At no time will your qualified real estate agent make an offer on your behalf until you have named the price you want to offer. Before making any offer you should take the time to investigate some of the information below prior to settling on a price for offer. Your real estate agent will help you through the investigation process.
Below is a list of factors to consider as part of your investigation:
* Determine the local market
* Investigate how much the seller paid
If the seller purchased the house recently in the depressed market, your purchase price should hover near it.
* Learn what the seller’s balance is for their mortgage
This will allow your offer to consider if this is a short sale. Short sales often have a minimum to the offer they will accept. You will need to be aware of this.
* Examine Comparable home’s sold
This includes homes that are near or in the same neighborhood with similar layout, square footage, and age.
* Analyze List-Price to Sale-Price Ratio locally
This will inform you of the range the seller may be willing to operate within. Trends are often very clear and your real estate agent can provide you with a report reflecting this information.
* Check Square Foot Cost Average
This article shows you how: How to Calculate Residential Square Footage
* Get a home history report and a Days on Market Report (DOM)
An important part of this process is to keep in mind this is a business transaction until your offer for purchase has been accepted. This fact in mind, have a counter offer and several other options in mind when you make the offer to begin with. This will make certain you will find the right house at the right price for you. Depend on your Real Estate Expert for this process and you won’t go wrong.
In every business and industry there is a concern for deceitful behavior. Real Estate is not an exception to this, unfortunately. Should you encounter something that concerns you, the best place to start is the Federal Trade Commission site. The site can provide critical information that can protect you and help you steer clear of hidden snares used by unscrupulous real estate investors, or to simply clarify contract misnomers.
When focusing on the purchase of an investment property, there is no shame in nit-picking for clarity in every section of your contract. Typically this is a very large investment. Contracts tend to have terminology that we do not use on a daily basis. A slight misnomer in a contract can make a huge impact on whether or not you will be making a good investment or an expensive blunder. Make sure to contact your real estate agent or attorney to answer any questions and provide any options that may be available to you, before making any commitments.
Taking a logical pragmatic approach to making your investment is vital to making your investment a good one. There are common downfalls to resisting this pragmatic approach. The most common downfall is fixating on the “perfect property”. Once you put yourself in that position, you lose perspective on the fundamental issues that must be addressed. In addition, you may overlook or simply ignore problems or imperfections in the property or contract. It is essential for negotiations to stay focused.
Making an investment in the right property and making sure you understand the contract, can be tricky, but following a few worthy tips and consulting with a trusted real estate agency or attorney are highly recommended.
This message is to alert you to changes in the federal Truth-in-Lending Act regulations, which will have an impact to every mortgage provider. It will require a fundamental change to how we finalize loan terms for the borrower prior to closing. Changes at the closing table could require the borrower to reschedule the closing date if a revised Truth-In-Lending (TIL) is needed.
The rules for the Mortgage Disclosure Improvement Act were finalized Friday, May 8th, and it is applicable to all mortgage lenders (federally chartered or state licensed). For applications taken as of July 30, 2009, new requirements about the delivery and the accuracy of disclosures will apply. One of the new requirements is that the borrower must be provided with an accurate APR disclosure at least three business days prior to closing.
Remember the new rule with “3/7/3”
3 days after application – An initial Truth-In-Lending (TIL) statement must be provided no later than 3 business days after receipt of the loan application. Our current process generates an auto-compliance package that complies with this requirement, so no changes are needed.
7 business days after initial application – Waiting period – the borrower is not permitted to close until at least seven business days have passed since the TIL was placed in the mail or provided to the borrower.
3 business days prior to closing – Waiting period – the borrower must receive an accurate APR on their TIL at least 3 business days prior to closing. If it was provided before that period of time, because the loan terms were locked in earlier in the process, no new TIL is required if there is no change to the APR or the change is less than 1/8th of a percent.
If the final loan terms cause the TIL / APR to be understated by more than 1/8th of a percent, a revised TIL with an accurate APR must be provided to the borrower so that they receive it at least three business days prior to closing. It must be in their hands at that time, and they may close on the 3rd business day after that day.
What this means to you? All Realtors and buyers need to be advised of these new timing requirements, which will limit rush closings and could even delay closings.
Austin has been a front runner for green living almost since the topic became a mainstream ideal. The city has created many incentives for homeowners to select a more energy efficient way of life.
As a way of continuing this venture, Austin has recently signed into law an ordinance that requires homeowners to have their homes inspected for energy usage before they are able to put it on the market. This new law will go into effect this year. The ordinance is just another way that Austin is truly trying to go green.
Homeowners who are planning to place their homes on the market may need to do a few upgrades to be sure they are prepared for the energy audit. In Austin, energy is mostly used to heat and cool the home; therefore it is important to learn about any leaks in the duct work, cracks in doors and windows, and updating insulation within attics. While the energy audit is required before placing a home for sale, the upgrades are not currently required prior to purchase. Any potential buyer must be made aware of the energy audit results.
These upgrades may not be the most noticeable when looking at buying a home, but can save money in the long run. The bottom line is, the less energy you use to heat and cool your home, the more you will save on utility bills throughout your life there. Austin has recognized the importance of these small, but important, parts of a home. The new law enables buyers and sellers to be on the same page at the time of sale.
Starting this June, those who wish to sell a home in Austin will be required to have their home inspected for energy efficiency. This new ordinance does not require the seller to upgrade any leaks or other problems that may be found, but it does state that the buyer be made aware of the outcome of the audit via disclosure. Of course, given the current market and economy, anything that may decrease the value of a home should be repaired prior to sale. Buyers don’t want to think of what needs to be fixed when looking at a home, so it will be better to make any necessary upgrades before putting the house on the market.
The energy audit will be looking into four areas of energy efficiency. There will be a duct pressure check on the air conditioning unit to check for leaks. Weather stripping around doors will be inspected. Shades and screens, especially on the east, west, and south sides of a home will be looked at, as will the type of insulation found in an attic. Energy Raters can be found online at Austin Energy’s Website, and will generally run about $300 for every 2,000 square feet. If you decide to go ahead with the upgrades, the home will need to be inspected again when complete.
There is another option considered in compliance with the new ordinance. Homeowners can participate in the Home Performance with Energy Star Certificate program. Homes that have already done so within the last ten years are exempt from the ordinance. In this case, a home performance contractor will inspect the home, sometimes for free with a bid for work. The same areas will be reviewed as with the energy audit, and then the information will be sent to Austin Energy for review. To receive a certificate of completion, three of the requirements must be met or the homeowner must have received a rebate of $500 or more from Austin Energy.
In either case, Austin Energy must approve the upgrades for energy efficiency. The information must be contained within the Seller’s Disclosure and is good for ten years.
The mortgage industry is full of confusing terms and jargon. Many of the terms apply directly to the forms of loans. The Loans are often referred to by shortened acronyms, but not all. Some are simply put, but not clarified by eligibility. Two most common terms are Government Loans and Conventional Loans.
Government Loans – any mortgage insured by the FHA, or VA, or RHS constitutes a government mortgage. This includes loans to veterans, and home loans available through the rural housing service.
Conventional Loans – any mortgage financing that comes from the traditional lending institutions. This would include any loan made by a bank, mortgage company, or nontraditional owner financing.
So that sounds simple enough right? It should be, unfortunately many of the large mortgage brokerages and companies fail to explain this very simple point, which will lead to some confusion down the road. To further elaborate on some additional options and terms related to loans we have included the following terms:
Assumable Mortgage – A mortgage can be assumed by a buyer once they have qualified for all requirements made by the seller’s mortgage company. This is completed at the time of sale.
Balloon Mortgage – This is when a mortgage is written so the payments are steady for a specified period of time, and at a future date requires the remainder of the total paid in full. An example of this would be a 30 year amortization of a loan that comes due in 15 years. Payment until the 15th year may be around 500 a month, however on the date determined the remainder of a 100 thousand dollar loan becomes due in full.
VA mortgage aka VA Loan – a mortgage insured by the Veterans Administration. This applies to qualified veterans only, and encourages private mortgage lenders to write loans for military and former military personal.
Potential home buyers might be inclined to run screaming from two small words: “As Is”. This phrase can signal anything from a house that’s falling apart to one where the seller is just not in a position to make disclosure on an otherwise perfectly good property. An article by Dian Hymer attempts to take some of the fear out of this tiny phrase.
“As is” can have several different meanings. It could be the property was inherited and the heir is unable to inspect and make disclosure on the house. The label on an inherited property is put there to protect the heirs from liability.
A bank foreclosure is usually sold “as is”, as the bank is not in a position to inspect the house. However, a homeowner who has not been able to make mortgage payments, may not have had the funds to keep up with maintenance either.
It could also be subject to regional regulations. California, for instance, advertises most homes in “as is” condition. This only means the seller won’t warrant the condition of the property and it’s strongly suggested that the buyer retain a professional inspector.
It could also pertain to a property that needs major repair. In the current buyers’ market, the purchaser is not as willing to accept the “as is” condition without a significant drop in price.
The bottom line is a potential buyer could get a good deal on an “as is” home, but he or she should conduct a thorough, professional inspection of the property and be prepared to make what could be major repairs. Buyers are also encouraged to make sure they have the option to withdrawal from a sale without loss of deposit should the property need more attention than they’re willing to give.
As Texas is a non-disclosure state, I’ve never liked Zillow. People who think Realtors do nothing, but schmooze and collect paychecks love Zillow, because they feel it empowers them to do their own home sale. In reality, since non-disclosure states do not disclose all sales prices, Zillow often gives poor data because (1) it only has sparse data to give and (2) a computer program is never going to be able to select comparable sales as well as a human who can go and physically view the property and adjust subjectively. So basically, Zillow, while it may be fun, is completely unreliable here in Texas.
But what about Zilpy? It’s a terrible name, but I thought I’d check it out. I compared the data provided by Zilpy for three apartments and condos that I know the rental rate and occupancy for in Austin to gauge the usefulness and accuracy. It was remarkably accurate for all the places that I checked. Granted, the site doesn’t appear to delineate by class of dwelling, but the ranges it gives help make it seem more accurate.
If you have a rental, check it out and let me know what you think. I’d love to hear from you.
Excerpt from Inman News.
Zilpy, the new ‘Z’ site in online real estate
Web site offers rental price estimates
Thursday, February 07, 2008
Inman News
Zilpy is like Zillow for rental properties, with rental price estimates, demographic data and heat maps based on median rental rates.
The new Web site, which launched last week and lists Zillow as a partner company, offers competition to Rentometer.com, another site that allows users to gauge rental prices in a selected area.
Zilpy.com is not a rental listings site. It is a rental research site that allows users to grab automated rental price estimates by address, city or ZIP code, and to refine searches based on type of rental property, a desired rental range, number of bedrooms and a range of square feet. One of the founders referred to the site as “the Trulia for the rental market.”
The heat maps show areas with higher and lower rental prices — red zones feature the highest median rental prices, while dark green shading indicates the lowest rental pricing.
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Screen shots from Zilpy.com
Well sometimes everyone makes a mistake… But to misrepresent the school district that your new home is being built in is either evidence of a very slimy representative or an extremely incompetent one. Either way it’s not something that you’ll want to add to your resume. :)
Kathryn points out some great tips at the end of the snippet below. Mainly, make sure that you have an agent working in your best interest. In Austin and the surrounding areas, buyer agents are typically paid for by the seller, but represent YOU. It’s also hugely important that if a salesman looks like the guy in the photo above that you seriously reconsider signing at that time!!!
One item that’s not in the list below that is always a good idea is including the builder’s representations in the contract. If they won’t allow that, then it would be best to have the builder’s representative sign the documents so that you have a copy of the papers that confirm the representations. In Texas we have a very strong (well it seems strong to me, but I’m no lawyer) Deceptive Trade Practices law. Think treble damages and lots of other scary things that could happen to people who are found guilty of deception.
Excerpt from Charlotte Observer.
Homebuyers say builder misstated school district
2 Pecan Hills buyers released from contract
KATHRYN THIER
Alisa Frady put down $20,000 in earnest money for a new home in Mooresville in the Iredell-Statesville Schools, the same district her children now attend.
But it turns out that the Pecan Hills subdivision is in the Mooresville Graded School District.
Frady and others say Ryan Homes, builder of Pecan Hills, gave them wrong information.
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Tips for homebuyers
• Call the school district to confirm which district serves the home you intend to buy. You must provide an accurate address.
• Remember that individual school attendance zones may change. But district boundaries rarely change.
• Engage a real estate agent to represent you. Don’t rely on the seller’s agent to represent you.
I was watching an HGTV real estate show yesterday and I finally got around to posting about oneof the things that the sell this house-type shows do, that are kind of hokie. In this particular episode, the sellers were getting ready to sell their condo. The condo was terribly dated and had low end appliances. The designer came in and proceeded to cover the appliances with a stick on faux stainless steel veneer. In the show, the owners did replace the stove and microwave vent hood with real stainless steel appliances, but when they had the open house they let the prospective buyers comment on the wonderful stainless steel appliances and didn’t correct them or inform them that only two of the appliances were stainless steel and that the dishwasher and refrigerator were actually covered with the veneer.
Granted it’s a tv show, but I think that some people out there might think that it’s acceptable to use this stick on and then advertise stainless steel appliances when they are actually not stainless. I’m not a lawyer, but if the appliances looked like stainless and were advertised as stainless steel and after the sale closed the buyer found out the appliances were covered with veneer and not really stainless, I’d be seriously worried as a seller or listing agent. I think the veneer is a neat product, but if you play above board you’d have to advertise it as something like “faux stainless steel” appliances. In the last 5 years of selling residential real estate, I’ve not run across anything like that, but I know I’d really pause if I read “faux stainless steel” on a brochure. I think it might work for some properties and it may look great, but some research will show that it is only heat tolerant to 122 degrees Fahrenheit. 122 degrees is not very hot and I think dishwashers and stoves could damage the faux finish because they may get hotter than that.
Bottom line: If you try this technique to update your appliances be sure to disclose what you did to the prospective seller and avoid misrepresenting the appliances. It could be a costly mistake.
If any agents, brokers or owners have used the veneer and have feedback or know more technical information about it, I’d love to hear from you.
