Want a smooth loan application and approval? Read on . . .

Be thorough and up front.  Have all of your financial information, assets and liabilities, documented with account numbers and balances.  Checking account, savings accounts, certificates of deposit amount and maturity dates, IRA/ SEP, 401K, brokerage accounts, etc. will be verified.  Be prepared to explain large deposits within the past few months. Was that money borrowed or a gift? If it was, say so. Are you borrowing from your retirement account?

When it comes to recurring debt, this is where most applicants miss the mark.  You MUST disclose all your debts.  Do you have a second home that you will be renting out? Have you co-signed on a loan of ANY KIND?  Do you have student loan obligations?

You will need to provide a current pay stub, w-2 and tax returns for the past couple of years. If you are self-employed, you will include your Schedule C (P&L).  As an employee, do you have reimbursed expenses?

You will need all of the above – and perhaps more. Keep your documentation on hand because everything will be verified again just before closing.  Lastly, and most importantly, do no incur any new debt.  Wait until title transfer before making any major purchases.

"Sales volume could probably be an additional 10 to 15 percent higher . . ." Jed Smith, NAR

Are low appraisals holding back prices and slowing the recovery? Some people think so --

http://realtormag.realtor.org/daily-news/2012/10/16/appraisals-remain-big-hurdle-agents-say

Is buying a bank owned home difficult?

The process of buying a bank owned (REO, Real Estate Owned) property is pretty straight-forward.  The properties are listed with a brokerage firm and appear in the multiple listing. Your buyer agent can show the property and negotiate the purchase for you as they would in a traditional transaction. You must have a mortgage pre-approval letter or proof of cash.

Caveat emptor (buyer beware) applies to any real estate purchase, especially so with an REO.  Since the property is exempt from OH Property Disclosure documentation, you must be diligent with thorough private inspections.  Some homes have been vacant for a long time and with no heat. You also need to investigate water, sewer and utility payments, any pending special assessments, zoning and use restrictions, point-of-sale inspection repairs, occupancy permits, etc.

The bank wants to remove the home from its inventory, but is not going to give the house away.  They have investors and shareholders they must answer to and are obligated to get the best price possible. Expect to negotiate. You may be in a multiple offer situation, as asset managers often hold out for the best deal. 

Avoid Home Equity & Refinancing Scams

Here is a great post from my association, the Cleveland Area Board of REALTORS:
http://www.cabor.com/2012/08/30/avoid-home-equity-refinancing-scams/

What are you asking me to sign? I just want to see the house.

Most likely the agent is asking you to acknowledge receipt of their Company Policy regarding agency.

If you are a prospective buyer or renter, OH License Law requires that the agent inform you who it is they represent with regard to that particular property and any future properties they my show you. This is done before the property is shown.  The agent is required to give you a copy of the company policy as outlined in their “Consumer Guide to Agency Relationships.”  It details Buyer Agency, Seller Agency, Disclosed Dual Agency and Fair Housing.  Once the agent explains the information contained in the brochure, you will be asked to sign, acknowledging receipt of the Guide. This in no way obligates you to work exclusively with this showing agent or their company when viewing other homes.

The only exception to receiving the Guide beforehand is if you are attending an open house.  In that case, the agent will provide you that information if you show a sincere interest in purchasing the property. However, you should always feel free to ask an Open House agent whom it is they are representing.

What is "stigmatized" property?

When referring to residential real estate, a stigmatized property can best be described as a property with a notorious background.  Something profoundly negative or grave has occurred in the home sometime in the past, thus it carries a “stigma.” When this is the situation, it becomes a disclosure.  While it is “caveat emptor” – buyer beware – when purchasing a home, many court decisions have ruled on the side of the buyer’s right to know when there has been a grey area.

Examples of a stigmatized property would be a home where a murder or tragic incident has taken place, such as a family succumbed to carbon monoxide. It may also include properties that were homes of infamous people, criminals or debtors. Then there are those homes that have had paranormal activity.  Yes, there are people who are drawn to such homes and want to own them, but the majority of buyers do not.

3.8% Tax on Real Estate Sales

Rumors regarding a 3.8% tax on real estate transactions have been flying ever since the health care act was passed.  Here is a summary from the National Association of REALTORS (via CABOR) that attempts to shed some light on the topic.
http://www.cabor.com/2012/08/13/top-10-things-you-need-to-know-about-the-3-8-tax/