Exquisite Homes and Properties in Ulster County, NY
The buyer should select an attorney to represent his or her interests and to review all legal documents that apply to the real estate transaction. It is important to select an attorney that specializes in real estate law to represent you as real property law can vary greatly from criminal, divorce or family law.
What Your Inspection Should Cover
Siding: Look for dents or buckling
Foundations: Look for cracks or water seepage
Exterior Brick: Look for cracked bricks or mortar pulling away from bricks
Insulation: Look for condition, adequate rating for climate (the higher the R value, the more effective the insulation is)
Doors and Windows: Look for loose or tight fits, condition of locks, condition of weatherstripping
Roof: Look for age, conditions of flashing, pooling water, buckled shingles, or loose gutters and downspouts
Ceilings, walls, and moldings: Look for loose pieces, dry wall that is pulling away.
Porch/Deck: Loose railings or step, rot
Electrical: Look for condition of fuse box/circuit breakers, number of outlets in each room
Plumbing: Look for poor water pressure, banging pipes, rust spots or corrosion that indicate leaks, sufficient insulation
Water Heater: Look for age, size adequate for house, speed of recovery, energy rating.
Furnace/Air Conditioning: Look for age, energy rating. Furnaces are rated by annual fuel utilization efficiency; the higher the rating, the lower your fuel costs. However, other factors such as payback period and other operating costs, such as electricity to operate motors.
Garage: Look for exterior in good repair; condition of floor—cracks, stains, etc.; condition of door mechanism.
Basement: Look for water leakage, musty smell.
Attic: Look for adequate ventilation, water leaks from roof.
Septic Tanks (if applicable): Adequate absorption field capacity for the percolation rate in your area and the size of your family.
Driveways/Sidewalks: Look for cracks, heaving pavement, crumbling near edges, stains.
Source: National Association of REALTORS®
10 Most Common Home Defects
1. Poor Drainage- Improper drainage can lead to water intrusion in the basement of homes and even severely compromised foundations.
2. Failing or Aging Heating and Cooling Systems- Older heating and cooling systems require maintenance and may be energy inefficient. There is also the risk that they can emit dangerous carbon monoxide fumes that are harmful to the family.
3. Environmental Hazards- Older homes may contain lead-based paint, high levels of carbon monoxide, radon, toxic molds, and even asbestos.
4. Inadequate Ventilation- This occurs when moisture accumulates in homes, which damages interior walls and structural elements.
5. Improper Maintenance- Taking poor care of your household appliances can create consequences. Simple actions like cleaning out the lint trap in the clothes dryer can help prevent a fire.
6. Plumbing Problems- The pipes under your sink can be made of incompatible materials that lead to dripping faucets, leaking fixtures, and slow drains.
7. Roof Problems- The roof of your home may contain old or damaged shingles and improper flashing due to rain. The overall structure of the roof may be affected because of improperly installed collar ties and ridge beam supports.
8. No Permit- Many homes do not have permits for finished basements, deck additions, and hot tub and pool additions. This can lead to unnecessary fines when putting the house up for sale.
9. Electrical Safety Issues- A home with an out-of-date or insufficient electrical system can lead to fires and electric shock. Examples of other electrical safety hazards are ungrounded outlets, lack of Ground Fault Circuit Interrupters (GFCI), aluminum wiring, and faulty wiring conditions in electrical panels or elsewhere in a building. These are potentially hazardous defects and not to be taken lightly.
10. Rotted Wood- Wood placed around areas that are frequently wet can begin to rot. Wood around bathtubs, showers, and toilets are especially defective. The exterior of the home, including the outside trim of the house, decks, and roof eaves, should also be checked regularly for signs of rotting.
Knowing the top 10 most common house defects can help you prepare to put your home on the market. Check these areas of the home often to prevent damage and provide repairs when needed.
Source: HomeTeam Inspections
10 Questions to Ask a Home Inspector
1. What are your qualifications? Are you a member of the American Society of Home Inspectors or National Association of Home Inspectors?
2. Do you have a current license? Inspectors are not required to be licensed in every state.
3. How many inspections of properties such as this do you do each year?
4. Do you have a list of past clients I can contact?
5. Do you carry professional errors and omission insurance? May I have a copy of the policy?
6. Do you provide any guarantees of your work?
7. What specifically will the inspection cover?
8. What type of report will I receive after the inspection?
9. How long will the inspection take and how long will it take to receive the report?
10. How much will the inspection cost?
Source: National Association of REALTORS®
How Do I Know What Lender is Offering Me the Best Deal?
It can be a challenge to compare competing mortgage financing offers because lenders tend to be very savvy in hiding fees. A common denominator a buyer can use in comparing offers is the APR or Annual Percentage Rate. The APR takes into account the costs of the loan throughout the life of the loan and translates it to a percentage. It is a percentage that is higher than the actual interest rate. APR calculations for adjustable rate mortgages are less telling than fixed rate mortgages because terms of the loan change part-way through the life of the loan.
Unfortunately, even the APR can be manipulated slightly; so another good way to compare is by looking at the bank fees that are itemized on a Good Faith Estimate. Ask each lender for a Good Faith Estimate (GFE) in writing. A lender should provide a GFE within three days of your application. Pay special attention to the bank fees, which are placed primarily in lines #800-900 on the GFE. Third party fees, recording fees and title fees will basically be constant among lenders, so getting a good understanding of the total bank fees is crucial when comparing. Once you do select a lender and lock in a rate, keep your GFE and bring it to closing to make sure that the bank fees have remained the same.
Things to Ask Before You Commit to a Lender
The mortgage process can be very confusing and intimidating. Before you commit to a lender you should ask these questions and get the responses in writing:
* Is there an origination fee? Discount fee? Broker fee? Application fee? Points? Each bank typically has it’s own way to disclose bank fees. However, some banks will unnecessarily add in points, which can amount to thousands of dollars in extra bank fees. One point is typically 1% of the loan amount and can be charged to you under the guise of the terms used above. Points are typically not necessary, unless you are looking to do a long-term interest rate buydown.
* Is there a pre-payment penalty? If you are not careful, you can get stuck with a hefty pre-payment penalty, which will limit your options to refinance or pay off your loan when you sell. Some states limit or do not allow pre-payment penalties.
* How long will my rate be locked for? What happens if my loan does not close before my lock expires? Typically rate locks guarantee an interest rate for 30, 45, or 60 days. If your loan does not close before the rate lock period expires, you could be required to pay a penalty to extend the interest rate.
* Who will underwrite my loan? Some banks outsource their processing and use automated underwriting. Automated underwriting decreases your loan processing time and tends to be very efficient. Underwriting that is done at the local level often gives more allowance for compensating factors and unusual circumstances. Therefore, a bank with both automated underwriting and manual underwriting is preferred.
* Are You a Broker or a Bank? A broker is a middleman, who matches you with a lender. If you have a strong profile, you are often able to do the work of the broker on your own and can save thousands of dollars in broker or origination fees. Look to get financing from a bank first.
* Will My Interest Rate Adjust? Some buyers are unsuspectingly sold adjustable rate mortgages (ARM) and enjoy a very low payment initially, but are shocked at the rate and mortgage payment increase as the rate begins to adjust. ARMs serve a purpose if your goal is to retain the home are short term. Be especially wary of the ‘Option ARM’ loan that gives you a very low monthly payment, but forces you to pay additional accrued interest each time you make that minimum payment.
* What Documentation Do You Need to Verify My Income, Debt, Credit, Assets and Employment? Be extra careful if self-employed income, commission, overtime and bonuses are being used to qualify you for the loan. The employment, commission, overtime, and bonuses must usually be consistent over two-year period to be used in qualification. Unfortunately, some lenders are not thorough enough in asking the appropriate questions to help you select the correct loan product in their initial conversation with you. Assets must usually be seasoned in an account for at least two months to be used to qualify towards a downpayment, closing costs, or required financial reserves. Banks offer many different options for those who are self-employed, unemployed or may not be able to document their income or assets on paper. The less the lender can verify on paper, the higher you interest rate will be.
What is My Interest Rate Based on?
Your interest rate is based on the risk that you present to the lender and the strength of your overall credit and financial profile. Your rate is based primarily on your credit, income, debt, assets, and employment history. Those that can verify and document adequate income and assets, who have been steadily employed, and have excellent credit can expect to get the best rates.
Why is it a Good Idea to Obtain a Survey of the Property?
A survey sets forth the legal description of a property. A survey map shows the location and dimensions of the parcel and the location and size and shape of buildings on a lot. Having a survey read into a title policy can protect you from future property disputes.
The seller provides the contract to be reviewed by your attorney. Your attorney will review the contract to make sure that any clauses and riders are appropriate and in your best interest.
5 Vital Things to Understand About Homeowner’s Insurance
1. Look for exclusions to coverage. For example, most insurance policies do not cover flood or earthquake damage as a standard item. These coverages must be bought separately.
2. Look for dollar limitations on claims. Even if you are covered for a risk, there may a limit on how much the insurer will pay. For example, many policies limit the amount paid for stolen jewelry unless items are insured separately.
3. Understand replacement cost. If your home is destroyed you’ll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. This means that if your home is insured for $150,000 and it costs $180,000 to replace it, you’ll only receive $150,000.
4. Understand actual cash value. If you chose not to replace your home when it’s destroyed, you’ll receive replacement cost, less depreciation. This is called actual cash value.
5. Understand liability. Generally your homeowners insurance covers you for accidents that happen to other people on your property, including medical care, court costs, and awards by the court. However, there is usually an upper limit to the amount of coverage provided. Be sure that it’s sufficient if you have significant assets.
Source: National Association of REALTORS®
10 Ways to Lower Your Homeowner’s Insurance Bill
1. Raise your deductible. If you can afford to pay more toward a loss that
occurs, your premiums will be lower.
2. Buy your homeowners and auto policies from the same company and you’ll usually qualify for a discount. But make sure that the savings really yields the lowest price.
3. Make your home less susceptible to damage. Keep roofs and drains in good repair. Retrofit your house to protect against natural disasters common to your area.
4. Keep your home safer. Install smoke detectors, burglar alarms, and dead-bolt locks. All of these will usually qualify for a discount.
5. Be sure you insure your house for the correct amount. Remember, you’re covering replacement cost, not market value.
6. Ask about other discounts. For example, retirees who are home more than working people may qualify for a discount on theft insurance.
7. Stay with the same insurer. Especially in today’s tight insurance market, your current vendor is more likely to give you a good price.
8. See if you belong to any groups—associations, alumni groups—that offer lower insurance rates.
9. Review your policy limits and the value of your home and possessions annually. Some items depreciate and may not need as much coverage.
10. See if there’s a government-backed insurance plan. In some high-risk areas, such as coasts, federal or state government may back plans to lower rates. Ask your agent.
Source: National Association of REALTORS®
What Can I Do If the Appraised Value Comes in Lower Than the Purchase Price?
If the appraised value comes in below the purchase price, it gives you as the buyer a good opportunity to re-negotiate the purchase price. A low appraisal can affect your ability to obtain your mortgage where loan-to-value is a concern with certain mortgage programs, so it might be vital to re-negotiate for a lower purchase price in that case.
4 Important Things to Understand About Title Insurance
1. It protects your ownership right to your home both from fraudulent claims against your ownership and from mistakes made in earlier sales, such a mistake in the spelling of a person’s name or an inaccurate description of the property.
2. It’s a one-time cost usually based on the price of the property.
3. There are both lender title policies, which protect the lender, and owner title policies, which protect you. The lender will probably require a lender policy.
4. Discounts on premiums are sometimes available if the home has been bought within only a few years since not as much work is required to check the title. Ask the title company if this discount is available.
Source: National Association of REALTORS®
All the paperwork has now been completed to the satisfaction of the mortgage company and they are ready to provide the buyer the funding necessary to purchase the home.
What Not to Overlook During Your Final Walk-Through
Certify that:
* Repairs you’ve requested have been made. Obtain copies of paid bills and any related warranties.
* All items that were included in the sale price—draperies, lighting fixtures—are still there.
* Screens and storm windows are in place or stored.
* All appliances are operating.
* Intercom, doorbell, and alarm are operational.
* Hot water heater is working.
* HVAC is working.
* No plants or shrubs have been removed from the yard.
* Garage door opener and other remotes are available.
* instruction books and warranties on appliances and fixtures are there.
* All personal items of the sellers and all debris have been removed
Source: National Association of REALTORS®
What to Pay Most Attention to At Closing
Review HUD-1 Closing Settlement Statement—Pay special attention to Bank Fees, Lender and Seller Credits, Binder Deposit Amounts
What to Keep From the Closing
* The Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called a HUD 1 statement, itemizes all the costs associated with the closing. You’ll need for income tax purposes and when you sell the home.
* The Truth in Lending Statement summarizes the terms of your mortgage loan.
* The mortgage and the note (two pieces of paper) spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.
* The deed transfers ownership of the property to you.
* Affidavits swearing to various statements by either party. For example, the sellers will often sign an affidavit stating that they have not incurred any liens on the property.
* Riders are amendments to the sales contract that affect your rights. For example, if you buy a condominium, you may have a rider outline the condo association’s rules and restrictions.
* Insurance policies provide a record and proof of your coverage.
Source: National Association of REALTORS®
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