Dale Cosack

Bucks Condo King

10 Questions You Must Ask When Buying Your Home In Bucks County

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1.  How can I be sure I'm getting the best price on the condo or townhome I want? 

When you find a condo or townhome you are interested in I will review all of the recent sales in the neighborhood with you and break down the difference in upgrades so you will see where the home you are interested in stands in comparison to the rest of the neighborhood.  I will also provide you with comprehensive market statistics for the neighborhood and surrounding community.

 

2.  How much can I really afford?

It is important to find out how much a mortgage lender will be willing to give you to purchase your new home before you waste your time looking at homes outside of your comfort zone.  Nothing is more disheartening than falling in love with a place only to find out you can't afford it.  I understand that speaking with mortgage companies & banks can be daunting and you don't want to have to commit to anyone on the first day.  You're really just looking to see what a company would be willing to lend you towards your new home.  Over the years, I have worked with some great lenders all of whom do NOT require any commitment from you in order to get a pre-approval.  A pre-approval can be obtained over the phone in about 15 minutes and will let you know what type of mortgage you could receive based on your specific scenario.  After you have your pre-approval we will sit down to make sure it fits in your budget.  Just because a bank will lend you the money does not mean it's the right amount for you to borrow.  Maybe you have student loans to pay off, maybe you want to invest some of your money elsewhere, or maybe you just want to be able to go on vacation, or out to eat now and then. All of these things should be considered so we'll review the true costs to purchase your new home and make sure it fits into your budget.

 

3.  What are the total costs when purchasing a condo or townhome in Bucks County?

Before we head out together to look at the condos and townhomes that appeal to you we will sit down and review the total funds needed to purchase your new home.  Often times, when I first meet with clients they have been online and run their numbers on a mortgage calculator and then they start looking at homes on Realtor.com.  The problem with these mortgage calculators is they are usually created by a mortgage company so they usually assume the best scenario rather than your specific scenario, and they don't include all of the costs you will incur such as your home inspection which can run from approximately $350 - $650, the transfer tax which is 1% of the sales price in Bucks County, as well as the lenders fees and more.  They also don't consider all of your monthly costs i.e. taxes, insurance, association fees, etc.  When we review the costs of buying your new home we will take all of these factors into consideration so you won't be surprised along the way and find out the homes you've been looking at are out of your comfort zone.  It is important to plan your budget and stick to it.

 

4.  When do I have to make payments when purchasing a condo or townhome?

A. When making an offer on a home it is customary to offer $1,000 of good faith money with the agreement.  This check is not cashed until the offer is accepted, but then it will be held as a deposit towards your settlement costs. 

Once your offer is accepted the timeline begins.

B. Typically, your home inspection is due within 10 - 15 days, but I have had them done in 7 days before.  The upfront non-refundable cost for your home inspection is approximately $350 - $650 depending on which inspections you have done and the size of the home.

C. Your mortgage application is due within 10 days and the upfront non-refundable cost is usually around $500 which goes towards the banks formal appraisal.  The average time it takes to acquire funding is 45 - 60 days.

D. Typically, your second deposit (good faith money) is due within 15 days and this is customarily between $4,000 - $9,000 in Bucks County, but could be a bit more, or a bit less depending on the price of the home.

E. About a week, or two before closing you will want to have your homeowners insurance in place.  The mortgage company will require this before issuing your loan.  You will have to pay for a full years of coverage upfront and then your mortgage company will escrow your insurance payment monthly so next year when the time comes to pay your insurance bill the mortgage company can do so from the money they have already escrowed.  Most insurance companies will allow you to pay for the insurance policy at settlement as part of your closing costs so you might not have to pay for it a week, or two before closing but it's best to be ready to do so just in case.

F. At settlement you will be required to pay the remainder of your total funds needed to purchase.  You will receive a settlement statement about a week before closing with the total amount you need to bring to settlement in certified check form made out to the Title Co.  Before we even make an offer we will review your total funds needed to purchase so you'll already have a good idea of what the remaining balance is after your good faith money is taken into account and some of the other costs have been paid for.

 

5.  What are the association fees and what do they cover?

Each association is different and what the fee covers is different from neighborhood to neighborhood.  Some cover snow removal, trash removal, road and sidewalk repair, and others also include a swim club fee, tennis courts, basketball courts, exterior maintenance on your home, and a few even cover utilities, although not many.  I will research what each association fee covers before we make an offer.  When buying a condo, or townhome in Bucks County you receive all of the rules and regulations about 2 - 3 weeks after your offer is accepted.  Then, you have 5 days to review all of the rules and regulations to make sure you can live with them before moving forward with the purchase.  However, at this time you have already spent money on a home inspection, your mortgage application, and possibly the appraisal so it's best to get a good idea before making the offer before you spend your valuable time and money.  I will reach out to the associations to find the answers to the questions you have.

 

6. What are the real estate taxes?

Even in our area taxes can vary a good bit and all of this affects your bottom line and monthly payment.  However, you can't just compare the property taxes because there are some others to take into consideration as well such as the school taxes.  In the Council Rock School District residents are charged a 1% earned income tax, but in Pennsbury they aren't so you have to look at all of these factors when comparing the costs of one condo or townhome to another.

 

7.  Is the condo, or homeowner association stable?

This is an important question to ask and the sellers and association won't release this information until you are already under contract.  One way to check is to see if the Federal Housing Agency (FHA) who issues approximately 30% of all loans today has the neighborhood on their loan program list.  If you are using an FHA Loan I will make sure the neighborhoods you are interested in are FHA approved.  The 3 questions the FHA asks are:

How many homeowners are more than 30 days behind on their payments? The FHA requires that no more than 15% of homeowners fall into this category. 

 

How many units are rented? FHA requires less than 50% rentals, because the higher amount of rentals, the riskier it is that there will be defaults.

How much money is in the reserve? This is important because the higher the reserves the better able an association can deal when some homeowners fall behind, and the less often you will receive special assessments when work needs to be done. 

I will do the research for you and find out if the association is acceptable to the FHA which is a good sign of the associations strength. 

 

8. Do they allow pets?

This is an important question as some associations have weight limits, number of dogs or cats limits.  Even if you don't have a pet does someone who visits you often bring along a pet.  I'll reach out to the association to find out these answers. 

 

9. What's the difference between buying a Short sale, Foreclosure and REO (Bank Owned Property)?

A Short Sale is where the seller is negotiating with the bank to accept less than the bank is owed.  To give an example the seller purchased the home with a $200,000 loan a few years ago, and now due to their circumstances can no longer afford to make the payments.  Over those few years the condo has dropped in value to $190,000.  To sell the home will cost approximately 7% so the net would be $176,700.  So, the seller is trying to negotiate with the bank to accept less than they are owed rather than pursuing foreclosure.  The reason the banks are willing to accept these deals is because it saves them time and money having to repossess the home and then hire an agent to sell it all while no one is looking after the home and keeping it in good repair.  There are some great deals out there like this, but they require more patience and flexibility than a straightforward transaction so they are not for everybody.  Banks typically take 30 - 45 days to respond to your offer, and often times the home is being sold as-is so even though you are getting a good deal you may need more money in your reserves to fix things you usually would have asked the seller to do.

A Foreclosure is a home that is going to sheriff sale.  There are some great foreclosure deals out there, but of course the greater the reward the greater the risk. First of all the homes are not available for tours so it is difficult to know the condition of the property before purchasing it. Since, the homes being auctioned at the sheriff sale have not been repossessed by the bank yet, often times the owners have not been evicted.  You are actually at the hearing to determine what will happen with that property.  About 75% or more of the time the foreclosure is stayed, or adjourned meaning it is put on hold and no decision is rendered, it is off the list, or it is purchased by the bank.  The ones that do go up for auction are bid on right there and then.  In Bucks County you must put up 10% of the bid price right then and there in certified check  or cash and the remainder is due within 10 days, and there are no extensions.  This means there is not enough time to get a mortgage on a foreclosure so you must be able to pay cash.  other things to be aware of when purchasing a foreclosure is you are buying it with all liens attached.  This means that there could be a second mortgage that you will acquire, or there could be mechanics liens against the home which you will be responsible for. So, it is important to run a title search on any home you are thinking about making a bid on.  These typically run about $275.

 

A Bank Owned, or REO property is sold through our MLS and is a home that has already been foreclosed on and the owners have been evicted.  Out of these three types of sales this is probably the safest.  The reasons why are because it is available for showings so you can see what the condition is like, and because the bank usually signs off within a week of submitting your offer so you are not waiting for a month, or more like you would with a short sale. 

 

 

10. How am I going to wade through the home buying process?

Purchasing your new condo, or townhome will most likely be the biggest investment you have ever made and it's important to have a good game plan and the right Realtor to help you get from A - Z.  I have helped many buyers and sellers over the years and pride myself on customer satisfaction.  To learn more about me checkout my

Client's Testimonials

 

Finally:  Is there a condo, or townhome out there for me?

Click  on the  Neighborhoods Tab to read about our local Bucks County Communities in the Council Rock & Pennsbury School Districts.  On each neighborhoods page you'll learn about the community, the association, it's location and you can also see what homes are currently for sale.  If you're not sure which community you are interested in you can use the search at the bottom of this page to see what is available in the town of your choice.