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Mortgage News Roundup

May 29th, 2014

Home PurchaseMortgage News Roundup

Costs of homes are slowly inching up, and the interest rates for mortgages are slowly inching down. Today we’ll look at questions for a potential real estate agent, and what you should know about homeowner associations when buying a home.

5 Questions for Real Estate Agents From Potential Clients

When you’re ready to buy a home, you generally will want the services of a licensed real estate professional. Often you’ll get numerous recommendations. Before you choose one, ask them all a series of questions to gauge how well they compare and who is going to be best for your situation.

  1. How long have you been in this business?
  2. What geographic areas and types of homes do you handle?
  3. How will you communicate with me?
  4. Can you share references?
  5. What will it cost me to sell this property?

So if you’re a buyer, you’re wondering why you would ask question number 5, right? Well, often, buyers don’t pay costs associated with the sale of a home. It will help you to understand how much it may cost you when you decide to sell the home. Also look into detailed closing cost estimates.

What to Review in HOA Documents When Buying

HOA stands for Homeowners Association. There are rules and regulations with a governing body when you buy into a common interest development. You’re not just buying your house; you’re buying into a larger entity that typically owns the building structure, the roof, the parking garage, the clubhouse, the pools, security guards at the gates, etc.

You need to read carefully what you’re signing into when you buy into a development like this. Work with the real estate agents and HOA to get a copy of the documents sooner rather than later. Often, buyers don’t receive them until late in the escrow process, and don’t have enough time to really review the implications.

You need to ask for:

  • HOA bylaws, board meeting minutes, newsletters
    These will alert you to special unit or building issues, such as restrictions on short-term rentals or pets, ability to park in your driveway, insurance issues, building construction quality and all the rules you’ll need to live by.
  • Demand statement
    This will tell you whether there are any unpaid HOA fees, unit violations that may need to be resolved associated with your property.
  • Reserve study
    This will tell you how much money is saved for paying for long-term repairs such as roofs, streets, fences, painting, etc. The reserve study tells you how much the community should have saved for those capital repairs and replacements and how much is actually saved.
  • Financial statements and budgets
    This will show you whether the HOA is collecting enough money to pay its bills and whether it is putting away money for reserves.
  • Insurance master policy binder
    This will tell you what the HOA insurance covers. Take this to your insurance agent to see what is not covered, so you can get the proper coverage for yourself.

Engage a lawyer if you have questions. And use the internet to see if there are any complaints.

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