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so lenders are so generous that they are willing to make loans on houses w/0 any inspections ?
all the time. I've only had one circumstance over the years where a lender required a copy of the inspection report (and two appraisals), and that was because the seller had owned the house for less than 90 days and was flipping it
1. How much money would I be expected to commit with a signed offer And what is that money called?
2. If the offer is accepted, how long before we have to go to the next money step, how much money would that be, and what is that money called.
3. What can I do between step 1 and 2 such as a home inspection, appraisal, radon testing, etc? If I do not have much down (Step 1 money), it would be cheap enough for me to walk away if I do not like any of the results.
In one sale in MA (Andover) the buyer go cold feet and did not show up at the closing. I was told I could keep their money. The buyer was a PIA lawyer and I could see her trying to make trouble thus holding any other sale up. I said tell her to GFH, refund everything to her, and get them out of my life ASAP. My realtor said even with cold feet, they were still a solid buyer. The buyer came back within 48 hours, said she was sorry, and asked if we could we still put the deal down. I told my agent to change the sale to "as is" and I would consider it. They did and I accepted. We closed 10 days later. Some 20 or so years later, they still live in that house.
so lenders are so generous that they are willing to make loans on houses w/0 any inspections ?
There are only certain loan types like VA for example that require any kind of inspection over and above the appraisal. In the Boston area, home values are so high that even with 20% down the loan amount often exceeds the lending limits of these loan types. In 10 years, I've only dealt with one VA loan. My broker who's been doing this close to 30 years has only dealt with a VA loan once and that was last year.
Quote:
Originally Posted by johngolf
1. How much money would I be expected to commit with a signed offer And what is that money called?
It's entirely negotiable, but generally I encourage my clients to put a total deposit of 5% down at the signing of the Purchase & Sales Agreement. This is detailed up front in the Offer to Purchase so it's part of the information a seller will use to gauge the buyer. 5% is a pretty typical amount. So, putting that much down makes you look like a qualified buyer. I've certainly had buyers who don't have that much cash on hand though and so we've put down in the deposit whatever we can.
Most people seem to refer to that simply as the "deposit."
Quote:
Originally Posted by johngolf
2. If the offer is accepted, how long before we have to go to the next money step, how much money would that be, and what is that money called.
Typical deposit at the time of offer acceptance varies in different parts of the state, but it's usually between $500 and $1K. That deposit is typically delivered at the time the offer is signed to the seller's agent who also acts as escrow agent in the vast majority of transactions.
Generally 7 to 14 days later, we move on to the Purchase and Sales Agreement. At that point, in many transactions the deposit is increased to a total of 5% of the agreed upon purchase price although I've done more and I've done less depending upon the buyer's liquidity and the situation.
Most people just refer to these payments as deposits. They're applied toward the purchase price and they're held in an escrow account until the closing. The funds can't be moved without instructions from both parties.
Quote:
Originally Posted by johngolf
3. What can I do between step 1 and 2 such as a home inspection, appraisal, radon testing, etc? If I do not have much down (Step 1 money), it would be cheap enough for me to walk away if I do not like any of the results.
If you have the right to perform an inspection, that generally happens in the timeframe between making the 1st and 2nd deposit. Most people wait until after the Purchase & Sales Agreement is signed before ordering an appraisal. If you're not going to make it out of inspection, it doesn't make sense to pay for an appraisal. You could walk away in this period and only lose $500 to $1K, but if you have an inspection contingency then you can get your deposit refunded.
Quote:
Originally Posted by johngolf
In one sale in MA (Andover) the buyer go cold feet and did not show up at the closing. I was told I could keep their money. The buyer was a PIA lawyer and I could see her trying to make trouble thus holding any other sale up. I said tell her to GFH, refund everything to her, and get them out of my life ASAP. My realtor said even with cold feet, they were still a solid buyer. The buyer came back within 48 hours, said she was sorry, and asked if we could we still put the deal down. I told my agent to change the sale to "as is" and I would consider it. They did and I accepted. We closed 10 days later. Some 20 or so years later, they still live in that house.
That's annoying. I don't know the details of the situation but it definitely sounds like you had a claim on the deposit based on what you've said. You're right though. People can make it hard for you to move on to a new buyer when you try to claim their deposit money. I've seen it happen before.
There are only certain loan types like VA for example that require any kind of inspection over and above the appraisal. In the Boston area, home values are so high that even with 20% down the loan amount often exceeds the lending limits of these loan types. In 10 years, I've only dealt with one VA loan. My broker who's been doing this close to 30 years has only dealt with a VA loan once and that was last year.
Being I'm outside DC, the majority of the buyers I work with go VA loan, but none have ever had to give an inspection to the lender (except termite)
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