Q. What is the difference between an appraisal and a CMA?

A. An appraisal is performed by a certified appraiser who uses comparable homes in the area, condition of the property, etc. to determine an official value. An appraisal usually ranges in cost between $225 and $500. A Comparable Market Analysis (CMA) is usually done by a real estate agent and uses many of the same factors to determine an estimated value. A CMA is almost always performed free of charge.

Q. What documents should I leave in the house for the new owner?

A. Any important documents such as any warranties or owners manuals on appliances that are staying in the house. Also, information on the heating system, water heater, roof repairs, new windows, or anything else you can think of will come in handy for the new owner once they take possession of the property.

Q. Is it to My Advantage to Sell "By Owner"?

A. The majority of the people who sell by owner want to avoid the cost and commission of hiring an agent. This is a very time consuming and challenging task to pursue. One reason for this is that FSBO's (For Sale By Owner) don't have the resources that real estate agents have at their fingertips - the large customer base, financial and legal ties, knowledge of local customs, and most importantly, patience. As a result, many FSBO's overprice their properties.

If you are the kind of person who appreciates a challenge, best wishes to you. However, if you are like most people, you have a time-consuming job and a family to take care of, and don't need the extra hassle of managing real estate. That is why agents exist today.

Q. What repairs should I make before selling?

A. While you want to be sure your home is as appealing to potential buyers as possible, you need to be careful not to overextend yourself on repairs before selling. Too often a homeowner will invest huge amounts of time and money in repairs just to realize that much of that money will not be recouped in a higher sale price.

Q. How is an asking price determined?

A. Asking price is usually set using a CMA or Comparative Market Analysis. This method uses other properties that are similar in size, style, and condition, that are currently on the market or have recently sold, to determine a reasonable price. It also may be the result of independent appraisals or broker's opinion of value and current market conditions.

Q. How should I prepare to sell my house?

A. You need to start by taking a close, objective look at the property. Walk around the exterior with a pad of paper and write down EVERYTHING that needs to be done to make the house look it's best. Do the same inside and then sit down and determine how much time and money you can put into making the property most appealing to perspective buyers. You may want to consider putting some of your belongings in storage to open up some space in the rooms and closets.

This is usually one of the most difficult aspects of selling and sometimes it helps to have an unbiased point of view. Your real estate agent will be happy to help you evaluate your home

Q. What is KHC?

A. Kentucky Housing Corporation, created by the 1972 General Assembly, is a self-supporting, public corporation of the Commonwealth of Kentucky administratively attached to the Finance and Administration Cabinet. A portion of KHC funds are derived from the interest earned through the sale of tax-exempt mortgage revenue bonds. From these proceeds, KHC has made homeownership possible for over 52,000 low- and moderate-income Kentucky families. KHC also operates through the receipt of fees for administering federal programs including rental assistance that makes safe, decent, affordable housing available to more than 20,000 low-income Kentuckians. Other programs additionally offered by KHC include rental housing production financing, homeownership education/counseling and a variety of rental assistance, housing rehabilitation and home repair initiatives

Q. Is a pre-approved buyer better than a pre-qualified one?

A. A pre-qualification is a letter from a lender stating that, based on income and a rough idea of expenses, the buyer may qualify for a certain loan amount. A pre-qualification is not a guarantee that they will be able to obtain financing; it is solely an estimation of what they can afford.

A pre-approval means the buyer has already submitted a loan application and most of the necessary paperwork to obtain a mortgage. The loan has already been approved, subject to finding a property that appraises for that loan amount and buyer has not changed any significant information or job status.
Pre-approved buyers, therefore, have a distinct advantage when making an offer on a property. Most sellers are more likely to accept an offer when they know the buyer will not have a problem getting a loan.

Q. What is the difference between sales price and assessed value?

A. The selling price of a home is the value placed on it based upon other home sales in the area, condition of the property, and other factors.

The assessed value of a home is estimation used by the city to determine your property taxes. An assessed value has no bearing on the market value or sales price of a property, however they are often very close in valuation.

Q. What happens at the closing?

A. At the closing, the buyer will be required to sign a mortgage, and a number of other legal documents. The seller will sign a deed, and several tax documents. Once you've passed papers, the buyer will be given the keys, and then own the property.

Q. Do I need a survey?

A.By determining the location of the boundaries of your property, it will ensure that your interests are served and investments protected. A survey is not required, but is highly recommended.

Q. Once an offer is submitted on a property, how is my offer evaluated?

A. A number of criteria are considered when evaluating offers from prospective purchasers. These include, but are not limited to, net funds recieved after deducting brokerage commissions and sale expenses, and payment terms considered in light of the applicants credit worthiness and ability to perform.

Q. Is it a Bad Idea to Buy From "FSBO's"?

A. (For Sale By Owner)Buying from FSBO's can cause you a lot of extra work and time. This is the reason why real estate agencies exist, to make it easier and faster for you. For most buyers, and especially first time buyers, this is a great inconvenience. Unless you have your own broker, you will have to do all the face-to-face negotiations, pay for an attorney to finalize the paperwork, find your own financing options, and you may have to pay for a building inspector to come and look at the property before you commit. Your agent may be able to contact the owners and do the negotiating for you.

Q. What is an "earnest money" deposit?

A. A serious buyer will put down an "Earnest Money Deposti" as a show of good faith. This shows the seller that you are "earnest" in your interest to purchase the property.

Q. What happens after I present my offer?

A. Once your offer has been presented, the seller has three options. They can accept the offer as it was, they could counter-offer with a price and terms that are more acceptable to them, or, if the offer is completely unacceptable, they can reject it.

Q. What happens to my deposit it my offer is accepted?

A. Once all parties have agreed to a price and terms and have signed the offer to purchase agreement, the deposit is placed in the listing properties escrow account, where it stays until the closing. The deposit is usually counted as part of your total down payment.

Q. What happens to my deposit if my offer is rejected?

A. If the Seller rejects your offer outright or if all parties cannot agree on price and terms, the deposit is returned to you

Q. What is a final walk-through?

A. A final walk-though is an opportunity to for the buyer to walk through the property and make sure everything is the way you agreed in the Purchase and Sale Agreement. Any work that was to be done before the closing should be completed at this point, and if the property is to be delivered vacant, any tenants should have moved out. If there is a problem and things are not as you agreed, then arrangements can usually be made at the closing to remedy the situation. The final walk through is usually done right before the closing.

What do I need to bring to the closing? You will need to obtain an insurance binder and bring it to the closing. Also be sure to have your driver's license or picture identification and the necessary funds to close. These funds are needed in the form of a certified check or cashier’s check made payable to the buyer. The check is then endorsed at the closing.

Q. What happens at the closing?

A. At the closing, the buyer will be required to sign a mortgage, and a number of other legal documents. The seller will sign a deed, and several tax documents. Once you've passed papers, the buyer will be given the keys, and then own the property.

Q. Is a termite inspection required?

A. For conventional loans, some lenders will require a termite inspection. All government loans require a pest inspection on any structure that is ground level or of total wood construction (including condos).

Cash buyers do not need a termite inspection, but it is recommended

Q. What is the Mortgage Good Faith Estimate?

A.The Good Faith Estimate (GFE) discloses estimated costs associated with your mortgage transaction. The GFE, by Federal law, estimates the lender's charges along with the local closing agent's charges and fees. The GFE also includes estimated amounts for real estate and property taxes and homeowner's insurance.

Q. Why is private mortgage insurance (PMI) required?

A.Private mortgage insurance (PMI) is an actual insurance policy that the lender takes out to protect them if the borrower defaults on the loan. This protects the lender and at the same time, enables buyers with minimal down payment the opportunity to purchase a home. PMI is usually required for loans that are greater than 80% of the property value. Once 20% or more of equity has been achieved in a home, you can apply to have the PMI removed from most loans.

Q. What is FHA?

A. FHA assists first-time buyers and others who might not be able to meet down payment requirements for conventional loans by providing mortgage insurance to private lenders. It also insures loans for home improvements and buying manufactured (mobile) homes. This is done through the Federal Housing Administration (FHA), a branch of HUD which works through local mortgage lending institutions to provide Federal mortgage and loan insurance for homeownership and the construction or improvement of affordable housing.

Q. What's so great about VA Mortgages?

A. No Money Down!! All you have to do is be able to carry the payments as with all mortgages. You can get VA loans for the entire appraised value of a property.

US Armed Forces veterans with a discharge "other than dishonorable," and one of the following:
180 days active duty between September 16, 1940 and September 7, 1980
90 days service during a war (Korean, Vietnam, and Gulf conflicts count)
Two years service after September 7, 1980.
Eligibility never expires. Once the first one is paid off, another one may be taken out

Q. How much house can I afford?

A. Since most prospective home buyers do not wish to set themselves up for financial ruin, it is important to determine how much house you can afford before getting too far into the house hunting process. The two most important questions to answer are:

How large a mortgage do I qualify for, and at what rate and terms?
How much do I feel comfortable spending each month?

Lenders determine the answer to the first question, while you must determine the answer to the second question.

Q. How do I find out how much my closing costs will be?

A. Once you've applied for your mortgage, your lender will provide you with a Good Faith Estimate of Closing Costs. This will give you a good idea of how much you'll be expected to pay at the closing. It will also explain the fees in writing so you know exactly where the money is going. The final numbers at the actual closing may be slightly higher or lower, but the original estimate is often pretty accurate.
families. KHC also operates through the receipt of fees for administering federal programs including rental assistance that makes safe, decent, affordable housing available to more than 20,000 low-income Kentuckians. Other programs additionally offered by KHC include rental housing production financing, homeownership education/counseling and a variety of rental assistance, housing rehabilitation and home repair initiatives

Q. What do I need to bring to the closing?

A. You will need to obtain an insurance binder and bring it to the closing. Also be sure to have your driver's license or picture identification and the necessary funds to close. These funds are needed in the form of a certified check or cashier’s check made payable to the buyer. The check is then endorsed at the closing.