A real estate agent is a REALTOR® when he or she becomes a member of the NATIONAL ASSOCIATION OF REALTORS®, The Voice for Real Estate®, the world's largest professional association. The term "REALTOR®" is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and abides by its strict Code of Ethics.
Founded in 1908, NAR has grown from its original nucleus of 120 members to more than 1 million today. NAR is composed of REALTORS® who are involved in residential and commercial real estate as brokers, salespeople, property managers, appraisers, counselors, and others who are engaged in all aspects of the real estate industry.
Members belong to one or more of 1,700 local associations/boards and 54 state and territory associations of REALTORS® and can join one of our many institutes, societies, and councils. Additionally, NAR offers members the opportunity to be active in our appraisal and international real estate specialty sections. REALTORS® are pledged to a strict Code of Ethics and Standards of Practice.
Working for America's property owners, the NATIONAL ASSOCIATION OF REALTORS® provides a facility for professional development, research, and exchange of information among its members.
Check out the Public Awareness Campaign television and radio spots that encourage consumers to rely on the expertise and integrity of REALTORS®.
Now in its ninth year, the NAR advertising campaign runs February through November on network and cable television and network and satellite radio. This year's commercials help consumers understand the real value of working with REALTORS®. From their voluntary adherence to a Code of Ethics to their incomparable knowledge of real estate processes, REALTORS® are the experts of residential and commercial property transactions.
Friday, July 31, 2009
Tuesday, July 28, 2009
Hiring Buyer's Agents
Should Buyers Sign Exclusive Broker Agreements With a Buyer's Agent?
By Elizabeth Weintraub, About.com
Ask any buyer's agent who has been practicing real estate for a while, and you'll hear sad stories from those buying agents who wished they had signed a buyer to a buyer's broker agreement. In defense of buyers, however, it's rarely the buyer's fault. It's the agent's fault for not explaining how the business works.
What often happens is an agent will work with a buyer for a few weeks to several months or longer. This effort includes:
Introducing the buyer to lenders and obtaining loan preapproval letters
E-mailing listings that fit the buyer's requirements
Calling listing agents to determine availability
Making appointments with sellers before showing homes
Driving the buyer from one neighborhood to the next, sometimes touring up to 10 homes a day
Then one day the buyer calls, in breathless excitement, to announce that he and his wife had driven by a new subdivision, stopped to look at a model home and signed a contract to buy a new home from the builder. Sometimes they add, "Isn't that fabulous?" It's not fabulous from the agent's perspective.
Buyer's Agents Expect CompensationJust as listing agents sign formal listing agreements with sellers, buying agents expect formal agreements, too. Like listing agreements, buyer's broker agreements are typically bilateral, which spell out the rights and duties of both parties. Because bilateral contracts are essentially a promise for a promise, if the agent doesn't perform, you may have the right to fire the agent.
Finding a Buyer's Agent
Many buyers are referred by family, friends or co-workers to a buyer's agent. A referral is the best way to find an agent. However, buyers who are relocating to a new area rarely have the luxury of building contacts quickly enough to trust a referral source. Alternatives buyers can use to find an agent are:
Internet Searches
By finding online listings of homes for sale, a buyer can quickly figure out which agents in certain neighborhoods list most of the homes. But that would mean those agents are likely to specialize in seller representation and not buyer representation. Instead, run keyword searches such as "downtown denver buyer's agent" from a search engine. You can also search Web sites where agents maintain national profiles such as activerain.com or realtor.com, in addition to finding exclusive buyer brokerages that specialize solely in buyer representation and do not take listings at all.
Open Houses
An agent hosting an open house may or may not be the listing agent. You should ask. Open houses provide an excellent opportunity to interact with the agent and find out more about the agent. If a certain agent appears knowledgeable and your personalities mesh, ask for a business card. Then later, look up the agent's Web site for more information.
Should You Sign an Exclusive Agreement?
Little turns off buyers faster than an agent from the Internet who e-mails a buyer's broker agreement before meeting in person. It's common for agents to expect a buyer to sign a buyer's broker, but most buyers need to feel comfortable with an agent before signing.
Interviewing a real estate agent can help to ease a buyer's uncertainty. But many buyers are leery of signing agreements because they are concerned that the relationship might not work out. They don't want to be stuck with a crummy agent, and that's understandable. Here are a few precautions you can take to relieve that anxiety:
Ask For Short-Term
The term of a buyer's broker agreement is negotiable. Although many agents might request a 90-day commitment at minimum, you are free to ask for a 24-hour, seven-day or 30-day term; it's whatever you can negotiate.
Request a Non-Exclusive Agreement
These agreements provide compensation to the agent if you decide to switch agents midstream and buy a home introduced to you by the first agent. It protects the agent by establishing procuring cause. But you are free to pursue any other homes with another agent.
CompromiseYou can tell the agent that you prefer to spend a little time getting to know the agent before signing an exclusive buyer's broker agreement. It's reasonable to say, "Let's spend an afternoon looking at homes, and if I think we can work together, I will sign an agreement with you before we go out again." I would caution against working with an agent who is too eager to work with you before she has interviewed you, as well.
Specify Areas and Terms
Most contracts contain a description of the property. If you are undecided about areas, you might want to specify the terms and area in the contract, which will allow you to work with other agents in other areas or at different terms. For example, you might specify a price range or a neighborhood. If you later decide you do not want to buy a home in that price range or in that neighborhood, you can choose a different agent to show you homes in another price range or new area.
Ask For a Guarantee
I give my clients a guarantee. Many agents will accommodate that request if you ask. That means it's a two-way street. I guarantee buyers that if either of us decide that the relationship is not working out or our personalities clash, I will release them from the agreement, and they can do likewise. That way you're not cemented to a business arrangement if the agent is too pushy, argumentative or stubborn, and I'm not just talking about myself.
By Elizabeth Weintraub, About.com
Ask any buyer's agent who has been practicing real estate for a while, and you'll hear sad stories from those buying agents who wished they had signed a buyer to a buyer's broker agreement. In defense of buyers, however, it's rarely the buyer's fault. It's the agent's fault for not explaining how the business works.
What often happens is an agent will work with a buyer for a few weeks to several months or longer. This effort includes:
Introducing the buyer to lenders and obtaining loan preapproval letters
E-mailing listings that fit the buyer's requirements
Calling listing agents to determine availability
Making appointments with sellers before showing homes
Driving the buyer from one neighborhood to the next, sometimes touring up to 10 homes a day
Then one day the buyer calls, in breathless excitement, to announce that he and his wife had driven by a new subdivision, stopped to look at a model home and signed a contract to buy a new home from the builder. Sometimes they add, "Isn't that fabulous?" It's not fabulous from the agent's perspective.
Buyer's Agents Expect CompensationJust as listing agents sign formal listing agreements with sellers, buying agents expect formal agreements, too. Like listing agreements, buyer's broker agreements are typically bilateral, which spell out the rights and duties of both parties. Because bilateral contracts are essentially a promise for a promise, if the agent doesn't perform, you may have the right to fire the agent.
Finding a Buyer's Agent
Many buyers are referred by family, friends or co-workers to a buyer's agent. A referral is the best way to find an agent. However, buyers who are relocating to a new area rarely have the luxury of building contacts quickly enough to trust a referral source. Alternatives buyers can use to find an agent are:
Internet Searches
By finding online listings of homes for sale, a buyer can quickly figure out which agents in certain neighborhoods list most of the homes. But that would mean those agents are likely to specialize in seller representation and not buyer representation. Instead, run keyword searches such as "downtown denver buyer's agent" from a search engine. You can also search Web sites where agents maintain national profiles such as activerain.com or realtor.com, in addition to finding exclusive buyer brokerages that specialize solely in buyer representation and do not take listings at all.
Open Houses
An agent hosting an open house may or may not be the listing agent. You should ask. Open houses provide an excellent opportunity to interact with the agent and find out more about the agent. If a certain agent appears knowledgeable and your personalities mesh, ask for a business card. Then later, look up the agent's Web site for more information.
Should You Sign an Exclusive Agreement?
Little turns off buyers faster than an agent from the Internet who e-mails a buyer's broker agreement before meeting in person. It's common for agents to expect a buyer to sign a buyer's broker, but most buyers need to feel comfortable with an agent before signing.
Interviewing a real estate agent can help to ease a buyer's uncertainty. But many buyers are leery of signing agreements because they are concerned that the relationship might not work out. They don't want to be stuck with a crummy agent, and that's understandable. Here are a few precautions you can take to relieve that anxiety:
Ask For Short-Term
The term of a buyer's broker agreement is negotiable. Although many agents might request a 90-day commitment at minimum, you are free to ask for a 24-hour, seven-day or 30-day term; it's whatever you can negotiate.
Request a Non-Exclusive Agreement
These agreements provide compensation to the agent if you decide to switch agents midstream and buy a home introduced to you by the first agent. It protects the agent by establishing procuring cause. But you are free to pursue any other homes with another agent.
CompromiseYou can tell the agent that you prefer to spend a little time getting to know the agent before signing an exclusive buyer's broker agreement. It's reasonable to say, "Let's spend an afternoon looking at homes, and if I think we can work together, I will sign an agreement with you before we go out again." I would caution against working with an agent who is too eager to work with you before she has interviewed you, as well.
Specify Areas and Terms
Most contracts contain a description of the property. If you are undecided about areas, you might want to specify the terms and area in the contract, which will allow you to work with other agents in other areas or at different terms. For example, you might specify a price range or a neighborhood. If you later decide you do not want to buy a home in that price range or in that neighborhood, you can choose a different agent to show you homes in another price range or new area.
Ask For a Guarantee
I give my clients a guarantee. Many agents will accommodate that request if you ask. That means it's a two-way street. I guarantee buyers that if either of us decide that the relationship is not working out or our personalities clash, I will release them from the agreement, and they can do likewise. That way you're not cemented to a business arrangement if the agent is too pushy, argumentative or stubborn, and I'm not just talking about myself.
Monday, July 27, 2009
Love at First Site? : Get the lowdown to get a prince of a residence
Houses are like spouses --- some grow on you over time, some strike your heart like a thunderbolt. But true love is true love, so don't worry about how it happens. Look at available homes with open eyes and an open mind, and evaluate each one as thoroughly as possible.
1) Location, location, location.
a. What's your job commute going to be like? Is the traffic heavy or light at the times of day you'll be on the road?
b. How's the school district? Even if you don't have kids, the quality of the school district affects your home's value, so it pays to find out.
c. Is there much crime?
d. How convenient are shopping centers, libraries, churches and so on?
2) Decide which home features are most important to you.
a. Do you have pets? You may want to narrow the field to homes with substantial backyards.
b. Is your family growing? Make sure there are enough bedrooms for your family today and five years from now.
c. Be shrewd about storage space. Houses with cavernous rooms may be impressive to look at, but they sometimes compromise storage space to achieve that effect. Would you rather have a place to hang your crystal chandelier or a place to hang your coats?
d. Will any remodeling be required to make the home move-in ready for you? If so, are you handy with a hammer or would you prefer to find a home that needs little work?
3) Ask questions.
Resist the temptation to traipse starry-eyed through each home you tour. Look at any pros and cons as honestly as possible, and ask questions. Some good questions to ask your agent or the seller:
a. What service providers (cable, Internet, telephone) are available in the area, and is the house completely wired for each?
b. How much do you pay yearly in city and/or county property taxes?
c. How much do utilities run each month? Does the house use gas or electric for the furnace, water heater, and appliances?
d. How old are the major appliances, and which are included with the house?
e. Have there been any major repairs to the house, and if so, when were they completed? For example, how old is the roof? Has water ever damaged the basement or foundation?
f. Ever had problems with insects, spiders or rodents?
4) Scrutinize.
Look inside cabinets, inside closets, at baseboards, at window casings, at door frames, where walls meet floors and ceilings. Look for any signs of damage, wear or poor construction.
(from Frontdoor.com)
1) Location, location, location.
a. What's your job commute going to be like? Is the traffic heavy or light at the times of day you'll be on the road?
b. How's the school district? Even if you don't have kids, the quality of the school district affects your home's value, so it pays to find out.
c. Is there much crime?
d. How convenient are shopping centers, libraries, churches and so on?
2) Decide which home features are most important to you.
a. Do you have pets? You may want to narrow the field to homes with substantial backyards.
b. Is your family growing? Make sure there are enough bedrooms for your family today and five years from now.
c. Be shrewd about storage space. Houses with cavernous rooms may be impressive to look at, but they sometimes compromise storage space to achieve that effect. Would you rather have a place to hang your crystal chandelier or a place to hang your coats?
d. Will any remodeling be required to make the home move-in ready for you? If so, are you handy with a hammer or would you prefer to find a home that needs little work?
3) Ask questions.
Resist the temptation to traipse starry-eyed through each home you tour. Look at any pros and cons as honestly as possible, and ask questions. Some good questions to ask your agent or the seller:
a. What service providers (cable, Internet, telephone) are available in the area, and is the house completely wired for each?
b. How much do you pay yearly in city and/or county property taxes?
c. How much do utilities run each month? Does the house use gas or electric for the furnace, water heater, and appliances?
d. How old are the major appliances, and which are included with the house?
e. Have there been any major repairs to the house, and if so, when were they completed? For example, how old is the roof? Has water ever damaged the basement or foundation?
f. Ever had problems with insects, spiders or rodents?
4) Scrutinize.
Look inside cabinets, inside closets, at baseboards, at window casings, at door frames, where walls meet floors and ceilings. Look for any signs of damage, wear or poor construction.
(from Frontdoor.com)
Tuesday, July 21, 2009
The Basics: 2009 First-Time Home Buyer Tax Credit
Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.
Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Breaking news: Tax Credit Can Be Used on Closing Costs.
Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors: The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000. The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit. The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
(from Realtor.org)
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.
Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Breaking news: Tax Credit Can Be Used on Closing Costs.
Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors: The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000. The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit. The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
(from Realtor.org)
New Listing! 541 Columbus Drive
Just Listed! 541 Columbus Drive - Adorable midtown bungalow with low maintenance siding and windows. Featuring spacious rooms throughout, living room with fireplace, separate dining room, adorable office/sunroom which opens to deck and large rear garden. Especially deep lot. Off street parking and one car garage. Two bedrooms, one bath, 1,328 square feet. Offered at $193,000.
Monday, July 20, 2009
Don't Skimp on Title Insurance
by Dian Hymer
Inman News
Most people are trying to cut costs these days. Some even wonder if it's necessary to pay for title insurance when they buy or sell a home. Skimping here could end up costing plenty if you discover a title defect after you own the property.
Title insurance is paid for once at closing and covers the property for as long as you own it. It protects the purchaser from financial loss deriving from defects in the title to the property. The premium cost varies depending on the title insurance company, and is usually based on the purchase price.
Who pays the title insurance premium often depends on local custom and can vary from one county to the next. For instance, if you were to sell a home in Los Angeles County where the seller usually pays for title insurance, and buy in Alameda County where the buyers usually pay, you'll pay for title insurance twice during one move. Buyers typically pay the premium to cover their lender's interest in the property.
The payment of title insurance is not set by law and can be negotiated between the buyer and seller, although local custom usually prevails. Whatever is agreed to in the purchase agreement will dictate who pays the premium.
A buyer who was an attorney thought title insurance was expensive and a waste of money. Given his legal expertise, he decided he'd search the title record himself to avoid paying the title premium. In the end, his agent talked him out of the do-it-yourself approach based on the risks involved.
Title insurance companies search the title to a property to make sure that there aren't any defects in the chain of title. They also look for liens and easements recorded against the property, as well as establish who has marketable title to the property.
In one case, the title company discovered when searching the chain of title that when the property sold to the current owner, an heir to the estate had not signed the deed transferring title. This meant that person still had rights to the property.
Fortunately, the title company located the heir, who was reputable. She relinquished any interest she had in the property. If the heir hadn't been cooperative, the current owner could have made a claim against the title insurance company that issued title insurance to him when he bought the property.
Title companies usually issue a preliminary title report, which is an offer to provide title insurance on the property. It is not the insurance policy, but it shows the results of the title search.
You and your real estate agent or real estate attorney should examine the preliminary report carefully to make sure the person who has marketable title to the property is the person who signed the purchase agreement. Also check for liens secured against the property.
Easements grant the right to use the property to someone other than the owner. Common easements are for utilities, sewer and drainage. Ask the title company to provide written copies of any easement and CC&Rs (covenants, conditions and restrictions), and to locate the easements in color on a copy of the parcel map. You can't build over an easement.
Both CC&Rs, typically found in condominiums and planned-use developments, and easements restrict your use of the property. Make sure you understand how these will affect your ownership interests before you complete a purchase.
If you find defects in the title, make it a condition of the purchase that the seller cures the defects before closing. Make sure that your purchase agreement includes a clause that gives you that right.
THE CLOSING: Ask your title officer, real estate agent or attorney for answers to any title-related questions.
Dian Hymer is a nationally syndicated real estate columnist and author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
Inman News
Most people are trying to cut costs these days. Some even wonder if it's necessary to pay for title insurance when they buy or sell a home. Skimping here could end up costing plenty if you discover a title defect after you own the property.
Title insurance is paid for once at closing and covers the property for as long as you own it. It protects the purchaser from financial loss deriving from defects in the title to the property. The premium cost varies depending on the title insurance company, and is usually based on the purchase price.
Who pays the title insurance premium often depends on local custom and can vary from one county to the next. For instance, if you were to sell a home in Los Angeles County where the seller usually pays for title insurance, and buy in Alameda County where the buyers usually pay, you'll pay for title insurance twice during one move. Buyers typically pay the premium to cover their lender's interest in the property.
The payment of title insurance is not set by law and can be negotiated between the buyer and seller, although local custom usually prevails. Whatever is agreed to in the purchase agreement will dictate who pays the premium.
A buyer who was an attorney thought title insurance was expensive and a waste of money. Given his legal expertise, he decided he'd search the title record himself to avoid paying the title premium. In the end, his agent talked him out of the do-it-yourself approach based on the risks involved.
Title insurance companies search the title to a property to make sure that there aren't any defects in the chain of title. They also look for liens and easements recorded against the property, as well as establish who has marketable title to the property.
In one case, the title company discovered when searching the chain of title that when the property sold to the current owner, an heir to the estate had not signed the deed transferring title. This meant that person still had rights to the property.
Fortunately, the title company located the heir, who was reputable. She relinquished any interest she had in the property. If the heir hadn't been cooperative, the current owner could have made a claim against the title insurance company that issued title insurance to him when he bought the property.
Title companies usually issue a preliminary title report, which is an offer to provide title insurance on the property. It is not the insurance policy, but it shows the results of the title search.
You and your real estate agent or real estate attorney should examine the preliminary report carefully to make sure the person who has marketable title to the property is the person who signed the purchase agreement. Also check for liens secured against the property.
Easements grant the right to use the property to someone other than the owner. Common easements are for utilities, sewer and drainage. Ask the title company to provide written copies of any easement and CC&Rs (covenants, conditions and restrictions), and to locate the easements in color on a copy of the parcel map. You can't build over an easement.
Both CC&Rs, typically found in condominiums and planned-use developments, and easements restrict your use of the property. Make sure you understand how these will affect your ownership interests before you complete a purchase.
If you find defects in the title, make it a condition of the purchase that the seller cures the defects before closing. Make sure that your purchase agreement includes a clause that gives you that right.
THE CLOSING: Ask your title officer, real estate agent or attorney for answers to any title-related questions.
Dian Hymer is a nationally syndicated real estate columnist and author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
Saturday, July 18, 2009
Putting the 'short' back in short sale
Tips on how to make process go smoother written by Steve Bergsman for Inman News
Lately, homebuyers are seeing more and more short-sale opportunities, but it seems as if fewer purchases are actually being completed. The perception in this case is correct. The short-sale process has become a nightmare: it goes on forever, sometimes never coming to a satisfactory conclusion even after months of effort.
All I can say is, "Hang in there, folks, help is on the way."
According to industry sources, the playing field will soon begin to make more sense to buyers as servicers (the folks who actually handle your loan) will either move at-risk loans to special servicers that are experienced in this field and/or set parameters ahead of bids.
"There are going to be a lot more short sales coming into the system," predicts Scott Thompson, a principal in Mortgage Resolution Services Inc. in Rancho Cordova, Calif. "Servicers have done a lousy job. They know it and are now looking to solve the problem."
This is a necessity, Thompson adds, "as right now the queues are long and getting longer day by day."
The short sale seems complicated -- mostly because it takes so darn long to accomplish -- but it's not. The basic short sale happens when the proceeds from the sale of a property are less than the balance owed on the loan (secured by the property being sold). The key in all of this is the lender accepting a price that is less than the amount owed on the property -- and the lender would do that to avoid a foreclosure situation, which can be a lengthy and sometimes costly process.
For buyers, a short sale is the chance to acquire a property at discount.
More often than not, however, the process has been gummed up. The numbers I hear are: just one to three out of 10 applications get accepted; and while the process can take as little as 45 days, it has been taking on average 90 to 120 days with some wayward dealings going on for nine months.
Here are some things that can be done to smooth the process:
1) Prequalify the listing agent. If the listing agent hasn't even started getting from the seller the key documents -- tax returns, bank statements, pay stubs, in short, the completion of the "hardship package" -- then the property should not be listed because the agent is nowhere near ready to close a deal.
2) When a property is found, demand a commitment from the seller. In lots of areas, such as California, there is a provision in regulations that allows the seller to continue marketing the property during the short-sale process. However, your agent should have written into the contract that you are the primary buyer and any other offers that come in are backup offers.
3) Many lenders don't look at a short sale unless there is a viable offer in hand. Every agent should have an arsenal of investor clients. If the agent representing the investors can't bring them to the table, she can then go to her investor base and say, "Would you make a fair offer on this property? That allows us to start the foreclosure process. We will give you a 72-hour clause to perform and then substitute a higher offer in there."
4) Broker price opinions are needed for sales, but since brokers doing the valuations are paid so little, they often do no more than a drive-by. However, if you can give the broker background on the property, list what repairs are needed and offer comparables, the valuation can be more accurate.
"The agent," says Valasakos, "is the gatekeeper to getting the short sale accepted."
Steve Bergsman is a freelance writer in Arizona and author of several books, including"After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade."
Lately, homebuyers are seeing more and more short-sale opportunities, but it seems as if fewer purchases are actually being completed. The perception in this case is correct. The short-sale process has become a nightmare: it goes on forever, sometimes never coming to a satisfactory conclusion even after months of effort.
All I can say is, "Hang in there, folks, help is on the way."
According to industry sources, the playing field will soon begin to make more sense to buyers as servicers (the folks who actually handle your loan) will either move at-risk loans to special servicers that are experienced in this field and/or set parameters ahead of bids.
"There are going to be a lot more short sales coming into the system," predicts Scott Thompson, a principal in Mortgage Resolution Services Inc. in Rancho Cordova, Calif. "Servicers have done a lousy job. They know it and are now looking to solve the problem."
This is a necessity, Thompson adds, "as right now the queues are long and getting longer day by day."
The short sale seems complicated -- mostly because it takes so darn long to accomplish -- but it's not. The basic short sale happens when the proceeds from the sale of a property are less than the balance owed on the loan (secured by the property being sold). The key in all of this is the lender accepting a price that is less than the amount owed on the property -- and the lender would do that to avoid a foreclosure situation, which can be a lengthy and sometimes costly process.
For buyers, a short sale is the chance to acquire a property at discount.
More often than not, however, the process has been gummed up. The numbers I hear are: just one to three out of 10 applications get accepted; and while the process can take as little as 45 days, it has been taking on average 90 to 120 days with some wayward dealings going on for nine months.
Here are some things that can be done to smooth the process:
1) Prequalify the listing agent. If the listing agent hasn't even started getting from the seller the key documents -- tax returns, bank statements, pay stubs, in short, the completion of the "hardship package" -- then the property should not be listed because the agent is nowhere near ready to close a deal.
2) When a property is found, demand a commitment from the seller. In lots of areas, such as California, there is a provision in regulations that allows the seller to continue marketing the property during the short-sale process. However, your agent should have written into the contract that you are the primary buyer and any other offers that come in are backup offers.
3) Many lenders don't look at a short sale unless there is a viable offer in hand. Every agent should have an arsenal of investor clients. If the agent representing the investors can't bring them to the table, she can then go to her investor base and say, "Would you make a fair offer on this property? That allows us to start the foreclosure process. We will give you a 72-hour clause to perform and then substitute a higher offer in there."
4) Broker price opinions are needed for sales, but since brokers doing the valuations are paid so little, they often do no more than a drive-by. However, if you can give the broker background on the property, list what repairs are needed and offer comparables, the valuation can be more accurate.
"The agent," says Valasakos, "is the gatekeeper to getting the short sale accepted."
Steve Bergsman is a freelance writer in Arizona and author of several books, including"After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade."
Tuesday, July 14, 2009
Why Use an ABR®: REALTORS® Experienced in Buyer Representation
Buying a home is no small matter. Besides being the largest financial transaction you may ever undertake, it’s probably also the most complex. There are many good reasons to work with a qualified real estate professional—especially a trained professional who has earned the Accredited Buyer’s Representative (ABR®) designation, representing best-in-class buyer services.
When you look for an ABR® before you look for a home, you’ll be served, not sold. Your interests become their interests. And you’ll be working with someone who has gone the extra mile by completing specialized training in delivering the best in buyer-representation services. Plus, a REALTOR® who has an ABR® Designation also has an established track record, with proven experience in representing the concerns of homebuyers.
The ABR® Designation is awarded through the Real Estate Buyer’s Agent Council, or REBAC, which was founded in 1988 to promote superior buyer-representation skills and services. REBAC is an affiliate of the National Association of REALTORS® (NAR).
From the Real Estate Buyer's Agent Council of the National Association of REALTORS
When you look for an ABR® before you look for a home, you’ll be served, not sold. Your interests become their interests. And you’ll be working with someone who has gone the extra mile by completing specialized training in delivering the best in buyer-representation services. Plus, a REALTOR® who has an ABR® Designation also has an established track record, with proven experience in representing the concerns of homebuyers.
The ABR® Designation is awarded through the Real Estate Buyer’s Agent Council, or REBAC, which was founded in 1988 to promote superior buyer-representation skills and services. REBAC is an affiliate of the National Association of REALTORS® (NAR).
From the Real Estate Buyer's Agent Council of the National Association of REALTORS
Monday, July 13, 2009
FrontDoor.com's Top 10 Ways to Beat the Sluggish Housing Market
Don't let the slow market get you down. Whether you're a home seller looking for offers, or a homebuyer facing stricter loan requirements, rev up your real estate potential with these helpful pointers from FrontDoor.com.
FOR SELLERS:
Give your house a makeover that adds value and keeps it up with the Joneses'. That doesn't mean you should run out and install Italian marble. But if hardwood floors are the norm in your neighborhood, replace the carpet.
Use the secrets of staging experts, or hire one. Staging can be as easy as a fresh coat of paint, new cabinet hardware and strategically-placed lighting. Think of it as a creative, inexpensive facelift for your home.
Find out what's wrong with the house and get it fixed. Don't wait until that serious buyer finds faulty wiring or a termite problem and then pulls the plug on the deal. Be proactive. Get an inspection before hitting the market.
Come up with a comprehensive home-selling strategy. Don't put an ad on Craigslist, stick a sign in the ground and call it a day. Whether you're going FSBO or using an agent, selling your home in a buyer's market requires a well thought-out plan with accurate pricing, targeted improvements and focused marketing and exposure.
Hire an aggressive, well-connected real estate agent. Find an experienced agent with a proven track record and knows how to pound the pavement. In this market, name recognition is important, so find the go-to person for buyers and their agents in your community.
Help a buyer buy it. Offer incentives that put money in the buyer's pocket, such as buying down the interest rate, absorbing more of the closing costs or offering seller financing.
Consider renting or offering a lease option. Minimize the impact of two mortgages by renting your house out until you find a buyer. Or offer a lease option to a motivated buyer who doesn't have enough cash to buy a home outright.
Make the house move-in ready. Throw in the furniture, flat-screen TV, washer/dryer, appliances, backyard jacuzzi AND the kitchen sink. The less money a buyer will have to shell out to furnish the house, the higher the perceived value.
FOR BUYERS:
Use calculators and tools to evaluate your potential purchase. Be careful not to get caught up in the hype of a buyer's market. Make calculated decisions with FrontDoor.com's "Return on Investment" tool, for instance, which helps you determine your potential IRR (internal rate of return) on a property.
Evaluate and boost your financial profile. If you're having trouble finding favorable terms or interest rates on a mortgage, make yourself more appealing to lenders by boosting your credit score.
By FrontDoor.com Published: 12/21/2007
FOR SELLERS:
Give your house a makeover that adds value and keeps it up with the Joneses'. That doesn't mean you should run out and install Italian marble. But if hardwood floors are the norm in your neighborhood, replace the carpet.
Use the secrets of staging experts, or hire one. Staging can be as easy as a fresh coat of paint, new cabinet hardware and strategically-placed lighting. Think of it as a creative, inexpensive facelift for your home.
Find out what's wrong with the house and get it fixed. Don't wait until that serious buyer finds faulty wiring or a termite problem and then pulls the plug on the deal. Be proactive. Get an inspection before hitting the market.
Come up with a comprehensive home-selling strategy. Don't put an ad on Craigslist, stick a sign in the ground and call it a day. Whether you're going FSBO or using an agent, selling your home in a buyer's market requires a well thought-out plan with accurate pricing, targeted improvements and focused marketing and exposure.
Hire an aggressive, well-connected real estate agent. Find an experienced agent with a proven track record and knows how to pound the pavement. In this market, name recognition is important, so find the go-to person for buyers and their agents in your community.
Help a buyer buy it. Offer incentives that put money in the buyer's pocket, such as buying down the interest rate, absorbing more of the closing costs or offering seller financing.
Consider renting or offering a lease option. Minimize the impact of two mortgages by renting your house out until you find a buyer. Or offer a lease option to a motivated buyer who doesn't have enough cash to buy a home outright.
Make the house move-in ready. Throw in the furniture, flat-screen TV, washer/dryer, appliances, backyard jacuzzi AND the kitchen sink. The less money a buyer will have to shell out to furnish the house, the higher the perceived value.
FOR BUYERS:
Use calculators and tools to evaluate your potential purchase. Be careful not to get caught up in the hype of a buyer's market. Make calculated decisions with FrontDoor.com's "Return on Investment" tool, for instance, which helps you determine your potential IRR (internal rate of return) on a property.
Evaluate and boost your financial profile. If you're having trouble finding favorable terms or interest rates on a mortgage, make yourself more appealing to lenders by boosting your credit score.
By FrontDoor.com Published: 12/21/2007
Saturday, July 11, 2009
Why testing the market could backfire
by Bernice Ross Inman News
With the credit crunch and huge amount of competition from distressed properties, "normal sellers" have had a tough time getting their properties sold. If you must sell in this market, it's absolutely critical that you price your property right.
Pinpointing the best possible price for your home can be a challenge. If you overprice your property in today's market, it can stay on the market for months. If values in your area are declining, the longer you take to sell, the less money you will net. If you want to net the most from your real estate sale, avoid these common seller pitfalls:
1. Basing the list price for your home on the list price of other properties
This is probably the most common mistake that sellers make. They look at what other properties are listed for in their neighborhood and base their price on those numbers. This is a huge mistake. To correctly price your property, the only accurate "comparable sales" are those properties that have closed either for all cash or where a lender has funded a loan. While properties may be selling, many are not closing due to the credit crunch. Appraisals are a huge issue. The reason is that a property worth $200,000 today may be worth $196,000 when it closes 60 days later. Appraisers are aware of the issue and often set values more conservatively as a result.
You can obtain comparable sales information online from real estate brokerage sites, Realtor.com and multiple listing service (MLS) Web sites. These online resources are a great starting place. The challenge is that they often lack up-to-date sale and/or price-reduction data. The best source for comparable sales information is a competent local broker who has access to the most up-to-date MLS data.
2. Basing your list price on what you paid for the property
Many sellers believe that what they paid for the property influences their current sales price. "We paid $200,000 for the property three years ago. We have to sell it for at least $218,000 to break even." This reasoning is based upon a very common fallacy. Many people believe that the agents and the sellers determine the price at which a property will sell.
The truth of the matter is that the real estate market is like the stock market. The buyers -- not the sellers or agents -- determine whether a property is saleable in any given market. For example, if you paid $80 a share for IBM stock and today it's selling for $50 a share, if you wanted to sell for $80 per share, you wouldn't be a seller in today's market. The same is true for your real estate. The price you paid for the property has no bearing on what the buyer will pay. (It does make a difference in terms of your tax liability and a host of other issues.)
3. Overestimating the value of your improvements or upgrades
Many sellers have a challenge understanding how the improvements or upgrades that they have made to the property impact value. Some improvements do increase value. Generally these include adding square footage or bringing your property up to the same standards as most other properties in the area. Most improvements, however, make your property more saleable, but they don't necessarily add to the value.
For example, assume that you have white travertine marble countertops throughout your home and distressed walnut floors. These features make your home more attractive to potential buyers, but normally don't add much to your sales price. The reason is that those improvements have no value to a buyer who prefers dark granite and plush carpets. Also, if you overimprove your property by making your home substantially larger than that of your neighbors, you probably won't recoup that money either.
4. Testing the market
Sellers often want to "test" the market. "Let's list it at a higher price for a few weeks and see what happens." This is a huge mistake. Real estate professionals know that all listings have a "honeymoon period" where the listing will have the most showings. This normally takes place during the first 30 days the property is on the market. The reason is that buyers who have not yet found a property attempt to see new listings as soon as they come on the market. This initial rush normally drops off after the first 30 days. After that, showings are normally limited to new buyers coming into the market. If you don't sell during the honeymoon period, there's a high probability that your property will be on the market for an extended period of time. You can generate additional interest with a price reduction, but it never creates the attention you receive when you first list the property.
To get the most from your real estate sale, avoid these costly mistakes. If you need more help on how to price your listing correctly, look for Part 2 next week.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books.
You can reach her at Bernice@RealEstateCoach.com and find her on Twitter: @bross.
With the credit crunch and huge amount of competition from distressed properties, "normal sellers" have had a tough time getting their properties sold. If you must sell in this market, it's absolutely critical that you price your property right.
Pinpointing the best possible price for your home can be a challenge. If you overprice your property in today's market, it can stay on the market for months. If values in your area are declining, the longer you take to sell, the less money you will net. If you want to net the most from your real estate sale, avoid these common seller pitfalls:
1. Basing the list price for your home on the list price of other properties
This is probably the most common mistake that sellers make. They look at what other properties are listed for in their neighborhood and base their price on those numbers. This is a huge mistake. To correctly price your property, the only accurate "comparable sales" are those properties that have closed either for all cash or where a lender has funded a loan. While properties may be selling, many are not closing due to the credit crunch. Appraisals are a huge issue. The reason is that a property worth $200,000 today may be worth $196,000 when it closes 60 days later. Appraisers are aware of the issue and often set values more conservatively as a result.
You can obtain comparable sales information online from real estate brokerage sites, Realtor.com and multiple listing service (MLS) Web sites. These online resources are a great starting place. The challenge is that they often lack up-to-date sale and/or price-reduction data. The best source for comparable sales information is a competent local broker who has access to the most up-to-date MLS data.
2. Basing your list price on what you paid for the property
Many sellers believe that what they paid for the property influences their current sales price. "We paid $200,000 for the property three years ago. We have to sell it for at least $218,000 to break even." This reasoning is based upon a very common fallacy. Many people believe that the agents and the sellers determine the price at which a property will sell.
The truth of the matter is that the real estate market is like the stock market. The buyers -- not the sellers or agents -- determine whether a property is saleable in any given market. For example, if you paid $80 a share for IBM stock and today it's selling for $50 a share, if you wanted to sell for $80 per share, you wouldn't be a seller in today's market. The same is true for your real estate. The price you paid for the property has no bearing on what the buyer will pay. (It does make a difference in terms of your tax liability and a host of other issues.)
3. Overestimating the value of your improvements or upgrades
Many sellers have a challenge understanding how the improvements or upgrades that they have made to the property impact value. Some improvements do increase value. Generally these include adding square footage or bringing your property up to the same standards as most other properties in the area. Most improvements, however, make your property more saleable, but they don't necessarily add to the value.
For example, assume that you have white travertine marble countertops throughout your home and distressed walnut floors. These features make your home more attractive to potential buyers, but normally don't add much to your sales price. The reason is that those improvements have no value to a buyer who prefers dark granite and plush carpets. Also, if you overimprove your property by making your home substantially larger than that of your neighbors, you probably won't recoup that money either.
4. Testing the market
Sellers often want to "test" the market. "Let's list it at a higher price for a few weeks and see what happens." This is a huge mistake. Real estate professionals know that all listings have a "honeymoon period" where the listing will have the most showings. This normally takes place during the first 30 days the property is on the market. The reason is that buyers who have not yet found a property attempt to see new listings as soon as they come on the market. This initial rush normally drops off after the first 30 days. After that, showings are normally limited to new buyers coming into the market. If you don't sell during the honeymoon period, there's a high probability that your property will be on the market for an extended period of time. You can generate additional interest with a price reduction, but it never creates the attention you receive when you first list the property.
To get the most from your real estate sale, avoid these costly mistakes. If you need more help on how to price your listing correctly, look for Part 2 next week.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books.
You can reach her at Bernice@RealEstateCoach.com and find her on Twitter: @bross.
Wednesday, July 8, 2009
New Website Launched
Check out the new and improved DonCallahan.com website for The Don Callahan Real Estate Group. This new site features a section dedicated specifically for Buyers, where Buyer's Agent David Costrini provides valuable insight and a Buyer's Roadmap to outline the buying process. Visit the Properties Search tab to search the entire Savannah MLS for a property just for you! The My Listings link showcases all of Don's listings in the Savannah area. Click on any listing for an image slideshow, virtual tour links, and more details about the property. Our Concierge section provides visitors with Don's recommendations to all things Savannah; from restaurants and lodging to spas and galleries to all things real estate. Visit different communities in Savannah without leaving the comfort of your home. Find a brief history of each community, home styles, and local landmarks by visiting the Communities section. Last, but certainly not least; ever wondered what the back story on the members of The Don Callahan Real Estate Group was? Well, visit The Team tab for a mini bio on each team member.
Take a look around and let us know your thoughts! Feel free to email us or give us a call. We'd love to hear from you!
Take a look around and let us know your thoughts! Feel free to email us or give us a call. We'd love to hear from you!
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