Tag Archives: home loan

What’s the Difference Between a Home Appraisal and a Home Inspection?

29 Jul

What’s the Difference Between a Home Appraisal and a Home Inspection?

 

I get it!  Everyone is looking to save money when possible on the purchase of a home.  But friends, the argument that since the lender will be appraising the house you can go ahead and skip the home inspection.  NOT a good idea!  Here are the major differences, as I see them, between a home appraisal and a home inspection.

The Home Appraisal

First, let’s take a look at the home appraisal.  The purpose of the home appraisal is to get an independent opinion of value.  It will confirm to the lender that the house they are considering loaning money against is worth at least as much as the buyer has offered to pay for it.  Sometimes a misguided buyer just has to have that cute little bungalow because of that maple leaf shaped swimming pool and the granite island in the kitchen.  Here’s the problem:  They’ve been looking for a maple leaf shaped swimming pool and this is the only one they’ve found.  So, yes, $150,000 seems a little high, but who’s counting when you find that perfect pool!  The buyer can agree to buy.  And the seller can agree to sell.  But when the lender finds out that similar houses are actually only selling for $125,000 the lender will not make the loan based on the $150,000 purchase price.  The lender will lend based on the real market value of $125,000.  So, either the deal falls through or the buyer makes up the $25,000 difference with their own cash.

AppraisalThe licensed home appraiser will pull “comps.”  Comps are homes that have sold in the past 12 months that are similar to the house being appraised (called the “subject property”).  Generally the appraiser will find 3 comps that are similar in age, size, location, bedrooms and baths.  They will make “adjustments” to the value if they cannot find identical homes that have sold.  Based on the sales price of the comps the appraiser will determine their opinion of the subject property’s fair market value.

So, as you can see the appraisal is to protect the lender, NOT to inspect for the condition of the house.  Yes, if something is grossly and obviously wrong with the house the appraiser will catch it.  But the appraiser does not go to the home with the idea of checking the furnace, roof, wiring, plumbing, termites, etc.

The Home Inspection

The home inspections is wildly different from the home appraisal.  First off, it has nothing to do with your mortgage.  You can get a mortgage without a home inspection, but probably not without a home appraisal (unless you’re putting down a VERY large percentage of the purchase price).

The home inspection is contracted and paid for by the buyer of the home.  A licensed home inspector will inspect for major defects all the major components of the home:  i.e. foundation, roof, plumbing, electrical, heating, air conditioning, appliances, outlets, windows, insulation, etc.

knob and tube wiringAt the completion of the home inspections, which take from 2-5 hours, and cost from $225 – $600, the buyer will receive a copy of a very detailed home inspection report.  As you can guess, the home inspector does not generally offer an opinion of value as the appraiser does, but rather a report of the condition of the home.  In the case where a “major defect” is discovered, the buyer may complete an “inspection response,” requesting that the seller repair the major defect.  The seller may choose to correct the defect, in which case the buyer is obligated to purchase the home.  Or, the seller may determine that they are not willing to correct the defect.  If the seller refuses the purchaser should be able to recover their “earnest money deposit” from the seller.  Occasionally the seller will disagree with the inspector’s findings, which can get pretty interesting, but that’s a different post altogether!

Hopefully you are now much clearer on the difference between a home appraisal and a home inspection. 🙂

Your next loan in Indiana

When you’re ready to get your next loan in Indiana, I would love to help you.  My pledge, as always, is to treat your money as if it were my own.  I will treat you as a friend, not just a file.

Sincerely,

Chris Sanderson
Tech Savvy Lender
260-414-3511

Have You Ever Seen a Real Estate Office Like Realtor Duane Miller’s?

10 Jul

Have You Ever Seen a Real Estate Office Like Realtor Duane Miller’s?

I hate to say it but it’s true:  Real estate offices (with a few outstanding exceptions) are just pretty darned impersonal, functional places.  Heck, let’s just say it:  They’re BORING!  But NOT Duane Miller’s out at the Coventry office of Coldwell Banker Roth Wehrly Graber!

DIFFERENT IS GOOD – Just ask Duane. He’s taken the Fort Wayne real estate market by storm, finding himself in the top 10% of Indiana Realtors within his first 12 months in business – a task absolutely unheard of in such a short period of time.

“That’ll never work here!” was a favorite refrain from the “old timers” back in my real estate days at Charleston Better Homes & Gardens.  It seemed back then that the majority of Realtors would fight every single attempt at differentiation.  It was as though they didn’t have the energy or boldness to try something new Customer's Intereststhemselves, and therefore, rather than encouraging me they would let me know ‘That’ll never work here.”  I didn’t let that dissuade me from become the “South Side Specialist.”  It didn’t dissuade me from running a fun, tongue-in-cheek TV campaign where I ran for “Fort Wayne’s Favorite Realtor” during the political campaigns.

MonitorsI’d bet there was a whole lot of grumbling when Duane began bringing in modern Scandinavian furniture and dramatic lighting.  And when he brought in 3 monitors and painted the walls (***gasp***) mustard, I would bet my rental houses that the words “That’ll never work here!” were expelled by at least a few die-hard old-timers!  LOL.

Duane Miller of Coldwell Banker Roth Wehrly GraberTo that I say “Congratulations, Duane!  It can work.  It will work.  And it DID work.”  See you at the top.

You can reach Duane for all your real estate needs either by email at dmiller@cbrwg.com or via his batphone at (260) 437-8088.

And, by the way, HAPPY BIRTHDAY, Duane!  🙂

Showcasing Fort Wayne Day 1 – The Home of Philo T. Farnsworth

1 May

Showcasing Fort Wayne – The Home of Philo T. Farnsworth

Philo T. Farnsworth

Who knew?  Philo T. Farnsworth, the inventor of TV, set up shop right here in Fort Wayne.  Want to see where he lived?  Just go east on E. State Blvd a few blocks to the corner of St. Joseph Blvd & E. State.  There you’ll find the beautiful historic home of Philo himself!

According to Wikipedia (which of course, is absolutely accurate!):

“In 1938, Farnsworth established the Farnsworth Television and Radio Corporation in Fort Wayne, Indiana, with E. A. Nicholas as president and himself as director of research.[26] In September 1939, after a more than decade long legal battle, RCA finally conceded to a multi-year licensing agreement concerning Farnsworth’s 1927 patent for Television totaling $1 million. RCA was then free, after showcasing electronic television at The New York World’s Fair on April 20, 1939, to sell electronic television cameras to the public.[22][26]

Farnsworth Television and Radio Corporation was purchased by International Telephone and Telegraph (ITT) in 1951. During his time at ITT, Farnsworth worked in a basement lab known as “the cave” on Pontiac Street in Fort Wayne. From here he introduced a number of breakthrough concepts, including: a defense early warning signal, submarine detection devices, radar calibration equipment and an infrared telescope.”

 

About the author:

I’m Chris Sanderson, Fort Wayne’s own “Tech Savvy Lender,” with Ruoff Home Mortgage.  As a life-long resident of Fort Wayne I continue to be amazed by the hidden treasures right under our noses.

When it’s time to get a mortgage in Fort Wayne please call me! 

Chris Sanderson
Tech Savvy Lender in Fort Wayne, IN
Ruoff Home Mortgage
Direct:  (260) 414-3511
mrchrissanderson@gmail.com
www.TechSavvyLender.com

Top Secret Mortgage Payment Calculator

16 Apr

Top Secret Mortgage Payment Calculator

After many years as a mortgage loan originator I was frustrated by how difficult it was to quickly give a Realtor or a home buyer an accurate estimate of the money they would need for closing.  Sure, we all have access to mortgage payment calculators, but that won’t tell you how much you’ll need for closing, the difference between lender-paid closing costs, interest rates, etc.  Furthermore, I could not easily email or print out samples from a mortgage payment calculator. 

Soooooooo, I came up with a fabulous idea, if I do say so myself!  It tested every “tech savvy lender” bone in my body, but I developed my top secret mortgage payment calculator!  Watch the video to see it in glorious action!

What do you think?  How cool is that!?!  Realtors and borrower alike were shocked to see how effortlessly I could accurately estimate their monthly payments and money needed to close, etc.  Within 2 minutes this top secret mortgage payment calculator can knock out what loan origination software used to take 15 minutes to do.  Who wants to wait around 15 minutes????  Not me.  Not you.  Not my borrowers.  And certainly not the Realtors I deal with.

Attention Realtors and home buyers in northeast Indiana: Why not program my name and phone # in your cell phone so you can call me to get a quick sample?

Chris Sanderson, Tech Savvy Lender
Ruoff Home Mortgage, Fort Wayne, Indiana
mrchrissanderson@ruoff.com
260-414-3511
http://www.facebook.com/techsavvylender.com
http://www.twitter.com/techsavvylender

How to Give Your Realtor AND Your Parents Ulcers When Buying Your First Home

5 Apr

How to Give Your Parents Ulcers When Buying Your First Home

As a home mortgage specialist I get a lot of requests for home-buying advice.  One thing that still haunts me from my pre-mortgage days as a full time Realtor was first time home buyers bringing their parents to look at “The ONE!”  Here’s what I mean…

A young couple would get pre-approved, decide what their dream home would be like, pick out from the available homes for sale.  Into the car we’d jump!  2 days, 4 hours, 16 minutes and 42 houses later we would find THE ONE!  The PERFECT house, new on the market, priced right, BINGO!

It was at that point that the excited, and somewhat terrified, home buyers would say those words that will strike fear into even the most icy-veined Realtors alive… “I’d like to get my parents’ opinion before we make an offer.”  Crash.  And.  Burn.

The poor parents, who have NOT seen the other 41 dumps, and who haven’t purchased a home for 15 years, then get dragged out to look at said cream-puff at 9pm on a Saturday night in April…  And what do you suppose they say with nothing to compare the house to, and not having a clue what houses are selling for since they bought theirs in 1988? 

You guessed it!  Scared to death to give their stamp of approval for fear of “helping” little

The One

Mom, Dad! I think we found "THE ONE!"

Alex and Bethany make the worst decision of their life, they say…  “Seems like for $X you should be able to get a nicer place than THIS…”

Now Alex and Bethany have got a heckofa quandry on their hands!  Buy what they KNOW is a great house at a great price AGAINST Mom and Dad’s advice (and have to suffer the “I told you so’s” for the rest of their lives), or go on looking, knowing that this IS their house…

Don’t let that happen to you!  If you’re going to rely on someone’s advice other than your own, GET THEM IN THE CAR from day one!  You will thank me.  Your Realtor will thank me.  And YES, they will thank you.  It’s not fair to put them in the situation of asking for their blessing without having seen the other 41 houses just like you!

When you’re ready to get your first, or your next, home in Indiana, I’d be honored to help you with the financing.  Please contact me!  I will take great care of you and treat your money as if it were my own!

To your abundant (house-hunting) success, 

-Chris Sanderson, Tech Savvy Lender

P.S.  For God’s sake if you made it this far at least leave a comment so that I know my fingers aren’t bleeding for nothing!

First Time Home Buyers – How NOT To Be Broke Your Whole Life

3 Apr

First Time Home Buyers – How NOT To Be Broke Your Whole Life

Take a peak at the video below to see how I got my humble start as a homeowner.

As a mortgage professional I get lots of questions in the “How much should a first time home buyer spend on their first home?”  Well, long before I was a lender for four years…  long before I was a Realtor for 7 years….  I bought my first home. 

French Avenue Front
My first home – no kidding!

I was managing the suit department of the Gentry Shoppes in Northcrest when I was a first time home buyer right here in Fort Wayne, IN.  I thought you guys might enjoy seeing my VERY humble beginnings.  As you can tell, I’ve never been a fan of peer pressure!  LOL.

Now granted, I was single, no kids, and barely 21 years old.  A one bedroom 650 square foot house for $19,900 (or something like that) may not be practical for you as a first time home buyer.  But rest assured, neither is a $225,000 4 bedroom 3,500 square foot mini-mansion!

As my mentor, Jim Rohn, used to say, “If your outgo exceeds your income, your upkeep will be your downfall.”  Amen, Jim!

Stay conservative, my friends.  As yourself, “What can I afford with my eyes closed?  What can I afford if one of us loses our job?  What can I afford on a 15 year mortgage?  What will allow me to start building my investment portfolio and still visit Applebee’s from time to time?”

And for God’s sake, whatever you do, unless you want to be broke your whole life, DO NOT ask your mortgage lender how much you can qualify for (unless it’s me, then you’re safe!)!!!  If you borrow up to the amount a mortgage lender can qualify you for you almost guarantee yourself a life of incredible financial pain and suffering!  DON’T DO IT!

My next post will be on “Mortgage Qualifying Ratios” so you can see for yourself just how much trouble you CAN get yourself into.  If you can’t wait please call me directly or shoot me an email.  I’ll be happy to pre-qualify you right over the phone at  no charge.  If you prefer more anonymity you can download a complete pre-qualification packet here.

To your abundant success,

Chris Sanderson

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