Prospective buyers have an edge in a down market but that does not always mean they will make money on the properties they buy or will find the best deal available. In a buyer’s market, buyers will have the advantage but homework needs to be done before you make that all important purchase. Today there are so many places to look that it can be confusing. Prospective buyers need to know where they can get the best information which often times is the internet. Internet searches can provide you with a lot of information but to really know the area in which you want to purchase you will want to contact a local Realtor. Not just any Realtor, but a seasoned professional who has seen the ups and downs for the market area. They can provide you some insight about the market and all the factors that may affect your purchase decision. Tips on buying come from many sources so do your research and heed the advice of the professionals.
Now that you have done your research and found that seasoned professional listen to what they have to offer. The information they provide can make all the difference in the world between success and failure. They will most likely be the first to tell you to get your financing secured since they know the best deals go fast and you will need to act quickly with a strong contract. They can find motivated sellers and will negotiate the best price with only your interests in mind. They can provide comparative market analysis which will tell you as the buyer what the true value of the property in which you are interested as well as many other bits of information critical to your decision.
Many buyers enter the market when sales are slow and there is a glut of homes. Many times buyers will want to jump into the market and there is nothing wrong with that but you may need to show some restraint. Since most buyers are buying for themselves there can be a great deal of emotion involved. Sometimes knowing just when to jump in to the real estate market can save you thousands of dollars and make you feel really good about yourself for making not only a sound business decision but finding that home you desire. Do your research and find that trustworthy real estate professional.
This is the last in a series of blogs regarding the purchase of real estate and is taken from the investor’s perspective. Investors are a whole different breed of real estate purchaser, motivated solely by the potential income that may be realized. Investors ask themselves two major questions. Is now the right time to buy, and will the property generate income now or sometime in the near future? This is what drives investors to enter the market and make their move, but before they do that they perform a lot of research and look at the many factors that will influence their decision to invest and at what prices.
- Are values going up or down?
- Are interest rates at a level that will make the payments affordable?
- Will my expenses continue to increase and can I increase rates to cover those expenses?
- What is the condition of the property and can I afford to make improvements initially?
- Does the area support increased rates or will they stagnate?
- Do I intend to sell the property relatively quickly or am I in for the long term?
- Does the market area show signs of overbuilding or over investing?
As you can see from the investor’s perspective it can be a complicated process and the need for information is critical. Investors look at when they should enter the market and the short answer is it is always a good time to invest. Always being a good time to invest and needing up to date information is where hiring a real estate agent as a buyer’s agent is critical. A buyer’s agent's number one responsibility is to you, the investor. They can tell you where the hot and cold areas are in which to invest. They are able to present you with comparable market analysis which can help you make an informed decision regarding price. They have the skills needed to negotiate the most optimal priced base on your research. From the investor's perspective they need to know at what price and condition a property can be income producing and have no emotional tie like many purchasers of owner-occupied properties. They are in for the return of their investment and will move on to other properties when they cannot get their price and terms. Investors are making business decisions and, as with all business owners, they are in it for the money. As mentioned before it is always a good time to invest and no matter if you are just starting out or are a seasoned investor, information is critical.
This is the second in a series of blogs regarding the purchase of real estate and is taken from the seller’s perspective. Real estate transactions are a complicated process and the need for a professional real estate agent is crucial to complete the transaction so all parties involved are satisfied with the outcome. Traditionally sellers are always represented by both real estate agents in a transaction. Obviously, the listing agent who has a signed legal document with all the responsibilities lined out represents the seller. What many buyers do not know is the agent who is finding and showing them properties is also legally responsible to the seller. But in the past several years a new type of representation has emerged with the buyer being exclusively represented by their agent. This type of representation is known as Buyer’s Agency.
From the seller’s perspective buyer's agency can eliminate any conflict of interest real estate agents may have when showing and negotiating for a buyer. The seller’s main focus is to sell their home or condo for the highest and best price which is the fiduciary responsibility of the listing agent. The main focus of a real estate agent acting as a buyer’s agent is to find and negotiate the sale for the buyer, representing their wants and wishes above all others. Sellers need to be careful about what they say, as well as their actions, when the buyer or their agent is present at showings. The seller needs to be aware that any information they may give the buyer’s agent can be conveyed to the buyer, which may or may not influence their price and terms when making an offer. Sellers also need to know that the buyer’s agent will most likely complete a Comparative Market Analysis (CMA) for the buyer which shows what similar properties have sold for in the area. The CMA is the basis for the buyer’s offer. This is where many times emotion enters the transaction and it is the job of both agents no matter who they represent to calm everyone down and present the facts to both parties. No one wants to complicate matters when as a buyer you may be making the most expensive investment you will ever make and as the seller you are trying to sell your home or condo and move on with your plans. From the seller’s perspective it is best to remember that as you are being represented, so is the buyer and both of you are trying to get the best deal possible.
First-time home buyers have much to consider when deciding whether to give up renting and purchase a condo, townhouse, or other property rather than continuing to rent.
While interest rates for mortgages are historically low, and property values have dipped considerably as a result of the high number of vacant properties currently on the market, many prospective buyers are understandably hesitant about wanting to take that final step and become homeowners. This is understandable for many reasons, not least of which is the national focus on job losses and foreclosures, which could cause people to worry about the possibility of becoming another sad statistic.
For instance, although mortgage rates have dropped as low as 4.75 percent—something unseen since the 1960s, people with a few dings on their credit scores likely would not qualify for the best rates. Also, mortgage lenders are becoming more circumspect about giving loans. However, everything is relative, and a mortgage rate under 6 percent is still quite good.
The pressure to buy has abated since the first-time homebuyers tax credit was not renewed when its deadline ran out last spring. Now people can take their time looking without being under deadling pressure, although it would have been nice to get the extra tax rebate too.
Of course, no matter what the incentives are, depending on your individual situation, renting a condo is sometimes the best move for the time being. You have to consider whether you plan to settle down for at least a few years, or move in a short time, because a quick turnover might result in a loss of money. Rental condos are commonly found in upscale buildings in vibrant neighborhoods, and are usually much larger and amenity-rich than an ordinary apartment.
If you are looking forward to being a first-time homebuyer, but are just not in a good financial position right now, you have the option of looking for rent-to-own properties, which can be found all over these days because sellers want to have their properties occupied. Many people aiming for home ownership just have trouble saving enough for a down payment, and a rent-to-own agreement can help with that because part of your rent will go toward the down payment. During the rent-to-own contract, usually between 12 and 18 months, you can also work on repairing your credit score in order to qualify for a mortgage loan. In the meantime, you will be living in the home you are working toward buying, and the seller benefits too, because their property is earning them money rather than sitting empty.
Today’s real estate market is challenging to buyers, sellers and real estate agents and requires creativity to satisfy the needs of everyone. The rent to own program offered by OwnACondo.com satisfies that need.
You just purchased the home you have wanted your entire life but haven’t sold your current home. What can you do? Rent to own may be the solution to your problem. This scenario as well as many others, offer both buyers and sellers alike opportunities not often made available by traditional real estate brokers.
The rent to own program offers the seller the opportunity to sell their condo and enables buyers who might be cash strapped or have credit issues that can be addressed over time to buy.
The rent to own program works very much like a car lease. Each month the renter pays you a certain amount to live in the house. The program can be set up have a portion of the rent go toward down payment accumulating over time to enable the buyer to purchase. The seller is covering his expenses and feels secure the property is being taken care of because the potential owner is currently living there. The buyer is living in a property that might be his one day so he is saving toward a down payment and experiencing the neighborhood, schools, shopping and other amenities in the area.
There are definite advantages to the rent to own program and below are just a few.
- Potential buyers who have no down payment or credit issues may be able to purchase. They have time to build income and repair their credit.
- Depending on the agreement, a buyer may not exercise their option to purchase if there is something seriously wrong with the home.
- Monthly lease or rental amount may go toward down payment enabling the buyer to save for a down payment while living in the property.
- Potential buyers will be able to determine if the location is one in which they wish to live. They will be able to learn about the neighborhood, schools, shopping, transportation, etc.
The great American dream of owning your own home is alive and well if you know where to look and what to look for. A rent to own program can be the perfect solution for everyone and more and more people are seriously looking at it as a means to owning their own home.
The topic has come about and after much debate, a decision has been made and it appears that blind contingencies are not allowed when posting an MLS listing. A blind contingency is when the seller and the buyer agree to not change the MLS listing to Contingent, and/or pending when there is in fact a deal pending. There are many benefits for the seller to create this blind contingency.
A seller would chose to do a blind contingency because they still want to be able to market their home even though a deal is pending. The way the times are, anything can happen during the closing process, and nothing is set in stone until the closing is through and the key s are in your hands. Also, the seller would want to keep it on the market, for the hope that a higher offer may come along. The buyer may also agree to a blind contingency. The buyer may have a home to sell and is comfortable with the arrangement that if another offer comes in then they will go back to the drawing board.
The answer to this question is, no. By doing a blind contingency and not providing the correct information, you are going against the Code of Ethics. Part of the Code of Ethics reads that all Realtors are to cooperate with one another. This would include sharing the correct information on the MLS listing. The Code of Ethics also states that you must be honest and truthful in your communications. By advertising the property on various websites connected to MLS, you need to have the correct information, otherwise this is a violation of the Code of Ethics. The change must be made within 72 hours of the signed contract or you risk the possibility that an MLS fee could be charged.
It is important that Realtors are also upfront and honest to each other. It is always the best way to conduct business regardless of whether or not it is a violation of the Code of Ethics. It is also important to always stay compliant and play by the rules to stay out of trouble and avoid paying fines or even lose your Real Estate License. In summary, if there is a contract on a particular property then it must be noted that way on not only the listing, but any other information and advertising that is out there for the public to see.
Buying real estate has been the great American dream since there was an America. It has long been regarded as one of the basic elements to being an American with all the rights and privileges we enjoy. Buying real estate is one of the biggest purchases most people will make in their lives, but it also encourages us to examine our goals, commitments and lifestyle. So is it any wonder that on the list of stress producing events in our lives, buying real estate ranks as one of the highest. Even with the stress produced with buying real estate the right guidance, advice, and an increased understanding of the many facets to buying will help you to identify your own objectives and make the whole buying process relatively easier.
People buy real estate for a variety of reasons from personal use to an investment in their futures and the steps and strategies followed will vary if you are a first-time homebuyer, upgrading or downsizing, or investing in income property. As said before buying real estate is typically one of the biggest investments in your lifetime and you will want to make sure you do your homework before committing to any sort of purchase.
There are several factors that need to be taken into consideration to reduce the stress and to feel confident you are accomplishing your primary goal.
- Get your credit checked and apply for a mortgage. Obviously you will need money or the promise of money to purchase any type of real estate and speaking with your bank or mortgage company to get a pre-approval is the first step to take. Sadly, too many people skip this step only to be disappointed when they find out they cannot afford the home they have already fell in love with.
- Identify what you are looking for and what is important to you. Any easy way to do this is to rank your “must haves” and those that are an “absolutely no go”. You might think a fixer upper is a “no go” but in the right location it might be exactly the right choice.
- Find a real estate agent. Sounds simple but when buying real estate it can make all the difference in the world. Traditionally real estate agents represent the seller even when showing buyers properties. Many potential home buyers are not aware of this and assume their agent is looking out for their best interests. To be certain you are being represented look for a Buyer’s Agent whose sole responsibility is to represent you and accomplish your goal of owning a home.
Buying real state is certainly a stressful activity but with the right examination of your goals and the right preparation you will end up accomplishing the great American dream.
An exclusive buyer agency representation is much different than being represented by a traditional brokerage that works with buyers and sellers. An exclusive buyer agency only represents buyers. The sole focus of the agency is buyers' and making sure that they get the home of their dreams at the price of their dreams. An agency of this representation will typically provide the buyer with a presentation so that the buyer understands exactly what services the buyer agency will provide.
The first step is discussing the buyer agency representation. You will be presented with all of the state-required agency forms to help you understand the legal relationship between the agent and the buyer. The agent will also discuss the advantages of an exclusive buyer representation. The next step would be to cover all of the resources the company has to offer to make the home buyer experience as easy and convenient as possible.
It is always important to make sure that the agent covers fair housing laws and equal opportunity to ensure the client that the agency takes this very seriously. The agent will cover some of the agency laws to make sure the client understands that there are some things an agent cannot do for them because it is against fair housing laws. The agent will then explain the process of mortgage pre-approval and the importance of getting pre-approved before the search process begins.
The next step is really to discuss the search plan. The agent will map out the process of locating the home to finding the right home to negotiating the best offer to purchase the home. This can often times be a lengthy process which can get side tracked very easily. It will be the agents’ responsibility to make sure the clients stay on track with the home buying process.
Once the contract gets accepted, it will be the real estate agents responsibility to ensure a smooth closing. The agent will explain the closing process and what documents are needed. The agent will also advise the buyer to contact a lawyer to represent the buyer legally throughout the closing process.
The agent will not only explain the process of securing a new home, but they will also cover the differences between an exclusive buyer agency and what one can do for you vs. a traditional brokerage that works with buyers and sellers. The agent will cover the advantages of working with an exclusive buyer agency. At the end of the presentation the buyer will have a clear understanding of the agency relationship.
When looking for condominium insurance there are crucial questions to ask to help guide you to the coverage you need. To state the obvious, a condominium is not the same thing as a house. Usually, there is no backyard or basement, and you don’t have to worry about cutting the grass or shoveling the front walk. Insurance is another area where homes and condos differ. Condo owners are typically responsible for insuring just a portion of their property on their own. However, rules differ from complex to complex, and it is important to ask the right questions to ensure you have proper insurance coverage.
What are your ownership and insurance responsibilities in the condo association’s Master Deed? In other words, what does the association expect from you regarding your condominium insurance requirements? Individual owners have a collective responsibility for insuring areas of the complex owned in common - building exteriors, hallways, pool area, etc. Individual unit owners typically are responsible for separately insuring everything within the four walls of their unit. The condo association’s master policy , as well as association rules, should spell out clearly which parts of the complex are insured through association dues and which parts are not.
How much is the association deductible? This is an area many condo owners don’t think about. Condo association insurance typically includes commercial insurance coverage for the commonly shared building and common areas which usually includes an association deductible. In the event of a natural disaster or hurricane or whatever and the condo association needs major work the association will tender the claim to their commercial insurer. But would be a deductible and that deductible would be assessed against all unit owners so if there were 10 unit owners, it would be divided 10 ways. You could really be hit with bill you weren’t expecting or did not know about if you didn’t do your homework.
It is also important to know how to lower you condominium insurance. Several questions need to be asked that can factor in to reducing your costs.
- Have your agent properly estimate the value of what is being insured by you for your condo.
- Apply modification credits. For condos that can mean sprinkler systems and central monitoring burglar and/or fire alarm.
- Shop around. It is often inconvenient and may require some effort but finding the right policy and coverage can save you money in the long run. Finally, keep in mind that there may be discounts. Many companies offer discounts such as non-smoker or retired.
The time has come when you are about to close on your new home and you are informed that you are going to have to come to the closing table with money. In order for you to better comprehend what the closing costs are, it is important for you to understand the Good Faith Estimate and the costs you are responsible for.
One of the sections on a Good Faith Estimate is an explanation of your loan terms. It will underline what you loan amount is, the term of your loan, and the interest rate. It also explains the initial monthly amount owed for principal, interest and any mortgage insurance. This will help you clearly understand the summary of your loan.
The next section is the Escrow Account information. When purchasing a home you can have two options for paying your taxes. You can either pay your taxes in a lump sum every year, or you can have the mortgage company escrow your payments into your mortgage. This way you are paying small amounts every month.
Following this section is the summary of the settlement charges. The first line item is the adjusted origination charge. This is the charge that you will pay the mortgage company for getting you the loan. The second line item is your credit or charge (points) for the interest rate. This amount depends on whether or not you used your money to pay off some points on your interest rate or whether you received a credit.
The second portion of the summary of settlement charges is the charges for all other settlement services. This may include required service fees. The mortgage company will charge a fee to complete your settlement. You will also pay a fee for title services and lenders title insurance and also for owner’s title insurance. The next time item you will need to pay for is government recording charges. These charges are for the state and local fees that you will have to pay to record your loan and title documents. The following charge is for transfer taxes. The charges are for state and local fees. You will also pay an initial deposit for your escrow account. This is a sum of money that will get you started with your escrows. You are also charged for your daily interest. It starts on the first day of your loan and you will pay up to the next month. The last line item is for your homeowners insurance. You must buy home owners’ insurance to protect your home from a loss.
Section B is a total of your charges for all other settlement services that were involved in the loan process. Closing costs are not cheap, so it is important you know exactly what you are paying for and where your money is going. Since recent changes have been made, all Good Faith Estimates have an instruction section that will explain the charges, which again will allow you to better understand what the settlement charges are for.
