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Date Archives: July 2012

Revolutionary Real Estate Home

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About Us | 9 Posts
Buyers | 3 Posts
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Events | 3 Posts
Information | 3 Posts
Just Listed | 11 Posts
Legal | 2 Posts
Mortgages | 1 Posts
Open House | 10 Posts
Sellers | 2 Posts
Sold | 2 Posts

The search for a new home can be an exciting one; however, before you begin your quest for that dream home, your REALTOR® would require that one of your first steps would be to meet with a mortgage lender.  This individual will help you determine the price range at which you should be looking and at the end of the meeting if all goes well you should find yourself pre-qualified for a mortgage loan. 

What is one of the primary factors that go into a lender's decision of whether or not to grant a loan? Credit scores.  It has been estimated that nearly 75% of all mortgage loan decisions are made with the applicant's credit score in mind. 

The importance of credit scores in mortgage decisions and real estate transactions has risen over the past decades, and this is in large part due to what the lenders call risk-based mortgage pricing.  Essentially, the lender will make a decision on a mortgage based on how much risk is involved in the transaction.  If an individual has a credit score below 700 (which I'm sure none of you do), then that tells the lender that they are at higher risk of defaulting on their obligation to pay, and that will be reflected in the loan that they propose.  They may be offered a higher interest rate.
Now before you rush off to a free credit report website in a wave of panic, please keep in mind that a credit score is not a permanent and accurate representation of who you are as a person, and many mortgage lenders understand that.  It is important to find a lender who can see you as an individual with your own story.  That is not to say that you should ask them to completely disregard a credit score of 450 and give you a loan for that million dollar home, but there are some lenders out there who are willing to work with a low credit score, owing to the fact that you are not a number, but a person.  They will take into account things like your rental history.
That being said, it can't hurt to try and raise your score before meeting with a lender, and there are many ways to do this.  Getting a credit card and keeping up with the payments is a quick and easy way to improve your credit and show lenders that you are serious.  In the end, that is all the lenders want.  They want to know that you are a responsible borrower and understand the value of a positive credit history, and a high credit score will give them a good first impression. 

Consumer NoticeHave you attended an open house and innocently discussed your current situation with the hosting agent when you were told to STOP, and a green paper was being put in front of you to sign? 

This green paper is known as The Consumer Notice, and it must be presented by any licensed PA Real Estate Professional before they can have any discussion on your needs and motivations for seeking real estate services.  It is NOT A CONTRACT, but an affirmation that you, the consumer, have been advised of your rights.   

The Consumer Notice serves as notice of your rights and business relationships that exist in a real estate transaction.

  • Seller Agent: the licensee works only for the seller/landlord
  • Buyer Agent: the licensee works only for buyer/tenant
  • Dual Agent:  the licensee works for both seller/landlord or buyer/tenant
  • Designated Agent: the broker may designate one or more licensees from the agency to represent the consumer. This occurs, for example, when your real estate agent and the other party's real estate agent work for the same company or office.
  • Transaction licensee: Licensee performs real estate services without having any relationship to the consumer.

By signing The Consumer Notice, you and the agent have NOT entered into a binding contract, but simply acknowledged you received information pertaining to your rights in representation in a real estate transaction. For example, if you're a buyer attending an open house, the agent hosting the open house may identify themselves as the seller's agent and their duty is to their client – the seller.

This agent has a fiduciary relationship with the seller and you should to be careful what information you disclose to that agent in what may seem like casual conversation. If you end up pursuing a purchase of that home, you may be sorry you disclosed certain information. This is where you have the right to know that you may want to consider a Buyer's Agent to represent your interests. 

The next time a Consumer Notice is presented to you, read it carefully and afterwards don't be afraid to sign, it is there for your protection.  

A copy of the Pennsylvania "Consumer Notice" is available at any real estate brokerage office or from any licensee. To obtain a copy of the "Consumer Notice" or to gain more information about agency relationships in Pennsylvania, feel free to contact us at 717-364-3000.

For further information about real estate laws and consumer education in the Commonwealth of Pennsylvania, visit the Pennsylvania Association of REALTORS.

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