UNDERSTANDING REAL ESTATE TERMINOLOGY

Purchasing a home can be a complicated and confusing process, especially for first-time buyers.  Throughout the process, first-time home buyers will encounter a variety of unfamiliar real state terms. There are several key terms associates with purchasing real estate that are helpful to learn.

 

For example, many buyers confuse the terms broker and salesperson.  A broker is a properly licensed individual, or corporation, who serves as a special agent in the purchase and sale of real estate, a salesperson is an individual employed or associated by written agreement by the broker as an independent contractor.  The salesperson facilitates the purchase or sale of real estate.

 

Once you decide to purchase, a salesperson will prepare a sales contract to present to the seller along with your earnest money deposit.  The sales contract is the document through which the seller agrees to give possession and title of property to the buyer upon full payment of the purchase price and performance of agreed-upon conditions.  The earnest money is a buyer’s partial payment, as a show of good faith, to make the contract binding.  Often, the earnest money is held in an escrow account.  Escrow is the process by which money is held by a disinterested party until the terms of the escrow instructions are fulfilled.

 

After the buyer and seller have signed the contract, the buyer must obtain a mortgage note by presenting the contract to a mortgage lender.  The note is the buyer’s promise to pay the purchase price of the real estate in addition to a stated interest rate over a specified period of time.  A mortgage lender places a lien on the property, or mortgage, and this secures the mortgage note.

 

The buyer pays interest money to the lender exchange for the use of money borrowed.  Interest is usually referred to as APR or annual percentage rate.  Interest is paid on the principle, the capital sum the buyer owes.  Interest payments may be disguised in the form of points.  Points are an up-front cost which may be paid by either the buyer or seller or both in conventional loans.

 

In general, there are two types of conventional loans that a buyer can obtain.  A fixed rate loan has the same rate of interest for the life of the loan, usually 14 to 30 years. An adjustable rate loan or adjustable rate mortgage (ARM) provides a discounted initial rate, which changes after a set period of time.  The rate can’t exceed the interest rate cap or ceiling allowed on such loans for any one adjustment period.  Some ARMs have a lifetime cap on interest.  The buyer makes the loan and interest payments to the lender through amortization, the systematic payment and retirement of debt over a set period of time.

 

Once the contract has been signed and a mortgage note obtained, the buyer and seller must legally close the real estate transaction.  The closing is a meeting where the buyer, seller and their attorneys review, sign and exchange the final documents.  At the closing, the buyer receives the appraisal report, an estimate of the property’s value with the appraiser’s signature, certification and sporting documents.  The buyer also receives the title and the deed.  The title shows evidence of the buyer’s ownership of the property while the deed legally transfers the title from the seller to the buyer.  The final document the buyer receives at closing is a title insurance policy, insurance against the loss of the title if it’s found to be imperfect.

 

Buyers should plan on a least four to twelve weeks for a typical real estate transaction.  The process is difficult and at times, intimidating.  A general understanding of real estate terminology and chronology of the transaction, however, will help any real estate novice to confidently buy his or her first home.

MOVING ON: POWERFUL TIPS FOR SELLING YOUR HOME

Maybe you’re moving to a larger home to accommodate a growing family, relocating for a new career opportunity, or purchasing a townhouse for retirement.  Whatever the reason for the move, you’ll need to take the necessary steps to sell your home for the best possible price, within a reasonable amount of time.  Where do you begin?

 

If you’re like most people, you’ll start by seeking assistance from a professional.  A local real estate sales associate, who knows your neighborhood, can help you determine a fair market price.  The sales associate should also recommend the extent to which you should make repairs or improvements to your house.

 

In order to select a real estate professional who’s right for you, ask family, friends and neighbors for referrals.  Attend open houses and interview several sales associates to find out how professional or experienced they may be.  Get a written outline of how they plan to market your property and the services they will offer you.

 

Once you’ve identified a qualified professional, the rest is chemistry.  Is the sales associate someone with whom you would like to work closely?  Do you feel comfortable with the sales associate as your partner, working with you to give you advice and acting as your representative?  Does he or she practice a consultative selling approach, focusing on the long-term client relationship and on the importance of exceeding client needs and expectations or is he or she caught up in the proverbial ‘hard sell?’

 

The brokerage firm that your agent is associated with is also important.  Research the firm’s success rate and commitment to quality service.  Does it survey existing clients in order to ensure customer satisfaction?  What are the results of those surveys? How in tune are they with consumer needs?  Do they offer guidance with mortgages or any discounts for other home related or moving services?

 

Determining your home’s fair market value is one of the most important decisions you’ll make during the home-selling/buying process.  Your sales associate can help you set a fair price based on local market conditions.  For instance, she or he will provide sale prices and other statistics of homes similar to yours that have recently been sold.  Prospective buyers will be comparing your home to others on the market.  Therefore, setting a comprehensive price can determine if your property will or will not sell.

 

For the first offer made, it’s rare that the prospective buyer matches the asking price.  If the offer is reasonably close to the asking price, carefully consider the offer before you consider turning it down.  Curiously, it’s the first offer that can often be the best offer.  If the first offer is unacceptable to you, it may in your best interest to have your sales associate respond with a counter offer.  Whenever considering an offer, ask yourself if you would purchase the property for the amount being offered.  Always be willing to negotiate, especially if the prospective buyer is pre-qualified for a mortgage.

 

Once you decide what terms are acceptable, let your sales associate negotiate with the prospective buyer to work out the best agreement for you.  You’ll need to be patient while the buyer arranges financing and as the real estate company compiles and prepares pertinent data.

 

Careful planning and sound advice from a real estate professional can make selling your home a very satisfying experience.  Please contact me, for further information.

HOW TO SPOT A GOOD BUY

Beauty is in the eye of the beholder, particularly when it comes to buying a home.  Features that attract one home-buyer may repel another.

 

However, the one feature of interest to every home-buyer is price.  Getting the most home for your money is paramount.  The real problem is figuring out whether that fixer-upper on one street is a better buy than the home in next-to-new condition two blocks away.  That’s why knowing what to look for before you buy can save you time, energy and money down the line.

 

The first step is figuring out what kind of house you need.  A good buy is only a good buy if it meets your current and future living requirements.  Before shopping for a home, decide how much space you and your family require.  How many bedrooms, bathrooms?  Is a family room necessary?  Do you need a layout that will accommodate a lot of entertaining?  Do you prefer a spacious or compact work space in the kitchen?  If you have small children, can the house easily be childproofed?

 

Evaluate the front and back yards.  Is there enough space to accommodate your children?  Do you want a park-like or garden setting?  Do you enjoy yard work and gardening, or do you want a low-maintenance yard?  Take into consideration the cost of extensive landscaping and upkeep.

 

Next, determine how much work is required to make the house you are considering livable.  Make an honest assessment of your fix-it abilities.  How much work are you willing to do or pay someone else to do?  Do you have basic decorating, carpentry and plumbing skills?  If you plan to learn as you go, make sure you have accurately determined what you are getting into.  Ask an experienced friend, family member or your real estate agent for their opinion, and be sure to consider how much remodeling inconvenience the rest of the family can handle.

 

Unless you are ready and able to tackle a major remodel, look for a house or condominium that needs only cosmetic improvements.  These include painting, wallpapering and replacing items like flooring, window treatments, bathroom and kitchen fixtures, light fixtures, cabinet and interior door hardware and appliances.  Remember that even these simple changes can be costly if you have to make many of them.

 

Beware of improvements that seem easy enough at first glance buy may turn into major headaches and require a lot of money once you’ve moved in.  Remodeled kitchens and bathrooms, changes to the floor plan, room additions and redesigned landscaping are examples of seemingly minor changes that can easily eat away the money you thought you saved by selecting a so-called “bargain priced” home.  Of course, you may be perfectly willing to spend whatever money is needed to customize the house to match your tastes and needs.

 

Make sure major systems in the house are in good working condition.  The furnace, air-conditioning and plumbing should be up to date, since repairs can be costly.  Your agent can arrange to have a professional inspector determine whether the electrical wiring and any room additions are to code.  Local utilities often offer free or low-cost inspections to tell you if the house is energy-efficient.

 

Look for a house with universally popular selling points.  If you’re impressed, the next buyer down the line is bound to be, too.  For example, a roomy, modern east-to-clean kitchen is the best selling point a home can have.  A house with only one bathroom is less desirable than a house with two or more.  Many buyers expect at least three bedrooms, with a master bedroom that offers a feeling of privacy.  Lots of storage space and closets, especially walk-in closets, will be a real selling point.  Family rooms or “great rooms” also are desirable.  On closer examination, a house that looks like a bargain may lack some of these key features.

 

Don’t forget the old adage:  location, location, location.  Unless you’re looking for a fixer-upper, the house should be in a condition that is comparable to other homes in the neighborhood.  Avoid buying the biggest or fanciest home on the block.  Consider the amount of traffic or noise.  Homes located in a quiet area away from a busy street will command a higher price.  Make sure the schools in your district have a reputation for quality education and safety.  Nearby supermarkets, gas stations, restaurants and theaters also will make a location more desirable.

 

Good community facilities also add appeal; pools, athletic fields, community centers, libraries and hospitals all add to a neighborhood’s value and desirability.  Transportation needs also should be considered.  Is local public transit available?  How long are typical commutes to places of current and potential employment?  Are there several alternate route?  How close is a major airport?  All of these can affect a home’s pricing.

 

Consider the cost of living in a home.  It’s important to consider not only purchase price but the monthly cost of living in a home.  Estimate your utility and maintenance costs.  For example, will the house need to be painted on a regular basis and will you need to spend money maintaining a swimming pool?  Ask your agent about the property tax rate and whether increases are anticipated.  Will you have to pay special assessments for a homeowner’s association?  Consider the point in the life cycle of major household systems, such as the furnace, air conditioning, roof and kitchen appliances.

 

You can find a bargain!  Your first step should be to seek out a knowledgeable real estate agent with experience in the market areas where you wish to purchase a home.  Your agent can help you locate those properties that truly are “bargains” and help find the home that most closely matches your desires and needs.

HOW TO SIMPLIFY YOUR REAL ESTATE BUYING/SELLING EXPERIENCE

Today’s real estate consumer has a lot to consider during the sale or purchase of a home.  Be it waiting for the right buyer/seller, mortgage rates, or the moving truck, the experience can take a bit of patience on the part of the consumer.  With this in mind, it is incumbent upon real estate brokers/agents/firms to institute services that will the buying/selling process hassle-free.

            “Realizing this trend is not going away, the CENTURY 21 System has worked to improve the experience of buying or selling a home through the CENTURY 21 Preferred Alliance Program.  The program offers consumers and brokers access to strategic alliances with various links to home-related value added products and services.  Making the process easier and much more convenient,” said (Sharam Ahrony), (Century 21 Metropolitan).

            Among the products and services offered through these alliances are ADT Home Security Systems, CENTURY 21 Home Protection Plans and Budget Truck Rentals, just to name a few. The programs are offered at preferred pricing for all CENTURY 21 clients. Therefore, the programs involved focus heavily on the immediate, yet long-term value of the service/product for the consumer.  For example, homeowners will have their lawn equipment, home warranties, and home security systems for many years of use.  All of which come as a result of their purchase/sale through the CENTURY 21 System.

“Today’s consumer demands that a real estate firm provide more service than just the sale and the purchase aspect of the transaction.  With that in mind, our Preferred Alliance Program has been well received and very popular as a result.  Customer satisfaction rates are soaring, post-transaction surveys have been very positive which has bolstered the overall success of the program among consumers,” said (Sharam Ahrony), (Century 21 Metropolitan).

HOW TO GIVE YOUR HOME A FACE-LIFT

One of the great challenges to selling a home can be showing all of its space, decor and natural light potential.  For example, every home has crowded closets and dead space.  Sellers should be aware that areas such as these are easy to spruce-up with a little elbow grease and old-fashioned innovation.

 

Begin by evaluating your closet/storage space, determine which areas can cut-down in clutter.  Go through old clothes, shoes, etc., and get rid of anything that will not be used and in turn create more space.  Consider organizing shelves and other areas to make better use of your storage space, including your garage and basement.  Also, try to throw out or give away any old furniture that is no longer of use.  All of the discarded items can be given to Good Will, Salvation Army or even sold at a yard sale.

 

 

“Although most sellers keep their homes clean and well-decorated, it can be difficult to convince a buyer of a home’s potential when clutter is noticeable.  As brokers, it’s our responsibility to offer any tips that will expedite the sale and make the experience more enjoyable for the seller,” (Sharam Ahrony), (Century 21 Metropolitan).

Once you’ve eliminated the unwanted items and furniture, begin the ‘renovation’ process.  For non-storage spaces that could use a little more decor, consider adding a small bookshelf complemented with a cozy reading chair.  Always be sure you’re filtering as much light into your property as possible.  Open or replace curtains.  For example, light from a window overlooking the backyard offers a room more color, a great view and the illusion of more space.

 

Always maximize the potential of existing decor; wash old curtains, re-stain old wood casings, anything that refreshes and emphasizes all the potential of the space and decor of the home.

 

Prospective buyers are often more drawn to homes with features that they don’t have, those with clutter-free closets, open sunny rooms, and cozy little corners.  To ensure you’ve realized all of the above characteristics the last step should be to bring in a friend and observe their reaction.  Make sure it’s an honest friend, who will offer suggestions as well as notice the improvements.  Seeing your own home through someone else’s eyes is a great way to make a home optimally attractive and more sellable to prospective buyers.

 

Be diligent in your efforts and be sure the renovations improve the aesthetic appeal of the home.  All the hard work will be worth the reward of a successful sale.

HOW TO DETERMINE THE PRICE OF YOUR HOME

Why is it that some homes sit on the market for a year while others sell like hot cakes?  Frustrated sellers will blame a bad market, while a good real estate professional will tell you that many times, a slow sale is often attributed to the listing price.

If a home is overpriced, buyers will stay away.  But, if the price is competitive with similar homes in the area and “shows” better than the competition, it will have a better chance of being sold quickly.

The secret is perfecting a technique that’s as American as apple pie: comparative shopping.

Although comparing houses with different styles, square-footages and locations is challenging, real estate professionals still feel it’s one of the best methods to use when determining a home’s market value.

A responsible real estate agent will effectively evaluate a home’s worth through a process known as Comparative Marketing Analysis (CMA).  Taking a look at assets, such as a swimming pool, bigger than normal living spaces, a fantastic view, adjacent city parks and other attractions, the agent will begin to compare your home with similar properties, called “comparables,” that have sold in the area within the last six months.  Typically, the agent is able to recommend a realistic price range that will ensure you top dollar and a reasonably

However, factors such as the amount of time needed to sell your home can alter the agent’s price recommendation dramatically.

Typically, people should check with real estate offices in the community to determine the typical duration that listings are on the market.  Sales associates will explain that the marketing “norms” vary with prices and properties.  Based on this criteria, the agent feels confident that he or she will be able to sell it for a price that both you and the buyer will be happy with.  However, if you’re under time constraints because of unexpected job changes or moving agreements you’ve made on another property, this will narrow your chances of selling the home for top dollar in the market.

Assuming you have sufficient time to market the home, here are a few small steps you and your agent can take to finding the right price for your property.

The best comparisons can be made with similar homes that have been sold within the last 45 days as opposed to the standard six months.  Any longer and other factors, such as the economy, could cloud your view of how much your home is really worth.

Another good benchmark is to review the selling prices of homes that have just been sold and are pending closes.  Most MLS services provide information on deals pending that most real estate agents should be able to shore with you.

A good rule of thumb before setting a price is to make 20 comparisons of comparable properties within a one-mile radius of your house.  Once completed you can feel comfortable that the price you’ve picked is a good gauge of the home’s worth and won’t discourage qualified buyers.

Being open and honest about what you see as the home’s greatest strengths and biggest weaknesses will also help an agent get a better feel for how to best evaluate (or assess) and market your home.  Think of your home as if you were the buyer.  If your home is listed at the right price, you’re well on your way to a speedy and fruitful sale.

HASSLE-FREE HOMEBUYING

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Perhaps you’d like to take advantage of today’s great buyer’s market in housing but feel a little intimidated by everything that’s involved.

You know the routine: finding the right locale and the right house; negotiating an agreement; putting together a down payment; and selecting the best mortgage available.

There are two things you can do to make every step run smoothly.  The first is to select a really professional agent who knows the real estate business, knows your local market, has both a solid reputation for integrity and a solid record of success, and clearly is eager to respond to your needs.

The second is to make you agent your teammate in the literal sense of the word, using teamwork to be sure that the house you ultimately buy is the house you’ve always wanted.

Making your agent your teammate requires choosing an agent you feel able to trust both as a person and as a professional.  And that’s no small matter.  In real estate as in all areas of business – as in all aspects of life, actually – trust can make all the difference in the world.

True teamwork is nearly impossible to achieve unless you stick with one agent throughout the buying process.  Buy all means you should shop around – and shop around carefully – when you’re still deciding which agent to work with.  Once you’ve made that decision, however, don’t reverse it unless (and this rarely happens to people who are careful in the first place) something specific happens to make it clear that your choice was unwise.

Teammate status is all the motivation a first-rate agent needs to go all-out in finding houses that suit your needs.  And if you’re concerned about what it is you’re looking for and how much house you think you can afford, your agent can save you huge amounts to time and effort.

If you’re not sure how much you can afford, be candid with your agent about that, too.  He or she can provide you with some helpful preliminary guidelines and can put you in touch with mortgage lenders who know how to get you focused on an appropriate price range.

It’s always a good idea, as you look at listed homes, to give your agent a lot of feedback on what you’ve seen.  Good feedback will refine and sharpen the agent’s understanding of your likes and dislikes, which in turn will make it easier to find the house of your dreams.

The ultimate payoff, once again, is that you get to your goal more quickly, expending less time and less effort along the way.

Anyone who have ever done it this way will assure you of one thing: it pays off.

FINDING A CAPABLE AGENT TO MEET YOUR REAL ESTATE NEEDS

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Whether you’re a first-time buyer, selling your current home or relocating to a different part of the country, the support of a qualified, knowledgeable real estate agent can alleviate many of your concerns and ensure a smooth transaction.   A professional agent can market your present residence, help you locate the home of your dreams and assist in making your transfer to an unfamiliar area easier.

To find a trained sales associate or broker, you may need to look no further than your own neighborhood or home town.  If a well-established brokerage is involved in many listings and sale, this is a god sign.  Speak with some of the agent’s past customers about the quality and integrity of service and performance.  Successful real estate agents rely heavily on customer referrals and will therefore strive to provide the very best in customer service and satisfaction.

Set up appointments to “interview” agents and brokers much like an employer world interview a prospective employee.  Inquire about their training, marketing programs and specific service policies.  Also determine how many years of experience they have, the number of listings they have had, and the number of homes they have sold within the past few years.  More importantly, find out how well they know the area.  Ask for references, and check them out.

Your goal is to determine just how knowledgeable the agents are.  Question them on financing, closing costs and/or local market conditions, depending on whether you’re a prospective home buyer or seller, to determine their expertise.  If they know their stuff, they should be able to answer your questions effortlessly.

If you’re selling your home, learn what they will do if you decide to list with them.  How do they plan to market your home?  Will they provide you with a market analysis to help you determine the most effective listing price for your property?  Will they supply regular progress reports and assist with negotiations once you’ve received offers?

If you are relocating to a different part of the country, is your agent connected with a national relocation service that will not only expose your present property to incoming transferees, but assist with your search for a new house?

Ask for a written guarantee that everything promised will be delivered.  The CENTURY 21® organization, for example, backs its listings with the CENTURY 21 Seller Service PledgeÔ.  This 11-point written commitment covers everything from furnishing the seller with a marketing plan to monitoring pre-settlement activities throughout the closing process.  It also gives the seller the right to terminate the listing if the pledge is not fulfilled.

A qualified real estate agent should be able to answer all your questions and provide you with qualify service that is courteous and responsible.  Finding the right person may take time and patience, buy when purchasing or selling a home, the selection of a dependable agent should be tops on your list.

A FEW EASY WAYS TO TAKE THE HEADACHE OUT OF MOVING

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          Moving from one house to another is always a challenge, but it doesn’t have to be a nightmare.  Here are some simple tips on how to get it done with minimal stress and strain.

  • Look at all the alternatives: hiring a moving company, for example, versus renting a truck and doing it yourself.  Whichever alternative makes most sense for you, get bids from more than one vendor.
  • A few days before the moving company is scheduled to arrive or you’re supposed to pick up your rental truck, call to confirm that everything is on track to happen when it’s supposed to .
  • Prepare your change of address cards in advance and send them out as soon as it’s appropriate to do so.  The post office, utilities, companies and people you do business with, city hall, friends, relatives – all should be notified of your move.
  • Get an early start on packing by concentrating on seldom-used items first.  Each box should have its contents and the room those contents belong in written on it clearly.
  • Take a hard look at things you seldom or never use and throw away as many of them as you can.  The more you throw away, the less you’ll have to move.  Every item you throw away is one less item to clutter up you new home.
  • Use your extra towels and linens to protect breakables.  When your supply of these things is exhausted, crumpled newspaper makes an excellent substitute.  Write “Fragile” on all appropriate boxes.
  • Put your valuables (such as jewelry) and important documents (birth certificates, car titles, etc.) aside in some safe place where they won’t be misplaced.
  • When the house is empty, go back for a thorough final inspection.  Check closets, crawl spaces, basement, attic, out-of-the-way nooks and crannies of all kinds.  Have a second person make the same inspection separately.
  • Clean your new home thoroughly before moving in.  It’s infinitely easier that way.
  • Decide in advance where you want the heavy furniture.  Changing your mind after the movers have departed is no fun – especially for your back!
  • Locate all fuses, circuit breakers, and water/gas and electrical valves.  Record the meter readings and check the smoke detectors.
  • List the phone numbers of the local police and fire stations, doctors, nearby hospitals, etc.  Put a copy of your list near each phone.

 

Above all, plan, plan, plan and plan some more. Make a schedule you can live with, and then stick to it.  Preparation and forethought will help you to keep everything under control and finish the move with your sanity and your nervous system intact.