What Happens in a Transaction?

These milestones are built-in contingencies that must be satisfied for the sale to be completed. They mostly protect the buyer from losing the earnest money if the buyer terminates the sale for legitimate reasons.

1. Review of the Sellers Disclosures

By law, sellers must disclose what they know about the property. Oregon is not a ‘buyer-beware’ state; it is a full disclosure state. Sellers who do not disclose all that they know about their property risk a lawsuit for withholding material facts. This can result in financial loss, and in some cases, nullify the sale.

We will do everything we can to prevent such a thing. You the buyer must seek to know as much about the property before you close on it. While we are prohibited from performing your due-diligence, we will guide you in yours. We will also keep our trained eyes open for issues. A good inspector is indispensible and your curious and suspicious mind will also assist in preempting issues that could later result in a lawsuit.

Buyers have the opportunity to review what the seller has disclosed and negotiate, terminate, or accept the findings. There is usually a 5 day review period once delivered by the listing agent.

2. Review the Preliminary Title Report

As soon as escrow is opened, a ‘snapshot’ of the legal title will be sent to all parties. This will show ownership, all liens, judgments, and encumbrances, easements, tax liabilities, and issues such as Covenants, Conditions, and Restrictions (CC&Rs), etc. The buyer reviews this information and raises any concerns or issues for negotiation or remedy. There is usually a 5 day review period once the title is received from the title company.

3. Inspection Deadline

It is a necessity for buyers to know what exactly what they are purchasing and the current condition of the property.  A professional inspector is hired by the buyer to thoroughly evaluate the home, and a report is given to the buyer for further negotiations, further inspections by specialists (if necessary), or future maintenance consideration. This is also a time for full due-diligence; talk with neighbors, the city or county, Home Owners Association, etc. Once you close on the property, it is too late to do your research (except in a fraudulent circumstance).

4. The Appraisal

The appraisal is a contingency if the property fails to appraise for the agreed-upon price. The buyer may renegotiate, accept the appraisal, or terminate the entire deal.

5. Final Loan Approval

The sale is contingent upon the buyer gaining full loan approval. If the financing fails by no fault of the buyer even up to the closing day(!), the buyer may terminate and retain the earnest money.

6. Closing = Signing, Funding, and Recording

After final loan approval, any final funding conditions must be met. More information may be asked of a buyer, or other administrative tasks may have to be done by the mortgage broker or the escrow company. Loan documents are then sent to escrow where they are printed, formatted, and organized for efficient signing.

Signing usually takes place 2 or 3 days before closing. Both parties sign at the escrow office. For buyers this may take an hour or more because of all the loan documents. The loan documents are returned to the lender for final review of signatures, which can take up to 48 hours.

Funding and Recording: When all conditions are met, the lender will release funds, wire transfers will commence, and then the escrow company will record the deed in the county courthouse. At this point the sale is legally complete.

7. Possession

Sometimes possession does not occur at 5pm on the closing date. If negotiated in the offer, the seller may have a few days to move out before the buyer actually takes possession.  Sometimes these days are paid per diem in advance by the seller; sometimes it is a courtesy given to the seller by the buyer.

Published 05/28/2018

Handshakes & Lawsuits

[dropcap character=”F” color=”gray”]In the ‘good ol’ days’ people may have initiated the sale with a handshake, but history shows that those friendly intentions often ended in bitter court disputes. For as long as real estate has been bought and sold in Oregon, there have been real estate lawsuits.

Well over a hundred years of real estate agency law and practice evolved to react to litigation, minimize risk, reduce fraud, and prevent and resolve conflicts. Your property is one of your most significant investments. Remember, whenever much money is at stake, fraud, temptation, and unethical compromise are nearby dangers. Which is why it’s of utmost importance to find yourself the best attorney possible in case anything goes awry.

A real estate agent’s main responsibility is to help reduce your risk, keep you well informed, and guide you through a proper purchase or sale.

Our greatest value to you is not when things go well, but when things go wrong or obstacles are faced, or when uncommon issues arise. [space10]

Protection from Lawsuits

Oregon is not a ‘buyer beware’ state. It is a full disclosure state. Sellers who do not disclose all that they know about their property risk a lawsuit for withholding material facts. This can result in financial loss and in some cases the nullification of the sale.

But we don’t want buyers to ever be put into that miserable situation. We will do everything we can to prevent such a later surprise. This means you the buyer must seek to know as much about the property before closing. While we are prohibited from performing your due-diligence, we will guide you in yours. We will also keep our trained eyes open for issues. A good inspector is indispensible and your curious and suspicious mind will also assist you in preempting issues that could later result in a lawsuit.

Your Loyalty, Our Faithfulness

In due time, we hope to make a trade with you. If you will commit to working loyally with us, we will commit to working faithfully with you. We have a lot to offer but in order to commit our time and resources completely, we need to know that you will make your purchase with one of us.

The selection of a real estate agent is important and personal. We are eager to be interviewed and happy to assist you freely. But when you are comfortable, let us know that we are ‘hired’ to be your agent.

Additional Resources

  • The Oregon Buyers Property Advisory is a tool produced by the Oregon Association of Realtors® (OAR). It is a comprehensive and informative guide for issues one should consider when purchasing. We can help you understand much of this, help you think through what is relevant, and assist you to perform thorough due-diligence.
  • The Oregon Real Estate Agency Disclosure Pamphlet is produced to comply with Real Estate Agency law. It explains the relationship between an agent/broker and the client. You have rights and can expect important affirmative duties from your agent. We have representation responsibilities to you in addition to providing you with excellent service. The Real Estate Agency (REA) is an agency of the State of Oregon charged with protecting consumers and policing agents. Much good information can be found on their web site.

Get to know the Bella Casa Real Estate Brokers

 

Published 09/11/2017

6 Things to Expect During Your Home Search

This is some of what you can expect to take place during your home search:[space10]

1. Your search could take 6-9 months

Most people begin their online searches 6-9 months before they are ready to buy. We know this, accept this, and will never try to rush you into any decision. Your Bella Casa agent will feed you appropriate, professional information that may have a bearing on your timing. For example:

  • We usually can tell when a property will not last long on the market because it is such a good deal.
  • We monitor the mortgage industry and know when rates are most attractive.
  • We daily watch market conditions for changes and trends in the market.
  • We know the history of a property and monitor new listings and price reductions.
  • We do know that some people may have to lose a property before they understand the dynamics of the marketplace and its timing.
  • Our promise to you is that we will educate, but never push or put pressure on you to make a decision before you are ready and fully informed.

2. Do your homework

You have access the most accurate and up-to-date real estate listing information 24 hours a day. We have purchased software for our website that allows our guests and clients to access the local RMLS database directly. You can be assured that no one has more thorough, accurate, or timely information than you. Once you have examined all the active listings, then it becomes less time consuming to focus on only the news listings that trickle onto the market.

3. Make a list

Do you really know what you need and want in your home? You’ll save yourself many hours of shopping (and potential arguing) if you make a list ahead of time. Zero in on the features you must have, would like to have, definitely don’t want, and prefer not to have. Your goal is to find the right home for your family without falling in love with one that doesn’t suit your needs. Tip: Start compiling your wish list by thinking about what you like and dislike about your current home. Property searches may take place on the sites of particular neighborhood developments like northgate real estate in Colorado in the hopes of finding suitable properties there that meet all the needs you noted on your list.

4. Take notes

Rather than relying on memory, make notes about the homes you visit . Turn your priorities into a personalized home-shopping checklist and use it track the features of each home. Once you’ve shortlisted the homes you like and decide on one, you may have to plan a lot of other things as well. This may include hiring professional movers (check the likes of https://www.atlantahomemovers.com/) and cleaning companies to get your home ready to move in. Make sure to take notes on all of these so that you don’t forget what needs to be done. All of this can be stressful but with the right planning, it could be a piece of cake as well.

5. Sometimes your search is discouraging and depressing.

Remember, all buyers are in your shoes…and only one buyer can get the house. So, keep looking, keep trying, and you WILL eventually get a wonderful home. I would also encourage you to leave your offer as a back up offer because many times the first buyer cannot get the house due to lending issues. You might be surprised how often this happens.

6. Your Bella Casa Realtor ® will think outside the box

We hear about and see opportunities that are not on the market, not yet on the market, or might be possibilities. We will go to any length to find what you want. We can send mailers into areas (neighborhoods, targeted rural areas, demographically selected criteria, etc). We will advertise for an appropriate property, make calls, and knock on doors if needed. We network with Realtors ® and industry professionals far and wide to see what others might know and to glean a lead for you.

Published 11/03/2014

FSBO or Realtor®?

[dropcap character=”O” color=”gray”]Option #1: FSBO, Do it Yourself Real Estate

Technology and the internet have given buyers more information and control than people have ever had before. This is good. People have always had the opportunity to buy and sell FSBO without professional assistance. Many people have done this without mishap.

We believe in expert representation by a Realtor , and advocate for this. Why? It is not just self-serving. We know the risks, pitfalls, and have seen the damage when things do not go well.

Look before you leap. Consider this: we have had numerous clients who are attorneys. If anyone could navigate the waters of real estate safely, you would think a lawyer could and would. Yet many ask for professional guidance and assistance from Realtors . Why? Because they do not work in the real estate field every day and are not acutely tuned to the issues and risks along the way. They realize that expert and accountable guidance is worth the cost to avoid the losses and missteps that are often innocently made. Additionally, where there is a substantial amount of money at stake, there is usually a substantial amount of fraud and corruption present.

Any seasoned Realtor can site painful stories of people who got burned because they went it alone. We have seen people who want to sell, be shocked at issues they have to deal with because they did not have an agent when they bought their home. Other people pay too much, get taken advantage of, or make regrettable decisions.

You are free to ‘do it yourself’, but is it worth the risks, the intrusions into your life, and extraordinary efforts you must take to best accomplish your real estate goals?

Option #2: You Can be a Customer Buying Real Estate

What is a Customer? It is someone who buys something from a seller. We do this almost every day. But think about the dynamics of the relationship of the customer to the seller…

  • While the Ford salesperson may be willing to show you any number of Ford’s, you will not be told about, or shown, the competing Chevy or Toyota. While a Ford Fiesta might be adequate for your needs, the seller may pressure you subtlety, or manipulate you overtly, or persuade you by argument, to buy an Edge or an Explorer instead. Is this in YOUR best interest?
  • Costco is amazing, but the products are arranged ever so scientifically to encourage impulse buying. And those ‘end-cap’ products? You would be shocked to know how much the brand-seller pays Costco to have that position. Ever come home from Costco having spent hundreds of dollars, and then realize you still have nothing for dinner tonight? The science is called ‘Applied Psychology’. Of course Costco is not the only store to use the sciences to become the most successful seller by creating the right climate for brand awareness among customers. And if you find the concept mildly interesting, then visit here for a more thorough comprehension.

Sellers want customers! Customers are eyes and ears open to the influences of the seller’s message. Product placement, product packaging, product labeling, and all the marketing and advertising genius is there for one purpose: to convince you to buy this product! Your emotions will be toyed with, memories and nostalgia will be stimulated, your desires will be teased, experiences will be conjured, and your mind will be solicited. You will be told about all the features, and even more so about all the benefits for your life, but you will not be told about the weaknesses, the flaws, and the wishful thinking of the product manufacturer. More money is spent on achieving sales than on anything else in the commercial realm. It is that important, and it is that effective!

Most of us are not equal to the challenge. We do not have the experience and sophistication of those in the sales industry, and succumbing to the resources of the seller, marshaled to persuade us to spend our money with them, is common.

One of the most basic principles in the sales industry is this: People buy emotionally, and then justify their purchase rationally. Most of us think it is the opposite; it is not. Storage units, garages, and yard sales testify to the accuracy of this principle.

As a customer you can work on your own or with a Realtor ; in fact, you can work with any number of Realtors , including the listing agent. Because most people do not understand our industry, they by default buy real estate as customers. It is also common because a buyer may be ready to connect with a Realtor yet, they inadvertently remain customers. We think this is second best, at most!

Option #3: You can become a Client

This is the better way to buy!

  • What if you had access to an industry insider who knows all the brands, is up to date on all the latest features, and is savvy about the trends in the industry? If he or she also understands the values, knows where the bargains are, and where the risks are, would that be valuable?
  • What if you could be guided in your quest by someone who is a dedicated buyer specialist, representing the interests of buyers only? If this person knows the strengths and weaknesses of what the sellers are hawking, and knows how to negotiate more effectively with sellers, would that be valuable?
  • What if this person had no vested interest in any particular outcome, and has no conflict of interest with any property? If this person could professionally guide you in buying listed properties, for-sale-by-owner properties, new construction properties including subdivisions, and even properties not currently on the market, would that be valuable?
  • What if you had an objective guide, who got to know YOU and what you want, and could insure that you make a rational decision as well as a satisfying emotional decision? If this person could help you think this decision through thoroughly and get the timing right, would that be valuable?
  • What if this kind of service was available for free and this personal advisor cost you nothing extra? Would this be valuable for you? I can’t imagine why someone would buy any other way.

Published
2012/12/19

Location! Location! Location!

[dropcap character=”E” color=”red”]Everyone knows that location is the most important consideration affecting value in real estate. But there is even more to it than that. The most basic principle for understanding and evaluating all real estate is this: All Real Estate is Local. It is very, very local, right down to the individual property. So whether you are looking for a property in Hawaii (see here) or in Texas, buyers want to make sure that their location is spot on for their needs.

What About Automated Online Valuations???

Many websites offer an automated valuation of your property. Although this is an option in the Ethernet world, it is just a hook to get you drawn in; there is no such thing as an accurate automated valuation in the real world!

Online valuations access county sales and tax assessment data, and sometimes multiple listing data. There is no consideration of the actual market conditions at the time of sale (which can vary significantly), the specific neighborhood or area, the type of property, or the condition of the house and property. Is it a fixer, a bulldozer, dated, recently remodeled, high-end construction, or a do-it-yourselfer? What about the schools, view, proximity to traffic, trains, industry, noise, or anticipated detrimental changes to come (and the list can be long)? Tax assessments rarely match actual market value.

The only way to properly value a property:

  • Walk the property and see the home in person. It takes ‘boots on the ground’ reconnaissance to make smart decisions. One cannot even begin the research until this has been accomplished.
  • Know the comparable areas. Two towns located in the same county will have considerable differences in value because of numerous tangible and intangible differences. This goes for neighborhoods as well.
  • Compare the property with genuine comparable properties. Two statistically identical homes will be dramatically different in price because of location alone, and there are always other considerations as well.
  • Compare sales which occurred in the same market conditions. Appraisers prefer ‘comps’ to be no older than 3 months, almost never more than 6 months. It does little good to see properties which sold last year unless you have a depth of knowledge to properly extrapolate value.
  • Compare with actual sales in the free market. Distressed sales which are the result of foreclosure, or closed sales within a family, do not reflect the actual market price. They distort the value and need to be eliminated from consideration.

Many of the problems we now suffer from (the sub-prime mortgage mess, rabid speculation and non-existent standards) are tied to the fact that in-person appraisals were not performed. Instead, lenders relied on automated valuations to support their loan programs.

Locally, we can begin with McMinnville, Oregon which is the County Seat of Yamhill County. With 30,000 residents, McMinnville is only 13 miles south of Newberg and its 20,000 residents. Each is a college town and yet the markets are very different. Each of our smaller towns has its own character and set of unique values. The prices of homes in Amity are far different from Yamhill. Carlton is not far from Dayton, but there is a significant price difference. Sheridan and Willamina are at the southern end of the county and Gaston is at our northern most point; they all represent different markets. Dundee is the epicenter of Oregon’s world renowned wine industry because of the soils, elevations, and southern aspect. The hills of Dundee have an amazing concentration of gorgeous vineyards and wineries and so it is a valuable place to live. The area also has legendary traffic problems, so some of the high price luster is dulled. Lafayette, after 150 years, is finally growing and doing so rapidly; its values are changing dramatically.

In rural areas, the location has a more profound effect. Bald Peak in rural Hillsboro and Newberg is a valuable place to live. The views over the Yamhill Valley or the views toward Portland are breathtaking. The farmlands of the valley hold a different value, as do the densely forested retreats of the coast range complete with streams and abundant wildlife such as deer and elk. That being said, rural living does come with its own unique ways that those who have never lived in this type of location before may take a while to get their heads around. For example if a property is not connected to a municipal sewer system, sewage will likely take the form of a septic system, and homeowners will have to liaise with local septic tank cleaning companies when it is time to clean the tank, or should it need any maintenance work. However, once people are used to rural ways, life becomes quite wonderful, and they can enjoy the benefits of cleaner air and a slower pace of life. It is almost impossible to have a monolithic valuation for rural areas. The diversity is amazing. Can a website evaluate that?

We are not California, Arizona, or Florida!

These are the places which have dominated the nation’s news outlets for more than three years. Our local area is very different and has resisted much of the damage done by over-speculating, the sub-prime housing fiasco, the spike in oil prices, the financial sector meltdown, and the deepening recession. We never saw out-of-control appreciation, and so there is not as much to correct, as all markets are prone to do. The metro-Portland market as a whole still boasts the lowest prices of any major area on the west coast.

But there is another reason our values have held stable, and why so many people are now leaving California and other states to build a life here instead. We are attractive to people changing careers and to baby boomers who are planning for retirement. When people are looking for a new life and a better location, Yamhill County is often in the running. The greatest allure might be the wine industry and the stunning beauty of the vineyards gracing our hills. As one of the most well-known wine producing areas of the country, many are attracted by this culture and its relative affordability.

If not for the stunning beauty of our rural areas, and our quaint towns, we may not enjoy as much interest or value. But if you have lived in the Sunbelt, with its own particular desert beauty, then the magnetism of our green, clean, and lush landscapes may move you. We treasure our vast and spacious beauty and spectacular scenery featured around every town and city. Vineyard-covered hills and fertile farmland valleys adorned with rivers and streams and creeks affect the demand and the price. The Eola Hills, Chehalem Hills, and the Coast Range add more variety. Equestrian properties dot the landscape. Yamhill County is a complex wonderland.

Published
2012/12/19

What First Time Home-Buyers Need to Know

[frame align=”right” border=”1″]This information was provided

by Beth Frischmuth

971-237-1800 [/frame] [dropcap character=”A” color=”blue”]A first-time home-buyer, according to the traditional industry standard, is one who has not purchased a home within the last three years. Programs for the first time home buyer come and go. Some people decide to purchase their first home at auction, in hopes of getting a better deal. With this being said, there are some people who may prefer to get in touch with residential construction companies, in the hopes of building their dream home from scratch. These types of choices depend on the individual and their financial situation.

If you’re interested to learn more about house auctions click to view more. There are a variety of programs available with different down payment options and your lender will explain the advantages and disadvantages of each. Keep in mind that there are additional costs incurred when purchasing a home such as closing costs, the cost of a home inspection and an appraisal.

If you are a first time home buyer, perhaps you have many questions you will want answered. So, let’s take the process of purchasing a home one step at a time. You probably have looked through real estate magazines and perused the internet for homes you are interested in. Now that you are ready to begin looking, you will want to select a Realtor® and a lender. If you’re not quite ready to purchase a property and at this moment in time would rather rent, sites like Apartment Guide can help you to find your ideal property, you can see for yourself here – https://www.apartmentguide.com/apartments/Washington/Seattle/.

Find a Realtor®

As a buyer, it costs you nothing to be represented by a Realtor®. A Realtor® will represent your interest and take you through the entire process from writing an offer to being by your side when you sign the final documents at closing. Ask family and friends for recommendations. It is a good idea to interview several, preferably face to face. You might want to consider approaching somewhere like one of the real estate companies tri cities wa. Your Realtor® should be one who is working real estate full time and has been in the industry long enough to have gained experience and expertise or be backed by a team or brokerage that is available for support.

Questions for a Realtor®

  • How long have you been in the real estate industry?
  • Is real estate your full time profession?
  • Are you typically available on your cell phone?
  • How many houses have you sold in the last six months?
  • How many listings do you have?
  • What is your availability?
    • May I call you in the evening?
    • May I view properties on the weekends?
  • If you are not available is there someone else who can help me?

Find a Lender

Choose a local lender if at all possible. Your Realtor® will most likely have recommendations of lenders he or she trusts and has worked with in the past. It is a good idea to interview several, preferably face to face, before making a final decision. Do not allow lenders to check your credit score until you have decided whom you will use.

Questions for a Lender

  • How long have you been in the mortgage industry?
  • Do you have an assistant?
  • Can I reach you if I have questions?
  • What type of loans do you offer?
  • Who will service my loan, your company or another?
  • What are your fees? How does that work? Are they negotiable?
  • What do you need from me?
  • How long will the loan approval process take?
  • What can I do to speed up this process?
  • How long will it take to close the loan?
  • Is there a prepayment penalty for prepaying the loan?
  • After locking my interest rate, how much time will I have to close?
  • What happens if we need more time? Is there an extra cost for this?

Timeline for a Loan & Getting Pre-Approved

Your Realtor® will want to know that you have been pre-approved for a purchase before you begin viewing homes. Your lender will give you a timeline for obtaining the loan and a list of “dos” and “don’ts” which will be similar to this list provided by Pacific Residential Mortgage:

Do Save and Provide:

  • Your most current pay stubs
  • Last three years of federal tax returns
  • W-2’s/1099’s and other income documentation
  • A complete and final copy of divorce decree, if applicable
  • Identify current debt including creditor’s name, monthly payment and balance
  • Information on any derogatory credit, judgments or liens
  • Most recent asset statements including: bank, brokerage, mutual funds and retirement accounts
  • 60 days seasoned liquid assets for funds to close
  • Gift fund documentation including: proof of donor’s ability to gift, gift letter, copy of gift check and proof of gift deposit

Don’t Do Before or During the Loan Process:

  • Quit or change jobs
  • Increase current credit balance
  • Open, close or apply for any new credit accounts
  • Dispute any items on your credit report
  • Forget to make your payments on time
  • Transfer or deposit large sums of money
  • Make any cosmetic or structural changes to the property

Now that you have a Realtor® and a mortgage lender, you are ready to begin your search for a home. These two partners will take you through the entire process of your first home purchase from beginning to end and be there to answer your many questions. When being represented by two knowledgeable professionals your journey should be worry-free and rewarding.

[stylebox color=”blue”]Contact McMinnville Realtor® Beth Frischmuth at 971-237-1800 to learn more about real estate in McMinnville.[/stylebox]

 

Published
2012/12/16

Interview an Agent

[dropcap character=”I” color=”green”]Interviewing a prospective real estate agent is a safe way to choose the agent who will represent you in your home-buying transaction. It is important to learn about the agent’s personality, experience, specialties, values, and manners. For example, if you’re based in Portland then you should Check Out These Real Estate Agents as they could be the perfect choice for you. At the end of the day, if you don’t have the same values as your real estate agent then how will you know that they’re finding you the best homes and not just the ones that will get them the most commission? This is why it’s always best to find an agent who is local to your area such as these real estate agents Lynchburg based or similar. For most realtors, interviews can be conducted in whatever method you are most comfortable with: via email, telephone, or face to face at the office.

Questions you should ask:

  • Is the agent a REALTOR®? (if it’s a Bella Casa real estate agent, then YES!)
  • Does the agent have an active real estate license in good standing? To find this information, you can check with the Oregon Association of REALTORS®.
  • Does the agent belong to the Multiple Listing Service (MLS) and/or a reliable online home buyer’s search service? Multiple Listing Services are cooperative information networks of REALTORS® that provide descriptions of most of the houses for sale in a particular region.
  • Is real estate their full-time career?
  • Communicate what kind of service you want. How much communication to you want? Do you prefer email, phone calls, or personal meetings? What time of day or evening, or what days of the week are best to communicate or to view prospective properties? How precise do you want them to be about the property description you give?

Test-drive an agent:

Ask to be taken out to see four or five properties in a day and see the broker in action. Are you comfortable? Does he present himself professionally? Is she helpful, insightful, and appropriate? Does she listen to what you say and understand what you want? Do your personalities blend well? Was it a profitable time?

When you are comfortable, communicate your intention to work solely with your broker until closing. At that point you will be placed on the Priority Service List. When our Realtors® are able to confidently place you on the Priority Service List, then they are willing to turn down other work and reserve that premium level of service for you. Your loyalty allows us guarantees our service.

Afraid of getting into something you can’t get out of?

Still not a committing person? Of course, we hope that if we serve you well that you will reward our efforts with payment for services. That can only happen if we write the offer for you, represent you in a sale, and close it to your satisfaction.

As can happen in any relationship, if something is not right, please let us know so we might have the opportunity to correct our shortcoming. If dissatisfied, we will be glad to offer a referral to someone else. You can also review our other brokers online and in person for a better fit. Our goal is premium service and client satisfaction. In fact, it is more that than; we want our clients to become friends and a source for referrals to other opportunities. We sum it up this way: Buy. Sell. Be Happy.

Published
2012/12/15

Your Biggest Investment

Carl Richards sketch
[dropcap character=”H” color=”green”]Homeownership is how many American families begin to accumulate wealth, according to studies by the National Association of REALTORS? and the U.S. Federal Reserve Board.

Whether you’re looking buy a home or checking out the local real estate agents for rent arlington toronto. You will know that Buying a home should be approached as a long-term investment, providing a build-up of equity over time and considerable tax advantages. Housing is not a quick-in, quick-out investment. When purchased for the long term, housing is one of the safest investments consumers can make. No paper investment provides this kind of benefit. It is so important to build up your wealth in ways like this so that you’re prepared for the challenges life can throw at you. There are even companies that specialise in wealth management jacksonville fl way, as well as in many other areas, that can help you to come up with a strategy on how to make sure you are always financially secure.

The key factor when it comes to property investment, of course, is purchasing a home you can afford. In almost every neighborhood we have seen the effects of purchasing a home beyond the buyer’s means and selecting an unsavory mortgage lender/broker. I’m sure that we all know someone personally who has gone through a foreclosure or short sale in the past three years. Being able to “afford” a home mortgage doesn’t just mean that you can make the monthly payment. Do you have an emergency fund to cover living expenses in case you lose employment? You need to have funds available to pay your mortgage while searching for new employment. What if the furnace unexpectedly breaks down? or a fallen tree causes damage to the roof? These “unexpected” expenses are to be EXPECTED and financially planned for. Homeownership is more expensive than your monthly mortgage payment.

With that being said, if your finances are in place then homeownership is a tremendous investment. Dollar for dollar, the rate of return on an individual’s cash down payment on a house is substantial. Homebuyers typically use their own money to cover only a small portion of the purchase price, but the home appreciation they realize is based on the total value of the property.

Homeowners accumulate significantly more wealth than renters. According to the Federal Reserve Survey of Consumer Finances, the median net wealth of a renter household is $4,800, while the median net wealth of a homeowner household is $171,700. Clearly, owning a home is the best way for most families to build a nest egg.

We encourage you to explore homeownership! Whether that be by finding your dream home that’s for sale or having a Custom Home Builder build your dream home for you, it’s an exciting and important step forward. A lot of people have been considering the later option recently. With the increasing prices of homes these days, some people feel that it’s more beneficial to build their own house to try and save some money. If you’re leaning more towards this option, it might be worth looking at a company like Danmar Homes for some inspiration and advice before building your home. Regardless of what you decide to do, you can start the journey today by getting your financial house in order. Very soon you could be the proud owner of a comfortable home to live in and confident with your sound investment.

When the time is right for you, a Realtor’s job is helping you make sound decisions about buying and selling property. We know the intricacies and the valuations of the local markets, we know the pitfalls, and we know what must happen for your investment to be protected and profitable. Do not put your largest investment at risk. With knowledgeable and wise counsel, and the thoughtful consideration of your needs, abilities, and dreams, we can form a team to help you build wealth for your future.

Published
2012/12/13

Anatomy of a Transaction

[dropcap character=”T” color=”gray”]These milestones are built-in contingencies that must be satisfied for the sale to be completed. They mostly protect the buyer from losing the earnest money if the buyer terminates the sale for legitimate reasons.

1. Review of the Sellers Disclosures

By law, sellers must disclose what they know about the property. Oregon is not a ‘buyer-beware’ state; it is a full disclosure state. Sellers who do not disclose all that they know about their property risk a lawsuit for withholding material facts. This can result in financial loss, and in some cases, nullify the sale.

We will do everything we can to prevent such a thing. You the buyer must seek to know as much about the property before you close on it. While we are prohibited from performing your due-diligence, we will guide you in yours. We will also keep our trained eyes open for issues. A good inspector is indispensible and your curious and suspicious mind will also assist in preempting issues that could later result in a lawsuit.

Buyers have the opportunity to review what the seller has disclosed and negotiate, terminate, or accept the findings. There is usually a 5 day review period once delivered by the listing agent.

2. Review the Preliminary Title Report

As soon as escrow is opened, a ‘snapshot’ of the legal title will be sent to all parties. This will show ownership, all liens, judgments, and encumbrances, easements, tax liabilities, and issues such as Covenants, Conditions, and Restrictions (CC&Rs), etc. The buyer reviews this information and raises any concerns or issues for negotiation or remedy. There is usually a 5 day review period once the title is received from the title company.

3. Inspection Deadline

It is a necessity for buyers to know what exactly what they are purchasing and the current condition of the property.  A professional inspector is hired by the buyer to thoroughly evaluate the home, and a report is given to the buyer for further negotiations, further inspections by specialists (if necessary), or future maintenance consideration. This is also a time for full due-diligence; talk with neighbors, the city or county, Home Owners Association, etc. Once you close on the property, it is too late to do your research (except in a fraudulent circumstance).

4. The Appraisal

The appraisal is a contingency if the property fails to appraise for the agreed-upon price. The buyer may renegotiate, accept the appraisal, or terminate the entire deal.

5. Final Loan Approval

The sale is contingent upon the buyer gaining full loan approval. If the financing fails by no fault of the buyer even up to the closing day(!), the buyer may terminate and retain the earnest money.

6. Closing = Signing, Funding, and Recording

After final loan approval, any final funding conditions must be met. More information may be asked of a buyer, or other administrative tasks may have to be done by the mortgage broker or the escrow company. Loan documents are then sent to escrow where they are printed, formatted, and organized for efficient signing.

Signing usually takes place 2 or 3 days before closing. Both parties sign at the escrow office. For buyers this may take an hour or more because of all the loan documents. The loan documents are returned to the lender for final review of signatures, which can take up to 48 hours.

Funding and Recording: When all conditions are met, the lender will release funds, wire transfers will commence, and then the escrow company will record the deed in the county courthouse. At this point the sale is legally complete.

7. Possession

Sometimes possession does not occur at 5pm on the closing date. If negotiated in the offer, the seller may have a few days to move out before the buyer actually takes possession.  Sometimes these days are paid per diem in advance by the seller; sometimes it is a courtesy given to the seller by the buyer.

 

Published on: Dec 13, 2012

Buying Foreclosures in Oregon

[frame align=”right” border=”1″]This information
courtesy of Gary Eckdahl,
Realtor® specializing in
foreclosure and distressed properties.

503-883-3938 [/frame]

[dropcap character=”P” color=”red”]Perhaps you’ve heard that one of the best ways to get a “steal” or a “great deal” is on foreclosed properties. It’s no secret that there are great bargains to be had right now. A flood of these foreclosed properties have hit the market and the banks that repossessed them want to get them sold…….quickly. So if you’re wanting to find what could possibly be a great deal on a house, look into how to find houses in foreclosure locally or in a new location you wish to reside.

Why are there so many foreclosed properties for sale right now?

The current economic situation has affected us all to one degree or another. No one is exempt from higher gas prices and its on most other goods and services. And, to some degree we will all get to experience the effects of the decisions our nation’s leaders make as they try to adjust to the situation at hand. Although some may only feel a little uncomfortable or uneasy, others have had it much tougher. All of us know someone who has been hit hard economically. Loss of jobs and homes, stress-related illnesses, vanishing retirement savings and bankruptcy are some of the more common things people all over this country are experiencing today.

As a real estate broker, I work with people regularly who have lost their home or are on the verge of losing their home. The most common scenario is a client who purchased their home between 2004 and 2008, somewhere near the top of the market, and now they are in a position where they owe more on the property than it is worth. They are what we call “upside down”. Have you ever hung upside down for a long period of time? All the blood rushes to your head and you feel like it’s going to explode. You can’t think straight and all you want to do is get turned upright again. Not a fun position to be in.

Outcomes to Upside Down Mortgages

If a person is upside down in their mortgage and, for whatever reason, cannot make their monthly payment, there will be one of two likely outcomes:

  1. They will either “short sale” the property, or
  2. The property will be foreclosed on by the lender.

A short sale occurs when the lender agrees to be shorted the difference between the sale price of the property and the amount owed on the property. Both outcomes have very serious consequences and I advise anyone who finds themselves in one of these situations to seek the counsel of an attorney AND a tax professional. For the purpose of this article I want to concentrate on properties that have already been through the foreclosure process and are now being listed for sale by the lender.

Terms You Need To Know

Before we go any further I want to define a few terms that are often used when discussing foreclosed properties:

  • REO (Real Estate Owned): Property owned by a lender, typically a bank, government agency or government loan insurer, after an unsuccessful sale at a foreclosure auction. This term will be used when discussing properties that have been foreclosed and are now for sale by the lender.
  • Distressed Property: A property that is under a foreclosure order or is advertised for sale by its mortgagee (the lender).
  • Hard Money/Private Money: Financing through which a borrower receives funds secured by the value of a parcel of real estate. Hard money loans are typically issued at much higher interest rates than conventional commercial or residential property loans and are almost always made by private investors in the local area. For the purposes of this article, the terms hard money and private money will be used synonymously.
  • Flip: To purchase a property with the purpose of making some improvements and then selling it in a relatively short period of time for a profit.

For Investors

For those of you interested in investing in Oregon real estate, now is a great time to think about purchasing an REO. There are properties in all areas, in all price ranges, and in various conditions. Some properties are brand new and move-in-ready, while others may have a structure on the lot of no value with the value being only in the land itself. I have worked with investors who have both flipped properties and purchased properties to hold as rentals, as well as investors coming together using crowdfunding platforms like this CrowdStreet review, in order to put together enough capital for investment properties. Whatever your investment goal, this is the time to act.

Many of the great values in Oregon are on properties in some degree of disrepair. Due to the poor condition of the property, many of them cannot be financed through traditional lending and need to be purchased with either cash or private money (hard money).

If you are new to real estate investing you will need to do your homework. There are many pitfalls along the way that can turn a dream of big profits into a nightmare. Always work with a Realtor® with experience in real estate investments. A knowledgeable Realtor® will guide you through the process and help keep risk to a minimum.

For Homebuyers

Maybe you are not an investor but rather a person looking for a home to live in and you want to take advantage of the low-priced REO’s out there. Maybe you have already been out and looked at some REO’s (or at least looked at them online), but all you see are properties that require a lot of work. Believe it or not, even if you don’t have the skills to do the work yourself, or the money to pay for it, you may still be able to purchase one of those REO’s.

If the home doesn’t need major repairs then you can usually get traditional financing and purchase the home just as you would a non-foreclosed property. However, if the home is in a condition that will not allow it to qualify for traditional financing, such as no heating system, dry rot in the siding or a leaky roof (which could potentially need Roof Replacement), you may be able to get financing through what is called an FHA 203K Loan. There are some qualifiers for this loan but basically it is a loan for someone who is planning to live in the house (this is not for investors) and it allows the borrower to borrow the amount of the purchase price plus the cost of the repairs (up to a certain amount) that will then allow them to get in contact with exterior repair and renovation teams such as a James Hardie Siding contractor or others to restore the exterior of the property to an exceptional condition. Typically, a buyer can negotiate a much lower price so that the total price of purchase and repair will still allow for considerable equity in the property.

So whether you are an investor looking for that sound investment or a person looking for that next property you will call home, REO’s are something you should consider. Call your Realtor® and let them go to work for you. If you are not currently working with a Realtor, please give me a call and I will put my experience to work for you.

[stylebox color=”red”]Contact McMinnville Realtor® Gary Eckdahl at 503-883-3938 to learn more about buying foreclosure properties in Yamhill County and throughout Oregon.[/stylebox]

Published on: Dec 11, 2012