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Naperville and Chicagoland, Illinois Real Estate |
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FAQs |
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YOU BE THE JUDGE...  |
REALTORS provide
up-to-date information on what is Happening in the marketplace.
REALTORS determine the best price depending on current market
information to sell your property quickly.
REALTORS give your property
exposure to other real estate agents and the public.
REALTORS know
when, where and how to advertise your property.
REALTORS pre-screen and
accompany qualified prospects through your property.
REALTORS help you
objectively evaluate every buyer's proposal without compromising your marketing
position.
REALTORS assist you in writing a legally binding, win-win
agreement that will have more success through the process.
REALTORS
objectively help you monitor, renegotiate and move the transaction to closing
(or settlement).
Source: www.realtor.com, official web site
of the National Association of Realtors & The Naperville Sun |
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WHY A
REALTOR?  |
REALTORS have the
expertise, resources and dedication to guide you through a real estate
transaction. We understand the contracts, the finances and the laws that apply
to sales and purchases. We have the resources you need to find just the right
combination of location, amenities and price range. We have the skills to
handle the negotiations and marketing of your property. We have the experience
and the contacts to ease your way through a complicated process, including the
final inspection and closing.
Source: National Association of
Realtors & The Naperville Sun |
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REALTORS LIKE
DAN JUNGCLAS DELIVER!  |
KNOWLEDGE: Agents like
Dan Jungclas are familiar with the market and how to price a home accordingly.
MULTIPLE LISTING SERVICE: A database which allows real estate agents
like Dan Jungclas to view your home's specifications.
MARKETING: Agents
like Dan Jungclas know what area to target to sell a home. For Example, a real
estate agent like Dan Jungclas might target apartment communities if selling a
"starter" home.
PROJECT MANAGEMENT: Agents like Dan Jungclas provide
coordination with home inspectors, attorneys, and loan officers involved in the
home-buying process.
MEDIATION: Agents like Dan Jungclas are the go
between seller and buyer.
RESULTS: Using a real estate agent like Dan
Jungclas typically means the home could be sold
quickly.
Source: www.realtor.com, official web site
of the National Association of Realtors & The Naperville Sun |
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Buying VS Renting  |
WHY BUY RATHER THEN RENT?
For most people, buying a home is one of the
most important decisions of their lives. The decision is not usually an easy
one. Here are 10 good reasons why buying a home is one of the best investments
you make.
1. IT WILL BE YOURS AND YOURS ALONE
The freedom of owning your own home can't begin to compare to the
restrictions that renters experience. You can paint the walls the color you
like. Hammer a nail where you want, All without hassle from a landlord.
2. LIFESTYLE
When you live in a neighborhood or building that is basically
owner-occupied, your neighbors, like you, have invested alot of time, care and
money in their property. They're willing to invest more of their time, money
and efforts to improve their property and community, which in turn improves the
value of your property!
3. EQUITY
Rental payments are gone once you have made them. But with each
mortgage payment you are buying something tangible, building up equity. The
longer you own your home, the larger your equity.
4. KEEP UP WITH INFLATION
A home is an investment that helps you keep up with inflation.
Although not all homes appreciate at the same rate and some years are better
than others, real estate has historically kept pace with and usually
appreciated faster than the rate of inflation,
5. INCOME TAX BENEFITS
Under current law, all interest paid on a mortgage incurred in
buying a home is deductible for tax purposes as long as the mortgage does not
exceed $1 million. In the early years of your mortgage, most of your payment is
interest. Remember, too, that real estate taxes are still deductible.
Later on should you decide to take advantage of the growing equity
in your home by taking out a home equity loan, the interest on up to $100,000
of home equity indebtedness is tax deductible. And under current law, the
proceeds of these loans can be used as the homeowner desires.
6. PAYBACK ON IMPROVEMENTS
A renter who makes any property improvements gets no financial
benefits from them if he or she relocates. But as a home owner, you can realize
some or all of the cost of improvements when you sell your home.
7. TRADE-UP VALUE
Even if your first home isn't your dream home, you will be
working your way up to it when you buy any home. With appreciation and possibly
some improvements, it may provide you with enough equity to make a down payment
on your dream home later.
8. SECURITY FOR RETIREMENT
Unlike rent, which goes onforever, the mortgage on your home will
be paid some day, providing you with "rent free" living for your retirement.
9. INVESTMENT PROPERTY
For some, second single family homes or condominiums are proving
to be good income investments and tax shelters. You may be able to realize
profits and tax benefits from renters who don't yet know the benefits of owning
a home.
10. DO NOT LET THE MORTGAGE INTEREST RATE FOOL YOU
You will pay less in interest than the mortgage rate of your
loan, because the interest you pay becomes tax-deductible.
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Why use an Attorney?  |
The purchase and sale of real estate may be the
largest investment you will make in your lifetime. Real Estate agents and
mortgage lenders agree that the assistance of an attorney is essential to real
estate transactions.
Often the purchase and sale of real estate is
the first opportunity to consider the need for an attorney. How then do you
select an attorney? Obviously, you must consider the knowledge and experience
of the attorney; second, the ability of the attorney to communicate to his
client in a friendly but professional manner; third, the attorney's working
relationship with real estate agents and lending institutions; fourth, the
ability of the attorney's support staff; and fifth, cost.
When selecting an attorney, the decision should
never be based solely on cost. The cost of retaining an attorney to protect
your interest is rather small when compared to the size of your investment and
the complexities faced in today's real estate market.
The buyer and seller wish to transfer title to
the property without added costs, delays and difficulties. Good attorneys
recognize the needs of the parties and are dedicated to accomplishing this
result through the highest degree of professionalism and competence.
WHAT WILL AN ATTORNEY
DO FOR THE BUYER?
- Examine your real estate contract to be certain it is valid.
- Examine the preliminary title report to make sure you are
buying good title to the property.
- Make sure all liens or title objections in the preliminary
title report are either removed, insured over or disposed of in the most
effective manner.
- Make sure the Seller has properly prepared the deed and all
related documents to transfer good title to you.
- Examine the Survey for adjoining encroachments from neighboring
property and the property you are buying and building line violations.
- If you are buying a condominium or townhouse, make sure you are
receiving proper credit for assessments if applicable, a certificate of
insurance and all related documents.
- Examine your closing statement prepared by the seller and your
lender to make sure you receive proper credits and are not being charged for
any prepaid item.
- Examine your closing statement prepared by the seller and your
lender to make sure you receive proper credits and are not being charged for
any prepaid item.
- Inform you of the time and place of closing.
- Personally attend the closing and explain all documents and
costs to you.
- After the closing, make sure that your deed is recorded in the
proper Recorders office and that you receive your final title policy.
WHAT WILL AN ATTORNEY
DO FOR THE SELLER?
- Examine your real estate contract to be certain it is valid.
- Offer you the convenience of closing through Attorneys' Title
in a local office if agreed by the parties.
- Order a title examination to remove any liens or title
objections so the closing is not delayed.
- Order your mortgage payoff statement and a copy of your real
estate tax bill.
- If you are selling a condominium or townhouse, order your
assessment letters, certificate of insurance or waiver of first right of
refusal.
- Order a new survey, if necessary
- Prepare your deed and all related documents to effectively
transfer title.
- Prepare your closing statement.
- Set the time and place of closing and contact all parties.
- Personally attend the closing and explain all documents to you.
- Do all follow up work after the closings.
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Closing Costs  |
There are several types of closing (or
settlement ) costs and other up-front costs that will need to be paid at
closing. Highlighted below are just some of those costs or expenses. However
this list is not comprehensive and is not intended as such. Just as each house
is unique so is each sale and the circumstances behind it and the costs that go
along with it.
Buying a home involves time, energy, and, most of
all, money. In addition to committing to mortgage payments for 15 to 30 years,
buyers need quite a bit of money "up-front" to close the transaction.
Financial closing costs are paid by both
the buyer and the seller. The seller will pay for certain expenses and the
buyer will pay for others. One way to minimize closing expenses is to negotiate
some of them as part of the offer or counter-offer. Some fees are set by law,
and therefore are not negotiable. Others are set by the local real estate and
financial markets and may be more flexible.
What Happens at Closing.
Much of the paperwork involved in closing (or
settlement) is done by attorneys. Before closing on a house, the buyers should
have a final inspection, or walk-through, to make sure any repairs that were
agreed to have been made and that items which were to remain with the house
(drapes, light fixtures) are still there.
At the closing, ownership officially is transferred
from the seller to the buyer. It will involve the buyers, the buyers' attorney,
the seller, and the sellers' attorney among others like a lender and so on. It
is possible to have an attorney act on your behalf if you cannot attend the
meeting. Closing can take as little time as an hour to sign all the forms and
transfer ownership or it can take several hours, depending upon the terms of
the contract and financing.
Settlement or closing can be done by a title or
escrow firm to which all the materials and information along with the
appropriate cashiers' checks have been forwarded. The firm will make the
necessary disbursements.
Buyers may need to pay some fees even if they pay
cash for the house and did not need to take out a mortgage.
Statutory Costs
- Transfer taxes are required by the State, the County and some
localities to transfer the title and deed from the sellers to the buyers.
- Recording fees for the deed pay for the county clerk to record
the deed and mortgage and change the property tax billing.
- Other state and local fees can include mortgage taxes levied by
states as well as other local fees.
- Pro-rated taxes such as school taxes, municipal taxes may have
to be split between the buyers and the sellers because they are due at
different times of the year. Some lenders may require the buyers to set up an
escrow account to cover these bills. If the lender does not require an escrow
account, the buyers may want to set up a special account on their own to make
sure they have money set aside for these important, and large, bills.
Third-party costs
- Third-party costs are expenses paid to others such as
inspectors, attorneys, and/or insurance firms.
- Title search costs. The buyers' attorney will do or arrange for
the title search to make sure there are no obstacles (liens, lawsuits) to
owning the home. In some cases, the buyers may work with a title company to
verify a clear title to the property.
- Homeowner's insurance. Most lenders require that the buyers
prepay the first year's premium for homeowner's insurance (sometimes called
hazard insurance) and bring proof of payment to the closing. This insures that
their investment will be secured, even if the house is destroyed.
- Real estate agent's sales commission. The seller pays the
commission to the real estate agent.
Finance and Lender Charges
- Origination or application fees. These are fees for processing
the mortgage application and may be a flat fee or a percentage of the mortgage.
- Credit report. If the buyers are making a small down payment
most lenders will require a credit report.
- Points. A point is equal to 1% of the amount borrowed. Points
can be payable when the loan is approved (before closing) or at closing. Points
can be shared with the seller and may be negotiated in the purchase offer. Some
lenders will let the buyers finance points, adding this cost to the mortgage,
which will increase the buyers interest costs.
- Lender's attorney's fees. Lenders may have their attorney draw
up documents, check to see that the title is clear, and represent them at the
closing.
- Document preparation fees. The buyers may be charged for the
preparation of the amazing amount and array of paperwork that it takes to
process the transaction.
- Preparation of amortization schedule. Some lenders will prepare
a detailed amortization schedule for the full term of the mortgage. They are
more likely to do this for fixed mortgages than for adjustable mortgages.
- Land survey. Most lenders will require that the property be
surveyed to make sure that no one has encroached on it and to verify the
buildings and improvements to the property.
- Appraisals. Lenders want to be sure the property is worth at
least as much as the mortgage. Professional property appraisers will compare
the value of the house to that of similar properties in the neighborhood or
community.
- Lender's mortgage insurance. Depending upon the down payment,
many lenders will require that the buyers purchase private mortgage insurance
(PMI) for the amount of the loan. This way, if there is a default on the loan,
the lender will recover his money. These insurance premiums will continue until
the principal payments plus down payment equal the appropriate percentage of
the selling price, but they may continue for the life of the loan. The premiums
are added to any amount that the buyers must escrow for taxes and homeowner's
insurance.
- Lender's title insurance. Even though there is a title search
for any obstacle (liens, lawsuits), many lenders require insurance so that
should a problem arise, they can recover their mortgage investment. This is a
one-time insurance premium, usually paid at closing; it is insurance for the
lender only, not for the buyers as a purchaser.
- Release fees. If the seller has worked with a contractor who
has put a lien on the house and who expects to be paid from the proceeds of the
sale of the house, there may be some fees to release the lien. Although the
seller usually pays these fees, they could be negotiated in the purchase offer.
- Inspections required by lender. (termite, water tests, etc.)
If the buyers apply for an FHA or VA mortgage, the lender will require a
termite inspection. In many rural areas, lenders will require a water test to
make sure the well and water system will maintain an adequate supply of water
to the house (this is usually a test for quantity, not a test for water
quality).
- Prepaid interest. The first regular mortgage payment is
usually due about 6 to 8 weeks after closing. Interest costs, however, start
with the closing. The lender will calculate how much interest is owed for the
fraction of the month in which the closing takes place. In some cases this is
due at closing.
- Escrow account. Lenders will often require that the buyers set
up an escrow account into which they will make monthly payments for taxes,
homeowner's insurance, and PMI (mortgage insurance, if required). The amount
placed in this escrow account at closing depends on when property taxes are due
and the timing of the settlement transaction. The lender should be able to give
the buyers a close approximation of these costs at the time they apply for
their mortgage loan.
Up-Front Expenses
- The major portion of up-front expenses is the deposit, binder,
or earnest money that the buyers make at the time of the purchase offer and the
remaining cash down payment they make at closing.
- Inspections. (structural, radon tests, etc.) In addition to
inspections required by the lender, the buyers may make the purchase offer
contingent on satisfactory completion of some other inspections. The buyers and
the sellers will need to negotiate these fees.
- Owner's title insurance. The buyers may want to purchase title
insurance for themselves so that if problems arise, they are not left owing a
mortgage on a property that they no longer own. A thorough title search is
often assurance enough of a clear title.
- Appraisal fees. The buyers may want to hire their own
appraiser, either before they sign a purchase offer or after seeing the results
of the lender's appraisal.
- Money to the seller. The buyers may need to pay for personal
property items in the house that they want. Such items may include appliances,
light fixtures, drapes, lawn furniture, and fuel oil and propane left in tanks.
RESPA
The Real Estate Settlement Procedures Act (RESPA)
contains information on the settlement or closing costs that both the Buyers
and Sellers are likely to face. Within 3 days of the time the buyers apply for
the mortgage, the buyers' lender is required to provide the buyers with a "good
faith estimate of settlement costs," based on his or her understanding of the
buyers purchase contract. This estimate should give the buyers a good idea of
how much cash will be needed at closing.
An information booklet entitled "Settlement Costs
and You" written by the U.S. Department of Housing and Urban Development, which
discusses how to negotiate a sales contract, how to work with various
professionals (attorneys, real estate agents, lenders), and your rights and
responsibilities should be given to the buyers by the buyers' lender. It also
shows an example of the uniform settlement statement that will be used at the
closing.
Truth in Lending
Mortgage lenders are required to give buyers a
truth in lending (TIL) statement containing information on the annual
percentage rate, the finance charge, the amount financed, and the total
payments required. For adjustable rate loans, the "total payments" figure is
estimated as a "worst case" scenario. The figure represents the payments that
the buyers would make if their loan adjusted upward to the maximum rate allowed
by annual and lifetime caps and then stayed there for the duration of the loan.
The TIL statement may also contain information on
security interest, late charges, prepayment provisions, and whether the
mortgage is assumable. If the buyers have an adjustable rate loan, it may
outline the limits on the adjustments (annual and lifetime caps) and give an
example of what the next year's payment might be, depending on interest rates. |
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Home Inspection?  |
Home Inspections and other inspections are commonly done in our area and are highly recommended. Inspections should be performed by licensed professionals as requested by the Buyer and at the Buyer's expense. Buyers have inspections done to gain knowledge of their investment. For more information ask Dan. |
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Radon Testing?  |
Radon Testing is commonly done in our area. Excessive levels of radon can be a safety and health concern. Radon tests should be conducted by a licensed professional as requested by the Buyer and at the Buyer's expense. Buyers have radon testing done to gain knowledge of their investment. If high levels of radon exist they can be easily mitigated by a licensed mitigation profesional to bring the radon down to an acceptable, safe level as defined by the appropriate governmental authority. Once a home has been mitigated, the home should then be re-tested to assure that the radon level has been brought down to an appropriate level. The expense of mitigation is negotiable and can be requested by either the Buyer or the Seller. However, please note that the mitigation professional should not perform the re-test as this would inherently be a conflict of interest. For more information ask Dan. |
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