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If you’re a first-time homebuyer, you may feel overwhelmed by all the terminology you hear during the process. Here are some of the terms you are likely to hear.

Listings: Real estate agents frequently refer to homes for sale as “listings.” A “listing” on a website shows information about the home, like the price and number of bedrooms.

Comparative Market Analysis (CMA): This is an evaluation of comparable recently sold homes in a neighborhood (known as “comps”) to determine a fair price range for a certain home on the market.

Dual agency: Dual agency occurs when the listing agent selling a home also serves as the buyer’s agent. In most cases, it’s not a good idea for one agent to represent both parties in a real estate transaction. The listing agent’s job is to sell a home at the highest price; the buyer’s agent aims to negotiate the lowest price for his buyers. In this case, the agent and his client’s interests aren’t aligned. Some buyers feel that a dual agent will be more motivated to write an offer on his own listing since he’ll get double the commission from both sides of the deal. This could be a possibility, but chances are the buyers won’t get the home for the best price when working with the listing agent.

Appraisal: When you apply for a mortgage, your lender will require an appraisal of the home you want to buy. A licensed appraiser will estimate the home’s value based on comparable homes that have sold in the area and an investigation of the property.

Contingencies: When you put in an offer on a home, you can specify certain conditions that must be met before the deal will go through – these are called contingencies. You have to make sure you can actually get the loan (a financing contingency), that the inspection doesn’t show anything too crazy (inspection contingency), and that the appraised value is close to what you’re offering to pay (appraisal contingency). Those are just a few common examples; there are several other types of contingencies, which you should discuss with your agent.

Good Faith Estimate (GFE): An estimate of a loan’s total costs that lenders are required to provide to borrowers within three business days of the borrower submitting a loan application. The estimate includes the interest rate, principal, mortgage insurance and mortgage fees for the loan. Remember, this is just an ESTIMATE. The HUD-1 Settlement Form (see below) will detail the actual costs.

Mortgage insurance: This insurance protects the mortgage lender against loss if a borrower defaults on his loan. There is both private and public mortgage insurance. Private mortgage insurance (PMI) is required for borrowers of conventional loans with a down payment of less than 20 percent. Alternatively, many homebuyers will opt for a Federal Housing Administration (FHA) loan, which is insured by the federal government and backed with taxpayer dollars.

Earnest money: The money buyers pay within one to three business days after agreeing with the seller on a price for the home to show that they’re serious about the offer. The money is usually 1 – 3% of the purchase price (though sometimes it’s a fixed amount) and is deposited into an escrow account via a cashier’s check or money order.

Escrow: A neutral third party or attorney that handles the exchange of money and documents once mutual acceptance is reached on an offer. Escrow handles the transfer of the buyer’s loan documents and property taxes and works with a buyer’s lender and real estate agent to make sure that the title of the home is clear of liens before the transfer of ownership. In addition, escrow agents prepare the HUD-1 settlement form that lists the costs of the transactions that both the buyer and sellers must pay at closing.

HUD-1 settlement form: The official settlement document for the purchase and sale of real estate from the Department of Housing and Urban Development (HUD). The form is completed by the escrow agent or attorney handling closing and lists all costs of the transaction for both the buyer and the seller, including the cost of the property, the real estate agents’ fees, the lenders’ fees, the cost of title insurance and the escrow agent or attorney fees. To avoid surprises, agents will provide both buyers and sellers with a preliminary version of the HUD-1 one day in advance of the closing.

Closing costs: Be prepared to pay a lot of fees when you purchase a home. Typically, closing costs will amount to 2-5% of the purchase price of the home, and that doesn’t include the down payment. Common fees include excise tax, loan-processing costs and title insurance. For a more exact list of what you’ll be charged, ask for a “Good Faith Estimate” from your lender.

Title insurance: After all the negotiations are done and the seller has accepted your offer, you should receive a home title report within a week. Most mortgage lenders require you to pay title insurance as part of the closing costs; title insurers search the public records to make sure the home seller actually had rights to the title and that there are no liens on the home (like an unpaid contractor or unpaid taxes).

Deed: A legal document filed with the county that documents the transfer of home ownership. This is a document the buyer signs when her deal closes and she’ll receive a copy once the original is recorded by the county.

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It’s not a bad time to be a home buyer. Just don’t think the odds will be on your side indefinitely.

Mortgage standards, such as credit score requirements, have started to loosen, and mortgage rates remain low. Although it is a seller’s market in many parts of the country, many sellers realize that today’s buyers are more conservative and will not overpay.

Still, if you are planning to buy, act quickly. The housing market is expected to heat up in coming months and rates will eventually rise — believe it or not.

You may have heard that it’s hard to get a mortgage unless you have perfect credit. But in reality, lenders seem to be loosening their credit standards. The average credit score for mortgages that closed in August was 727, according to Ellie Mae’s latest origination insight report. That’s still a high score, but it’s much lower than the 750 average seen a couple years ago.

If you think buyers aren’t willing to move out of their comfort zones to live in more affordable housing markets, you may want to reconsider. Many buyers, especially the younger generation, are relocating to areas that didn’t seem as appealing before, but now they are prioritizing affordability, says Daren Blomquist, vice president for RealtyTrac, a real estate data company in Irvine, California.

RealtyTrac recently compiled a list of the most affordable counties in the nation, based on median home prices and the percentage of income required for the mortgage payments.

For instance, in Fayetteville, North Carolina, buyers spend about 13 percent of their incomes on house payments for an average home, according to RealtyTrac. The millennial population there has jumped more than 20 percent since 2007. The younger generation views a house as a place to live and not the great investment that their parents once thought they had made, Blomquist says.

This may be your last chance to lock a rate while mortgage rates are at the bottom. 30-year rates increased 13 basis points from the same week of the previous month, showing the first significant movement in rates in recent months.

The Mortgage Bankers Association expects the 30-year fixed rate to climb to 4.5 percent by the fourth quarter of the year, according to the association’s latest forecast. That’s still an attractive rate, but if the MBA is right, the fixed rate will climb gradually, reaching 5 percent by mid-2015.

If you are still looking for a home and are not ready to lock yet, you probably have a bit of time. But if you are trying to time the market or are hoping for rates to drop further, you have very little chances of succeeding with your bet, mortgage analysts say.

Total housing inventory fell 1.7 percent at the end of August to 2.31 million existing homes available for sale, according to the latest report by the National Association of Realtors. That represents a 5.5-month supply of homes and it’s 4.5 percent higher than a year ago.

With more homes to choose from, buyers who have been shopping for a home for months but who just haven’t been able to find the right home yet, will be able to close on a deal, analysts say. Pent-up demand from potential buyers who have been sitting on the sidelines also may lead to more sales this fall.

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Exclusive Buyer’s Agents give buyers their undivided loyalty. Most real estate agents and buyer’s agents work in traditional brokerages that take listings. Because of that, they have an inventory that they must sell. In addition, if that brokerage brings both the buyer and the seller into the transaction, they get to keep the entire commission, making the transaction more profitable. These can be strong incentives to steer a buyer to one of their own listings. It also means that their buyer loses many of the benefits of hiring a real estate agent including negotiating on his behalf as well as the agent’s ability to point out reasons why the buyer might not want to purchase that particular property. Since Exclusive Buyer’s Agents must work in a brokerage that only works with buyers and never takes listings, a buyer can rest assured that the EBA will remain on their side throughout the entire transaction, getting the buyer the lowest price and the best terms possible.

Principles That Buyers Can Count On

The National Association of Exclusive Buyer Agents is an independent alliance of real estate professionals who provide client-level services and whose real estate companies do not accept seller-property listings. We, the members of this Association, set forth the following principles as the minimum professional standards, which will guide us in serving our Buyer-Clients. An Exclusive Buyer Agency relationship requires that we operate according to these fundamental commitments. The essence of Exclusive Buyer Agency practice is undivided loyalty to our Buyer-Clients. We recognize that it is our duty as real estate professionals to serve our clients with fidelity to these Standards of Practice. We also pledge to adhere to the Code of Ethics established by this Association.

1. A Buyer Agent will disclose that he/she is a Buyer Agent and define his/her agency relationship to a prospective Buyer-Client. A Buyer Agent will explain how different agency relationships may affect the level and type of service a

Buyer-Client may receive from a real estate agent.

2. Before entering into an agreement with a Buyer-Client, a Buyer Agent will determine if any conflict of interest may exist on his/her own part or that of a Buyer-Client. If a conflict should occur, a Buyer Agent should be precluded from representing a Buyer-Client, who should have the option of seeking representation elsewhere.

3. A Buyer Agent will provide a copy of these professional Standards and answer any questions a Buyer-Client may have about them.

4. A Buyer Agent will make him/herself available to his/her Buyer-Client in a timely manner.

5. A Buyer Agent will pledge absolute confidentiality to a Buyer-Client when representing him/her, thereby protecting that Buyer-Client’s ability to negotiate all aspects of the transaction.

6. A Buyer Agent will counsel a Buyer-Client regarding his/her financial qualifications and will assist that Buyer-Client in seeking and working with mortgage lenders. A Buyer Agent will not steer his/her Buyer-Client to any one lender but instead will assist him/her in evaluating interest rates and closing costs.

7. A Buyer Agent will discuss objectives and preferences in property styles, age, floor plans, and so forth with a Buyer-Client, then develop from this information a target property profile for him/her.

8. Based upon the target property profile, a Buyer Agent and his/her Buyer-Client will determine the appropriate level of property preview services to be provided.

9. With a Buyer-Client’s target property profile in mind, a Buyer Agent will search the real estate market, including properties for sale by owners and builders, to locate properties to show that Buyer-Client.

10. A Buyer Agent will discuss and evaluate the properties viewed with his/her Buyer-Client, comparing each property shown with the target property profile.

11. Before preparing an offer to purchase, a Buyer Agent will inform a Buyer-Client about any defects or problems he/she has observed or in any way discovered regarding the target property.

12. Before preparing a contract offer on behalf of his/her Buyer-Client, a Buyer Agent will prepare a comparative market analysis, including explanations and documentation, to determine the target property’s market value. A Buyer

Agent will not prepare an offer to purchase a property he/she has not seen.

13. Before a Buyer-Client signs an offer to purchase, a Buyer Agent will provide that Buyer-Client with an estimate of closing costs and, whenever possible, with the truth-in-lending estimate provided by the mortgage company.

14. A Buyer Agent will counsel his/her Buyer-Client and explain the choices available in completing a real estate contract. This real estate counseling is based upon a Buyer Agent’s experience in negotiation and real estate business decisions and is not legal advice. Legal matters should be identified and a Buyer-Client advised to seek legal counsel where appropriate.

15. Whenever possible, a Buyer Agent will prepare the contract offer on a form which has been designed to protect a Buyer-Client’s interest. A Buyer Agent will provide proper disclosures regarding agency representation and other matters as required by law.

16. A Buyer Agent will develop contract negotiation strategies with his/her Buyer-Client, establishing pre-set limits on key points of negotiation when that Buyer-Client wishes to do so. A Buyer Agent will actively negotiate only on behalf of his/her Buyer-Client.

17. Before submitting a contract offer to a Seller, a Buyer Agent will counsel his/her Buyer-Client regarding the time requirements specified in the contract and will encourage that Buyer-Client to have professional inspectors inspect the property if the contract is accepted.

18. A Buyer Agent will counsel a Buyer-Client regarding the types of home inspectors, the suggested criteria for selecting home inspectors, and the comparative costs of inspection services. A Buyer-Client will select real estate inspectors. A Buyer Agent will encourage his/her Buyer-Client to be present during inspections.

19. A Buyer Agent will notify a Seller or a Seller’s Agent in writing of inspectors’ findings and of corrections/repairs mandated by a Buyer-Client. A Buyer Agent will specify a Buyer-Client’s desire to proceed or cancel the purchase contract whenever such notification is required.

20. A Buyer Agent will maintain contact with a Buyer-Client’s title company and mortgage company to make sure that his/her Buyer-Client’s interests are being protected.

21. A Buyer Agent will review a settlement statement with his/her Buyer-Client at or before closing, if possible.

22. A Buyer Agent will accompany a Buyer-Client on a property walk-through before closing.

23. A Buyer Agent will attend a closing with a Buyer-Client. A Buyer Agent should be prepared to support his/her Buyer-Client’s position at closing.

24. A Buyer Agent will keep records of transactions for a reasonable period of time and will provide this information to a Buyer-Client on request.

These Standards of Practice establish obligations that include all those consistent with the “Common Law of Agency” and are considered to be client-level, not customer-level, services. These obligations are, in many instances, higher than those mandated by law. If there is any case where the law requires a greater obligation than these Standards of Practice, then the requirements of the law must be followed. It is the duty of each individual Exclusive Buyer Agent to make himself or herself aware of the laws which may affect him or her.

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For many a foreign national, the United States has always been a great place to invest in.

Buying Real Estate in the United States does not give foreign owners any rights or privileges regarding legal stay or status. If you’re interested in staying in the states longer than allowed by a standard visa, contact an immigration lawyer.

By determining the primary use for your property and how long you plan to own it, you’ll be able to provide information to your real estate agent that will help guide the search and sale.

How will you use the Property?

Before you start your property search, it’s important to think ahead to how you’ll use the home once the deal is done.

• Will this be a vacation home?
• A home to stay in while doing business in the United States?
• A home for your children while they attend college in the States?
• An investment?
• An eventual long-term residence?

The way U.S. real estate transactions are carried out may differ from your home country. Each State in the US has its own set of rules regarding the purchase of real estate, including the type of purchase contract used, the method of closing the sale and even the duties and titles of the individuals involved.

Several important U.S. real estate practices that are worth noting are:

• In the United States, real estate listing information is shared by agents using multiple listing services ( MLS) and consumers can access that same information using real estate sites such as com or Realtor.com. In many other parts of the world, real estate is a fragmented business and buyers have to go from agent to agent to find a property.
• In some countries, it is typical to pay a fee to the agents who are scouting properties on your behalf and showing you around. In the United States, the sales commission is paid by the seller who has a listing agreement with the Seller, so buyers don’t pay anything to have an agent work on their behalf if it is being advertised in the MLS system. It is always advisable for a buyer to work with an Exclusive Buyer Agent who will protect the buyer’s interest in the transaction. Make sure you ask any agent you contact what their “agency relationship” is to you. Each state has different forms of agency and many agents do not work for the benefit of the Buyer.
• In the United States, real estate agents need licenses to operate. The licensing laws of each state differ regarding how much education is required, the type and depth of licensing examinations, and whether continuing education courses are required once an agent becomes licensed. The licensing system was designed to ensure real estate agents are qualified to guide consumers through the maze of finding, evaluating and financing real estate.

Foreign buyers will also want to give consideration to issues such as currency exchange rates, international wire transfers, banking systems, multi-national taxation and accounting issues, and import/export restrictions regarding currency and household goods. It is recommended that you consult with an accountant and attorney before finalizing any transaction.

Foreign buyers are eligible to buy single-family homes, condominiums, duplexes, triplexes, quadru-plexes and townhomes. Housing cooperatives or co-ops often have rules prohibiting foreign ownership. That’s because co-ops generally require that a buyer’s source of income be from the United States and that most of the majority of the buyer’s assets be kept in the U.S.

Financing or Paying Cash?

Qualified foreign buyers with a 30 to 40 percent down payment can often obtain financing for their U.S. real estate purchases. MANY BANKS REQUIRE FOREIGN BUYERS to have a specific amount ($100,000 or more) on deposit with the bank while others set loan limits of $1 million to $2 million. You may also be required to present a minimum of three months of bank statements.

The U.S. home loan market offers an array of safe, affordable mortgages, including some that will allow Muslims to buy a home without violating Islamic laws against paying interest.

Before applying for a U.S. mortgage, you must first establish credit and earn a good credit score. You can start building your credit score by opening U.S. bank and credit card accounts. You’ll also want to be sure to report all income on your tax returns. Lenders use this income information to determine how much money they’re willing to loan you to buy a home.

While you don’t necessarily need to be a citizen or even have a green card to buy a home in the U.S., you will need an Individual Taxpayer Identification Number.

All cash purchases are permitted, but U.S. law mandates that cash transactions over $10,000 be reported to the federal government. The requirement for reporting involves everyone connected to the transaction (purchaser, real estate agents, attorneys and title companies). The government wants to know how you earned the money and that it was legally obtained. Cash buyers can potentially save money on mortgage application fees, loan origination fees, appraisals and title insurance.

Should I purchase U.S. property in my name?

Foreign investors can purchase property directly – in their own names – or through some sort of business entity, such as a domestic corporation, foreign corporation, limited partnership, joint venture, real estate investment trust or limited liability company.

How the property will be used should play into your decision. Additionally, the structure through which you purchase your property can have dramatic tax consequences. Your real estate attorney and accountant should be able to provide counsel concerning your options.

Do I have to travel to the U.S. for the closing?

While you may very well want to attend your real estate closing, it is not necessary. In the event that you cannot or choose not to attend your closing, you must execute a “Power of Attorney.” This is a written document authorizing another person to represent you and sign on your behalf.  Some lenders may require that you be present in the US to sign their loan documents.  This is something you should inquire about when selecting a lender if you do not plan on traveling for the closing.

How will a U.S. real estate purchase affect my taxes?

A foreign property owners’ tax liability in his home country will vary depending upon where the purchaser is from and whether that country has a tax treaty with the United States. Consult a tax attorney familiar with your home country’s treaty to get answers to tax-related questions.

The United States government requires that foreign nationals pay U.S. income taxes (state and federal) on any net income (rental revenues less expenses) received from rental property. If tax returns are not filed in a timely fashion, a tax of 30 percent of the gross rental income may be assessed. Even if you’re incurring losses in the early years of your investment and you don’t owe any taxes to the government, you still must file your tax returns in a timely manner or be subject to financial penalty.

What is FIRPTA?

FIRPTA refers to the Foreign Investment in Real Property Tax Act of 1980.  This ruling authorizes the United States to withhold income tax when property is sold, exchanged, gifted, transferred or liquidated by a foreigner. The Internal Revenue Service takes 15 percent of the proceeds and the state government will also take a percentage (if applicable). When a US tax return is submitted reporting the capital gains tax, if there is any refund due, that money will be refunded to the filer.

If the buyer of the home from the foreign national investor will reside in the home more than 50% of the time and the home sales price is under $300,000.00, the purchaser is not obligated to retain the 15% tax.

Filed under: 20 Blogs, Blog, Exclusive Buyer Agent, First Time Homebuyers, Florida Real Estate, Foreign Home Buyers, Foreign Nationals, Home Buyer Advice, Home Buyers, Home Financing, Homebuyer Advice, International Home Buyers, International investors, Real Estate, Real Estate Closings, Real Estate Investment, real estate news, Real estate trends, Relocation, Retirement, South Florida Real Estate, western north carolina real estate by Kim Bregman
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Checklist for HVAC Maintenance

Here’s an easy, doable preventative maintenance plan to keep your HVAC in top shape.

It’s a good idea to hire a HVAC company to inspect and do maintenance on your system every fall and spring. They’ll do things like inspect and clean the wiring and mechanisms of the unit, which is bit more challenging for the average homeowner.

But you can prolong the life and increase the efficiency of your system if you follow this simple maintenance plan:

Some things you should do immediately; other tasks only need to be done seasonally or once a year. Here are the steps to a healthy HVAC system:
Buy a better filter if you haven’t already. The new high-efficiency pleated filters have an electrostatic charge that works like a magnet to grab the tiniest particles — even those that carry bacteria.

Replace the filter at least every 90 days. But check it monthly. If it looks dark and clogged, go ahead and change it. If you have pets, you’ll probably need to change every month.
Check to make sure there’s at least two feet of clearance around outdoor air conditioning units and heat pumps.

Weekly during spring, summer, and fall remove debris such as leaves, pollen, and twigs from top and sides of outdoor air-conditioning units and heat pumps. Don’t allow the lawn mower to discharge grass clippings onto the unit.

Monthly, inspect insulation on refrigerant lines leading into house. Replace if missing or damaged.
Annually, ensure that outdoor air-conditioning units and heat pumps are on firm and level ground or pads.

Annually, pour a cup of bleach mixed with water down the air-conditioner condensate drain to prevent buildup of mold and algae, which can cause a clog.

In summer, shut off the water supply to the furnace humidifier. In fall (or when you anticipate turning on the heat), replace the humidifier wick filter, set the humidistat to between 35% and 40% relative humidity, and turn on the water supply.

Never close more than 20% of a home’s registers to avoid placing unnecessary strain on the HVAC system.

Annually, replace the battery in your home’s carbon monoxide detector.

By:Douglas Tranner
Published: July 17, 2013

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Because the builder’s agent’s job is to convince you to buy only their homes at the highest price. Your Buyer Agent’s job is to even the odds and negotiate for the lowest price and best terms for YOU!

It is foolish for a home buyer to enter into a new construction contract without an Exclusive Buyer Agent. The advantages are many; aside from the obvious ones. The fact that having buyer agent representation is often FREE cannot be repeated often enough. So too, should the misconception that not using a buyer’s agent will save money be constantly repeated – that simply doesn’t happen.

Remember that that site agent represents the builder/developer. Most real estate agents are sub-agents of the Seller or Transactional agent. In neither case do they have a fiduciary responsibility to the Buyer.

There is a listing contract in place that specifies the agent’s duties and the commission paid by the builder. When an unrepresented buyer contracts a home, the commission agreed upon does not change, it is simply reflects the listing broker (site agent) receiving both sides of the commission.

The site agent is legally bound to represent the best interests of the builder, not the homebuyer. They are expected to work to secure the builder the best deal; not do anything illegal of course but they will not – cannot – negotiate against their client. This is consistent throughout the course of the build; the builder is their client, the buyer is their customer.

Benefits of Using an Exclusive Buyer Agent for New Construction:

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The home mortgage industry can be confusing. Rates, points, caps—there’s a lot to take in. Take some time to educate yourself about the process—and be aware of the big missteps home buyers often make.

Thinking Too Big

Banks qualify their customers on their “debt-to-income ratios.” Simply, that’s the ratio of how much money you make vs. the money you owe to other institutions. Banks don’t take into account other expenses like your weekend entertainment and the tuition to your children’s school.

Ask yourself, what goes into your budget every month? List it all out—restaurants, car payments, taxes, insurance, cable, cell phone, gym memberships, etc. You don’t want to find yourself spending all your money on your house. A good rule of thumb: No more than 30% of your gross income should go toward total housing expenses.

Waiting for Pre-Approval/Pre-Qualification

Besides offering a rough idea of how much home you can afford, a pre-approval gives you leverage when you make an offer on a home—it lets a seller know your offer can be seriously considered. One thing to know: You don’t have to secure your mortgage from the lender that “pre-approves” you. You’re free to take out a mortgage from the bank or lender of your choosing when you’re ready to buy.

Getting the Wrong Loan for You

Although it’s a classic, not everyone needs a 30-year fixed-rate mortgage. Today there are many different products, designed to accommodate different financial plans. Everyone’s life trajectory isn’t the same. Maybe you don’t plan to be in your house for more than five years; maybe you can afford to put more money down than most people. Take a moment to visit http://www.usa.gov/shopping/realestate/mortgages/mortgages.shtml that explains several of the different products out there. Talk to a trusted financial advisor if you’re having difficulty understanding the type of loan that’s best for you.

Choosing Not to Shop Around

When looking for a home loan, don’t go with the first quote from a bank. Shop for a loan the same way you would shop for any other big purchase. One percentage point on a mortgage rate can mean the difference of tens of thousands of dollars difference over the course of a loan.

It might be a good idea to call an experienced mortgage broker who can access many banks across the country. Although the broker is a middleman, you won’t get charged anything extra. Brokers receive loans at wholesale rates and will pass them to you at retail. You might be able to get a better deal than reaching out to banks on your own. If you’re building a new-construction home, you might want to get a quote from an in-house lender like NVR Mortgage or compare developer financing incentives.

Forgetting to lock in a rate

Don’t rely on the verbal promises of a loan officer. Mortgage rates can change daily. If you find a great rate, lock it and get the rate quote in writing. Once a home mortgage rate is locked, your rate is guaranteed for a certain period—anywhere from seven days to a month or more.

When do you lock in a rate? Basically, after an offer has been accepted, you’ll need to backtrack and figure out when you’re going to close. But know that the longer the lock-in, the more the loan will cost you in fees or rates. Why? Basically, the bank is hedging its risk—they don’t know if rates will change either.

Don’t Spend, Change Jobs, Etc.

Many new homebuyers make the mistake of rushing out to buy things to fill their home with as soon as the seller accepts their purchase offer and the lender pre-approves their loan. But there are still a few major hurdles to overcome before the keys are handed out. Here are some things to avoid during the home buying process to assure your transaction goes as smoothly as possible:

• Don’t make an expensive purchase. It may be tempting to order that new sofa for your soon-to-be living room, but its best to avoid making major purchases like furniture, cars, appliances, electronic equipment, jewelry, or vacations until after the closing. Financing that furniture with a store credit card or even one of your own credit cards could jeopardize your credit worthiness during the time it means the most. Using cash to purchase big items can also create a problem because many banks take into consideration your cash reserve when approving your mortgage.
• Don’t get a new job. Lenders like to see a consistent job history. Generally, changing jobs will not affect your ability to qualify for a mortgage loan – especially if you are going to be making more money. But for some people, getting a new job during the loan approval process could raise some concern and affect your application.
• Don’t switch banks or move money around. As your lender reviews your loan package, you will likely be asked to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other liquid assets. To eliminate potential fraud, most loans require a thorough paper trail to document the source of all funds. Changing banks or transferring money to another account – even if its just to consolidate funds – could make it difficult for the lender to document your funds.

Don’t disregard your lenders requirements.

You may have been pre-approved for the loan but your work with the lender is far from over. In order to process your loan, you need to meet certain requirements. Your lender will need copies of your bank statements, W2s, tax returns, and other paperwork. It is up to you to get it to him or her as soon as possible. Failure to submit certain qualifying documents could cause you to lose your loan and the financing you need to buy your home.

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One of the first questions I get when reviewing an Offer to Purchase or Real Estate contract with a Buyer is “ What is Title Insurance” and “Why do I need it?” These are great questions and ones every savvy (or even bewildered) home buyer should be asking.

Title insurance is normally purchased at the same time as you buy your home. Unlike other types of insurance, your title insurance policy, for a one-time premium paid at closing, provides protection to you and your heirs for as long as you own your house. Also unlike other types of insurance, title insurance protects you from events that happened in the past: a forgery, forgotten heir, hidden mortgage or tax liens or other claims by people or entities who may truly (but unbeknownst to you) have a right to your property.

If you get a mortgage as part of your purchase, chances are the lender will insist that you get title insurance, indeed a special form that specifically protects the lender. Technically, you don’t need title insurance any more than you need homeowner’s insurance to offer peace of mind against a fire loss. But this unique form of protection insures that you actually own your property, free and clear of impediments and, as a consequence, it is worthwhile.5

Many Buyers think that title insurance is something they can choose to fore go. After all, the title company did a search of the property already. Why not just review the commitment and forgo the policy? It is a common misconception that a title search will uncover every possible defect in title. Title searches only discover events and documents of public record, so anything done illegally or without proper documentation may not be known until some time in the future.

Remember, even the most thorough title search is prone to human error. And even if the title company or your closing attorney has done their job perfectly, there may have been an error in recording or at some other step in any previous transaction including the property.

Lenders do not consider title insurance optional. In fact, nearly all institutional lenders insist on having their own policy separate from the owner’s policy. If it’s important for their partial investment in the property, it is even more important for the homeowner to be protected for the full value of the home. The lender’s policy protects the lender for the amount of the loan, and for the validity and position of their lien. Only an

Owner’s policy fully protects the buyer against title problems that arise after the home is purchased.

There are potentially hundreds of ways title to your property can be compromised. Even if you don’t lose your property altogether, certain title defects can make it impossible for you to sell or even give away your property. Here are some, but no way all, of the possible title defects covered by title insurance:

• Forged deeds, releases, or wills.
• False impersonation of the true owner of a property.
• Documents executed under invalid or expired powers of attorney.
• Misinterpretations of wills, or discovery of a later will after the first will goes through probate.
• Mistakes in recording deeds
• Undisclosed divorce by someone who conveys title of a deceased former spouse.
• Claims resulting from the use of aliases or fictitious names by someone earlier in the chain of title.
• Liens for unpaid estate, inheritance, income, or gift taxes.
• Disputed or fraudulently obtained release of a mortgage document.
• A misapplied tax payment.
• Undisclosed heirs who surface years or decades later.

The party responsible for paying for the two policies — buyer’s and lender’s — varies from state to state and sometimes from county to county. In some locales, the buyer may pay for one; the seller, the other. If you’re buying the owner’s and lender’s policies from the same company, “in many cases, there’s a substantial discount.

If you pay for the title insurance, you have the right to select the company. If you’re not paying but want to choose the company, be prepared to share some of the costs.

Be wary if the seller is pushing his title company. A title search is meant to find errors before you buy. Use the same company that your seller did years earlier and odds are you’ll get the same results. Often, searchers aren’t using actual records but summaries or extracts of those records. A fresh set of eyes (and extracts) could unearth problems, allowing you to fix them before you buy. I always recommend that my Buyers retain their own real estate attorney to review Title and survey and state exceptions and clear any known defects.

If you’re getting advice from your seller, you’re a real estate agent that is not an Exclusive Buyer Agent and your mortgage lender, look to the lender. The lender’s interest dovetails with yours in getting these things done thoroughly and correctly. The lender is guaranteeing a large amount of money based on the assurance that the property you’re using as collateral is really yours.

If you want to verify that the underwriter issuing the insurance policy is currently sound, check its financial solvency with ratings companies like Fitch Ratings, Demotech Inc. or A.M. Best Co.

Once the closing takes place, the title company records the documents and issues the final title policy, which you should keep in a safe place with other legal documents.

Should a title problem arise at any future date, the title company will stand behind the policy holder, both monetarily and with legal defense if necessary, to pay claims and defend their title to the property.

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AVONDALE, Ariz., Jun 13, 2014 (GLOBE NEWSWIRE via COMTEX) —

Over the last several months, the National Association of Exclusive Buyer Agents (NAEBA) has seen an increase in the number of real estate agents claiming to be Exclusive Buyer Agents in spite of working within a company that takes listings or even taking listings themselves. Per the industry definition, an Exclusive Buyer Agent never works with sellers and works within a company that does not take listings. Because an Exclusive Buyer Agent has no inventory to sell, they can work as a true advocate for the buyer regardless of which home is viewed or purchased.

According to NAEBA President Chris Whitehead, “The definition based on the company taking no listings goes back to the Common Law of Agency. In most states, when contracting with a real estate agent, a consumer is actually contracting with the broker and the agent is simply acting on behalf of that broker. Therefore, in order to state that one works with buyers exclusively, the broker, and as such the company, must actually work with buyers exclusively, not just the agent.” In spite of a few states states no longer following the Common Law of Agency, the legal industry definition stands.

Over the last several years, consumer groups, financial experts, and even the U.S. Housing and Urban Development (HUD) office have advocated the use of an Exclusive Buyer Agent when purchasing a home. Unfortunately, as when anything is recommended so highly by multiple organizations, a few people will make false claims and it appears that Exclusive Buyer Agency is no exception. NAEBA Headquarters has seen complaints regarding “fake” Exclusive Buyer Agents increase from 2 – 3 per month to 2 – 3 per week.

NAEBA President Whitehead, however, states that it is easy to verify that your agent is an Exclusive Buyer Agent. He adds, “Simply check if your agent’s brokerage takes listings or sells homes. If the answer is no, you have a true Exclusive Buyer Agent.”
About NAEBA

The National Association of Exclusive Buyer Agents (NAEBA), created in 1995, is an organization of companies dedicated to representing only buyers of real estate. NAEBA member brokerages do not list homes for sale and never represent sellers. This restriction to one side of the real estate transaction avoids conflicts and ensures that the interest of the home buyer is protected at all times from house-hunting and negotiation to inspection, financing and closing.

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WASHINGTON – June 3, 2014 – An electronic mortgage process could cut 30 days off the average 52 days it takes to close a loan, according to a team developed by Fannie Mae to study e-mortgages.

What’s more, going paperless could save the mortgage industry an average of about $1,100 per mortgage – about $1 billion a year.

The industry has been slow adopting e-mortgage, however, and faces several hurdles in a transition to an all-electronic system. But the Consumer Financial Protection Bureau’s new mortgage disclosure forms process could boost the change since they’ll be disseminated electronically.

“This (change) will allow stakeholders much earlier in the origination chain to derive value from going electronic,” says Nancy Alley, vice president of strategic planning at Simplifile, a company that helps record mortgages electronically. “That should help adoption. Plus, an electronic process should drive a better consumer experience.”

The industry has been gradually progressing toward digital mortgages. About 25,000 mortgages had electronic promissory notes in 2013 – but that only represents about 1 percent of all U.S. mortgages originated last year, according to Michael Cafferky, product development manager at Fannie Mae.

Fannie Mae created a team called “Advancing eMortgage” charged with improving the electronic mortgage process. The team has focused on three key elements:

• Borrower financial passports: online employment and financial profiles that borrowers can share with lenders.
• Loan file service: electronic storage vaults for documents and data from loan files.
• National mortgage registry and clearinghouse: enhancements to a decade-old system that keeps digital records on electronic promissory notes for real property.

Source: “Advanced eMortgage: Why Are We Still Using Paper?” Fannie Mae’s Housing Industry Forum (May 6, 2014)

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