Protecting Your Buyer's Money

A Look at Paragraph 8-B of the FR/BAR Contract

Marlen Rodriguez, President
HomePartners Title Services

When it comes to the execution of a real estate contract, one of the most important things you have to do is keep your client’s money safe. Did you know that many buyers who lose their escrow deposit do so because they did not track and follow the requirements of the sales contract? Mortgage contingencies do not automatically mean that if a buyer doesn’t obtain financing, they receive a return of their deposit.

The FR/BAR contract requires both application and diligence by the buyer (and by you, their Realtor®). The contract also requires that the buyer notify the seller prior to the loan approval due date if they have not been able to secure financing. This is the window for either requesting termination and a return of the deposit or requesting an extension of the due date.

If the due date comes and goes and the buyer fails to notify the seller, the contract treats that lack of action as moving forward toward closing. Then, if the closing does not occur on the closing date, the deposit may be forfeited. Another important feature of this provision is – should the buyer fail to notify the seller as required, then for 3 days after the loan approval due date, the seller may choose to terminate the contract.

Why would they do so? The seller may want to work with another buyer for more money or perhaps to a cash buyer. It’s important to provide these guidelines to your buyers and sellers so that they know their responsibilities under the contract. You can find these guidelines in paragraph8-B in the FR/BAR contract. This provision is also SO important that you should review it on a regular basis.

HomePartners Title and our Legal Counsel, Rose Sheehan, provide contract training for Realtors® on a regular basis. Be sure to inquire about the next training in your area.

Visit HomePartnersTitle.com for any and all of your title needs!

Important Changes to an FHA Loan Program

FHA Loan Program Changes Affecting Pre-Approved Buyers

Craig Garcia, President
Capital Partners Mortgage

Today, we’re going to discuss FHA loans. Specifically, we need to look at two recent changes by the FHA that are having an effect on some homebuyers. For a quick overview of the distinctions that make FHA loans appealing to many first-time homebuyers, check out our FHA Loan Page.

The first change they may affect a group of buyers who have already received pre-approval for an FHA loan and make approval harder for similar buyers in the future. If your credit score is less than 620 and you have greater than a 43% debt-to-income ratio, your loan now needs to be manually underwritten. 

When you have a DU (desktop underwriter program) approval, which most of the time is the starting point for the loan, that’s usually good enough to get financing. Now, it isn’t for this lower credit score and higher DTI group. If you fall into this group, a live underwriter has to justify making the loan for you. It’s going to be difficult for them considering the reason for which they have to give justification. This is going to result in some people not qualifying for an FHA loan. It’s impactful.

The good news is that most of the borrowers out there pre-approved for FHA loans don’t fall in that group. Those that do may have to work on their credit or pay off some debt to qualify. It doesn’t mean they’re out of the market, but it may delay their purchase.

Also, last week the FHA said that for down payment assistance loans where a government agency is providing down payment assistance on an FHA First Mortgage, they will need more documentation from that government agency. The reaction across the industry is that now some lenders won’t provide loans in this circumstance. We still do, but we’re monitoring the situation.

In the case where your buyers, who may already be pre-approved, are affected – give us a call! We will see what assistance we can provide.

- Craig Garcia, President | Capital Partners Mortgage

www.capitalpartnersmtg.com

What's My Home Improvement R.O.I.??

5 Home Improvements Which Actually Impact Sales

Are you looking to update your home before a potential sale?
Not all renovations pay for themselves at the closing table.

If you’re in the process of selling your home, or just thinking about it; one of the first considerations is usually – should you do any home improvements before listing. 

Is that kitchen countertop outdated? Should you buy new carpet? What improvements should you make to ensure you get the best possible sales price when you list?

Guessing about the improvements, renovations or upgrades that make the biggest impact in sales price is really just a gamble. Design trends change so quickly that what is popular today could be dated tomorrow. Fortunately there are some timeless changes you can make to help present your home in the best possible light.

5 Improvements which provide the best return-on-investment

1. Green Energy - The "Green" movement is here to stay. Consider upgrading to energy efficient appliances and systems. Gardens which are water-friendly and low maintenance are also great investments.
2. Painting - Fresh paint, inside and/or out, is also a great way to spruce up the home. Designer magazines are filled with new palates and while a soft green might not appeal to every buyer, if it compliments your décor, it will show off the home in a modern light.
3. Spa Bathrooms - 2018 was considered the "Year of the Spa" in designer circles. Soft lighting, fresh colors, and a clean and welcoming bathroom are definitely a plus for today's home buyer.
4. Outdoor Living - While building an outdoor kitchen might not be in your budget, section an area of the yard where family and friends can gather for a meal or relax by the pool. Showcase Florida's warm indoor/outdoor lifestyle!
5. Bonus Rooms - If you have a spare bedroom or loft, consider converting the space into a media room. From home theaters to simple gaming/family spaces, bonus rooms are more popular than ever.

Selling your home is a big decision! Before you spend extra time, money, and energy on home improvements, make sure the home is clean, maintained, and decluttered. Then if you want to take it to the next level, consider a few updating projects to take it there!

Have you thought about any of these renovations? From
small and simple, to large-scale, you'll see some of your
best R.O.I. if you make any of these updates!