Tag: title

HOA or No?

Homeowner associations are organizations that oversee a group of homes by setting and enforcing rules as well as maintaining the grounds. They are common in planned developments. Those who purchase homes and agree to their terms and fees at the closing of the home in these communities.

Owning a home in these communities binds the owner to the association’s covenants, conditions, and restrictions (CC&Rs). The HOA also has legal powers, such as placing a lien on the home, imposing fines, or suing the homeowner for not complying with the rules. The HOA creates the CC&Rs and strictly enforces them.

When buying a home in a community with an HOA, it’s important to ask your realtor or the HOA for the CC&Rs to make sure it is up to date and is satisfactory to you as the buyer. Rules of the HOA are different and may be unique in each community so never assume from previous experience or hearsay from others in different communities with an HOA.

For the HOA to operate, there needs to be funds collected through fees paid by the homeowners. Often these fees are high, they can differ even within a development due to variations in square footage, location, and orientation. 

The Benefits of an HOA

  • Property values remain high. With an HOA, homeowners can expect the community will hold to all the standards, regulations, and processes that are put in place to manage all home exteriors and landscaping.
  • Access to amenities. Often, appealing and rewarding advantages to an HOA membership are increased amenities. Having Exclusive access to well-maintained swimming pools, walking trails, parks, playgrounds, fitness centers, golf courses, gardens, and clubhouses is well worth the cost.
  • Standards of compliance. Because of the guidelines that must be complied with, the HOA will not tolerate unruly behavior—whether it’s a rambunctious late-night party in someone’s backyard or a clear disregard for architectural rules. There’s a board set in place to mediate neighbor disputes and set forth consequences when things go wrong.
  • HOA leaders live in their communities and better understand the needs of the homeowners and residents, from the delivery of core services and amenities to decisions that affect the future of the community.

The Downside of an HOA

  • The cost. Being a part of a community with an HOA means regular monthly fees that can be expensive depending on where it is and what type of amenities are available. This bill is not tied in with a mortgage and if not paid, the HOA may place a lien on the home and possibly foreclose on it. The fee can increase over time.
  • An excess of restrictive rules and regulations. An HOA probably won’t let homeowners personalize their homes the way they have always dreamed. Owners must adhere to paint colors, the number of cars in a driveway, fencing, pets (size & breed), the length of their grass, and the composition of a garden.
  • Loss of freedom. Because homeowners are automatically required to agree to the HOA’s strict rules and regulations, there are few avenues to dispute a rule that the owner may disagree with.

The Bottom Line: An HOA has a significant impact on a community with CC&Rs. Maintaining a home can consume a lot of an owner’s time and with an HOA in place, there are plenty of benefits to reap. When it comes to selling a home an owner can feel confident as an HOA exists to maintain the community to increase property values. The rules in place are to protect the property value of the home by ensuring that your home and the homes around your property remain beautiful and desirable all year round. On the flip side, paying a monthly fee and abiding by their restrictive rules that the homeowner may not agree with might not be worth it.

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MYTH: You Don’t Need Title Insurance

MYTH: You don’t need title insurance

Everyone needs title insurance. You may think you know the entire history of the house you’re purchasing, but it’s impossible to know everything. Title insurance protects your right to the property if a previously unknown heir claims ownership of the property if it is later revealed that the “sellers” were not the rightful owners, or if liens against the property resurface. If you have an owner’s title insurance policy, you will not be responsible for paying any of the fees associated with protecting your right to the property, should these types of issues arise.

MYTH: New construction homes don’t need title insurance

Your home could be brand new, but the land on which the house is built isn’t. Chances are, the land had several previous owners before construction began. Buying property on such land opens you up to certain risks tied to ownership issues from previous owners.

Disputed wills, easements, and property liens are just a few of the issues common to land ownership. You could get caught in the mess and end up losing your resources or, worse still, your new property as well. Title insurance is crucial even for a new home and should be on your list of priorities during the closing process.

MYTH: If no one challenges ownership, then the title policy is a waste

At the closing, when you purchase a title insurance policy, the closing company does the bulk of the work behind the scenes. The title company goes through many steps to make sure that everything is in place by that time, including conducting a comprehensive title search and identifying any potential issues. The team investigates the entire history of the property to ensure that you, the buyer, will be aware of any problems that will need to be addressed before closing. By the time the closing comes around, the title company has completed a great deal of research and legwork for you.

MYTH: Title insurance offers only minimal protection

When you purchase a home, you receive the “title” to the property. This title is your legal right to own it. Early in the home-buying process, a title search is conducted to review the history of the property and uncover any issues that could limit your right to ownership. Even after the most meticulous search of public records, there can be hidden title defects, such as tax liens, forged signatures, claims by ex-spouses, and recording errors. These title defects can remain undiscovered for months or even years after you purchase the home.

MYTH: Title insurance is the same thing as homeowner’s insurance

Homeowners insurance protects you so you have the resources to pay for any damage that might occur to your property. Title insurance protects you from anyone else claiming your home is theirs or for some prior owner’s back taxes or encumbrances or any other real property dispute

Title First Agency: Dedicated to innovation and passionate about service, Title First Agency is your comprehensive, nationwide resource for title and real estate settlement services. Headquartered in Columbus, Ohio, Title First has branch offices throughout the Midwest and a robust virtual partner network throughout the country. Title First got its start in 1956 as an affiliate of a local law firm and has since emerged as one of the largest independent title agencies in the nation. Proudly servicing Realtors, lenders, builders, developers, law firms, buyers, and sellers, Title First is equipped to serve your residential and commercial title and settlement needs.

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Seller Concessions

Seller concessions are an agreement within a real estate contract whereby the home seller agrees to pay for some or all of a home buyer’s closing costs.

Concessions can be offered by the seller as an incentive to encourage buyers to purchase their home. Closing cost fees can add up quickly and the expense of this, on top of adown payment could be a big reason preventing someone from buying a home. Offered concessions may be more appealing than a lower price as some of the financial strain can be offset because the seller agrees to financially contribute to the closing costs.

If the home has been on the market for an extended time, or it is a buyer’s market, a seller might be motivated to offer concessions. To officially ask for seller concessions, your real estate agent will write out an offer to the seller, indicating a specific amount you hope for them to pay.

Seller concessions are a useful tool in real estate. Used correctly by the seller, it increases the marketability of their home. Buyers often can’t afford to put more money down than they have allotted which turns them away from considering a home. With a concession from the seller in the form of either paying the buyer’s closing costs or paying points to get an FHA or VA loan, (for example) a deal could be done.

Always work with an experienced realtor who will be able to give you all the information about the market, local sales, and the regional housing market. The realtor will be the one doing the negotiating and depending on the condition of the market they will guide you in the right direction.

The Bottom Line: When asking for concessions, the buyer should use the best realtor to help negotiate with the seller. Since they might not be willing to offer everything asked for there will need to be a compromise and a solution that works for both the buyer and the seller. In the end, this can save a lot of money as well as making the entire process of buying a home more affordable and attainable.

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Appraising a Home

An appraisal on a property intends to determine the fair market value. It’s one of the final steps in the home-buying process that happens once the seller has accepted your offer and you have started the work with a lender. A financial institution will not lend money without an appraisal. The appraisal value of a home can make or break a sale, leaving this part of the real estate process a critical step.

The home appraisal is different from the home inspection even though both an appraiser and an inspector will walk inside, outside, and around the property to check everything with a fine toothcomb. The appraiser is finding the value of the home and the inspector is looking for problems or defects with it.

During an appraisal of a home, the appraiser will look at the state of repair, the features, the square footage, as well as the number of bedrooms and bathrooms. Give a list of repairs and improvements made such as a new roof, water heater, air conditioning, etc. The owner of the home should bring forward anything and everything that will help the appraiser decide the general market value.

The appraiser will research all the comparables (“comps”) in the area with features similar to the home. Also provided should be whether the values of homes are on the rise, decreasing, or stable. If there are any concerns that he feels will harm the property’s value, it will be noted. Additionally, he will flag any bigger problems he may see in the foundation, the roof, or any noticeable water leaks in ceilings or floors.

Again, an appraisal can make or break a sale of the home so it’s a stressful time. If the appraisal comes back higher or lower than the sale price, there will need to be more negotiating. If the seller isn’t happy with the outcome, a good realtor will discuss with the appraiser why certain decisions were made. With the help of a realtor, the seller can put together a valid argument as to why the appraisal is not correct.

Appraisals are valid for six months unless the home is in certain markets where homes are selling fast and prices continually change. At this point, lenders usually like an appraisal every three months. The real estate market changes from year to year and even month to month.

The Bottom Line: The process of home appraisal and final valuation might seem beyond your control. But, you can take charge by making some improvements to your home to up the appraisal outcome. Ask your realtor to help you understand what the appraiser will look for so that you can update and make sure your home is ready for show!

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Earnest Money

To show you are serious about buying a home, “earnest money” is a good-faith deposit you would make. This money is deposited after the seller has accepted your offer and is usually kept in an escrow account. When the sale closes, you can keep the cash or apply the money toward the purchase.

The earnest money you pay when purchasing a home can vary widely. Some home buyers pay as little as $500, while others pay several thousand dollars. The amount is negotiable between you and the sellers. It can depend on various factors, including the price of the home, the strength of the local real estate market, and your financial situation.

As a general rule, the earnest money deposit should be enough to show the seller that you’re indeed very serious about purchasing their house, but it shouldn’t be so large that it puts a strain on your finances. In most cases, earnest money deposits are a small percentage of the home’s purchase price, typically ranging from 1% to 3%.

The purpose of earnest money is to provide the seller with compensation if you were to back out of the deal through no fault of the seller and in violation of the agreements in the purchase contract. If that happens, the seller will keep the earnest money.

However, if you were to back out of the deal because a contingency in your contract was not met, in most cases, you’ll get your earnest money back. Most contracts include four common contingencies that allow you, as the buyer to terminate the agreement and remain entitled to a refund of the earnest money deposit:

  • The home inspection contingency: As the buyer you will determine the period to conduct due diligence on the condition of the home, including the home inspection. If the inspection discovers issues that are not acceptable to you, the contract may be terminated and your money will be returned as long as it is within the specified time in the contract.
  • The appraisal contingency: Applies to any offer that requires a mortgage to purchase the home. You would decide a date by which the lender conducts an appraisal. If that appraisal comes in below the purchase price in the contract, you would be able to back out and get your money back.
  • The financing contingency or mortgage contingency: This is used when the offer will require a mortgage to purchase the home. It’s a time that you would set to secure financing approval from your lender. If the financing should fail, you would be able to get out of the contract and your money would be returned as long as it is within the timeframe you had set in the contract.
  • The home sale contingency: You would have the ability to back out of any contract if your current home does not sell in time. As long as you had this included in the contract, you will get your earnest money back.

The Bottom Line: Earnest money exists for two primary reasons: to help a potential buyer strengthen their offer on a new home and to protect the seller from losses if a buyer isn’t able to follow through.

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Home for Sale? Don’t Forget Tik-Tok!

Whether you’re working with an agent or selling your home on your own, how your home is listed and marketed is crucial. MLS will get you the most exposure for your home because it reaches other websites and most people online. Ask friends and family who they know, and look online for the busiest Realtors using all the social media platforms, and then set up an interview 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 who are watching. Another option is to make a targeted ad and pinpoint people by location, interests, behaviors, age, and more.

Instagram:  The world’s 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.

Tik-Tok: This is a can not miss for social media marketing! TikTok has a fast-growing real estate industry presence. The real estate agents on TikTok feature videos of luxury home tours, inspection fails, wealth management, and real estate agent tips. These short-form videos help homes stand out by essentially giving a virtual tour of the home for sale.

The Bottom Line: Everyone wants a Realtor who 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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New Year, New Home!

Should you consider putting your home on the market in January? It may seem that doing so during an off-peak season is not the most optimal but if you hire the right realtor who knows your market the best, even in January, you still can sell your home at a competitive price. Are you in the dark and cold Northeast or Midwest? There are plenty of reasons to be optimistic about your home selling.

There will be less competition! It’s well known that fewer homes are on the market in the winter. The warmer, longer days get more people out looking for homes in the spring, but after the new year when most people are back at work after the holidays, plenty of people are searching the web for their next big move. New year, new home. If you are serious about selling your home, get it listed online and marketed early to ensure you get this audience!

The experience of the realtor you hire is critical in most markets all year long, but because the dark winters are not the highest-selling months, you will need the best on your team. Pricing your home can be complex and you don’t want to scare off buyers by pricing too high. On the flip side, even pricing too low will cause buyers to wonder what’s wrong with your house. Whether true or not, a home on the market in the winter can lead buyers to assume that the seller is desperate to sell. Lowball offers may come in believing that the home will sell for any price. Buyers house hunting during this non-traditional time of year can often mean they are eager to buy and more willing to negotiate the price.

The real challenge might be to help dress up your home during the dreary weather. To help make your home feel more welcoming, shovel the walks, add outdoor illumination along paths, light candles indoors, add cozy throw blankets, and have holiday-type smells such as cinnamon or cookies, but take down any holiday decorations.

Beware that during the winter, any problems you may have in your home can become more prominent including drafts and leaks. To help lessen these potential problems, crank up the heat so buyers feel toasty warm and will be less likely to notice any issues.

The Bottom Line: It’s certainly possible to sell your home in the winter especially if you have a great realtor with a marketing plan. Someone who will get beautiful pictures inside your home to showcase online since most of the shopping will be first on real estate websites.

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Realtors and Closings

Complications and setbacks can come when buying a home, or it can go remarkably smoothly and fast if it is planned carefully.  Choosing the best realtor to be on your team is the key to success at closing. She will stay focused and be the voice of reason during the process at closing and will make sure all parties have completed any unfinished business before coming to the closing table. Here is what you should expect from a realtor: 

Repairs: The status of all repairs that were to be made on the home should be checked the day before closing. Confirming that anything that needs to be fixed has been completed. If there was an arrangement for repairs to be taken care of after closing, the realtor will have all necessary paperwork showing this as fact.  A final walk-through should be done with the buyers. The realtor must make sure that the condition of the property is as promised and all their items are removed.

Title Insurance:  The title company you have hired should be certain that there is a clear title on the home and that the property can be transferred without obstructions.  Should any title issues include judgments or liens, they must be settled before the hour of closing.  The moment of truth in a real estate transaction happens at the closing table. Title First Agency will work hard to ensure a seamless experience for you and your clients. From contract to closing, we handle all the details to help a transaction run smoothly and close on time. 

Financing: The lender should be contacted the day before the closing to be certain that all the documents they need have been received. Occasionally, the closing is delayed due to one document or one final verification.  The interest rate for the loan should be locked as well as the final mortgage and monthly payments.  A good realtor will make sure the buyer has all the funds available and ready to close.  Having everything in hand the day before gives both the buyer and the seller 24 hours to review everything and have any questions ready, errors noticed or points not understood addressed. 

The Bottom Line: Find a realtor who has a history of making sure the buyers are ready for the closing. First-time buyers, especially, don’t always realize all the people that could be at the closing table, and all the paperwork there will be that needs their signature. The buyer needs a cashier’s check or arrangements made to wire the closing funds to the escrow company.  The seller should bring all the keys, garage door openers, alarm codes, and any other controls to the settlement. A good realtor will take care of little things such as confirming that all utilities have been disconnected by the sellers and that the setup is ready for the buyers upon closing. 

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Beware of Dishonest Tricksters & Scammers in Real Estate

Buying, selling, and owning real estate is often the most expensive transaction many individuals will undertake in their lives. Hundreds of thousands of dollars are involved and dishonest tricksters and scammers are out there hoping to take advantage of those involved.

Con artists may use several methods to swindle you in one of their schemes. Foreclosure bailouts, home equity fraud, home renovation scams, rental fraud, and deceptive timeshare scams, are just a few types of real estate fraud that may be performed. Here are three of the most common:

Foreclosure Bailout

A foreclosure rescue scheme is a type of fraud that takes advantage of homeowners who have fallen behind on their mortgage payments.  The fraud perpetrator approaches the homeowner with promises of paying off the delinquent mortgage and helping the homeowner stay in the property. 

There are many variations of a foreclosure rescue scheme.  Some schemes require the homeowner to unknowingly transfer the property title to a third party.  Other schemes will promise homeowners that if they transfer the title, they can continue to rent the home and repurchase it at a future date.  The purchaser of the property, sometimes the foreclosure rescue artist, is now free to refinance the property or to sell the property to another party.  Sometimes the foreclosure “rescuer” charges the borrower high ‘service fees’ up front and then disappears with the money without providing the promised service. 

Home Equity and Home Renovation Fraud

According to the Council of Better Business Bureaus, home-remodeling contractors ranked slightly behind car salespersons and auto mechanics in generating the most consumer complaints. Be very careful when using your home or your home equity as security for a home improvement loan. Fast-talking salespeople will offer to refinance your home at a lower interest rate to provide cash to the homeowner, the cash can be used to pay for home improvements or to pay off bills. Victims are frequently asked to sign blank contracts or contracts that they were not allowed to read before signing. Later, the homeowner discovers that they signed a contract that contains terms in contrast to the originally promised terms. This results in the loss of equity in the victim’s home, and they have signed a mortgage in which they have incurred considerably higher interest rates. The homeowner is now faced with a higher mortgage payment, one that they may not be able to afford.

Rental Fraud

Rental scams occur when the victim has a rental property advertised and is contacted by an interested party. Once the rental price is agreed upon, the scammer forwards a check for the deposit on the rental property to the victim. The check is to cover housing expenses and is, either written in excess of the amount required, with the scammer asking for the remainder to be remitted back, or the check is written for the correct amount, but the scammer backs out of the rental agreement and asks for a refund. Since the banks do not usually place a hold on the funds, the victim has immediate access to them and believes the check has cleared. In the end, the check is found to be counterfeit and the victim is held responsible by the bank for all losses.

Another type of scam involves real estate that is advertised online. The scammer duplicates postings from legitimate real estate websites and reposts these ads, after altering them. Often, the scammers use the broker’s real name to create a fake e-mail, which gives the fraud more legitimacy. When the victim sends an e-mail through the classified advertisement website inquiring about the home, they receive a response from someone claiming to be the owner. The “owner” claims they’re unable to show the property without payment because they are either out of town or out of the country. If the victim is interested in renting the home, they are asked to send money and shortly thereafter the property is no longer available.

The Bottom Line: Be suspicious of unsolicited email or telephone offers. Scammers often find victims through these spam emails. They may send tens of thousands of those emails, hoping to find a handful of individuals who will respond. With advanced technology and interacting digitally with victims, it can be challenging to avoid real estate scams. However, it’s important to stay vigilant about protecting your personal information and bank accounts. Only work with qualified professionals you trust and familiarize yourself with some of the common warning signs. If you believe you’ve been involved in a real estate scam, make sure to contact the authorities immediately.

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The Holiday Spirit & Home Sales

Buying a home during the Thanksgiving and Christmas holiday season can end up being one of the best deals you can make. If there is a home for sale during this time, with all the baking, shopping, visiting, and partying, it is usually because the sellers really need to get it sold fast. These are motivated sellers. There is most likely a job relocation or a time-sensitive issue that puts the buyer in a position to negotiate, thus, the seller will get a great deal.

Less competition, lower home prices, faster closings, and the year-end tax advantages make this a most desirable time to buy if you are ready. While the inventory may not be what it is in the spring, negotiating a favorable price will be much easier.

Closing on a new home before December 31 will bring tax benefits. Deductions can be itemized such as points paid upon closing, property taxes, and mortgage interest rates. If you happen to be moving for employment, expect even more tax breaks. For instance, even the costs associated with hiring a local moving company can be itemized.

Another fact is that everyone involved with the sale, including the sellers, realtors, title agencies, banks, inspectors, and lenders wants to wrap the deal up before the holidays. This time of year brings about a much more focused and speedy process that takes longer during the rest of the year. It’s important to have a realtor who won’t be leaving for vacation during this time.

Favorable financing comes at holiday time. Interest rates on mortgages and loans typically hit a lower point around the holidays because fewer people are looking to borrow. There is historically, less financial business being done during December.

Choose a well-connected realtor. Fewer homes are listed between Halloween and New Year’s Day but a good realtor knows what is going on around town. There could possibly be many pocket listings.

Bonus comes in January and February bringing the seasonal sales. New furniture, appliances, decor, even next year’s holiday decorations! 

The Bottom Line: Shopping for a new home during the holidays may not be conventional. But, time and time again, it has proven to find a home quickly, easily, and for a far better price.

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