Lehigh Valley Real Estate Blog, Home Buying & Selling Information

Buyer CD (Consumer Disclosure) Needs to be Signed 3 Days Before Closing or You Can't Close!!

After the mortgage meltdown a few years ago, the government (aka CFPB) implemented a new regulation that could STOP the closing on your new home.

In order to ensure "Buyer Beware", a Lehigh Valley Home Buyer, getting a mortgage on a home, must receive a document (from the mortgage company) known as the Buyer Consumer Disclosure 3 days before the closing. If the Home Buyer does not receive and sign this document at least 3 days before closing an act of god won't allow the closing to occur.

For example, if you are due to close on your new home on Friday you must receive and sign this document before midnight on Tuesday.

If the Buyer CD doesn't get signed until Wednesday guess what? Your home purchase will have to get moved to the following Monday.

There is no addendum available to over-ride this government requirement.

The Lehigh Valley Home Seller should also receive a Seller Consumer Disclosure but the 3 day beforehand timeline ONLY applies to the Buyer CD AND a home buyer getting a mortgage.

The home sellers agent (listing agent) may want to check with the buyers agent or mortgage company 3 days before the closing to ensure the Home Buyer did sign the form in the required amount of time.

For all of your Lehigh Valley Real Estate information, visit www.lehighvalleyhomesonline.com.

Buying a Lehigh Valley Home When You Have a Home to Sell

A lot of Lehigh Valley Home Buyers, especially in the $200,000 or up price range, have to sell their current home in order to purchase a new home. Most home owners can't afford to own two homes.

How do you purchase a home when you need to sell your current home?

The Correct way to Sell and Buy a Home:

You list your home for sale, go under agreement, then make an offer on your new home continent on the settlement (closing) of your current home.

The problem:

Doing it the "correct" way can be a problem because of the low inventory of homes for sale. Your home may go under agreement and you don't have a new home to purchase! You can end up homeless and need an alternate plan.

The Incorrect way to Sell and Buy a Home:

You don't have your Lehigh Valley Home listed For Sale:

Mr Seller, I don't have my home currently listed but I want to purchase your home. Will you give me the time to market and sell my home plus the additional time needed to close?

The problem:

This is a major negative to a Lehigh Valley Home Seller whom may be entertaining a lot of showings or even multiple offers. Are they willing to take the risk that you can sell your current home fast and in a timely manner?

Accepting the buyers offer and ageeing to take their home off the market and go under agreement may require a really good offer (price, inspections, large deposit)

The Semi-Correct way to Sell and Buy a Home:

The "Home Buyer" lists their current home for sale but makes the purchase contingent on them finding a new home. This way they can make an offer on the new home contingent on "closing" on their current home.

The problem:

A home buyer may not be willing to take the risk. Is the Lehigh Valley Home Buyer willing to stop their home search, possibly start spending money (inspections and appraisal) for a home they aren't certain they will be purchasing? 

Finding a home buyer to agree to the above may be difficult. The Lehigh Valley Home Buyer may be tough on negotiations to accept what the seller is asking for and want the seller to give them a safety net (inspections and appraisals will be done after the home seller knows they are definitely buying a new home). What if any of these cause the buyer to walk? Now, the home seller will lose the house they plan on buying.

A Home Sale Contingency may be used to address any of the above issues when you need to sell a home in order to buy a home. Depending on the situation, a contingency and/or verbiage in the agreement of sale (on both homes) may be needed.

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These are some of the solutions to purchasing a Lehigh Valley Home when you have a home to sell. I would be happy to discuss any of these in more depth Give me a call. Joe

For all of your Lehigh Valley Real Estate information, visit www.lehighvalleyhomesonline.com

Lehigh Valley Low Home Inventory is Causing Problems for Buyers Asking for Repairs

The Lehigh Valley Home Inventory has been low for the past year or two. This is causing a pent up demand with Home Buyers.

A house comes on the market and it may have multiple offers within a few days.

Lehigh Valley Home Buyer's are making really good offers that would never have been done a few years ago. 

This may seem good to Lehigh Valley Home Sellers but is it really? 

Home Buyers are getting forced into making hasty decisions. "If you want the house we need to write up an offer now!!"

The second showing, where a buyer pays more attention to the home's condition and what they will offer, may never occur. 

As a result, the home buyer is dependent on the property disclosure and property inspections to justify their offer. We love the house but are all of the major systems okay?

All of a sudden, the Home Buyers are faced with the fact that they paid full price or maybe higher for a property that needs thousand of dollars of Repairs.

The Home Seller received this offer, and potentially multiple offers, after only being on the market a few days.

Are the home sellers going to be willing to work with the buyer to negotiate some potential repair issues?

It depends on the motivation of the Lehigh Valley Home Seller. Do they wish to "deal" with the current buyer or put the home back on the market? Are they going to disclose any problems the previous buyer found with the home if they put the home back on the market? Legally, they are supposed to.

If a house was under agreement and comes back on the market your real estate agent should be checking to see what happened. Why did the deal fall apart?

For all of your Lehigh Valley Real Estate information, visit www.lehighvalleyhomesonline.com.

Lehigh Valley 55+ New Construction and Community News

The Lehigh Valley, PA has become known as a great place to retire. As a result, we have 24 55+ Communities in the Allentown, Bethlehem and Easton areas and are continuing to add more.

Last month, Bethlehem Township approved Traditions of America (TOA) at Green Pond as a new 55+ community.

Green Pond is a great location within minutes from route 33 and William Penn Highway. The community still has some approvals to get through and anticipates breaking ground in the spring of 2019 with homes being available towards the end of 2019.

TOA is also trying to get a new community approved in the Coopersburg area called Traditions of America at Locust. If approved, it is anticipated that this community will start towards the end of 2019. 

Toll Brothers has a new 55+ community in South Whitehall. It is called Regency at South Whitehall and is located off Walbert Avenue and Cedar Crest Boulevard (north of route 22 on the west end of the valley). 

Kay Builders has a new 55+ community in the Emmaus/Lower Milford area. It is called The Fields at Indian Creek and is located south of route 22/78 and west of Cedar Crest Boulevard.

After years of lawsuits between the builder and the HOA at Riverview Estates in Forks Township, it appears everything has been finally worked out and new construction has started again in the community with a new builder.

Currently, Toll Brothers, Kay Builders and Riverview Estates are the only 55+ Developments for New Construction in the Lehigh Valley where a buyer can select the lot, the home, and have their "custom" home built. All of the other 55+ Communities are resales only.

For all of your Lehigh Valley 55+ Information contact Joe Finnerty at 484-241-1641 or visit www.lehighvalley55plus.com.

Lehigh Valley Home Buyer Should Have Mortgage Preapproval

It is very common when I ask a potential Lehigh Valley Home Buyer if they have a Mortgage Preapproval they say NO.

The Home Buyer wishes to see a home, has tried some of the on-line mortgage calculators and believes they are in great shape to purchase a home based on the calculated monthly payment.

Yes, a home buyer should be comfortable with the monthly payment and maybe they can definitely afford the payment but that doesn't mean they can get a mortgage to purchase a home.

Getting a Mortgage to buy a Lehigh Valley Home involves many factors:

Credit Score - if your score is below 600 it can be very difficult to get a mortgage (620 or higher is much better)

Debt ratios that support the ability to pay the monthly payment - how much monthly income do you have versus how much debt

Job Stability - if you recently switched jobs this can cause a problem especially if you switched job types

Self employed or own a business - can you show a consistent income?

Savings - do you have the down payment plus closing cost money saved up?

For instance, FHA requires 3.5% of the purchase price plus an additional 5-6% for closing costs (sellers assist can be used for the closing costs but you must have the 3.5%).

A Lehigh Valley Home Buyer may know their finances but they should still talk to a Mortgage Professional before starting to look at homes.

Know your Numbers!

For all of your Lehigh Valley Real Estate information, visit www.lehighvalleyhomesonline.com

Buying a Lehigh Valley Home with Cash and Multiple Offers

One of the best offers a Lehigh Valley Home Seller can get on their home is full price Cash, no inspections, no appraisal contingency and no home sale involved.

When Multiple Offers are received, the Lehigh Valley Cash Buyer that starts to add contingencies loses leverage and at some point the home seller will be willing to risk the inspections, appraisals and possibly even the buyer having to sell a home instead of the "cash" offer.

Some cash home buyers believe because there is no mortgage they can offer a lot less for the property. 

At some point the cash nullifies the other contingencies in the contract. 

For instance, if the cash offer is $10,000 less than the offer with a mortgage and both include inspections the home seller may be willing to risk the mortgage by getting $10,000 more for the home. 

Even if either Home Buyer (cash or mortgage) asks for $5,000 in repairs, the offer with a mortgage still nets the home seller $5,000 more.

A few months ago, I received a full price cash offer on a Lehigh Valley Home that was listed for 1 day. Wow, it doesn't get better than this. The seller immediately accepted the offer and we turned away multiple showing requests and even the potential of an offer that had a mortgage.

The "cash" home buyer did the inspections and terminated without checking to see if the seller would do any repairs.

We had to put the home back on the market. That great "cash" offer wasn't so great.

The new buyer on the home had a mortgage, asked for a few repairs, and we agreed and successfully closed.

A Cash offer on a Lehigh Valley home is great but if Multiple Offers are received the buyer that is getting the mortgage may be more vested in purchasing the home and willing to work with the seller on any potential problems.

The Lehigh Valley Home Seller may really like the idea of cash but based on the other contingencies and other offers may pass over the cash deal. Which Buyer REALLY wants the home?

For all of your Lehigh Valley Real Estate information, visit www.lehighvalleyhomesonline.com

Buying a Home in Lehigh Valley with a Well and Septic System - VA, FHA, USDA Financing

If you are Buying a Home in the Lehigh Valley, depending on where, there is a high probability that the property may have a Well and Septic System instead of public water and sewer.

The Well and Septic System should be inspected, as part of the purchase (for the home buyers protection).

Certain mortgage types such VA, FHA, and USDA have SPECIFIC criteria that needs to be met to obtain the mortgage.

The Well should be located at least 50' from the Septic Tank.

The Well should be located at least 100' from the Septic Field or Sand Mound.

A Water test should be done for Bacteria, Nitrites, Nitrates, and Metals.

The Septic System should be checked to make sure it is functioning correctly (tank, field and any pumps).

Based on Financing (VA, FHA, USDA), the Mortgage Company is probably going to ask for copies of these inspection results/reports.

A Failed Septic can stop a mortgage.

Water that is not potable (drinkable) can stop the mortgage.

The Distance between the Well and Septic tank/field can stop the mortgage.

In certain situations, an exception for the distance from the Well to the Septic may be given. It is based on a case-by-case analysis.

If the Lehigh Valley Home Seller can't or isn't willing to correct any of the above problems, VA, FHA and USDA financing may not be an option to purchase the home.

The only option may be Conventional Financing, an FHA 203K Renovation Loan or Cash. 

For all of your Lehigh Valley Real Estate information, visit www.lehighvalleyhomesonline.com.

Are Websites that Give Automated Lehigh Valley Home Prices/Values Accurate?

The Lehigh Valley Home you are thinking about buying or selling is listed on a website at a value of $240,000.

Is this Automated Lehigh Valley Home Price even accurate?

There are multiple websites that suggest a "price or value" a home is worth.

I've been looking over these through the years and sometimes they are "Right On" but often times they are not. A house last month had one website stating $209,000 and another at $267,000. Which one should a home buyer or seller believe?

To determine value on a home in the Lehigh Valley, sold properties are used. These properties should "ideally" be the same size, same type of home (Ranch, Colonial...etc) and in the same area and school district. Home types that match and were sold within the past 3 months are ideal...sometimes very difficult to find.

When a Lehigh Valley Home is under agreement, the mortgage company is going to send out an appraiser to determine if the home is worth the purchase price. The Appraiser isn't going to rely on some automated value on a website but look at recently Sold properties for comparable properties and what they sold for.

When determining price, the same should be done. Your Lehigh Valley Real Estate Agent should go over sold properties to see how they compare (home, land, location) to the home you are going to sell or buy.

This is typically called a Comparable Market Analysis or CMA.

A CMA should also include information about the Available properties (competition) and Under Agreement homes (competition a buyer made an offer on that was accepted by the seller).

For all of your Lehigh Valley Real Estate Information visit www.lehighvalleyhomesonline.com

Home For Sale in Palmer Township

Welcome to this 3 BR 1.5 BA home in Palmer Township. Just listed, this home offers many amenities. Formal LR, DR and a FR with fireplace are just some. Enjoy the covered patio and large yard. Central Air. Two car garage. View Full Details!

For all of your Lehigh Valley Real Estate information, visit www.lehighvalleyhomesonline.com.

Repairs When Buying a Lehigh Valley Home with an FHA Mortgage

Buying a Home in the Lehigh Valley with an FHA Mortgage is very common. An FHA Mortgage requires 3.5% down and allows up to 6% sellers assist to be used towards closing costs.

Although a good mortgage option for home buyers it isn't always the best for home sellers. If there are multiple offers, a home seller is likely to pick a buyer using a conventional mortgage instead of FHA.

A Conventional Mortgage appraisal tends to look at just the "Condition" of the home.

An FHA Mortgage is more stringent. An FHA appraisal looks at the "Condition" AND for "Safety Items" that need to be added or repaired. 

FHA Mortgage Repairs can include safety items such as fixing flaked/peeling paint if the house is built before 1978, adding handrails and well and septic distances. It may also include fixing the roof and adding rain gutters to the garage. Safety and Condition items.

Many mortgage companies offer a 3% down Conventional Loan. A Lehigh Valley Home Buyer may want to see if they can qualify for this mortgage and switch to it for a home they wish to purchase that may need too many FHA Repairs.

For all of your Lehigh Valley Real Estate Information, visit www.lehighvalleyhomesonline.com