June 11, 2014

Video-5 Most Common Home Sales Contingencies Omaha Metro Area



5 Most Common Home Purchase Contract Contingencies

When a buyer writes up a contract on a home to purchase, there will be certain criteria in the contract that have to be met to both the satisfaction of the purchaser as well as the bank or lender who is giving that buyer the money to purchase the home.  These criteria, or contingencies, are considered to be standard home buying contingencies.  There’s many different contingencies and clauses that a buyer could put in the contract, but what we will be covering today are the 5 most common home purchase contract contingencies that we are seeing in our office for the homes that are going under contract in the Omaha Metro Area.  The 

5 most common home purchase contract contingencies are:
1.  Contingent upon purchaser’s satisfaction with the home inspection
2.  Contingent upon passing the radon inspection
3.  Contingent upon the home passing the appraisal process
4.  Contingent up passing termite/pest inspection
5.  Contingent up getting final mortgage loan approval


A fully executed contract means an offer on a home has been made and the seller has accepted it, but the finalized sale is contingent upon passing the above contingencies.  If any of these contingencies do not pass or get resolved so that the buyer and seller can move forward, the contract will terminate and the earnest deposit will be returned to the buyer in most cases.  It’s very common for the buyer to pay for all of the upfront inspections and appraisals and then the seller paying for the repairs to release the above contingencies.
    
1.  Home Inspection Contingency

Immediately upon contract acceptance, the purchaser will hire a professional home inspector to inspect the home.  The inspector will be at the house for about 3hrs on their own and then towards the end, the buyer’s agent and the buyer will meet the inspector at the home to go over the findings.  At this point, the buyer will have 3 choices.  Terminate the contract if they are not satisfied with what the inspector found, release this contingency and move forward with the next step of the closing process, or most likely, put together a list of items they are asking the sellers to repair prior to the closing date.  After the list of items are sent over to the seller, the seller can accept the list of repairs or counter back.  If the seller and the buyer agree on the final list, the home inspection contingency will be released and the contract will move forward with the next step.  If the seller and buyer do not agree, the contract will terminate.


2.      Radon Inspection Contingency

The purchaser can hire a separate radon inspector, but what will happen most likely is that the home inspector will also be the radon inspector.  A radon test kit will be dropped off and placed in the seller’s basement and then the test kit will be picked up about 3 days later.  Most all of the Omaha real estate brokerages will have addendums pre-drafted stating that if the test comes in at an unacceptable level determined by the EPA of 4.0 or above, that seller will install a radon mitigation system prior to closing.  As long as the seller as a regular basement and not just crawl space, we’re seeing these radon mitigation systems being installed for between $900-$1000.


3.      Appraisal Contingency

With this contingency, a third party hired by the lender evaluates the fair-market value of the home. In the event the appraised value is less than the sale price, this contingency lets the buyer back out of the deal.  The 3 most common types of appraisals are for conventional loans, FHA, and VA loans.  For a conventional loan appraisal, the appraiser will come in and provide a dollar amount value on the home.  The FHA and VA appraisers will do that as well, but they also have another duty to check the home so that it meets FHA and VA insurable standards.  They types of things they are looking for to be repaired prior to loan approval are (bad roofs, chipping paint, wood rot, loose handrails, bad flooring, and other items)  If any of these items get tagged, the seller will not be able to sell the home to a VA or FHA buyer unless these items are fixed and the appraiser comes back to approve the repairs.


4.      Termite Inspection Contingency

The title company will order a termite inspection prior to closing.  The termite inspector will look for current termite and carpenter ant damage.  If none is found, the termite inspector will provide a confirmation report stating that the home passed and this contingency is automatically released.  If pests are found, the termite inspector will provide an estimate of repair costs.  The purchase contract that was initially accepted will typically state that if repairs are required, as long as the repair estimate is less than 2% of the sales price, the seller agrees to pay for the treatment and the seller and buyer move forward with the transaction.  If the repair estimate is 2% or more of the sales price, then either party can terminate the contract.


5.      Mortgage Contingency

Last but not least, most purchase agreements with the seller is conditional on the buyer being able to obtain a mortgage on the property.  If the prospective buyer cannot get a mortgage within a fixed period of time, the buyer can terminate the contract.  At Heeran’s Home Team at REMAX Platinum Realty, we require mortgage pre-approval letters to be submitted with the initial purchase contract.  This means that the prospective buyer has already provided preliminary information to the mortgage lender or broker to see if they can qualify for a mortgage loan.  The buyer’s will then provide proof such as (bank statements, paycheck stubs, tax returns, and other information) requested by that mortgage broker or lender.  As long as everything checks out and the home passes all of the other contingencies, the final underwriting of that mortgage will be approved and the buyer will have the money from that mortgage broker or lender to close on the home. 


If any of the above contingencies fail and the contract terminates, the title company that has been holding the earnest deposit will return the earnest deposit back to the buyer.  These are the 5 most common purchase contract contingencies to pass when buying or selling a home in the Omaha Nebraska Metro Area.


If you have friends or family who are looking to buy or sell real estate in the next 3-6 months, we would certainly appreciate your referrals. Please call Heeran's Home Team at REMAX Platinum Realty at (402) 707-7878 for a complimentary home selling or buying consultation.  

May 14, 2014

Video-Service One Home Warranty-Take The Stress Out of Buying!


Home Warranties – Do you want to take the stress out of home buying and selling?

Welcome to Heeran’s Home Team Video blog!  We are here today to keep you informed with tips, education, and information about pertinent real estate matters.  Today we are going to discuss home warranties.

We are pleased to welcome Brenda Stuart who is a Home Warranty Manager for ServiceOne, serving the Omaha Metro area and home buyers.  She has been with ServiceOne for over 20 years.  Brenda is married and has two daughters, a son in law, two grandsons and a grandbaby on the way.

Her hobbies include gardening, crafts, cooking once in a while, spending time with her grandsons at their schools and sporting events.

Brenda first explained that home warranties are a service agreement to maintain the major appliances and systems in your home.  When there is a mechanical failure, customers call ServiceOne and they provide the parts and labor to fix the appliance or possible replacement.  A new Omaha Metro homeowner sees real value in knowing who to call when there is a problem.  Home Warranties can be purchased as part of your home purchase and can be a negotiated item in the purchase contract.

If you are a Metro Omaha home seller and offering a warranty, you can use the warranty yourself if a problem arises.  In a lot of real estate transactions, the buyer will ask the seller to provide a home warranty, so with this in place, its one time on the checklist which is finished.  A home warranty can provide a lot of “peace of mind” for seller to keep their homes in great shape while it is being sold.

Buyers will also have “peace of mind” knowing who to call and how much it will be to have a ServiceOne technician provide service.  The trip charge is $75 plus tax.  Also, the possibility of a replacement is an added benefit to the new homebuyer since they have already invested so much to purchase their home.  Some homeowners do not have the time, tools, or talent to make the fixes and repairs in the homes.  A home warranty can take care of their mechanical failures by providing timely repairs and quality workmanship.

ServiceOne is a locally owned company in operations since 1989.  The telephone number is
402-339-4357. 
The technicians are licensed, bonded, and trained.  They are uniformed with name badges and arrive in marked vehicles.  Also, there is a Solution Center staffed in Omaha, so they understand the Omaha Metro weather and live right here in the community.

We want to again thank Brenda for joining us today.  You can view or share today’s video blog from our website, Facebook, Twitter, or LinkedIn.  Future topics include Great Photos---Professional photography makes your home shine when you are selling your home and Radon—How does the Omaha Metro Area measure up to the rest of the country.

If you have friends or family who are looking to buy or sell real estate in the Omaha Metro area in the next 3 to 6 months, we would certainly appreciate your referrals. Take care and have a great week.



April 17, 2014

Video-How To Determine If You Are Under Or Over Insured On Your Home


By Loretta McNally, Heeran's Home Team, RE/MAX PLATINUM Realty

Today, we want to thank Adrian Enzastiga, with American Family, for joining us to discuss ways to determine if you have enough, or too much, insurance.   Adrian works with the Robert Whitesel Agency, Inc., an American Family Insurance company. 

Adrian has also served the Omaha community by being a family teacher at Boys Town for 10 years and worked with foster children and much more.

He reported that you have to review your home owner's policies in three ways. 

1    Look at the building or house.  There is a maximum total amount that will be paid for your dwelling coverage—replacement cost or actual cash value.  A certain percentage of this amount (10%) covers unattached buildings such as garages.  An American Family policy actually covers 120% of replacement value. 

2.     Take a look at your personal property.  You want to check the total personal property covered.  Specific coverage for certain items such as computer equipment or unscheduled jewelry is listed in the policy. 

3.      Review the amount of time and dollar amount that will be covered for insured to live elsewhere while the home is being built which is called Loss of Use.

4.     Review the coverage you have if someone is injured on your property.

Adrian also explained that purchase vs. replacement cost is calculated via a computer program based upon current costs to rebuild a home (if a total loss), so this is the way it is done if you have a home in Omaha, Nebraska or another state.  If the purchase price is significantly less than the replacement cost, an actual cash value policy can be purchased as the cost to rebuild the home is much higher to insure.  

It is also very important for Omaha homeowners to review their deductible vs. monthly premium.  Adrian addresses with homeowners what saves the owners the most money.  Adrian explained that truly this is up to the customer.  However, the customer should know that if they go with a higher deductible (ex. $2500), they will be responsible for the difference when there is damage.  For instance, if there is a hail storm – we do have those in Omaha – and there is damage to your roof upwards to $6000, you will be responsible for that first $2500.  You must weigh this deductible figure against the monthly savings received.  Whatever the deductible is, you will want to set this money aside you are ready.

Adrian recommended reviewing your policy every 2 years with your agent.  Replacement cost calculations often increase with inflation, and they additionally can change with the rate of inflation.  Also, any upgrades or additions to the home need to be considered.  The bottom line is to make sure you have the best coverage possible for you and your family can afford. 

Adrian further recommended calling your agent first whether you are or not going to file a claim.  Your agent will answer your questions to help you make that decision.  The agent can help the customer understand how a particular claim might affect their insurance going forward. 

Lastly, if you do need to file a claim and have repairs made, your insurance agent can give you suggestions on how to look for well qualified and licensed Omaha area contractors. 

Adrian was delightful to be with us today.  He is looking forward to helping families review their current insurance or set up a new policy if you are a first time homebuyer.  Just give Adrian a call today at 402-330-0119.




April 3, 2014

Video - How's The Omaha Housing Market Doing? Heeran Workman RE/MAX PLATINUM Realty




From friends, family, and prospective clients, the most common question they ask me every day is “how’s the market?”  Then that is followed up with them saying “I heard we have little to no inventory and that it’s a hot seller’s market.”  Or, “I waited a couple years until the market bounced back to sell my home.  Do you think I can sell it for this price?”  Or, “If I wait a couple more years, do you think I can get $20,000 more?” 

For those of you who are analytical and want to see hard numbers, here it is. 

Omaha Metro Area (Statistical Comparison)
Category
2013
2012
2011
2010
2009
2008
2007
Total Res. Closed
12,405
11,177
9538
9295
10,655
9226
10,750
Active Listings
3403
3621
4324
4918
4345
4678
5409
Average DOM
54
65
72
68
67
72
68
Average Sale Price
 $ 177,734
 $ 170,502
 $ 163,268
 $ 164,357
 $ 158,616
 $ 166,216
 $ 172,251
Median Sale Price
 $ 149,000
 $ 142,000
 $ 137,000
 $ 138,000
 $ 135,000
 $ 137,500
 $ 140,000
Absorption Rate (Dec.)
4.3
6.5
6.6
10.1
8.3
7.7
9.4
Total New Construction
1509
1166
975
1163
1223
1058
1487
Average Sale Price NC
 $ 275,552
 $ 259,326
 $ 248,038
 $ 239,760
 $ 236,958
 $ 283,957
 $ 272,901
Average sale Price Exist
 $ 164,188
 $ 160,186
 $ 153,479
 $ 153,566
 $ 148,335
 $ 150,961
 $ 155,763
# Bank Owned
Foreclosures Sold
1200
1442
1686
1379
*986
NA
NA
# Sold over $500,000
247
208
182
157
157
188
219
# sold over $1,000,000
22
17
17
8
14
21
15







Percentage sold increase from 2012 to 2013
10%

Inventory decrease from 2012 to 2013
6%

New construction increase from 2012 to 2013
23%


Over the last 7 years, 2013 was a record breaking year in terms of closings.  It will be interesting to see how the Omaha Metro Area markets performs for the remainder of the year but currently, 2014 has been slower than the previous year.  Last year, the market peaked the first half of the year.  Consumer confidence came back, the fear of falling values subsided, and we had amazingly low interest rates.  Then as we approached fall, there were variables that affected the market slowing down.  These variables included the rates rising 1%, school starting, government shutdown, holidays, and Obamacare rolling out.  From fall of last year to now, total sales are down about 8%.

Overall for the last several years in a row, it’s taking shorter and shorter time to get a contract on the table.  But this still does not mean that every seller gets a contract.  Over-pricing your home will turn off buyers and they will go down the street and purchase a better priced home.  The absorption rate of 4.3 tells us that at the end of December of 2013, if no other houses came on the market for sale, the Omaha Metro Area had enough real estate listings to supply buyers for the next 4.3 months.  The lower the supply, the better it is for sellers.  Last year’s absorption rate is very similar to what the market was experiencing about 10-11 years ago.  So for the seller’s out there who are waiting and waiting to sell your house until the market continues to improve, there is no need to wait.  The time is now. 

New construction sales are up considerably at a whopping 23% increase from the previous year.  For the sellers listing their homes, they really need to think about the other competing listings out there as well as new construction.  For example, if you’re a seller and you have a 10 year old home that you want to sell, the buyers in the marketplace will consider spending an extra 30 to 40 thousand dollars to build.  For the purchasers, now they are more willing to have the confidence to spend a bit more and get the house to their exact specifications and taste.  There are still lots available in some of the established neighborhoods and we have a few new brand new developments where you can have cherry pickings on the lots.  We have a new construction specialist Heeran’s Home Team so if you are thinking about building, please call me.

The bank owned foreclosures have decreased from the last couple of years but these types of listings will always be in the marketplace.  Yes, they do affect the neighborhoods to some degree, but they only account for 1 to 2 percent of the market.

In all of 2013, 247 homes priced over $500,000 sold.  22 sold over $1million.  There’s not as many buyers for this price range so these sellers need to have more patience, time, and hire a Realtor with an aggressive home marketing plan.

So generally:
1.     Yes, the market is better. Considerably from 2010 but not from the previous year.
2.     No it’s not a HOT seller’s market.  Buyer confidence has gotten stronger over the last several years but buyer’s are smart and want the best home for the money they are willing to spend.  You will sell your house for fair market value for today.
3.     No, if you wait another couple years, it doesn’t necessarily mean you will get $20,000 more for your home.  As long as the home marketing plan is good and buyers an buyer’s agents know your home is for sale, you home will sell for fair market value for the condition and location of your home.  Even when times were good for example in 2005, the appreciation rate in Omaha was only 2-3 percent.  Trust me, I started my career as a real estate investor so I paid very close attention to this.

If you or someone you know is looking to buy or sell a home in the next 3-6 months, please call our office to schedule a private home buying or selling consultation.  We would love to be your Omaha Metro Area’s real estate source for information.  Take care until next time!

Heeran Workman, MBA
(402) 707-7878
http://www.HeeransHomeTeam.com


March 12, 2014

How To Instantly Raise Your Credit Score - Loretta McNally (Heeran's Home Team, RE/MAX PLATINUM Realty)




By:  Loretta McNally, Heeran's Home Team, RE/MAX PLATINUM Realty

Today, Ryan Larsen with Regent Financial Group, joins us to discuss how “you could raise your credit score and perhaps clean up your credit.”  Ryan has worked with Regent Financial for 10 years with a total of 12 years in the mortgage industry assisting Omaha homebuyers.  He has a grand 16 years of experience in the financial industry. 

He first reported that most companies require a 640 credit score; however, with Regent Financial you can get approved with a credit score of 620!!!

 He also explained that anyone who applies for credit with Regent Financial Group receives a free credit evaluation to determine what may be needed to increase your credit scores.  Not only will increasing your credit score allow you to finance the purchase of your home, it may also allow you to qualify for a lower interest rate, as well as more programs, thereby increasing your buying power. 

The credit reports he receives are so detailed that many times they are able to help clients increase their scores in as little as 3 days. Most of our competitors simply deny buyers if they don't possess the minimum credit score to qualify.  Ryan reported that at Regent Financial, we go that extra mile and work hard for our client’s best interests.

 Your credit score is a number that summarizes your credit risk.  Lenders like Regent Financial use it to make a credit decision such as the interest rate you get when you apply for a loan.  The higher your credit score, the less risk which translates into more favorable terms for financing.  The lower your credit score the higher risk you are, which may make qualifying difficult and may care less favorable terms for financing.

There are 5 main things that make up your credit score including: 1) Payment History, 2) Amount Owed, 3) Length of Credit History, 4) New Credit, 5) Types of credit used.  All five of these items play a different percentage of determining your credit score, and are broken down accordingly.

Your payment history is 35% of your credit score so making your payments on time has the biggest impact.  The amount owed is 30% of your credit score which is determined by how much revolving debt/credit card debt a person carries in contrast to their available credit.  Your length of credit history is 15% of your score.  New credit and types of credit are each 10% of an individual’s credit score.  So as you can see, payment history and the amount owed are the two biggest contributors to your credit score.

If you want to increase your credit score, in most cases you can realize a tremendous increase in your credit scores by simply paying down your credit cards.  To maximize your credit scores you only want to be using about 30% of your available credit.  So let’s say you have a $5,000 credit limit on your credit card, to maximize your credit scores you would want to keep your credit card balance at or below $1,500.  Where most people get themselves into trouble is carrying too high of credit card balances specifically those that use 70% or more of their available credit.  After reviewing your credit they are generally able to advise our clients on what accounts to pay down and how much to pay them down to ensure you get the best possible terms for financing. And in as little as 3 business days you can have improved credit scores

Are you looking to sell your current home and buy a new come?  Omaha real estate is on the move!! We have the complete MLS real estate listings and will show you all the properties that meet your needs.  Ryan, who offices in mid-town and serves all of Omaha, said that if you want to find out your credit scores simply complete a mortgage application with him at Regent Financial.  In as little as 10 minutes he'll have credit scores from all 3 major credit bureaus, and from there be able to tell you exactly how much home you will qualify to buy.  You can reach Ryan at 402-884-5624. 


Interviewed By Loretta McNally, Heeran's Home Team, RE/MAX PLATINUM Realty
Phone:  (402) 616-0103
Email:  Loretta@HeeransHomeTeam.com
http://www.HeeransHomeTeam.com




February 26, 2014

Video-How To Estimate Closing Costs To Sell Your Home – Heeran Workman REMAX Platinum Realty

By Heeran Workman, MBA

Sellers all over the Omaha Metro Area are getting ready to sell their homes as the weather warms up.  My name is Heeran Workman and I’m a Realtor with REMAX Platinum Realty in Omaha, NE.  Whenever I stop by a seller’s home for a private home selling consultation, seller’s have a rough idea of the closing cost items- but not quite sure.  They all easily calculate the Realtor’s cost, but they are not sure of the other closing costs.  Heeran’s Home Team specializes in listing and selling homes in Douglas and Sarpy county.   This video will cover the typical closing costs to sell a home. 

The closing costs to sell is not nearly as bad as when buyers complete a purchase of a home.  Buyers have to bring money to closing for closing costs, escrows (upfront property tax and insurance premiums), and down payment.  For the purposes of this educational blog, we will focus on the closing costs only.

Sellers estimated closing costs to sell:
·       Lien release for mortgage payoff - $20
·       Title insurance (1/2 the total amount) – Roughly $500 for a $100,000 home – then add another $140 per every $50,000 increase in sales price.
·       State documentary tax for ownership transfer - $2.25 per every $1000
·       Escrow closing fee to the title company - $300

That’s it!  Sellers have a sigh of relief when I go over the figures with them.  Keep in mind that when you sell a home, a buyer will also frequently want a home warranty insurance and their loan programs will allow them to ask the sellers to help pay for a portion of the buyer’s closing and escrow costs.  These are negotiable items.

If you’re thinking about selling your home and want us to complete a comparative market analysis of your home as well as the seller’s estimated cost sheet, please call (402) 707-7878.

If you or someone you know is looking to buy or sell a home in the next 3-6 months, please call our office to schedule a private home buying or selling consultation.  We would love to be your Omaha Metra Area’s real estate source for information.  Take care until next time!

Heeran Workman, MBA
(402) 707-7878
http://www.HeeransHomeTeam.com