Good Faith Deposit? Earnest Money

What is Good Faith Deposit? Earnest Money?

Tuesday, April 06, 2010by Jan McNulty

Good Faith Deposits - Earnest Money


After many months of searching, you have found your ideal house. You want to give the impression that you are serious without appearing to be too eager. What should you do? In the marketplace, "money talks."



There is no absolute rule about how much "good-faith" deposit you should put down--but it is a tool to make your point with the seller. The typical $1,000 will hold many homes for you, except in larger-home markets where it may be critical for you to show that you are an especially serious and able buyer. You don't want to make a deposit that is too large in case there is a problem getting your money back, but if your offer is substantially below the asking price, a larger deposit--$5,000 or $10,000--might influence the seller. If you make a low deposit with your offer, be sure to provide for an increased deposit when the offer is accepted or upon removal of the contingencies ie home inspection and attorney review or a house to close contingency.

932 MAYFAIR CT 6 Chicagoland Area Home for Sale - Jan McNulty Real Estate

932 MAYFAIR CT 6 Chicagoland Area Home for Sale - Jan McNulty Real Estate

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FHA Financing in 2010

Financing 2010: FHA lending requirements revised again!

It's in the news today, that HUD Commissioner David Stevens announced 4 specific areas of change which will create more stringent lending requirements and raising the fees to borrowers, which is its hope to cushion against defaults and stave off a taxpayer bailout of the agency.

1. Front end MIP (Mortgage Insurance Premium) will be increased from 1.75% to 2.25%.  This is the second increase in the past 2 years. Congress enacted a requirement that the agency must maintain a 2% capital- reserve ratio. The FHA reserves cover losses has falled to $3.6 billion, which is why they will be increasing the rate. It is hopeful that this will boost the reserves by more than $1 billion.The Wall Street Journal also indicated that the FHA will ask Congress to set up a separate insurance fee that borrowers will pay annually,in hopes not to as Congress for some needed money.

 2.  Update the combination of FICO scores and LTV maximum. FICO (credit scores) less than 580 will  see down payment requirements increase to 10%. Most conventional lenders are harder on the scores requiring a 640 or better.

 3. Reduce seller contributions for closing costs from 6% of sale price to 3% to conform to the conventional market. It is believed that the sellers "heavily marked up the purchase price" to cover the closing costs for buyers.

 4. Increase enforcements and guidelines on FHA Lenders by announcing a series of measures keep FHA in the loop.

 
Some background information: FHA doesn't lend money, rather they insure lenders against default on loans that meet their (FHA) requirements. In exhange for that backing, borrowers must pay an upfront insurance premium on the total loan amount, which can be rolled into the loan. FHA has taken a major role in the housing market during the economic downturn. Currently, FHA is backing about 50% of all new loans in certain markets throughout the U.S., and with reserves falling, the agency is walking a very thin line between protecting taxpayer dollars and helping to facilitate the housing recovery.

What does this mean to you? It's going to cost the buyer a little more using FHA financing in the near future. At that, these proposals are set for the Spring of 2010, which is also when the expectation is that interest rates will increase.

So the handwriting is on the wall---Costs to purchase will move up in the spring, Interest rates are expected to rise, and prices are at an all time low. Rumor has it, that by Fall, prices should be stabilizing. Buyers who are waiting to purchase, might regret it later!

If you are looking for your first home, Call me! I'd love to shop with you and show you the opportunities in the market.

Learning about Garage Door Shopping

My Homeowner Learning Curve:

For years, my garage has stored everything but my car. So I cleaned up my act and storage space to find that I could put my car in the garage. What happened to the remote?? I looked and looked and thought it must have disappeared. Easy solution: Buy a replacement or an remote for a Genie garage door opener from 20 years ago. E-Bay was mentioned, and I looked but found nothing.

So I contacted Genie, who said, I could buy an adapter for my 20+ years old garage door, which by the way works very well, but the adaptor is 1/2 the price of a new garage door opener. So am I willing to invest 50% of value on a garage door opener that could go at any time or buy an opener with safety features that my opener never dreamed about! (I know garage door openers' don't dream, but I thought I'd throw that in.)

I made a decision and started researching garage door openers. And then someone mentioned that I should consider a new door. Well, heck, I hadn't considered a door, since the other one has probably been on the house since its' infancy of 1952. It's a good wood door. Then my friend mentioned a tax credit. More research....This is what I found out on the EnergyStar.gov site:

"On February 17, President Obama signed into law the American Recovery and Reinvestment Tax Act of 2009. This bill extends and modifies the tax credits for windows, doors, and skylights established in the Energy Policy Act of 2005. The following guidance is not intended as legal advice, and you should consult a tax professional with specific questions.


Qualifying products purchased between January 1, 2009 and December 31, 2010 are eligible for a tax credit equal to 30 percent of the product cost. Installation is not included; be sure to obtain an itemized invoice from your retailer or installer. The maximum amount of homeowner credit for all improvements combined (including roofing, insulation, HVAC, and water heaters) is $1,500 during 2009 and 2010.
Very complicated table of what doors would be considered for the credit or not. I'm going to rely on the contractor I hire on that specifically. Interesting note: There is no door with an Energy Star Rating at this time.

Wow! A tax credit of 30% and have a insulated garage door! Now, I'm looking at garage doors with more interest. Some garage doors have windows, of all different shapes and some do not. Window doors look newer, and might improve my "curb appeal". What color? So I did more research and talking with friends. My friends are voting for the windows. Hmmm. Stay tuned, first quote just came in, another will come on Tuesday. By the way, I have two excellent referrals if you are looking for a garage door/garage opener man.
 
I'm writing this blog to enhance your ability to become a better shopper. Shopping and comparing is my business, so I thought I'd walk you through my process. Someone once said to me years ago, after shopping and comparing houses, that I analyzed the houses, like I was in his shoes. That hearing me question or state objectives of that home, made him a better shopper in all things. I considered it a great compliment.

Snowblower Safety Tips

Snowblower Safety Tips

Sun, 12/20/2009 - 12:36 — Tom Kraeutler

I've received this information from the above mentioned and believe this to be something everyone should read with our winter in full regale! Hope everyone has a safe winter. By the way, the weather report is indicated warm enough to melt some snow and then a freeze, so don't forget salt or ice melt when you go to the store!

If a big snowstorm has you dragging out your snow blower, make sure you follow these snow blower safety tips to make sure to keep safe while you use this amazing and fun machine!


•FIX CLOGS CAREFULLY - If your snow blower becomes clogged, turn it off and remove the key before trying to clear it. Use a stick and NOT your hands to clear it! Also make sure that the snow blower is completely turned off before replacing any parts.

•VENT PROPERLY- Always start your snow blower in a well-ventilated area to avoid the possibility of carbon monoxide poisoning.

•FRESH GAS - If you haven’t used your snow blower in a while, remember that the gasoline still inside it from the last snow blower use is only good for about 30 days, unless you’ve added a fuel stabilizer.

•GET IT SERVICED – If your snow blower hasn’t been professional serviced in a while, get it done now. Mechanical updates, like new spark plugs, shear pins or belts, will definitely keep your machine operating normally and help avoid accidents and other snow blower safety concerns.
 
Get a Clean Out Tool


Two-stage snow blowers are equipped with "Clean Out" tools to help you remove caked-on snow from the auger and chute.

If you don't have one - or like lots of people lose it - you can order a replacement at www.SnowBlowersDirect.com.

Much better than a stick.

What's happening in our Real Estate Market?

Whew, when it comes to the Real Estate Market, the theme is Change. The general sentiment is "Thank God, we are putting 2009 in the past, shelved next to 2008". We're (the Realtors, Banks and Federal Government) are all looking forward to 2010 to be a better, and brighter year. Currently, prices are low, much more affordable and interest rates are at the historic low end, and the Federal Thanksgiving bonus of a Tax Credit is still available for a while. So in a nut shell, it's a great time to change residences or buy a home.

But be forewarned, our interest rates have been hovering at the lower rate of 5% for almost a year now, and once again, change will be coming. The Federal Government very quietly have been warning the Realtors that the rates are artificially low, and the rates cannot be at this level for very much longer at all. As prices and the market starts to stabilize, we believe the rates will increase. The expectation is that prices will not be affected by the interest rate increase. So can I repeat the phrase again? Now, is a Great Time to take advantage of the housing market by locking in your rate and home. Our current inventory, with the presence of short sales and foreclosures, will dry up, and then very slowly we hope to regain some of the equity we have previously lost in the 2007-2009 eras.

Change is in the air, higher interest rates, and a start to the stabilization of the market, both should force a buyer to wonder, when will the buyer's market be ending? I don't have a prediction, but experiance tells me that the buyer's market will not be as strong as it has been. So rejoice! The market is doing everything it can and will start improving. Yahoo finance had an interesting article in Dec. that you might want to see.

My New Year's Gifts that will Last a Lifetime

I read this the other day, and felt I should pass it on, and make these gifts more part of my life to improve other lives around me. Can you imagine if everyone had these 6 gifts to practice every day. What a wonderful life that would be, right? So as New Year's Eve is appearing soon, I thought this would be my 2010 wish forever more.

The Gift of Listening....But I plan to really listen. No interrupting, no daydreaming, no planning my response. Just listening.

The Gift of Affection.....Being generous with hugs, pats on the back. Let these small actions demonstrate the love I have for friends and family.

The Gift of Laughter....Not enough of this the last couple of years, so I planning to clip some cartoons, share an article. I just want to enjoy laughing again.

The Gift of a Favor...Everyday, going out of my way, to be kind, without a hope for a return.

The Gift of a Written Note.....There's something memorable, that lives on with a written note that show's "I'm thinking of you, and You mean something to me".

The Gift of a Sincere Compliment....Just might improve someone's attitude and feelings about themselves. A pat on the back, a "job well done" or a "great looking outfit".