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Real Estate 101
Location, location, location:
Costs and Financing:
Types of Real Estate:
When and How to Ask for Help:
The Importance of Escrow in Real Estate Transactions
Real estate transactions can be complex and involve a considerable amount of money. Whether you are a buyer or a seller, real estate is often your biggest investment. That is why it is important for both buyers and sellers to protect their interests and ensure that the transaction is completed smoothly. This is where escrow comes in.
What is Escrow?
Escrow is a financial arrangement where a third party holds and regulates the payment of funds required for both the buyer(s) and the seller(s) involved in a transaction. Escrow helps ensure that the transaction is completed smoothly and according to the terms agreed upon by both parties. Both the buyer and the seller provide the escrow agent with written instructions. When all conditions have been met, the escrow officer sends the closing papers to the county recording office, where the new deed is recorded. The escrow officer then releases funds to the seller.
How is Escrow Used in Real Estate Transactions?
In a real estate transaction, escrow is used to ensure that the buyer’s funds are securely held until all the terms of the sale, such as the transfer of the property title, have been completed. In addition, the escrow agent may also be responsible for completing tasks such as ordering a title search, obtaining necessary documentation, and disbursing funds according to the instructions of the parties involved in the transaction. During this process you may hear the term title insurance and you might wonder what it is. Title insurance is like a safety net around your property. Sometimes hidden mistakes in previous deeds, mortgages, easements or other recorded documents might give someone else an ownership stake in the property. It is important for you to get Title Insurance to protect you and your home as it will save you time and money in the future if problems arise. You can learn more about it in our “What is title insurance and why is it important?” blog. Read it here.
In conclusion
Escrow is an important tool that helps to protect the interests of both buyers and sellers in a real estate transaction. It ensures that the transaction is completed smoothly and according to the agreed upon terms, and helps to reduce the risk of disputes or issues arising. If you are buying or selling a property, it is important for you to understand the role of escrow and how it can benefit you.
If you are ready to connect with an agent or have any further questions, please don’t hesitate to connect with us today by clicking here. If you are just getting started on your home buying journey, consider reviewing these real estate terms to help you along the way.
Penn Cove Park
Welcome to Penn Cove Park. There is no doubt you will find a home you like here. There is an array of newer and older homes amongst this quiet community on the northern shoreline of Penn Cove off Monroe Landing. The central location between Oak Harbor and Coupeville provides not only more options for educational opportunities but also quick access to all the amenities both cities have to offer.
What sets this neighborhood apart from some of the others you might find on Whidbey Island is that residents not only have access to a private beach, but they also have a boat ramp. During the summer the water is warm enough to swim in because the cove is protected from the strong offshore winds that other water access areas are exposed to, making it likely the warmest beach on Whidbey Island. Not to mention, the incredible views of Penn Cove, gorgeous views of Saratoga Passage and the lovely historic Town of Coupeville. On sunny days you can spot snow covered mountains in the distance and a pod of Orca whales may be playing in the Cove.
One of the major benefits of living here is the short distance to the only Hospital on the island, Whidbey General Hospital. Downtown Coupeville offers quaint restaurants, galleries, shops, and a museum that overlook the cove offering luxurious views making for special trips all year round. Oak Harbor, just north of the neighborhood is home to Naval Air Station Whidbey Island where you will find an array of fast-food restaurants, car washes, and big-name shopping centers. In between the two discover the heart of Whidbey, with family farms like Three Sisters Market, small churches, and one of the very few left in the USA the Blue Fox Drive-in Movies with attractions like arcades, go-carts, and food!
Are you ready to get to know this Whidbey Island neighborhood better? Check it out here.
Have questions? We are happy to help. Connect with us here.
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Annual Report 2022
Are you interested in buying or selling, or just wanting to learn more about the market or just Whidbey Island in general? We are here to help! Connect with us here.
What is an Interest Rate Lock?
It is no surprise that you might have questions when buying a home. There is a lot to know. Having a good realtor on your side can help you navigate some of those tough questions. Don’t have a realtor of your own? Contact us here and we will get you connected.
In this article, we will be discussing mortgage loan rate locks and how they are used to help you when you are buying a home.
In a market with frequently changing interest rates, some people worry that their interest rate will change before they get into their homes. Depending on the individual circumstances this could be a realistic fear. It is important to discuss this with your trusted realtor and your lender. However, lenders know you need time to search for your home after you have been pre-approved. A rate lock is implemented to protect your agreed-upon rate for a specific length of time.
Let’s discuss this further.
A rate lock is an agreement between you and your lender guaranteeing a specific interest rate will be provided to you for a specific length of time after the pre-approval. This is called the rate lock period. Your lender will confirm with you your interest rate, the start date, and the date of expiration.
What if interest rates go up before I close on a house?
Rest assured you are locked in at your agreed-upon rate even if interest rates have gone up before you close. But again it depends on the expiration date. You might be wondering how lenders can do this. As soon as your rate is locked, lenders purchase money from their investors for you at your rate to be ready for you to spend it when you find your home. Assuming your loan application is approved (see our “Nervous about getting approved for a home loan?” article) and all the terms and conditions for the approval have been met the money is made available to you at closing regardless of the changes in the market after you had locked in your rate. Lenders do not ask you to pay a higher interest rate just because market rates have shifted upward.
Why you shouldn’t wait to lock your rate even when interest rates are dropping.
Would it be more disappointing to have locked in a rate and find that you have missed a lower rate, or NOT locking in your rate and then having rates increase? Trying to time the market can be a dangerous game. Often the market spikes without warning leaving buyers regretting not locking in lower rates. Don’t forget if rates continue to fall, you can often refinance your loan typically after 120 days. Check your lender’s post-closing refinancing policy and make sure to discuss this with your lender ahead of time.
If you do not have a lender of your own or would like to discuss buying or selling a home, please do not hesitate to connect with us so that we can help you.
Email us at WhidbeyCommunications@windermere.com or call us at 360.675.5953
Nervous About Getting Approved For a Home Loan?
Are you nervous about getting approved for a home loan?
Don’t be! Staying informed about what to expect and what you should and should not do will help ease some of that worry. We are here to help you. Follow these simple DOs and DON’Ts and they will help you avoid hiccups during the approval of your home loan.
Dos:
- Continue to your current rent or mortgage payments on time.
- Stay up to date on all existing accounts (even if you are paying them off).
- Continue to work for your same employer.
- Continue to use the same insurance company.
- Continue living at your current residence.
- Continue to use your credit cards as normal.
- Call your trusted lender if you have any questions.
Don’ts:
- Make any major purchases like cars, boats, furniture, jewelry ect.
- Apply for a new line of credit (credit card or loan) even if you are pre-approved.
- Open a new credit card.
- Transfer any balances from one account to another.
- Pay off any collections or accounts without first checking with your trusted lender.
- Close any credit card accounts.
- Change bank accounts or banks.
- Max out or overcharge your current credit cards.
- Consolidate your debts into fewer accounts.
- Take out a new loan.
- Start any home improvement projects.
- Finance any elective medical procedures.
- Open new cell phone accounts.
- Create a new fitness membership at a gym or club.
If you run into any unique situation that leaves you questioning whether you should proceed it is in your best interest to connect with your lender and ask before you make any decisions. Your lender can help you determine what is right for you in your unique situation to achieve your financial goals.
If you do not have a lender of your own or would like to discuss buying or selling a home, please do not hesitate to connect with us so that we can help you.
Email us at WhidbeyCommunications@windermere.com or call us at 360.675.5953
Drop in Mortgage Rates, What that Means for You
Mortgage rates rise and fall in response to varying inflation. If 7% was too high for you, it is likely now a better time to connect with your lender to see if the current rates better align with your monthly housing allowance goals, as mortgage rates have begun to decline. Keeping an eye on inflation will offer you a strong indicator to where mortgage rates will go.
While there is no comparison to the rates offered at the beginning of 2022 there is hope that they will ease a bit from the dramatic climb.
Buyers Purchasing Power
If you are considering buying, this decline in mortgage rates means an increase in your purchasing power. For example, let’s assume you want to buy a $400,000 home with a monthly payment between $2,500 and $2,600. Consider the chart below to see how your purchasing power changes as mortgage rates move up and down. The red demonstrates payments above your desired threshold while the green represents payments within and below your desired price range.
This is a small example of how a little quarter-point change in mortgage rates can significantly impact your monthly mortgage payment. It is of the utmost importance to work with a trusted real estate professional and lender who follow the market and understand the projected mortgage rates for the days, months, and year ahead,
If you are considering buying and do not have a trusted real estate broker already on your side, connect with us and we will pair you with a broker that will meet your needs.
A Different Approach to Developing Wealth
Mynd recently released their 2022 Consumer Insights Report that demonstrates how millennials and Gen Z’s have taken a different approach to developing wealth than previous generations.
For example, while 9% of Baby Boomers are contemplating the idea of investing in rental properties over 43% of Millennials and Gen Zs are choosing to remain in their current living environments and invest in rental properties elsewhere to build their wealth.
BUT IS IT WORKING?
This strategy is becoming increasingly popular. It allows the investor to remain living without disruption to their lifestyle in a place they may not be able to afford to purchase a home of their own. Instead of uprooting their lives and relocating elsewhere to attain the dream of homeownership the investor achieves homeownership by purchasing a home in a more affordable location with the intention of renting it out.
With no disruption to their life, they become a homeowner and investors at the same time. Their purchase not only creates monthly passive income for their pocketbooks but also builds equity over time – ultimately increasing their overall net worth.
They can later choose to continue to rent out the home, sell for an increased price, or move into the home if or when they want or need to.
READY TO EXPLORE THIS APPROACH?
If you would like to explore this idea further connect with us so we can help you build your wealth through real estate.
