Your kids have moved out, and it’s probably time for you to think about downsizing your home. You might want to consider staying in a house with fewer rooms and accessible facilities. Furthermore, the extra space in your house determines the equity that can potentially be converted into cash. Additionally, make sure you ask these 4 questions while selling your house for retirement.

#1 What Is The Reason To Sell Your House?

Selling your house to a cash buyer in NY may seem like the best option. Although, you may still want to consider looking at financial numbers while seeing other options. Selling your house is not only about making money but also making your life easier post-retirement. If take a look at the statistics, according to a study it was shown around 64% of seniors chose downsizing to lower their monthly expenditure on housing costs. Whereas, around 44% stated owning a huge house is too much work and maintenance.

When you decide to sell a house you are inclined to buy a house of your choice as you have definite advantages over young buyers, how? Starting with you likely have more cash to offer, school districts are not an obstacle, and living near your workplace is not required anymore. All of this is a bonus while you hunt for a property of your choice.

#2 What Is Better While Retirement, Buying Or Renting?

Buying a house may sound like the safest option while planning your retirement. Although, there are some touchdown points you may want to consider. In some cases, renting is the most feasible option. To begin with, renting a house makes sense if you want to save the constant repair costs. Furthermore, renting promises a predictable monthly expense flow making your life much easier. It enables you to even change your mind and change the current house or just look for more space, fewer amenities, etc. Also, if you plan to move out of the city or even the country you have the liberty to do so when renting. 

#3 Is Piling Up Extra Cash For Retirement On Your Mind?

Most of the retirees who downsize soon discover expenses they never knew about. Moving altogether can be a lifestyle change as you might live in new weather, clothing, furniture, etc. Although, downsizing from a huge bungalow to a condo can result in a significant amount of savings. 

#4 Do You Have Enough Funds To Fix Up Your Old House?

Let’s get it straight, the longer you live in a house the more difficult it gets to sell it later. Furthermore, selling the property can be an expensive undertaking as it will definitely require improvements. If you don’t have enough funds handy to renovate your house or take up any new improvement project, it is best to sell house as-is for cash. Selling a tenant-occupied property for cash will save you from the extra costs and troubles of selling your house the traditional way.

Conclusion

If you want to avoid the hassles of falling into the straining home-selling process, you may consider selling your property to a cash-buying company. At Elite Properties, we buy and sell properties online and provide a no-obligation offer to our customers. Selling your home to a cash-buying company will give you hard cash in return. Sell your house as-is and save that extra money from drowning in real estate agents and home improvements. Call us today at 718-977-5462 and our experts will offer you the best solutions.

After a lot of house hunting, you’ve finally found the home of your dreams. A house with the right amount of rooms and a beautiful front yard so, what do you do next? How do you turn yourself into a homeowner from being a potential buyer? It’s simple, you apply for a mortgage to finance the purchase of your new home. As simple as it sounds there’s a lot that goes into applying for a mortgage and one of them is the mortgage underwriting process. If you’re a potential buyer, here’s a Step By Step Detail On Mortgage Underwriting Process.

What is Underwriting?

Underwriting is a critical step in the mortgage approval process where a qualified individual, known as an underwriter, assesses your financial information and determines whether you meet the lender’s requirements for a loan. This process involves a comprehensive review of your creditworthiness, income stability, debt obligations, and the property’s value. The underwriter’s role is to minimize the lender’s risk and ensure that you can repay the loan.

What Is Mortgage Underwriting Process?

An underwriting process merely determines whether a buyer is able to pay back the loan to the lender. It is a process due to the lender, assessing the risk of lending money. The lender here will assess and verify your income, debts, assets, etc. towards the decisive approval for your loan.

What Goes Into Mortgage Underwriting

A mortgage underwriter’s responsibility is to assess the overall risk of the potential buyer, and whether he/she would be able to repay the mortgage. The underwriter evaluates the factors which help the lender comprehend a buyer’s financial condition that including –

• Buyer’s credit score
• Buyer’s credit report
• Property intended to be bought by the buyer

Additionally, the underwriter also aids the lender in determining if the buyer may or may not see a forthcoming loan approval. The motive of this process is to ensure the buyer doesn’t end up closing a mortgage that they can’t afford. An underwriter further will investigate the buyer’s credit history, order an appraisal, verify the income and employment, analyze the Debt-To-Income Ratio, and lastly, verify your payments and savings. 

Here’s what an underwriter does:

A mortgage underwriter is a crucial player in the loan approval process. They are responsible for assessing the risk associated with lending to a borrower and determining if the loan meets the lender’s guidelines. Here are some key responsibilities of a mortgage underwriter:

1. Review Your Credit History: This includes a thorough examination of your credit report, credit score, and payment history.

2. Analyze Your Finances: Lenders typically adhere to federal financing guidelines. For example, Fannie Mae guidelines require borrowers to have a maximum loan-to-value (LTV) ratio of 97 percent, a credit score of 640 or higher, and a maximum debt-to-income (DTI) ratio of 36 percent. The lender might also incorporate its own criteria. Additionally, they’ll consider specific aspects of your financial situation. If it’s an income-producing property, they might assess whether you plan to occupy the property alongside tenants and take into account your financial reserves, such as investments, assets, and savings.

3. Conduct a Property Appraisal: The approval of your loan is influenced, in part, by the relationship between the amount you’re borrowing and the value of the home you’re purchasing (used as collateral). As a result, the underwriter will request a property appraisal to ensure that the asking price aligns with recent sales of comparable homes in your area.

4. Render the Approval Decision: Once all the necessary reports and paperwork are gathered, the underwriter makes the critical decision to approve or deny your application.

Common Factors That Can Impact Mortgage Underwriting

Mortgage underwriting is a complex process that takes into account various factors to assess your eligibility for a loan. Let’s explore some of the common factors that can impact mortgage underwriting.

1. Credit Score: Your credit score plays a significant role in mortgage underwriting. Lenders use this three-digit number to evaluate your creditworthiness and predict your ability to repay the loan. A higher credit score indicates a lower risk for the lender, making it easier for you to secure a favorable loan.
2. Income: Underwriters carefully evaluate your income to determine if you have the financial capacity to make regular mortgage payments. They will assess your employment history, stability, and the consistency of your income. Generally, a higher income level makes you a more attractive borrower.
3. Debt-to-Income Ratio: Your debt-to-income (DTI) ratio is another crucial factor in mortgage underwriting. It measures the proportion of your monthly debt payments to your monthly income. Lenders prefer a lower DTI ratio, as it indicates that you have enough disposable income to comfortably handle mortgage payments.
4. Employment History: Underwriters consider your employment history to gauge the stability of your income. They typically look for a steady employment track record, preferably with the same employer or within the same industry. Frequent job changes or gaps in employment can raise concerns for lenders.
5. Property Value: When underwriting a mortgage, the value of the property you’re purchasing or refinancing is also assessed. Lenders want to ensure that the property’s appraised value aligns with the loan amount. A lower loan-to-value ratio (LTV) is generally preferred, as it reduces the lender’s risk.

Understanding these common factors can help you prepare better for the mortgage underwriting process.

What Information Do Underwriters Look at?

Mortgage underwriters analyze a range of documents and information to assess your eligibility for a loan. Here are some of the key items they review:

1. Credit Report: Underwriters obtain your credit report from the three major credit bureaus – Experian, Equifax, and TransUnion. They scrutinize your credit history, including your payment history, outstanding debts, and credit utilization. A clean credit report with a history of timely payments enhances your chances of approval.
2. Income Documentation: Underwriters review your income documentation, such as pay stubs, tax returns, and W-2 forms. They verify the stability of your income source and calculate your debt-to-income ratio. Self-employed individuals may need to provide additional documentation, such as profit and loss statements or business tax returns.
3. Bank Statements: Underwriters analyze your bank statements to assess your financial health and verify your assets. They look for consistent deposits, large cash transactions, and any red flags that could indicate undisclosed debts or financial instability.
4. Employment Verification: Underwriters verify your employment history and income by contacting your employer directly. They may request additional documentation, such as employment verification letters or recent pay stubs, to confirm your income details.
5. Appraisal Report: Underwriters review the appraisal report to ensure the property’s value aligns with the loan amount. They assess the property’s condition and location to determine its marketability and potential risks.

By understanding the information underwriters evaluate, you can gather the necessary documents and ensure that your financial records are in order. Now, let’s explore the step-by-step process of mortgage underwriting.

Types of Underwriting Categories

There are three main types of underwriting process. Those are: loans, insurance, and securities.

Loan Underwriting

All loans, in some capacity, undergo the process of underwriting. This involves the evaluation of an applicant’s credit history, financial records, collateral value, and other factors that vary based on the loan’s size and purpose. The appraisal duration can range from a few minutes to several weeks, depending on whether human intervention is necessary.

The most common form of loan underwriting that involves human underwriters is for mortgages. This is the type of underwriting that most individuals encounter. The underwriter assesses an individual’s income, liabilities (debt), savings, credit history, credit score, and more, considering their unique financial circumstances. Mortgage underwriting typically has a “turn time” of a week or less.

Refinancing often takes longer, as buyers facing deadlines receive preferential treatment. The loan applications can be approved, denied, or suspended. The most receive “approval with conditions,” requiring clarification or additional documentation.

Insurance Underwriting

In insurance underwriting, the focus is on the potential policyholder – the individual seeking health or life insurance. The medical underwriting for health insurance was used to determine pricing and coverage decisions. These are based on health status, often considering pre-existing conditions. However, since 2014, under the Affordable Care Act, insurers are no longer allowed to deny coverage or impose limitations based on pre-existing conditions.

Life insurance underwriting aims to evaluate the risk of insuring a potential policyholder based on factors such as age, health, lifestyle, occupation, family medical history, hobbies, and other criteria determined by the underwriter. The outcome of life insurance underwriting can lead to approval, along with various coverage options, prices, exclusions, and conditions, or outright rejection.

Securities Underwriting

Securities underwriting, which evaluates the risk and appropriate pricing of specific securities. That are related to Initial Public Offerings (IPOs), is typically conducted on behalf of a potential investor, often an investment bank. Following the underwriting process, the investment bank may purchase (underwrite) securities issued by the company attempting the IPO and then sell those securities in the market.

Underwriting ensures that the company’s IPO will raise the necessary capital and provides the underwriters with a premium or profit for their services. Investors benefit from the vetting process that underwriting provides, enabling informed investment decisions.

This type of underwriting can encompass individual stocks and debt securities, including government, corporate, or municipal bonds. Underwriters or their employers purchase these securities to resell them for a profit, either to investors or dealers (who sell them to other buyers). When multiple underwriters is involved, it is referred to as an underwriting syndicate.

What Is Automated Underwriting Vs Manual Underwriting

A mortgage underwriter has two options to assess the loan application. The first is to do it manually and the other through software. The one with software is known as automated underwriting. An automated underwriting process is much easier and faster than the manual one as a computer evaluates it. Although, it has some limitations that are non-negotiable like inconsistent income, poor credit score, etc. That may be a deal-breaker for borrowers. Hence, in such circumstances, manual underwriting is an easy option. Furthermore, in some situations, lenders combine automated and manual underwriting to avoid the complications of the loan application.

Mortgage Underwriting Process Steps

As explained above in brief, an underwriter evaluates your finances and forwards them to the lender. Although, there are more aspects that need to be analyzed while proceeding with the underwriting process. Some of the aspects are given below.

1. Income

While assessing a buyer’s income the underwriter requires a set of documents as proof to determine if he/she can cover the monthly mortgage payments. As a buyer, you’ll need to submit documents like –

• W-2 (of last 2 years)
• Bank Statements (2 most recent ones)
• Pay stubs (2 most recent ones)

Furthermore, if the buyer is self-employed or has a share in a business. There are some additional documents that need to be submitted. Such as –

• Profit And Loss Sheets
• Balance Sheets
• Personal And Business Tax Returns
• K-1s

Adding to the above, the underwriter will verify if the buyer’s income is as mentioned in the payslips (or any other format where the income details are provided). Also, the underwriter will verify your employment status with the employer as well. 

2. Assets

Your assets help you qualify for a mortgage. As they can sold for hard cash if you fail to satisfy the outstanding loan amount. An underwriter will go through your savings accounts, stocks, and property if any. As the closing amount ranges from anywhere from 3%-6% lenders use assets to make sure the buyer makes monthly payments post-paying closing costs.

3. Credit

It is one of the most important aspects of mortgage approval, is assessing your credit score. An underwriter will evaluate your credit score to understand how well you have managed to repay your past loans. Assessing your credit score helps the underwriter to predict your capacity to repay the loan. 

4. Collateral

The underwriter needs to understand the worth of the house you’re interested in buying. The motive for seeing the collateral risk is to avoid putting the buyer’s money in a house that is not worth it. Hence, as a part of the closing process, the lender will order an appraisal.

Potential Underwriting Consequences

There can be only three possible consequences of the underwriter’s evaluation as given below.

1. Conditional / Contingent Approval

You can submit documents to satisfy the underwriter’s questions. Although, you’ll be clear to close while the documents go through the assessment. One of the most common requests includes verification/proving large amounts of deposit in the buyer’s bank. In such situations, a gift /donation letter from the donor is vital to prove it’s not a loan.

2. Suspension

This means there are significant questions in your file for which a loan officer will work with you closely to resolve the underwriter’s questions.

3. Denial

If the buyers got the loan pre-approved and review of their finances thoroughly, their loan will still be ultimately declined.

How Long Does Underwriting Take To Complete?

The underwriting process takes up to 5-8 days. Although, there are dependencies like your financial condition, loan type, missing paperwork, etc. that may prolong the whole process. Additionally, a point to remember, underwriting is a mere part of the process. A complete closing can take up to 40-50 days in total.

Tips for Smooth Mortgage Underwriting Process

1. Organize Your Documents

The key to a streamlined mortgage underwriting process is to have all your financial documents ready before applying for a loan. Keep the following document ready when you apply:

• Employment details from the past two years (for self-employed individuals, include business records and tax returns)
• W-2s from the last two years
• Pay stubs covering 30 to 60 days before application
• Comprehensive account information, including checking, savings, CDs, money market accounts, investment accounts, and retirement accounts
• Additional income details, such as alimony, child support, annuities, bonuses, commissions, dividends, interest, overtime payments, pensions, or Social Security payments
• A gift letter if you’ve received funds from friends or relatives for your down payment

2. Enhance Your Credit Profile

A lower credit score can make mortgage approval challenging and result in a higher interest rate. Improve your creditworthiness by taking the following steps:

• Pay down existing debts
• Avoid applying for new loans during this period
• Aim for a favorable debt-to-income (DTI) ratio (ideally 36% or less)
• Review your credit report for errors and dispute inaccuracies

3. Consider a Larger Down Payment

The underwriter also evaluates your loan-to-value (LTV) ratio, which compares your loan principal to the property’s value. A higher LTV ratio puts the lender at more risk if you default on the mortgage. You can improve this ratio by making a substantial down payment upfront. Borrowing less through a larger down payment increases your chances of qualification. Don’t hesitate to explore down payment assistance programs or seek support from family and friends.

By following these steps, you’ll pave the way for a smoother mortgage underwriting process. Also, well-prepared and maximizing your chances of loan approval.

Takeaways

A pro tip to speed up the process is to keep the documents in place, maintain a good credit score and always put a larger down payment. This way it’ll make the mortgage underwriting process a smooth sail. Furthermore, if you are in a hurry to move out and don’t have time for a traditional home-selling process then sell your house to Elite Properties. We buy houses as-is which means no hassles of legal documentation. We close a deal in less than 7 days and offer you hard cash. Call us today at 718-977-5462 and sell your house fast for cash.

What Are the Steps in the Mortgage Underwriting Process

Mortgage underwriting involves several stages that culminate in the lender’s decision to approve or deny your loan application. These steps are

1. The process begins with completing a loan application and submitting it to the lender.
2. Once your application is received, the underwriter performs an initial review to ensure all necessary documents and information are included.
3. Underwriters analyze your credit report, income documentation, and other financial records to assess your creditworthiness.
4. Underwriters review the appraisal report to ensure the property’s value supports the loan amount.
5. Underwriters may issue a list of conditions or additional documentation required for loan approval.
6. Once all conditions are satisfied, the underwriter grants final approval for the loan.

What are the factors that impact the duration of mortgage underwriting?

Several factors can impact the duration of mortgage underwriting, those are

1. Application Accuracy
2. Lender’s Workload
3. Complexity of the Loan
4. Third-Party Involvement

How Long Does Mortgage Underwriting Take?

On average, the underwriting process takes approximately 30 to 45 days from the time of application submission. However, it’s important to note that this timeframe is just an estimate, and the actual duration may differ.

FAQ

What Are the Steps in the Mortgage Underwriting Process

Mortgage underwriting involves several stages that culminate in the lender’s decision to approve or deny your loan application. These steps are

1. The process begins with completing a loan application and submitting it to the lender.
2. Once your application is received, the underwriter performs an initial review to ensure all necessary documents and information are included.
3. Underwriters analyze your credit report, income documentation, and other financial records to assess your creditworthiness.
4. Underwriters review the appraisal report to ensure the property’s value supports the loan amount.
5. Underwriters may issue a list of conditions or additional documentation required for loan approval.
6. Once all conditions are satisfied, the underwriter grants final approval for the loan.

What are the factors that impact the duration of mortgage underwriting?

Several factors can impact the duration of mortgage underwriting, those are

1. Application Accuracy
2. Lender’s Workload
3. Complexity of the Loan
4. Third-Party Involvement

How Long Does Mortgage Underwriting Take?

On average, the underwriting process takes approximately 30 to 45 days from the time of application submission. However, it’s important to note that this timeframe is just an estimate, and the actual duration may differ.

Buying a house is one of the most massive financial decisions a person will ever make. So it’s important that you’re completely confident that you’ll be able to manage your mortgage before you commit to it. Don’t just find the perfect home and rush into something you aren’t ready for. Take time to consider these questions, and make sure your finances are in order before you move ahead with your house search. Check out this guide on ‘7 Questions You Need To Ask Before Buying A House and learn more about whether or not you are ready to buy a house.

Here are some deciding factors to determine whether you may buy a house or not.

1. Do You Have Enough Capital For A Down Payment for Buying a House?

Having a 20% down payment is one of the most common perceptions while buying a house for the first time. Although, it’s not completely the truth. A homeowner needs a minimum of 3.5% – 10% for an FHA home loan and around 3% – 5% for a conventional loan.

For example: If you want to purchase a house worth $900,000 your lender will require a total of 3% as a down payment depending on the type of loan you qualify for. Hence, 3% of $900,000 will be $27,000 as the down payment.

The only thing to remember is the larger the down payment the lesser will be your EMIs and interest. Although, in a lower down payment you are entitled to pay Private Mortgage Insurance (PMI) that protects your lender in case you don’t pay your mortgage. This is only applied when you put less than 20% downpayment, the PMI will be added to the monthly payments.

2. Do You Have A Good Amount Of Savings And Emergency Funds?

You may have saved enough money while thinking about making a big down payment, but did you think about closing costs? Closing costs include multiple fees like legal fees, lender fees, taxes, etc.  The total is usually 2%-5% of the home’s purchase price. Additionally, there are many things that show up while a home inspection related to home improvement which you might want to care of. If the septic tank is leaking or there are cracks in the ceiling, this is where you’ll need emergency funds.

3. How is your credit score?

The first thing homebuyers think of is having a perfect credit score with no red dots. Although, the truth is you don’t need to have a perfect credit score to buy a house. There are multiple home loan and homebuyer programs available for first-time homebuyers that do not require a perfect score. Furthermore, a minimum credit score of 600 or higher is favorable. Keep in mind a high score (that is above 700) will aid in qualifying for a lower mortgage rate.

4. Worried About Having A Handle On Your Debt?

Buying a home doesn’t mean you have to be debt-free. You might have an outstanding student loan, car loan, bills, etc. which makes purchasing a home difficult. Fortunately, many companies these days understand it is impossible to expect potential homebuyers to be debt-free. The main objective of most companies is to know if you will be able to fulfill the mortgage payments. Keep in mind the savings you have versus how much you’ll pay in the future.

Your lender will have a look at your debt-to-income ratio, which simply means what chunk of your monthly income goes into debt payments. You need to have a 43% debt-to-income ratio to qualify for any mortgage on the house.

5. Can You Afford Your Monthly Expenses for Buying a House?

The first while figuring out expenses is to know if you can afford additional payments to your existing monthly expenses. To calculate this you can use an online mortgage calculator. Additionally, you must also check with the other financial aspects like –

• Property insurance and taxes
• Other Home expenses (sewage, garbage, internet, etc.)
• Utilities (water, electricity, etc.)
• Home Owner Association (HOA) fees (if applicable)

It is vital to do your calculations before you move on with the transition from renting to buying your house. As you might be paying multiple bills already and there’s going to be an additional amount as a mortgage payment. 

6. Do You Have A Stable Income Source for Buying a House?

Having a stable job is extremely important for home buyers as losing a job after moving into a new house can be a nightmare. A stable job is a good indicator for lenders as then qualifying for a mortgage and fulfilling the amount is possible. Furthermore, even if you can show financial stability on paper, you must only buy a house knowing your income will remain steady in the future. 

7. How Much Space Do You Need?

Before buying a house always ask yourself the question ‘how much space do you need?’ While planning on money and other aspects you may forget this important aspect. Whether you need an extra room for office space or a gym thinking through it is always advisable. If you have kids or expecting a child, then buying a house with extra space is ideal. 

Takeaways

Buying a house comes with a long list of questions and contingencies. Make sure you think through the options and make a wise decision. If you’re someone who wants to sell your house fast before moving to a new one you may contact us at Elite Properties. We’re ‘we buy houses all cash’ company which offers people home selling and buying services with no obligations. You can get in touch with us by calling 718-977-5462.

As a seller, you simply can’t deny the fact that there’ll always be a lot of paperwork involved while selling your house. Whether you pick a real estate agent for a home sale or you do it yourself, there’s no running away from the verification and paperwork. Home selling is a big transaction and if you need to know what goes into a home selling process then read this blog till the end, ‘Selling house by Owner? Check The Paperwork You Need’.

Where To Find The Right Paperwork?

Starting off, different states have different laws and you’ll have to line up all the necessary documents according to your state. It is extremely vital to do your research and gather all the information before proceeding with showings. Now the question is how and where do you find the appropriate documents to sell your house by owner?

A real estate attorney can help you provide all the information and legal documents that you need while selling your house. Keep in mind hiring an attorney will require fees, so make decisions on your suitability. Additionally, there are also state and county government websites that help you find relevant information.

Documents Needed For A Home Sale

Given below is a list of documents that you’ll require before proceeding with the home sale with the process. (Note: the documents mentioned below may differ depending on the states you reside in)

• Property Survey

A survey document determines the boundaries of the specific land or property based on the legal documents filed on it in the past. The document also includes details about fences, driveways, etc. if any.

• Receipts And Warranties

The document helps in documenting information on any new appliances or improvements done to your house.

• Plans And Permits

This document ensures that you have made changes or upgrades in your house with due permissions, additionally, it’s proof for the potential buyer to cross-verify. 

• Certificates Of Occupancy

To get this document you’ll have to visit the municipality, get the permit pulled post which you’ll have to get an inspection done, do necessary repairs, and again get the house inspected again. The certificate signifies that your house is safe to reside in and is compliant with all the building codes. 

• Loan Documents

The document usually comprises your first mortgage, second mortgage (if any), and any home equity lines of credit (if any).

• Latest Utility Bills

The document showcases the monthly amount spent on the household such as electricity, gas, water, etc.

• Latest Property Tax Bill

The bill gives an idea to buyers of how much tax they’ll pay post purchasing the home.

• Title

This document shows that you own legal/equitable interest in the property.

• Homeowners Association Covenants and Agreements

This document signifies a detailed set of rules established by the body that governs the neighborhood. The rules usually contain information about pets, noise level maintenance, etc.  

• Floor Plan or Blueprints, If Available

Having a plan or a blueprint of your house makes the buyer understand in-depth about the property. Make sure you have two sets of all the documents, furthermore, make sure to add anything that pertains to the ownership of your house.

Selling House by Owner, Here’s How You Do It

If you’re stuck with limited funds, selling a house to an owner is the ideal way out. To know how it’s done follow the process below –

• Assess Your Property’s Value

Always assess the value of your property before listing it. There are certain setbacks while you list your house like over or underpricing. What do you do in a situation where you are aware of the drawbacks? First off, check the estimated value of your house from home value sites available on the internet.

By only paying a small amount for an FSBO home evaluation you’ll have a licensed professional who’ll do an in-depth evaluation of your home. In 5-7 business days the person will visit your house and you’ll have a detailed report in your hand.

• Get Your Home Sale Ready

It is an unsaid rule to keep your home in its best shape before putting it on the market. You might want to showcase your home’s full potential by rearranging furniture, decluttering waste, and giving your walls a fresh coat of paint. 

• Promote Your Home’s Sale

As old-school as it may sound, putting a sign in your yard saying ‘for sale’ makes a lot of difference in the sales. People in the neighborhood will take note of the sign and spread the word. Furthermore, list your house on famous FSBO (For Sale By Owner) listing sites and MLS (Multiple Listing Service) and take that extra step to generate more traffic to your house.

• Negotiate The Sale

A buyer will always offer a price that’s below the asking price or ask you to pay the closing costs, here’s when you have to negotiate. At this stage, you’ll need documentation, within days of accepting the buyer’s offer it is mandatory to have a copy of their mortgage approval. Post this the buyer will submit a written offer that is mutually acceptable. It is only now that you must draw up a contract that includes closing concessions, final price, closing date, location, and a list of contingencies.

The contingencies are put in the contract by keeping in mind the buyer’s security and allowing them to back out if things fall out of place.

• Close On the Sale

A closing may either take place at the real estate attorney’s office or the title company depending on the state laws. Make sure everyone is on the same page and the communication is free of any loopholes as the date of closing is the final stride to complete the sale.

• Disclosure Statement

What is a disclosure statement? It is a document required by most states that outlines defects of the property. It may include mold, flooding, lead paint, radon, structural problems, etc. A disclosure statement protects the seller from any post-sale claims made by the buyer of which they didn’t know initially. Fill out this Disclosure Form before selling the property.

Things That Must Be Included in a Real Estate Contract?

Here’s a list of things that you must touchdown while drafting a real estate contract –

• Property And Its Characteristics
• Identity Of the Parties Involved
• List Of Fixtures/Personal Property
• Purchase Price
• Earnest Money Amount and Financing Terms
• Target Closing Date
• Contingencies
• Proration
• Title
• Closing Cost
• Notice Or Default Legalese
• Miscellaneous Provisions

Conclusion

If you’re a first-time seller and trying to sell your house on your own, we hope the blog might help you in the process. Furthermore, if you wish to sell properties online you can contact Elite Properties, we buy houses New York and if you want to know more about the process of selling house by owner, contact us today at 718-977-5462.

The facade of real estate has changed with time and new-age processes like virtual tours, virtual staging, advertising online, etc. , are pulling the limelight. With the moving age of the internet selling and buying is as easy as a click. The dynamics of business are constantly evolving whether it’s real estate or groceries. People prefer convenient alternatives rather than the traditional home selling process. Nowadays, people are attracted to iBuying, don’t know what is it? Scroll through our blog, ‘Is iBuying Worth The Hype? What is an iBuyer?’ to know more about the topic.

What Is An iBuyer?

To put it in simple words, an iBuyer is a company with ample finances that makes an offer on your behalf based on algorithms. The term “iBuyer” is a fusion of words where I denote ‘instant’ combined with the word ‘buyer’. The company makes all the trades and makes the whole process convenient for both buyers and sellers. iBuyers try to sell your house with a profit margin and give you cash in return once sold.

iBuyers buy your house as-is which means selling your house without spending a ton of money. It enables a buyer to avoid the extra upfront costs that incur while closing. Additionally, it avoids the need for real estate agents or brokers.

How Does An iBuying Model Work?

As given above iBuyers use algorithms to determine the ideal price of a home, which are based on comps (comparables). The iBuyers provide instant offers to sellers in as few as 24 hours once you fill out the requisites in the form. A potential seller will have to go to the iBuying website and fill out a form, post which they receive an offer. For instance, if the seller accepts the offer then the sale is likely to close in just a few weeks.

How do iBuyers make profits?

iBuyers usually buy a property with a discount as-is. They add value to the property by making minor improvements to optimize the selling price post which they list on MLS. Additionally, iBuyers provide an in-house financing service to customers which helps in earning good profits. A service charge typically ranges from 5% (can be higher or lower, relies on the tenure of selling your house)

Pros And Cons Of Selling Your Home To An iBuyer

iBuying is a great way to close deals fast, although it comes with a set of pros and cons. Some of them are given below.

Pros of iBuying

• Capable of fast closings (as less as a couple of weeks)
• Avoid the hassles of legal verification, inspection, or appraisals
• Does not require walkthroughs
• Avoid paying the upfronts costs while closing deals

Cons of iBuying

• May require some amount as a listing fee, which is usually higher than a real estate commission
• Currently, only a few iBuying companies are active and providing services
• Less selling prices, usually below the fair market value
• In most iBuying models the house may have to satisfy the ideal house criteria

Is iBuying Really Worth It?

Whatever method you use to sell your house whether it’s a traditional home sale or iBuying,  will have some advantages and disadvantages. It is all about what suits you best. Although, if you choose to sell through an iBuyer, make sure to do your due diligence. Besides, it is equally important to go through all the fine print and policies including the other costs and fees if any.

Conclusion

If you are someone who wants to sell your house fast and doesn’t have enough time to wait? You can get in touch with Elite Properties. We buy houses for cash online in New York and offer you enticing deals over your as-is property. Furthermore, if you wish to learn more about a house sale then call us at 718-977-5462, we’ll be happy to help.

A home selling process is not a one-time transaction, there are multiple steps that come into play while selling a home. You might have to deal with the state and municipality laws that may affect the ultimate sale process. Although, some steps are pretty standard. If you’re a seller and want to know what is the ultimate home sale process then read, Home selling process, when is a home actually sold?

Signing The Home Sale Purchase Agreement

The Home Sale Purchase agreement is the next step after making an offer. When a buyer makes an offer you can either accept it, reject it, or make a counteroffer. In cases, while accepting or rejecting an offer the deal has a definite outcome although, in a counteroffer, it’s back and forth.

A counteroffer can come from a single buyer or multiple buyers collectively, which is a lengthy negotiation process. When such an instance takes place your house goes from listed to available, and then pending sale. Once you accept the house sale offer, it’s time for you and the buyer to sign the agreement that includes the following terms –

• ID verification of both the home seller and home buyer
• The legally verified description of the property
• All Finances (purchase price, closing costs, buyer financials, down-payment)
• Home sale conditions that need attention
• Timeline for the home sale (offer expiration, contingencies, closing date)
  
  

Home Selling Process, When Is A Home Actually Sold?

Inspections Before Home Sale

A buyer will schedule a home inspection prior to the closing date. The motive of a home inspection is to secure the buyer’s future investment. An important point to note is that if your house has any defect which will cost you money your home may reopen negotiation terms.

For example, while inspecting, if the inspector discovers a crack in the foundation, it will need repairing before the sale which requires a lot of funds. These kinds of inspection discoveries are time and money-consuming, which leads to missing out on a great deal. As a seller make sure you carry out an inspection in advance to avoid any hassles.

Approval For Buyers Loan

In order to approve the buyer’s loan, it is essential that both the buyer and the seller boil down on the same selling price. Post-approval of the offer there is a home appraisal. The buyer will send all the documents to the lender after which the underwriting process commences. The underwriting process can take anywhere from a couple of weeks to a couple of months. Keep in mind the home is still not considered sold even after the approval of the loan. 

The Contingency Sale

In simple terms, when a buyer has to close on their existing home prior to purchasing another property leads to a contingency sale. It is vital that the contingency is completed before closing and passing the ownership of your house. A buyer may satisfy a contingency by depositing the funds to close escrow or signing a release of contingencies. Although, depositing all the purchase price to close contingency will still not derive ownership of the house.

When Is The Home Considered Sold?

Technically, a home isn’t sold until the seller no longer owns the property or has ownership of the house. Once you sign the contract and receive the price of the property only then the house sale is complete.

Conclusion

We understand that a home selling process can be physically and mentally draining. Although, if you are planning to sell properties online you can get in touch with Elite Properties NY. Elite Properties is a cash-buying company that offers hard cash in exchange for distressed houses NY. Call us today at 718-977-5462 and we’ll help you in a smooth home sale.

A home inspection can be a stressful process for homeowners who are planning to close a deal. It may be time-consuming but it is an essential step to assure buyers to purchase a genuine property. A home inspector may bring many unseen problems to your plate that will require a huge amount. If you want to avoid spending a hefty amount you must fix these home inspection problems before it’s late.

Foundation Difficulties

While inspection, a home inspector will look for the condition of the foundation. If the foundation has erroneous grading, slopes, or gaps, it can be a problem for the seller. If there are pieces of evidence of cracked concrete floors, they might need repair. Damp crawlspaces may create greater issues like water seeping towards the foundation causing it to fall out of the alignment. This can result in the falling of the structure, which can be a point of hesitation for potential buyers. 

This is a major inspection issue and will require special attention. Although, it will come up with additional upfront costs. 

Water Issues

Nobody wants a house with molds and a leaking ceiling. This calls for another nightmare that’s water and mold issues. Leaking ceilings or water stains can be a derelict plumbing issue. Besides, bills generated for broken water lines can be an additional cost. Sometimes, you may have to deal with the local municipality for water issues, which come up with upfront costs. Water or plumbing issues can be costly and an inevitable reason to spend your money on it.

Mold Problems

On the other hand, mold isn’t always a significant problem although, if avoided it can become a nightmare. Although, having mold-infected walls have been directly associated with health hazards. Black molds may lead to asthma or any other serious health issue, which can be a bad dream. A small crack can cause mold to grow hence, it is better to address it as soon as noticed.  

Pest Damage

In pest inspection, the biggest issue can be termite damage. Pests like bugs, small rodents, etc. can damage your property, but termites can be much worse. Termites can eat the house completely especially when there are wood framings. If there are any rodents or squirrels they can chew on electrical wiring which can be hazardous. Additionally, rodent droppings and urine can be unhygienic. You must check on and inform pest controllers or critter control contractors to solve the issue and avoid further damage.

Faulty Electrical Wiring

In many cases, house fires are usually caused by defective electrical wiring. If this issue comes up during inspection, there is a high chance you’ll have to spend quite a lot on rewiring. Home inspectors do not have permission to open the walls and ceilings, which is why the issue may go unnoticed. Inspectors will usually check the electrical panels to investigate anything related to electricity issues.

You will have to check for existing issues like taped, spliced, or exposed wires and get them fixed. Make sure you call for an electrician and get over the electrical obstacles.

Asbestos Inspection and Septic Issues

Nowadays, home inspectors are offering a radon testing service as an add-on service. An asbestos or radon test signifies the indoor air pollution problem. A positive test states your home has been exposed to a lot of asbestos or radon index. In such a case, you’ll have to act fast and sign up for remediation. It is advisable to hire a professional for asbestos removal and remediating indoor air pollution, as doing it yourself can be dangerous.

Not to forget about the septic issues, having a septic tank that smells awful can draw potential buyers away. This may be a basic improvement but leaves a long-lasting impact on buyers. If you have flooded or blocked septic drains you might have to look into it. Call the nearest service provider who does it all and fix the issues before an inspection.

Bottom Line

The issues mentioned above surely will cost you a thousand dollars before closing. Selling your house usually is a chaotic scenario and you might want to close a deal fast. Sell your house as it is to us at Elite Properties and avoid the hassles of paperwork. Furthermore, you can sell your distressed home and avoid spending tons of money on improvements. Call us today at 718-977-5462 and sell properties online with us.

When it comes to a home selling process in real estate, selling psychology is always a part of it. When you sell your house there’s always an underlining message you put out for your buyers. You may not be aware of it but you’ve been sending these messages to buyers secretly. In these cases, you might want to send the right message to potential buyers. It is essential to understand the demography of buyers and your locality. For eg: If there are grad students residing in your neighborhood or there might be a retired couple. When home selling psychology comes into play, you have to picture who your ideal buyer is and think accordingly from a buyer’s perspective.

Clutter Can Be A Strong ‘NO’ For Buyers 

For a buyer, it is important to feel homely while picturing themselves in the house they’re visiting. When you have your personal belongings lying in the house while walkthrough, sellers may feel a bit intrusive. No buyer should feel as they are invading your personal space rather should feel homely and imagine themselves residing there.

What’s The Solution?  

Cleaning up personal items such as trophies, family portraits, collages, etc. can help avoid such awkward situations.

Take Time In Preparing Your Home     

Buyers will never make significant changes in the house unless they’re a real estate investor. If a buyer has infants or toddlers in a family they’d not buy a house with a pool or lavish landscapes. Besides, even staging your house excessively will have certain drawbacks. In order to keep your home tidy, you don’t necessarily need to stage it. A well-planned staging with minimal neutral upgrades can sell your house fast for cash. Eventually, it is vital to understand the buyer’s demography and make upgrades accordingly.

What’s The Solution?

As it might be difficult for you to understand initially who your buyers are? You can always switch to keeping the tone of your house neutral. Having a neutral room can allow buyers to put ideas into perspective. However, you can do basic upgrades like plumbing and fixing the roofs, etc., and avoid extra decor to make your house look beautiful.

It Is Important To Have A Purpose

Defining the purpose of each room can sell your house fast. Most people have a room for multiple purposes. For eg: A storeroom, which is also your gym or office space that has a play area. If this is the condition of your rooms as well then you might want to start defining the purpose of each room. Setting a room that is multifunctional can be practical for your family. Although, as a potential buyer it can still be a little confusing for them to understand the purpose of the room/s.

What’s The Solution?

If you have a total of 3 rooms excluding the kitchen and living area make sure the other three rooms are plain and neutral. Avoid creating chaos by having a multipurpose or multifunctional room while selling your home. Let the buyers have the advantage to think about how the rooms can serve their purpose.

Sell Your House With Elite Properties

A traditional home for sale method will require money, time, and energy. You can contact Elite Properties they are cash buying company that provides cash for homes New York. Selling house to a cash buyer (selling psychology) is much feasible as they don’t charge you any upfront costs. You can sell your house within 3 days in any condition and we will pay your closing cost. Call us today for an offer at 718-977-5462.

There is always a debate amongst people about what is better. Buying a House Cash vs Mortgage? In this blog, we will try to clear the picture and try to help you in the home selling process.  A lot of finance experts say buying a house in cash can avoid drowning in debt. Although, the other half believes in getting a mortgage and repaying it over the 15/30-year mortgage. Every method of purchasing an asset has its pros and cons. We will share an overview of each method and how it varies in each situation.

Why Must One Buy House in Cash?

In simple terms buying your home in cash allows you to avoid foreclosures and you are free of debt. You have complete ownership of your assets as you buy the property in full cash. Although every scenario has its pros and cons, scroll down below to know more.

Pros Of Buying a House in Cash

• Free Monthly Cash Flow

One of the big reasons to buy a house in cash is free cash flow. If you buy a house in cash you aren’t entitled to pay monthly mortgage installments. It allows your income source in multiple bifurcations as per your convenience and needs. Although, you’d still be paying the homeowners association fees, property taxes and maintenance costs, homeowners insurance, etc. You will pay these extra costs even if you don’t get your house on mortgage. When you buy a house on a mortgage, you pay a big chunk to the lender whereas in this case, you avoid it entirely.

• Save A Lot on the Interest

If you purchase a house in cash, you can save a lot on the interest of the mortgage. When you take out a mortgage, the interest rates are bound to escalate over the tenure. Example: A mortgage of $170,000 having a 4.375% interest rate costs you around $135,000 as interest expense for 30 years. Furthermore, mortgage debts are one of the cheapest in the USA if calculated on the APR (Annual Percentage Rate) basis. So, buying your home in cash might save a big chunk on the repayment.

• You Are a Preferred Prospect

Sellers always prefer cash buyers as the deal closes faster. When a seller sells the property to a cash buyer, it only requires the buyer’s due diligence and mutual closing date. Whereas, when a buyer applies for a mortgage, he/she has to work on a lot of things. Things like the verification process, legal documentation, the underwriting process, etc. The real estate market is big, but sellers usually pick cash offers as they are enticing and close faster. Also, a cash offer allows negotiation in closing costs as you trade in hard cash. If you are a cash buyer, you’ll be the preferred prospect instead of the one with a mortgage.

• Faster Closings and Lower Closing Costs

When you buy a house in cash, you avoid paying the associated loan fees. Also, costs like the originating fee, mortgage insurance premium, credit card report fee, etc. A cash offer may help you get away with legal processes and verification. Remember, an all-cash offer is less than the traditional bidding price. Getting paid in hard cash eventually is better than the orthodox mortgage bid, which is time-consuming. Additionally, as stated above, you close a deal faster with flexible closing costs.

Cons Of Buying a House in Cash

• Tying a Lot of Money into One Asset

If your property is worth $150,000 and you are a cash buyer, it can be quite risky. If you invest a large amount of your savings in one asset, you are tying up a lot of money. Such transactions do not show a positive outcome on your credit score.

• Low Liquidity

The real estate market or a house is an illiquid asset, which means it is difficult to sell it fast. Selling a home is time-consuming and a daunting task. Assets like bonds and stocks which have high liquidity are easy and quick to resell whereas a house is not. Therefore, putting a lump sum amount in one asset is never ideal as it slumps access to the liquid assets.

• Missing Out on Tax Benefits

The itemized taxes may help in putting the money back in your kitty. You can deduct a lot of amounts on mortgage rates through itemized taxes. Itemized tax deductions levy on multiple assets; it is advisable to check the taxes before purchasing. If you are using cash as your primary payment source then you are definitely losing some good tax benefits.

• You Are Left with No Savings

Buying a house in cash blocks your savings, and you have nothing, which means no emergency funds. It is always advisable to keep petty cash handy during an unexpected crisis.

Why You Must Consider Getting a Mortgage?

Buying a house on a mortgage allows you to maintain your savings and caters to the funding. Many people do not have enough savings to buy a house in cash. Prospects get a mortgage and keep building the equity over the tenure of repayment.

Pros Of Buying a House on a Mortgage.

• Flexibility Savings

When you get a mortgage, you have the flexibility to put your savings into other investments, which promise good returns. You can pick from innumerable liquid investments and grow your wealth and manage your monthly payments as well. Buying a house on a mortgage is always a better option as you have more flexibility to manage the money.

• Low Mortgage Rates

Comprehending the pandemic and the current state of the market, it’s a better option to opt for a mortgage. The mortgage rates are low, and the inventory has houses sitting for potential buyers. Hence the above makes it an ideal situation for purchasing a home.

• Improve Your Credit Score

If your credit report shows timely repayments, you will ultimately have a good credit score. Unlike buying a house with cash, it is essential to show the diversity of debts for a better credit profile. Credit reporting agencies prefer timely repayments of debts including home loans. It improvises the borrower’s profile allowing them to get a faster mortgage and boosting their credit score.

• Advantages Of the Tax Deduction

Mortgage debts are tax-deductible, which means more benefits for the person getting a mortgage. Married couples planning to buy a home can write off interest taxes up to $750,000 if filing together. If you are filing separately, you can write off tax interest up to $375,000.  Post the tax reform in the year 2018 write-offs were not as profitable. Although it still is beneficial for homeowners with outstanding mortgages.

Cons Of Buying a House on Mortgage.

• The Intricate Mortgage Process

It’s no hidden truth that getting a mortgage can be a really daunting and tiring process. You have to keep track of all financial documents inclusive of your IDs, which can be frustrating at times. Lenders will ask you for every detail and if you miss even a single document, you won’t qualify for the loan.

• Paying Mortgage Insurance Premiums

When you pay less than 20% on the property, having a mortgage insurance premium will be mandatory. A mortgage insurance premium is an addition to your monthly mortgage payments. Insurance is an added cost to secure the lenders in events if you miss out on paying the installments.

• Drawback Of Additional Costs

When a mortgage has lenders involved, it always comes with extra costs. The buyers are liable to pay lender fees, closing costs, mortgage origination fees, and appraisal fees. These additional fees can add to the existing cost and make the purchase even more costly.

• You Still Don’t Have the Ownership of the Property

When you buy a house on a mortgage, the lender has ownership while you keep making the monthly payments. They are entitled to hold your property until the last installment. If you fail to pay a consecutive number of installments, there is a high risk of losing your home.

Bottom Line

We know buying and selling a home is an overwhelming task. It can be a very confusing, lengthy, and mentally draining process. We tried to cover the pros and cons of buying a house in cash or by getting a mortgage. So, choose wisely keeping in mind your monetary status and plan futuristically.

If you are planning to sell your house fast for cash in NY, get in touch with Elite Properties. It is a ‘We Buy Houses For Cash Company’ which means you can sell your house fast for cash. Give us a call on this number at 718-977-5462 and we’ll help with fast home selling.