Ask the Broker: Your Real Estate Questions Answered

This week we begin answering the questions you’ve submitted for our “Ask the Broker” feature. We appreciate those who took the time to send us their most pressing inquiries and we’re all too happy to answer with our best knowledge and opinions. Please continue to forward your inquiries to info@iDealRealEstateProfessionals.com.

“Are credit lines for investment homes or secondary/vacation homes as hard to get as they were a year or two ago? Are you still looking at a minimum of 20 percent down?” – Eric C.

Our experience with mortgage lenders is that, yes, investment properties in most cases do still require a minimum down payment of 20 percent. As to the difficulty of loan approval, that question is best answered by a licensed mortgage advisor. Different lenders have different programs. We are currently working with investors who have been approved with ease and the loan process is just as smooth as any other owner-occupied transaction. Interest rates are also low enough that even though investment property loans are usually given a higher interest rate, they aren’t as high as they were in the past. It is still a great time to buy, whether an investment property or primary residence.

This next question is a tie-in to the previous question about purchasing investment property.

“Our lender advised us that the limit for seller-paid closing costs and prepaid contributions is 2 percent of the purchase amount for our investment purchase. Can you explain what that means?” –Whitney D.

Closing costs and prepaids are costs associated with closing the loan. Items such as lender fees, recording fees, attorney’s fees, insurance, etc. are all costs that can be charged to either party in the real estate transaction. Most of these are charged at the closing table and are fees charged to the buyer, as they are associated with the buyer’s loan. However, the parties may negotiate an amount contributed from the seller’s proceeds to cover these costs. The seller is never required to make this contribution but often times those terms are negotiated as part of the agreement. As an example, new homebuilders will sometimes offer to pay a percentage of a buyer’s closing costs as a marketing strategy. Limits are subject to change at any time and we always recommend that you consult a licensed mortgage advisor prior to negotiating a purchase offer.

“Can I really purchase a home with only a $100 down payment? That sounds too good to be true.” – Multiple potential buyers

We receive this question frequently. The answer is simple—yes you can purchase a home for as little as $100 down. The Department of Housing and Urban Development, more commonly referred to as HUD, does offer a program for owner-occupant buyers to purchase a HUD-owned property without the current FHA down payment requirement of 3.5 percent of the total purchase price. The program has been in existence for several years and is meant to encourage home ownership by offering the lower down payment to buyers who have not purchased a HUD-owned home as an owner-occupant in the prior 24 months and who intend to live in the property as their primary residence for a period of least 12 months. There really is no catch and it’s not too good to be true. Again, the buyer must gain approval for an FHA loan and must purchase a HUD-owned property as an owner-occupant. There are other requirements such as earnest money minimums, etc. Please contact your preferred mortgage advisor for further information on this program. And of course, feel free to contact us as we are HUD home experts having worked with numerous buyers who have taken advantage of this program.

“I have heard the term REALTOR® used to describe Real Estate Agents for years. Recently I’ve heard that all Licensed Real Estate Agents aren’t REALTORS®. What’s the difference?” – Various respondents

Quite simply a REALTOR® is a Licensed Real Estate Agent who has paid a membership fee to the NATIONAL ASSOCIATION OF REALTORS®, usually through a locally managed BOARD OF REALTORS® for the ability to use the name REALTOR® as a credential.  As stated on NAR’s website under the Missions and Vision section:

“Mission
The core purpose of the NATIONAL ASSOCIATION OF REALTORS® is to help its members become more profitable and successful.”

All Georgia Real Estate Licenses are held to the same legal standards and professional practice requirements set forth in the Georgia Real Estate Licensing and Appraiser Laws and Regulations included in the Official Code of Georgia Annotated (O.C.G.A.). NAR Membership is not a requirement of any Real Estate Licensee in Georgia and no extra protections are afforded to the public by choosing one over the other. While some Multiple List Systems are owned and operated by local boards, that is not the case for North Georgia. The two most widely used are First Multiple Listing Service and Georgia Multiple Listing Service. Any Licensee can join either service and have full access to those services.

iDeal Real Estate Professionals LLC is owned and operated by Brandon Bramlett and C. Mark Willix and is affiliated with Maximum One Realty Greater Atlanta. For personalized service, visit us at www.idealrealestateprofessionals.com. You can also email us at info@idealrealestateprofessionals.com.