Author: David Chang

THINGS TO NOTE AS A FIRST TIME HOMEBUYER

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You are about to own your first home, you are excited! It’s a whole new experience and you can’t wait to get started. But first, there are a few things you must know before you dive in headfirst. Buying a new home can be an overwhelming experience, more so when it’s your first time. You might be tempted to make a quick buy when you see homes going off the market in mere weeks and seemingly attractively priced homes. Unfortunately, making such a mistake might cause a strain on your financial goals. You sure don’t want to keep paying a mortgage when you are retired. 

As they say, what is worth doing, is worth doing well. You want to get it right the first time. Don’t anyone trick you into believing that you can’t buy a home you love at a great price that won’t hurt you financially. Here are some tips to make your first-time home purchasing a happy one.

  1. Be Debt-free and Have An Emergency Savings Fund
    Owning a home is great but it comes with its own dose of responsibility. When you do an initial calculation, it may be cheaper than paying your current rent or at the same rate. However, you would need to also put into consideration that the home is now your full responsibility, meaning you are now responsible for utilities, maintenance, etc. You don’t want to have debt while trying to set up your new home. Do be mindful of your spending though. You want to be debt-free and stay that way.
  2. Calculate What You Can Afford
    Before you start house hunting, determining what you can afford. It’s easy to fall in love with a house at first sight, just make sure that the house is within your budget. Calculate your monthly budget to help you determine the price range of a house you can afford. Keep in mind other costs such as housing costs (tax, insurance, etc.). These costs should not be more than 25% of your monthly take-home income. Insurance and homeowners tax vary, so endeavor to factor that in when determining your price range.
  3. Save For A Down Payment
    Not everyone is capable of paying the total price of a house up front, and that’s ok. However, if you can’t pay all at once, ensure you have at least 20% for a down payment. You may be thinking of going for private mortgage insurance or first-time homeowner program, they may sound great, but they cost you more at the end. Whatever plan you choose, ensure you are not in debt for longer than necessary. 
  4. Find A Home In Your Price Range
    Searching for a home in your price range helps you save time and effort. You also don’t get emotionally attached to homes you can’t afford. Search for homes in your range online and send them to your real estate agent. Your real estate agent now knows what you want and can find suitable homes that meet your criteria.
  5. Find a Neighborhood
    Finding a home in your price range is great, however, finding it in a great neighborhood makes it even better. You want to find out about things like crime rate, types of schools, how long your commute would be to work, supermarket, or hospital. Visit the neighborhood at different times, on different days to check the level of traffic, noise, and friendliness of neighbors. Your new home should be comfortable for you and your family. 

Buying your first home is a huge step and you sure want to get this right. A real estate agent can help you make the process easier and see the deal to a favorable closing. 

HOW TO CHOOSE THE BEST REAL ESTATE AGENT

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No matter how many times you have bought a home in the past, buying a new home holds a certain level of thrill. Searching for the perfect home, neighborhood, and finally, closing the deal, are all thrilling experiences. With a good real estate agent who knows all the best stuff, you are sure to make a great buy. But how can you tell which real estate agent is a great fit for you? It is a bit more challenging than one may imagine, picking a real estate agent. This is because there are so many brokerages and agents to choose from.

It cannot be overemphasized that working with an experienced and trustworthy top agent can be the difference between getting a good bargain or making the worst mistake ever. Here are some tips to help you choose the best real estate agent for you.

  • Ask for referrals from other homeowners
    Technology has helped make most of the job of searching for a home easier, but having a real estate agent is still a human-to-human job. Referrals from homeowners mean you will be getting a real estate agent who is tested and trusted. A happy homeowner will be happy to sing the praises of a real estate agent who did a good job. If you have chosen an area where you want to reside, find out the expert agent of the area.
  • Do Your Own Research
    Go to your proposed neighborhood and look at agent names on real estate signs. Repeated names might be a good sign, a bonus point if the house(s) is (are) sold. You can also go for a nearby open house to see how that agent interacts with potential buyers. Interact with the person yourself and take notes about their personality and professionalism. 
  • Compare Real Estate Agents By Their Ratings, Reviews, and References
    The internet has provided us with so much information at our disposal. Best to use it to our advantage. Search for potential real estate agents’ names online and read what people are saying about them. Take note of how they respond to both positive and negative reviews. Also, compare their star ratings. An online review is almost as good as a personal referral. 
  • Get A Real Estate Agent Who Can Mitigate Risks
    You want a real estate agent who is honest about what he/she does. Everyone knows there are risks involved in buying and selling. Find an agent who is not afraid to tell you exactly what they are. Beware of flattery. Seek out a realistic individual. A person who uses real data to answer your questions about investment analysis, area-level market performance, and long-term financial impact of a purchase.
  • Interview Multiple Real Estate Agents
    Treat getting a real estate agent like a job interview because it is and you want the best candidate to fill the role. Interview at least three different agents and watch for their personality and if you can work with them.

Finding the perfect home is a big deal and you want to get it right. These tips will help you make the right decision when it is time to choose an agent. 

TYPES OF LISTING AGREEMENTS AND REAL ESTATE AGREEMENTS

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When selling a home for the first time, it’s best to treat the process very carefully. The first step is properly understanding what your real estate agent agreement contains. Listing documents can be quite complicated, especially because they are legal documents. But, knowing the main elements contained in it can help you quickly recognize if there are missing portions or if there are fraudulent looking bits in it.

Listing Agreement

A listing agreement is also known as a listing agent contract. It is a document that is legally binding between a real estate agent representing a person wanting to sell their home and a seller. There are different aspects of a listing agreement and they can be modified to fit a particular situation.

Types of Listing Agreements

Exclusive Right To Sell

This is the most popular type of listing agreement. In this agreement, the listing agent has exclusive rights to earn a commission if they bring the buyer. This agreement prevents you from working with another agent during the period. Offers go through the listing agent, protecting the real estate agent from losing time and money when they won’t get a commission. Also, agents work hard to get a buyer because that’s the only way they get a commission. 

Exclusive Agency

This is a less common type of listing agreement. Here, you hire a listing agent but if you find a buyer yourself, you get to keep the commission. That way, you avoid paying the commission fee. If you are comfortable investing in your own marketing, then this is a good plan for you. In this agreement, you also have an agent working for you, although they might not provide the full support as in the case of having a full-service agent.

Open Listing Agreement 

Unlike other types of listing agreements, the open listing agreement is not a formal contract. A seller does not engage a listing agent, rather, they allow local buyer’s agents to market the listing. This listing agreement gives 3% buyers agent commission. An interested buyer’s agent may want the agreement in writing before bringing in potential buyers. This listing is flexible and you can take the house off the market when you want without any penalty. You also only pay half the commission fee.

Net Listing Agreement 

This is the least common type of listing agreement. In a net listing agreement, a listing agent would sell your house at a particular set price. The catch here is that if they sell the house for a higher price, they get to keep the excess. Net listing is illegal in many states and in the few places where they are legal, there are clauses to protect the seller. To use this type of listing agreement, be sure to engage an agent you trust. It is illegal because it is financially risky as an agent might try to take advantage of the process by not showing you lower offers.

Before choosing a listing agreement, ensure you know all the pros and cons. Pick the one that will be suitable for your current needs.

5 THINGS TO DO BEFORE PUTTING UP THE SALE SIGN

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There is so much more involved in selling a home than simply hanging up a “For Sale” sign. Most times, we only see the final product, the house ready for sale, without knowing how much work it took in getting it ready. When planning to sell your home, you are hoping to make some decent amount of money from the sale, so you would have to put in the work.

Below are a few things to do before you put up the “For Sale” sign that will make buyers gush over your house and hopefully, you can receive a great offer in no time! 

  1. Fix Your Exterior
    Your exterior is the first thing anyone notices about your home, more so a buyer who may be interested in cutting you a deal. First impression matters. Improving your exterior doesn’t have to break the bank. Little things like repainting your front door, mowing your lawn, and planting a few colorful flowers at strategic places can make all the difference. With an attractive exterior, a potential buyer may just decide to stop by for your open house or schedule a tour. 
  2. Inspection and Repairs
    Creaking stairs, leaky taps, broken doorknobs should all be fixed. You don’t want to have a potential buyer taking a tour of the place and there’s a jammed door somewhere. What you might consider minor might be a deal-breaker for another. You don’t want to take chances. Get your home inspected thoroughly by a professional inspector and fix any issues found.
  3. Declutter and Depersonalize Your Home
    “Less is more” comes into play when trying to sell your home. Take away knick-knacks from counters, tables, windowsills, and the couch. Clear them all away. Cupboards, closets, drawers, and behind doors shouldn’t be left out either. Having a cluttered home with all your personal things such as pictures and other memorabilia hanging around is sure to put off a potential buyer. A clear, clean space will allow people to appreciate the beauty of the space, making them happy to place an offer. Packing out things you don’t need will also make it easier for you to move when you are ready. 
  4. Deep Clean
    As a homeowner, you can afford to skip some spots when you do your weekly cleaning. However, when you put your house up for sale, you are not allowed to cut corners. A clean house can determine how long a house stays on the market. You sure don’t want a potential buyer wondering if they might have to call a pest eradication team before they can move into the home. Clean every room, bathroom, and living area. Behind doors, under the stairs, and cupboards. You can employ the services of a cleaning agency to help save you time and energy.
  5. Consider A Staging
    You want to show off your home in the best light possible. A professional home stager can help evaluate your home and help you rearrange things to your advantage. The goal is to raise the interest of potential buyers and help you sell faster.

Selling your home is a big step, you might as well make a good sale while at it. 

Steps of a Real Estate Closing

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If this is your first real estate deal, the process and protocols involved when closing a deal could be draining. Closing a real estate deal entails signing some paper works that make the house yours. But before you grab that pen to draw your signature, here are steps you must take before that event. It would ensure you don’t make any mistake that you will regret later.

  1. Open An Escrow Account

An escrow account is inarguably the first step to take in every real estate deal. It ensures that none of the parties get cheated as a third party is responsible for holding the money and documents. When all formalities and processes are over, the capital and materials get moved from the escrow account to respective owners.

  • Home Inspection

Before you close a deal on the house, you need to be sure the house is safe and in good condition. Through home inspection, you’re able to discover the problems facing the house. Such information would help negotiate better with the seller. When you forgo a home inspection, you might find out that there are lots of issues with the house that requires a vast amount of money to solve.

  • Hire An Attorney

Even educated individuals often find it hard to understand the jargon in real estate documents. That is why professional legal aid is very paramount before closing. Although it would cost you some penny, it saves you the headache of making a mistake. In most states, an attorney is a requirement to handle any housing closing.

  • Title Search And Insurance

After closing a close, some drama could spring up that might threaten your ownership of the house. It could be a spurned relative left behind in a will, or maybe a tax-collecting agency that not paid its dues. Through a title search, you’re able to know if there are any claims to the house. Information like this would guide you into making the right choice.

  • Pest Inspection

If the home is a wood house, then this is a step you shouldn’t overlook. Pests can ravage a home and reduce it to nothingness, which is often frustrating to homeowners. A home inspection is different from a pest inspection. A pest inspection specialist evaluates the house, to know if there is any pest that could become a pain to the homeowners.

The seller might try to convince you that the home is perfect. Never take their word for it, as they are merely looking out for their selfish interest. The fact is, even a small infestation can wreak havoc in the future, which is why you mustn’t joke with this.

Conclusion

There are lots of things involved during a house closing. The right information would ensure you take the right step. Make sure you have an attorney that help interpret the terms, while a home inspector and pest specialist ensure if the home is safe and worth buying.

Real Estate Myths Debunked

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Myths exist in all facets of life, often propelled by ignorance. In the real estate world, there is a truckload of them. Harboring these myths would negatively impact on your real estate deals, as you will always make the wrong move.

A myth is merely an invented idea, story, or concept. You read it on the internet doesn’t make them right, which is why you need to be conscious of the information you devour. In this article, you will learn some of these myths and why they are not valid.

  1. All Real Estate Agents Are The Same

It is a common myth some buyers believe in, which can lead them to make the wrong choice. All real estate agents are different, with their diverse skill set, experience, and traits. A real estate agent with a two years’ experience isn’t the same as an agent with over 20 years’ experience. There are also real estate agents who specialize in dealing with sellers, while some deal with buyers. Have you now know why this myth is ridiculous?

  • Real Estate Agents Make A Truckload Of Money

This myth has made many people delve into real estate, hoping to make insane money after their first deal. The fact is that it isn’t realistic. Although getting a real estate license is pretty easy, real estate agents don’t make a truckload of money. The top real estate agents do earn a decent income, but a lot of factors come into play. First of all, the commission a real estate agent makes from a house sale is not always 6%, as people commonly believe. The commission is negotiable, and the agents often incur lots of expenses in the process.

  • Open Houses Sell A House

Although it is interesting, believing that your house is open for sale every Sunday. To many, an open house is a great way to sell a home and make money. According to the National Association of Realtors, only 2% of households get sold as a result of open houses. So, there is a high chance that your home will not make it to such a competitive percentage. When a real estate persuades you to utilize open houses, it is often for their interest, since they usually tend to meet new clients through such avenue.

  • Real Estate Agents Can Do Anything To Make A Sale

Many are often of this notion, believing that it is the norm since the agent doesn’t go home paid without selling the house. That is not true, as there is a strict code of ethics that they must follow. However, some professionals would do anything, but it doesn’t apply to every real estate agent.

  • Preparing A House For Sale Isn’t Necessary

This myth is prevalent and often end up affecting the seller negatively. Developing a house would ensure it increases in value. When a seller fails to this do, they end up selling the home for a peanut.

Conclusion

There are tons of myths circulating the real estate world, and it is imperative you know and avoid them. Most often, these myths often come from supposed educated individuals. When you come across them, never hesitate to debunk them.

Qualities That Make an Excellent Real Estate Agent

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A day in the life of a real estate agent is never a straightforward path. Every day comes with its unique diversity, just as the people they represent. When it comes to choosing a great real estate agent, there are some exceptional qualities to anticipate. It would determine if the agent is the right fit or not. Here some conditions to look for when searching for a real estate agent.

  1. Good Agents Value Communication

The real estate market is time-sensitive, which is why you need an agent who understands that. Most real estate agents can be annoying, especially regarding disclosure. If you don’t choose a real estate agent that values regular contact with clients, you will end up losing tons of opportunities. The agent and client need to stay in constant touch.

  • Great Listeners

If your agent talks too much, and find it hard to listen, then that’s a big red flag. Your agent must be able to listen and understand you, to satisfy your needs. As a customer, you will be doing most of the talking. So, your agent must be able to understand your special request and be ready to satisfy them. Most clients prefer conversation to happen via email. Some others prefer a phone call, so they can chat and know the latest happenings. Your real estate agent must be able to understand that, then make provision to listen to all you have to say.

  • Client-Motivated

An excellent real estate agent understands that if a client gets a good deal, he gets a good deal. When choosing a real estate agent, ensure that your agent holds its customers in high esteem. No doubt selling or buying a house is stressful, which is where the right agent comes in. A good agent is after your success because it means a lot to their success too.

  • Customer’s Motivation

The reason for selling or buying is something that every competent real estate agent doesn’t fail to know. According to Ben Hatch, an excellent real estate agent always knows why their client is selling – the motive behind selling the house. The real estate finds out if the house is merely an investment property or something that they will live on for a while and knock it off. Customers motivation is a top priority and often help when it comes to choosing the right deal

  • Credible and Reliable

Great real estate agents will never hesitate to refer you to previous clients for reference purposes. If they are outstanding, their client will leave a positive review of their experiences. But when reverse is the case, then it means they are hiding something, which is a sign you need to run.

Conclusion

A great real estate agent would ensure you have an incredible experience selling or buying a home. They are very transparent and often looks out for your interest before theirs. If you’re looking for a great, look for the qualities mentioned above.

Best Real Estate Apps

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Hunting for a house to buy can be a stressful activity, especially when you’re doing it the old fashion way. Some time ago, buying a home would require checking the local newspapers, looking for the “For Sale” signs as you walk, or perhaps leveraging on your realtor friends. But with some incredible real estate apps, you no longer need to worry. Do you know the best part? Those apps are free to use. So, here are some intriguing real estate apps that would make house hunting easy.

  1. Redfin

When it comes to hunting down a place you can call home, you will never go wrong with this incredible app. Its features are topnotch, making the house-hunting process easy and smooth. With functions like foreclosure notifier, sale-by-owners, and short sales alter, you will never miss anything again. With this incredible app, you can find nearby houses for sales, see pictures, and their location on the app. This real estate app has all the features you need to find that dream house of yours. You can download it on your IOS or android.

  • Homes

With this fascinating apps, you have condos, millions of homes, apartments at your fingertip. All you need to do is filter your search based on your preference. Every listing comes with attractive pictures and details that would help you make a decision. Additionally, it comes with a calculator, which enables you to find out your mortgage or rent. It is available for download on your app store.

  • Zillow

It is probably one of the most popular, with millions of homes listed to make your home hunting easy. With this fantastic app, you can look up any rent or property in the US with just a few clicks. Through the advance search button, you can filter or sort your search via foreclosure stats, the type of property, location, etc. When you finally make a choice, the app would help you track down the nearest local lender so that you can get preapproved for a mortgage. You can download this app on IOS or Android. Just visit your app store to get started.

  • Trulia

Another advanced real estate app is Trulia, which many refer to as super sleek and sophisticated. It comes with time-saving features, which helps you find the ideal house fast. Every listing comes with its photos, videos, and interactive maps. You can easily download this app through your app store.

  • Realtor

The Realtor app has dominated the real estate world and has become the first go area when it comes to house hunting. With this incredible app, you can find nearly houses that you will be interested in buying. You can also filter listings through address, zip code, prices, etc. You can download this real estate app through your app store.

Conclusion

There are lots of real estate apps in the store. They all serve the same function, helping you to hunt down that dream house without having to struggle. Those apps are free to use, which is quite fascinating.

Ways to Finance an Investment Property

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The world has gotten to the point where every income-oriented person is always looking for ways to make extra income, whether passively or actively. Many people love having passive income streams because they give them the chance and time to work on a lot of other things, especially if they have a regular job. One of the best ways to earn passive income is through investment property. And besides providing you with a source of income, you can increase your assets, stabilize your financials through investment property.

However, knowing how to buy an investment property in your name is always the first step. Buying the property is the hardest part, except, of course, you already have the cash lying around in the bank or a rich family member who is going to give you the money. If you are just an average Joe who wants to invest in properties, below are some options that you can use to finance an investment property.

  1. Apply for a bank loan

For investors just starting out in the world of investing, getting a bank loan is the most common go-to option. The only difficulty that many of these investors grapple with is the insistence of banks on up to 30% of the property’s value as a down payment. This could be a bit difficult for an investor who is just getting into the business. Some of the other limiting factors, including poor credit scores and a bad debt-to-income ratio, which make the banks tag them as bad bet and refuse them loans.

But if you can swing it, a bank loan is one of the best ways to finance an investment property. You can get good rates, and once the property begins to yield some income, servicing the loan becomes easy.

  • Tap into your home’s equity

Financially, we do not usually advise using your existing home’s equity, but if you are trying to buy an investment property, it could be a great idea. You have different options, which include using the home equity loan to get the amount you need or extending your mortgage or even cashing out all the equity that you have on your home. Whichever it is you choose, this is a viable option to finance your investment property.

  • Get a hard money loan

Not all investment properties are meant to be kept long-term to yield income. Sometimes you can get a “hard-money” loan in which the property will serve as the security. Lenders that provide loans like this will use the after-repair estimated value of the property to determine their risk. This kind of loan does not use your credit score or debt-to-income ratio to check your loan eligibility.

If you have your sights set on investment property and the whole process is overwhelming for you especially in the area of financing, it is time you talked to experts. Get in touch with Chang Legal LLC Attorneys at Law. Call 847 907 4971 to talk to a lawyer.

Ways to Fight Foreclosure

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A Foreclosure is a situation whereby your mortgage holder, lender, or the bank take over your property because of late in payment. But what do you do when you are behind in paying your mortgage? What do you do when the banks are threatening to foreclose your house?

People will answer these questions based on their experiences, which may differ from person to person. As each person must have had different experiences with different mortgage holders. However, this article is a compilation of a few possible alternatives to foreclosure.

  1. Ask for a Forbearance

This is an agreement you go into with your lender/financial institution to delay foreclosure. With forbearance, your payment is suspended for a few months to allow you to catch up with your previously due payments. With forbearance, you would eventually settle every payment owed, but in the interim, it helps you catch a break and reduces the piling up of debts and, of course, stops foreclosure.

  • Mortgage Modification 

With mortgage modification, you and your lender may need to come up with a modification plan, which in essence, means that you would not need to make any payment, or your required payment is reduced drastically until your financial crisis is over. This is another sure alternative to foreclosure.

  • Set up a repayment plan 

If you are behind your mortgage payment because of a short-term financial issue, for instance, the current lockdown, setting up a repayment plan might be your only option. You and your lender can come up with a new payment plan and structure which will not in any way affect or strain your pockets while the financial issue lasted.

  • Offer a “deed-in-lieu” of foreclosure

This will not keep your home, especially if you owe more than your home is worth; however, it is a viable option in case you have suffered a permanent loss of income. It also does less damage to your credit compared to what a foreclosure would do. This alternative is advisable not because it’ll keep your home, but because it’ll keep your credit at a reasonable level and your property won’t have to go into foreclosure.

  • Short-sale

This is also known as the pre-foreclosure sale. For this to happen, the bank has to agree to allow you to put your house on the market for its current value provided that’s less than you owe. This alternative is only viable for people who bought the property when the market was hot, which has now gone soft.

Conclusion

Whatever you do, complete honesty with your lender and the bank will go a long way in opening up opportunities for any of the above alternatives, because, the goal of these alternatives is to avoid your property from going into foreclosure; therefore, it is very important that you negotiate with your mortgage holder and leave no stones unturned, particularly if you are going the way of short-sale or deed in lieu of foreclosure. Ensure that any agreement you make with the mortgage holder absolves you of being responsible for the remainder of the debt because, if this happens, you would be stuck with that debt.

You can contact Chang Legal LLC Attorneys at Law for a more professional help on how to fight foreclosure or avoid altogether.