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.