REAgentFinder Blog

Sellers Attorney and Buyer’s Attorney – The Importance of Having an Attorney When Buying or Selling Real Estate

November 30th, 2011

Real estate agents are forever being asked by their clients, whether buyers or sellers, should they hire an attorney? The answer is an emphatic YES.

Real estate offers and Purchase & Sale Agreements are legally binding CONTRACTS, and legal documents will need to be recorded at the Registry of Deeds. Real estate agents do not have the capacity to advise clients about any legal question. Here is a brief summary of the various roles attorneys can have in common real estate transactions.

Lender’s Attorney

If the buyer is financing part of the purchase price, then the bank where the mortgage is obtained will have, or will appoint, an attorney to represent the bank in the transaction. This attorney will handle the closing or settlement of the property on the date of sale and is the attorney is the one who will explain each document in a stack of paperwork that takes, on average, about an hour for the buyer to review and sign. The lender’s attorney will have researched the Registry of Deeds to make sure that title is passed free and clear of all liens, clouds and encumbrances and is marketable.

Buyer’s Attorney

It’s very important that buyers have their own legal representation as the purchase of a home is one of the largest financial transactions most people ever make. In some cases, buyers will hire the lender’s attorney to also represent them for an additional fee. However, such dual representation must be disclosed and agreed to by all involved parties.

It’s most common for buyers to hire their own attorney – not the lender’s attorney — to represent the buyer’s self-interests. The buyer’s attorney will determine how the buyer(s) wish to take title to the property, as this is extremely important in the event of the death of one of the buyers or a spouse.

The buyer’s attorney will also be the intermediary who negotiates with the seller or seller’s attorney regarding the language that becomes the sales contract. This contract often numbers ten or more pages when addendums submitted by each attorney are included. The attorneys will be using precise, legal terminology and wording that spells out the binding obligations of both the buying and selling parties.

The buyer’s attorney will also discuss the advantages of having the property legally declared as a Homestead in order to protect assets from future creditors. In some cases, Title Insurance protecting the buyer may be advised as well.

Seller’s Attorney

Most sellers will find that, at some point in their transaction, having an attorney representing their self-interests will be required. At the very minimum, a deed will need to be drawn up conveying ownership and interests in the property from the seller to the buyer.

It is usually the responsibility of the seller to provide the buyers and buyer’s attorney with a draft copy of the sales contract. After inspections, additional repairs are often discovered and have to be negotiated and incorporated into the final sales contract. Sometimes it’s best to have the two attorneys become involved in such negotiations.

If there are existing mortgages on the seller’s property, these must be paid in full at the time of sale and the Notes should be discharged and recorded at the Registry of Deeds. Also, such financial items as taxes, utilities, rents, deposits etc., must be calculated and apportioned as of the date of settlement. Attorneys are used to doing this and often save their clients the cost of their services by finding errors in the others calculations.

The buying and selling of real estate are complex transactions. By having attorneys who specialize in real estate becoming involved, representing both the lender, buyer and seller, many problems and potential disputes can be either eliminated or at least minimized.

Selling your home can be a daunting task. Having the right real estate agents to interview in the first place is a helpful way to begin the process. For help in finding a real estate agent, visit RealEstateAgentFinder.com for our free service of helping you find the perfect real estate agent that fits your needs.

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Incentives to Sell – Offering Incentives to Sell a Property

November 11th, 2011

Did you know the most common and powerful incentive a seller can offer a prospective buyer is cash back or closing cost credit?

That’s because this allows the buyer to effectively increase their purchasing power by rolling the amount of the credit into their mortgage payments over 15 to 30 years.

For more information about finding a real estate agent visit us at http://realestateagentfinder.com

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Repair or Replace? That is the Question

November 4th, 2011

When a homeowner is planning a move, the question of what to repair, upgrade, or replace always comes up prior to putting the house up for sale.

Selling your home can be a daunting task. Having the right real estate agents to interview in the first place is a helpful way to begin the process. For help in finding a real estate agent, visit http://RealEstateAgentFinder.com for our free service of helping you find the perfect real estate agent that fits your needs.

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Finding A Real Estate Agent – Questions to Ask in an Interview Part 2

October 31st, 2011

This blog is the second in a two-part series, offering homeowners excellent and fair questions to ask when interviewing real estate agents to list, market, and sell your home.

Part 1 of this topic dealt with questions to ask prospective selling agents in order to determine an agent’s knowledge, experience and fee. It also explored the benefits an agent’s broker could offer you. The next five questions focus on what will be the benefits of working with the agent you are interviewing.

1. How should I price my home and how long will it take to sell?

Real estate agents prepare what is known as a CMA (Comparative Market Analysis). The CMA looks at what buyers recently paid for similar properties and what is on the market today that would be considered competition. A better question to ask is, “If I list my home with you at your recommended price, how long will it take to sell, and how close to my asking price will I get? Asking the question this way puts the burden of proof on the real estate agent. The agent is then accountable for both the price opinion and the most likely estimate for the number of days it will be on the market.

2. What is the ratio of initial asking price to sold price for the last three homes you have listed and sold?

This a good follow-up question. If the difference between the selling price compared to the original asking price is large, then it’s an indication that maybe the agent did not suggest a realistic sales price in the first place, or it’s a case where the seller insisted on an initial price that was too high. Delve into each one where there has been a large disparity and ask the agent what happened. Ask the agent how many days on market it took for each house to sell and how that number compares to the local real estate market in general. And ask the agent if you may contact any of these sellers for a reference.

3. What will you do as my selling agent to get my home sold?

This question should provide a long list of the standard ways the agent will promote a home for sale. Entering the listing into the Multiple Listing Service, holding Open Houses, installing a For Sale sign on the property are the normally offered services. Also, it’s customary that a home for sale will be advertised in the newspaper, and the agent will create and print flyers and Feature Sheets. Sometimes the agent pays for this out-of-pocket and sometimes the brokerage pays the expenses. What the seller should be listening for are the services the real estate agent will provide that are truly expenses the agent pays for, regardless of whether your home sells. Such services include professional photography, staging, floor plans and Internet presence. These are just a few examples, but it gives you an idea as to the range and nature of such additional ways agents use to promote their listings. It’s also a measure of commitment the agent has to you to making sure your property sells.

4. How will buyers communicate with you and how will you communicate with me?

Today’s consumer expects answers in seconds, or at most, in a few minutes. Most buyers today access the Internet with their phones. How long did it take the real estate agent to get back to you after you reached out? That’s a fairly good indication of the tools and technology the agent uses in an effort to stay connected with clients and customers. Find out what an agent’s preference is for communicating with you. Find out if the agent has a regular habit to provide you feedback from showings and Open Houses. Make sure you are comfortable with the agent’s preferences and let yours be known as well.

5. What if I’m not happy with the job you are doing? May I terminate our contract?

You might be surprised at how many sellers employ a friend, neighbor or relative who just happens to have a real estate license. Why pay all of that commission to someone you don’t even know when there is a nephew or aunt in the family to turn to? The first question to ask of yourself in such a situation is how comfortable would you be in changing real estate agents if the first one you hire isn’t up to the job? The real estate sales commission is a lot of money and you want to employ the most professional person that money can buy. If it turns out that you do make a hiring mistake, ask ahead of time about what recourse you have to terminate the contract?

There are nearly 2-million real estate agents licensed to practice today. It’s an industry where the barriers to entry are few and that’s one of the reasons why there are so many. But it is not an easy profession to master. Fewer than 5% of all agents are the top producers in the industry. If you ask the ten questions that have been suggested in this blog series and have good and satisfactory responses to each of them, there is a high probability your interviewing process will guide you to a real professional

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Finding A Real Estate Agent

October 31st, 2011

Whether buying or selling a home, finding a real estate agent is the first step towards success. Having the right professional to help you navigate the process can make your real estate transaction painless and worry-free. If you are looking for an agent, there are a few different ways to find one.

Know the difference between a Realtor® and a real estate agent. All agents are not created equal, and only half of those holding a real estate license are Realtors®. Realtors are not only licensed to sell real estate, but also belong to the National Association of Realtors®, and have pledged to follow higher levels of conduct and business practices than those required by law. Working with a Realtor® who belongs to a multiple listing service (MLS) will give you access to the largest number of listings.
Referrals can point you in the right direction. Many agents get a large portion of their business through satisfied clients who refer family members and friends. If you know someone who has recently purchased or sold a home, start a conversation, and find out about the real estate agent. The perfect agent for your friend may not be the right one for you, but an agent who has gone above and beyond the call of duty for someone you know is an agent worth checking out. Other real estate professionals are also a good source of information; often, they are happy to refer you to another agent, especially if your needs do not fall under their specialty.
The internet is an excellent source of information. Most real estate agencies have websites, and you can go to those sites and look up the individual agents’ profiles. A good way to find these websites is through a Google search of the top real estate agents in your area. Another great way to use the internet to your advantage is by partnering with an agency that does the legwork for you. REAgentFinder.com is such a company, matching up agents and consumers through the submission of anonymous personal data.
Attend open houses. By looking for open houses in your desired area, you will have the opportunity to meet agents in a low-pressure setting, and see their level of professionalism, as well as how their personalities mesh with yours. Collect business cards, and do some research on the agents to find the right one for you.
Check ads and signs. Track the signs in your neighborhood, to see how quickly properties sell. If you are looking to sell a home, you want to find an agent who moves properties quickly. Likewise, if you want to buy a home, you want an agent who is good at matching consumers with the right homes in a short time. Also, study the ads in the newspaper to find out which agents are the specialists in your neighborhood.
Ask the right questions. Once you have narrowed your list of agents, interview them. Find an agent who is appropriately licensed, and affiliated with an MLS service. It is generally a good idea to find an agent who works in real estate full time, and will have plenty of time to devote to you. Do not hesitate to ask for their sales records, and a list of references.

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Finding a Real Estate Agent – Questions to Ask When Interviewing A Real Estate Agent – Part 1

October 21st, 2011

This blog is the first of a two-part series that identifies excellent questions to ask when interviewing real estate agents to list, market, and sell your home.

When it comes time to sell your home it is essential to hire a real estate professional with whom you are comfortable. As you interview prospective agents, be sure to take notes. Doing so will make it easier to compare agents when it’s time to make the final hiring decision, and it also sends a clear message to the agents being interviewed that they will be held accountable for their performance. Here are five questions you must ask any real estate professional before making a hiring decision.

1. How long have you been selling real estate?

This single question, if answered honestly, will distinguish the real estate “newbie” from the veteran professional. Many years ago, when I first undertook formalized training from a large, national brokerage, my instructor told the class that the first three years in real estate should be considered an apprenticeship. True, the real estate sales license allows one to practice in the field, but in reality the first few years will be “on-the-job” training. In years 4-7, one moves on to becoming a Journeyman, where the agent pretty much knows the ropes and has seen and experienced most of what it takes to be accomplished in the business. Finally, once an agent has invested eight years of practice in real estate, professional stature is achieved and an agent may finally claim to be a master of the trade. These are only guidelines, but as I reflect on my own career, the timelines proved to be pretty accurate.

2. How many homes have you listed and sold in the past 12-months?

This is a follow-up question to the first one. More than half of all practicing real estate agents work only part-time and do so to supplement income from a spouse who is the primary bread-winner. Knowing that an agent earns about one-quarter of the total sales commission on your home, multiply that figure times the answer to this question. Does the product equal an amount that is sufficient to make a living and raise a family in your community? If the number seems too small or doesn’t make sense, then it’s a good bet you are not speaking with an agent who has enough experience as measured by the number of transactions, versus years in the business, which is a better measure of having mastered the trade.

3. What professional designations do you have?

If the answers to the prior two questions have not done enough to distinguish the relative experience between two or more agents, then this question may help shed some light on the matter. Real estate agents earn professional designations by taking additional coursework above and beyond what is required by each state’s licensing board. Among other things, it takes time and money to earn professional designations. Some of these also have certain threshold requirements, such as the total number of transactions in the past year or years. Some designations indicate a specific interest, specialty or niche in real estate. Ask each agent you interview what additional real estate designations they have, what the designation stands for, and how that extra training may be of benefit to you.

4. What is your fee to sell my home?

Every real estate agent is going to know this will be one of your questions and should have a practiced, polished answer. However, real estate sales commissions are completely negotiable, so understand that your agent is beginning a negotiation with you. How he or she bends on the commission subject will reflect, to some measure, how hard the agent will negotiate for you with the eventual buyer and buyer’s agent for your property. Whether the requested fee is acceptable or not, it’s a good idea to ask for a reduction in the commission, if only to find out how each agent responds to an uncomfortable situation.

5. What benefits will the agent’s brokerage bring to the transaction?

In most cases, the real estate agent works as a sales associate for a real estate brokerage. In some instances though; especially in smaller agencies, the agent you will be talking to may be the owner/broker. There is no single answer to this question. Larger companies have more resources to support the sales staff and often bigger budgets for advertising and promotion. Smaller real estate firms are commonly populated with more experienced agents who need less in the way of office support and training. The important thing to take away from this question is knowledge as to the similar as well as unique benefits each agent’s brokerage will offer you, and how the differences may affect the sale of property in your real estate market.

These five questions are only a few that should be asked of any prospective real estate agent you may consider hiring to sell your home. The next article in this series will offer some additional interview questions. Your home is possibly the largest single asset you own, so having the answers to 10 great questions to ask your real estate professional will help you make the best hiring decision possible.

Selling your home can be a daunting task. Having the right real estate agent in your corner can help alleviate the frustration in the home selling process. For help in finding a real estate agent, visit RealEstateAgentFinder.com for our free service of helping you find the perfect realtor that fits your needs.

Tags: finding a real estate agent
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Best Use of Home Equity Loan – Home-Owners and Sellers Can Use a Home Equity Loan to Their Advantage

October 5th, 2011

best use of home equity loan

A home equity loan is a line of credit, up to a specific dollar amount, that has been approved by the lender. Just like any other loan or form of credit, the home equity loan is approved based upon the borrower’s income, debts, credit-worthiness, and, in this particular instance, only if the owner has sufficient equity in the property.

With a home equity loan, that owner is borrowing funds and the lender is using the home as security to make sure the loan is eventually repaid in full. Unlike other mortgages (first and second mortgages) that also use the value of the home as security, the home equity loan is in a junior position and thus, in the event of a default, it is the last one to be repaid. Thus, home equity loans come with a higher interest rate than a first or second mortgage.

But unlike first and second mortgages that have principal and interest payments to make every month, interest is only charged on the amount that has been borrowed with a home equity loan. Repayment of principal, or the amount borrowed, is deferred until later or when the loan is paid off. And if the homeowner has not borrowed against the line of credit then there is nothing to pay come month’s end.

Unfortunately, before the real estate bubble burst several years ago, many homeowners took out home equity loans and used them like a checkbook. The loans were used as a way to keep up with the Jones’ — purchasing cars, taking vacations and otherwise living above one’s means. Some of those homeowners today are “under water” and unable to pay off their loans with the proceeds from the sale of their property.

A wiser use of the home equity loan is to have money available to pay for big, unforeseen or unusual expenses. If one doesn’t have tens of thousands of dollars sitting in a savings account but has equity in their home, then money is available to pay for a new roof or a furnace that has to be replaced. However, the expense does not have to be house-related, so the home equity loan can also be used to pay for a daughter’s braces or to help pay for a college education. And if the loan is something that can’t be paid off in short order, it’s considerably less expensive to use the home equity line of credit instead of a credit card with monthly interest costs four or five times higher.

Another good use for having a home equity loan already in place is when a seller will not have immediate or sufficient savings available to make a down payment on a new home. For example, about ten years ago I had an elderly seller who had no savings but owned her home free and clear. She wanted to move out-of-state to an assisted living facility in order to be close to her daughter. My client needed to come up with a sizeable entrance fee as well as to pay for moving her belongings half way across the country. I suggested she use a home equity line of credit in order to have the funds available to move in to her new home and pay to have her belongings shipped. When, several months later, her home sold, the home equity loan was paid off and my seller had a pretty sizeable check from the proceeds of the sale to put in her bank account.

When it comes time to eventually sell a home, owners seem to understand that remaining mortgage balances will be deducted from the total amount of the property sale price. What some forget is that the home equity line of credit, if it has been borrowed against, must also be deducted. And even some real estate agents fail to ask a homeowner when the listing is taken if there is a home equity loan that has been borrowed against. You do not want to get to settlement day only to find that the sum of mortgages, line of credit and broker’s commissions totals more than the buyer is bringing to the table.

I’m not an advocate of taking on debt, especially if you do not need to do so. But having a home equity line of credit is almost like having an insurance policy. The money is there when and if you need it, and unless the credit line is tapped, you actually have not taken on more debt. And if you do need to use the home equity loan, repayment is easier because you only pay monthly interest costs, plus any principal if you wish—but, again, that’s your choice. And the interest rate is far less than that of credit cards.

When it does come time to sell your home, remember that the home equity line of credit must be paid off along with any other mortgages that may be secured by your home. Also, be sure to let your real estate agent know whether you have used a home equity loan so that it can be factored into your selling situation.

Tags: best use of home equity loan
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Buyers Home Warranty – Sell Your House Fast by Offering a Home Warranty

September 22nd, 2011

Buyers Home Warranty

A smart way to set your home apart from others for sale is to offer a Buyers Home Warranty. Not only does it offer the buyer of your home peace of mind, it also sends a message that you care. The home warranty can be introduced just about any time during your transaction if and when it is needed. At a cost of less than $500 for single family homes, and lower for condominiums, offering a Home Protection Plan as part of your sales strategy may, in the long run, net you a higher sales price and result in a faster sale.

First of all, let’s examine what a buyers home warranty is. It’s a service contract that pays for repairing, or even replacing the major appliances and costly systems in a home that fail due to age and normal usage. Typically, each covered item has a deductible the homeowner has to pay for a covered item, but then the insurance company is on the hook for the balance of the repair or replacement if it can’t be fixed. Companies normally have toll-free customer service hot lines open 24/7 if a problem arises, and service is contracted with a network of approved independent contractors who come to the house and fix the problem.

What types of appliances, items and systems in the home are covered under home buyers warranty? Some of the big ticket items include your air conditioning and heating systems as well as your water heater. Electrical systems and plumbing are covered. Appliances such as your refrigerator, stove, washer & dryer and built-in microwave are also standard coverage items. If your home is not serviced by public water and sewer, well pumps and septic systems can be covered for a small, additional cost. Even swimming pools can be included.

Buyers home warranty protection can be purchased just about any time during your transaction by the seller, the buyer, the seller’s real estate agent or even by the buyer’s agent. The seller can obtain protection that covers not only the buyer for one full year of ownership, but also the seller during the period of time while the home is up for sale. Your real estate agent might offer you a home warranty to be paid for out of the commission that is earned as a way to differentiate herself from other agents competing for your listing. The buyer’s agent might offer his client a home protection plan as a “thank you” gift to help seal the deal. Warranties can also be purchased by homeowners on their own, even years after the sale, if they feel that appliances or systems are aging or prone to failing.

From personal experience, the two best times to introduce the buyers home warranty plan are at the beginning of the listing or as part of the home inspection-negotiation process. Offering a protection plan right out of the gate as part of your selling strategy communicates to potential buyers that you care about your home and about their needs. If, however, a warranty is not offered up-front and the buyer learns from the home inspector that an appliance or system is “older but operating,” or has “reached the end of its useful life,” then offering a home warranty plan is an excellent way to counter that objection.

Several years ago when I listed and sold a well-maintained but older home built in 1917, the buyers requested money off the purchase price following the home inspection. They wanted the seller to replace the burner of an oil-fired hot-air furnace with a more energy-efficient one. Instead, my seller countered with, and the buyers accepted, a home warranty that would cover all the systems in the house for a full year. During the course of the buyer’s first year of ownership they had three separate service calls that fixed a leaking pipe in the basement, replaced a dishwasher that gave up, and the oil burner finally died of old age. All told, the buyer saved several thousand dollars by accepting the home warranty instead of insisting on just a new oil burner, which they got anyways.

Home Protection plans may not be an automatic benefit to every seller or buyer, especially when the home is relatively new. But the average re-sale property is usually at least a decade old. Some appliances, such as electric hot water heaters have life expectancies of only about 10-years. So if your home is more than 10-years old, adding a home warranty to your listing is definitely something to consider. Many of the big-name, national brokerages have negotiated discount pricing with home protection providers and warranties are available through their real estate agents. If yours doesn’t bring the subject up, Google “home warranty companies” and it will bring up the large and reputable players in the industry, and you can learn about the types and cost of coverage that’s readily available.

Tags: buyers home warranty, Home Protection Plan
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Make Your House Smell Good in the Home Selling Process

September 12th, 2011

Make Your House Smell Good

This blog addresses the common practice of how to make your home smell good by introducing pleasing scents and smells to a home in order to make it more appealing to buyers. The problem with doing so is that more often than not, manufactured scents can be a real turnoff for some people. Therefore, when your home is scheduled to be shown, it’s best to refrain from introducing smells for a variety of reasons. However, if you are set on doing so, then there is one method that works fairly well.

First, understand that what smells good to you does not automatically mean that everyone else will also be fond of that scent. For example, my wife likes scented candles, and according to the label on one she purchased a few years ago, it’s supposed to smell like freshly baked bread. The burning of that candle, and my own olfactory sense, found it instead to give off a very noxious odor. For the first few days, my wife kept lighting it and when I’d come home I’d have to snuff it out. She couldn’t believe that the smell of that candle, though pleasing to her, would bother me so much. But it really did. Having been married for more than 30 years we are compatible on most things, just not that particular candle!

So sellers, in the home selling process, when you know that a prospective buyer is coming to your home, do not burn incense, or light scented candles, or leave spice or fragrance mixtures simmering on the stove. It might just be a scent that really turns off an otherwise interested buyer. Likewise, real estate professionals should advise the sellers not to do so. In addition to being potentially bothersome to some buyers, having an open flame in the house can also be a safety hazard.

Introducing a strong fragrance into the house almost always leads visitors to wonder what smell you are trying to conceal, At that point, the prospective buyer has lost focus of the positive aspects of your home and mentally starts the search process to figure out what you are “hiding.”

If, in fact, you really are trying to hide an odor in the house, you face a much bigger issue. Fix it immediately and do not try to mask or hide the problem because potential buyers will always eventually discover its source and demand that you correct it—or worse, back out of the deal altogether. I once had sellers who could not figure out why a playroom in their basement smelled a bit odd. They first tried air fresheners, and then thoroughly cleaned the carpet, but still they just couldn’t get rid of that nagging odor. Come to find out, moisture trapped between the concrete floor and the carpet underlayment had created the perfect environment for black mold. They spent several thousand dollars for a mold mitigation company to come in and clean up the whole mess.

It’s understandable that you and your real estate agent want to make your home as desirable as possible, by setting the stage, so to speak, with background music, good lighting and pleasing aromas. One almost surefire way to make your house smell good and generate an honest and inviting aroma for guests visiting an open house is to bake a batch or two of chocolate chip cookies. Simply pick up a package of some already mixed cookie dough, cut it into pieces and bake. There is practically no clean-up, and offering right-out-of-the-oven goodies to open house attendees is a nice way for agents to engage visitors in conversation about the house. And that, my friends, just may be what’s needed to help you get top dollar for your home.

Tags: home selling process, make your home smell good
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Real Estate Technology Tools of the Trade

September 2nd, 2011

By far, the single most important piece of the real estate technology tools of the trade which is central to the buying and selling of real estate is the Multiple Listing Service.

All other forms of technology like:

smart phones,
laptop computers,
even new tablet computers,

allow buyers, sellers and their agents to communicate with the MLS and each other easier and more effectively.

Tags: Real Estate Technology Tools
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