Real Estate 101

Not every agent can call him or herself a Realtor®; only an active member of the National Association of Realtors can be referred to as a Realtor®. NAR's membership is composed of 1 million residential and commercial brokers, sales agents, property managers, appraisers, counselors, and others engaged in the profession. Every Realtor belongs to one or more of approximately 1,700 local associations and boards, as well as 54 state and territory associations. The Realtor you hire adheres to a strict code of ethics and professionalism while protecting and promoting ownership of property.

1. Sellers Agent:

• This agent is the representative of the seller and is fully devoted to the seller. He or she will put the seller’s best interest first in the negotiation process. The relationship between the seller and broker is completely confidential.

2. Buyer’s Agent:

• Loyalty of the broker is solely focus on the buyer in this relationship. This broker is accountable to the buyer and is the negotiator on the buyer’s behalf. Similar to a seller’s agent, this relationship between the buyer and broker is confidential.

3. Disclosed Dual Agent:

• In this type of agent relationship the broke is working with both the buyer and the seller on the same property. The broker needs the permission of both parties to be a “Disclosed Dual Agent” and must provide each party with a written consent. In this case the broker is not an exclusive representative of either party and is obligated to be fair and honest with both the buyer and the seller. It is illegal for a broker to perform an undisclosed duel agency.

4. Facilitator:

• A facilitator is an agent that is not a representative of either the buyer or seller. The facilitator helps both the buyer and seller reach an agreement. A broker works with the facilitator to provide the buyer and the seller with accurate information on the property. They are required to provide any known material defects about the property.

The amount a seller is willing to accept and the buyer is willing to pay in the open market.

In order to assure adequate pricing of a property, have the home appraised by a professional.

What is considered in the appraisal?

- Property square footage

- Lot size square footage

- The year built

- Neighborhood of property

- Accessibility to schools, shopping centers and transportation

- Design of home and the value of the construction

A real estate professional may also find the approximate value of your home by researching the sales of comparable properties in your neighborhood.

1. General Warranty Deed:

• This type of deed fully secures the buyer. The seller transmits the property with certain agreements or warranties.

2. Special Warranty Deed:

• Under this deed the buyer is not as protected as under the General Warranty Deed.
• The Special Warranty Deed transfers the property with two assurances:
• The grantor pledges that they have obtained the title
• The grantor affirms that the property was not encumbered during their time of possession.

3. Bargain and Sale Deed:

• This deed does not give an assurance against any encumbrances. The buyer is not protected from afflictions.
• Used normally in tax sales and foreclosures actions.

4. Quitclaim Deed:

• This type of deed is the least protective of all four deeds for the buyer. Conveys whatever rights or interests the buyer has in the property, does not provide any warranties to the buyer.
• Typically used when transferring property between family members.

In a lease purchase tenant is given the option to purchase the home in the future. Both tenant and landlord enter into a written agreement. The rents may or may not apply towards down payment; this is established between the tenant and the landlord. The seller will typically want an “option payment”, this means that tenant is leasing with the option to buy. An “option payment” is a nonrefundable fee.

Lease purchase is a great tool for owners who are having a difficult time selling their home; as well as, buyers who do not have the credit or the assets to purchase immediately.

1. Vacant Land:

• Commonly the size of the property and the price is fairly large.

2. Residential Property:

• This includes - condominiums, separate homes, duplexes, high value homes, vacations homes, etc…

3. Commercial Property:

• This includes empty land zones for commercial use, as well as existing business building or buildings, shopping centers, apartment buildings, etc…

The foreclosure process is initiated when the mortgage payments for a property are not met. Foreclosure is a course of action in which the lending institution obtains complete entitlement to an estate.

Number of causes can be the reason behind a foreclosure:

- Loss of employment

- Divorce or separation which adds a strain in family finances

- Bankruptcy

- Unplanned repairs

Effects of a Foreclosure:

- Increase in taxes

- Foreclosure devastates credit history for at minimum 7 years. At this time lenders consider the subject a credit risk.

- A lawsuit may arise if a mortgage company decides to target the borrower for damages.

- Some employers require their employees to have good credit history. In this case a foreclosure may result in a loss of job.

If finances begin to appear unstable take action. Seek for the assistance of a loss mitigation counselor who will guide a homeowner in right course to saving the property.

Short sale is a better alternative to foreclosure; it is the best option for home owners who are unable to make their payments. In a short sale, a seller strikes an agreement with his/her mortgage lender to accept less than the amount owed on the property.

Most lenders are willing to accept a discount on the mortgage in order to avoid foreclosure or bankruptcy. Instead of buying from the seller, the property is purchased directly from the lender.

Why is short sale a better alternative to foreclosure?

- Credit is repaired in a shorter period of time in comparison to foreclosure.

- Under the regulations of Fannie Mae, the seller will be eligible after a short sale to buy another home in 2 years versus waiting approximately 5 to 7 years after a foreclosure.

If you have not fallen behind in payments, you will automatically qualify to buy a new home after a short sale.

- Short sale is a fast way out of an otherwise uncomfortable mortgage foreclosure.

- Chances that your lender will pursue you for deficiency judgment are drastically lower.

Why do banks accept short sales?

- In order to avoid surplus of inventory and bad loans on their books without a huge loss.

- Lenders may lose a large amount of money if the property goes into auction.

- Many fees are involved with going into auction. Short sale is a way for lenders to avoid these annoyances.

If you are having trouble with your mortgage, let us help you find the best solution and be of assistance during these hard economic times.

We, at New Era Properties, have a dedicated relationship with lenders. Our experience has made speedy short sales a viable option for our clients.

Please do not hesitate to contact us with any inquiries.

REO is used to describe a property that has been foreclosed on and taken by the lender or the trustee. REOs are only produced in an event of unsuccessful foreclosure. This occurs when the buyer cannot be located and the lender repossesses the property.

When the bank is unsuccessful in selling a foreclosure property the estate goes back to the mortgage company. At this point the mortgage loan vanishes and the fees owed by the former borrower are dealt with by the financial institution.

Positives in Purchasing REOs:

- At times properties are sold for savings of up to 20% in association to the comparative market price.

- Taxes and other issues are usually covered by the lender. This makes the purchase of the estate a quick and easy one.

- No back taxes or liens.

- Down payment is less than the standard amount.

New Era Properties has specialists who work with REOs and can provide you with helpful advice on the proper course of action. For more information in regards to REOs, contact our specialist. We ensure your satisfaction in our ability to meet your wishes.