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Mortgage News Matters

Pros and Cons of Holding an Open House

home for sale with open house sign out front

What is an Open House?

An open house is a scheduled time set for potential buyers to walk through a property that is for sale. Typically hosted by a broker, the owners or renters of the property are absent from the viewing and many potential buyers are welcome to tour the space.

How Does it Work?

Typically scheduled during weekends, brokers welcome potential buyers to leisurely view the property and ask questions, they would otherwise not have the opportunity to do so without a broker present. It is customary for brokers to provide drinks and small plates for those who attend, and many provide collateral that buyers can take with them and refer to with information on the home, such as square footage, number of rooms, and information on the surrounding neighborhood.

The goal of an open house is to secure interest from buyers by providing a rare opportunity to take their time looking at a property closely, before placing an offer.

Advantages of Holding an Open House:

  1. Provides an opportunity to attract potential buyers. When an open house is planned correctly and properly marketed, it can provide a great opportunity to attract potential buyers, and possibly even lead to an offer. Many realtors suggest sellers hold an open house the first weekend that the property goes on the market – to generate the most buzz.

    Open houses can also bring in potential clients who may not have even planned for such an event but happened to be driving by. It’s a great way to appeal to potential buyers in a more casual way and low-pressure scenario.

  2. Provides feedback to realtors from visitors. Another benefit of holding an open house is for the potential for realtors to gain real feedback from visitors – both positive and negative.

    Many realtors find that potential buyers often share their feedback out loud as they walk through the home. This can give realtors crucial insight into buyers’ perceptions and any issues that could keep the owners from making the sale.

  3. Can lead to an immediate offer. If done properly, and by generating enough buzz, an open house can sometimes lead to an immediate offer. When potential buyers are browsing a home with many others also looking to buy, they can get a good sense of their competition. If competition is high, this may encourage them to make an offer much quicker than they ordinarily would otherwise.

    This is beneficial to sellers and buyers alike, as it gives the buyers a realistic idea of how many others like them are also looking to buy in their desired neighborhood.

  4. Allows sellers to cast a wide net. Showing a home to multiple buyers, rather than one at a time only widens the reach of potential buyers for the seller. It is also much more efficient to spend the same amount of time showing a home to a group of people, rather than an individual.

    This, in addition to potential feedback from viewers and an understanding of competition in the market, are huge benefits to holding an open house.

So now that we’ve covered its advantages, what are some of the disadvantages to holding an open house?

Disadvantages of Holding an Open House:

  1. Requires much effort – sometimes more than it’s worth. Planning and executing an open house is not an easy task. In addition to coordinating a time that works best for the owners to be out of the house for an extended period, making accommodations for pets or children, and removing all personal items throughout the home, putting on an open house requires money and time spent on marketing to bring viewers in. And if no offer is made – it can feel like a huge waste.

    That’s why it is important to take the time to properly plan, market, and organize for your open house, if you decide to hold one.

  2. Compared to online listings, an open house requires more time to reach potential buyers. Nowadays, most homes for sale are listed online before they even schedule an open house. And most buyers go online and browse properties from the comfort of their own home.

    Buyers can find almost all the same information online as they would at an open house, like the condition of the home, its details, and even view photos of the property from every angle. This alone, can make open houses seem unnecessary and even antiquated.

  3. Owners are typically required to leave their home for a designated amount of time. Typically, when holding an open house, the homeowners are asked to leave their home and take with them any personalized photos or memorable that can be found throughout the home.

    This can be tedious and difficult to plan for with the daily bustle of normal life. Some would rather avoid having to deal with this added stress and simply list their home online.

  4. Can open the home up to potential theft. Though there are benefits to opening your home for sale to many individuals – with hopes that with increased awareness, comes increased offers – doing so can open you up to potential theft. Open houses can give opportunities for criminals to explore a property and plan a break-in.

    If you are considering hosting an open house, make sure to hide any valuables, or take with you anything that you would not want to get stolen or damaged.
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Mortgage News Matters

What are the Pros and Cons of HOA?

homeowners association document

What is an HOA?

A HOA, or Homeowner Association, is an organization that oversees or manages a private community or subdivision. Run by a board of directors, made up of its community members, a HOA enforces rules and guidelines to be followed within the community, as well as provides upkeep and maintenance of facilities.

Where can you find a HOA?

A Homeowner Association is typically found within communities of single-family homes or multiple unit buildings, like condominiums.

Run by an elected group of individuals within the community, membership is usually mandatory for anyone who chooses to buy a home with an established HOA.

What are the Pros of HOA?

  1. Structure through a set of community rules and regulations. A HOA provides a set of rules and regulations that all community members must follow. This offers a sense of structure and stability for all members and protects and enhances the community’s property values.

    Many of the guidelines are aimed at preserving the home’s exterior, and are focused on the cleanliness of the property, the property’s condition, and any repairs or upkeep that need to be done. Typically, HOA guidelines are aimed at maintaining a uniform appearance for all properties within the community.

  2. Provides access to exclusive services, amenities, and facilities. Like many communities made up of single-family homes or multiple unit buildings, HOA communities offer access to exclusive services, amenities, and facilities.

    These amenities often include landscaping, parking lots, swimming pools, common areas, workout facilities, tennis courts, and party spaces. Some HOA will also cover the cost for snow removal and trash collection for its residents. In addition to offering such services, the fees that community members pay to their HOA covers the costs to maintain each area.

  3. Mediates problems between neighbors. If there is a disagreement or problem between neighbors living in communities with HOA, they can often look to the board to help resolve such issues. This can be anything from a neighbor who is violating a specific rule or regulation, or an issue with a service or amenity on the property.

    Acting as a mediator between community members, a HOA can ease tension and provide a more peaceful, regulated environment.

  4. Opportunity for self-governance of community. Many individuals who live in a community governed by a HOA enjoy the freedom of being a part of a democracy, made up of individuals who live within the community.

    By following rules and regulations set by fellow community members, rather than an outside landlord who may not live on the premises, offers a sense of self-governance and equality.

What are the Cons of HOA?

  1. Often include fees, dues, and assessments. With access to exclusive services and amenities, like workout spaces, swimming pools, and common areas, comes HOA fees that pay for maintenance of each. These monthly fees also go towards upkeep to the exterior of the homes within the community and can be as little at $100 per month and as much as several hundred dollars.

    Because these fees are a requirment for living within said community, they can deter many from moving in. It is important to also keep in mind that these fees can fluctuate and often increase year-over-year. If the fees do not cover the cost to make such needed repairs, they will need to be raised.

  2. Imposes rules and regulations. Though community rules and regulations may provide structure and stability for its members, they can often feel restrictive and unnecessary. Many HOA rules have to do with the outside appearance of the home and often dictate things like the color one can paint their home, as well as which type of windows and doors they can buy.

    HOA even have the authority to decide what type of decorations or landscaping one can maintain and how many vehicles they can have on their property. If these rules are violated, they often result in a fine.

  3. Repercussions for those who default on payments. In addition to fines for violating rules and regulations set by the HOA board, individuals will be faced with addition repercussions if they fail to pay their fees. Dues will be accrued until the individual pays and in some states, not paying these fees can put individuals at risk for foreclosure.

    Keep in mind that these fees go towards the maintenance of shared amenities and property values. Which means that if sufficient funds are not collected, the community will risk losing vital services that keep the community running properly.

  4. May be run ineptly. Because members of a HOA board are volunteers or elected individuals within the community, the association can, at times, be run ineptly.

    These members may not be experienced enough to run a community and often do not receive proper real estate training. This can often lead to more problems for community members and between those on the board itself.
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Mortgage News Matters

What Does a Title Company Do?

A Title Company is responsible for verifying that the title to a property is legitimate and that the seller has the rights to sell said property to a buyer. They do this by making sure that there are no barriers to purchase like liens, prior mortgages, fraudulent transfers, unknown heirs, and more.

Once verified, the Title Company will provide title insurance, that protects the lender if title issues surface, and potentially the buyer – depending on which policy they choose.

In order to issue Title Insurance, a Title Company must…

  1. Perform a Title Search.

    Typically, the first thing a title company will do, a title search checks to see if there are other people who have ownership or rights to the property. It can also reveal outstanding mortgages, any other existing liens, unpaid Homeowners Association dues, judgments or unpaid tax liens, restrictions, easements, and leases.

    In any of these instances, these fees – or restrictions – must be paid off or dealt with before both the seller and buyer can move forward.

  2. Conduct a Property Survey.

    Sometimes, a property survey, or drawing of the property, is required. This will reveal any potential infringements on the property or the land the property occupies, such as a neighbor’s addition having been built in your property. A property survey will verify that the home is set within its boundaries.

    A property infringement could become an issue if there is physical damage caused as a result. If this is the case, the title company will have to take this into consideration when choosing an insurance policy.

  3. Prepare Abstract of Title & Title Opinion.

    An Abstract of Title is a document that shows the history of ownership of a property. This includes when the property was previously sold, and any history of inheritance, court litigation, and tax sales.

    Once the Title Company has the prepared Abstract of Title, they write an official Title Opinion. This document states the seller is the valid owner of the property and they are willing to insure the title for purchase or refinance.

What is Title Insurance?

This is a type of insurance that protects lenders and homeowners from any financial loss, in the case that another party makes a claim to the property title. There are two types of title insurance policies that homeowners can get. These are 1) Lender’s Title Insurance and 2) Owner’s Title Policy.

Types of Title Insurance

  1. Lender’s Title Insurance. Lender’s Title Insurance is required for anyone who is getting a mortgage license. This type of insurance protects the mortgage lender if there is an issue with the property’s title. It is typically paid for by the buyer, and in some cases, the seller will pay. The most important thing to understand about Lender’s Title Insurance, is that it does not protect any existing equity on the home, and for that, the buyer will need to consider a Owner’s Title Policy.

  2. Owner’s Title Policy. An Owner’s Title Policy is an optional insurance policy for buyers who are looking to protect the equity in their home. With this type of insurance, a buyer is protected in the case that another party shows proof of ownership to the title, and whoever transferred the property wasn’t authorized to do so. In this case, the buyer will still have to vacate the home, but they would be given money to buy a new property of equal or lesser value. Without this type of insurance, the buyer would have to leave the home and would not be compensated for any equity built into the home.

When should you consider getting Owner’s Title Insurance?

All homebuyers who purchase a home through a mortgage lender will be required to purchase a Lender’s Title Policy. However, it is their choice whether they want to obtain an Owner’s Title Policy. To help decide if an Owner’s Title Policy is right for you, ask yourself the following questions:

  1. Has the home had multiple owners? If the property has a history of many owners, there is more chance that a separate party could come forward with a claim on the title. Owner’s Title Insurance would protect the buyer for such claims.


  2. Would you be able to afford the legal fees to dispute any potential claims? Even if it is not legitimate, the buyer will still be responsible for the legal fees to dispute the claim to the title. With an Owner’s Title Insurance Policy, the title company is responsible for providing the defense for the buyer.


  3. How much is your peace of mind worth? By obtaining insurance, a buyer has a certain level of protection in the case that someone makes a claim on the title. It protects their investment on the home and pays for any legal fees that may be necessary.
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Mortgage News Matters

What’s the Difference Between Refinancing & Home Equity Loan?

house made of dollar bills

One of the major benefits of owning your own home is that it can often be a major financial investment. In the long-term, real estate tends to increase in value over time due to the appreciation of the land it sits on and by building equity.

To determine the value of your property, let’s take a closer look at appreciation, how to build equity, and different ways to obtain a mortgage loan refinance.

What is Appreciation?

Appreciation represents the change in the value of your home over time. This change is typically due to the piece of land that the home sits on, rather than the structure itself which tends to lessen in value, due to typical wear and tear.

What is Equity?

A home’s equity represents the difference between the current market price of the home and the amount that is still owed on the mortgage. Equity grows as you pay down your mortgage. It is important to note that building equity takes time, as it takes a while to lower the principal balance owed on the mortgage loan.

Both appreciation and equity grow over time. This means the longer you own your home, the more valuable it becomes.

With this, homeowners who take out a mortgage to pay for their home can choose to access cash to cover events like unplanned emergencies, necessary repairs, and important updates by choosing to refinance their current mortgage loan.

Why would you want to Refinance?

The main reason homeowners choose to refinance is to lower the overall cost of their mortgage or obtain equity that has been built over time.

Borrowers can lower the overall cost of the mortgage loan by refinancing during a period of lower interest rates. Or, they can choose to access the equity they’ve built in their home get cash out to pay for upgrades, remodels, or other life expenses.

What types of Mortgage Loan Refinances are there?

The two most common forms of mortgage loan refinancing are rate-and-term refinancing, which is when a borrower exchanges their current loan for a new one, or by accessing equity in their home, which can be done by obtaining a cash-out refinance or home equity loan. Though these are the most popular forms of refinancing, there are many methods out there and it is important to understand each to assure that you are selecting the right one for your unique situation.

What is a rate-and-term refinance?

A rate-and-term refinance is when a borrower replaces their current mortgage with a new one, typically with a better interest rate. No money is exchanged in this type of refinancing, other than any costs associated with closing or funds from the new loan to pay off the existing one.

What is the difference between a cash-out refinance and a home equity loan?

A cash-out refinance pays the homeowner a portion of their home’s equity in cash. This method results in a new mortgage loan for the homeowner at a larger amount than was owed on the previous loan, giving owners cash in hand. Compared to a rate-and-term refinance, a cash-out refinance will typically result in borrowers paying a higher interest rate or more points.

A home equity loan gives homeowner’s cash in exchange for the equity they’ve built up in their property as a separate loan. They typically carry a lower interest rate than personal loans because, when you get

Home equity loans are often structured as lines of credit with variable interest rates and payments which make them less predictable. Borrowers should consider obtaining a copy of their credit report before going through the process of applying for either loan, to be sure it is the right decision for them.

What are the benefits of refinancing?

Refinancing can be beneficial to homeowners in many ways. Whether you are looking to lower your mortgage payments or access equity in your home to pay for necessary upgrades, a child’s education, or collect some extra cash for the upcoming holiday season, a refinance can help you access cash quickly.

Visit our blog post on the Top 5 Reasons to Refinance here.

To learn more about the different methods of mortgage loan refinancing and to determine which one is right for you, contact a VanDyk Loan Originator today!