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It’s no secret that most of the country is currently experiencing a strong seller’s market. Yet even in this competitive environment, almost 25% of all escrows fall through before closing. Home inspections, appraisal surprises, and loan approvals are just a few of the issues which can arise, causing the buyer to pull out of the deal.

An essential component of any listing strategy should be a good backup offer, meaning that another buyer is willing to step in and close if escrow falls through. As you consider a backup offer, here are 4 things you need to know:

1. A Backup Offer Is Legally Binding – A backup offer is a fully executed offer, just like the original, so make sure the terms are acceptable. Typically, the buyer will include a contingency in the event they find another home.
2. Multiple Backup Offers – In a strong seller’s market, it is not unusual to accept multiple backup offers. Always clarify the position of each backup offer and whether you will continue to accept backup offers.
3. Leverage – Backup offers provide leverage during the escrow period as well as security for the seller. Use backup offers to discourage unreasonable requests for repairs or concessions during escrow.
4. Earnest Money – Backup offers do require the buyer to submit earnest money, just like the primary offer. This stays in an escrow account. Often this is smaller than a typical deposit with the condition to increase the amount if the offer becomes the primary one.

Backup offers should be an important consideration in any home sale. Not only do they protect the seller if an escrow fails to close, but the buyer can also have another opportunity to close on a home they love.

If the home you’ve fallen in love with has an easement, you may be wondering how this affects you. An easement gives a person or entity the right to use part of your land, but only for a very specific reason. For example, a utility company may have an easement on your property to maintain an electric pole. Another example is an easement which allows your neighbor to drive through a portion of your land to access their garage.

Easements will be disclosed as part of the sales process and if you’ve discovered that your new purchase is subject to an easement, it’s important to learn the different types and their effect on your use of your land.

Types of Easements

• Appurtenant vs. Gross – An appurtenant easement benefits the property, by allowing access through another’s land, such as the neighbor’s garage example above. A gross easement benefits an individual or entity, such as the utility company example above.
• Private vs. Public – A private easement allows a specific person to access your property while a public easement allows any member of the public to use your land.
• Affirmative vs. Negative – Most easements are affirmative (which is to say they allow something to happen) but some are negative easements, such as preventing a neighbor from building a second story that blocks a view.

Easements are not permanent and can be challenged if the need no longer exists. If your property is subject to an easement. It’s important to understand how it will impact your property before completing the purchase.

For many, the idea of buying a new home can seem overwhelming; the reality is the process is rather simple once you understand the steps. Part of that understanding is learning the most common acronyms used in buying a home. Here is a quick reference list of the 5 most often used acronyms and how they pertain to your transaction.

1. APR (Annual Percentage Rate) – APR is the total cost of borrowing money; this includes the interest rate, closing costs and other fees associated with the loan.
2. FRM (Fixed Rate Mortgage) – A fixed rate loan is one where the interest rate remains the same over the life of the loan.
3. DTI (Debt to Income) – DTI is the percentage of your income used to service all your recurring debt; this includes your mortgage, credit cards, car loans and other loans or lines of credit.
4. PMI (Private Mortgage Insurance) – Loans for more than 80% of the home’s value are subject to PMI. This is insurance which protects the lender in the event of borrower default and every loan with less than a 20% down payment will include PMI.
5. P&I (Principal and Interest) – P&I is the portion of your loan which goes to pay down the principal of the loan amount. Other monthly costs could include taxes, PMI, association fees and other costs which are included in your payment but separate from P&I.

Real estate has a lot of terms, and understanding the most common can take the mystery out of the home buying process and provide peace of mind as you search for your new home.

Saving for a down payment in preparation for buying a new home is pretty common knowledge.  While FHA and VA loans still offer little to no money down, most potential homebuyers will need to save at least 5-20% of the home value.

Unfortunately, many first-time homebuyers are dismayed to learn that in addition to the large down payment, they also owe thousands of dollars in closing costs that they might not have expected. The national average for closing costs ranges from 2-4% of the purchase price, which adds considerably to the amount of savings needed to buy a home. In addition, while not a closing cost, most lenders also require a savings reserve equal to at least two months of the mortgage payment. Needless to say, it adds up.

Let’s break these costs down.

Closing costs include fees charged by the escrow or closing attorney, as well as costs associated with obtaining a home loan, including:

• Escrow fees
• Title search and filing fees
• Appraisal fees
• Home inspection fees
• Wire transfer fees
• Loan costs – These include what are termed “points”; each point is 1% of the purchase price and is used as both commission for the lending officer and as an upfront fee to reduce the loan interest rate.

These are just a few of the extra costs associate with buying and closing on a new home. It’s important to know these costs ahead of time, so potential homebuyers can save the appropriate amount of money needed to buy a home. Nobody wants to be surprised by unexpected costs and and end up missing out on the perfect property.

Summer is in full swing and you’re spending more time outdoors. For most of us, this still
means primarily in our own backyards. Personal outdoor space has never been
more popular and if yours could use a little sprucing up, here are the hottest
trends for 2021.

• Outdoor Kitchens – This trend is going nowhere. Ever since the first built-in
BBQ showed up, homeowners have loved cooking outdoors. Choose from a
simple pizza oven to a full chef’s set-up with multiple ovens, refrigerators,
cooking spaces, and bar.

• Edible Gardens – While home gardeners have enjoyed seasonal tomatoes
and herb pots for decades, the rise of sustainability trends have increased
the attention on home-grown, organic fruits and vegetables. Any small
space can be transformed to grow your favorites.

• Privacy Structures – Creating some private outdoor space is relatively easy.
Simple strategies, such as a large, well-placed umbrella or planter
containing tall grasses, can carve out some private outdoor space. Another
trend is using larger furniture, such as covered daybeds or gazebos have
made a strong return to the pages of design magazines.

• Front Yards – With the lock downs and restrictions of the past year, front
yards have made a comeback. As people have enjoyed the ability to
socialize with neighbors and friends as they pass by, not only have front
porches become more popular but adding a patio or sitting area in the front
yard has topped the garden trends this year.

The warm weather is here for a while. This is a great time to explore the many ways to enjoy
your outdoor space. From simple weekend projects to large-scale remodels, the
trend toward using the outdoors to supplement indoor living space is here to stay.

Mortgage interest rates are the lowest they’ve been in years and perhaps you’re wondering if it’s time to refinance your loan. Lenders advertising their refinancing services make it sound as easy as filling out a form and paying less each month. While refinancing does not need to be complicated, here are 5 common mistakes that could cost you thousands of dollars over the course of the loan. Refinancing can be a great experience if you can avoid making these mistakes.

1. Not Shopping Around – Not all loans are structured the same. It’s important to compare your options. Even loans with the same interest rate can have different costs, fees, and terms.
2.  Shopping for Too Long – Interest rates change quickly and, in this volatile market, it’s possible to lose a great interest rate by looking for too long. Consider getting three different loan options at the same time and choosing the best option out of those three to work with.
3. Adding Years to Repayment – Interest rates are not the only consideration in deciding to refinance. If you are 7 years into a 30-year loan, restarting the clock with a new 30-year loan can cost you thousands of dollars. Never refinance with a longer term than your current status.
4. Not Considering Your Job Stability – The pandemic has created instability in the job market; consider your employment situation carefully before using precious savings for loan costs. Additionally, if you are moving from a 30-year loan to a 15-year loan, your payment might go up. Make sure you have the income to comfortably pay that increase each month.
5. Assuming Your Credit is Great – Before looking for a refinance, check your credit score and make any adjustments before you get a surprise at closing.

This is a great time to reduce your mortgage interest rate, while rates are low. Consider all the aspects of the refinance offer first and make sure you get the best option to save money.

Most homebuyers realize that they can’t expect a perfect home inspection report when buying a resale home. Cosmetic flaws and minor repairs are easily managed and shouldn’t be deal breakers. That said, there are some issues that are more serious and should give the buyer pause if not addressed adequately.

10 Home Inspection Red Flags

1. Leaky and Rundown Roofing – watch for signs of current or past water damage.
2. Poor Drainage – drainage issues can cause serious damage to the home foundation, siding and basements.
3. Foundation Issues – signs of foundation problems can include cracks around doors and windows or uneven floors. Foundation problems can cost thousands of dollars to correct.
4. Plumbing Problems – major plumbing issues should be considered carefully and further explored.
5. Pest Infestations – termites and other wood-eating pests can cause extensive damage that can be hard to find and costly to repair.
6. Mold – that musty smell could be due to hidden mold and further investigation should be undertaken as mold can be dangerous to the health of the family. Depending on the type of mold, it can be very difficult to remove entirely.
7. Faulty Heating System – a malfunctioning furnace can be a fire hazard.
8. Electrical Wiring – faulty wiring can cost thousands of dollars to repair.
9. Structural Damage – sagging joists, rafters and door jambs can be evidence of larger issues.
10. Deferred Maintenance – a home in poor condition could be hiding more serious issues due to chronic neglect.

Homebuyers should be alert to these issues and know the costs to repair before concluding the sale. Home sellers should address these issues before putting the home up for sale to ensure they get the best possible sales price