‘Back on the market’ – a risky proposition? | SummitDaily.com

‘Back on the market’ – a risky proposition?

Special to Summit Homes and Properties Joyce Nenninger and Allison Simson

Real Estate Forum.BY JOYCE NENNINGER AND ALLISON SIMSONQuestion: We lost out on a property to another buyer but just got a phone call that the first transaction fell through and the property is again available for us to bid on. We have some concerns about why the first contract failed. What should we take into consideration? Answer: Buyers are often reluctant to bid again on a house that has returned to the market several months after they made an offer on the same home and lost out to another bidder. Psychology plays an important role in any home purchase and, thus, the presence of other buyers wanting the same property is comforting. The second time around, however, the situation is different; and there may be some doubt about whether the property is a good buy or not.Buyers can assume that when a home comes back on the market, either the original deal fell through or the home was temporarily taken off the market. Regardless, buyers should learn the exact reason for the home’s presence back on the market. Be particularly careful of these situations because often is the case that the house didn’t pass muster. By obtaining copies of the inspection report, buyers can find leverage in their negotiations for the home. Also, buyers should be open to the fact that there may be nothing wrong whatsoever with the house. Sometimes financing falls apart; other times, buyers simply change their minds. Luckily for buyers, houses that come back on the market after a few months often have lower asking prices and can present a good bargain. In short, buyers shouldn’t let someone else’s inability or indecision to purchase a good home affect their own shot at residential bliss.

Question: We will be closing on a home in Summit Cove next month. We would like to avoid having money escrowed for taxes and insurance and put this money into our own interest bearing account. Do you have any comments on this?Answer: When closing on a new mortgage, many lenders offer to keep funds required for tax and insurance purposes in escrow on behalf of the home buyers.Accepting such an offer has its advantages, including knowing that the money is there and that the taxes and insurance will be paid on time. In fact, most escrow accounts will actually pay the taxes early, earning the borrowers a discount on the tax amount.On the downside, there is the chance that the home buyers will overpay should the lender inaccurately estimate the money due. In such a case, however, the lender must notify the borrowers and either refund the difference or apply it to the following year’s payments – which, in turn, will reduce the customers’ monthly cost. Some buyers are tempted to waive the escrow option and deposit the money instead into an interest-bearing savings account, however, they all too often lack the discipline to adhere to their monthly savings plan. Moreover, they are less likely to make payments far enough in advance to get a discount. What little interest borrowers generate from their own savings account, meanwhile, is probably not worth the risk of missing tax and insurance payment deadlines.

Question: Joyce, we are going to sell our home here in Summit County in order to buy another. We are so worried that the timing won’t work out. How should we proceed? Answer: Don’t spend a great deal of time worrying about what will happen when you’re selling one home and buying another. You’re not alone. Realtors, lenders, and title and escrow companies have had plenty of experience in arranging contracts and loans so that the two transactions dovetail smoothly.It’s best to list your present home for sale first. Selling and buying a home is a very emotional event and if you create a “race” by locating your replacement property before you sell your current home, you may lose it to another buyer, who does not need to sell in order to buy. If you do find just the house you want, you can always put in a purchase offer contingent (dependent) on selling your present one. However, in a hot market you will have difficulty getting the house you want this way. Sometimes the seller will sign a contract agreeing to wait a certain period of time while you find a buyer for your house – sometimes not. What would you do if you were presented with such a proposal, from a buyer who also has a house to sell?If you do find that you need to buy the next house before you’ve received the proceeds from the present one, lending institutions can sometimes make you a short-term “bridge” loan to tide you over between the two transactions. Make sure you fully understand the exposure and emotional investment before proceeding with this type of loan.

Question: We bought a home which has a home-security system installed. Can we save money on our home insurance because of this? Answer: Homeowners can receive insurance discounts if they install a home-security system.A basic alarm system and dead bolts on exterior doors give customers a 7 percent credit, but the discount rises to 12 percent if the system alerts police, the fire department, or a private security firm. The savings on a typical $600 homeowners policy can be as much as $72.According to the National Burglar and Fire Alarm Association, the average security system costs $1,300 plus $25 a month for monitoring contracts.For answers to your real estate questions, call JOYCE NENNINGER or ALLISON SIMSON at (970) 468-6800 or 1 (800) 262-8442. E-mail Info@SummitRealEstate.com or visit their website at http://www.SummitRealEstate.com. Allison and Joyce are both long-time locals in Summit County. Summit Real Estate – The Nenninger/Simson Team is located in the Dillon Ridge Marketplace. Their long-time residency and years of real estate experience can help you make the most of any buying or selling situation. Both are Certified Residential Specialists (CRS), the highest designation awarded to a Realtor in the residential sales field. Their philosophy is simple, whether buying or selling, they understand that the most important real estate transaction is yours.

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