When you take out a loan on real property you may have two options for how you want to pay your property taxes and hazard insurance.    You can either pay them in large sums twice yearly when they are due, or you can pay them monthly via impounds.

If you make the decision to pay your taxes and insurance monthly (most people do) then the lender collects them along with your monthly mortgage payment and pays them when they are due.  This is an especially good option for people who aren’t the best at saving money.  The lender does collect a very small fee for this service.

There is another important part to impounds you should know.  When you close a loan that has impounds you will at that time be required to “fund your impound account”.  This means that at closing in addition to coming up with your regular closing costs you will have to come up with any where from 2 to 9 months worth of impound payments up front.  The lender collects this money and puts into an account for you.  This is their way of making sure there will always be enough money in your account to pay your impounds.   This money required up front is not technically a lender fee since it will be used to pay your taxes.  Keep in mind this can be a substantial sum (thousands of dollars).  Exactly how much you need to come up with at closing will depend on a few things like, your county’s tax rate, the purchase price of your home,  and what month of the year you close escrow on your home.

Lastly you may have noticed in the first sentence of this post  I said you “may have two options for how you want to pay your property taxes and hazard insurance”.  The reason I used the word “may” is because in many scenarios you don’t have a choice.  For instance, as of today most lenders require that you have impounds on any purchase where you will have less than a 20% equity position.  This means that if you down payment is less than 20% of the purchase price the lender is going to require impounds.

It is also important to note that it may cost you a little extra to get a loan without impounds.   I will get into why this is in another post in the future.

Now that you know what impounds are you are well on your way to being an Intelligent Buyer! Feel free to ask if you have any more questions.

Andrew

Yes, we can!  We don’t mind doing this at all, but there are certain possible complications that may arise.

The first complication is usually not a big issue but is worth mentioning.  Some traditional real estate agents are worried about the fact that we are giving you a rebate.  You see if we give you a buyer’s rebate in escrow, it goes on the closing statement.  Some sellers agents worry that their buyer will see this and demand lower fees from from them.  In the two years that we have been in business, we have never run into a complication involving this, but that doesn’t mean it is not possible.

The second complication is the most serious.  Some lenders and some loan programs will not allow us to credit  you money in escrow.  Some lenders view your ability to come up with your own closing costs, as indicator of your ability to pay your mortgage on time.  I don’t agree with this line of thinking, but I don’t make the decisions.  Also, some loan programs limit the amount of money you can have credited by your agent in escrow.

The bottom line is that if you want to get your rebate credited in escrow, talk to your lender.  If it is O.K. with them, it is certainly O.K. with us.

Andrew

The good news is obviously that the increase in traffic also caused a significant increase in Intelligent Buyers requesting our services. The second part of the good news is that we upgraded to a new high end server that should keep us from having the same issue.

Thank you to our loyal visitors, and all of our Intelligent Buyers.  We look forward to improving our services over the next couple of months.

Andrew

When you use Intelligent Buyer’s real estate services, you are ahead of the game before you even get to the negotiating table.

So, if you use IntelligentBuyer.com to buy a $600,000 house:
You pay: $589,200
The seller receives: $600,000
Intelligent Buyer keeps: $7,200

If you use a traditional real estate agent:
You pay $600,000
The seller receives: $582,000
The traditional agent keeps: $18,000

The big difference is that a traditional agent representing you keeps a whopping $18,000 of your money.
Most homes sell for 99% to 101% of the asking price. If you offer $594,000 on a $600,000 home, the seller would receive $594,000. However, with your Intelligent Buyer rebate, you are starting your negotiations at $589,200 instead of the $600,000 asking price. This is because Intelligent Buyer gives you a rebate of up to 60% of the commission we receive. If the commission is 3% your rebate can be as much as 2% of the purchase price of your home. In addition, Intelligent Buyer’s experienced agents negotiate with the seller on your behalf to get you the best price possible on your new home.

This is a win, win, win situation.

You win because you get fantastic service and a real estate commission rebate.
The seller wins because they have sold their home.
We win because we earned your business.

First time home buyers, be prepared! Mortgage rates are very low and real estate prices are getting lower. This is an opportune time to purchase your first house or condo. A real estate crash can cause a lot pain to existing home owners, but it can be a benefit for a first time buyer.

A few years back, home prices flew into the stratosphere. This left many potential home buyers feeling like they had missed the bus. The good news is that the crash has brought a new bus. Of course by bus, I mean opportunity.

You see, the thing about real estate booms is that real estate prices go way up much higher than they should. They got so high in fact, that first time home buyers were priced out of the market. These high prices are the cause of the current real estate bust. Logic states that prices should fall back down to equilibrium right? I mean they should fall back to a point where first timers can afford to get into the market. That is not going to happen.

You see, the thing about real estate crashes is that for a period of time, home prices are lower than they should be. This buyer nirvana will offer chances to claim some great property at basement prices. That time is fast approaching. It has already arrived in some parts of the country. Keep your eyes open and be patient. Unlike during the boom, first time home buyers now have time on their side. Fear is so thick that real estate prices will not shoot up anytime in the near future.

Find a house you can afford, get a low mortgage rate, and use a real estate agent in your area that gives real estate rebates. Get the best of all worlds. It is a great time to be intelligent for first time home buyers!

The term “home buyer rebate” is being used a lot lately and it has a few possible meanings.

A home buyer rebate is what we offer here at IntelligentBuyer.com. It is when a real estate buyer’s agent shares his commission with his client. We at IntelligentBuyer.com offer the complete array of real estate services to help our clients buy their homes or investment properties. We then give up to 66% of the commission we receive as the real estate agent back to our clients, saving them thousands of dollars.

Some people use the term home buyer rebate when referring to the first time home buyer tax credit that the U.S. government is offering as part of its economic recovery package. This is a tax credit of up to $8,000 for first time buyers who purchase their home before December 1st 2009.

So, if you were to use our real estate services to buy a home before December 2009, you could receive both rebates. For instance, if you are a first time home buyer who buys a $500,000 home and gets a 50% home buyer rebate on 3% commission, you will receive a $7,500 check from IntelligentBuyer.com and an $8,000 tax credit from the U.S. government. This equals a total of $15,500 that you can save. If you add a 4.5% mortgage rate to this equation, you have a pretty good reason to consider buying your first house in 2009.