Category: Title Insurance

Pre-Inspection

A pre-inspection gives the seller of a home a heads-up if there are any problems that a potential buyer will probably want to have repaired. Once you know what is wrong, you can have the issues fixed before you even put your home on the market. Too often, a home inspection is where the deal falls apart because buyers will make their offer contingent on approval of the results. Hidden defects or problems can turn any negotiating into the buyer’s favor. Even if you offer to fix a problem that arises on the buyer’s inspection report, skittish buyers may be hesitant to close the deal. Knowing before you list your home gives you the opportunity to fix the problem or price accordingly.

Most Realtors will tell you to make major repairs before you list your home. The buyer’s inspection will uncover significant defects, and you will be expected to repair them if you want to get the full price for your home. The problem is that you will only have until closing to get the repairs done after the buyer’s inspection.

The limited time frame leaves sellers scrambling to get everything fixed in time. With a pre-listing inspection, you set your own schedule for repairs. There is no rush to list the property until you have made sure the home is in good shape.

You’ll be putting your home on the market with the confidence you’ve corrected any large problems.

Sellers can justify listing price through a pre-inspection. You can feel confident in the price you are asking with the results available to buyers. In a hot market, some buyers will make an offer on a home without the home inspection contingency.

According to Forbes: …”pre-inspection is a goodwill gesture. It demonstrates a willingness to go beyond what’s expected, and that sets you apart from other sellers. You’re sending a signal that your house is an ‘open book,’ and that you’re being upfront about the property. All of this can give potential buyers peace of mind and confidence.”

Once you have the pre-inspection report in your hand you can’t ignore any issues that came up. You’ll be required to disclose that information as a known defect or fix it before anyone makes an offer.  There may be some issues that you aren’t able to take on and it will be reflected in the price. You and your Realtor will be able to establish the right sale price including what you can or can not fix before putting your house on the market.

The bottom line: As a seller, getting a home inspection before listing your home gives you more time to make the repairs that you can and to shop around and control the costs for the work.  Be sure to hire an experienced Realtor that will know how to interpret inspection reports, and to let you know which issues are vital to address before listing your home.

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Pricing Your Home Right The First Time

No matter what anyone tells you, the very first thing that buyers look at in their home search is the price. Does not matter how perfect your home is, if the price isn’t in the budget, they won’t even consider it. In order to sell your home for the most money possible, you must price it right. So, when it is time to sell your home, find the best Realtor that will price your home properly – in fact, this might be the most important thing a skilled Realtor can do. Too many Realtors will tell sellers what they want to hear instead of what they need to hear to sell their home.

Realtors see this every day. Homeowners have a price in their mind that they want even though it doesn’t align with the market. Pricing a home is a skill that takes training, understanding of the market and the comparable sales (comps). When a home is listed too high, buyers pass on even looking at it. It will end up being on the market for a long period of time and the price will eventually be forced to be lowered to be competitive. But, by that time buyers assume there must be something wrong with the home and it will gain a bad reputation and continue to be bypassed. Even the buyers who do look at it will lowball the new price and the home will end up being sold for less than what it would have had you priced it correctly to being with. Homes sell for the most money when they are on the market for less than 30 days in almost all markets.

You don’t want your home priced lower than it is worth, but you want it low enough to create excitement among buyers and possibly even multiple offers coming in. This is an excellent option if you want to sell a home fast.

A good Realtor will make sure that the seller’s home shows up in online searches. To make sure this happens, a proper price is paramount. If the neighborhood comps are lower, the house may not show up if it’s even slightly higher! For instance, if the comps top out at $300,000, and the buyer wants a 4 bedroom home in that neighborhood under $300,000, the house listed at $325,000 won’t even show up in the search.

Pricing a home to sell properly is a skill that the best Realtors have. It is the most critical piece to selling your home. The right price is 75% of the marketing for any home on the market. It’s what will attract buyers. So, when you are interviewing Realtors to sell your home, ask the question “what’s my home worth” and know they can’t tell you what it will sell for but expect comparable sales, pending sales, and active sales. Finally, ask to see a track record of their previous listings – the original price and the final sale number. And, don’t be afraid to ask for a personal guarantee from them.

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What is Title Insurance?

Whether you are buying or refinancing a home, there’s an optional insurance policy you should buy: title insurance. Title insurance is a policy on the deed of your home. Some people just don’t want the extra expense. However, going without it could end up being awful for your finances. Title insurance can protect owners of events and matters that can be brought up from the past. Can you imagine if one day someone comes along and contests your ownership of the property? What happens if an old title issue surfaces and a claim is made on a policy? Imagine buying your new home only to find out that back taxes are owed on the property and remain unpaid. If you didn’t have this protection, you would be responsible for payments on those back taxes. If the payments aren’t made, you could lose the home to the party that the taxes are owed. Title insurance was created to protect homeowners from unknown claims against their property that can show up years down the road.

Title Insurance can protect the homeowner from:

  • Mistakes on titles, especially lately, that are transferred through a sale of foreclosure without certain rulings met, thus making the transfer of the title invalid.
  • Mistakes within all the paperwork brought to a closing, somewhere along the line there may be a forged signature or recorded documents signed by people without legal authority.
  • Mistakes made during the probate process for the previous owner that overlooked someone else’s rightful claim (undisclosed heirs) to the property or someone else’s interest in the property. Misinterpretation of wills and deeds.
  • Mistakes made in the description of the property.
  • Mistakes missed where claims, tax information or easements have not been recorded properly in the public record.
  • Mistakes missed of liens on the property or judgments against the previous owner.
  • Mistakes in unpaid taxes or mortgages and unpaid debts.

Be sure to use a licensed and reputable title company, such as Title First Agency, to review the title and ensure the property you want to buy has no disputes or defects attached to it that could hurt you financially. Buying a home is probably the largest single investment most of us make, we need to protect it.

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Use Social Media to Sell Your Home

Whether you’re working with an agent or selling your home on your own, how the listing is marketed is crucial. Especially now, during the COVID pandemic. MLS will get you the most exposure for your home because it reaches other websites and most people online. Ask friends and family why they know, and look online for the busy Realtors using all the social media platforms and then interview her to see how she will take advantage of all the opportunities to get your home in front of people.  It is now more important than ever that the person hired to sell any home utilizes the internet and social media for promotion. Most American adults are online. More than 1 billion people in the entire world log in to Facebook on any given day. The potential to reach a huge number of people is exceptional.

Photographs:  The very best Realtor should help stage and prepare the home for professional pictures. All rooms should be clear of any clutter. The pictures MLS displays are usually grainy and poor quality. Homebuyers more times than not, begin the search for their new home online. Take advantage of this. Stand in the doorway to rooms and snap the photo shooting into the room.  There are never too many photos!

Facebook:  Now those beautiful photos need to be posted and announced, showcased and marketed. A good Realtor might even host open houses via Facebook LIVE and interact with people that are watching. Another option is to make a targeted ad and pinpoint people by location, interests, behaviors, age and more.

Instagram:  The worlds largest photo sharing platform is the perfect place to showcase the photos taken of the home.  A good Realtor should know how to use hashtags because that is how Instagram helps users find relevant content. Spread the pictures throughout the day.

The Bottom Line: Everyone wants a Realtor that can be trusted and will do everything she can to get the most money for a home in the least amount of time. The Realtor is the homeowner’s advocate. The marketing of the home should be exceptional.  Beyond using the MLS (Multiple Listing Service) there should be professional pictures to use on websites and every social media platform available.

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Your House May Not Be Selling Because…

Smell

Why is smell so important in selling a home? Research suggests that one of the first impressions someone has walking into your home may be of the smell. If you have a house that doesn’t smell good it can be a harder sell. Odors that turn a home buyer off include dogs, cats, small caged animals, cigarette smoke, last night’s dinner, mold, and others.  Wall to wall carpeting can harbor bad smells as well, especially if pets are present in the home. Before you sell your home walk through with a friend, a Realtor, or someone you can rely on to give you an unbiased opinion. You will want to get rid of the source of any bad odor as soon as possible.

Dirt

Dirty houses, especially bathrooms and kitchens. If you don’t have time to clean your house daily concentrate on your kitchen and bathrooms. In the kitchen, make sure floors are vacuumed and devoid of spills, crumbs and dirt. Make sure counters are wiped clean and that there are no dirty dishes in the sink. Buyers want to see a like-new bathroom. Take the time to clean even the smallest areas of your bathroom such as the drains, corners and grout. Now is a great time to go through the bottles of bath products your family owns. Get rid of any empty containers or old products and leave only what you’ll need. Organize what’s left in shower caddies and cabinets.

Light

No one wants to enter a dark house, especially someone who wants to buy your home. Replace dim or burnt out light bulbs with high efficiency, bright bulbs to brighten up your space. If you have big windows, take advantage of them. Make sure they are clean and make sure that drapes and curtains are not blocking the natural sunlight.  When it comes to selling your room, lighting really can be everything. If a house is too poorly lit they may tend to wonder what you are trying to hide. Maybe they think there is a repair that you are trying to avoid. Either way, you want to avoid the perception that you have something to hide. On the other hand, well-placed lights can make a huge difference in highlighting the best qualities of your home, creating a cozy ambiance, and illuminating essential work and play spaces.

Personal Belongings

Personal items in your home may offend or provoke buyers. They are there to see the house, no you and your family. Get rid of your collection of figurines or weapons, sports memorabilia from your favorite teams, expressions of religious faith or political belief, and diplomas. If you ensure that your prospect feels as comfortable as possible walking through your home during the viewing, as if they already live there, then you are halfway to selling the home. Watch out with holiday decor as well. It can be hard for buyers to overlook as they may not celebrate the same holiday as you.

Carpeting

Many buyers expect and want hardwood floors. If you have the original hardwood floors under carpet in your home, remove it, even if the wood isn’t in the best condition. In negotiating you might want to offer to have the floors refinished when you move out or give the buyer an allowance to do it on their own. Someone out there probably likes and appreciates having carpet in the bathroom, where it will absorb moisture and more, but most Realtors will recommend pulling it out.

Old Appliances

Although potential buyers realize they can replace a refrigerator, if your appliances look old and mismatched, they may wonder what else might need replacing. Although brand-new appliances can be a significant selling point for your home, they’re not a requirement. For most buyers, appliances that are clean and functioning with plenty of life expectancy left will probably be good enough. Do your appliances match? Homebuyers love appliances that are the same color, quality, and brand. After two decades, stainless steel is still the most popular kitchen appliance finish, but consistency among appliance finishes is your first goal as a seller. 

The Bottom Line:

A house fails to sell for all kinds of reasons. Most of the issues are an easy fix and with a bit of work, you can get your house ready for the market fast. It’s important to find the best Realtor.  Their job is to help you get your house sold. If they are good at their job, they will be able to advise you on the likely cause of why your home is not selling and provide you with the assistance you may need to rectify the problem.

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Seller Disclosures

A Seller Disclosure is a set of documents completed by the seller of a home, listing any known issues with the property and any remodel projects completed during the time they owned the home. In most states, the seller is required to provide this disclosure within a few days of mutual acceptance. The buyer then has a certain amount of days to review the disclosures.

While mandatory disclosures can vary from state to state, here are some of the more common ones:

  • Lead paint. You are required by law to provide a lead disclosure form. This is a federal law and applies to every state. Even if you believe the lead paint has been removed, it must be disclosed. If you are not aware that there was ever any lead paint you are not required to investigate.
  • Asbestos disclosures. Up until the early 1970s, asbestos insulation was commonly used in both residential and commercial buildings. If your home contains asbestos, it can represent a significant health hazard. Before putting your property on the market, make sure to have the insulation removed by a firm that specializes in asbestos removal and cleanup. While it is legal to sell your home with asbestos, you MUST disclose the information if you know about it.
  • Environmental hazards. If your property contains other environmental hazards such as oil, gasoline, or toxic chemicals, you must disclose the presence of these materials at the time of sale. If water has gotten into the home where it shouldn’t it may undermine the home’s structure and possibly create a health hazard if mold is growing. As a seller, you should disclose past or present leaks or water damage.
  • Faulty equipment. If you are including any equipment in the sale of your business, you must disclose upfront whether or not any of that equipment is potentially faulty. It pays to have equipment that you are including in the sale checked beforehand.
  • Natural hazards disclosure. These are fairly new. With all the flooding and hurricane damage to properties in the last few years, it is now necessary to let the buyer know the good, the bad, and the ugly about your property. Is your home located within a natural hazard zone? Such as an earthquake fault, a seismic hazard zone, seasonal flooding, or wildfires?
  • Miscellaneous disclosure. To be on the safe side, you should disclose everything there is to know about your property at the time of the sale. Most state laws mandate that disclosures be on special forms that the seller must sign and date. Be sure the buyer acknowledges receipt of the disclosures by signing and dating the forms as well. If your state doesn’t require a specific disclosure form, be sure the buyer otherwise affirms receipt of your disclosures in writing.

There can and will be legal backlash for the Realtor and the seller if any problems are knowingly withheld from the buyer.

The bottom line: If you are not sure if you should disclose something, you probably should. It is always best to have an experienced Realtor on your side to help you navigate these required legal disclosures. Even if a certain disclosure is not required in your state, but you know of information that could make a buyer uncomfortable, you should disclose it anyway. Beyond the moral reasons for being honest with the buyer, it will avoid the expense and hassle of a lawsuit down the road.

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Short Sale

If you are facing foreclosure and can no longer afford your home, you may qualify for a Short Sale—even if you don’t think you can or haven’t been able to sell your home.

What is a short sale?

A short sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all or a portion of your mortgage balance with the money you sell it. Depending on your situation, you may be required to make a financial contribution to receive a short sale.

  • You are ineligible to refinance or modify your mortgage
  • You are facing a long-term hardship
  • You are behind on your mortgage payments
  • You owe more on your home than it’s worth
  • You have not been able to sell your home at a price that covers what you still owe on your mortgage
  • You can no longer afford your home and are ready or need to leave

When is a short sale a benefit?

  • Eliminate or reduce your mortgage debt
  • Avoid the negative impact of a foreclosure
  • Start repairing your credit sooner than if you went through a foreclosure
  • May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (up to 7 years)

What is the process for a short sale?

If you qualify for this option, the process is similar to a normal real estate sales transaction. You will work with a real estate agent to market and sell your home. However, your mortgage company will also be working with you and your real estate agent every step of the way to:

  • set the sale price based on the market value at the time
  • collect financial information and negotiate with other lien holders
  • review acceptable offers,
  • agree to the terms of the sale once a buyer is in place

A short sale may take up to 120 days, but this could be shorter or longer depending upon your specific situation. If you are unable to sell your home, you may be able to transfer the ownership of your property to the owner of your mortgage.

The Bottom Line: Your mortgage company wants to help you avoid foreclosure and, in most cases, will be willing to work with you. The biggest mistake you can make is to wait any longer to take action. Contact your mortgage company today to determine if you are eligible for a Short Sale.

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Buying a Foreclosed Home

Buying a foreclosed home has its benefits; most importantly because it’s often cheaper than buying a home the conventional way. In a foreclosure, you’re buying from the previous owner’s mortgage lender because the owner has defaulted on their loan. The reason a foreclosure is more affordable is that while a homeowner wants to make as much profit as possible, the bank mainly wants to recoup the remainder of the mortgage and any holding costs. Buyers need to be careful: Purchasing a home that is in foreclosure can lead to big problems.

Banks are in the business of lending money, not maintaining homes. That means when a bank owns a home, it will not make any repairs to the property, regardless of any damage.

Still, as the buyer, get an inspection, even though you shouldn’t expect to receive any money from the bank to make repairs or any repairs to be made for you. In some cases, you can use the inspection report as a way to negotiate a lower sales price, but only if there aren’t multiple offers willing to pay more for the property.

Make sure that you get the home inspection from a licensed inspector before closing on the property. One way to do this is to make the offer to purchase contingent on the home inspection. The home inspector will reveal to you items in need of repair, such as a leaky roof as well as items that are not up to safety code, like a water heater that’s not strapped up. Then, you can decide whether or not you are willing to purchase the property based on the new knowledge that the inspection report showed you.

Not every bank-owned property needs repairs, but many do. So, take into account the cost of all the necessary repairs when buying a foreclosure. Some may be major, such as roof repair, while some are likely to be purely aesthetic like painting the walls or pulling out carpet.

Can you do the work yourself? How much time will it take you and what is the cost of materials? If you’ve never done repairs on a home before, get a professional estimate, preferably a free one from a local contractor or a home improvement store.

The Bottom Line: Buying a foreclosed home can turn out to be the best deal, but you should be able to handle the risk. Make sure you get your home inspected and figure out how much other homes in the area are going. That way you don’t end up paying more than you should.

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Firing Your Realtor is Hard, But Sometimes it Must Happen

Hiring the right Realtor for the job is critical when buying or selling a home. Without experienced professionals by your side, the entire process can become a nightmare. The three main factors that will sell a home are price, condition, and location. No one can change the location, so if a home is priced correctly according to its condition, then it will sell. A good Realtor should properly research the market, and advise you to list the property at a price that will bring offers. Unfortunately, if the price advised is too high, in order to simply get the listing, you won’t know until months later when your house remains unsold.

Unfortunately, it’s easy to sign with the wrong Realtor without sufficient training and experience. Listing a property and writing up a contract is the easy part. A Realtor can seem like they meet the qualifications you are looking for, only to realize later that they don’t. Is it time to move on and “fire” your Realtor?

Canceling the Realtor, however, and the contract with them can be tricky for sellers. Agents and their agencies usually make bigger upfront investments in selling the home (listing, marketing, staging, showing). As a seller, you probably had to sign an exclusive right-t0-sell contract, which is most commonly used by listing and selling agents. The Realtor will have exclusive rights to earn commissions by representing you and by bringing buyers to see your home.

Unless there’s an exception in the contract, this document makes you responsible for paying a commission. In some cases, you may still owe this fee even if you sell the house yourself. For example, if the selling agent gives you a list of buyers, and one of them buys your home later, you could still be obligated to pay some or all of the commission.

If you are close to the end of the contract, the best thing to do is just let it expire. At this point you will be free to hire another Realtor of your choosing. This is a low-drama option that many sellers choose. Most protection periods are terminated as well when you sign a new listing contract with another agent.

The Bottom Line: Like any other service, picking the right real estate agent is crucial for your success. Selling a home in a bustling seller’s market is easy. When the market turns, however, you need the best of the best. Selling your house is a major milestone and investment, don’t trust it to just anyone. Read the fine print of your listing agreement before signing. Ask for an easy exit listing clause. An agent who offers an easy exit listing agreement is so confident in his or her abilities that if you are not 100% satisfied with their services, you can part ways at any time.

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First-Time Home Buying Mistakes To Avoid

This month marks Homeownership Month, which is a time to educate yourself on homeownership as well as celebrate the work it takes to create your dream home! It’s also the beginning of summertime, which marks the busiest time of year for home buying so it’s important to be aware of common mistakes first-time homebuyers make and how to avoid them if you’re in the market. It’s easy to get caught up in the thrill of searching for your first home but be sure to think about each of the tips outlined below so you don’t make any dire mistakes that you may regret.

Be aware of the cash you have to spend

To close on a house, you will need cash on hand for your deposit and closing costs, which can include insurance, taxes, and the service providers’ fees. Since these costs aren’t included in the price of a listed home, they can sometimes come as a surprise to first-time home buyers. Knowing how much cash you have for your deposit and closing costs can help you decide which loan option is best for you and even what price point you can afford.

A conventional loan isn’t always best

There are tons of loan options available and a conventional loan might not be the best for you right now. For example, if you don’t have a lot of cash to put down but have a good credit score, an FHA loan might be the better option because you’re only required to put 3.5% of the purchase price down as a deposit. If you’re a veteran, look into a VA loan, which helps you secure a home with no down payment or mortgage insurance requirements. Depending on which state you live in, there may even be first-time homebuyer grants available to you; these can help with closing costs, deposits, or home upgrades. Educating yourself on the options available to you can be tedious but will help you make the best financial decision.

Know what you can afford per month

Sometimes the easiest place to start with the home-buying process is to know how much money you can afford to spend on a mortgage per month. Taking this approach allows you to set a realistic budget and stops you from going “house poor” which is spending all of your available money on homeownership. To do this effectively, write down your monthly income and start subtracting all of your monthly expenses from that number. Then, factor in what you strive to save per month, other expenses like going out to eat, getting your nails done, or going to the barber. Finally, you will have a good idea of what amount you can afford to pay for your home.No matter what amount you’re pre-approved for, give the amount you would like to spend on a mortgage per month to your lender so you don’t spend all of your money on your home.

No big purchases during the process

Once you’re approved to buy a home, it’s important to not make big purchases until you close, specifically on credit cards or with another type of financing. You may be eager to finance a new couch or bed for the house but you have to wait until after closing. These large fluctuations in your credit can affect the purchasing process by changing your debt-to-income ratio and your credit score. This could force you to start over on your loan approval process and could change the amount you were once approved for.

Don’t get emotionally attached

This is a tip that’s easier said than done, every person that has looked seriously into buying a house knows the disappointment that can come if you lose out on it. For starters, only look at houses in person that you know you can afford and would want to buy. It’s not worth your time and energy to look at a house beyond your budget or so below it that you hate everything about it. When you do see a house you love, it’s easy to get caught up in imagining your life in this new home and feeling emotionally attached to it. Try to remember that every house has pros and cons, and your future home is out there now or ready to be listed any day now!

Know that there will be future expenses

Owning a home means that the expenses will likely never stop. There will constantly be upgrades you want to do, decor to buy, and bills you need to pay. Always remember that just because you’ve closed on a home, doesn’t mean you’re done spending the bulk of your money. If possible, have extra money saved to help you get settled into your new home. Whether you have a big home repair to do or just want to have your home decorated exactly how you’ve dreamt of, it’s important to save for these future expenses as well.

No matter how much you prepare, there will always be bumps in the road when it comes to buying a house. However, it’s an exciting time so try to enjoy the process and utilize the people around you that can help. Experienced professionals like realtors, lenders, and lawyers help first-time homebuyers every single day and should be used to your advantage so you can avoid common pitfalls on the path to buying your first home!

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