The Roles Taken by A Real Estate Agent and Attorney During A FSBO Purchase
Posted on April 21, 2008 - Filed Under Florida Real Estate, Palm Coast Real Estate, Homes For Sale, Mortgages, Home Builders, Real Estate
Even when you sell your real estate yourself, obtaining services from two professionals will make sure you get the best price on the sale and that all the legal and financial procedures have been completed accurately. Both the real estate agent and the real estate attorney have skills and information that can make certain of a successful and profitable sale even for a ‘For Sale By Owner’ transaction.
The Real Estate Agent
A primary role of a real estate agent in a ‘For Sale By Owner’ transaction is in preparing the Comparable Market Analysis. The Comparable Market Analysis is a list of prices for like properties that have sold recently in your area. These properties should have the same features as yours and be approximately the same size. If they are in the same community or same neighborhood, that is even better. The idea is to use the list of selling prices for comparable houses in order to set a realistic asking price for your own property.
Real Estate agents can be beneficial in other ways as well. A good real estate agent or broker can provide you with pointers on how to make your house more attractive to buyers. This might include such items as changing paint color, freshening landscaping, checking lighting fixtures and even a thorough housecleaning. The real estate agent in your community will more than likely have a contact list of participants in real estate activities. These include such people as mortgage brokers, roofing inspectors and real estate attorneys. Even in a ‘For Sale By Owner’ closing and sale, a real estate broker can be of assistance in organizing documents and negotiating terms for the sale.
The Real Estate Attorney
Another helpful professional during the sale of your property through a FSBO transaction is a real estate attorney. The state laws in most jurisdictions provide for the sale of property through an attorney. The attorney will accomplish such services as holding the earnest money, binder or down payment from the buyer. If the buyer of your FSBO property or the lending institution used by your buyer has an attorney at closing, you should do the same. In fact the attorney can act as the host at the closing activities. If buyers present complicated offers, an attorney experienced in real estate financing should be used to review offers. Filing of financed mortgages and lease/purchase agreements through the courts should be done by your attorney.
Some states require the FSBO seller to complete closing details by the use of a Title Company or Escrow Agent. Even in this instance, a real estate attorney can provide the other activities involved in the sale of property.
Finding the Right Professional
You can check with friends, family or neighbors to find the names of good real estate agents in your location. You may have an agent that you have used in the past. If you are not content with the referrals you can check with Realtor.com for more choices. finding a real estate attorney also can be done through referrals from those who have made use of such legal experts in the past. Avoid using corporate or criminal attorneys, as they may not be knowledgeable about real estate law.
Suggestions For Capably Flipping Homes
Posted on April 7, 2008 - Filed Under Florida Real Estate, Palm Coast Real Estate, Homes For Sale, Mortgages, Home Builders, Real Estate
In order to make money as a real estate investor, you must find and purchase good properties, but even more importantly, you must be able to sell the properties you have purchased and you must be able to sell them at a profit. Otherwise you have wasted your money and your time. Since you are in the real estate investment business, make sure that you understand these tips about buying and selling real estate in order to be successful:
When you choose a piece of property with all the characteristics of a good investment, you must then change roles and make sure the real estate has all the characteristics of a house that buyers will find attractive. The house must have curb appeal so that potential buyers will want to come in and be sold on the house. The outside of the house or its curb appeal is what captures the attention of the potential buyer and creates a desire to see more.
As you drive past the house, try to look at the house from the standpoint of the buyer. If you find problems such as overgrown bushes and shrubs, worn or chipped paint or a generally or seedy unkempt appearance, the problems should be corrected.
Any good realtor will tell you that buyers are interested in the outside of the real estate, the kitchen and then the number of bedrooms in that order. You should concentrate your efforts toward renovation and repair of the area that has the highest importance to the buyer, namely the outside of the house first. You may need to remove unsightly shrub and bushes. You might need to patch broken walks or steps. The driveway may need to be resurfaced. The largest part of your fix up budget will probably be focused on the outside of the house.
The prospective buyer for your real estate investment property will want to see a neat, clean and appealing real estate when he or she drives by the house. Broken toys or implements in the front yard and overhanging branches or shrubs at the entryway are not conducive to curb appeal. The buyer may feel that a property that looks unattractive on the outside is not worth visiting the interior so you may lose the sale entirely.
Once the exterior of the house is fixed up to suit the potential buyer, you should make needed changes to the appearance of the kitchen. Some people think that kitchen remodeling is too difficult and too expensive, but it doesn’t have to be so. You can usually perk up the appearance with a coat of white or off white paint. You may want to replace cabinet doors or cabinet hardware.
Your paint color choices should be in the light or neutral range rather than bold or bright colors. Buyers want to be able to envision their own furniture and accessories in the rooms. Light colors makes the rooms look more open and neat while bold colors can be overwhelming to the buyer.
Use these hints confidently when you plan to buy or sell investment real estate. If you do the repair and renovation, it will provide you with income from the sale. By focusing on the highest priority things first, you won’t be doing unnecessary fix-up tasks, so your profits will be higher.
Exceptional Tactics For Forming A Real Estate Portfolio
Posted on April 2, 2008 - Filed Under Florida Real Estate, Palm Coast Real Estate, Florida Home Builders, Homes For Sale, Home Builders, Real Estate
Growing a portfolio of property property is identical to developing any business. When you go to apply for a loan, the lenders like to see that you can manage your financial obligations prudently. Sometimes, an inflow of cash is required to continue the growth of your business and this is only possible by borrowing money using the equity in your property portfolio as equity. This attitude shows lenders that you are serious about growing your business and that you have a professional attitude about it.
The preliminary stages of building your property portfolio does not need to be very expensive. You can buy empty lots in an area where development is likely. These lots probably won’t cost you a great deal of money, but are likely to become desirable in the future as the land nearby is developed.
A fairly common way to quickly increase the value of land in your property portfolio is to have the lots rezoned. Changing a zoning classification from single family to multifamily, for instance can make a significant difference in the price of the value of the lots. If you can achieve a dual zone classification on the lots, they will be worth even more.
The regional planning board in your area may have some information that would be helpful to you in your property development plans. For instance, if you contact the board and review information on file there, you may find that there are plans to expand into a certain neighborhood in five or ten years. With this knowledge, you can watch for inexpensive bare lots in the path of the development and purchase them for your portfolio. When a future developer needs one or more of these lots in order to start a project, you will be able to earn from three to five times the original price of the land.
Another way to expand your property portfolio is to purchase distressed properties in an area that is stagnant economically. These low cost properties can be renovated and rented or leased, thus generating a sizable positive cash flow relatively easily. You purchase the houses inexpensively and rent them for market rates. Lenders like to see such activity in a portfolio when a loan application is being processed. Rental units of this type can be approved as HUD housing which gives you a guaranteed monthly income on the properties. Lenders also look more favorably on guaranteed income sources.
Building a property portfolio is mostly a matter of taking small steps to improve the number and quality of your investments.
Home Remodeling Project
Posted on March 25, 2008 - Filed Under Florida Real Estate, Palm Coast Real Estate, Florida Home Builders, Homes For Sale, Home Builders, Real Estate
No matter what type of home remodeling project you are trying to accomplish, it can easily be done if it is planned properly; choices have to be made and this is where the delays happen. The expense of remodeling can be another difficult part to deal with but it also needs careful consideration and planning. Unfortunately, for the vast majority of homeowners, the cost is the primary consideration and often it is not possible to have everything within the budget that has been set.
To make the whole project simpler, it is advisable to employ the services of a professional contractor who will be able to guide on prices and viability of aspects that have been discussed. The cost of supplies will be a huge chunk of the overall cost so you should decide who is going to take charge for this aspect before the contractor starts any work.
If most of your remodeling is exterior work then it is always advisable to let any neighbors know they may have to put up with some noise and mess for a while. You will also need to find out exactly what materials can be used on the project and measure everything carefully as mistakes in this area will cost money. Ordering exactly what you need for your home remodeling can be difficult if you have little or no experience but if materials are incorrect then you will only have yourself to blame.
There are those who like to carry out as much of the works as possible but will still employ the services of a contractor to consult and ensure the plans are sound. It is not uncommon for contractors to employ outside workers to carry out certain sections of a project if it is something that they are unfamiliar with. General project managers can also carry out all of the remodeling or you may decide you only require them for aspects you do not feel comfortable with completing yourself.
Home remodeling is often carried out by owners who do not want to move as they like the area they live in, and as a consequence this type of work is on the increase. Although it can be difficult because the type of home improvements can depend on where you live, and does vary considerably, so it is worth finding out from contractors what their most popular work is. However, if you are just purely making your home a better place to live in, this remodeling may or may not coincide with what is happening elsewhere.
However, home improvement has another, equally important advantage – it increases the value of your home.
It is always worth noting that there is no guarantee that the money spent on remodeling and maintenance work will be recouped once it has been sold. With house values dropping in some locations, a home remodeling project could be just the thing to put a sparkle in your property and increase its value at the same time.
Questions Related To How To Control Earnest Money And A Home Warranty
Posted on March 25, 2008 - Filed Under Palm Coast Real Estate, Florida Real Estate, Homes For Sale
Once the homebuyer has made the decision to buy the house, he will submit an Offer to Purchase and an earnest money deposit made payable to the seller. An Earnest Agreement is prepared and provided to the homebuyer. The Earnest Agreement is a document that shows an earnest money deposit check has been received. The check will be held by a trustee until the sale is completed or until the homebuyer defaults on the sale. It is usually in the amount of $500 to $2000. The trustee will often be the real estate agent for the homebuyer, but the seller’s real estate lawyer can be used as well. In California, state law requires that an Escrow Agent be the one who holds the funds and completes the closing process. In this instance, an Escrow Agreement won’t be required. Other states use title company personnel to be in charge of the closing.
At the time of closing, the earnest money check will be presented to the seller or returned to the homebuyer, depending upon the terms of the Escrow Agreement. Since the completion of the Escrow Agreement is usually one of the duties of the real estate agent, it is typically filled out by the agent acting as trustee for the transaction. If the sale does not go through, the earnest money deposit will remain with the seller as partial reimbursement for the time the house has been off the market.
If you have no real estate agent involved as the listing agent when selling your ‘For Sale by Owner’ house, an Escrow Agreement is a helpful document to prepare. In this instance, the document would be prepared by the seller, but will still be placed with a trustee to hold. This sales form and others needed to complete an FSBO sale and others similar forms are available at major office supply outlets such as Office Max.
A Home Warranty policy is an insurance policy that provides coverage for home systems and major appliances in the house for sale. The home systems include electrical and plumbing systems, heating and cooling equipment among others. The Home Warranty is a great idea if you are selling a ‘For Sale by Owner’ house. New home builders nearly always include a Home Warranty policy on the houses they sell.
A Seller’s Warranty is the Home Warranty purchased by the seller. The usual cost is $300 - $400. The coverage is the systems and appliances from the sale date until the closing date on the transaction. The cost of the policy is often built into the asking price of the house. The Seller’s Warranty will make the house more attractive to buyers and advertising should indicate that a Seller’s Warranty exists.
The homebuyer may buy a Buyer’s Warranty to protect against loss or damage of major systems and appliances in the house beginning with the closing date and continuing through the following year. The cost is usually in the $300 to $400 range. This policy protects the buyer against large outlays for new systems following the purchase of a used or new house.
Program For Advertising Your FSBO Assets
Posted on March 5, 2008 - Filed Under Palm Coast Real Estate, Florida Real Estate, Homes For Sale, Real Estate
Preparing an informational flyers about your ‘For Sale by Owner’ home will help prospective home buyers to find out more information about the home. The flyers can be place in a waterproof holder connected to the FSBO sign in front of your home. The information on the flyers helps home buyers know whether they want to see more details about the home. The prospective buyer can then make arrangements to see more of the home through a showing. Informational flyers can also be posted on community bulletin boards or other locations as well.
The informational flyer that you prepare should contain many of the details about the home. Tell prospective home buyers about the best features of the home. If there is a home warranty or security system, include the information. List the number of rooms and if there are extras such as a swimming pool or a spa, note the information. Let potential home buyers know what type of construction is in the home, such as a Tudor style, a townhouse, or a brick rancher. The square footage of the home is often very important to home buyers, as is the number of levels and whether there is an attic or basement. The address of the FSBO home and contact phone numbers will be a critical bit of information to be included in the flyer. If you have set up a website about the home, be sure to include the web address so that home buyers can see pictures of the interior of the home.
When a prospective buyer finds a suitable neighborhood, he or she may just drive around looking for properties for sale. It is important that you make sure your home is recognized as being on the market. You can lead prospective home buyers to your home by purchasing directional signs at your local home improvement center such as Lowes or Home Depot.
Since almost everyone in the market for a home today has a home computer and access to the internet, you can take advantage of that fact to help in the marketing of your ‘For Sale by Owner’ home. By preparing and posting a web page about your home, you can increase the amount of information available to prospective home buyers and boost exposure as well. You should include the information from the flyers plus several pictures so the buyer can see a virtual tour of the home.
Take about ten good quality photos of your house showing off the best features both inside and outside of your house. The web host for the listing site will help you to create a map link so that visitors will know how to get to the location of your home. Use the ‘For Sale by Owner’ web sites to easily and quickly build your own FSBO website.
When you place an advertisement in your local newspaper, be sure to include your web address. The web address should also be included in your informational flyer. Those people who live and work in an area are often the same people who buy homes in the area. For this reason, an open home is a very effective marketing tool.
Information Related To How To Utilize Earnest Money And A Home Warranty
Posted on March 3, 2008 - Filed Under Palm Coast Real Estate, Florida Real Estate, Real Estate
A decision to purchase the real estate on the part of the homebuyer will be followed by an Offer to Purchase and submission of an earnest money check made out to the seller. The homebuyer will receive in return a form called the Escrow Agreement. This document shows that the earnest money deposit has been received and that it is being held by a trustee. The earnest money deposit typically is for $500 up to $2000. The trustee holds the earnest money deposit check until the transaction is completed or until the homebuyer defaults. Often, the trustee is the seller’s real estate lawyer, but it may also be the real estate agent for the homebuyer as well. California State law requires that an Escrow Agent must hold the funds and host the process of closing. The presence of an Escrow Agent makes an Escrow Agreement superfluous. In other States, the title company officials or the Escrow Agent can be in charge of the closing. Regulations vary from state to state, so the seller will need to review the requirements of their own State.
At the time of closing, the earnest money check will be presented to the seller or returned to the homebuyer, depending upon the terms of the Escrow Agreement. Since the completion of the Escrow Agreement is usually one of the duties of the real estate agent, it is typically filled out by the agent acting as trustee for the transaction. If the sale does not go through, the earnest money deposit will remain with the seller as partial reimbursement for the time the house has been off the market.
If you have no real estate agent involved as the listing agent when selling your ‘For Sale by Owner’ house, an Escrow Agreement is a helpful document to prepare. In this instance, the document would be prepared by the seller, but will still be placed with a trustee to hold. This sales form and others needed to complete an FSBO sale and others similar forms are available at major office supply outlets such as Office Max.
A home warranty is a type of short term insurance policy that covers the operation of major appliances and systems in the home such as plumbing, heating and cooling equipment, and electrical equipment. The policy is to cover the cost of replacement or repair of any of the equipment from the date of purchase until the date the sale is closed. The seller of a used house should always purchase a home warranty. Builders of new homes always include a home warranty in the purchase price of the home.
A Seller’s Warranty usually costs in the range of $300 to $400 and is purchased by the seller of the real estate. It covers from the purchase date until the date of the final closing. The seller will almost always include the price of this policy in the asking price of the real estate. If you want to make the real estate more attractive to potential buyers, advertise the fact that it has a home warranty.
The Buyer’s Warranty picks up coverage at the closing date on the house and usually costs about the same amount–$300 to $400. The items covered are the same as on the Seller’s Warranty. The coverage period is from closing forward for a period of 12 months. The homebuyer has the option of yearly renewal if desired.
Advice Relating To The Client’s Offer To Purchase A Property
Posted on February 19, 2008 - Filed Under Florida Real Estate, Palm Coast Real Estate, Greg Beaty, Florida Home Builders, Homes For Sale, Home Builders, Mortgages, Real Estate
After the prospective buyers have seen your FSBO house and have decided that they are interested in purchasing the property, they will prepare an Offer to Purchase and submit it to you for your review and decision. You should have taken the time to familiarize yourself with a standard purchase offer agreement. Most office supply stores carry blank real estate contracts, or you can find examples on the internet. Make certain you look over the blank form so that you understand the conditions and the wording of each section. It is unnecessary and even foolish to attempt to design your own form, since you may end up omitting critical clauses or adding wording that will create problems further down the road toward purchase.
Special clauses are sometimes included in the Offer to Purchase. The potential purchaser may ask for special features outside the normal range of purchase offer conditions. When this occurs, the seller should review such clauses carefully to determine what is intended by the section and how implementation of the conditions of the special clauses in the Offer to Purchase will affect the way the sale is concluded. Some of the special clauses which might be found in an Offer to Purchase include: A short time in which the seller must vacate the house after the sale; an abnormally lengthy time between acceptance of the offer and the date of closing; a penalty for not vacating the property by the agreed upon date; making the purchase of your property contingent upon the sale of the buyer’s current property; or an extremely low earnest money deposit.
Every one of the clauses included in the Offer to Purchase has an effect on the amount of cash the seller receives at closing. They may reduce the price to the seller or increase the expenses to the seller if agreed to. It is important that the seller review and understand what each section will do. The seller doesn’t have to agree with any of the special clauses.
Along with the Offer to Purchase, the purchaser is usually expected to include an amount of money offered to show that he is serious, or in earnest, about the offer to buy. Earnest money is not a legal requirement in most places. The earnest money deposit is held by a third party until the closing date. If the purchaser defaults on the contract, the money goes to the seller.
Once the seller has received and reviewed the Offer to Purchase, the seller has several options for its disposition. With the assumption that the purchaser has already been pre-qualified for financing needed to purchase your FSBO property, the seller can agree to all the clauses, terms, and conditions listed in the purchase offer. In this instance, the seller signs the Offer to Purchase and it is then considered to be a sales contract. The seller’s second option is to make a counteroffer that negates or changes any or all of the provisions of the Offer to Purchase. This is done by crossing out clauses, editing clauses, or adding additional clauses to the offer and signing or initialing the document. The third option is to simply reject the entire offer.
Before you sign the Offer to Purchase, you should make certain that you completely understand all the clauses included in the document or binder. It is also acceptable to continue to accept backup offers to purchase your property, just as long as the backup purchaser knows about the sale pending contract with the first purchaser.
Will You Implement Owner Financing For Your FSBO Home?
Posted on February 12, 2008 - Filed Under Florida Real Estate, Real Estate
Finding the perfect buyer–one who has cash and is willing to pay the full asking price for your FSBO house is a great dream for the ‘For Sale by Owner’ seller, but one which doesn’t happen very often. As a seller, you may want to consider offering owner financing for the sale of the house, particularly if there is a significant amount of equity build up in the home. Providing seller financing for the buyer’s mortgage loan can result in a significant advantage for the seller and the buyer as well.
If you have accrued significant equity in your ‘For Sale by Owner’ property, you may find it to your advantage to provide the buyer with a seller-financed first or second mortgage on the home. Sellers find that owner financing is beneficial because it allows the seller to charge more for the price of the house. Seller financing also allows the holder of the mortgage–the seller–to earn a higher rate of interest than could be gained by investing the money in a savings account or certificate of deposit.
By agreeing to finance a mortgage for the buyer of the FSBO home, the seller makes it possible for the buyer to %purchase% the house. There are many reasons why the buyer would have trouble obtaining financing, but usually they relate to credit worthiness. There may be other problems making obtaining a mortgage loan difficult. The seller who is nearing retirement age will appreciate having a regular monthly payment arriving from the buyer to repair the mortgage loan.
Seller financing may take the form of either a first or second mortgage. In either case, if the buyer defaults on the loan, the mortgage holder can suffer a loss. The first mortgage holder can impose a forced sale on the home, known as a foreclosure, but the second mortgage holder is unlikely to get anything at all from the forced sale. Because of the higher risk of loss, most second mortgage holders impose a higher interest rate.
Qualification of the buyer will be your responsibility when you do a seller financed transaction. You will want to ask the borrower for a financial statement and copy of their credit report in order to verify that they have the income necessary to make the mortgage payments each month. By documenting the details of the transaction and getting the legal papers signed at closing, you will be protecting yourself financially. Be sure to have an attorney look over the legal documents to make sure they are accurate and complete.
Since bankruptcy and foreclosure rates in the United States have become more common, you must accept that taking the house back from the buyer in the event of a default on the loan may be required. This procedure can be complex and sometimes costly. The danger of default on the loan is the largest single disadvantage for the concept of owner financing.
As the seller, you must weigh the advantages of a higher sales price and higher earnings on your investment funds against the risk of losing part or all of the remaining loan proceeds. Even with the risks, seller financing is a lucrative way to invest earnings from the sale of your FSBO home.
Projecting What Your Home Prices Can Add Up To
Posted on January 28, 2008 - Filed Under Florida Real Estate, Palm Coast Real Estate, Greg Beaty, Florida Home Builders, Homes For Sale, Home Builders, Mortgages, Real Estate
Each “For Sale By Owner” seller needs to set the right home prices. First and foremost, one must start by discovering the true market value of their home. The Comparable Market Analysis is a vital tool for doing this. This service will list houses by address and give details including the square footage of the home, the asking price in comparison to the actual selling price, as well as the date of the sale. The foundation for the true market value of your home can only be found here.
Carefully review the houses of equivalent size and number of rooms. Houses in your neighborhood listed on the Comparable Market Analysis are perfect items for comparison. Review how the size of the lots compare to your own. In addition to this, you must determine how the general condition of the homes listed compare to that of your own. Having reviewed all these variables, you can now determine the price of your home. Don’t hesitate to make it higher or lower than the selling price of other homes in your neighborhood.
If you are interested in a more simple option, you can always hire a real estate appraiser to appraise your home. He or she will review the quality of your home and determine a price after comparing this to what similar homes in your neighborhood sold for.
The closing cost is a very important item to consider. This is essentially the amount of money that you will receive after the sale. Expenses attained by the seller will not go into the home prices, but will be included in the closing cost. Some examples of these expenses are recording fees, surveyor’s fee, attorney fees, title search, or any other costs corresponding to the sale or purchase of a home.
You will be responsible for half of the closing costs if the buyer you see fit was brought to you through a real estate agent. This sum will be approximately three to three and a half percent of the selling price. If your home was listed through a real estate agent, you should count on paying six or seven percent of the selling price.
The most profitable situation for the seller of a “For Sale By Owner” home is finding your own buyer through your own advertising. If this is the route you take, you won’t have to pay any debts to the real estate agents.
One of the best ways to abbreviate your costs is by putting in the sales contract the maximum amount the buyer will pay towards his mortgage costs and any other closing fees. The fees may be prevented from being restricted if a real estate agent gets involved and creates a separate contract for the fees.
More often than not, the fall and winter seasons have fewer buyers in the market for new homes. Sometimes in order to get a buyer, a “For Sale By Owner” seller will abbreviate their home prices as a last resort. A family will primarily prefer to move during summer vacation if they have children who are still in school. Places with warmer weather are exceptions to this trend. Buyers in these locations prefer to purchase new homes when the weather cools down in the spring or fall.
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