Tag: real estate

Credit Mistakes That May Keep You From Buying a Home

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Before you think of buying a new home, it is necessary to determine if your credit score is in excellent shape; when reverse is the case, your dream of owning a new home might dash to pieces.

Having a good credit score will always work in your favor since you wouldn’t have issues getting your mortgage approved. A bad credit score, on the other hand, does more harm than good.

As you try to find your way around the home buying experience, here are some credit mistakes you probably should avoid.

  1. Forgetting Your Credit Reports

When you apply for a mortgage or seek a loan from a lender, what they often go through is your credit report. It will enlighten them on your financial capacity, and also stir their decision.

Since they will be looking at this credit report, you must know what’s there before you sit with your bank or lender.

You can pull out your credit reports from one of the major credit bureaus like Equifax, Experian, and TransUnion.

  • Late Bill

Aside from your credit report, another mistake you shouldn’t make it paying your bills late. It can be a glaring red sign, and lenders don’t like late bills.

Although your credit score is a huge factor, your payment history is also something that is hardly ignored. That is because it shows how financially responsible you are.

When you make a late credit loan or, perhaps, student loan, it shows you can’t keep up with your bills. 

  • Going On A Shopping Spree

A new home entails shopping for some home appliances, furniture, and lots more. But wait, you don’t have to dabble into that just yet.

When you max out your credit card or maybe open some new credit accounts, it could hurt your credit score, which can be saddening.

It would help if you didn’t make any substantial financial moves to avoid making a mistake. 

  • Falsely Disputing Negative Items On Your Credit Report

You are eligible to dispute some inaccuracies in your credit reports, such as charge-offs and late payment. 

However, do this only when you’re convinced that the information is inaccurate. If there were indeed an error, it would take your credit bureaus about 30 days to ratify the issue. 

If there were an error, the negative mark would be erased almost immediately.

  • Accepting Bad Loan Terms Due To Poor Credit

It is one of the biggest mistakes you shouldn’t make since it never plays in your favor. As much as you need your new home, you shouldn’t get it under a bad credit score.

That will only mean lousy loan terms, higher interest rates, and high monthly payments. No matter how tempting it might be, resist the urge to acquire a loan using a bad credit score.

Conclusion

Many people have made these credit mistakes when buying their first homes. But if you can avoid it, it makes everything less hostile and manageable to pay off. A good credit score is vital for lasting peace of mind.

Challenges of Investing in Real Estate and How to Face Them

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Most people invest in real estate for monetary gains, while others need to acquire a home of their own. Since real estate involves an enormous financial commitment, there are some challenges you might need to navigate through.

Here are some of the challenges in real estate and how to face them. With the right tips, you wouldn’t have a problem in this sector.

  1. Pursuing High Returns

There is absolutely nothing wrong with going for a deal that promises higher returns. But don’t be myopic when handling such an arrangement, as you might find yourself overlooking the house’s overall quality.

You don’t need to find yourself in the net of high-risk returns vs. High-risk purchase. You can strike a balance between these two factors. That is, the risk returns compared to the risk purchase.

  • Unrealistic Property

Many real estate tycoons believe there is no perfect property out there. They could be right or wrong, but getting that ideal investment property is rare and very unlikely.

The housing industry is very tight, and finding such rare pieces is often impossible. There is no need to wait too long and to block your fund in the meantime. Let go of every unrealistic expectation and go for the best option.

  • Buying At The Wrong Time

Getting the perfect deal is about timing. Sadly, no person, agency, or software chips out the ideal time to buy a house. In that case, you’ll need help from professionals and veterans to save you from a bad investment. 

By seeking the help of experienced and successful real estate tycoons, you might grasp one or two tips that will help you invest right.

  • Maintenance Of The Property

After the closing day, another challenge that might arise is the maintenance of the property. Although these factors may have been addressed before closing the deal, there is always a chance of the inevitable poking its face up. 

It could be a political or social situation that might cost the owner a considerable sum of money. There could be a natural disaster that might pull off the roof, windows, or doors. When such happen, you should be ready to fix them.

  • Regulatory Bodies Of The City

The last thing you need is to be in the black book of regulatory bodies like the PMC. Landlords or house owners must abide by these bodies’ rules and regulations, which also include taxes. Failure to adhere might attract some fines or penalties.

Facing These Challenges

A common way to manage these challenges is through research, and there are lots of content on the internet. When you’re equipped with the right information, tackling these challenges becomes easy but to crack. Through forums and popular platforms like Quora, you’ll be properly guided on the right cause of action.

Conclusion

Challenges exist in every facet of life. The problem most times is: how to mitigate these challenges for the best result. With the tips in this article, you wouldn’t have a problem making the right real estate decisions.

Common Commercial Real Estate Legal Issues

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Commercial real estate deals need extensive experience to pull off, which is why you might need to learn about some potential legal issues that might spring up.

Aside from the financial aspect, which is sometimes an issue, there are numerous other legal issues that you might encounter during a commercial real estate deal.

These legal issues can put you at risk, costing you hundreds of thousands if not mitigated as soon as possible. In this article, you’ll learn about these common issues. That way, you will know of a way to navigate around them.

  1. Assumption Of Liability

When you purchase a property, you need to ensure you’re not liable to any legal violation or damages caused by the previous tenant. Failing to do this might lead to you being responsible for any damage. Not only will you be accountable for removing the threat, but you will also need to restore the property to a safe level.

When you acquire a property, ensure that it is insured in case of the inevitable or uncertainty.  By having insurance coverage, you cut down on the issues which you might have to face.

  • Liens On The Title

Before concluding any deal, you must ensure that a title search is done. It is done to ensure there are no liens on the property, which might affect your inability to sell the property. 

By working with a reliable and competent lawyer, they will conduct thorough research to ensure no liens on the property. Although the title search is pretty expensive, it will save you from many headaches in the long run.

  • Reps And Warranties

In the real estate world, representations are factual, while promises are indemnity for false statements. Ideally, most real estate buyers will want a full contract of representatives and warranties to verify their income, expenses, and the general condition of the house.

Most buyers of real estate might want a contract with few reps and warranties. Take note that every deal is different; that is why working with a reliable real estate attorney will serve in your best interest.

  • Zoning And Land Use

Most real estate buyers often run into this issue, and that is because proper research wasn’t done. It isn’t always wise to rush into a deal, but rather take your time to evade most zoning and land-use problems. Your attorney will help you decide if the land can be used in ways you intend to use it. Also, he will be in charge of getting the local permit for your business or new project.

  • Defects In Title

Although deeds are meant to show who owns the land, sometimes they aren’t recorded, listed, or perhaps match the proposed land. It might be impossible to avoid most of these commercial real estate legal issues, but taking your time before concluding a deal will save you a lot of stress.

Conclusion

Every situation or contract is different, so you need to trust your agreement the same. By working with a competent real estate lawyer, you will avoid most of these real estate legal issues that might spring up.

How To Protect Yourself From Real Estate Fraud

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Real estate involves a massive sum of money, making it a potential target for wire fraud and numerous other real estate illegalities. Whether as a real estate buyer or seller, you need to get yourself acquaint with these real estate frauds and common ways to protect yourself.

The complexities and rigorous processes involved in real estate deals make virtually all the parties involved vulnerable to these scams. According to real estate experts, referrals are the most trusted sources as it minimizes cases of fraud.

Types Of Real Estate Fraud

  1. Wire fraud

This type of fraud revolves around the closings when both parties are about to finalize the deal. The real estate lawyer could most commonly be the type that uses the same password for all his accounts. When a bad guy manages to access an account, the hacker can use the same password to access email.

Once they are in, they search for emails with phrases like ‘offer is accepted.’ They send a mail to the buyer, instructing them to make a payment to a shady account. Before the buyer could understand what has happened, the hacker is gone.

To avoid this kind of scam, call the real estate agent to confirm the mail before making any transfer. If possible, contact the Title Company or lender to ask if they send the mail. If they didn’t, you would know at the spot.

  • Identity Theft

You’d be surprised the length cybercriminals can go to steal your information. When they have your information, be ready for a long game. How this plays out is often interesting, and it usually when a data breach occurs. Most smart cybercriminals won’t do anything for six months when they gain access to your email.

The wait is often to gather enough data about you, and there are chances of getting your social security number while monitoring. A way around this is to always be at alert and not rely heavily on emails.

Before you start that real estate deal, make it a duty always to change your password as a precautionary measure. You might never know what could be lurking around the corner.

  • Title Fraud

If you deal with a reliable title company, you should be protected from this sort of scam. But on the other hand, title companies are not the same in terms of competence and reliability. In that case, you need to be cautious.

Just like emails, you’re not to rely heavily on them as they could fail. If you want to make sure you don’t ever fall into this type of real estate fraud, then a personal referral for lenders and title companies is best. No doubt, the recommendation is because they are reliable and competent.

Conclusion

If you want to protect yourself from real estate fraud, you should never be in haste. Before you take action, confirm through a phone call. Remember, it is your money on the line, and you want to make sure you don’t lose it.

What to Know About Title Insurance in Real Estate

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If this is your first time dealing with real estate, you might get confused at what a title insurance means. Title insurance is a security that protects both buyers and mortgage from defects or problems in case there is a transfer of property ownership.

Before closing any real estate deal, you must get title insurance as it is a standard procedure. Since this element protects you in case the previous owner didn’t clear ownership of the house. If you don’t want to end up in regret, you shouldn’t neglect title insurance. If you’re working with an attorney, rest assured that you will be appropriately guided.

How To Get Title Insurance

You don’t need to worry yourself, as your escrow or closing agent will kick start getting title insurance. In most cases, your attorney or closing agent will choose your title insurer. The payment can be on the high end, so most buyers often shy away from title insurance.

A onetime fee of $1000 will be requested for title insurance. In most states in the US, the seller traditionally foots the bill. The procedures are standards and most likely to go successful. Most homebuyers often ask if prices are regulated. In many states, they are.

However, there isn’t much of a difference when you compare prices. Look for two factors when seeking title insurance: the quality of insurance and the title search quality.

What Type Of Protection Does Title Insurance Give?

With title insurance, there will be an extensive title search of the property. This practice tends to minimize issues by searching for foreseeable title issues. On the other hand, it protects you from litigation that questions the property owner’s validity or legality.

Is It Essential?

Before you brush title insurance off, you need to know that title insurance has saved insureds massive sum of money. On your own, you won’t be able to detect if the property still has a claim or not. Through title insurance, you protect yourself against unforeseen circumstances that might arise.

As previously stated, title insurance protects you from some ownership claims or even specific errors made while inputting public records. The title check will determine if there are any claims on the property, as such information helps eliminate future issues.

Who Should You Trust?

The best person to look for during title insurance is your lender, not the seller or real estate agent. The lender wants the deal to pull through and will often ensure everything is perfect since the lender is guaranteed a large amount of money.

To be the safe side, you must make sure that you seek professional advice from your real estate attorney. That way, you’re confident of making no mistake.

Conclusion

Title insurance is there to protect you from future property claims. Although it is somewhat expensive, it is for the best. Since real estate comes with complex procedures, mistakes can happen, and your only savior could be title insurance.

What Does A Real Estate Attorney Do?

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If you’re a first time home buyer, you might find yourself wondering what a real estate attorney does. Most real estate buyers or sellers often think that a real estate agent can play the role, but they are two individuals with different responsibilities and functions.

Real estate lawyers or attorneys review real estate transactions, including purchases and leases. In case there is a title insurance issue, they can help resolve such without hassles. If by any chance, something goes wrong, a real estate attorney is ever ready to step in and defend.

  1. Draw Up Documents

A real estate lawyer’s primary role is to draft out documents by preparing deeds for conveyance transactions, rentals, and more. Your real estate agent can help you fill those documents, but it is the job of a real estate attorney to draft and revise these materials.

  • Handle Transactions

When it comes to the rules and regulations guiding the real estate market, a real estate attorney is the best person for the task. A competent real estate attorney knows the ins and outs and can help their clients understand contracts, inspections, leases, and other legal processes involved. If you ever have a question, your real estate lawyer is ever ready to answer and guide you.

  • Negotiate Sweet Deals

Real estate attorneys have closed more deals than you could ever imagine. So, it is always good to leverage their sophisticated experience in the real estate market. You can allow your attorney to handle the negotiation, including the terms and conditions.

  • Engage In Litigation

When a real estate transaction fails to work out, your real estate lawyer must represent you. It often includes drafting legal pleadings to file with the judge. Also, your attorney will be there for your hearing, trials, or any other legal processes. In extreme cases, they could work out a settlement agreement.

  • Protects Clients’ interest

Your attorney can be a preventive measure against hidden legal traps. You can trust your attorney to protect your interest and ensure that the legal documents are authentic. If you’re in doubt, you can always ask your attorney to take a second look at the contracts. In the end, your interest will be protected, and you’ll have no cause of alarm.

  • Assist With Closing

The closing day is the most crucial in real estate transactions. Through your lawyer, rest assured that every purchase will be facilitated. Also, your lawyer can familiarize you with some of the hidden costs and other likely surprises. Since the closing day is the most important event, your lawyer will try to ensure it is successful and have no regret.

Conclusion

If you want peace of mind, hiring a real estate attorney is one of the first things you need to do before any other deals. Your lawyer will ensure your interest is protected, and your chances of making a mistake are also eliminated.

Real Estate Scams You Need To Avoid

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Come to think of it; a house is probably one of the most expensive items most people buy in their life. Since big money is involved, it has become a hunting ground for scammers. There are now lots of creative ways these predators use to lure unsuspecting victims.

By learning how they work or operate, you cut down on the chances of falling victim. As usual, they prey on their victim ignorance and exploit it. If something sounds too good to be true, it probably is. This article aims to expose you to red signs you should be wary of.

  1. Hackers Stealing Your Down Payment

When closing a real estate deal, transactions are often required to seal it off. However, hackers have been known to hijack the process and have you transfer your down payment to an anonymous account. They could do this by sending you an email that contains a harmful malware.

Other times, they could fool you into thinking they are an agent and tricking you into sending him money. To avoid this sort of scam, arrange a home deal where there is zero closing cost. That way, there is nothing to hijack.

  • Fake Rental Listing Scam

This scam is viral, and yet many aspiring homeowners keep falling victim. The issue is because they make it seem so real that people rarely notice. The domain of this scam is online, and it works by reposting legitimate property listings elsewhere to scam their victims.

When you stumble on such websites, they often demand an upfront. The moment you send them money, rest assured you will not see that money again, or the property. To avoid this scam, never wire money to anyone you’re yet to see in person.

Before pushing the button, take another fresh look and verify the details. Go the extra mile and find out if they are even licensed, real estate agents.

  • Title Fraud

This type of real estate scam is very devastating since it takes identity theft while posing as the actual owner with fake documents.  Once they are successful with stealing your identity, they can get a new mortgage against the property, thereby taking the cash for themselves while leaving you with the repayments.

The ideal way to prevent this sort of real estate scam is to ask your insurance to recommend the best policy that offers the best protection against the type of fraud. Also, secure your data, as that is the only way to stop your identity from getting stolen.

  • Unlicensed Realtor Scam

In case you have no idea, this scam affects both you and the realtor. That is why you need to ensure you prevent situations like this by being cautious. This scam works when you find yourself dealing with a fake realtor who deposits the money into their account and not into an escrow.

Conclusion

The only way to mitigate these real estate scams is to be extra cautious and verify everyone and everything you do. In that light, good luck.

Real Estate Investment Books Of 2020

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There is no doubt that the real estate is a goldmine, and not many have exploited its potential. If you’re an aspiring real estate tycoon and you want to get your hands dirty, perhaps you should start with books. 

There are lots of ways to invest in real estates, like investing in real estate multifamily rentals. By investing in investment books, you will have a strong foundation to begin. So, here are books you should give a try.

  1. Rich Dad Poor Dad By Robert Kiyosaki

Robert Kiyosaki did justice by being a guardian to real estate enthusiasts. Through his unique perceptive and comparison between his rich and poor dad, he was able to draw the line between the rich and the poor.

This book is rated as one of the best general reads on investment. There are lots of incredible lessons to learn, and the storytelling is crafted to put you hooked and focused. This book is best for beginners, dummies, or anyone looking to focus on an entirely new field.

  • The Millionaire Real Estate Investor By Gary Keller

Ever considered investing in the real estate industry like a millionaire? You probably have taught about it, but unfortunately, you might not have a million buck lying around. 

That can suck, but “The Millionaire Real Estate Investor” draws wisdom from more than 100 millionaire real estate tycoons. This book is literarily a handbook to wealth.

The common problem aspiring investors face are myths. They don’t know what is real and what isn’t. This book was able to address this issue, this stumbling block stopping many from achieving their millionaire status.

  • ABCs Of Real Estate Investing By Ken Mcelroy

If you’re a beginner with little or no knowledge of the real estate, then get a hold of this book. Just as the title portrays, it covers the basics of real estate investment and how to create wealth.

The book will also guide you on how to find and evaluate properties, negotiation, and some management tips that help. Since the author is already a guru in the field, he can guide you through his book.

  • The Book On Rental Property Investing By Brandon Turner

The author of this fantastic book, Brandon Turner, is a real estate entrepreneur with years of excellent experience. In his book, he explained how one could succeed with rental investment to generate cash flow. This book covers almost everything you need to know as a real estate investor.

  • Long-Distance Real Estate Investing By David Greene

When dabbling into real estate, you will come across myths such as you should look to invest only locally. That way, you can monitor your property. However, this book challenges that myth and uncovers how you can invest without distance posing a barrier.  

If you’re looking to widen your real estate knowledge, then, by all means, try and get this book.

Conclusion

That is all for the best real estate investment book of 2020. With the right knowledge of the real estate market, succeeding becomes inevitable.

Ways to Avoid Illegal Steering

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Steering happens when a real estate agent or broker attempts to guide a buyer from a specific area or neighborhood to another due to race, color, or religion. It is discriminatory and degrades the worth of humans.

For any real estate agent or broker who is ethically conscious, an article like this will guide into avoiding this ill practice. By abiding by such laws, we can live in a society where our differences don’t divide us.

The Fair Housing Act

Illegal steering was very predominant during the 1960s, which lead to the enactment of the Civil Rights Act in 1968. This act made it unlawful to discriminate against anyone based on their religion, race, or national origin. This act further widened to include sex, age, or handicap status.

This law enactment eliminated such occurrences in the real estate market. However, there are still defaults that often span out from ignorance.

How To Avoid Steering

  1. Good Communication

Effective communication is something you should make a priority. Start by listening and understanding the other party. Only then can you establish an understanding. When talking, use simple terms and be concise. If possible, summarize and confirm the information you have. That is to ensure that you’re on the same page with your client.

2. Ask Certain Questions

These tips are all about being specific with your questions. Enquire where they want to live, and narrow it down to the street and road. The responses will help you make a perimeter, thereby leading to a better decision. By having the ideal place in mind, you can avoid steering.

3. Focus On The Property

You need to ensure that every focus is on the property and not on your client’s personality. Work with the features they want, and try to come up with houses with these qualities. Try as much as possible to avoid assumptions and predictions. Your client has to decide where he or she lives.

4. Direct To The Police

If the client wants to look at the crime rate of an area, direct them to the police. Try to avoid making crime statistics, even if you’re sure. Instead, refer them to a reliable source. Stating or assuming that a place is safe is steering.

5. Stick To The Rules

Most often, some clients are persuasive and persistent in their questions. Be adamant and state that you can’t provide such information. Turn them down as calmly as possible, and they will have no choice but to understand.

Conclusion

Steering is a legal issue that could dent your portfolio as a real estate agent or broker. It would help if you played by the rules to avoid problems. Like you already know, legal issues cost money and reputation. In the end, you find yourself in the losing end. That is why you must understand these laws and strive to abide by them.

Guide to Hiring a Real Estate Lawyer

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No doubt, real estate is one of the most significant investments you will ever make. As thus, you might need the assistance of an experienced and reputable lawyer. Since various laws are guiding real estate and property laws, a lawyer becomes a guide toward the inevitable.

If you must hire the right lawyer, you must ensure you follow the tips in this article. They will guide toward identifying the ideal person for your investment.

  1. Ask For Referral

The fact is, there are some families and friends who might have made one or two investments. These are people who you can ask for referrals. They are most likely to recommend a lawyer they have worked with before. If that didn’t work, you could check social media and forums. Who knows, you might find what you’re looking for with just a few clicks.

  1. Check For Experience

Referrals aren’t enough, as you need further assurance. Experience is another crucial factor you shouldn’t fail to include in your checklist.

Get as many referrals as possible, then screen based on experience. The more experience someone has, the better, but that doesn’t mean you shouldn’t look out for potential.

  1. Do Some Research

Before making your final decision, go the extra mile by running the lawyer’s name on Google Search. What kind of online presence does he have? It would be best if you had someone who can represent your investment business in a good light. In other words, they are like ambassadors and able to serve you in legal issues.

In-depth research will further guide you into making a decision you won’t regret. Remember, you need someone who can get you out of trouble.

  1. Contact The Bar Association

Another medium to get connected to potentially great lawyers for your real estate investment is this Bar Association. This body can provide you with a list of lawyers in your area that deals with real estate. You can either call this body or visit their corporate website for more information. No doubt, they will be more than helpful.

  1. Billing

This factor will determine if you’ll get your ideal lawyer or not. If the price is above your budget, look for another lawyer. There is no harm in hiring someone who understands and can work with your budget. There are numerous lawyers out there who are ever ready and able to work with what you have. To many, they believe they can work with a firm from infancy to a giant.

Conclusion

Finding the right lawyer for your real estate investment is an ideal route every investor takes. The benefits of having a lawyer by your side are tremendous, which is why you need the services of one. Although most of them can be somewhat expensive, there are always options that work best with your budget. All it takes is patient and a little research.