Monthly Archives: February 2014
About Me
It doesn’t matter whether it is a buyer market or a seller market.. there is always fierce competition among the houses on the market.
Buyers need aggressive, effective, REALTOR to help get the best out of their home purchase.
Sellers need a REALTOR who know how to get their home the best exposure through advertising and using Good marketing tools.
Buying/Selling a house is not an easy task, it is a complicated task and needs a REALTOR who can help you at every step.
That is why it may be in your best interest to hire the Very Best to represent you.
Selecting a Real Estate Agent
I’m going to touch base on one of the most important aspects in the process of real estate transaction; which is selecting a Real Estate Agent, whether you are buying or selling.
The market is full of Realtors from different backgrounds, with different skills, representing many brokers and brokerage firms, providing different levels of services, with different experience.
So the million dollar question will be: Which one to choose? The answer to this question will be whether you are buying or selling.
A- If you are selling your home, here are some of the characteristics sellers say they want in agent:
- Experience. With the local market is a key to succeed in selling your house.
- Education. Ask about degrees and certifications.
- Honesty. Trust your intuition. Your agent should speak from the heart.
- Networking. This is a people business. Some homes sell because agents have contacted other agents.
- Negotiation skills. You want an aggressive negotiator, not somebody out to make a quick sale at your expense.
- Good communicator. Sellers say communication and availability are key.
Two of the biggest mistakes home sellers make when choosing a listing agent are selecting an agent based on:
- Highest List Price for Your Home
- Lowest Commission
you may think that those are the 2 main keys to choose a realtor but those two criterion have very little to do with hiring a competent agent and, in many instances, are completely irrelevant. Let’s look at why.
The Highest Suggested List Price
Agents can’t tell you how much your home will sell for. That’s a not TRUE. A listing agent can show you comparable sales, pending sales and active sales. But YOU choose the sales price and a buyer will tell you if the price is right.
To get the listing, some agents distort the truth.
- Since agents can’t guarantee your sales price, the listing agent who suggests the highest price is probably untruthful. Ask the agent to show you numbers supporting that suggested list price. They probably won’t have them or the home sales will be located in a different neighborhood.
- Look for a listing agent who gives you a range.You always look for a price range. Many factors determine the range, among which are location, the market condition and improvements.
- Pricing is an art.The best time for an offer is within the first 30 days on market. If the home is priced right, you’ll get an offer. If it’s priced too high, you might not get any showings at all; buyers will shun your home and you’ll eventually end up reducing the price, leaving buyers wondering what’s wrong with your house.
Should You Choose an Agent Based on Commission?
Real estate agents are not equal; each is unique. Remember about 10% of the agents do 90% of the business. Each has their own marketing techniques and advertising budget. By choosing an agent with a large advertising budget and company dollars to match it, you will gain greater exposure to the largest number of buyers, which is ideal. Reaching greater numbers of buyers equals better chances of a good offer.
B- If you are buying a home, make sure to ask these questions:
1. Are you a member of the National Association of Realtors?
This organization requires certain standards from its members, and you don’t want to worry about having a shady agent.
2. Are you a member of MLS?
This is the Multiple Listing Service, which gives agents access to houses represented by all agencies — not just their own. For sellers, this means your home will be posted on the list as well, which means more people will see it.
3. Do you work on weekends?
Since this is when most open houses take place, the answer to this should be yes.
4. Can you outline how you would represent us?
The answer should include your housing inspections, following through with your mortgage approval process, and being present at your closing.
5. Will you show me houses listed by other companies?
Double-check that the agent isn’t partial to his or her own realty group.
6. Are you familiar with our area?
You’ll want the agent to know the ins and outs of your community.
8. What’s your business style?
Do you want a broker who calls you once a week or emails daily? Find out how the agent will keep you updated on prospects and inform them about your preferences.
Why hiring a Real Estate Agent when buying or selling a home.
1. Education & Experience.
2. Agents provide peace of mind.
3. Neighborhood Knowledge
4. Price Guidance
5. Market Conditions Information
Real estate agents can disclose market conditions, which will govern your selling or buying process. Many factors determine how you will proceed. Data such as similar homes, median and average sales prices, average days on market and ratios of list-to-sold prices.
6. Professional Networking
Real estate agents network with other professionals, many of whom provide services that you will need to buy or sell. Due to legal liability, many agents will hesitate to recommend a certain individual or company over another, but they do know which vendors have a reputation for efficiency, competency and competitive pricing.
7. Negotiation Skills & Confidentiality
Top producing agents negotiate well because, unlike most buyers and sellers, they can remove themselves from the emotional aspects of the transaction and because they are skilled. It’s part of their job. Good agents are not messengers, delivering buyer’s offers to sellers and vice versa. They are professionals who are trained to present their client’s case in the best light and agree to hold client information confidential from competing interests.
8. Handling Paperwork
One-page deposit receipts were enough to sell a house in the old days. Today’s contracts run so many pages with all forms and addendums and mandated disclosures. One tiny mistake or omission could land you in court or cost you thousands. In some states, lawyers handle the disclosures.
9. Develop Future Business Relationships
The basis for an agent’s success and continued career in real estate is referrals. This emphasis gives agents strong reasons to make you happy and satisfied. It also means that an agent who stays in the business will be there for you when you need to hire an agent again. Many will periodically mail market updates to you to keep you informed and to stay in touch.
Tips when buying a house
How to Buy a Home (in order)
1. Pick your your professionals. Stick with recommendations from Realtors. Your Realtor can help find the most trusted professionals who deals with the real estate transactions based on their experience with them. They can filter the good ones from the bad ones for you.
2. Hire a real estate attorney if your state law requires one for closing. Quiz them on their conflicts. A good real estate attorney can protect you throughout the process. Some state bar associations have a specialist certification for real estate attorneys.
3. When Searching Online to Find a Home. Ask your realtor about the most updated real estate website, some of them get updated once a week risking losing a good deal or property.
4 Shop and compare loan officers and narrow the selection down to three. The most important time to compare rates is when you lock in your rate. Most big real estate companies have in-office affiliated loan officers who can make the transaction goes smoothly.
5 Hire a buyer agent. Avoid dealing with listing agents that may lead you to a dual agent situation because they will be constantly running into conflicts of interests so severe that it will be illegal for them to assist you in key parts of the transaction and hence by law they have to protect the seller first. Try to find an Exclusive Buyer Agent who can represent you to your best interest in the deal. Base line, Never agree to dual agency and never allow your agent to collect incentives from the seller or other brokers or to pay referral fees to other brokers.
6 Hire an independent title company or attorney to close your transaction.
In states where attorneys are required to close transactions, make sure that your closing attorney is not the same one who has been helping you through the negotiation process. Use that negotiating attorney to help you negotiate the terms of the title insurance coverage that you receive from the closing attorney.
In states where title companies perform the closing, make sure that you are using a title company that is not affiliated with the seller. Make sure that the title company has attorneys on staff who supervise the title examination process.
Home Inspection Tips for Buyers
What is a Home Inspection?
Home inspection process is simply hiring a professional to inspect the property in all areas (structural, mechanical, electrical, plumbing) and prepare a comprehensive report to the the buyer of the house, new or old, in order to help the buyer make an informative decision before closing. The inspector should be certified and provide a report of the condition shortly after the conclusion of the inspection.
Reasons You Need a Home Inspection
It seems very important to get a home inspection, however many buyers opt out, especially when purchasing a new home or in tough seller’s market when the demand is high and the inventory is low to make their offers appealing to the seller. In short, you need to get a home inspection to insure you’re not walking into a financial disaster. You wouldn’t want to close on your home to later find out it has structural problems that are going to cost you thousands of dollars to fix.
How Much Does a Home Inspection Cost?
Cost of a home inspection depends on the size of the house and will differ by home inspector. Generally we are taking about a range of $300 – $500 which can save your thousands in the long run. There are some add – on services, so make sure you check with your inspector and get a quote before begging the process.
Include a Home Inspection Contingency in your Sales Contract
Make sure you have a contingency clause built into your sales agreement that states the sale of the home is contingent upon no major issues found in the home inspection. Your lawyer or real estate agent can help you with the wording, but you need some way to opt out of the contract based on the results of the inspection.
Who Pays for the Home Inspection?
The home inspection is the responsibility of the buyer. It’s well worth the money, especially if you’re buying an older home. However, you strongly should consider paying for a home inspection for a new home. Of course, you may love and trust your builder, but they make mistakes too. Keep in mind all new homes are generally insured for a year, but how do you know what to ask to be fixed without a home inspection?
How to Find a Home Inspector
Typically real estate agents are a good place to start to find a trustworthy inspector. Just ask your agent for their top three picks and you can do your research from there. You can also search on the web, but you may not be getting someone whom your agent is familiar with their work.
Makes Sure You Require Certification
It’s very important that your home inspector is certified. Otherwise, they may just be going on their own experience or judgment and not know the proper guidelines regulations to follow for their state. There are a lot of people with housing experience, but the state certified inspectors are required to look for certain things in the inspection and disclose them to you. Don’t take this issue lightly, Buying a home is a big, huge and long term investment that you don’t want to risk it to save few bucks.
Hire a Knowledgeable Inspector
While it’s important to hire an inspector who is certified, it also helps to find someone who has some home building, or related experience. Such inspectors are the brightest when it comes to finding issues as well as describing the problems to you in the report.
Watch Out for Conflicts of Interest
Under no circumstance should you hire a home inspector who also has a repair business looking to sale you services. While home inspectors may have remodeling and repair business on the side, the temptation is to find things that require their repair services.
Ask About the Inspection Report
A key to differentiate between home inspectors today is how they generate their report. Do you want a hand written report that is delivered in a few days? Or, would you rather have an electronic version with images you can via on the web the same day? Generally, it’s the latter, but it’s your preference. Some home inspectors, are using home inspection software to offer more conveniences to agents and customers.
Set Expectations in Regards to Timing
You should agree with your home inspector up-front in regards to when they will visit the home and when their report will be generated. This is a key in the home sales because those time frames are set in writing in the sales contract and missing those dates may cost you the right to opt out of the sale if there’s a major problem and Setting such an expectation up-front will insure you have the information you need timely during the already busy process of buying a house.
Use a Home Inspection Checklist
It’s always a good idea to understand what to look for and you can use a checklist from Closing.com as well as some other resources.
Preparing to buy your Next Home
Selecting a mortgage loan has become a challenging task in recent years. Sad News are :
Don’t expect it to change anytime soon.
Lending standards will remain tight in 2012, but that doesn’t mean you won’t be able to snag a mortgage with an attractive rate. Savvy borrowers who understand the rules and prepare in advance will improve their chances of success.
These tips will help you stay on top of your game as you try to secure a mortgage in 2012.
Most lenders require a minimum credit score of 680 to comply with Fannie Mae and Freddie Mac’s guidelines. Federal Housing Administration loans, which are guaranteed by the FHA, allow for lower scores, but most lenders want to stay away from scores lower than 620.
2- Prepare before you start
There are some basic documents every lender requires to process your mortgage application. Don’t wait for them to ask.
Have these documents ready when you walk into the lender’s office: your last two pay stubs, W-2s, income tax returns and bank statements.
Save these documents and any additional ones the lender requests in an electronic format, so you can easily resend them if anything gets lost in the process.
3- Know how much you can afford
Don’t rely on your lender to tell you how much mortgage you qualify for and then borrow the maximum amount. Plan your budget, and leave room for unexpected expenses. That’s especially the case when you are buying a house.
Bankrate’s calculators can help you determine how much house you can afford and estimate your monthly mortgage payments.
4- Shop around
Shopping around for a mortgage should go beyond comparing interest rates. Rates are important, but would-be borrowers must consider points, closing costs and different types of loans. Get estimates from three banks and three mortgage brokers before you decide which combination works for you.
5- Time is of the essenceOnce you submit your mortgage application to the lender, the clock starts ticking. Make sure you quickly send in any documents requested during the approval process.For buyers, a delay in closing the loan could kill the purchase and cost them their deposits. When refinancing, a delay could mean losing the interest rate the borrower originally locked in. Ask for an expected closing date, and follow up with the lender periodically until the loan closes. Keep in mind, some lenders close more quickly than others.6- Mortgage approved? Your credit must stay put until closing
After the lender pulls your credit and says you’ve been approved, don’t assume you’ve won the battle. Most lenders will pull your credit again before the loan closes.
It’s wise to avoid any moves that may affect your credit. Don’t apply for new credit cards or credit lines. Pay your bills on time
7- Consider a refi with no closing costsYou don’t always have to spend money to save money when refinancing. Many lenders offer mortgages with no closing costs. No, it’s not a free ride. Lenders usually make up for those costs by charging the borrower a slightly higher interest rate. Sometimes the slight increase translates into a few extra dollars in the monthly payment, and the borrower can save thousands in closing costs.8- Consider a shorter-term loan
Because interest rates are at or near rock bottom, short-term loans have become more affordable for many borrowers.
Those who currently have a 30-year mortgage with an interest rate of 6 percent or higher may be able to refinance into a 20-year or 15-year loan while keeping their monthly mortgage payments close to what they pay now. Consider this option even when the short-term loan means slightly higher monthly payments. This is your chance to pay off your mortgage more quickly.
Did your parents or in-laws give you a few thousand dollars as a gift to help out with the down payment? If so, congratulations — but make sure you can document and explain where you got the money.FHA loans allow borrowers to receive their down payment as a gift from a relative. For conventional loans, borrowers may receive gifts, but at least a 5 percent down payment must come from their own funds.Borrowers receiving a gift are required to present a gift letter signed by the donor, and they will need a paper trail of the money transfer. Be ready to present statements to show where the money came from when it was deposited into your account.Unless the money is being used for the down payment, avoid receiving large cash deposits in your bank account until your mortgage closes. Any large deposits other than your paycheck will have to be explained to comply with federal regulations.10- Be persistent
If one lender rejects your mortgage application, that doesn’t mean all lenders will. Most lenders follow Fannie Mae and Freddie Mac guidelines. In addition, they have their own internal underwriting guidelines, and some are stricter than others.
Ask exactly why your mortgage was denied. Depending on the reason, you may be able to take some quick steps to imp
11- Appraisal isn’t enough? Try againIf the home appraisal your lender received isn’t enough to back the mortgage loan and you think the appraiser is mistaken, try another lender.You can’t order a second appraisal or pick which appraiser the lender hires, but you can dispute the first appraisal or apply with a different lender.In a perfect world, the appraised value of a home shouldn’t vary drastically from one appraiser to another. But you may find that they do. If you believe the first appraiser is wrong, try a different lender and hope that lender’s appraiser does a better job.
12- Seek help
If you are behind on your mortgage or are struggling to keep up with your mortgage payments, seek counseling.
The U.S. Department of Housing and Urban Development has counseling agencies throughout the country. Homeowners can receive free foreclosure-prevention counseling from HUD-approved counselors. To find a housing counseling agency near you call (800) 569-4287 or visit the HUD website.
Sellers, what to do and not to do when selling your home
Selling Don’ts
1. Think you know more than your Realtor and insist on listing your home over what your Realtor advises. They are the experts and know the market. This is the most important “don’t” when selling your home, bar none!
2. Clean your home by cramming all your junk into every conceivable storage space. It’s a given that buyers will look in your closets, cabinets, basement and garage. If your storage areas are crammed with “stuff”, you’re sending a flag that their “stuff” won’t fit either.
3. Wait until a few days before your open house to discard or store unnecessary furniture, personal collections and family photos. Rent PODS – the newest, fastest growing self-storage units, or call on family to store the things you don’t absolutely need. This serves two purposes: you’ll have far less to do once you sell and showcase the room’s square footage.
4. Assume buyers are going to take on your deferred maintenance like broken doorbells, leaky faucets, chipped molding, running toilettes and/or torn screens. Buyers want turnkey homes. Moreover, you don’t want to give them instant negatives when they walk in the door.
5. Fill your home with Glad Plugins and similar products. It’s akin to spraying perfume in lieu of a shower – it doesn’t work and buyers suspect your trying to mask unpleasant odors. Clean is the only smell everyone loves!
6. Assume buyers are pet lovers – many are not and some are allergic to cats and dogs. During showings and open houses, temporarily take pets and all trances of them out of the home. Yes, this is a hassle, I know, but it’s temporary and your goal is to sell quickly.
7. Neglect curb appeal – it’s buyer’s first impression of your home in person and on MLS (where 90% of buyer’s start their home search). Hire a landscaping company or do it yourself. Don’t forget to trim hedges, add fresh mulch and blow debris clear from walkways, porch and driveway.
Selling Do’s
1. Find a reputable, seasoned Realtor and let them price your home based on their research, knowledge and comparable comps. Did you know that 85% of people think their home is worth more than it is?! Defer to your Realtor and trust that they understand the market and are experts at pricing homes!
2. Throw out any outdated, dusty floral arrangements and flower swags that went out with the eighties. Replace them with real plants, or buy high quality silk arrangements that will pass for the real thing – just not at the dollar store!
3. Paint the interior of your home in neutral colors. Nothing cleans and brightens up a home more than a fresh coat of paint. Moreover, it yields the biggest bang for your buck with a staggering 150% return on investment. Consult a home stager for the most popular neutral wall colors that have mass appeal.
4. Have your rugs shampooed so they are clean and odor free. You can rent carpet cleaners at most grocery stores or hire a carpet cleaning company. While you’re at it, open all your windows and air out your home every few days.
5. Give every room a purpose taking the guess work out for buyers. If you’re selling your home as a 4 bedroom, but have been using one of the rooms as an office/home gym, return it to a bedroom. If you have a small room with no closet, make that room an office.
6. Make your master bedroom non-gender specific.Invest in neutral bedding and add some decorative pillows. Look at high-end hotels. They are designed to appeal to the masses. Grandma’s homemade afghan isn’t going to cut it!
7. Invest in a home staging consultation. Home stagers are experts on preparing your home for the market. They understand and can implement all the necessary changes that will give your home that competitive edge it needs in today’s market.
Selling your home
Today I’m going to 
touch base on some of the services that your listing agent will provide:
1- Market Analysis.
Pricing your home properly is half of the job of selling. The agent will perform research, often before your initial interview, so that you will have the data needed to arrive at the proper listing price.
2- Information.
At the time your house is listed, the agent will collect detailed information about the property. The material will be used not only for assisting possible buyers in choosing which homes to view, but for preparing advertisements, drawing up a purchase agreement and arranging the eventual transfer of title.
3- Fixup Advise.
It can be difficult for you to view your home with an impartial eye. Being skilled in looking at houses as buyers see them, the agent can offer valuable suggestions for showing your home off at its best.
4- Interim Services.
If you must leave town for a vacation or move before the house is sold, you can expect a real estate agent to supervise the property, pick up papers, arrange for lawn care or snow removal and check for signs of vandalism or fire. Neighbors seeing anything suspicious usually call the number on the For Sale Sign, and the agent is available in an emergency.
5- Advertising.
These costs are usually borne by the real estate firm, which decides on the size and frequency of advertisements. You may be asked for suggestions, but you’ll find that the agent is experienced in writing ads.
6- Qualifying prospects.
Unless each house hunter who visits your property is financially capable of buying it, then you, the agent and the prospects themselves are just spinning your wheels. The agent has an established technique for judging buyers and will obtain information about income, assets and credit rating within the first few minutes of conversation. The process is called “qualifying” the prospect.
7- Appointments to Show.
You can expect your agent to clear appointments with you in advance, accompany all prospects, you as a seller should not be present at showings because you can jinx a sale. Every good agent has developed a skilled, professional technique for showing property to best advantage.
8- Open Houses.
For the same reasons, your agent may recommend that you leave the property during an open house. This period, usually a weekend afternoon, is advertised as a time when the public is welcome to visit the house. Special signs invite all comers, and the agent will devote several hours to your property that day.
9- Reports on progress.
While your home is on the market, you should receive periodic calls from your agent. You will appreciate these even if the agent reports only that nothing is happening. In this case you can expect suggestions for improving your home’s appeal.
10- Contract Negotiations.
The agent’s tact and diplomacy are most directly in the process of bringing you into agreement with the who wants your property. Knowledgeable in finance and law, with the experience of past transactions to call upon, the agent serves as a buffer between buyer and seller, skillfully smoothing the path to a satisfactory agreement.
3 types of mortgage loans for homebuyers
When it comes to getting a mortgage loan, homebuyers have fewer options than they did even a couple of years ago. In the days of the real estate boom, lenders were much more willing to float exotic loans based on risky terms, but recently they have returned to safe and sensible home financing.
Homebuyers hoping to jump into the mortgage market will find three basic types of loans, for the most part.
Fixed-interest mortgage
With a fixed-rate home loan, your interest rate remains the same for the life of the loan and the payment is split into equal monthly payments for the duration. In other words, it is amortized over the life of the loan.
The interest payments are front-loaded, however, so that during the first few years of the loan term, only a small portion of the payment pays off the principal.
Most commonly taken as a 30-year loan, fixed-rate mortgages can be shorter in duration or, more rarely, longer.
“Fixed-rate home loans can be 10 years, 15 years or 20, but most popular is the 30-year because that makes your payment the lowest,” says Floyd Walters, owner of BWA Mortgage in La Canada Flintridge, Calif.
During the height of the real estate bubble, news broke about even longer loan terms, with some mortgages being offered for a long as 50 years. Those may have been more of an urban myth than reality, says Walters.
“To be honest, I never saw a real offering for a 50-year mortgage. I did see just a few lenders offering a 40-year mortgage,” he says.
An extremely long mortgage term offers few advantages to consumers.
“On a fully amortized 30-year fixed-rate loan at 5.25 percent for $250,000, the payments would be $1,380 per month. Take that same loan out another 10 years to a 40-year note and the payments drop but only to $1,247 per month. You save $133 per month but it adds 10 years to your note with a net cost of an additional $100,000 or so,” Walters says.
Adjustable-rate mortgage
Unlike a fixed-rate home loan, which sports a static interest rate over the life of the loan, the interest rate on an adjustable-rate mortgage, or ARM, changes every year.
ARMs come in various permutations. For instance, a hybrid ARM features aspects of both adjustable and fixed-rate mortgages.
“Hybrid mortgages can be anything from a three-year, five-year, seven-year, or 10-year fixed interest rate period,” says Mark Klein, president of Pacific Coast Lending in Agoura Hills, Calif. After the fixed-rate period, the loan is amortized over the balance of the term with a rate that adjusts annually.
Conversely, a one-year ARM has no fixed-rate period. Though they are still available, they’re not widely offered, says Walters.
“It’s hard to believe there are very many people taking a one-year. I haven’t done one for years and years. It’s just not a product that feels right,” he says.
One circumstance when they might be appropriate would be in a high fixed-rate environment.
“If I could take a one-year ARM that was 1 or 2 percentage points below what I could get as a fixed-rate mortgage, and if I could get some interest rate caps built-in, I would analyze it. If we were in a high fixed-rate environment, it might appear more attractive,” Walters says.
Unlike a plain-vanilla fixed-rate mortgage, ARMs come with more jargon than most people would care to know. But it’s vital to understand the index on which the rates are based, the margin amount, and any interest rate caps (provisions in the contract that limit rate increases).
Index — An index is a published measure of the cost of money. Lenders price home loans based on the index to which the loan will be tied. There are several different indexes lenders use to calculate the rate on ARMs. Some commonly used indexes are the one-year Treasury Constant Maturity, the London Interbank Offered Rate, or Libor, or the 11th District Cost of Funds Index, or COFI.
After the initial fixed-interest period, the rate will adjust based on predetermined agreements in your note.
“The lender will say, ‘We will fix your interest rate at 4 percent for the next five years. At the end of five years, we will go out and find the value of one-year Treasury bills and add a margin to that and we will fix your interest rate on the loan for a year at a time based on that (index and margin),'” says Walters.
Margin — The margin is a set amount that will be added to the index to determine the interest rate.
Cap — The interest rate will adjust regularly, but there is a limit to the amount it can change. Typically, there will be a cap on the initial interest rate reset that is higher than all of the subsequent rate adjustments, and a cap on the amount the rate can change over the life of the loan.
“On the first adjustment with a lot of lenders, there is a 5 percent cap on the first reset and then it goes to 2 percent a year every year, with a lifetime cap of 5 percent over the starting interest rate,” says Walters.
Interest-only loan
For those buyers who need a rock-bottom payment for several years, the interest-only mortgage product, as its name implies, allows them the option of paying only the interest for the first few years of the loan.
“You can pay principal if you wish; interest-only is an option,” says Walters.
Interest-only loans are structured like an adjustable-rate mortgage.
“The most common one is the five-year fixed 30-year loan,” says Klein. “The payment and interest rate are fixed for five years and the payment could be based on only the interest payment, so you’re not paying down the principal. When it resets your payments can go up pretty significantly, even if the interest rate doesn’t change that much.”
An interest-only loan may be appropriate for homebuyers who believe their income will increase in the coming years — for instance, young families or a professional just starting out at the bottom of a potentially lucrative field such as law or medicine.
“Who they are not good for is someone who is stretching every dollar to get into a house and whose income is going to be relatively flat,” says Walters.
No matter what kind of loan gets you into a home, do your homework beforehand and make sure there are no details about the mortgage loan you don’t understand.
How Do I Choose a Title Company?
How Do I Choose A Title Company?
Most consum
ers don’t even realize what Title Insurance really is. Many consumers don’t know they even need a title company until they were told so by their bank or realtor. The fact you are actually conducting due diligence in your search for a title insurance company is an important step. First off you are on the right path to guarantee your transaction goes smoothly and you have the adequate 3rd party protection and security that you as a consumer deserve.
How Do I Choose A Title Company? Before exploring how to make such a choice lets first make sure you understand what a title company is or even does, let’s review.
So now, how do you choose the right title company? First off, you as the buyer or borrower have the right to choose your title insurance company. The decision is not up to the Seller, Realtor or Bank. Section 9 of the Real Estate Settlement and Procedures Act or RESPA “prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance.”
So there are most likely several title companies that come up as local agencies to your neighborhood. A lot to choose from right! But while most title insurance charges are state regulated and are the same across the board it’s important to know that not all title companies or individual title insurance offices are created the equal. Consider these key factors when deciding a title company to handle what is often the largest financial transaction in one’s life.
1) Company. There are many “in house” or “joint venture” title companies that possibly work exclusively with 1 real estate company, one lender or one home builder. While this obviously leads to higher efficiency within the parent company, it also creates the opportunity for price gauging. Often times a consumer will pay higher fees to such an entity and even more so get less in service.
2) Services. Closing in your home at a convenient time for you? E-Recording? The importance to these items is easy to explain. 1- Convenience to you; 2- Electronic Recording guarantees that your deed will be recorded right away as to avoid any potential discrepancies or potential fraud by past owners.
3) Fees. As mentioned previously, title insurance fees in most states are regulated by the States Department of Insurance. However, ancillary fees charged by title companies often times can create a significant difference from one company to the next. In addition to title and endorsement fees, there are recording, reconveyance, release tracking, courier, overnight delivery fees, wire fees, electronic document fees, mobile notary fees, document prep fees, etc. Additional work fees are also not uncommon. Shopping around can save you anywhere from 200-1,000 in ancillary fees depending on the County and State the transaction is in.
4) Experience: Has your escrow officer or title agent worked in the industry for 10 years or 10 days? Is the title agent an Attorney Title Company or a non-attorney title company? Some inexperienced title agents or non-attorney based firms may not be well versed in all forms of real estate transactions. Whether it’s a commercial deal, short sale, refinance, 1031 exchange, bank owned, REO, Seller Financed, Installment Sale, assumptions and wraps? Or do they have one specialty, more importantly; is it the specialty you are hiring them for?
5) Communication: Believe it or not, one of the biggest issues in the industry is lack of communication. In a business that requires communication many people are poor at communicating. How does your escrow officer or title agent communicate? Phone, email, face to face, text, fax, or all the above? It doesn’t really help to have an escrow officer that only communicates via phone if you prefer email or even text.
6) Financial Strength: Remember the title company is going to essentially place the transaction with an actual Insurer. The agent depending on the state your transaction is based in is probably just an “agent” for the Insurer. While many title companies have been around for over a hundred years, not all have. The purpose of a title company is to facilitate your escrow and provide title insurance for your most valuable asset. But will the underlying title insurer be around in a few years to pay a claim that an escrow officer with no experience and poor communication skills messed up? Ask the question, who is this being placed with? Then look up the companies rating http://www.demotech.com/01_pages/fsr/companies.aspx?t=1.
Choosing the right title insurance company is imperative to a successful closing. Many things can go wrong in a real estate transaction, it is vital that your title company be well versed in all aspects of the closing process. After all, the mark of a good company is how they respond when things go wrong.