realtor Archives - Page 25 of 26

Real Estate Myths: Debunked

Are you ready to start looking for your first home? Buying a home can seem intimidating, but it doesn’t have to be. Your home will likely be the biggest investment you’ll make in your life, which can also make it your biggest risk. Don’t fall for the following myths:

Myth: If you pre-qualify for a loan, you will be approved for a mortgage

Loan approval involves an underwriter analyzing hundreds of pages of documentation, as well as considering other factors like the home appraisal report. A pre-qualification letter, however, is based on a quick, preliminary analysis of your credit report. Getting the letter is a recommended early step to show you’re a serious buyer, but it doesn’t mean a loan approval is guaranteed.

Myth: You need 20% for a down payment

There’s an array of loan options that don’t require 20 percent down — in fact, this amount is rare in today’s home buying market. According to the National Association of Realtors, 60 percent of millennials are putting just 6 percent down on average.

Saving for a big down payment can be advantageous, but you don’t want to deplete your savings or risk coming up short on your mortgage payment. Instead, you should save as much as possible for unexpected expenses.

Myth: You don’t need a real estate agent

Realtors are so important to the home buying process. Real estate agents get a commission, but the home buyer does not pay their fee. It is paid by the seller and is built into the selling price. Every seller expects to pay a buyers agent commission. If you show up without one thinking you can get a 3% discount on the price you will quickly regret it. Realtors help you get the lowest purchase price with their expertise and using comparables. Real estate contracts are long and often hard to understand for the average person. There are many items such as home appraisals, inspections, opt-out clauses, etc. that you need to know about in depth in order to protect yourself.

Myth: You need a perfect credit score

Your credit score doesn’t have to be flawless for you to be able to find a mortgage that fits your budget. It surprises many when they talk to a lender and realize that they can still qualify, even with a lower credit score. To offset potential negative factors on your credit history, you may need to have a larger down payment or meet other qualifications, but you don’t need to have a “perfect credit score” to qualify.

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Ohio Disclosure Rules

When selling your home, you are obligated to disclose problems that could affect the property’s value or desirability in Ohio. Sellers and their Realtors are required to document any known defects to potential buyers. Sellers also have to take a proactive role by making written disclosures about the condition of the property. Disclosure of a problem doesn’t mean you must repair or correct it. A buyer has an interest in getting the deal closed as well and oftentimes will overlook minor issues. More times than not, the disclosed item can become a point of negotiation between you and your buyer.

The Residential Property Disclosure Form is designed so that prospective home buyers are aware of known problems with the property during your ownership for a period not to exceed the past five years. Once the buyers have this in their hands, they have the right to rescind the purchase contract if it is made before the closing, within 30 days of signing the purchase contract and within three days of receiving the form itself.

Not everything needs to be disclosed. Many problems are obvious – a water stain on the ceiling for example or a deck that is rotten and falling apart. As a seller, you don’t have to disclose it. You can’t conceal or prevent a buyer from investigating the problem. A defect that is open, observable and can be discovered through inspection and inquiry is called a patent defect. The buyer can be held responsible and liable for all defects that could have been discovered upon inspection. The burden is on the buyer to notice these issues prior to purchase.

If there’s any doubt about whether something should be disclosed, the best policy is to err on the side of disclosure. Full disclosure will protect sellers from future legal claims.

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Do a Home Inspection Before Listing to Sell

Be ready for the buyer’s home inspection. Find out the exact condition of your home before you put it on the market to sell. The home inspection is often where the deal falls apart because buyers will make their offer contingent on approval of the results. Hidden defects or problems can turn the 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.

Buyers use items that need to be repaired on a home inspection to ask for a reduced price. The reductions are commonly based on estimates that are often inflated. When you fix the repairs, you can call the contractor with the best price, saving you money in the long run.
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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Quitclaim Deeds

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When a mortgage is in danger of becoming an unsustainable burden a homeowner’s finances, they may sign a quitclaim deed that will transfer some ownership interest in their home to another party. Quitclaim deeds are most often used when a home is transferred between family members or to cure a defect on the title, such as a name that has been misspelled, or when an owner gets married and wants to add a spouse’s name to the title, or when the owners divorce and one spouse’s name is removed from the title. Sometimes, they may be used to transfer ownership of a home from an individual to a sole proprietorship or corporation.

Common facts needed to understand a quitclaim deed:

The quitclaim deed contains no warranties of title or ownership. If the grantor owns nothing, the grantee receives nothing.
When purchasing a home, the buyer should receive a general warranty deed, not a quitclaim deed. Title insurance is favorable and often required by mortgage lenders.
A real estate purchaser under a quitclaim deed is in many legal situations considered to be on notice that the title has defects. It is recommended that an experienced professional undertake a title examination based upon a title search and render a title opinion prior to completing the purchase.
If one has borrowed money under a real estate mortgage, a quitclaim or other deed to a third party does not release one’s liability for the mortgage debt. The lender may release a debt, but a borrower can’t avoid payment by unilaterally shifting that debt to a third person.
Subsequent ownership by the grantor after the delivery of a quitclaim deed is not impacted or transferred by the quitclaim deed.
Recording any deed in the public records at a local courthouse or recorder’s office, as determined by state law, only gives public notice of one’s claim of ownership. A deed does not guarantee actual title or ownership.
If two or more individuals are co-owners of real estate, a quitclaim deed by one owner only transfers at best that one owner’s ownership rights. If the quitclaim deed requires the signature of all co-owners, the deed is invalid unless all co-owners have signed it and the deed is then delivered to the grantee. However, if the quitclaim deed allows one co-owner to sign it and claims to transfers the entire property to a grantee who takes physical possession of the property, then the deed may create an adverse possession ownership claim to the entire property.
If one individual owns real estate and desires to add a co-owner such as a spouse, a quitclaim deed might be used. It’s in the best interest to contact an attorney before doing so, in order to curtail any taxation or inheritance issues.
Call the best Title Insurance Agency because a title examination is necessary.
There can’t be a reversal in a quitclaim unless the original owner proves that the quitclaim deed was signed under duress in a court.

As efficient as quitclaim deeds are in transferring real estate ownership from one person to another, they suffer from certain shortcomings that make them inappropriate for all but their intended purposes. Whereas they transfer title to a property, nothing more and nothing less, purchasers demand transfer assurances that quitclaim deeds can’t provide. They want warranties that guarantee “clear title” or lack of ownership encumbrances in the property. In such transactions, sellers transfer their real properties with general or special warranty deeds that offer those assurances to their buyers.

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Best Title Insurance Company

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All homes on the market have a history and using the best title insurance company will aid you in the discovery of any title defects that are connected to the property that you want to buy by completing a title search. Problems that come up often are clerical (incorrect spellings, wrong address, inaccurate property description) or filing error in the public record that can include street & sewer assessments, judgments, and special taxes assessments.

Beyond human error, a good title company will be able to identify:

Unknown Liens: Possible claims against the property, often the result of unpaid taxes or a judgment involving a creditor. This isn’t your responsibility to take care of – but can give you some leverage in the purchase of the home. The best Realtor in your area will always do the due diligence for you.

Illegal Deeds: There is always the possibility that a prior deed was made by an undocumented immigrant or a minor that will affect the ownership of the home.

Missing Heirs: This can lead to a major problem for you, as a buyer. If the home was sold and there are family members that come along after the sale claiming and proving to be an heir to the home it could lead to an expensive problem for you.

Forgeries: Occasionally forged or fabricated documents that will affect property ownership are filed within public records, obscuring the rightful owner of the property.

Undiscovered Encumbrances: Former mortgage liens or non-financial claims, such as restrictions or covenants limiting the use of your client’s property not surfaced at the time of purchase could result in a third party having a legitimate claim on the home.

Unknown Easements: Easements for driveways, roads, and sidewalks over a neighbor’s property, for example, are very common and can have a huge impact on the value of a property.

Having title insurance will provide you the protection from the above problems – some of which may not come to light until after closing. There are many potential impediments to a clear title. Title problems can be the most expensive to fix, thus, when buying a home you want to make sure a search has been done and that you are protected going forward. The title insurance exists to protect you and your heirs against any losses resulting from future claims by a third party.

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Rent or Buy a Home in Ohio

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Are you tired of watching your money fly out of your wallet and into your landlord’s to pay the rent and get nothing in return? If you are living in Ohio, it is better to buy than to rent. It has been widely believed that if you don’t plan to stay for more than 7 years in an area, it’s best to rent. But that is simply not the case in Ohio as buying is the cheaper option no matter the length of time spent living in most cities.

Renting a home has some good advantages. You won’t have any maintenance costs or repair bills, it will all be the landlord’s responsibility. Think leaking roof, broken hot water heater, air conditioning, big-ticket repairs. Renting can often allow you to live in a premium area of a city with the best school system where you would otherwise be unable to afford to buy a home. Renting enables you to be able to move without any strings attached. If your job is more mobile, most landlords will let you out of a lease with a 30-day notice. You may want more flexibility. If you are locked into a mortgage it will be harder for you to move in a few months time.

When you rent there won’t be any return on your money for the property. The landlord will be the one who benefits and earns the income. So, maybe it’s time for your money to build equity and work for you by owning a home. It is an investment that has great benefits that can add up over time and you end up with a valuable asset – a home that is paid for. As you pay your mortgage each month, the value of your home continues to rise. Plus, there are tax benefits. The federal government encourages homeownership by offering tax incentives for homeowners.

“Owning a home is more affordable than renting in Ohio, which has the lowest monthly mortgage cost on our list. The monthly rent is $294 more expensive than the mortgage on a home with a median list price of $154,900 — which is the second-lowest list price in our study.” Go Banking Rates.

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Marketing Your Home to Sell

The MLS will grab the largest exposure for homes on the market because it reaches other websites and the most people online. However, anyone selling their home should interview and find the most aggressive Realtor that will take advantage of all the opportunities to get the 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. 70% of 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 he/she can to get the most money for their 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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Title Insurance and Liens

Home buyers

When putting in an offer on a home for sale and then applying for a loan, the best thing to do is to let a title company do a property title search to make sure there aren’t any bad liens on or against the property.

A lien is a notice attached to a property that lets people know that a creditor claims money is owed. A lien is typically a public record. It is generally filed with a county records office or with a state agency, such as the secretary of state. Liens on real estate are a common way for creditors to collect what they are owed. More importantly, a lien means that the home could be foreclosed on and taken by the lien holder. Again, a title search can say whether or not there is a lien levied against the property.

Examples of bad liens on a property:

Mortgage – the current homeowner’s lender can foreclose on the property if payments are not made every month.
Property Tax – placed on a home loan when property taxes are not paid and take priority over a mortgage lien.
Judgment – a judge has placed a lien on the property after a creditor has successfully sued the current homeowner.
Child Support – if child support has not been paid by the current owner the lien is placed.
IRS -secures the government’s interest in the property when the tax debt is not paid.

A lien on a home is a legal claim against the property. It gives creditors a stake in the home and a way to collect debts owed to them. When getting a mortgage on a property, the lender will require a purchase of a lender’s title insurance policy, which protects their interests in the property should there ever be a dispute in the title. A policy of title insurance insures against defects in or liens or encumbrances on a party’s title to the property.

As a title company, much of our work can be done behind the scenes. The buyer may not even be aware that there may have been any title defects existing at all. They were simply taken care of before the closing.

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Cyber Threats in Real Estate

Buying, selling & refinancing a home requires submission of personal information to the lender which includes social security numbers, bank account numbers and credit/loan account numbers. Sadly, there are hackers out there looking for this personal information to steal.

Never trust wiring instructions sent by email, especially if there is a claim made that submitting a payment has changed and a new account is provided. The hackers are sending out sophisticated and convincing emails that look like they are coming from your Realtor. They often contain signatures, fonts, and logos that are an exact match to the original. Always confirm in person or by telephone to a verified and trusted phone number. Never wire money without double checking that the wiring instructions are correct.

How to avoid getting into this situation:

Never send wire transfer information, or any type of sensitive information, via email. This includes all types of financial information, not just wire instructions.
Never conduct business over unsecured WiFi
Make sure you learn your Realtor/Lenders email and communication practices. For instance, do they expect to be sending you sensitive information through email?
If wiring funds, first contact the recipient using a verified phone number to confirm that the wiring information is accurate. The phone number should be obtained from a reliable source.
If email is the only method available for sending information about a transaction, make sure it is encrypted.
Delete old emails regularly, as they may reveal information that hackers can use.
Change usernames and passwords on a regular basis, and make sure that they’re difficult to guess.
Make sure anti-virus technology is up to date, and that firewalls are installed and working.
Never open suspicious emails. If the email has already been opened, never click on any links in the email, open any attachments or reply to the email.

Cyber threats in real estate are too incredibly common. We all need to be vigilant and have security practices in place. One mistake acted on by a fraudulent request, could result in the loss of hundreds of thousands of dollars or personal data loss.

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Pricing Your Home to Sell

When it’s time to sell your home in Ohio, having the best Realtor is key to making it happen fast. You need an agent that will price your home properly – the most important thing a skilled Realtor can do. Too many Realtors tell sellers what they want to hear instead of what they need to hear to sell their home.

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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