Do I Need My Own Agent To Buy Property?

In challenging economic climates such as ours, we often say that it’s a “buyer’s market”.  This is true in theory, but as sellers become more desperate to sell their homes, does an unrepresented buyer looking for a home have all the information needed to properly protect him in the home buying process?

Consider this……

·         Do you know what price range you should be looking at, or if the homes you are viewing are really worth the price being asked?

·         Are you giving information to the seller’s agent that can be used against you at the negotiating table?  Would the seller go lower if he didn't know your financial situation?

·         Is the loan package you’ve chosen the best fit for the property you’re submitting an offer on?  Could you get a better deal with a different loan program or structuring your offer in a different way?

·         Do you know the rights you have as a buyer, or the responsibilities your seller has to you?  Are all the disclosures that you've been given truthful and the proper questions being asked?

·         Have you worded your offer or counteroffer to your best advantage?  If your purchase is dependent on financing or an inspection and that financing falls through or inspection goes bad, has your realtor worded your contract so that you are not held liable?

To obtain legal representation in the buying process, a Buyer’s Agency Disclosure Form must be signed by you and your agent.  If you haven’t signed an agent to legally represent you in the transaction, you have no representation.  If you, as the buyer, don’t have representation, the seller’s agent is required to do very little FOR you and legally can do much AGAINST your best interest.  The listing agreement the seller's agent has signed REQUIRES that agent to do EVERYTHING in his power to get the asking price for the home. 

In South Carolina, licensed real estate agents are required by law to provide you information on what responsibilities he has to you as a customer (working with you without legally representing you) and a client (working with you as a signed buyer’s agent).  If he does not diclose this information to you upon the first substantive meeting, ask the agent for the brochure on Agency Relationships.

A Realtor who has a signed contract with you to represent you as a buyer has certain responsibilities to you.  They include:

·         Obedience – Submitting All Offers, Acting On Your Wishes

·         Loyalty – Do Everything Legally Possible to Gain Advantage for You

·         Disclosure – Full Transparency To You in The Transaction – Beyond Material Facts

·         Confidentiality – Keeping All Matters Concerning Finances, Lifestyle, etc, Confidential

·         Accounting – Account for all Monies/Documents

If you don’t have a signed agent, the seller’s agent doesn’t work for you and does not have to provide all of the above.  A good Realtor will bring expertise to the table and help you find the right home for you and your family, provide the proper documentation to protect you from legal issues, and see your transaction through to the closing table with minimal stress to you and your family.  If you are considering the purchase of any real estate, call a local licensed Realtor and ask what their brokerage is willing to do to for you BEFORE you start calling for property showings.  A Realtor can proactively cover the bases of a transaction making sure YOU get the best deal possible on the property that is right for you.  Best of all, a Buyer's Agent's Commission comes from the sale of the property, not your pocket!

Is a Reverse Mortgage Right For Me?

Reverse Mortgage?  The TRUTH You Can Use To Protect Yourself

Have you seen distinguished actors Fred Thompson and Henry Winkler marketing reverse mortgages on TV recently?  While we love The Fonz and Thompson’s Law & Order DA was a straight shooter, don’t fall for the hype, know the facts before you call that number that’s scrolling across the bottom of your screen. 

Certain facts are indisputable.  What is a REVERSE MORTGAGE?

·         You own your home

·         You have a significant amount of equity

·         You want either a lump sum, an equity line, or a monthly payment

·         You don’t make monthly payments

·         A company specializing in reverse mortgages is willing to comply with your wants and desires

Financing your retirement with debt is a huge mistake! Debt is NEVER a winning decision - especially later in life when your future, let’s be honest, is less certain than it has ever been.

You still pay for property taxes, insurance and the costs of maintaining the home. The lender can foreclose if you don’t.

Interest accrues over the life of the loan, your debt can ultimately exceed the value of your home. If you sign for a reverse mortgage at 62 and live to 102, you’ll have FORTY YEARS of accrued interest that you’ll leave to your heirs, which will EASILY exceed the value of your home.  Your children, your grandchildren, will be left with this bill. 

You don’t make monthly payments, but if you sell the house or move out for more than a year, the loan is due and the income stops. If the house is sold upon your death, proceeds go to pay the loan, and any outstanding debt owed will then go to your estate.  Your children.

End of life expenses.  I know, we don’t want to think about those things, but what happens when you sell the rights to what you’ve worked for, and then you need the proceeds of the sale of your home to pay for a hospital stay, a retirement home expense, or other medical need?  Chances are you’ll need that equity you’ve built, don’t sell it for short term gain and end of life slavery to debt.

Fees!  These companies don’t work for free!

• Origination fee
• Standard closing costs
• Mortgage insurance premiums for coverage to make up the difference if your home doesn’t sell for enough to pay the loan
• A monthly mortgage insurance servicing fee
• Fees for mandatory credit counseling, which you pay whether or not you get the reverse mortgage

Interest rates on a reverse mortgage are adjustable unless you take your money in a lump sum. You are also required to take a loan for the maximum amount you qualify for.

Finally, the misleading advertising is easily debunked…….

• Lifetime income – Income from a reverse mortgage stops if you sell your house or move (even to a retirement home, nursing home, extended hospital stay, etc.)
• Never lose your home – You can lose your home if you can’t afford to pay taxes, insurance, or maintain the home.
• Never owe more than the value of your home – If your loan exceeds the value of your home, you or your heirs will have to make up the difference if the home isn’t sold when the loan is due.
• False implications that a reverse mortgage is a government benefit rather than a loan – Some lenders even use government logos to convince you to buy.

Be safe.  Read the fine print.  Talk to someone who is in the mortgage industry who DOESN”T sell reverse mortgages before you make a decision. 

Why Should I Consider Buying My Own Home?

The more information you have about this scary milestone, the more relaxed and better equipped you will be to handle the process.  Here are some good reasons why you should buy a home.

Pride in Ownership

Pride in ownership is the number one reason why people yearn to own their home. It means you can paint the walls any color you desire, turn up the volume on your CD player, attach permanent fixtures and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.

Appreciation

Although real estate moves in cycles, sometimes up, sometimes down, over the years, real estate has consistently appreciated over time.  If nothing else, home prices in the short term (over the past 6 years) have declined, you’re considering a purchase while prices are low, the only direction we have to go from here is UP!

Mortgage Interest Deductions

Home ownership is an awesome tax shelter and US tax rates favor homeowners. Mortgage interest is fully deductible on your tax return. Interest is the largest component of your mortgage payment for the first half of your loan term.

Property Tax Deductions

Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes.

Paying Your Mortgage Payment = Equity

Each month, part of your monthly payment is applied to the principal balance of your loan, which reduces your obligation. The way amortization works, the principal portion of your principal and interest payment increases slightly every month. It is lowest on your first payment and highest on your last payment.  Paying rent, you’ll never get ANY part of that rent check back.

Equity Loans

Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18% to 22%. Equity loan interest is often much less and it is deductible. For many home owners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home's equity for a variety of reasons such as home improvement, college, medical or starting a new business. Some state laws restrict home equity loans.

How Do I Choose A Good Realtor?

The real estate market is sensitive in a tough economy.  There is much more supply than there is demand. Buyers are picky, and market conditions allow them to be.  When the market becomes challenging, many real estate professionals fail to rise to the occasion.  How can you ensure that you’ve signed with the right realtor?  Follow these simple tips, and you’ll gain a leg up on the competition…..

·         Make sure your chosen Realtor is making the most of his/her marketing tools.  Ask to see a list of places your home will appear.  If buyers can’t see your home, they can’t buy your home.

·         Look at the Realtor’s listings.  Are the pictures showcasing the home, or the furniture?  It’s easy to take a picture of a sofa or well-made bed, can you see the portion of the room that will matter once those pieces of furniture are removed?  Do they give details about the home that would be relevant to buyers?

·         Call the Realtor multiple times before you sign.  Do they answer or return phone calls?

·         Ask the Realtor what they do to earn their commission?  If they can’t tell you, they probably aren’t doing much.

In the end, your Realtor should give you competent, relevant information and be able to do a thorough search of the market to find you a suitable buyer or a great home to call your own .  Choose your Realtor wisely and let them guide you through the process.  Make them earn that commission.

Taking advantage of a Down Market – Part I: Rehab of Distressed Property

No doubt you’ve noticed, the housing market is in a slump.  Prices continue to fall over much of the country.  Financing is a challenge.  Sellers are desperate.  It seems like a hopeless situation.  But what if it isn’t?  In this series of posts, we’ll explore how YOU can take advantage of a down market and make it work for you. 

Properties in Need of Repair

Look around you, and there is probably a home that has been on the market for a while.  It may be empty and in many cases, it’s either been vandalized or was in disrepair to start with.  There is opportunity in this property!  A 203(k) mortgage may be the start of your own personal economic recovery. 

The Section 203(k) program is the Federal Housing Association (FHA) department's primary program for the rehabilitation and repair of single family properties.  With this type loan, you can buy a home in need of repair and roll the expense of rehabilitation into the mortgage loan.   Still, even after the purchase price and rehab expense, you’re looking at a bargain in most cases.  Take this example:

·         Home is purchased for a bargain price of $110,000

·         The appraiser indicates that, if suggested repairs are made, the home could be worth $160,000

·         Repair by licensed contractor is expensed at $15,000

·         You have a home worth approximately $160,000 with a $125,000 mortgage

·         Instant Equity = $35,000

How can you find these properties?  Call your local neighborhood realtor and ask for distressed properties.  Getting preapproved and making sure your realtor and mortgage broker are aware of your goal is key.

Would you like more detailed information on this program?  Visit http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k.

This blog is written by Niki Davis, a licensed Realtor with Baron Agency in Anderson, SC

Property listings can be found at http://nikidavis.postlets.com

There many benefits related to the installation of an irrigation system in your residential or commercial landscape. Over the last few years we have seen an increase in the importance of conserving water, many states have seen the effects of drought.  By installing an automatic irrigation system that suits your needs, you will be saving time and money. When you water by hand more than 50 % of the water is wasted in evaporation. The system can be programmed to run at night when evaporation rate is lower. Irrigation systems encourage your plantings to flourish, lending to curb appeal, which most people look for when buying a home, whether it's a conscious decision or not. Research has shown that homes with an eye popping and healthy landscape seems to sell homes quicker and bring up the astetic value of the home, which in turn, improves value.

If you are looking to improve the value or appeal of your home, the installation of an irrigation system on your property may be the best investment to make.  Call Nathan or Dara at Morning Mist Irrigation in Easley, SC.   (864) 293-9594

    

What is my home really worth?

We've all looked at something we own and placed value on it.  Our first car, our child's football trophy or our favorite pair of shoes.  Is the value we place on these things universally accepted?  Probably not.  That doesn't matter so much with the trophy or those shoes that we'd never imagine parting with, but what about your home?  The value we place on this commodity is very important when we get ready to sell.  What can you do to make sure you've arrived at a marketable listing price?  Here are a few tips to make sure you don't price yourself out of a sale.

1.  Comparables.  The first things your realtor, a buyer and the mortgage company financing a purchase will look at in determining what your home is worth are comps.  What have homes similar to yours in the area sold for in the past few months?  Realtors often hear "the house down the street sold for much less than it should have sold for, so we can't consider that in our listing decision".  We have to consider the facts, a home is only worth as much as the market will bear.  You may have purchased this home for $200,000 five years ago, but the market is different today.  If comparable homes are selling for $180,000, asking for $200,000 will not only price you out of the market for buyers who are looking at similar homes, but if you do happen to find a buyer willing to pay the price, it will be difficult, if not impossible, to find a bank willing to fund the purchase.  Banks base their decision on appraisals that, in turn, base their analysis on comparables.  What the home down the street sold for is market value.  No matter how low it may have been, that is what a buyer was willing to pay, and that is, by definition, what market value is.

2.  Market Outlook.  Need another good reason to conservatively price your home?  Market projections in many regions of the country, including here in Upstate SC, predict that housing prices have not hit the bottom.  This means that what you can get for your home TODAY is more than what you may be able to demand in 6 months.  The longer your home sits on the market, the less it will be "worth" in the near future.  On the upside, if you sell your home at what you consider a LOSS, the home you purchase in turn will also be priced at a similarly diminished price.  You're not in this alone!

3.  Home Ownership Expenses.  The longer your home sits on the market, the more net profit you stand to lose.  Every day your home doesn't sell is another day of property tax that will be added to the seller's closing cost.  It's another day that you'll pay homeowner's insurance premiums.  It's potentially another maintenance bill, whether it's a carpet cleaning, another coat of paint in the foyer, having the gutters cleaned or another seasonal pressure washing of the siding.  You also pay interest payments to your bank every month that are not being added to the equity in the property.  If you purchased a $150,000 home ten years ago at 5% interest, you will pay approximately $6,000 THIS year in interest payments.  If your home sits on the market for a year without a sale, you've endured a loss of $6000 in that year alone that you'll not be able to recoup.  The sooner you sell your home, the sooner you can move on to building value and equity in a new property.

We all place value on the things that we love, but here’s where you have to separate sentimentality from reality….. Your home is worth what someone is willing to pay for it.  The county’s assessed tax value, your insurance company’s replacement cost estimate, and what you paid for it years ago have nothing to do with what its marketable value is TODAY.  How badly do you want or need to sell?  There are homes listed today that have been on the market for 3 years.  There are homes that sell within days of being listed.  The biggest factor affecting this is price.  Make sure you’re making good “on paper” decisions.  The housing market today is a challenge, but homes that are priced right are the first to go.  You don't have to participate in the down market. 

 

Settling In

The wind is whipping through the trees and scattering leaves across the back yard. The dogs chase the leaves and a few brave birds who dare to find a few nuts and seeds in the feeders. The nip in the air mixed with the warmth of the sun confirm it is finally Fall. As I pour my second cup of hot tea, I feel the weight of the morning leave and my heart settles in. School is back in session; sports in full swing. We are all settling into our daily and weekly routines.

There is always the excitement of new beginnings...new people to meet, new skills to learn, new places to explore. But what I have learned to treasure is the settling in. When the newness wears off and the routines are set, there is comfort. There is home. There is peace. That even in the midst of all the craziness and messiness of life, we all need a place to refresh and restore our minds, our bodies, our souls.

So, you may be saying, "Yeah, right! That sounds great, but what does it look like in real life? How do I get to that place?" We're hopeful that this blog will become a sort of reference for how to live your life intentionally and by doing so, create a haven for you and those you love. There will be a mixed bag of posts, everything from home maintenance and improvement to self-care and simple Home Skills 101, but all relating to ways you can take a deep breath and really begin to enjoy this life and not merely pass by at the speed of light.

So, sit back, settle in, and savor today.

I'm thinking of buying a house. Now what?

The real estate market can be tricky and unpredictable. It is important that the agent you choose works for you. Working with a trusted expert and buyers’ advocate helps you achieve your dream of home ownership without unpleasant surprises.   Common sense would suggest you’d go out, find the houses you like, call the agents listed on the signs/listings, and call them for a showing, right?  Not so fast!

The agent listed on that sign has a legal agreement with the seller of the home.  He is legally obligated by the listing contract to put forth his best efforts to sell that home for the listing price.  He can use any and all knowledge he has of any buyer who comes along to get what his seller wants.  He is the seller’s advocate at the bargaining table.    Unless you sign a similar agreement as a buyer with a realtor, you have no representation in the deal.  Any information that you will need to share in the transaction can be used to the seller’s advantage, leaving you with a less than optimal deal.  Enter… the buyer’s agent. 

Once you get ready to look for a home, your first step should be to find a reputable realtor to help you in your search. Realtors work in the industry, they know mortgage brokers, appraisers, attorneys and other professionals you will need to employ in buying your home. A buyer’s agent communicates with you, takes information that you give and keeps it confidential, away from the ears of the seller.  He makes sure that your information cannot be used against you in the negotiation process, and ensures that you won’t have to share that sensitive information with multiple realtors to find your next home.    Realtors are required by law to provide a certain amount of service to a signed client.  There is a much lesser obligation to a non-signed customer. 

A buyer’s agency can determine which loan programs you qualify for, and find which homes are available to that program.  He can communicate with your mortgage broker, your attorney, the appraiser, home inspector, termite company, movers and more to coordinate services to keep your life as stress free as possible during the transaction.  A buyer’s agent can show you any property, regardless of which company has it listed, and act as your advocate from beginning to end of the process. 

If you are looking to buy a home, consider calling a realtor and signing a buyer’s agency agreement.  Your home shopping process will go much more smoothly, and you’ll find your home more quickly!   The buyer's agent takes his commission from the sale of the home.  The seller pays for your representation, why not take advantage of this and protect yourself?  A single agent may act as both a buyer and seller’s agent, keeping information confidential from the other party, but a signed agreement is required to enter into a confidential relationship.  Choose wisely and keep in mind, without that agreement, anything you say can and probably will be used to get the party with representation the best deal.  You need representation!

Consider using Baron Agency as your buyer's agent.  Call Niki Davis at 864-420-0894.  You can also email Niki at nikigreerdavis@gmail.com.