Secaucus Real Estate Today - May/Jun 2016 by Authoritative Content, LLC.

AN 8-PART GENERAL OVERVIEW OF MORTGAGE TYPES

SECAUCUS ISSUE 3 MAY / JUNE 2016

REAL ESTATE TODAY

Golden

RULES RULES FOR FOR BEING BEING A A LANDLORD LANDLORD

FOR FINDING THE RIGHT LENDER

FOR YOUR HOME LOAN

ESSENTIAL TIPS FOR DISCOVERING YOUR HOME’S TRUE WORTH

6BOUGHT YOUR HOUSE

THINGS TO REMEMBER TO DO AFTER YOU’VE

COMMON MISTAKES REGARDING HOME SELLER INSPECTION

YOUR 8-PART GUIDE TO SUCCESSFULLY BUYING A FORECLOSURE

contents

04 05 09

Publisher’s and Editor’s Letter

14 19 22

9 Common Mistakes Regarding Home Seller Inspection

27 30 2

6 Essential Tips For Discovering Your Home’s True Worth If you are currently placing your home on the market, how can you select a proper price? Learn how to determine the current market price and property value of your home.

Your 8-Part Guide To Successfully Buying A Foreclosure Purchasing a foreclosure property is one way to get a home for a great price. But it is not for everybody. Learn more about the process involved in buying foreclosures.

Are you currently trying to sell your home and preparing to place it on the market? If you are, you must be sure that you have your home inspected by a professional inspector.

6 Things To Remember To Do After You’ve Bought Your House After signing the contract that goes with buying your new home, you aren’t finished. Finalizing your mortgage selection and closing is important, and then there are things to accomplish before closing.

7 Tips For Surviving Property Defects Disclosure Are you currently attempting to sell your home on the real estate market? If so, be sure that you disclose all defects and issues to the buyer prior to selling your home.

9 Principles For Finding The Right Lender For Your Home Loan Finding your lender is another part of the home buying process that can be overwhelming. Find yourself a decent lender for your mortgage with these strategies and tips.

8 Frequently Asked Questions Regarding Interest Rates After you’ve selected your loan and your lender, the next thing to consider is interest rates. Interest rates are another vital consideration that must not be overlooked.

SEC AUCU S REAL ESTATE TODAY | May / June 2016

contents 9 Tips For Selecting The Best Lender The process of deciding on a lender can be extremely daunting, especially when you consider how many options are out there!

8 Golden Rules For Being A Landlord Whether you are a new landlord or have been a landlord for a while, you have to follow the rules. Be sure that you are screening all potential tenants using legal means.

An 8-Part General Overview Of Mortgage Types Selecting a mortgage can be a complicated process. Educate yourself about the types of mortgages; and what to look for in a mortgage; it will make the process much easier.

7 Tips On Foreclosure Laws In Specific States The foreclosure laws in one state may bear little to no resemblance to those of another. Learn about New Jersey, New York, New Mexico and North Carolina foreclosures now.

9 Keys For Finding The Right Real Estate Agent The following are some keys to choosing a great real estate agent so that you can sell your home or purchase a new property for a price youâ&#x20AC;&#x2122;ll love.

8 Principles Of Handling An Underwater Mortgage If you find yourself underwater regarding your mortgage, do not despair! There are several different ways that you can solve this problem with some effort on your part.

7 Common Mistakes Made By Home Buyers Wondering if it is the right time for you to buy a house? Learn 7 common mistakes many people make when considering whether or not they should indeed purchase a new home.

An 8-Part Overview Of State Specific Foreclosure Laws If you are considering a purchase of a foreclosure property, your location matters. You should know that each state has its own way of handling the foreclosure process.

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PUBLISHER’S FOREWORD

SECAUCUS

Welcome to the May/June issue of Secaucus Real Estate Today! I’d like to thank all of our readers for their continued support for our magazine. We’re happy to say that the latest release is better than ever, and we’ll continue to make improvements wherever possible.

REAL ESTATE TODAY MAY / JUNE 2016

Editor

Sandra O’Connor Writer

Daniel Pratt Head of Creatives Nyvia Ross

Graphic Designer

On behalf of our entire staff, I’d like to offer our deepest condolences to the family of legendary singer Prince. His passing has shocked fans and fellow musicians alike. Tributes pouring in from all over the world are only a small testament to the reach of this artistic genius. He will be sorely missed. In past issues, we’ve presented information that will help you if you’re interested in buying or selling a home, from choosing a real estate agent to home inspections. Now, we’re here to show you some more intricate facets of the real estate process, including foreclosure and interest rates on mortgage types. As you learn more about these topics, it is our hope that you become better equipped to deal with various situations that you may come across in your real estate dealings.

Kerwin Wepee

Sandra O’Connor, our editor, will take you more in depth. I hope everyone has a wonderful May and June, and I hope to see you all in our next issue!

Digital Property

Regards,

Managers Maharlika Matutinao Layla Anaya

Digital Property

Kenan Ross KENAN ROSS CEO Authoritative Content

Assistants

LETTER FROM THE EDITOR

Krystine Sitjar Warren Nietes

Online Presence: Facebook Google+ Twitter Tumblr Pinterest

For advertising concerns please contact KJ Ross at kjross@authoritativecontentllc.com Secaucus Real Estate Today’s magazine content cannot be copied or reproduced in any form without the written permission of the publishers. Secaucus Real Estate Today’s editors and publishers shall not be held liable for any unsolicited materials. All prices and specifications published in this magazine are subject to change by manufacturers, agency and retailers.

Hello, and thanks for checking out Secaucus Real Estate Today! Our third, May/June, issue is here and I’m excited to show you what we’ve been working on. As always, our number one goal is to help you get the best real estate deal you can grab. Real estate is a market dominated by trends and somewhat predictable changes. As such, market speculation is a huge thing and there is a vast disparity in the kind of information you’re likely to hear regarding topics such as interest rates. While it can be difficult to pinpoint what’s true and what isn’t, some things never change! At Secaucus Real Estate Today, you’ll learn about how to choose the best real estate agent in the area for your needs, your home’s real value as a seller, becoming a successful landlord, and much more. Many of these concepts are static, meaning the knowledge will never go out of date: you won’t have to worry about your benefit being subject to change. We want to make sure that prospective home buyers and sellers in Secaucus, New Jersey have a solid place to turn to for guidance. Our tips, guides and overviews will give you the tools you need to really prosper in not only today’s market, but in whatever the future holds. We answer many of your frequently asked questions, and also cover some common home-buyer mistakes. This information will not only guide you to success in Secaucus, but also the greater market! Thanks for reading, and see you in the next issue! Best regards,

Sandra O’Connor

SANDRA O’CONNOR Editor Secaucus Real Estate Today Magazine

SEC AUCU S REAL ESTATE TODAY | May / June 2016

6 ESSENTIAL TIPS FOR DISCOVERING YOUR HOME’S TRUE WORTH by Sandra O’Connor

If you are currently placing your home on the market, how can you select a proper price? Learn how to determine the current market price and property value of your home.

e all take pride in our hard-earned money, which means it can be hard to accept that what was worth $380 yesterday might be worth $350 today. When it comes to getting your home sold, the first thing you’re going to need to do is let go of yesterday’s price, because if you don’t, you could end up holding on to your property forever. You’ll need to shed any emotional attachment you have

to the price you paid for your home originally and take a hard look at today’s market, because more than likely, thanks to today’s economy, that price has now gone down, not up. DETERMINING YOUR HOME’S VALUE While the difficult method would include you tracking down the records of property sales within your region, you can skip all the hassle

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If you are considering a purchase of a foreclosure property, your location does matter. Many states have their own way of handling the foreclosure process. Learn more on page 67. CLICK HERE TO LEARN MORE.

that it would bring by simply calling your local real estate broker. Ideally, you’ll want to contact one who has several years of experience, as they will more than likely have a pretty good feel for the market in that region. Let them know that you’re considering listing your house, and that you’d like a free appraisal. WORKING WITH YOUR AGENT The great part of working with a real estate agent is that they will have access to the Multiple Listing Service, or MLS, which is host to at least 95% of sales made all around the country. Using the MLS, your agent will be able to give you prices that homes of similar value went for, including extra information like any added amenities that may have been included, such as pools, fireplaces, air-conditioning, as well as the number of bedrooms and bathrooms. This leaves you free to go down the list, come up with the average, and have a quick estimation of about how much you are looking at receiving for your house.

THE ISSUE OF TIME You can get a real estate agent to find you the most recent comparable sales in your area, but the problem you might run into is time: there might not have actually been very many sales within recent months, and in severe cases there might not have been any at all. Meanwhile, as time goes by, prices are only continuing to go down. However, you can get around this by simply checking the median sales price of all the homes in your area, as this will give you the halfway point of all the sales. Find the percentage difference between now and six months ago, and you’ll know how much to expect your home’s price to have fallen. A real estate agent should be able to help you.

THE PROBLEM OF COMPARABILITY Obviously, no two properties are exactly the same. The best way for you to discover how close a property is to yours is for you to actually take a drive down the street to see it up close and personal. Even if you have photos from the Internet, that has nothing on actually seeing the property with

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your own eyes. For all you know, you could end up discovering that the buildings next to or nearby the house pose problems, or whether the neighbors are rowdy. The landscaping and paint job might be in better or worse condition. Depending on how the house compares to yours, you might want to increase or lower your estimated price for your home. OTHER WAYS TO DETERMINE PROPERTY VALUE There are other ways to determine what prices houses are going for within your area as well. You might want to go visit open houses nearby and see what the quality of their properties are, as well as what the seller’s asking price is. However, the problem with this is that you only know what the seller wants for their home, rather than what they’re actually going to end up selling for. You could hire an independent appraiser to give an appraisal of the property, but this can be expensive, and that money is often better spent on marketing. Not only that, but appraisers often just check comparables, which you can do for free.

FINDING THE MARKET PRICE The best way for you to get an estimate for how much you’ll be able to sell your home for is to check comparables with the help of a real estate agent. Once you’ve examined those, you’ll need to raise or lower your price according to your finds on how your property matches up. At the end of the day, however, only a buyer who is ready and willing to purchase your home can determine your property’s value.

Are you valuing your home according to facts, or your personal opinion? Home sellers who actually want to get their home sold will go with the former, not the latter. We all get very attached to our homes during the duration of time we are living in them. However, when the time comes to move on, we have to put those emotions to the side and face the facts when it comes to the real value of our homes. By being honest and using accurate comparables, you’ll be able to give your home a price that will draw potential buyers in, not scare them away.

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SEC AUCUS REAL ESTATE TODAY | May / June 2016

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YOUR 8-PART GUIDE TO SUCCESSFULLY BUYING A FORECLOSURE by Danny Pratt

Purchasing a foreclosure property is one way to get a home for a great price. But it is not for everybody. Learn more about the process involved in buying foreclosures.

f you have been thinking about purchasing a foreclosure property, timing is everything. You need to be sure that you know as much as you need to know before you begin bidding on a public foreclosure auction. In some cases, it may be a better idea to make an offer before it even gets to that point. Learn more about purchasing foreclosure property with the following information. WHEN TO PURCHASE A FORECLOSURE You may get a good deal bidding on a property at an auction, but it may be a smarter move to purchase the property right before it goes into foreclosure status. It’s highly likely at an auction that you won’t be able to tour inside the home until you own it. You would be able to look at the outside of it all you want. Really put some thought into the auction process and if it’s going be a good option for you.

HOW DO PUBLIC FORECLOSURE AUCTIONS WORK Once all of the legal requirements to foreclose on a property have been met by the lender, it is sold at a public foreclosure auction. The lender will set a minimum price based on his financial requirements, but anyone can make a higher offer. However, there are drawbacks to purchasing a property this way. First, the bidder is usually required to make full payment in cash as soon as the auction is complete. A greater hazard is created by the immediacy of the auction format: there is virtually no time for the

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Wondering if it is the right time to buy a house? Learn 7 common mistakes people make when considering whether they should indeed purchase a new home on page 64. CLICK HERE TO LEARN MORE

buyer to research the condition of the property or ascertain that there is a clear title. However, there are advantages as well. You will not need to deal directly with the former owner at all. Many times, all you will need to do is send the owner a legal notice to vacate within seventy-two hours of receiving the communication. Check your state’s laws to ensure you have the details right. YOU MAY NEED TO REQUEST AN EVICTION In the situation that the previous owner doesn’t remove themselves from the property you have just purchased, you have the right to go to the courts and request an eviction. If you are feeling nice you can negotiate with the previous owner to pay you rent on the property until they can find other accommodations. The eviction process can be appealed within ten days of it being filed. A majority of states do mandate that a property that is included in a foreclosure sale is posted one time each week for three straight weeks. The notice will need to be in a publication with general circulation in and around the area where the property can be found.

FILE IN THE NEWSPAPER OF LEGAL RECORD FOR THE AREA The newspaper will need to have an area to provide the foreclosure notice to any party that may be interested. Newspapers that are generally recognized as the newspaper of legal record (for the area the property to be sold can be found) will be the best newspaper to file in. Your attorney should have an idea as to which one is the best to use. If there isn’t an appropriate newspaper then the notice of default can be posted in the county courthouse where the property is found as well as where it will be sold, if different. You can pay for the information you need and make the procedure simpler for yourself. For instance, go to www.foreclosure. net or www.realtytrac.com to find Internet sites where foreclosure data can be found.

FORECLOSURE PROPERTY SALES ARE ‘AS IS’ SALES Buying a foreclosed property means that the buyer is buying that property ‘as is’. The buyer is agreeing to take the property in its current state and not expect any prepares to be done by the owner or the bank. Often times a

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foreclosed property is not able to be insured by insurance companies upon closing. Insurance companies may refuse to insure the property until it is repaired. Also the buyer may have trouble getting title insurers to insure the title because they are often times wary of foreclosed properties. If there was an error during the foreclosure procedures, it could be ruled that it was a flawed sale, meaning legal battles for months or years. Go to the county clerk’s office prior to bidding at an auction to avoid problems. WHAT INFORMATION SHOULD YOU REQUEST OR OBTAIN BEFORE BIDDING? The auction notice should provide you with the property’s legal address and description along with its zoning code. Find the following information out: tax value, the authentic mortgage amount, when was the last mortgage payment made, when was the house foreclosed on, how far in the hole the mortgage is and the total amount owed on the property altogether. Always do some investigation work with the property title to find out if there are any other loans taken out on it. Give the title holders a call and see what their rate would be for finding that information for you.

CHECK FOR ANY LIENS BEFORE BIDDING Using a lot-book report to check for any liens can help to avoid a $300 full-blown search and avoid missing any liens that might be present. If you do miss any and they are not taken care of by the time foreclosure happens, you could

have to take care of them. Also it is important to visit the property and at least view the outside of it and the surrounding homes as well. Even if you can’t go inside you can seek out neighbors who may have been in the house by walking around the area. Neighbors can give important information as to the properties condition. KNOW THE OUTSTANDING BALANCE OF THE LOAN AS WELL Published notices will give the outstanding balance of the loan. In many cases, the lender foreclosing on the property will bid the amount owed on the home in order to recover the loss. Don’t keep expectations that you will get the house for less than the balance due, but if you think it is worth less, you can attempt a lower bid. As you go over the lot-book report, make note of any liens or mortgages older than the one in foreclosure. If there is a second mortgage in foreclosure, the first will need to be paid in addition to the original mortgage in order to get a clean title. The foreclosure simply wipes away any liens prior to the foreclosed debt, but the old debt will still need to be paid.

At this point you may have decided that purchasing a foreclosure is not for you. Or perhaps you are dead set on it now. Maybe you’re still not sure and are scratching your head trying to figure out what your next move should be. Whatever the case, it makes sense to speak to a real estate professional to get some guidance before you make your move. Best of luck finding a great new home!

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9 COMMON MISTAKES

REGARDING HOME SELLER INSPECTION by Danny Pratt

Are you currently trying to sell your home and preparing to place it on the market? If you are, you must be sure that you have your home inspected by a professional inspector. article was written, inspectors arenâ&#x20AC;&#x2122;t required to have licenses in all states. Find out who your agent would recommend. Many agents have a few that they trust and work with closely. When you meet with your inspector, ask for references and then contact them. Most likely it was several months since the inspection and they are already living there. Have they noticed that the inspector missed something? Are they content? NOT HIRING A CERTIFIED INSPECTOR Make certain the inspector is a member of a national trade organization. Here are a few: (1) The International Association of Certified Home Inspectors, (2) American Society of Home Inspectors and (3) National Association of Home Inspectors. Currently contractors, mainly the ones who are unsuccessful with building, decide to make extra cash with house inspections. Be careful when picking an inspector for your home. Some are just not qualified and are looking to make a little more money for

f you are preparing to sell your home, you must be sure that you have it in an acceptable state of repair if you wish to be successful in selling it for a price you like. You also need to disclose issues and defects that you are aware of if you are not going to complete the repairs. It is thus essential that your home be inspected by a professional inspector before you place it on the market. MAKING MAJOR REPAIRS AFTER LISTING YOUR HOME Before you think about listing your house, get some of the big ticket repair items handled. You may be running the risk of making a change a potential buyer may not like, though. Inspectors can be found from online to a newspaper. Keep in mind that as this

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If you find yourself underwater in regards to your mortgage, don’t despair! There are ways that you can solve this problem with some effort on your part. Learn more on page 61. CLICK HERE TO LEARN MORE.

themselves. They can go through your home, put checks on their forms and it’ll cost you hundreds for a few hours work. GETTING USED BY SHADY INSPECTORS If they find a problem, they will most likely recommend their own company for the repair work, of course. These inspections can be questionable. Do your homework when finding an inspector. Find one who knows what they are doing and maybe has great references. Accompany an inspector with a broad knowledge base and a degree in some field related to real estate, like soils engineering. You will often do well to choose a retired city building or safety department inspector. Usually they won’t give you any advice on an area they can’t get to easily. That includes things like flooring under rugs, interior walls and high roofs. There is a “standards of practice” you can get from the above mentioned organizations that tells you what you can expect from an inspection of your home.

NOT KNOWING A GOOD INSPECTOR FROM A BAD ONE A good inspector will need to look closely at many areas in your home. These areas should include any fireplaces and their exhaust, loose bricks, blockage, lining in your chimney and also, your electrical system. Circuit breakers along with wiring, light fixtures and grounding will need to be paid close attention to. The HVAC system in your home will also require careful inspection and a possible tune-up prior to selling.

NOT KNOWING WHAT ELSE INSPECTORS SURVEY A thorough survey of the interior plumbing includes: type and age of pipe, rusting, leaks, water disposal condition, water pressure; sewerage, septic tank and other waste disposal; leakage, breakage and blockage; foundation and structure; cracks, breaks, leaning and flooding in basement; additions made without building department approval; and room additions, window or door changes, or addition of electric

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If you’re attempting to sell your home on the real estate market, you need to be sure that you disclose all defects and issues to the buyer prior to selling your home. Visit page 22 to learn more. CLICK HERE TO LEARN MORE.

or gas appliances. Exterior survey of plumbing should include the roof and its condition, gutters and downspouts and cracking of stucco or peeling of paint. A thorough exterior inspection includes: doors and windows (including leakage); weather stripping, hinges and alignment; and slope, groundwater conditions and drainage away from house. NOT UNDERSTANDING WHAT COMPRISES AN INTERIOR INSPECTION Interior inspection includes: walls, ceilings, carpets, drapes and their condition; safety of fences and gates, including any obstructions; and age and condition of appliances. Be cautious of contractors that offer to conduct an inspection for a small fee. There have been some cases when the contractor uses this as a device to find a problem and then offer to fix it for a much higher fee. The party doing that work should not be the one who did the inspection. (It’s also wise not to ask the inspector for a referral. The person they refer you to could be a relative of theirs.) Although it may be obvious, always be sure to get your report as a printed copy.

NOT ACCOMPANYING THE INSPECTOR AS THEY DO THEIR JOB Still, the most useful approach may be to go along for each step of the inspection, bringing plenty of questions that you ask and receive answers for. Inspections for pests such as termites are a longstanding component of a typical home inspection. Termite inspections as a condition for lenders have been required for approving a new home loan for decades. Along with a termite inspection, repairs for damages have been required for home sales for a long time. In mostly all states, termite inspectors are licensed and must have written reports registered. The seller usually pays for termite inspections and correction of any damages.

FAILING TO HAVE PREVENTATIVE WORK DONE The buyer is responsible for paying to have any preventive work done. So there might not be a big benefit to having a termite inspection done prior to getting a buyer if there hasn’t been a problem, although you might want to have one on tap if it’s an older house. But you don’t want to get it done far in advance and then not sell

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the house because the inspection will only be valid for a certain time period like 90 days. If it sells later than that, you might need to pay for another one. Getting a home warranty can be a good idea to cover any problems that may occur when you move out and a buyer moves in. If minor problems, or even major problems occur, the warranty will often cover them and it will have been money well spent.

all agents can forward you to a home warranty company salesperson in your town. Look online as well: www.americanhomeshield.com., www. nationwidehomewarranty.com and www. libertyhomeprotection.com. If you don’t know anything about disclosures, you will surely learn when your home is on the market. It is the law in many states and many buyers expect them. It is written documentation of any home defects.

NEGLECTING TO INVEST IN A HOME WARRANTY A warranty will cover the major systems like plumbing, electrical and the heating systems. It will cost about $300 a year and after about a year the buyer will take over. Don’t forget to also get an inspection in addition to the warranty. So, if the water heater breaks, buyers won’t expect you to fix it. They will get in touch with the company that holds the warranty. Nearly

Be sure to take the above information into account before listing your home. Once you know what the issues are with your home, it is up to you to decide whether you will solve the problems before selling or whether you will simply inform potential buyers of their existence. Whatever you decide, just be sure that you do your due diligence to prevent having future problems with your buyer. Best of luck selling your home!

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THE FULL FLAVOR SPECTRUM

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6 THINGS TO REMEMBER TO DO AFTER YOU’VE BOUGHT YOUR HOUSE After signing the contract that goes with buying your new home, you aren’t finished. Finalizing your mortgage selection and closing is important, and then there are things to accomplish before closing. by Sandra O’Connor

utting your name on the dotted line of your contract can be an exciting time. However, if you think that your work is over now that you’ve finally found your new home, you’re far from the truth. The following will give you a look at what further proceedings to expect after you’ve entered an agreement with the seller of your home. AFTER SIGNING YOUR CONTRACT Once you’ve signed a contract to purchase your new home, the ball gets started rolling on you moving into your new property. Depending on the time frame that you put on moving into your new home, you will have between thirty and sixty days to take care of the closing process. You’ll need to order surveys and appraisals, as well as meet with your lenders. You should also inform your current landlord, or put your home up for sale.

FINALIZING YOUR MORTGAGE AND CLOSING The biggest things you’ll need to take care of are your mortgage and closing. You’ll need to finalize your mortgage, and also take care of the closing process between yourself and the seller. If the two of you have both hired real estate agents, this will be a lot easier than if you

What are the keys to choosing a great real estate agent, so that you can sell your home or purchase a new property for a price you’ll love? Check out page 56 to find out. CLICK HERE TO LEARN MORE.

were making the transaction alone. However, the downside of this is that your agents will need to be paid a commission at the closing table. You should know the fees your broker charges before entering into an arrangement with them. CONTRACT SIGNING AND CLOSING If you have an agent involved, they will be orchestrating what goes on behind the scenes between the period of signing your contract and meeting at the closing table. You should expect to be asked for certain documents, as well as to review inspection reports about your home, among other things, although on the whole, this will be your agent’s job. This will be a time for the two of you to keep close contact as the date of closing nears.

THINGS TO DO BEFORE CLOSING Tasks can vary depending on the type of sale, as each is different and may require different approaches. The following is

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YOUR INSPECTION REPORT On a typical inspection report, you’ll find general information, as well as sections that center on specific areas of the house. The main information will include details such as the year the home was built, its structure style, what temperatures are like inside the home, weather, and so on. From there, the condition of the main house will be examined, followed by the roof, siding and trim, carport or garage, the landscaping, doors and windows, basement or crawl space, attic, and the utilities, such as electricity, heating, ventilation, A/C, and plumbing. The condition of the interior (walls, PRESENTING REQUIRED DOCUMENTS floors, and ceiling surfaces) will be inspected You can expect that your lender will for any damage as well. Important tests include need certain documents from you, like checks for radon, termites, and asbestos. your last two years’ tax returns and W-2 forms, pay stubs, and documentation of any other In the home stretch of buying your home, you sources of income you may have, as well as may be tempted to just kick your heels up and investments, records of any debts you may owe, let your real estate agent handle everything. You and any mortgage or rent checks that have been only have a little while to hold on until you make canceled. You may also be asked for information it to the closing table, however. After you’ve about your previous employers as proof of your handled financing and inspections, there is very employment (including tax returns if you are little more than handling title insurance to take self-employed). care of as you await your closing date. a general example of what follows as you count down the days until closing. You’ll apply for financing, and your lender will order an appraisal of your soon-to-be new property, including a termite inspection and property survey, as well as any other tests that need performing. After the inspection, if your contract included a contingency clause regarding the state of the home, you’ll decide if you really are going to buy the home. Around this time, you should be finding out whether or not you were approved for a mortgage, which will lock in your interest rate.

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7 TIPS FOR SURVIVING PROPERTY DEFECTS DISCLOSURE by Sandra O’Connor

Follow Us: Are you currently attempting to sell your home on the real estate market? If so, be sure that you disclose all defects and issues to the buyer prior to selling your home.

f you are currently selling a home, you need to be aware of any issues or defects to the property and disclose them to the buyer before you sell. Disclosing issues up front can save you a great deal of trouble in the long run. Consider hiring a professional inspector to take a look at the property before selling to ensure that undisclosed issues do not come back to haunt you. INSPECTIONS ARE EXTREMELY IMPORTANT A seller has responsibility to disclose any property defects that affect the value of the home after the buyer has conducted an inspection. When in doubt, get an inspection. You can do your own inspection or hire a professional. Most sellers rely upon buyer paid inspection. The issue is that typical home repair issues like plumbing, heating and even structural are things that the average seller knows nothing about. If you’ve lived in the house for a decade and occasionally recognized a gas smell, you may be unaware of a danger or issue.

ISSUES AND DEFECTS MUST BE DISCLOSED The house could explode with the next owner and it can be argued as to why the system wasn’t checked at the first sign something was out of sorts. You will need to give information regarding issues and defects in your home, but you may not need to fix them. If they are a threat to safety and become a possible liability, then of course they will need

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Foreclosure laws in one state may be different from another state’s rules. Learn about New Jersey, New York, New Mexico and North Carolina foreclosures on page 52.

CLICK HERE TO LEARN MORE.

repaired. If you have an issue with drainage that causes seasonal floods in your yard, that should be repaired. There are sellers and agents that try to sell homes on an ‘as is’ basis in order to get around having to disclose problems. This isn’t an ethical approach. EVEN IF YOU SELL ‘AS IS,’ YOU STILL NEED TO DISCLOSE ISSUES You still have to tell buyers problems with the property even if you are asking them to buy ‘as is’. As long as the buyers know about all the problems and agree to take them on you can sell the house ‘as is’. In order to avoid any problems you need to make known any issues with the house as soon as you can, even if it is before an offer is made by the buyer. If using an agent, they would give the disclosure paper to the buyer before receiving an offer. If you’re handling the sale and maintenance of your home on your own, it is acceptable to show the buyer prior to taking any money or signing any applicable agreements.

BE SURE TO RETAIN THE RELATED PAPERWORK The purpose is, the more information you provide prior to selling, the less you’ll need to worry later. Make sure that you have a copy of the disclosure information, and keep a signed and dated copy in your records as a way to prove the buyer has read and understood the information provided. If you fail to provide the disclosure sheet until after the buyer makes an acceptable offer, the buyer could withdraw his offer. Your sale would be canceled and subject to new negotiations. On the other hand, disclosing a problem may scare off your buyer or cause them to offer less. In reality, you need to deal with the problem in an open manner. You can either offer the buyer a credit or repair the problem.

A LEAKING ROOF IS ONE EXAMPLE OF A HOME DEFECT A leaking roof is the most average case. As a seller you have to disclose that the roof leaks. Naturally buyers don’t want a home that has a leaking roof. There are two things you can do. You can fix the leaky roof before trying

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to sell the house. It is inexpensive to fix if the roof is in decent shape but has a couple leaks. Then you can say the roof use to leak but has now been repaired. If the roof is so bad that it needs to be replaced, you can offer buyers a lower price. WHY IS IT IMPORTANT TO REPORT A FAULTY ROOF? By reporting a faulty roof and lowering the price for buyers, the lender could ask for a new roof before backing the mortgage. (The lender could have doubts that the buyer would complete the work and if foreclosure was imminent, it would end up with a house that has a leaking roof.). If this happens, you may have to do the work yourself. Regardless, ask the buyers first so you use the kind of materials they like, so that they donâ&#x20AC;&#x2122;t cancel the deal and demand the work be redone. Disclosures of lead is required by the federal government along with any state required disclosures.

7 24

LEAD PAINT DISCLOSURE IS ALSO IMPORTANT You have to give the buyer a statement related to your understanding of the

existence (or non-existence) of lead in the paint or on the property. There is also a booklet you have to give them explaining the hazards of lead poisoning. Your agent should assist you. You can also find the form and pamphlet on the web. Some real estate associations have assembled disclosure templates to assist sellers. You can obtain the forms from an agent even if you are not working with one. The forms are given to potential buyers to help sellers manage their paperwork. However, verify if the format is appropriate for your region with a Realtor or an attorney. As you can see, it is vital to do a thorough inspection of your home and to either repair issues or disclose all issues and defects to the buyer. Likewise, if you are buying a home you need to ensure that the seller does so. Undisclosed defects and issues can result in you being held liable for fixing the issues or for you being held liable for any injuries or damage that result from them. So if you are selling a home, be sure to do the right thing and ensure that it is inspected properly and that all issues are disclosed before you sell your home.

SEC AUCU S REAL ESTATE TODAY | May / June 2016

9 PRINCIPLES FOR FINDING

THE RIGHT LENDER FOR

YOUR HOME LOAN by Danny Pratt

Finding your lender is another part of the home buying process that can be overwhelming. Find yourself a decent lender for your mortgage with these strategies and tips.

nce you have located the home you wish to buy, you next need to find a lender to work with. However, finding the right lender can be difficult because there are so many options out there for you to choose from. The following contains many principles that can help you to select a great lender for your home loan. By obtaining referrals and interviewing your potential lenders and taking the other steps described below, you are sure to find a lender for your mortgage that works well for you.

SEC AUCUS REAL ESTATE TODAY | May / June 2016

Selecting a mortgage can be a complicated process. Educate yourself about the types of mortgages and what to look for in a mortgage it will make the process much easier. CLICK HERE TO LEARN MORE.

ASK YOUR REAL ESTATE AGENT FOR A REFERRAL

Ask for referrals. There are new and experienced agents who won’t give you any help regarding the mortgage loan, while others will give you multiple referrals to loan officers. That could be because of liability reasons and not because he or she works closely with all of them. You’re probably asking what the liability would be. Not due to financial liability, but to stop from recommending a single loan officer. That way if your loan goes south your agent can say he supplied three choices. You will be responsible for picking the wrong lender. If the agent offers several referrals ask which they work with most. Most likely they prefer one but throw in two extras.

HOW TO FIND A GOOD LOAN OFFICER

A number of the top loan officers don’t work for the big banks, but for an office. That is who you should look into for your mortgage. An additional method of searching for a good loan officer is to check whether they reply to your earlier e-mails or phone calls. If you do not receive a reply from them even after two days, you will get an indication of their response to real clients. You should pose queries for doing two things. Judge how experienced they are and also give them an impression that you are a well-informed borrower, well-versed with all the tricks of the trade.

BE SURE TO INTERVIEW YOUR POTENTIAL LENDER

It is not necessary to prepare hundreds of questions or asking them to complete a questionnaire. Take a few minutes to find out several things, like the rate at the moment for a conventional fixed mortgage of 30 years. You should get a fast, accurate answer with no reluctance on the part of the loan officer about an interest rate. You don’t want hesitation; you do want information. What will be the closing costs from the lender? This should be given as a matter of course because a mortgage banker’s company sets the fees.

ENSURE THAT YOU KNOW ALL FEES UP FRONT

When dealing with a broker, ensure that the fees they are stating to you include the lenders’ fees. At times when you use a broker, there can be two different sets of fees. If you ask for the lender’s fees, but fail to inquire as to the broker’s fees, they may not disclose the broker’s fee since you did not inquire. When in doubt as to whether you are dealing with a broker or a banker, you should ask. Something else you should find out is the APR for loan. This question is related to the first two questions.

HOW TO DETERMINE THE APR FOR A LOAN

The APR can be figured once you know what will be the interest rate, loan amount

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and fees from the lender for closing. These questions have been asked of any loan officer who’s been in the business a while, so he or she should have ready answers. If there’s hesitation or they say that there’s no reason to know the APR, you should sense trouble. It is important to work with a loan officer that is able to explain APR correctly and help you understand why it is important to you. What is the average price of the loan? Par price means rate quotes with no discount points given to the borrower in order to get the rate that has been advertised. This term is buried under a mountain of lending lingo. If you use this word when discussing terms with your loan officers, it shows them you are well researched and not some ‘johnny come lately.’

ASK YOUR POTENTIAL LENDER HOW MUCH EXPERIENCE THEY HAVE

You’ve been in this business how long? An honest question that should be asked to

anyone in a profession. It has added meaning in the mortgage business. As an example, you set up to see a doctor about an annoying cough. You check in and sit down when all of a sudden you see a kid no older than eighteen come in carrying your chart. Would you wonder about this kid’s experience? You definitely would.

WHY IS IT IMPORTANT TO SELECT AN EXPERIENCED LOAN OFFICER?

You won’t see any young adult physicians because physicians spend a majority of their adult life just going through medical school. There are many steps to becoming a doctor. Are there some for being a loan officer? Not many compared to the difficulties of getting through medical school. Most states have loan officer licensing but there is no national licensing or required training to become a loan officer. Because just about anybody can become a loan officer, you’ll want to ask a

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prospective one how much experience they have. Many new loan officers pop up when rates are low and there’s a lot of refinancing going on. As rates rise and business gets slower, they go out of business and return to being accountants or whatever else they were trained for.

WHAT TYPE OF LOAN OFFICER SHOULD YOU LOOK FOR?

You’re looking for a loan officer who can make money whether rates are high or low because anyone can do it when there’s a refinance boom. If you’ve got a loan officer who’s only been in the business for a couple of years, give him or her less credibility than someone who’s been in it longer. Ask mortgage brokers the lenders that they use and you’ll either get a direct or a vague answer.

HOW TO DETERMINE AN HONEST RESPONSE

An honest response is, ‘Usually I go to XYZ Bank, ABC Bank and HIJ Bank, considering the loan.’ An open response is, “Until I consider every lender I won’t be sure. You realize there are more than 100 lenders nationwide and I want to find out the best one available.” Although this second response seems wonderful, you don’t want to hear this. Your loan officer should let you know the companies they work with. There could be some unfamiliar names, however you shouldn’t worry about this. Remember that there are many loan officers out there, so do not feel obligated to go with the first lender you interview. Be sure that you select a lender who is honest and up front about all fees and costs so that you do not end up with unanticipated expenses. With all of the above tips and strategies in mind, you are ready to begin the process of looking for your new lender. Best of luck!

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8 FREQUENTLY ASKED QUESTION REGARDING INTEREST RATES by Sandra O’Connor

After you’ve selected your loan and your lender, the next thing to consider is interest rates. Interest rates are another vital consideration that must not be overlooked.

nterest rates are one of the most important aspects of a home loan, as they dictate how much you need to pay on top of the price of your home. The following answers explain how interest rates are calculated. You can use this information to help you to secure the most favorable interest rate that you can.

SEC AUCU S REAL ESTATE TODAY | May / June 2016

HOW DOES ONE SECURE THE BEST INTEREST RATE? You’ve finally made it. You’ve straightened out your finances, found a home, found a loan program and found a loan officer and now you’re ready. In order to secure the best rate, you need to understand how the rates are determined, how they can change and when they can change. Interest rates are set by lenders every business day when the markets open. Although there are a variety of indexes, fixed rate mortgages are priced based upon the mortgage bond they are set to. If there is a dip in the yield on that mortgage bond, the interest rates are reduced by the lending party and vice-versa.

WHY DO INTEREST RATES RISE AND FALL? Even for flexible rate mortgages, the same is done. If your ARM is based on a one-year treasury model, then your rate will rise and fall based on the current price of a one-year treasury. The same holds good for other loans that follow a particular index. If that index rises and falls, your rate will follow suit. Your loan officer will have a better authority on your mortgage rate as compared to the lender. Major banks and mortgage bankers on the national level have to quote certain rates for certain products and will have no exception for variance. If the lender states that loans ranging from ‘300,000 to 417,000 will carry a 7.0 percent rate with one point’, then you can plan on that being what you will pay.

The process of deciding on a lender can be extremely daunting, especially when you consider how many options are out there! See page 36 for 9 of our simple tips. CLICK HERE TO LEARN MORE.

HOW DO LENDERS CALCULATE INTEREST RATES? There is a database for national lenders to use in order to pull all of your applicable information. There are a few things to know while trying to lock in on a mortgage rate that is right for you and your budget. If you are working with a national lender or a retail bank directly, you will need to answer a series of questions that will reflect your current financial situation and other variables. A rate will then be quoted to you based on the answers you give. It is the responsibility of the loan officer to convey the interest rate to you that can change from day to day. He will enable you to lock into a rate and move forward with the mortgage process.

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WHAT ARE ORIENTATION FEES? If a 15 year fixed rate loan is given to a loan office at 5.5 percent then there will be an orientation fee. There is no minimum amount a loan officer is required to charge. However a lender can cap the amount of money a loan officer can make. Even if a lender promises you a 2 point rate that doesn’t guarantee he can get it, especially if another lender in the neighborhood quotes an identical rate with zero points. A loan officer who regularly offers rates and fees much higher than the competition will not last long in the business. Even though the Federal Reserve can set interest rates, it has no control over mortgage rates.

HOW ARE THE FEDERAL FUNDS RATE AND THE DISCOUNT RATE DETERMINED? The Federal Funds rate, the discount rate, or both rates are determined by the Federal Reserve. By altering the rates of interest, they control the amount of money in circulation. A hike in interest will decrease the flow of money and the reverse happens if the interest is lowered. Change in interest rates are decided by the Federal Reserve. Such changes are short term in nature and depending upon the market conditions, interest rates change very often. Banks borrow and lend money strictly in accordance with the Federal Funds rate. By law, all banks are required to keep a certain amount of money with them as their reserve.

WHAT HAPPENS WHEN A BANK’S RESERVE FALLS BELOW THE REQUIRED AMOUNT? If a bank’s reserve falls below the required amount on any day due to any reason, it has to borrow money from another bank to maintain its reserve requirement. That means they lend each other money at rates that are deeply discounted. When a sluggish economy needs some stimulation, then the Feds decrease the rates so that money can be borrowed cheaper. They’re hoping that, because of this, businesses will be able to get loans for new manufacturing plants or innovative product lines.

DOES THE FED GET INVOLVED WITH MORTGAGE INTEREST RATES? But the Fed doesn’t get involved with your mortgage interest rate. Rather, possible Fed moves are guessed at and investors set rates they hope will bring them profit. In the bond market, it all depends on the public driving prices up or bringing prices down. The prices going up pushes the interest rates up as well, going down drops the interest rates also. Anytime the Fed drops rates its hoping to get the economy going by more people refinancing and taking out loans buying homes. Once the Fed increases the interest rates, they want to slow down inflation.

SEC AUCU S REAL ESTATE TODAY | May / June 2016

HOW DOES THE FED MAKE THEIR ECONOMIC DECISIONS? In order to make key economic decisions, the Fed will analyze the entire economy with emphasis on particular reports in order to move the economy forward, rather than letting it fall into recession. If a positive report comes out, higher interest rates may be right around the corner. There will however, need to be several reports over a period of time to influence that determination. No one truly knows what the fed watches, but there are multiple pundits with interest in the same information that will try to forecast what the Fed will do next.

Now it is time for you to start taking a look at the interest rate your lender is offering you. If you are unwilling to accept the interest rate that is offered to you, it may mean that you need to start over from scratch. Remember that you should not accept an interest rate that you are not okay with, lest you end up paying far more than you would with a more favorable interest rate.

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THE BEST LENDER by Danny Pratt

The process of deciding on a lender can be extremely daunting, especially when you consider how many options are out there!

hoosing a loan type is only the first step in obtaining home financing. You then need to select the lender you will work with. This process can be extremely daunting, especially when you consider how many options are out there. The following advice will make it easier for you to select your lender. CHOOSING A LENDER After you pick your 1 desired loan, you need to pick a lender. There are many different kinds of lenders. Some lenders will specialize in particular kinds of loans and others offer every type of loan.

CLICK HERE TO LEARN MORE.

Choose a lender that offers the kind of loan you want. If you are looking for a common loan such as a Fannie Mae or Freddie Mac loan, you can usually go with any lender. If there is a small change in your loan, some lenders will have problems. What is different?

a different set of rules and guidelines to follow. Even though government loans are automated, they still have their own paperwork and are different from the conventional loans.

CONSIDER LENDERS FOR GOVERNMENT LOANS When you change to any government loans, like the VA or FHA, these loans have

Some mortgage bankers have a direct endorsement status (DE) given by the FHA that allows them to underwrite and approve FHA loans. If you decide an FHA loan would be what works the best, you’ll need to know if your lender has DE approval from HUD. If not, you’ll need to find another lender.

Whether you are a new landlord or have been a landlord for a while, you have to follow the rules. See page 41 for 8 golden rules to landlordship.

You may have to adjust to this change. It’s not a huge deal, but some mortgage companies only specialize in conventional loans and they may have a difficult time managing your government loans as well as those who specialize in that type of loan.

SEC AUCU S REAL ESTATE TODAY | May / June 2016

HOW TO DETERMINE IF A LENDER HAS DE APPROVAL If they have never heard of what you’re asking for, you’ll need to go another route. FHA lending differs from conventional lending a bit, but it can slow things tremendously at a time when they shouldn’t be slow.

If you need an FHA loan, get an FHA lender. If you’re a veteran or qualify for a VA loan, find a lender that specializes or at least understands VA grants for status and loans. Should a lender have VA approval, the process becomes very quick and singular. WHERE APPROVALS OCCUR Approvals occur in-house. A lender’s appraisal program (LAPP) gives the lender the permission to handle the appraisal with none of the regular approval needed when working with the Department of Veterans Affairs.

If you’re looking to qualify for a VA loan, check with your lender to see if they’re approved to do so. If not, you’ll need to continue on until you find one that is. Once you’ve concluded

what loan you will need, you will need to hold fast to that choice. When a lender can’t get you the loan you want, you might be cajoled into something they’d rather you take. For instance, you want an FHA loan at 3 percent down and they want to give you a regular loan for that interest rate. DO NOT SIMPLY FORGO THE GOVERNMENT MORTGAGE You’ll be hearing a lot of figures and rates to try to convince you to forgo the government mortgage. Just find out if they have DE approval from HUD because, if not, you might legitimately wonder why they don’t want you to have a government loan.

Include in your collection of possible lenders any lenders or brokers you come across that specialize in the kind of loan you’re looking for. The approval process will be smoother if you apply for a government loan because the lenders who handle such loans often manage many at once. However, be cautious. Watch out that the

SEC AUCUS REAL ESTATE TODAY | May / June 2016

lender who claims to specialize in one type of loan doesn’t also advertise a specialization in many other types of loans as well. ENSURE THE LENDER IS CREDIBLE You might question the lender’s credibility if it is stated that he or she is an expert in every type of loan offered. No one can specialize in everything!

When you read the ads, you think every lender is the best one with the lowest rates and fees and so on. But the one that’s right for you will offer you the product you want at a good rate with an efficient and timely delivery. When you venture out in search of a home loan, make sure your search commences with referrals. When you’ve details of different lenders before you, choosing the best one is not going to be a tough task. OBTAIN REFERRALS FROM YOUR REAL ESTATE AGENT Obtaining referrals from real estate agents is an ideal option. Also, seeking relevant information from friends or people in the know

of things can prove quite beneficial. Don’t forget that you can speed up the process by collecting personal referrals. The newspaper is a good place to look for lenders in your area whom you can call up for information. You could start out systematically by calling your bank and also the others based on referrals received from family, friends and your real estate agent. To be sure that you are dealing with a genuine company, you must contact the Better Business Bureau as well as the state agencies to find out if complaints have been lodged against them for violations or any other issues. HOW TO SELECT A MORTGAGE COMPANY You’ll find many reasons to go with a specific mortgage company and a wise one is if you trust them. The lowest rate means nothing if there’s no trust, which is why many prospective home buyers only want to deal with those they know and can depend on.

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If one back is 1/8 percent more than another you’ve seen in an ad, it still may be the best choice if it holds your credit card and maybe an account or two for you. If you have a doubt about the new lender, why even consider changing? People choose different products for different reasons and there is something to be said for loyalty and trust when choosing a lender. If you are comfortable with a lender, why look elsewhere? BE SURE TO GET A QUOTE AND 9 CONSIDER YOUR OPTIONS CAREFULLY There is a current trend among mortgage brokers to establish a relationship with a single lender or to own their own mortgage company. Make sure you get a quote from your real estate agent’s mortgage company like you would from anyone else.

to know anything about your credit situation and personal information. It is up for you to give that knowledge at your discretion. Unless you allow for that information to be exchanged, no lender or agent can give information in regards to your credit or employment. Now you are prepared to begin searching for your lender. Remember that the first lender you speak with may not be the right lender for you and that if a deal seems too good to be true it just might be. If you are having a rough time selecting a lender, consider asking your friends or relatives for recommendations. Good luck selecting the best lender for your home loan!

Step by Step for The First Time Home Buyer

Use caution, though. There are situations where these relationships become a bit too cozy. Even though your agent referred you to their lender, that shouldn’t give them the right

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8 GOLDEN RULES

FOR BEING A LANDLORD by Danny Pratt

Whether you are a new landlord or have been a landlord for a while, you have to follow the rules. Be sure that you are screening all potential tenants using legal means.

hether you have been a landlord for a while or you are new to being a landlord, you must follow the rules. HUD rules require landlords to comply with their regulations and these regulations can influence how you can and cannot screen potential tenants. The following are valuable rules for landlords that can help you to find permissible ways to screen potential clients. HUD REQUIRES ALL LANDLORDS TO COMPLY WITH THE LAW Whether you’re a big or small landlord, HUD requires strict compliance with every section of the law and it tries to do uniform enforcement of this. If you are in violation, then it is a serious offense. Every month, HUD will post violations on its website and it doesn’t matter if they happened years ago. The landlord will still be open to court action at the time the violation is reported. Discrimination based on race, religion or sex is an obvious violation of Fair Housing rules. However, limiting the number of children in an apartment or otherwise stipulating age of tenants (offering lower rents to seniors, for example) would also be forbidden.

After you’ve selected your loan and your lender, the next thing to consider is interest rates. Interest rates are another vital consideration that must not be overlooked. Vist page 30 to learn more. CLICK HERE TO LEARN MORE.

EACH APARTMENT MAY HAVE A SET NUMBER FOR MAXIMUM OCCUPANCY You may set a standard for number of occupants within each apartment. A good rule of thumb would be two occupants per bedroom, so that a three bedroom apartment could only accommodate two adults and four children. Rather than stating that there is a maximum number of children allowed to occupy the property, you would want to make a rule that at the maximum, two people could occupy one bedroom at the property. This will keep you out of hot water with the Fair Housing Act. Get some kind of permission in writing from the respective tenant to be able to communicate with their past landlords.

DO NOT TAKE THE TENANT APPROVAL PROCESS LIGHTLY It’s a good idea to find out what your about to get yourself into by approving the tenants. In the screening process of applicants

SEC AUCU S REAL ESTATE TODAY | May / June 2016

it is important to check with the potential tenant’s current landlord. Do not simply accept copies of rent checks as proof that rent has been paid without speaking with the landlord. There are many reasons that people get evicted from their apartments such as property damage or violating the rules/terms of the rental agreement. Also look for any periods of time in which the applicant was not renting/paying rent and determine the reason for the gaps. Red flags should be popping up if a respective tenant is not willing to give you the addresses they have lived at in the past. LEARN ABOUT POTENTIAL TENANTS It’s perfectly fine, unless otherwise regulated, to contact past landlords and question the tenants reliability to be a good tenant. The number one answer you want to get from a previous landlord is if they would be open to rent their property again to the tenant in question. Find out if the tenant followed the past leases with no problems. As a landlord looking to rent a space to a tenant it is important to check a number of things before making a commitment. You would want to make sure that the tenants were paying their rent on time and paying the amount specified. But you also want to make sure you check references.

FIGURE OUT WHICH INFORMATION IS RELIABLE Sometimes applicants try to use friends or relatives as past “landlords” and often those references cannot answer questions about the rental property or how long/when the person lived at the address. Make sure to double check any and all information given. You need to figure out if you can rely on this applicant to pay rent and follow the terms set forth in the lease. Checking with former landlords will help you determine if the tenant will live in peace and without issue on your property. There are multiple tenant screening services that are made available to landlords. Most will give landlords a way to view a credit report for a fair price and without having to join a credit bureau.

FIND TENANT SCREENING SERVICES These screening services for the most part can be found online. There are a number of services out there that are in place to help landlords with screening a potential tenant. Websites such as www. tenantscreening.com and www.e-renter.com can provide a screening service that checks national and local databases for judgments, court documents, credit reports and some even do criminal background checks. These

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websites can generate a number of reports for you, depending on how in depth you need the report to be and the prices vary from low cost ($15-$20) to high cost ($150-$200). RUN BACKGROUND CHECKS ON APPLICANTS With today’s technology, pulling up a background report on a rental applicant can happen in a matter of minutes or less. It is a priority to have the applicant’s written permission to access these kinds of reports. The applicant tenant is required to provide you a government issued ID if you ask. Don’t let anyone fill out an application or tour the property with out providing the required identification. Photo ID’s are issued by schools and businesses and will be accepted, but it is a good idea to have a government issued ID. Given the problems with identity theft, be sure you are in possession of the original documentation. Don’t accept any photocopies as opposed to seeing the real ones. A photocopy may be convenient, but not necessary. Review the identification and be sure it is the person you are looking at.

8 44

REFUSE APPLICANTS WHO DON’T HAVE ID If an adult has no identification,

refuse the application. Insist that any renter have government identification. Don’t just reject someone verbally but always have it in writing. The Fair Credit Reporting Act mandates that a landlord send such a notice and that prospective tenant may ask for a report from the credit agency to dispute data they think isn’t accurate or ask for more information from the landlord as to why the action was taken. You are now ready to begin screening potential clients. While you do have to be careful not to discriminate against any potential tenants based on protected elements such as race, religion and disability, it is ultimately your apartment and it is your decision who you rent it to. Best of luck finding a great tenant for your rental!

Deciding to become a real estate investor might be the smartest financial decision you’ll ever make. The next step is to make sure you do it right.

SEC AUCU S REAL ESTATE TODAY | May / June 2016

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AN 8-PART GENERAL

OVERVIEW OF by Sandra O’Connor

Follow Us: Selecting a mortgage can be a complicated process. Educate yourself about the types of mortgages and what to look for in a mortgage; it will make the process much easier.

hoosing the right mortgage can often make all the difference for a homeowner. It is essential that you understand the terms and conditions before you sign into any mortgage contract. Learn the different types of mortgages and some very important things that you should keep in mind while selecting the right mortgage for your specific needs and requirements. SELECTING A MORTGAGE OPTION When it comes to buying your new home, you’re going to have to select an option for your mortgage. There are certain factors that you should keep in mind as you make this choice, especially if you plan on moving into an even better house after this one. There are also a few questions that you’ll need to have the answers to in order to choose correctly. The following will guide you into making the best decision on how to set up your mortgage.

Finding your lender is another part of the home buying process that can be overwhelming. Find yourself a decent lender for your mortgage with these strategies and tips on page 27. CLICK HERE TO LEARN MORE.

MORTGAGE TYPE 1: FIXED-RATE LOAN The title is pretty straight-forward: the fixed rate loan has an interest rate that is â&#x20AC;&#x153;fixed,â&#x20AC;? or never changes as time passes. Once you take out the loan, the interest rate remains the same for either 15 or 30 years, however long you decide that your term will be. Because the interest rate is constant, so is your payment. The fixed rate loan is one of the most commonly selected plans.

MORTGAGE TYPE 2: ADJUSTABLERATE MORTGAGE This type, known as ARM for short, will change over the period of your term. Adjustments typically occur every year or 6 months, but can become as frequent as every 30 days. The reasons that these fluctuations occur is because of the rate of the economy.

Whenever the interest rate changes, so does your payment. If you have a very reliable form of income, and smart spending habits, this plan might be for you. Alternatively, this plan could be liable to sink your finances if payments get to be so high that you start defaulting. MORTGAGE TYPE 3: HYBRID LOANS The differences between hybrid loans contain features from all fixed rate loans and/or adjustable-rate loans. They are sometimes called intermediate ARMs. This type of mortgage loan begins just like the fixed rate loan, but that only lasts for a specific amount of years, whether three, five, seven or ten. Then, the loan adapts to an adjustable-rate, typically changing every half year or annually. There is also a subset of this loan called the interest only loan, which starts out with very

SEC AUCUS REAL ESTATE TODAY | May / June 2016

Purchasing a foreclosure property is one way to get a home for a great price, but it is not for everybody. Check out page 9 to learn about the process involved in buying foreclosures. CLICK HERE TO LEARN MORE.

low payments because you are only paying interest. However, once it comes time to begin paying the principal, the payments you are making will become much larger. CAN YOU HANDLE THE RISK? When you set out to decide between your mortgage option, that is the first thing you should ask yourself. Are you willing, and if then, are you able, to shoulder the weight of the more complicated options? It can be risky to take on an adjustable rate. While it typically has a lower interest rate than a fixed loan does, your monthly payment will potentially go up every time the market does. If your finances aren’t padded properly in anticipation of this, you could end up in seriously hot water.

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WHAT ARE THE ADJUSTMENT CAPS? The two important things to check with

an adjustable-rate mortgage are the periodic and life of loan adjustment cap. The periodic adjustment cap is the maximum amount that a rate would be able to change with an adjustment, and a life of loan adjustment cap is the highest interest rate allowed on the loan, period. It’s best to know these beforehand so that you’re aware of just how high these payments can go. Plan for the worst: if the maximum monthly payment would splinter your finances, you should definitely avoid an adjustable-rate mortgage. WHAT WILL YOUR TERM BE? The amount of time you plan on spending in your house also has an effect on which type of mortgage you should choose. If you plan to be off of the property within the next 5-7 years, a hybrid loan would be pretty applicable, as the starting interest rate of a hybrid loan is even lower than that

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How Your House Works: A Visual Guide to Understanding and Maintaining Your Home, Updated and Expanded of the fixed rate loan, saving you money if you get out before the increase hits. But if you intend on being in your home for longer than that time, the fixed rate mortgage makes the most sense for you. DECIDING ON YOUR MORTGAGE PLAN Examining your finances carefully is key in selecting the best kind of mortgage for you. Taking a good look at the state of your savings, as well as the nature of the aforementioned mortgages will help you see which plans would overwhelm you, as well as which ones you could manage to make work. Don’t feel pressured to choose a specific kind of mortgage, no matter what anyone tells you; do the math, and pick what’s right for you.

Now that you have all of this information at your disposal, you are ready to make an informed decision when it comes to your mortgage. Owning a home is an excellent investment and with the right mortgage with the right terms it can be an amazing financial benefit. Be sure that you carefully examine the terms before selecting a mortgage to ensure that you are happy with your decision.

Understand how to maintain everything in your home— including the kitchen sink! How Your House Works, Second Edition reinforces the fact that it pays to be an informed consumer. Knowledge of your home’s systems helps you control repair and construction costs and makes sure the correct elements are being installed or replaced. How Your House Works uncovers the mysteries behind just about every major appliance and building element in your house. Clear, full-color drawings show you exactly how these things should be put together and how they function, including what to check if they don’t work. CLICK HERE TO LEARN MORE

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Chris McLaughlinâ&#x20AC;&#x2122;s Guide to Smart Real Estate Investing CLICK HERE TO LEARN MORE

The Book on Tax Strategies for the Savvy Real Estate Investor: Powerful techniques anyone can use to deduct more, invest smarter, and pay far less to the IRS.

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The Homeowner Blueprint: Navigating the Real Estate Storm CLICK HERE TO LEARN MORE

The Book of YES: The Ultimate Real Estate Agent Conversation Guide CLICK HERE TO LEARN MORE

How to Get Approved for the Best Mortgage Without Sticking a Fork in Your Eye TM: A Comprehensive Guide for First Time Home Buyers and Home Buyers Getting a Mortgage Since the Mortgage Crisis of 2008 CLICK HERE TO LEARN MORE

Outrageous Authenticity: You Are Your Best Sales Weapon CLICK HERE TO LEARN MORE

7 TIPS ON FORECLOSURE LAWS IN SPECIFIC STATES by Danny Pratt

The foreclosure laws in one state may bear little to no resemblance to those of another. Learn about New Jersey, New York, New Mexico and North Carolina foreclosures now.

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s a homeowner or potential future homeowner, you need to learn as much as you can about foreclosure laws in the state where the property in question is located. The following is an introduction to foreclosure laws in New Jersey, New York, New Mexico and North Carolina. After reading this information, you will be more informed regarding how things work in your state.

FORECLOSURE LAWS IN NEW JERSEY

Lenders in New Jersey might foreclose a mortgage that is overdue by utilizing a judicial foreclosure process. Once the court system determines the amount of debt owed by the borrower, they give the borrower some time to pay. The clerk of court will post the property for sale if the borrower does not pay what is owed within that time frame. Once the foreclosure 52

SEC AUCU S REAL ESTATE TODAY | May / June 2016

If youâ&#x20AC;&#x2122;re attempting to sell your home on the real estate market, you need to be sure that you disclose all defects and issues to the buyer prior to selling your home. Visit page 22 to learn more.

CLICK HERE TO LEARN MORE.

has started, a notice of the foreclosure has to be advertised in the county office where the property stands, it has to be posted on the property itself and it has to be published in two separate newspapers of the county. The lender is responsible for also informing the borrower about the impending foreclosure ten days or more before the sale is to take place. Lenders may seek deficiency judgments from the court. For up to 10 days after the sale, the borrower has the ability to object or redeem and take possession of the building again.

NEW JERSEY DOESNâ&#x20AC;&#x2122;T OFFER A HOMESTEAD EXEMPTION

There is no homestead exemption offered by the state of New Jersey. However, in cases of a tenancy by the entirety, if one spouse is not in debt and the other is, the one who is may file for bankruptcy in order to prevent foreclosure of the property. Judicial foreclosure is used to foreclose on default mortgages in the state of New Mexico. In court,

the amount that the borrower owes will be determined and a time limit for payment will be issued. A notice of sale will only be issued by the court if the debt is not paid off by the borrower within that time. The notice of sale is required to list the time, place and date of the sale, as well as a property description. The sale must be held thirty days or more after the notice is posted. When the date of the sale arrives, the property transfers to the highest bidder at the auction.

DIFFERENCES BETWEEN NEW MEXICO AND NEW YORK FORECLOSURES

In a lot of instances, the borrower can take up to nine months in order to get the property back by paying whatever the highest bid at foreclosure was plus any applicable cost and interest. Nonjudicial foreclosures can only be used on a commercial or business property with a value over $500,000. Should the borrower choose to file bankruptcy in order

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to cease foreclosure proceedings, New Mexico will offer a homestead exemption that can go up to $30,000. A New York lender has the right to foreclose on a deed of trust or default mortgage by way of judicial or nonjudicial foreclosure processes. By way of this judicial foreclosure method, the bank lender will file a lawsuit against this borrower in default in order to get a decree of sale from the court with the jurisdiction in the county where this particular property is actually located.

MORE INFORMATION ABOUT NEW YORK FORECLOSURE LAWS

Once the court has made the decree, foreclosure proceedings will start. Normally, the court will allow for the borrower to pay the delinquent amount and additional costs over a specific time frame. However, if this doesnâ&#x20AC;&#x2122;t happen, the court will order that the property be sold by the county sheriff or a referee. Often times, there will be an advertisement four to six weeks before the actual foreclosure sale. Then the property is sold during a public auction to whoever places the highest bid. Anyone is allowed to place a bid, even the lender. Once the property has been sold, the 54

person running the sale has to begin a deed made out to the buyer.

WHAT HAPPENS NEXT IN NEW YORK?

The officer has to pay the debt owed with whatever the sale brought in and then get a receipt from the lender for it being paid. This person must file a report of the sale with the clerk of court within thirty days of the completed sale and it has to include the receipt from the lender. The report of sale must be filed and then it will take three months for the sale to be finalized, unless the court stipulates that it may be finalized earlier. Nonjudicial foreclosure takes places in cases where there is a power-of-sale clause within the deed of trust or mortgage. New York allows nonjudicial foreclose, but it isnâ&#x20AC;&#x2122;t often used in the state. New York offers a homestead exemption of up to $10,000 in bankruptcy cases.

NORTH CAROLINA FORECLOSURE LAWS

In North Carolina, a judicial or nonjudicial process can be used to foreclose. The former has to do with filing a lawsuit so that

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foreclosure can begin. Once that’s done, the home is usually put up for auction. If there’s a power-of-sale clause in the mortgage or deed of trust, then the latter can be used. However, in this state there must be a preliminary hearing prior to power-of-sale foreclosure. Here’s how nonjudicial foreclosures work. Twenty days or more before the foreclosure sale is scheduled to occur, the lender gives a notice, which must be sent via first-class mail, to the borrower. This same notice also must be made available to the public. The lender will publish it in a newspaper in the same county where this particular property is actually located. It must be published twice, once each in two consecutive weeks. The last ad must appear in the newspaper ten days or more before the sale.

MORE NORTH CAROLINA NOTICE REQUIREMENTS

It also must be physically posted on the door of the courthouse for the twenty days that precede the scheduled sale. The names of the lenders and borrowers, as well as a description of this property, must be included

in the notice. The time, date and location of sale are also required. The location of the sale is usually always at the county courthouse where this property resides and the time must be between 10:00 AM and 4:00 PM. The top bidder gets the property. A process for seeking a deficiency judgment is available to lenders and borrowers have a right to redemption for up to ten days proceeding the sale. If the borrower files for bankruptcy, a $10,000 homestead exemption is available in North Carolina. The property may also be exempt from foreclosure if the borrowers hold the property as tenancy and the debt is owed by only one spouse. Now you are more informed regarding foreclosure laws in New Jersey, New York, New Mexico and North Carolina. Use this knowledge to ensure that you are complying with the specific requirements in your location to ensure that you do not end up paying the consequences for not following the rules. If you need more help understanding how things work, speak with a real estate professional today. Best of luck!

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CLICK HERE TO LEARN MORE SEC AUCUS REAL ESTATE TODAY | May / June 2016

9 KEYS FOR FINDING THE RIGHT REAL ESTATE AGENT by Danny Pratt

The following are some keys to choosing a great real estate agent so that you can sell your home or purchase a new property for a price youâ&#x20AC;&#x2122;ll love.

hether you are currently placing your home for sale on the market or are shopping for a new home, a real estate agent is a must. You stand a much better chance of obtaining a great sales price if you work with the right real estate agent. The following are some keys to choosing a great real estate agent so that you can sell your home or purchase a new property for a price youâ&#x20AC;&#x2122;ll love.

IDENTIFYING THE RIGHT QUALITIES

Choosing a good agent with whom to list your home for sale is a critical decision. Your agent should, ideally, help you with pricing and promote your property among agents. They should also find suitable buyers and competently handle all of the sale paperwork all the while protecting your interests. Above all, they should secure the sale without costing a small fortune in the process. For all of these qualities, you should select carefully. A good agent can, through skillful representation and negotiation, offset the cost of their fees or even save you money above and beyond just their fees. Ask for recommendations. Talk to your friends if they have or their friends have recently sold their home.

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THERE ARE MANY WAYS TO FIND AN AGENT

There are a huge amount of agents in any

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After signing the contract that goes with buying your new home, you aren’t finished. Check out page 19 to learn about finalizing your mortgage selection, as well as before and after the closing process.

CLICK HERE TO LEARN MORE.

area, so it is likely almost everyone will know at least one. Was the selling experience a good one? Would they ever use the agent again? Were there any problems? If you aren’t able to seek out a recommendation, you’re going to have to find an agent the old fashioned way. Getting an agent is fairly simple. Just put a For Sale By Owner sign out in front of your property. All agents try to maximize their business and earn their commission. So the moment you start talking about selling your home, you will be swarmed by real estate agents. What you actually need is a reliable and trustworthy agent. If you can find an agent who knows your locality very well, it will be easier for you to sell your home quickly. So choose an agent who operates in your locality.

TAKE CARE TO SELECT A SUCCESSFUL REAL ESTATE AGENT

When you go to his/her office, don’t disclose your intention to anybody other than the agent. Tell only the agent that you want to sell your home at the earliest. The best thing to do is list with the top seller in that office. First though, get

some information about the office as far as their current listings. If it is a fairly active office, the broker will be more than happy to boast about their many listings. If the office however is slow, chances are there will be only a few, if any at all. If this is the case, just walk away.

ASK FOR EXACT FIGURES AND LISTEN CAREFULLY

Get the listings that the agents have taken in the office and don’t be played a fool if the broker just pulls out their books and shows you everything already out on the MLS. It may be that none of those successes occurred at this office. So make sure to ask the office their number of sales over the last six months or so. You should be able to get the exact figure. If they procrastinate on giving you the number or indicate a low number of sales, you should make your departure. Take a moment to hear what the salesperson has to say to you. Are they consistently mentioning a

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particular agent? If so, this agent is likely the top person in their organization. Prior to leaving, make sure to inquire as to who is the person who has sold the most homes in their office.

TAKE CARE WHEN SELECTING YOUR REAL ESTATE AGENT

REAL ESTATE AGENTS CAN HELP YOU BUY PROPERTY AS WELL

Selecting your real estate agent should be a careful process. Be sure to inquire about how many properties they have sold as well as how many may have been listed in the last six months.

When deciding to purchase a home through a real estate agent, it is important to ensure that you have chosen a reputable, honest and competent real estate agent. Many future homeowners think that this can be a long and arduous process.

After all, you want to be sure you’re dealing with a good salesperson who also handles listings. Do not be afraid to ask them for phone numbers of previous sellers; it is perfectly acceptable and wise for you to contact them to ask for their impression of the sale and the agent’s performance. The best way to find out whether an agent is a successful agent and will be able to sell your home quickly is to ask for a list of homes sold through him/her recently.

In reality, when searching for a good real estate agent, the process can be as simple as walking into a real estate agency and looking for pictures on the wall of top performing real estate agents. When interviewing potential real estate agents for your home search, it is important to ask relevant questions of them, such as how long they have been in the real estate industry.

IT IS OK TO ASK FOR A LIST OF HOME SALES

Normally, nobody asks for such a list thinking that it is something kept confidential by real estate agents. There is no reason for an agent to keep home sales a secret. You can collect details of homes sold recently from different sources. So there is nothing awkward in asking the agent for a list of recently sold homes. Successful agents 58

will be proud to show you the list but an agent who doesn’t have an active business will find a number of excuses for being unable to produce such a list.

EXPERIENCED AGENTS ARE GENERALLY BETTER

Real estate will take a while to truly learn. Due to the fact that you will only deal with one set of facts and challenges in each transaction, your experience will be limited. It will generally take three to five years, or even five to ten years, for an agent to truly understand all the intricacies of the market. At the very least a person should be involved within the local real estate

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board, NAR (National Association of Realtors) and Multiple Listing Service.

ENSURE THE AGENT IS INVOLVED IN THE COMMUNITY

The agent should be involved with local citizen’s organizations and the local chapter of the chamber of commerce. The answer to, ‘What will you do to speed up the sale of my home?’, should always be quick, to the point and thorough. Any agent in this situation should detail how they will sell your home. The agent should always have a plan with a definite time frame, if it does not then

there will be a problem of being locked in to a long term listing and their poor performance in regards to promoting the home, including talking up the home, advertising, and open houses. Now you know everything you need to know in order to select a great real estate agent. Remember, whether you are buying a new home or selling your current property, a real estate agent can make a huge difference. So be sure to check out a few real estate agents in your area to see if you can find one that fits well with your vision. Here’s to your success!

SEC AUCUS REAL ESTATE TODAY | May / June 2016

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8 PRINCIPLES OF HANDLING AN

UNDERWATER MORTGAGE by Sandra O’Connor

If you find yourself underwater regarding your mortgage, do not despair! There are several different ways that you can solve this problem with some effort on your part.

f you find yourself underwater in regards to your mortgage, it is not the end of the world. You will have to deal with some uncomfortable and perhaps unanticipated events, but there is hope. You can take action by fighting back, trying to negotiate, handing over your deed or holding an auction. Learn what your options are today so that you can make the best of a bad situation.

WHAT HAPPENS IF YOU ARE UNDERWATER

If you find yourself completely underwater and you see your Notice of Default from your lender, you know that a property auction is not far off. You may only have a small amount of time left even. How can you keep yourself out of foreclosure and save your home, or even sell it? You’ll need to no doubt, pay off any of your back payments as a way to stop the foreclosure process, but how will you find the money? Try a few of these options to save yourself. It’s similar to running into a bully in a dark parking lot that wants to fight.

FIGHTING BACK OR TRYING TO NEGOTIATE

You can throw some punches and try to fight back or you can attempt to talk to him in hopes that he’ll leave you alone. Therefore, the number one thing that you want to do is speak with the lender. You should insist that you speak with your lender, face to face, as soon as possible. Ask if there is anything that you can do to stall the proceeding of the foreclosure. Then try and lower your payments by restructuring the mortgage, which may involve reducing the interest or principle. It’s better to refinance and get your payments lowered instead of losing your home to foreclosure.

SEC AUCUS REAL ESTATE TODAY | May / June 2016

Are you currently to trying sell your home and place it on the market? If so, learn on page 14 how to have your home inspected by a professional inspector. CLICK HERE TO LEARN MORE

TRY TO NEGOTIATE A SMALL PAYOFF

It’s best to negotiate a small payoff after your home is sold. Always be polite and appeal to your lender’s needs during this time, keeping a clear line of communication. Certain people would argue that they are the same! But it gives you human qualities, personality, humor, worth, essentially a face to the name and your house. It’s a lot more difficult to give someone a hard time that you are acquainted and friendly with than someone you’ve never met. Keep in mind that the lender has the ability to stall foreclosures.

A HOME AUCTION MAY BE ABLE TO BE POSTPONED

The auction of your home can be postponed from several days to an indefinite period if you can provide the lender with a feasible alternative. However, you must talk to the lender, or it will not happen. There are other alternatives that are better, but in the end you are demonstrating that you are willing to assist the lender. This way the lender doesn’t have to go through the 62

whole drawn-out foreclosure procedure. Instead, you make it easier on them by giving them the property’s deed. In other words, you are saying to the bank that you are moving out and signing the home over to the bank in lieu of foreclosure. The bank takes possession of the home and tries to sell it.

WHY IT IS A GOOD IDEA TO HAND OVER THE DEED

While you may be not be getting any money, you also avoid having a foreclosure on your credit report. Keep in mind however, that some lenders are reporting taking a deed in lieu to credit agencies, but it is less of a negative on your credit history than a foreclosure. Doing this requires the agreement of the lender, however. The lender needs to accept this offer. If this sounds desperate that’s because it is your last chance. Once foreclosure is imminent, your house note isn’t usually the only bill you haven’t been able to pay. Hiring a credit counselor or attorney is a smart idea during this time.

SEC AUCU S REAL ESTATE TODAY | May / June 2016

WHAT HAPPENS AFTER YOU FILE BANKRUPTCY

After bankruptcy is filed, your judge can actually slow down the foreclosure process. This may potentially leave you with an opportunity to seek other options, for example, selling or refinancing. You should keep in mind that at this particular moment in time, the judge will not have the authority to change your loan, meaning that they will not grant reduction of the monthly payment, interest rate, or the principal. There are, however, bills that have been sent to Congress which would give judges the right to perpetuate these changes.

HOW LEGISLATION CAN HELP YOU

Legislation was first written and passed in 1918 as a way to aid World War I servicemen. By the time you read this, it may be helpful to check to see if bills of this nature have passed and become active. The rewrite occurred in 1940 and was meant to assist service members in the Second World War. It was extended and expanded in 2003 in order to assist members of the armed services during the Iraq war. SSCRA today helps in stopping foreclosures for the

service person and their dependents during their active service and also for three months after. This can apply to either a mortgage or trust deed. The service member needs to have owned their property at the time that relief is asked for.

THE TYPE OF RELIEF AVAILABLE

You may find a lot of relief if you can file for stay of proceedings, a diminished payment or an extension of the mortgage’s maturity date. If the judgment for foreclosure has already been made, or the sale even, the judgment can be reviewed. Educate yourself with all SSCRA information and know that it won’t eliminate your obligations, but it will actually slow the process down. If you think this may work for you, try Googling SSCRA to get as much information as possible. Now you are ready to start dealing with your problem. Remember, if you have found yourself underwater, you do not need to just sit by idly while foreclosure proceeds. Instead, take action to ensure that you come out with the best possible outcome. Best of luck!

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7 COMMON MISTAKES MADE BY HOME BUYERS Wondering if it is the right time for you to buy a house? Learn 7 common mistakes many people make when considering whether or not they should indeed purchase a new home. by Danny Pratt

re you thinking about purchasing a home? If so, there are many mistakes that many home buyers make that you can avoid making if you have the right knowledge and preparation. Learn 7 common mistakes that trip many people up when they are approaching the purchase of a new home so you can strategize ways to keep these types of mistakes from putting a wrench in your plans. 64

ASSUMING PRICES WON’T GO UP

If you’ve fallen victim to the so-called experts who’ve been saying that home prices have reached their peak, please take note: these experts have been saying that t h e p r i c e s o f re s i d e n t i a l p ro p e r t i e s w e re done rising for the past six decades. History teaches us that prices go up eventually. If you think today ’s price tags on homes are high,

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imagine what they ’ll be ten years from now, or even better, twenty or thirty. Claims from supposed experts on the economy have said that the housing market has plateaued dating as far back as 1947 and they continue to be thrown around today. It’s clear to see that the market’s tendency is to rise, not fall.

THINKING THINGS WILL CHANGE

Maybe the experts have been right in the past. Aren’t they likely to be correct in the future? The answer is no. Experts have been trying to back up their guesses at the housing market ’s bleak future for decades, but the passage of time has only served to prove them wrong. In the 40s it was said that an increase in population, a resulting lack of houses and inflation had all influenced the more expensive home prices, but analysts like John Dean predicted that they wouldn’t continue. However, sure enough, since then that’s been the majority of what we’ve seen: a growing population, a shortage of homes, and inflation. And with populations and incomes still growing, today ’s prices will more than likely look inexpensive in the coming decades.

FEARING LOW INFLATION RATES

TURNING TO STOCKS INSTEAD

M a n y w o u l d - b e h o m e ow n e r s a re convinced that a lower rate of inflation dictates a slowed appreciation rate for homes. I n re a l i t y, a re d u c e d i n f l a t i o n ra t e c o u l d actually result in heightened appreciation rates. Up until the 1990s, things seemed pretty simple. During times of inflation, the prices for building materials were higher and so builders would create less homes and increase their prices. A reduced supply of homes would mean a higher appreciation rate. However, inflation also means higher interest rates. Higher interest rates means less affordability, leaving certain people who’d like to buy homes without access to them. Conversely, a lower inflation rate means that the interest rates are lower, making homes more affordable for everyone. This mistake is due in part to the f ina nc ia l expe r t s w ho c o nti nu e to t e l l w o u l d - b e h o m e ow n e r s t h a t t h ey w i l l see a bigger return in the stock market than they would if they purchased a home. This, however, is wrong. The increase that the stock market has seen in the past 20 years is not likely to repeat itself in the coming decades.

SEC AUCUS REAL ESTATE TODAY | May / June 2016

On top of this, the laws of statistics dictate that the market will have to fall. On top of this, as gains increase, so does the cost of living. The real economy and the stock market are supposed to move together, but the economy is still in the process of catching up. But when you buy a home you gain leverage, allowing you to see greater, more stable returns than those investing in stocks will.

IGNORING YOUR HOME’S INVESTMENT POTENTIAL

You should never simply just be on the lookout for a comfortable place to lay your head every evening when you’re shopping for a house. You must also be aware that this property is going to be an investment, and thus, factor in the appreciation the property is likely to see in the future. No matter whether the market is hot or cold, you should be comparing homes not just by their livability and aesthetic appeal, but also on their profitability. You don’t want to move into a home that isn’t going to appreciate in value and call it a day simply because you finally have a place to call your own. A good idea is to find a neighborhood that is on the rise, with homes that show profit potential for the future.

NOT COMPARING NEIGHBORHOODS

M a n y h o m e ow n e r s b e l i ev e t h a t i f they buy a home in the best neighborhood around, they ’re in great shape. However, the best community isn’t guaranteed to have the best appreciation rate. You’ll need to compare neighborhoods, because things change. Some neighborhoods don’t stay on top for long. You’ll want to look to see whether the time period 66

it takes for a home to be sold is decreasing, if many of the people moving into the area are from out of town, if the newcomers are of higher occupation and education levels, if people are upgrading and renovating their homes, and so on. If the city is working on improving its infrastructure, that’s also a very good sign. With some research, the home of your choice could end up bringing thousands of dollars to you later on.

AVOIDING THE BEST HOME IN TOWN

First-time buyers are often advised to avoid the most expensive home in town, because the properties around it are likely to keep its value from appreciating as much. However, if that were true, that would mean that as the years went by, the smaller homes would eventually come to be worth more than the larger homes thanks to interest, which is illogical. Rather than avoiding the best home in the neighborhood, make sure you’re getting a good value for the amount of home you’re buying. But one thing to avoid doing is to have the biggest and best home in the area constructed, because then the surrounding property values really will hold your value down. Do not assume prices will not rise if you wait, do not think things are going to change and do not fear the inflation rates will be low. If American history has taught us anything, its that inflation is always occurring and thus your home truly does have investment potential. You will find the right home at the right price. All you have to do is start looking.

SEC AUCU S REAL ESTATE TODAY | May / June 2016

AN 8-PART OVERVIEW OF STATE SPECIFIC

FORECLOSURE LAWS by Sandra O’Connor

If you are considering a purchase of a foreclosure property, your location matters. You should know that each state has its own way of handling the foreclosure process.

f you are thinking about buying a foreclosure, listen up! You need to familiarize yourself with the foreclosure laws that govern your state before you make a move. The following information will help you to begin thinking about how your state may handle foreclosures.

KNOW THE FORECLOSURE LAWS IN YOUR STATE Each state will choose how to enforce and act upon their

laws about home foreclosures and how they will need to be completed. By knowing the laws of foreclosure, you’ll be able to discuss and explain to homeowners how it works and how the purchase would happen. Borrowers are able to temporarily cease foreclosure when they file bankruptcy. Bankruptcy will not cause the secured lien to be discharged, however it will give the borrower some time to bring the mortgage to current. Look up what your state’s homestead exemptions are. This is very important to know if you’re going to try and buy a property that could possibly have a bankruptcy in it’s future. Some states will do all they can to save the property for the borrower and keep it out of foreclosure. IS THE SELLER PLANNING TO FILE BANKRUPTCY? Be upfront, ask the seller if they are planning to file bankruptcy: this can save you a lot of misery. Don’t forget about it all together, as it could be that the property does get foreclosed on eventually. Alabama lenders have rights to foreclose on

SEC AUCUS REAL ESTATE TODAY | May / June 2016

If you are currently placing your home on the market, how can you select a proper price? Learn on page 5 how to determine the current market price and property value of your home. CLICK HERE TO LEARN MORE.

properties by ways of judicial or nonjudicial foreclosure. A nonjudicial foreclosure is applied when power-of-sales clauses are set forth in a deed of trust. Some deeds of trust have power-ofsale clauses that specify times, places and sales terms. If this happens to be the case with your deed of trust, it is vital the procedure be followed. If it is not, foreclosure sale will happen in front of or at the main door of the county courthouse that the property is found in once the deed of trust or mortgage has defaulted. HOW DO HOME AUCTIONS WORK? As per the law, there must be a gap of one month between the last notice of sale and the actual auction date. The highest bidder at the auction becomes the new owner of the property as soon as he/she pays for the property in cash. The law prescribes that the notice of sale must be published in all leading newspapers of the locality for four consecutive weeks. The mandatory details the notice should contain are the date, time and place of the

auction. If the agreement between the lender and the borrower doesn’t authorize the lender to sell the borrower’s property, the lender must get permission from the court before going ahead with foreclosure. Use this publishing information for your benefit to locate foreclosure properties you may like. Homeowners in Alabama can still get their property back for one year following a foreclosure sale. SOME STATES HAVE MORE HOMEOWNER PROTECTIONS IN PLACE There is a $5,000 homestead exemption for a homeowner who chooses to file bankruptcy to avoid foreclosure and the real estate can’t be more than 160 acres. If the property has more equity than this, a bankruptcy trustee can make the property go on sale. Alaska lenders can use a judicial or nonjudicial foreclosure on a property. When judicial foreclosure is used, it is done by the rules of equity. There is the ability to have a deficiency suit and the borrower will have no right of redemption. If there is a power-of-sale

SEC AUCU S REAL ESTATE TODAY | May / June 2016

clause within the mortgage or deed of trust, that is when nonjudicial foreclosure processes will be used. If the power-of-sale clause specifies times, places and terms of sale it will be followed, given that it meets the minimum protections as stated in Alaska state law. NONJUDICIAL FORECLOSURE IN ALASKA These are the steps that lenders will need to follow in order to have a successful nonjudicial foreclosure in the state of Alaska. Trustees are responsible for recording a notice of default in the recorderâ&#x20AC;&#x2122;s office of the district where the property is located no less than thirty days once it has reached default and not less than 90 days before it is to be sold. This notice will need to state the borrowerâ&#x20AC;&#x2122;s name, and the book and page location of the deed will be necessary as well. There must be a property description, details as to the reason for default, the amount owing and that the trustee is looking to sell the property.

WHAT DETAILS ARE CONTAINED IN THE NOTICE? Some of the very important details to be included in the notice are the date, time and place of auctioning the property. A copy of the notice must also be sent to the borrower in default and to the person, if there is any, currently occupying the property. Since there can be other people who also hold a lien on the property, copies of the notice must be sent to them as well. The borrower, however, has the option to clear all his dues and prevent his/her property from being foreclosed. The borrower is not required to repay the full amount of the loan. It is enough to pay whatever amount is in arrears to stop a property from being foreclosed. The property sale must be held in public at an auction in the front of the courthouse of the superior court or judicial district that the property can be found. The trustee is required to sell the property to the party that bids highest, which can be the actual lender. If the borrower files for bankruptcy as a way to cease the foreclosure, the homestead

SEC AUCUS REAL ESTATE TODAY | May / June 2016

exemption for Alaska residents will be $67,500. ARIZONA LENDERS HAVE OPTIONS FOR FORECLOSURES Lenders in the state of Arizona have the right to use judicial or nonjudicial foreclosure processes. The judicial process is used in situations where there is a no power-of-sale clause in the mortgage or deed. The process of a nonjudicial foreclosure becomes easy if the mode and conditions of sale of the property in question are detailed in the mortgage deed. If the deed doesnâ&#x20AC;&#x2122;t specify how the property is to be sold, the trustee has to follow the normal legal procedures. The first step is to file a notice of sale of the property with the county recorderâ&#x20AC;&#x2122;s office. Next, the trustee must, within five days of filing the notice of sale, send copies of the notice by registered post to all persons who are parties to the deed. This includes the owner of the property who has mortgaged it to secure a loan.

NOTICE MUST BE GIVEN If a lender is going to foreclose the property of a borrower and is going to sell it at an auction, he is required by law to

publish a notice of sale in all leading newspapers which have wide circulation in the locality where the property is located. The law further stipulates that the notice should be published weekly for four weeks successively. There should also be gap of at least ten days between the last notice and the actual sale of the property. The authorized person to conduct the auction is the trustee or his representative. The highest bidder at the auction gets the property and the buyer is required to make a down payment before the title of the property is transferred to him. But if the highest bidder is the lender himself, he need to pay cash to buy the property. If you live in Alaska or Arizona or are thinking about purchasing a foreclosure property in one of these locations, you can use the information above to help you decide whether to proceed. If you live elsewhere, you should really think about consulting a real estate professional or attorney before you decide to purchase a foreclosure property. That way, the process of purchasing a foreclosure can be as smooth as possible for you.

9 THINGS TO KNOW BEFORE UPGRADING YOUR HOME The time for avoiding those glaring home upgrades around the house is over. With the right guidance, you can get them done on your own. Here are 9 things to take a look at before you get started on some home improvements. 70

CLICK|HERE LEARN MORE SEC AUCU S REAL ESTATE TODAY May TO / June 2016

Town Of Secaucus New Jersey

Event & Meeting Calendar May 2016 SUNDAY 1

MONDAY 2

TUESDAY 3

WEDNESDAY 4

THURSDAY 5

FRIDAY 6

SATURDAY 7 Green Festival Project Pride

Municipal Utilities Authority Meeting 7:00 pm - 9:00 pm

Alcoholic Beverage Control Board Meeting 7:00 pm - 9:00 pm Clarendon Drama Club Show 7:00 pm - 9:00 pm

Clarendon Drama Club Show 7:00 pm - 9:00 pm

Huber St. School Choral Performance 7:00 pm - 9:00 pm

An Evening with Author Jon Dâ&#x20AC;&#x2122;Amore 7:00 pm - 9:00 pm

Caucus Meeting 5:00 pm - 6:00 pm

Board of Adjustment Meeting 7:00 pm - 9:00 pm

Fishing Derby 8:00 am - 12:00 pm

Mayor & Council Meeting 7:00 pm - 9:00 pm

District Science Fair Awards 7:00 pm - 9:00 pm

Middle / High School Band Concert 7:00 pm - 9:00 pm

Court Night (Information Session) 6:30 pm - 8:30 pm

Jazz in the Meditation Garden 7:00 pm - 9:00 pm

Boy Scout Pasta Dinner 5:30 pm - 8:30 pm

Genealogical and Historical Society Meeting 11:00 am - 12:00 pm

Coalition Meeting 7:00 pm - 9:00 pm

Remax Adoption Event 1:00 pm - 4:00 pm

Board of Health Meeting 7:00 pm - 9:00 pm

Library Board Meeting 7:00 pm - 9:00 pm Planning Board Meeting 7:00 pm - 9:00 pm

Middle / High School Choral Performance 7:00 pm - 9:00 pm

Clarendon School Choral Performance 7:00 pm - 9:00 pm

Memorial Day Parade Town Pool Opens

Caucus Meeting 5:00 pm - 6:00 pm Mayor & Council Meeting 7:00 pm - 9:00 pm

Housing Authority Meeting 7:00 pm - 9:00 pm

Senior Citizen Bingo 5:00 pm - 7:00 pm

Middle School Drama Performance 7:00 pm - 9:00 pm

Richard Muti at Library 7:00 pm - 9:00 pm

Huber St School Band Concert 7:00 pm - 9:00 pm

Memorial Day

Swim Club Opens 12:00 pm - 8:00 pm

Town Of Secaucus New Jersey

Event & Meeting Calendar June 2016 SUNDAY 29

MONDAY 30

TUESDAY 31

WEDNESDAY 1

Memorial Day

Municipal Utilities Authority Meeting 7:00 pm - 9:00 pm Street Fair

K&S Golf Outing

THURSDAY 2

FRIDAY 3

SATURDAY 4

Town Council Takeover Day

Street Fair

St. Matthewâ&#x20AC;&#x2122;s Strawberry Festival West Side Story Paper Mill Playhouse 5:30 pm - 10:30 pm

Primary Election

Flag Day

A Night With The Nerds | SEF & K&S 6:00 pm - 11:00 pm

Alcoholic Beverage Control Board Meeting 7:00 pm - 9:00 pm

Board of Adjustment Meeting 7:00 pm - 9:00 pm

Senior Citizen BBQ 11:00 am - 2:00 pm

Library Board Meeting 7:00 pm - 9:00 pm Planning Board Meeting 7:00 pm - 9:00 pm

Clarendon School Promotion 3:30 pm - 4:30 pm

Middle School Graduation 6:30 pm - 8:30 pm

Huber Street School Promotion 6:30 pm - 7:30 pm

Indian Caucus of Secaucus Picnic 11:00 am - 5:00 pm

Board of Health Meeting 7:00 pm - 9:00 pm

Caucus Meeting 5:00 pm - 6:00 pm Mayor & Council Meeting 7:00 pm - 9:00 pm

Concert At Xchange 7:00 pm - 9:00 pm

Housing Authority Meeting 7:00 pm - 9:00 pm

High School Graduation 6:30 pm - 8:30 pm

Movies at Xchange 8:00 pm - 10:30 pm

4th of July Celebration

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• A CLOSER LOOK AT FOR SALE BY OWNER SALES • YOUR GUIDE TO MORTGAGE LOANS • CONSIDERING BUYING A PRE-FORECLOSURE PROPERTY? • YOUR QUESTIONS ABOUT LIENS ANSWERED • OBTAINING YOUR DOWN PAYMENT • THE PROCESS OF MAKING AN OFFER ON A HOME • NEGOTIATING FROM STRONG AND WEAK POSITIONS Follow Us:

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