Advice on property transactions.

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Edward Van Zyl

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Oct 27, 2014, 9:08:20 AM10/27/14
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Ten Things to Consider Before Renting a Home for Living

Renting a home for living or for short stay needs some deliberation for different reasons, as choosing a house without much consideration or finalizing a home in a hurry may cause the tenant to face unpleasant situations.  Sometime it comes with financial losses, legal implications, and may even force the tenant to go through all the hassles of changing the home in a short span of time.  Therefore, before a home is chosen, the following things should be considered:

  • Condition of the House:  Is it worth living here?  Does it have all the basic amenities you wanted?  Is it new or in a dilapidated condition?
  • Approaching Road:  Is the approaching road sufficient for you?  If you have a car, do you think you can drive till the house?
  • Owners Attitude:  How is the owner as a person?  Does he look cooperative?  Could you talk to somebody to find this out?  Usually all owners are very nice before they rent it out to you.  However, things may not turn out to be that nice later.
  • Owners and Other Tenants Occupancy:  Do other people, including the owner, share the house?  Which portion are they supposed to use?  Is it clearly demarcated?
  • Bills and Taxes:  Who pays the electricity bill and water bill?  Who is supposed to pay the municipal or corporation taxes?
  • Rent:  It the rent you are supposed to pay reasonable?  Is it within your budget?  Is there any periodical increment of the rent?  Are you supposed to keep a large amount of deposit as a safeguard?  How does the owner plan to refund or adjust the deposit?  To be on the safer side, if the owner is a single person and not a company, it is better to adjust the deposit during the tenancy period, rather than to wait for refund when the tenancy is over.
  • Legal:  Is there any agreement to be signed between the landlord and the tenant?  Is the time-frame being mentioned for tenancy enough for the tenant?  Will the agreement be renewed after the lapse of the time the property being rented?  Is there any legal fee to be paid?
  • Neighborhood:  How is the neighborhood?  Is it peaceful?
  • Communication:  Is the home easily accessible from bus stops, railway stations, or metro?  Can you access the nearby market with ease?
  • Agents Commission:  Did you find the house with the help of a real estate agent?  How much is he charging?  How are you supposed to pay?

Not necessarily all the points mentioned above are pertinent to every house you visit.  However, before you are renting a home, the above issues should be broadly checked.

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Fair Housing Laws And Ethics

When you put your home up for sale “by owner”, you open yourself up to the world…literally! You may deal with people of different ethnic groups or nationalities. People of different races are sure to be house hunting. Those with disabilities or handicaps also need housing. Discriminating against any of the above groups is a violation of the law when it comes to fair housing. Exceptions can be made to be discerning, especially for battered women shelters or those with certain disabilities. Under the Fair

Housing Laws it is illegal to:

  • Base your decisions on someone’s color, creed, nationality, sexual orientation, or handicap.
  • Make housing unavailable.
  • Deny housing.
  • Refuse to negotiate for sale or rental of your home.
  • Falsely claim that the housing is not available to rent, buy or inspect.
  • Set different terms and conditions or privileges for the sale or rental of any dwelling.
  • Persuade owners to sell or rent to you. This is known as “Blockbusting”.
  • Deny access to any membership in a service or membership related to the sale or rental of any dwelling.

real-estate-law-bookViolating these clauses will result in prosecution, and criminal charges will be brought against the violator. This criteria exists for mortgage lenders also. There is a clause that states it is illegal to threaten, coerce, intimidate or interfere with any person exercising a fair housing right. You may not advertise, or put a limit or preference to race, national origin, religion, sexual orientation, or handicap. This prohibition against discrimination in advertising applies to all single family dwells, as well as the owner-occupied home that would otherwise be exempt from the Fair Housing Act.

Housing discrimination is not always someone slamming the door in the face of someone you don’t like. Nor is there always something derogatory said about someone. However, some actions are ugly and very hurtful to a would-be buyer. Sometimes we send messages through our body language – we frown or back away from people who are different. There are people who actually do this, and they have no idea that they are sending out negative signals to a would be buyer. No buyer would stand for someone who has such a negative reaction to their very presence. Besides that, it is against the law. As a seller, it is important to treat each perspective buyer as a person worthy of your respect. We are, after all, members of the same Human race. The best way to conduct the sale of your home is to do so in a business like manner. Treat the whole process with all the seriousness it deserves. The goal is to sell your home.

All newspaper ads should be directed to the general public. Ads should contain only descriptive pictures of your dwelling. You may disclose the demographic makeup of your neighborhood, but you may not describe just what “type” of buyer you want. If you follow all these guidelines you won’t have to deal with any offensive or discrimination problems. There will always be technical problems when selling by owner, but breaking the law is something that need not happen.

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Closing The For Sale By Owner Deal

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The buyer has signed the sales contract and you feel like it is a done deal. You might think you can sit back and relax now, but that is the last thing you should be doing with your for sale by owner property. The buyer can still back out.

Some buyers get cold feet at this point and are unsure if this is really what they want. They might also have seen other homes for sale by owners for less than what you are asking. You can’t sit back now, you need to take some steps to make sure this buyer stays with you and doesn’t back out of the deal.

After the sales contract has been signed, the lender will have an appraisal done. This is to ensure that the buyer isn’t asking for more money than the home is worth. If the home is appraised for less than the selling price, the lender will refuse the loan and the deal is off. To avoid hassles like this, have an appraisal done before you set your price, or talk to your neighbors and price your home to compare with similar homes in your neighborhood.

The lender may also have your land surveyed to establish the boundary lines. Most of the time, this is not much of a problem. However, there are times when property lines change due to changes in the way a creek or river flows. If your property has not been surveyed in the last 50 years or has been subdivided, this is cause for you to pay careful attention to the appraisal. The buyer might decide to have some inspections done on his own. Per the sales contract he can have termite, roof and a general inspection done at his own cost. As the seller, you can get your own inspections done. This is not necessary, but can be helpful if the buyer finds something wrong. Your best bet is to make sure all problems are spotted and taken care of before this time, or get them taken care of so your buyer does not back out.

During this final process, you should notify your lender and ask for a statement of the balance of your mortgage and let them know you will be paying it off. Collect all those appliance instruction books and warranty information you tucked away for safe keeping and give them to the buyer. When you do know the closing date, notify your service providers – electric, water, cable, trash, and your phone (if you still have a land line) – and let them know when to turn off service for your final billing date. For sale by owner closing dates are usually 30 to 45 days from the date that the sales contract was signed.
Depending on which state you live in, your real estate attorney may handle the closing, or the lender’s attorney will handle it with your attorney acting as your representative. At the final closing, the settlement statement is reviewed. The settlement statement details all the monies received. They include:

The lender’s check for the mortgage amount. The buyer’s down payment and the buyer’s earnest money deposit.
The settlement statement also includes money that is paid out: The balance on the seller’s current mortgage, real estate fees (if applicable),the closing costs and the amount you get to keep. That’s it. The title is then transferred to the buyer and the for sale by owner process is complete. Now you can finally sit back and relax.

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A Real Estate Attorney in For Sale By Owner Transactions

real-estate-lawIf you are not using a real estate agent to sell your home then you are still likely to benefit from advice from a real estate professional. It may be a requirement of the state that by law you must use a real estate attorney. Even if this is not the case, a for sale by owner (FSBO) seller may still benefit from the expertise of an attorney at various stages of the selling process.

A real estate attorney can assist in many areas throughout the housing transaction and it is their responsibility to ensure that your best interests are protected throughout the process of selling your home. The attorney can act as the escrow agent and will be able to hold down payments, documentation and earnest money deposits. Any complicated offers that are received from a potential buyer can be looked over by the attorney and they can help you decipher and evaluate the offer. An attorney can host and handle the closing in the event that it is not handled by the lender’s attorney, and if the lender’s attorney does host the closing, your attorney can represent your interests.

When searching for an attorney that will assist you in the housing transaction there are a number of ways that an attorney can be selected. Attorneys in your area can be searched for using a local or internet directory. However, hiring an attorney that comes with a reference is usually a better alternative than cold calling attorneys. Friends and family who have recently sold their homes may be able to provide you with a recommendation. You may also be able to ask any neighbors who have ‘for sale’ signs in their yard which attorney they are using and whether they are happy with the service.

When choosing a real estate attorney it is a good idea to hire an attorney that only deals with real estate. Some criminal and family law attorneys deal with real estate on the side but they may not have the expertise and experience of a real estate attorney. Attorneys that have never dealt with any real estate transactions should probably be avoided.
While the experience of the attorney is an important consideration when choosing someone to represent you, price is also a factor. Any prospective attorneys should be asked for a quote for the two main responsibilities that they will have which is reading and advising on documents and representing you at closing. Some money may be saved if you are able to prepare and fill out some of the documentation yourself. Getting quotes from a number of attorneys will ensure you have a number of options and you may also get a feel for the experience of the attorney which will help in making the decision.

Having a real estate professional to assist you with the housing transaction is a good idea even if you have sold a for sale by owner home successfully before. Legal representation can mean that you have an extra person looking out for your best interests when completing the sale.

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How Can a Real Estate Agent Help You to Choose a Property to Buy or to Rent?

Real estate agents are experts to guide you for leasing, renting, buying, or selling properties in a specific location.  Though most of the agents are not bound to work in a specific location, they build up their expertise in a specific location.  If you ask them to work beyond that location, they will either refuse or refer you to another agent in that area.  Sometime, the other agent will share his profit with the first agent whom you first contacted.  This way, the agents often form a good formal or informal network to help you out.  In cities or in locations where finding a property is a bit difficult, these agents help you to find a property to buy, rent, or lease.  They will charge you for this service.  If someone is planning to sell his or her property, they share their plan with some good agents, and they will bring in the prospective buyers.  In most of the cases, the buyers are charged for the agents service but the owners are not.

Apart from helping you to find out the properties you are eying to buy or to rent, the real estate agents services may include:

  1. They are experts in what you are looking for.  Therefore, the agents have a lot more knowledge about the properties in the nearby location.
  2. They form and keep good formal or informal network with other agents in the nearby location.  Therefore, even if your agent fails to pinpoint any property suitable for you, he will talk to other agents working in the same area and in the neighborhood and will let you know the available options.  This saves a lot of previous time.
  3. Some good agents have offices with staffs to support you.  Some of them even have websites.  All the tools are used in tandem to help you out and give you the best support.
  4. Ideal agents should try to get you properties at an affordable rate, in contrast to unscrupulous real estate agents who will try to overcharge you.
  5. They will help you in sorting legal issues and to finalize the deals.
  6. They will work as your representative, if required.  On the other hand, if they are selling someones property as authorized sellers, they may represent the sellers.
  7. The agent may give you ideas about how to fix small issues like repairs or getting a new connection for your cable TV.

Now as many people ask, should you try to buy or rent a property on your own or should you take help of real estate agents?  The answer is obvious.  If you have the time and opportunity to do it on your own, it will probably be always wiser to do it on your own, until unless you have some specific benefit getting it done with the real estate agents service.

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