Amanda Spears, REALTOR®

Escrow plays a crucial role in real estate, serving as a financial safeguard for buyers throughout both the buying process and the life of the loan.This guide can help enhance your understanding of its basic functions to ensure a smooth purchase and successful homeownership.What is escrow?This is a financial arrangement in which a neutral third party, called an escrow agent, holds funds and assets on behalf of a buyer or homeowner until all contractual obligations are fulfilled. What is homebuyer escrow?Once a buyer and seller have mutually agreed on and signed a sales contract and a good faith deposit has been provided by the buyer, a third-party representative, such as your real estate agents brokerage or a title company assumes the responsibility of holding these funds in escrow. These funds are securely safeguarded until all the specified contract conditions are met. The money is then released at closing and applied toward the buyers down payment. What is homeowner escrow?Following the completion of closing, lenders typically mandate the establishment of an escrow account as a means to protect their interests over the duration of the loan. This arrangement serves to guarantee the timely payment of property taxes, homeowners insurance premiums, and mortgage insurance premiums (a requirement if your down payment is less than 20 percent). Your lender or mortgage servicer will collect a portion of these expenses from you every month to fund your account. This is also useful if you have a large tax bill or insurance premiums because it can help spread out these costs over the year. What is a mortgage servicer?Your mortgage servicer, or originating lender, will manage your escrow account once you take ownership of your new home. One aspect of this is the conduction of an annual review of your account to ensure that there are sufficient funds in it to cover your taxes and insurance premiums for the upcoming year and prevent an escrow shortage. Theyll then furnish you with an escrow statement, which provides an ongoing snapshot of your account. It will include your current escrow balancethe amount currently reserved in your account for upcoming taxes and insurance paymentsand your principal balance, and how much you owe on the remainder of your mortgage. Are there fees associated with having an escrow account?There are two types of fees you can expect. The first is paid during the homebuying process and is part of your closing costs. These fees cover items such as the recording of the deed and the secure transfer of your funds at closing. The second type is for your mortgage servicer to manage your account. These costs can vary depending on the escrow company and your location, so be sure to discuss them with your lender in advance of purchasing your home. Is my escrow money refundable if the deal falls through?The answer hinges on the specifics outlined in the purchase agreement. For instance, if there is an inspection contingency in the contract and an issue emerges during the home inspection, youll be able to get your earnest money back in full if you and the seller cant reach an agreement on how to proceed. Likewise, a contingency related to securing financing or obtaining a satisfactory home appraisal gives you the right to terminate the contract and regain your funds should there be any problem with either one. Nevertheless, its important to note that even contingencies come with specific time limits. And if the purchase agreement lacks contingencies and you decide to back out of the purchase, your earnest money will not be refunded. To ensure you fully understand what escrow entails, speak to Amanda Spears, REALTOR and lender to understand the advantages and what you can anticipate as both a buyer and future homeowner.  Want to learn more or looking for a retirement investment or home, call Amanda Spears, REALTOR who is a Baldwin County Certified Specialist at 251-752-3747

Questions To Ask Before Hiring A Contractor For Your Home Improvement ProjectHiring a qualified and trustworthy contractor is one of the most crucial elements of a successful home remodeling project. But finding one isn't easy. Sure, you can ask for recommendations from friends and neighbors, even check online for reviews, but once youve put together a list of companies, where do you go from there? Your home is your haven and one of your biggest investments, so you want to ensure the quality and timeliness of the work. To make a sound decision on which company is the best fit for your project, here are some key questions you can use as a guide during the interview process.1. How long have you been in this business/industry?You'd want to get a sense of how much experience the company as a whole has with the work that needs to be done. A contracting business that has been in operation in the area for five or 10 years already has a local reputation to uphold and is more likely to have an established network of subcontractors and suppliers, which makes them a safer bet. They typically have a traceable record, and have created systems and controls to ensure their work is on time and of the highest quality. But you dont want to immediately shrug off a new company either, if the company owner or job foreman has years of experience working in the industry, either for other companies or as independent contractors. If youre impressed with their credentials, you can start by hiring them first for a small repair to check their quality of work. Just remember to do your research ahead of time and verify the credentials of any contractor youre considering hiring for the job.2. Are you licensed and insured?Aside from knowing their years of experience in the industry, you'll want to make sure that your contractor has gone through all of the necessary certifications to handle the job. And having a business license alone isnt enough, as it only allows them to operate a business, but it doesnt guarantee that they are licensed.A reputable contractor should have any required state license, workers compensation insurance, and liability insurance for the type of work they do. Moreso, they should have that documentation on hand and be more than willing to let you take a look. Regulations may vary from state to state and even county to county, so this is a good question to ask to learn more about the contractor and your states specific requirements. Doing so will give you peace of mind knowing that they are licensed and certified in their field of expertise.3. Who is the designated point of contact and how would you like me to get in touch?Whether it's the company owner, a project manager, or the job foreman, be sure that you identify a designated point of contact, as well as the best way to reach that person. Ask what times hell be available to respond to you, and how quickly you should expect a reply. Remember that communication is necessary for a positive and less stressful remodeling experience, so establishing a defined process with the contractors team is critical.4. Will you obtain the necessary permits and set up the required inspections for the job?While not every home improvement project requires permits or inspections, it's a must for large jobs, such as major renovations and anything that involves structural changes. A dependable contractor should not only know what kind of permits you need for the job and how to get them, but they should also be willing to arrange them on your behalf. No work should begin until the permit has been obtained to ensure everything is done to code and your homeowner's insurance can cover your claim if something goes wrong.5. Who exactly will be doing the work?Since contracting companies often work on multiple projects at a time, it's important to know if they have the workforce to complete the job on time. You should be clear on whether the contractor and their employees will be doing the work or if theyll be using subcontractors to carry out the project. If theyre using services from another company, you need to know which business theyve partnered with and who is liable for the work being done, and if the workers are also covered by their liability and workers compensation insurance.Also, clarify whether you can expect to see the same people working on your house to handle the job from start to finish. Its essential that you can be assured about the consistency of the work, and that you can trust the people you will be working with at all stages of the process.6. What precautions will you take to protect my property?While this may be a touchy topic, asking in advance is necessary. Your contractor should be willing to take reasonable measures to keep your property and belongings damage-free. Depending on the scope of work, be sure to inquire about what specifically he'll do. Are the workers going to wear shoe coverings when they enter the home? Will they use tarps to cover furniture items and surfaces in work areas? They should also be able to recommend certain items that need to be moved to other areas of the house to avoid damage. Moreover, a good contractor will make sure that the end-of-day and end-of-project clean-up is always taken care of. 7. What will be the payment terms and schedule?Another important detail to discuss with your prospective contractor is the payment terms. You should be aware beforehand of exactly how much is due and when. Payments can be organized by due dates or based on completed stages of the project. Be honest and ask what happens if you are late or need more time to make a payment, as well as the available payment methods.One thing you need to remember is that a reliable contractor should never ask you to completely pay upfront. Cash payments are impossible to track and are often requested only by questionable contractors. Safer options include checks, loan financing, and credit cards.This article was submitted by Amanda Spears, REALTOR.  Amanda is among the top performing agents with Bellator Real Estate & Development and is your Coastal Alabama real estate resource!  Contact Amanda at 251-752-3747 or amanda@alabamagulfcoastlife.com