May :: SoundBiteBlog.com 2007 :: SoundBiteBlog.com

Shock and dismay are quickly followed by anger as a homeowner reads the official-looking letter from the mortgage company instructing him to make a higher payment. Did somebody lie to him? Did he somehow sign up for an Adjustable Rate Mortgage when he thought he was getting a Fixed Rate? There must be a mistake, right?

No, nobody lied. Here’s what has happened.

On the day a homeowner signs loan documents for the purchase of his or her new home, a payment is presented. The majority of  mortgage loans that are set up in the U.S. include money for Property Taxes on the home and Hazard Insurance for the dwelling. These are called PITI payments. PITI simply means Principle, Interest, Taxes and Insurance. Each month, the portion of the payment for taxes and insurance, is set aside by the mortgage lender in an Escrow Account. This money (in theory) adds up each month until it is time for the property taxes to be paid, or the insurance premium to be renewed. At those times, the mortgage lender sends the correct amount of money to either the County for property taxes or to the Insurance Company. The escrow account is depleted to pay these expenses and the process begins all over again for the new year.

The great thing about a PITI payment is the fact that the homeowner never has to be concerned with budgeting for the annual Property Tax liability or the Insurance Premium renewals. It is both a convenience for the borrower and a safeguard for the mortgage company. The mortgage company does not need to worry about a foreclosure due to unpaid Property Taxes or a house that burned down because of unpaid Homeowners Insurance.

The unnerving thing about a PITI payment is the letter in the mail stating the mortgage payment is going up. The payment must increase from time to time to cover the increasing cost of Property Taxes and Homeowners Insurance. Just like eveything else from gasoline to lumber, Taxes and Insurance prices are subject to change. And, they will change.

Experience borrowers are not surprised to receive this notification. They have seen it before. New homeowners though, are often very upset to receive this type of letter. If you have received a letter like this, read it carefully first. You will probably find the payment is rising for the reasons above. If the letter is difficult to understand (many are), call your Loan Officer first. That is what he/she is there for. Information about your mortgage is available to you after you move in! If you Loan Officer notices something unusual about the letter, he/she will let you know and can guide you to the person or organization to sort out the problem.

But remember, when the Property Taxes and the Homeowners Insurance Premium rise, the mortgage payment will have to follow. The mortgage company must collect enough money to pay these bills for you next year. The Fixed Rate mortgage that you signed up for is only guarantying that the Interest Rate will not change. The mortgage company cannot control expenses like Property Taxes and Insurance Premiums.

Posted in Bremerton WA Real Estate, Gig Harbor Real Estate, Miscellaneous, Mortgage Bites, Port Orchard Real Estate, Poulsbo Real Estate, Silverdale WA Real Estate | 2 Comments »

Tags: bremerton mortgages, kitsap mortgages, piti, port orchard mortgages, poulsbo mortgages, silverdale mortgages

As real estate markets throughout the country continue to cool, the inventory of available homes for sale naturally increases. While this dynamic doesn’t necessarily translate into a “Buyer’s” market, per se, it does prompt Seller’s Agents to take a more agressive approach towards effectively marketing their client’s homes.

Gone now, thankfully, are the Days of the Lazy Agent. You know the type. The ones who simply input your home into the local Multiple Listing Service and pray for a buyer.

Their photo gallery (If you can call it that) has only 3 pictures, none of which does any good to help showcase your home’s features (Unless, of course, a shot of a toilet really sells homes? “Look, Honey, this house has a toilet! Quick, let’s put in an offer right now!”)

These are the same Agents who consistently neglect to fill the flyer box (Not that you’d necessarily want their flyer in there. I’ve seen better artwork from 3rd graders. At least the kids actually know how to use Publisher!)

And when was the last time you tried to contact this Agent? Your e-mails go unanswered. Their phone message says that your call is important, but after no response for several days, you feel like anything but important.

Lazy Agents are the by-product of fast markets. Attracted by the allure of “easy” money, they touchdown in a tornado of self-seeking inexperience, leaving behind a path of short-changed clients and potential lawsuits.

And fortunately, as soon as the market begins its downturn, they jump ship, headed back to their day jobs, or caught up in the latest TV infomercial money-making scheme.

In the meantime, the rest of us ‘career’ real estate professionals pursue the relentless representation of our clients, putting their best interests above all else. We constantly strive to master and employ the latest technologies in an ever-changing/evolving market. We expand our knowledge by on-going educational opportunities, better equipping us to serve our clients.

So, let’s all bow in a moment of grateful silence, and bid a fond farewell to the Lazy Agents everywhere.

And for the rest of us, back to work!

Posted in Bainbridge Island Real Estate, Buyers, Gig Harbor Real Estate, Poulsbo Real Estate, Real Estate Bites, Sellers | 15 Comments »

This is the tenth and final installment in an on-going series of posts dedicated to helping 1st Time Home Buyers successfully achieve their home purchasing goals.

We have been identifying and discussing, in chronological order, key events in the home buying process. In our last discussion, we indentified several last minute obstacles/difficulties that Buyers may experience in a post entitled, “Potential Pitfalls in the 11th hour.”

This time, we’ll talk about what Buyers can expect in the final days leading up to their closing and what to aniticpate beyond, in an article called, “Are We There Yet?”

Remember back when you were just a kid, and your family took that unbearably long cross-country vacation, all smashed together in an old beat-up the station wagon? And getting to your destination seemed to take FOREVER?

Well, that’s kind of the way it is in the final days leading up to your closing! Well, just be patient, you’re almost there!

Once your loan documents arrive at the escrow company, it’s normally just a matter of the Escrow Officer ensuring that all necessary documentation is prepared and ready for signing. Based on all of their input, they will draft a HUD-1 Statement. This is a projected detailed estimate of both parties (Buyers and Sellers) closing costs. You will receive a copy of this estimate prior to your signing, and so will your Agent. Now is the time to review these numbers carefully, with both your Agent and your Loan Officer, to verify that all the numbers are correct and correspond to what you had anticipated.

The Escrow Officer will contact you to schedule a time for you to come into their office to sign all the closing documents. For most standard residential transactions, you can plan on the signing to take at least an hour, depending on how in-depth you wish to read and review all the documents. The Escrow Officer will instruct you on what you will need to bring to the signing (typically your Driver’s License and any funds necessary to close the transaction),

In some instances, you may have negotiated with the Sellers for them to contribute to your closing costs. In addition, any Earnest Money that you deposited into escrow when you first went under contract will either be applied to your closing costs, or credited back to you at closing. Reviewing your HUD-1 statement will help you to aniticpate whether or not you will need to bring money to your signing. The escrow company usually requires the funds to be in the form of a certified cashier’s check.

One thing many people forget in the final stage of the home buying process is to contact all of the local utility companies and have them switch the billing over to your name. Your agent should be able to provide you with a list of utility companies that serve the property, along with their contact numbers. There are few things more frustrating than moving into your new home and discovering you have no power, water, or gas!

And, depending on the type of property, it might be beneficial for you and your agent to conduct a final walk-thru, prior to closing, just to ensure that everything is as specified per contract.

Now realize that closings can vary significantly from State to State. When we bought our house in Chicago, everyone was there for the signing – our agent, our attorney, the Sellers, their agent, and their attorney. We all sat around the table and passed the documents around for signatures. At the end of the signing, we got the keys to our new home!

Here in Washington State, Buyers typically come in to sign a day or two before the actual closing takes place. The Sellers come in separately, many times on different day altogether. This tends to make the process less intimidating and more comfortable for both parties.

Once you have signed all your documents, they are normally sent overnight to the Lender for final review. In most instances, the following day your loan is funded. Later that same day, the escrow company sends documents by courier to the County courthouse where the new deed is legally recorded. The recording numbers are furnished to the escrow company, and the transaction is officially closed, and the house is YOURS!

Your Real Estate Agent will have made prior arrangements with the Seller’s Agent to obtain the keys. Once escrow has informed them that your loan has been funded and they have recording numbers, the transaction has closed and you can take possession.

Before you begin moving your household goods inside, take time to tour the entire home and premises:

• Verify that you have adequate power, water, and gas servicing the property.
• Are there instruction manuals for all the appliances and primary systems (furnace, water heater)?
• Did the Sellers remember to leave the garage door openers?
• Does your neighborhood have locked mailboxes, and did the Sellers provide you a key?
• Is there a trash can, or will you need to purchase one? Check with your Disposal company to determine acceptable containers.
• As a safety precaution, have all the locks changed as soon as possible.

A good real estate professional never disappears after you’ve closed. There is always something that inevitably comes up after the fact. So don’t hesitate to contact your agent if there are any issues or concerns. Your complete satisfaction and future referral/recommendations are very important!

Enjoy this day! It is truly a momentous occasion! You’ve now joined the ranks of being a ’Homeowner!’ Take some time at the end of your busy day to journal your thoughts and impressions. This is an event you will want to capture for many years to come!

Posted in Adventures in 1st Time Home Buying | 6 Comments »

A friend of mine was recently visiting from out of state. He complimented me on my nice tan. I told him, “That’s not a tan, that’s ‘rust!’

The jokes about rainfall here in the Pacific Northwest are endless.

“What do you call two straight days of rain in Seattle? A weekend!”

“It only rains twice a year in Seattle. August through April and May through July.”

However, I recently read some rather encouraging news. It seems as though the bad rap we get here in Washington State for inclement weather isn’t all that accurate.

According to a recent study conducted by the San Francisco CA based WeatherBill, Inc., where they ranked the Top Wettest US Cities, the State of Washington didn’t show up until the 24th position with our capitol city, Olympia.

Who was the wettest city, you ask?

Mobile, Alabama, with a whopping 5 feet of annual rainfall!

Pensacola, Florida, comes in 2nd, followed by several other cities mostly in Louisiana, Florida, and Texas. To read the entire article, click here.

Well, maybe we don’t get the MOST rainfall per year, but surely we have to be in first place for the number of rainy overcast days overall?

So maybe our kids do have webbed feet afterall. Or perhaps daylight savings simply means another hour of rainfall.

At least we don’t have to worry about water rationing!

Posted in Laugh Tracks | 2 Comments »

If you have never heard of Larry Cragun and his notorious Tarantula Trademark graphic, it’s simply because Larry is not a loud or noisy internet guy. In certain circles though  Mr. Cragun is well known as a tireless proponent of Real Estate Transparency and a voracious reader of real estate articles.

Each month on his website RealEstateUndressed.com, seven Consumer Real Estate Articles are spotlighted as the the best on the web. These seven articles comprise what Mr. Cragun considers valuable and useful, well-written articles designed to keep the real estate consumer equipped with knowledge. Mr. Cragun calls his collection of articles the “Magnificent 7″. Inclusion in this list is high praise in internet real estate circles.

SoundBiteBlog has been included in the Magnificent 7 List for the month of April. Mr. Cragun nominated Rich Jacobson’s article “Putting The Cart Before The Horse” and Mark Flanders’ article “Should I Tell My Loan Officer…”. Needless to say Sparky and I are thrilled. It’s a real ego booster to have our articles included in this listing of articles by some of the best real estate writers on the web.

At the end of the year, Mr. Cragun will choose 7 of the articles that were nominated during the year to become 2007’s Magnificent 7. Last year’s collection was awesome. Every article was worth reading. This year the competition is even stronger.

The articles choosen for April 2007 are:

• Mortgage Rates and Why I Don’t Post Them. by Nigel Swaby: SLC Real Estate Blog
• Preparing to Sell Part 1 by Merv Forney – Northern Virginia Real Estate Guide
• Protecting Your Credit And Your Privacy Blown Mortgage
• Putting The Cart Before The Horse: Making A Contingent Offer by Sparky for SoundBiteBlog
• Should I Tell My Loan Officer About The Loan Thats Not On MY Credit Report by Buckwheat for SoundBiteBlog
• Two Refi Offers In One Day…Just How Lucky Can A Gal Be? by Rhonda Porter for Rain City Guide
• Top 10 Things To Know About Reverse Mortgages by Mortgage Loan Place Lending Guide

You may want to read them all. This is a great collection of articles from some very good real estate writers.

Posted in Miscellaneous, SoundBite Bites | 7 Comments »

Tags: real estate article award, soundbiteblog.com