancel the contract and keep the earnest money.

Don't want to do that.

So you as a buyer don't want to do that. So don't do it !

Just don't go into somebody else's house and alter it without something in writing saying "hey you're allowed to go and it change my house."

Buyers don't start any repairs and please don't try to move into the house before you own it. It's not yours.

Agents you have to err.., accompany ,excuse me, agents you have to accompany your inspections. You have to be there. You have to be there for your buyers.

You can't just give the code out to your buyers and let them go walk around willy-nilly.

It's not your property, is it? You're not paying for insurance are you? Just keep that level head, common sense guys and you'll be good.

So HUD properties are awesome purchase.

It can be, depending on the amount of work that's needing they've done the property and whether that's what you're looking for. Or whether it's move-in-ready.

There's just so many options. Thanks for watching again, hopefully I covered something that you got a little bit of knowledge from or a nugget. Please comment, like, share, suggest items that I should be talking about.

Sandy Curtis, Berkshire Hathaway Bowen Realty, have a great day!

 

Posted in Buying a Home
Aug. 7, 2020

What is a HUD Home?

 

Hi guys! Sandy Curtis here with Berkshire Hathaway HomeServices Bowen Realty in Hagerstown Maryland.

 And today I wanted to talk to you about the question that a lot of buyers have, which is what is a HUD home?

 So a HUD home first off, is not low-income housing.  It is a property that is one to four units and has been foreclosed   on...

 Now HUD homes are in varying conditions, varying locations, but they are all sold as is.

 No Repairs. Not until you own it.