What Is Escrow?

One of the most confusing processes for the uninitiated to go through can be buying a home. At times it may seem that people are speaking a different language than they have ever heard before. This situation to often leaves a home buyer having to take on blind faith that the brokers, attorneys, escrow agents, inspectors and mortgage agents know what they are doing and acting in the buyers best interest.

The real estate agents at Ballen Network don’t want their clients to ever feel like they are in the dark. Here is a very short course to help spread a little light on the escrow process.

When Do You Enter Escrow

The escrow or closing process actually begins once you, the  buyer and the seller have agreed on a price and all the conditions for the sale. At the same time that the sales agreement is signed your real estate agent will collect an agreed upon percentage of the sale price from you and deposit it into an escrow account with an escrow agent.

This known as earnest money and as the name implies it is to show that you are earnest in your desire to buy the property. Think of it as a deposit.

What is an Escrow Agent

An escrow agent is a neutral third party who actually handles all of the funds and documents associated with the buying and selling of the property. Not being a party to the sale, in any way, their function is to make sure that all parts of the sale are executed in an equitable and legal manner. Like a referee or umpire the make sure the rules are followed and that everyone plays fair.

Steps of the Escrow Process

1. Entering Escrow- Set the sells conditions, sign the sells agreement, open and escrow account and deposit earnest money.
2. Bank Appraisal– You should be preapproved before you start looking for a home. Still the bank is going to want their own, independent appraisal to assure the property value will cover the loan amount. Note:  home buyer usually pays for this and if property cannot be sufficiently financed sale is cancelled and earnest money returned. This varies state to state and situation to situation. All is negotiable when creating the offers and counter offers.
3. Good Faith Estimate- Once financing is approved you will be given a good faith estimate detailing all of your finances (interest rate, closing cost, inspection fees, etc.) associated with the sale.
4. Obtain inspections– These may or may not be required depending on what area you are purchasing a home but a general home inspection is always a good idea. Some other inspections you may consider or be required to have are pest inspection, environmental inspection.
5. Acquire Homeowners Insurance- This is a condition of any mortgage but you don’t have to use their recommended insurance company. Shop around to find your best deal and coverage.
6. Receive Title Report and Title Insurance- These assure you that not one else other than the seller has any claim on the property. In real estate parlance, that the property is unencumbered.
7. Final Walk-Through– One last look around the property.
8. Review Form HUD 1- This is the finale detailed report of all cost associated with the purchase. Check it closely against the good faith estimate to make sure that no mistakes have been made or added cost tacked on.
9. Closing- The last step. Where all the money and finale paperwork gets taken care of. Be prepared to spend half a day signing your name

Shared from:  http://theballengroup.realtytimes.com/advicefromagents1/item/38695-what-is-escrow

6 Basic Mortgage Rules

Whether this is your first home or fourth, really understanding your mortgage and how it works is crucial. After all, it’ll probably be the biggest loan of your life!

What IS A Mortgage?

In the most basic sense a mortgage is a loan to buy a property. The process of securing a mortgage means lender approval based on your income, credit rating and other debt.

Understand Your Fixed Costs

Before you decide what you can—or should—spend on a mortgage it’s important to take stock of your habits and your true fixed costs. Be honest with yourself when putting together your household budget, if you’re going to be miserable without your daily premium cup of coffee, then along with your student debt and car payments, consider that a fixed cost.

Be PITH Safe

According to the CHMC (Canadian Housing & Mortgage Corporation), your monthly housing costs should be less than 32% of your gross monthly income. These are considered your PITH or Principle and Interest (of your mortgage payments), Property Tax, and Heating bills.

Get A Mortgage You Can Afford

If you pass the PITH test, the second test of what you can afford mortgage-wise is that your entire monthly debt load (car payments, credit card debt, student loans, etc) should be less than 40% of your gross monthly income. The CMHC even has a handy Mortgage Affordability Calculator on their site: cmhc.ca.

Paying Off Your Mortgage

Once you’re approved for a mortgage and buy your home (congratulations!), now you have to actually start paying off the loan. There are several factors involved in this like your interest rate, payment schedule (monthly, twice a month, every two weeks, or weekly) and your amortization period, which is the amount of time you’ve selected to pay back the mortgage (usually ranging from 15-25 years).

Picking The Right Interest RateThe interest rate at which you select to pay off your mortgage varies from “fixed”—whereby the rate will NOT change for the term of the mortgage, and is generally a bit higher but considered more stable, or “variable” whereby the interest rate can fluctuate with the current state of the market.

Finally, owning a home can truly be an amazing thing. Thankfully there are many resources out there to help make the process a smooth one like mortgage brokers and financial advisors, so remember, you’re never alone through this daunting process!

Reposted from:  http://www.hgtv.ca/realestate/article/mortgage-rules/

Not Only Did You Lose Your House—Your Credit Score Is a Mess After a Foreclosure

“Foreclosure” is a frightening word for a number of reasons. Topping the list? If you’re unable to make your mortgage payments, you’ll lose your home.

However, the misery doesn’t end there. Foreclosure ripples out and affects your credit score, which can hurt your chances of qualifying for a new loan—or another home—in the future.

Foreclosure and your credit score

A foreclosure appears on your credit report and leaves a dingy residue that can seriously damage your credit score.

“A mortgage is considered one of the safest forms of credit but is also typically one of the largest debts a person ever has, so when you stop making payments, or are late on a payment, you will see a large drop in your scores,” said Rod Griffin, director of public education for Experian.

While it’s impossible to pinpoint exactly how many points your credit score will plummet after a foreclosure, it might be enough to drop your score from the prime to subprime range. “A consumer could drop credit tiers following a foreclosure. [It depends] on the consumer’s credit history prior to the foreclosure and if there are other negative factors contributing to a drop at the time of foreclosure,” Griffin said.

And while some of the negatives will diminish over time, a foreclosure will linger on your credit report for seven years from the filing date.

Rebuilding

Getting your credit score back on track after a foreclosure boils down to following a simple philosophy: Keep it positive.

“Because negative information is deleted eventually, you can rebuild your creditworthiness if you take control of your debts and build a history of positive payments that will continue to appear after the foreclosure disappears,” said Griffin.

Applying for credit

Applying for credit after a foreclosure is tricky.

“A foreclosure in your credit report is typically looked at by lenders as very negative. It may not be as bad as bankruptcy, but not paying your mortgage and losing your house is very close,” Griffin said.

If you apply for credit cards, department store cards, or other loans, you may find lenders aren’t as willing to extend credit as they once were. And when you do get approved, you’ll likely face higher interest rates, higher annual fees, or more onerous terms than you would have before your foreclosure.

Buying a home

If you think you’re back on solid financial footing and want to buy again, jumping back into the home ownership saddle is near impossible shortly after a foreclosure. All mortgage loans have a waiting period after a foreclosure before you’re able to apply for another loan:

• Conventional loans require a seven-year waiting period.
• Loans backed by the Department of Veterans Affairs require a two-year waiting period.
• Loans backed by the Federal Housing Administration require a minimum of one year.

It’s tough to rebound from a foreclosure and become a home buyer again, but the devastating effect of defaulting on a loan has a more immediate (and negative) impact on your credit score.

Reposted from:  http://www.realtor.com/advice/foreclosure-makes-a-mess-of-your-credit-score/

Are Green Cleaning Products Worth the Hype?

It’s officially spring, which means it’s time to get cleaning. But with rising concern about the chemicals in conventional cleaning products, many people are turning to “green” alternatives. But where do you start?

Watch out for these ingredients on the label

First, look at the conventional cleaners in your closet. You might want to toss them if they have the wrong ingredients.

Lindsay Dellasega, franchisee owner of ECOMAIDS in Portland, OR, says to avoid common ingredients such as petroleum products, sodium lauryl sulfate, phosphates, ammonia, carcinogens, and chlorine if you’re looking to go green.

“Also, trust your nose. Many volatile chemicals ‘off gas’ and seem harsh to the nose or are masked with heavy perfumes,” Dellasega said. “This should be a warning!”

Johanna Congleton, senior scientist at the Environmental Working Group, a nonprofit advocacy organization, recommends avoiding asthmagens, which are substances that may cause asthma in otherwise healthy, nonasthmatic people. These include sodium hypochlorite, or bleach, and quaternary ammonium compounds, she said. Common forms of these compounds are alkyl dimethyl benzyl ammonium chloride, benzalkonium chloride, and didecyl dimethyl benzyl ammonium chloride.

Also, Congleton says to avoid products with the chemical triclosan, which is a common disinfectant ingredient. Triclosan “has been linked to endocrine disruption and is toxic to the environment,” she said. The FDA, meanwhile, says triclosan “is not currently known to be hazardous to humans. But several scientific studies have come out since the last time FDA reviewed this ingredient that merit further review.” The federal agency is currently “engaged in an ongoing scientific and regulatory review of this ingredient.”

Don’t be fooled by packaging. A product can call itself “natural” and come in a green-and-brown recycled cardboard box but still be full of chemicals. Look for the USDA’s “Certified Organic” seal instead.

And remember—the advice to avoid things you can’t pronounce won’t necessarily protect you.

“Most people can pronounce ‘bleach’ and ‘ammonia,’ but these can cause respiratory irritation and are categorized as asthmagens,” says Congleton.

Air fresheners aren’t cleaners—and they’re not so fresh

Plug-in and canned air fresheners might smell nice, but there’s usually nothing green about them—and they’re not cleaning products, either.

“If it says ‘fragrance’ on the back, it’s a fragrance,” says Amanda Fig, owner of The Purple Fig, a green cleaning company based in Austin, TX. Look for dedicated cleaning products that use natural scented oils such as eucalyptus or peppermint, and avoid chemical substitutes.

“[Companies] engineer these products so your house smells clean for longer. But just because it smells like lemons doesn’t mean it’s lemons,” says Fig.

If you want to create a pleasant aroma in your house, Fig suggests getting your favorite scented oil, dabbing it on a couple of sheets of toilet paper and using a vacuum to suck them up. While you’re vacuuming, the scent will be dispersed.

Experts’ green product recommendations

According to Fig, Bio-Clean products are a solid choice. She says the company’s all-purpose cleaner is eco-friendly and suitable for most jobs. She even washes her cleaning rags in it after she uses its in-house cleaner. And if you’re looking to scrub away fat and oil stains on your stove, Fig says to check out the degreaser, which is made with soy and citric acid.

The Environmental Working Group also reviews and rates more than 2,000 popular household cleaning products, based on the safety of their ingredients and the information they disclose about their contents.

Here are some of the most highly rated products on its list, sorted by room:

Bathroom
GreenShield Organic Bathroom Cleaner
Seventh Generation Natural Tub and Tile Cleaner
Seventh Generation Natural Toilet Bowl Cleaner

Kitchen
Nature Clean Automatic Dishwasher Pacs
Sun and Earth Liquid Dishwashing Extract, Concentrated
Seventh Generation Automatic Dishwasher Powder

Laundry room
Eco-Me’s Emma Laundry Soap
Sun and Earth 2x Concentrated Laundry Detergent
Planet Ultra Powdered Hypoallergenic Laundry Detergent

Floors and carpets
Simple Green Naturals Floor Care
Simple Green Naturals Carpet Care

All-purpose cleaners
Bon Ami Powder Cleanser
Bronner’s Sal Suds Liquid Cleaner
Ecover Cream Scrub
Attitude All Purpose Eco Cleaner

DIY cleaners can get the job done, too

You can also save money and be 100% sure that you know what’s in your cleaning products by making them at home. Fig suggests mixing one part white vinegar with two parts water—and add a scented oil, if you wish—for an all-purpose cleaner that’s light enough for use on most surfaces.

If your bathroom isn’t too gunked up, you can simply use baking soda to scrub the ceramic and tiles in your bathroom.

“For most people who don’t have a ton of buildup, it’s enough of an abrasive to scrub it off,” says Fig.

For wood polish, Dellasega recommends two parts olive oil mixed with one part lemon juice. Use “a small amount with a soft microfiber to wood furniture for a clean smell and shine,” she says.

And once you’re done shining the furniture, you can actually use that DIY polish to dress a salad. A nice mix of fresh, springtime greens seems like a nice reward for all that cleaning, wouldn’t you say?

Reposted from:  http://www.realtor.com/advice/green-cleaning-products-that-work-for-spring-cleaning/

The Importance Of An Open House

Getting into a house is important.

There’s a magical connection when most buyers walk into their future home for the first time.

It is a sort of love affair — the light, the space, the promise of happy times and comfortable surroundings.

This isn’t necessarily true to everyone. Some buyers grow to love their prospective home after visiting it a couple of times.

In all situations, being in the home is a key element to deciding on whether or not to buy a particular house.

So, getting inside the house is critical.


Well, it just got a bit easier.


The Super Open House Sunday directory will help buyers make it a great day to go see some houses.

‘IT’S THE EXPOSURE’
The importance of an open house is tremendous, from all sides of the home buying equation.
For sellers and agents, it is a chance for several buyers to visit the home at one time. The more people who see the house, the more likelihood one of them will be the potential buyer.
“It’s the exposure,” said Susan Milling of PRUDENTIAL GARDNER, Realtors. “In this very challenging market, the more exposure you can create for your listings, the more people will come through.”
Buyers can use the open house as a chance to get into the space and get a feeling for the house, the relationship of rooms to each other and how the floor plan may or may not work for their situation.
As one professional said, homes are like “apples, oranges and grapes — no two are alike.”
While going through an open house, the buyer has the chance to compare kitchens to kitchens, bedrooms to bedrooms and bathrooms to bathrooms.
These showings afford buyers great information — even those who might not be in the market for a new home.
“Open houses on Sunday are an education for
        everyone,” said Margaret Stewart of LATTER & BLUM, Inc., Realtors. Those who might not be interested in buying may find a home or find out about another home that is a dream come true.
“Even if you’re not in the market, you end up going to the house and falling in love with the house.”

NEIGHBORHOOD VIEW
Buyers also can take a look at the neighborhood, seeing first-hand the adjacent homes.
Open houses “give the general public the idea of different areas of the city to live in,” said Todd Todesco of KELLER WILLIAMS, Realty.
Actually going to the house can also show the buyer the ease of access to the neighborhood from various parts of the city, plus the relationship of the home site to schools, churches and retail options.
“I think it gives the buyers an opportunity to see what’s out there,” said Karen Prieur of RE/MAX New Orleans Properties. “It enables them to understand what’s on the market.”
For the real estate professional, the open house can be a chance to see and be seen. Buyers get a chance to meet an agent and agents can meet a buyer that might be perfect for that property or another.
Buyers can also meet agents familiar with the area, well-versed in the neighborhood and the ambiance of the region.
An open house also provides buyers with something else: the luxury of time and plenty to look at.
Buyers can “look at your own pace and then go onto the next house,” said Phoebe Whealdon of COLDWELL BANKER TEC Realtors. “It’s a great way to get exposed to many houses in a short amount of time.”

MAP OUT A PLAN
Realtors share many good stories about recent open houses, with high viewer turnout and an increase in interest in the area.
So look for more open house listings.
Nothing compares to seeing a house in person. All the senses combine to tell the buyer that “this one” is the right one.
Use the listings of the Super Open House Sunday Directory on the back page of this section to map out a plan to see as many homes as possible. And check this section every Sunday for a listing of open houses.
As the saying goes, make a plan and “work that plan.” Happy house hunting.

Victor M. Andrews
Special Sections Staff writer
Victor Andrews can be reached at vandrews@timespicayune.com

Open House Tips For Buyers
Open houses offer excellent chances for buyers to see several houses at one time.
Be prepared when headed out to look for that special place to live.
• Use the directory of open houses to research in advance properties that might be of interest.  The Times-Picayune Super Open House Sunday Classifieds and community news sections (Picayunes), as well as, nola.com, are important resources. Find out if the house has enough bedrooms, the right price, etc.
• To maximize the number of houses to be seen, make a list of the addresses and plan the best route. A bit of forethought can increase the number of homes on the “to view” list.
• Bring a camera in case you find the perfect house. Ask the showing agent if you can take photos to remember certain things about the house.
• Talk to the agents showing the homes. They can answer questions about the residence. They can also provide information about other homes that might be potential dwellings for you. For those buyers without an agent, this is a great chance to meet a real estate professional who will be a perfect match for your needs.
• Footwear, believe it or not, is important. Opt for comfortable shoes that do not scuff or leave marks. There will be walking and standing involved, so be prepared.
• For some buyers, there are special needs for special pieces of furniture. A tape measure can be invaluable for finding out how much space is available for certain items.

Open House Tips for Sellers
Preparing for an open house should be no different than preparing the house to be put on the market.
But there are some things to consider when a seller knows the home will be visited by several people in one day.
Just remember a few concepts and make the most of the moment:
• Remove as much clutter as possible. Less things in a room make the room look bigger and it also makes it easier for potential buyers to picture their things in the room.
• Don’t forget to declutter closets and cabinets. Buyers will be opening doors to look inside. Well-organized storage makes a good impression.
• Make certain all the lighting fixtures are on, have working bulbs and are clean. Buyers are switch-hitters and will be turning on the lights (if the lights are not already on).
• Open drapes, blinds and shades to let in natural light and give potential buyers a view of the well-kept yard.
• Keep fragrances (and odors) in the home as neutral as possible. Freshly baked cookies or a lighted odor-reducing candle can send a message that all the senses are important in a home. Just be careful of placement and of an overpowering scent.
• Pets should be protected — for themselves and the visitors. This is a great time for an outing for all the animals.
• Items of great value, both sentimental and financial, should be protected from accidental damage. The best idea is to remove them.
• Protect prescription drugs (again, remove them).
• Find somewhere else to be. The real estate agent will be able to handle the situation. The agent can also help with any of these tips and also offer additional suggestions for getting ready.

Reposted from: http://blog.nola.com/realestate/2011/01/selling_solutions.html