Tuesday, May 29, 2007

Verbal Real Estate Offers

We want to save time by making a verbal offer but our agent recommends against it.

Your agent understands that if it isn’t in writing it is exceptionally difficult to enforce a verbal real estate agreement. In other words, if the Seller agrees to your offer and later won’t sign your written agreement there is little you can do without high risk, cost, and time … if at all. Many things can happen before a verbal agreement is memorialized … most of them bad for a Buyer. The Seller can have a change of heart, another offer can materialize, or the Seller’s Aunt Tillie can agree to give them money so they can wait for a better offer. A written offer that they sign when they are inclined to do so is an enforceable document.

If you do happen to connect on a verbal proposal, work to get a written contract as soon as is practicable for the protection of all parties. Verbal offers usually consist of price, escrow period, and maybe one or two other featured items. There are many other components to a transaction so it is important to agree on all of them quickly. If you don’t initially call out something that is out of the ordinary, there is an implication that you are going to handle the other terms and conditions in the customary manner. This is where integrity comes in – yours and that of your agent. You have given your word … what does it mean? It isn’t a time to further gouge a motivated Seller – you lost your moral chance to do so when you chose to make a verbal offer.

If you’ve selected several properties and want to make several offers looking to get the best price, have your agent write multiple offers. It is easy with computers these days, and you can have many offers working at the same time. In a Seller’s Market the Seller can contemplate multiple offers from multiple Buyers. In a Buyer’s Market the Buyer can submit multiple offers to multiple Sellers. Be aware, this situation can backfire on you. Why should a Seller accept a low offer from you if there is a chance that you won’t select their property to buy - the Seller’s low-price threshold is now known to people other than their agent. Sellers also know that if a Buyer doesn’t want their house more than another the price they receive may be less than optimum. Often Sellers, or their agents, are reluctant to compete in a multiple offer arena. Adjust your offer strategy appropriately for multiple offers so they will work effectively for you.

Our Advice: The main reason you wouldn’t put an offer in writing is because you think it too onerous to waste your time on. What do you really think of the home? How long do you plan to live in it? If you are buying it below market today and will be in it to see the market recover, why let a minor price difference keep you from the environment you really want to immerse yourself in for the next few years? Price is important, but it isn’t everything. Buy what you want, buy what you can afford, and buy with peace of mind. The best priced home doesn’t always meet this criteria.

If your offer is worthy … put it in writing. If the Seller signs it you have a deal. If it is to be your primary residence, remember what is really important to you and create that reality.

When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, carsonvalleyland.com, 775-781-5472

Wednesday, May 23, 2007

Making your home stand out in today's competative market.

We really have to sell … how can we stand out from the other homes?

It is important for Sellers to realize that Buyers have many options in today’s market. They are well informed, have access to a lot of information via the Internet, and are making wise decisions. Assuming that you are priced right, a must in today’s market, there are other things you and your agent can do to attract a Buyer’s attention. We think it is vital that you do them for your own success.

Start by looking at your home from the street. Is your landscaping up to snuff? Are the weeds pulled, lawn edged, street gutters clean? This is your Buyer’s first impression and it will set the tone for them to look at the interior. Put your Buyer hat on – what does it look like? Is it inviting? Are there cobwebs on the lights and eves? Clean them off!

As you enter your home what does it look and smell like? Is it inviting to the new viewer? Do they have to step over things to meander through the house? Is your dog barking incessantly at them … or worse? It is important that a Buyer enjoy looking at the environment and visualizing themselves living there. With that in mind – can they see the walls or is every inch covered with pictures? Is your dirty laundry contained, or is it in a pile in the corner waiting for Saturday morning? There is a difference between “living in” your house, and having your house “market ready”. That difference is important in today’s market and those that go the extra mile … agents and Sellers … will get separation in the market and stand a much better chance of selling in a timely manner.

Our Advice: Recognize that everyone has to work harder in today’s market. The agents are working harder, but many Sellers haven‘t accepted their responsibilities for getting their home sold. It is imperative that you do the many little things that will enhance your home in a Buyer’s eyes and memory. Work to sell your home and enjoy the fruits of your labor at the close of escrow. You can help to control your own destiny – positive or otherwise. Get rid of the clutter, clean everything … often, and make sure your home is readily accessible for showings. You have plenty of time for privacy in your new home – welcome a showing when it comes your way because many Sellers aren’t getting calls for showings. If you don’t want to make the necessary effort then adjust your price accordingly – buy the luxury of not preparing your home for sale by discounting your price dramatically.

Buyers have a lot of choices today … help them choose your home. Work on it as you would your used car – clean up, wash, polish, show it with pride. If you do that, and are priced right, you can start wrapping the china!

When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, carsonvalleyland.com, 775-781- 5472

Wednesday, May 16, 2007

We are having trouble making our payments!

We are having a hard time making our payments … what can we do?

You’re not alone if you are having trouble paying your mortgage. The housing boom took homeownership to nearly 70%, but some homeowners are having problems making their payments and they can’t refinance. Lenders invented new types of mortgages recently to help families without cash for a down payment, or with less-than-perfect credit. These “subprime” loans have higher interest rates and costs such as prepayment penalties (usually six months interest minimum!). They often start with a “teaser” rate followed by significant increases over the remainder of the loan.

Compounded by the Market correcting, the situation has caused many to be in the predicament of facing much higher payments, high cost to refinance or sell, and market values that would require them to write a check to sell their property. If you are having trouble paying your mortgage for any reason, or expect problems, you should work with experts and your lender to find a solution. If you fall behind and don’t take action, the lender will foreclose on your home. The sooner you act, the better the chances you will avoid foreclosure.

If you have, or are considering getting, one of the following types of loans be advised that they have a particularly high risk of failure: Interest-Only Mortgage – you pay only the interest on the loan for the first 5-10 years, nothing on the loan amount. After the interest-only period the payments are much higher. Payment Option Adjustable Rate Mortgages – you decide how much to pay each month. You can pay less than the interest and add the unpaid interest to the principal you owe, or you can pay just interest, or you can pay enough to pay the loan off sooner. This can have a big payment shock, and get you “upside down” in your property quickly. 2/28 and 3/27 Mortgages – you’ll have a fixed payment for the first two or three years before your payments adjust.

Our Advice: There are options for working with your lender that can prevent a foreclosure. If your payment is squeezing you we suggest that you get counseling immediately. Be careful of questionable counseling companies that want a fee and “will hire an attorney” for you. There are non-profit Neighbor Works organizations working with the Homeownership Preservation Foundation that can help you. Call 1-888-995-HOPE, day or night (24/7), English or Spanish, to get help. You can find the nearest Neighbor Works organization at
www.nw.org. The U.S. Department of Housing and Urban Development (HUD) website has a list of approved counseling organization by state, www.hud.gov/counseling, or call 800-569-4287.

Don’t play ostrich! Take action and control your destiny. Don’t let the pressure build, get a plan and work it. Help is available in more ways than ever before – utilize the resources available to you for your financial, emotional and psychological well being.

When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, carsonvalleyland.com, 775-781- 5472

Wednesday, May 9, 2007

Reconveyance of previous loans on real property.

We went to close and our old loan still showed up … what happened?

When you have Title Insurance in a transaction these things can happen … thankfully. That is why you get Title Insurance. Old loans that have not been reconveyed show up quite often on Title Reports, and can cause havoc in your escrow. The situation is becoming more prevalent with the rampant refinancing that was going on over the past few years. Lenders were exceptionally busy and details, like sending your reconveyance document for recording, were overlooked or missed.

Two documents are generated to memorialize and secure your real property loan. The first is a Promissory Note, your promise to pay. This specifies the loan amount, interest rate, term, and other special features. This is between you and the Lender, it isn’t public information. The second document is a Deed of Trust. This is the security instrument. It references the Promissory Note, and describes the property securing the loan, i.e.- your primary residence. This is recorded and gives the public constructive notice of the encumbrance against your title.

When you pay your loan off the Deed of Trust should be “reconveyed”, given back to you, the borrower. This is where things break down and your title can be clouded. It is particularly dicey these days as loans are sold and sold again in a National arena. Instead of needing a document from a company in Reno you might find yourself talking to a computer on the East Coast. A good title officer will work with you. If a sizeable new loan is currently in place the title officer knows that the old loan had to have been `paid off before the new loan would be funded. They still prefer the proper documentation, but they understand that the risk of the underlying loan not having been paid off is minimal. Title Insurance, like any other insurance business, is a study of risk. The perspective of risk is where your agent can help you mitigate the impact on your escrow closing if there is a title problem involving reconveyancing.

Our Advice: When you pay off an old loan follow up to make sure that the lender recorded the Notice of Reconveyance. They got their money – you deserve your documentation. Work with a knowledgeable, flexible title insurance company. Some are rigid and won’t adapt to reality … at your emotional and potentially financial expense. Most will work with you to minimize their exposure, that of the Buyer, and to close in a timely manner. Be proactive – make sure the details are handled in your transaction, don’t assume that they have been just because they were supposed to have been.

Title Insurance is the “dry” part of the real estate business, but it the essential core. Many people, including agents, ignore/neglect title issues. What is your property value if you’ve a defective title? Title problems can truly render a property worthless so pay close attention to your title matters because … title matters!

When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, carsonvalleyland.com, 775-781- 5472