Tag: real estate attorney

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.

Getting A Mortgage After Bankruptcy

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Many consider bankruptcy as a nightmare, but it doesn’t have to be with a formidable plan. Nevertheless, it is a horrendous undertaking that one has to take when debt is becoming intense or overwhelming. Taking such drastic action will halt activities such as lawsuits and repossession.

If you’re comfortable with having this mark on your credit score for seven to ten years, not being able to seek or obtain a loan, then go ahead. If you’ve filed for bankruptcy in the past and you’re considering getting a mortgage, this article will no doubt educate you on what you need to know.

Impact Of Bankruptcy On The Ability To Get A Mortgage

Although the impact of bankruptcy can lessen with time, it limits your ability to obtain loans. It is possible to get a mortgage after bankruptcy, but it is a challenging process. Before a lender can give you the attention you deserve, the default has to be discharged.

Most lenders will take a look at your credit score to determine your creditworthiness. So, you must check your credit score report before you apply for a mortgage. In your credit score report, ensure there are no mistakes by correcting incorrect or outdated information.

If there is an error in your credit score report, do contact your credit agency to correct or update your information. When applying, your lender is most likely to ask you a few questions regarding your bankruptcy. Take note that the questions are merely to understand your financial capacity to stick to the agreement.

Mortgage Loans To Consider After Bankruptcy

After filing for bankruptcy, you need to apply for a mortgage with less restriction. There are many mortgages to consider, and they have their unique requirement for bankruptcy filers.

Here are a few mortgages that are less stringent and more comfortable to acquire.

  1. FHA Loans

The federal government manages this type of loan and allows you to buy a house with a down payment as little as 3.5% of the purchase price. The only downside with this mortgage is that you will have to pay for mortgage insurance, thereby leading to a high monthly payment.

  • USDA Loans

If you’ve found a home in a rural area, you should consider applying for this mortgage. The U.S Department of Agriculture is designed to meet a specific income requirement. If you’re viewing this alternative, you might not even need a down payment and it comes with a low-interest rate.

  • VA Loans

If you’re a veteran or perhaps, currently working with the military, you might be qualified for a Department of Veterans Affairs (VA) loan. This type of mortgage doesn’t require any down payment and the interest rate is ridiculously low. However, you will need to pay a funding fee, which is the percentage of your home price.

Conclusion

Applying for a mortgage after bankruptcy can seem pretty challenging. However, applying for the right mortgage will make a difference, as the requirement becomes lesser than a conventional mortgage. If you’re yet to start applying for a mortgage, perhaps you should consider the options in this article

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.

Do You Need A Lawyer At The Mortgage Closing?

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At closing day, expect to come to a crowded room since virtually everyone will be around. That will include your real estate agent, your seller’s agent, and the title company and mortgage lender. But what about a real estate lawyer? Should you have a real estate lawyer at the closing day?

Legal experts advise that you have your attorney present at the occasion. Based on what a real estate attorney can do, it makes it ideal to have one present at the closing day. Many individuals have successfully closed a deal without a lawyer.  If you don’t want to take chances, getting a real estate attorney will be a smart move.

Since a massive sum of money is involved, an attorney’s protection is what you need. Not only do they draft out some important documents, but they also give expert advice that might benefit you in the long run.

The Role Of An Attorney

To fully determine if you need a lawyer at the closing of your deal or not, it is paramount you understand an attorney’s role. An attorney’s work goes beyond the closing day, as you will need their assistance to sign the agreement of purchase and sales.

With such assistance, rest assured that every document you will sign will be in your best interest.  During the closing day, an attorney will ensure that the loan document you sign is prepared and accurate in terms of the agreed fees.

If you ever have any questions that you wish to ask, your lawyer will answer them and even negotiate on your behalf. Due to your lawyer’s immense experience in real estate, mistakes are less likely to happen, and you will guide all through the processes.

Before Closing Date

Right before the closing day, your lawyer could be of assistance to negotiate for repairs before the home can be closed. Aside from that, they also study the title documents to determine if another individual or body has a stake in the home you want to buy.

There have been cases where the seller failed to pay property taxes, leading the government to have a lien against the house. When you have an attorney behind you, such a situation is less likely to happen. Your attorney will search for title documents to make sure there are no hidden surprises.

Depends On Your State

In most states in the US, an attorney must be present at a real estate closing. These states include Connecticut, Delaware, Alabama, Kansas, Mississippi, Maryland, etc. In this case, the lawyer is representing your mortgage lender, not you. If you want legal representation, it will incur some additional fees.

Conclusion

Whether your state made it mandatory or not, having a real estate lawyer present at closing day will save you tons of headaches. There are things you’re likely to miss, which an experienced lawyer won’t. Although the cost isn’t always friendly, you will eliminate mistakes that could even cost you more.

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.

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.

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.