Tag Archive for Real Estate

Rent-to-Own House Advantages and Disadvantages for Sellers

A few years ago, you hardly heard the word rent-to-own in the real estate market. But now there are so many homes in the market and these are rising. There are no exact terms for these contracts. Generally renters and the property owners sign contract with mutually acceptable rent for one to three years. The rent paid by the renter is usually higher than normal that compensates the down payment. At the end of the period, the renter will pay the final amount to get the ownership. The rent-to-own contract has some advantages and disadvantages to the sellers.

Advantages: Advantages with the rent-to-own house to the sellers are as follows:

  • If the seller was taken a mortgage on the home, he has to pay the interest for the mortgage. In the rent-to-own method, the property ownership is not transferred to the buyer until the final payment. So, the seller can deduct the tax for paying interest.
  • The sellers can enjoy the benefit of non refundable option fee when the buyer is not willing to buy the house at the end of the contract. This fee has to be paid to the seller. It will be helpful to the seller to reduce the risk when the buyers defaults with respect to agreement, or walks away from the deal.
  • The real estate agent’s commission on a sale of home can be thousands of dollars in total. The sellers can avoid to pay the commission to real estate agents if they choose for rent-to-own option. As well it is easy to find a good buyer to sell the property quickly.
  • When seller opts for this option to sell the home, many buyers are attracted because of financial terms offered are good. It even allows time for the home buyers to get the credit or finances. These are the advantages to the sellers to command a good price even in tough market conditions.
  • Rent-to-own option provides an advantage to the sellers to avoid the vacancies in their houses. Once they are advertised for selling a home in this way, buyers will come quickly and choose one them to enter the contract.

Disadvantages: Disadvantages with the rent-to-own contract to the sellers are as follows:

  • The rent-to-own contract do not bind the buyer or renter to buy the property compulsory, and they may opt to out from buying the property at the end of the period. In this case the seller again need to start the selling process from the beginning.
  • This option may give less profit than the traditional method of selling.

A lease agreement includes rent amount, length of the leas period, rent credit for down payment terms, responsible persons for home owner fee, insurance, property taxes, repairs, maintenance and utilities during the lease period. It is sensible to review with a lawyer because multiple issues have to be addressed.
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Types of Listing Contracts

There are various types of listing contracts, but a few of them are used. The Exclusive Right to Sell is the most common one, but there are the “one-time show,” the “exclusive agency listing,” and the “open listing”. Now we will see them in detail.

  • Open listing: The open listing is largely used by the people trying to sell their property or home by owner that those who are also willing to work with the real estate agents. Basically it gives the right to the real estate agent to bring buyers to bring the buyers around to view your home. The agent earns commission when their client buy your home. The home seller can give out open listings to every agent who comes around, because there is nothing exclusive about open listing. Due to this reason, no agent who accept this listing put in the Multiple Listing Service or going to market your home. The open listing is useful when, the agent feel that your home is convenient and fits the clients criteria then the agent may be willing to show it to them.
  • Onetime show: In many respects the onetime show is similar to an open listing. It is mostly used by the real estate agents those who are showing a For Sale By Owner (FSBO) to one of the clients. The home or property seller signs on the agreement, which identifies potential buyer and the guarantees agent a commission should that buyer purchase home. This prevents the seller and buyer from negotiating later and trying to avoid the agent’s commission paying.
  • Exclusive agency listings: This listing is not a popular type of listing agreement. The exclusive agency listing allows the agent to market and list your home. As well it is guaranteeing them a commission if house sells through any of the real estate agent or the company. It also allows the home seller to seek out buyers on their own. In this listing, there is no incentive to the company or to agent to spend time and money to market your home. If the seller come up with his/her own buyer, the agent or company have spent time and money cannot be get back through the commission. It is too easy for a lack of ethics and greed to enter the picture. Some unethical sellers or buyers will try to cut the agent, even it was the agent’s effort.
  • Exclusive right to sell: The exclusive right to sell giving to a real estate agent means not that your property will not be other agent involved. Your agent is the listing agent, and most important part of his/her job is to market the home to the other agents those who work with the buyers. The buyers agents will show the home to their clients. Regardless of who sell the home, the agent will earn the commission. If you are looking for full service from an agent or his/her company, this is might be the only listing they will accept.

Make clear about the listings you are going to be signed with the real estate agent or the company. There may be little changes as per the company and with the local and state government policies.
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Differences between Standard and Extended Title Insurance

Title insurance policy covers you and in most of the cases your lender also. It protects against the title defects of your property. The type of title insurance coverage you buy determines the types of title defects that you will be covered.

  • Owners and lenders coverage policy: There are two different parties have an interest in the title coverage policies. Those are the property owner the person who wants to ensure as he owns the property without any clouds and the property lender the person that wants to guarantee a legitimate title exists and it can foreclose when you do not pay the loan taken by you. The lender’s title insurance policy protects the lender’s interest by covering the amount up to the loan. The owner’s insurance policy protects the buyer when a title problem comes up. The lender’s policies are generally contains an extended level of coverage. The owner’s coverage comes in a extended or standard forms.
  • Standard or CLTA policy: In California the standard coverage policy is often referred as California Land Title Association policy. The standard owner’s policy will cover the policyholder against matters which are on the public record, and against certain problems with execution by someone who was not competent, non delivery, including forgery and deeds. Which means if the seller is sold the property to you with a forged deed, the original or previous owner of the property returned and claim for ownership rights, your title insured company will protect you.
  • Extended or ALTA policy: The extended policy also called as an ALTA policy. The ALTA is stands for American Land Title Association. This policy covers the insurer from many more risks. To get an ALTA extended insurance policy, you may need a professional surveyor come out and the purchased land’s map. Once the surveyor does that, you can get coverage against buildings or other parties which are encroaching on your land. You can also get protected against unrecorded tax liens, unrecorded mechanic’s liens from workmen and other imperfections in title.
  • Exclusions: The extended polices cover you against many number of things theoretically. But they usually come with some exclusions. When you get the title policy, title insurer researches title for identify existing issues and excludes them. The predictable items will be exclude by the insurer on a clean property. Those are may be utility easements or the county’s authority to charge property taxes. When the exclusions from coverage are normal, others can be serious. You might want to work to cure them before closing on the property with attorney or title officer, or your real estate agent.

The general coverage exceptions are taxes or assessments, easements, encumbrances or claims or easement, interests or claims, and facts not shown in the public records. Encroachment or boundary disputes, water rights, exceptions in patents or reservations, no patented mining claims, mechanics liens or construction are the exceptions.
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Ten Common Mistakes Committed When Hiring a Real Estate Lawyer

1. Choosing an attorney because s/he will be supportiveOnline billing software
There will be two different attorneys the first who is sympathetic to your situation and the other who wins your case. But you need to hire an advocate having both the qualities. Do not, therefore, mistake supportive for expertise.

2. Hiring the first attorney that you find
When you are doing research for home buying, definitely you will not buy the first house you see. The same applies for the attorney to hire. Here you should get some names of the different, several, preferable through referrals and then make a sound choice.

3. Not doing homework by research
Go to the local law library and get details and referrals and find information about the lawyer or go online or go to the local bar association. Do not hire the attorney without checking his/her background. It will be advantageous if you talk with people who have encountered such cases. Then, ask about the background, competence, manner, etc. You can also check the Martindale-Hubbell directory for the guidance.

4. Not checking an attorney’s area of specialization
Only some attorney will do well outside area but many do not know the nuances of the other areas. So if you need a lawyer/attorney for the contract, hire a real-estate attorney, for more details, search in some good websites etc.

5. Not discussing availability
Do not hire a lawyer who does not have a time to take you on as a client, if you hire your legal needs will suffer. So make sure that how much time you require and have a lawyer who is able to make timely commitment.

6. Not meeting in person
In today’s generation emails and phone calls are becoming more and more commonplace for business communication. It will be not be good if someone is there between you and your attorney, instead you need to him in person.

7. Not receiving all fees in advance
Never complain that the lawyer has charged too much if you neglected to check the costs upfront. For information on legal fees, check out with referrals or relevant good websites

8. Not being prepared
When you are working with the attorney who is played for the time, then time is money at that situation. So be prepared it you won’t and shown up for unprepared for meeting then you have to blame yourself.

9. Doing someone a favor
If your relative is an attorney, it does not mean that s/he can deal your case very legally. But you need to know and learn how to politely decline such offers.

10. Getting Passed around
You have to make sure that your attorney that you meet will handle your matters and will not pass the buck to a recently pass-out law school graduate.

These points you need to learn and know about the attorney, hope this may help you to find a best and good attorney who can deal with you properly.
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Know About Condos Vs Houses

For a customer when there is a need to choose one, among the condo or house, there are some aspects which are to be considered. The following are some of these points which explain the advantages of the both condominium and an individual house.

A condominium also called as condo, is a form of real property where a specified part of a piece of real estate is individually owned. The owners of the condo can access the common facilities legally. Condos involve shared living and shared ownership. The condo consists of amenities which are to be shared with cooperative society. The society members also share the maintenance costs. The condos are generally near to the business areas and because of the location, condos can offer easy accessibility to these areas. The condos offer amenities such as recreational parks, playgrounds, swimming pools, gyms, and sports complexes.

The major advantage of the houses over the condos is that they are more affordable than the condos and with the cost of a single condo unit, the customers can buy a 2 to 3 story high house. Generally individual houses are located in the city out skirts and these are best suited for families as they are very peaceful without any disturbances from the neighbors. By having individual house you can have more privacy. You can change the house as you like and there is no need to take permission from the others.

A customer can choose any of the above residential type based on his budget and convenience.

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