Tag: real estate law

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.

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.

How Much Does A Real Estate Lawyer Cost?

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As you may already know, real estate is a complex sector that comes with numerous processes. Thus, it is worth hiring a real estate lawyer to ensure you’re adequately represented. A real estate attorney will also help draft out the necessary documents; even negotiate on your behalf.

Lawyers are incredible individuals, but what is the average cost of a real estate lawyer? Will you be able to foot the bills?

The average cost for real estate lawyers ranges from $300 to $3,500, just for a simple buy and sell transaction. In most states, the prices will differ. So, it would help if you found out the current average cost in your state.

There are lots of factors that influence the cost of hiring a real estate lawyer. The more complex the transaction, the more they are likely to charge you. Since the role of a real estate lawyer is crucial, you can’t do without them.

Aside from the cost, they save you from making mistakes that could have incurred more expenses. Since this might be your most significant investment, you need to get it right. Remember, a massive sum of money is involved in this deal, and you don’t want to leave anything to chance or luck.

How Attorneys Are Paid

If you’re planning to hire a real estate lawyer, it is ideal to inquire about the average cost. It also depends on some factors, especially how the attorney wants to get it. The fee could be hourly, which typically range from $250 to $350.

In most cases, the lawyer will request a flat fee to prepare some vital real estate documents. The attorney might also offer some packages that allow him to handle the case from start to finish. Following this model, he will calculate how many hours he spends and the task completed.

Most lawyers offer a free consultation that allows you to know more about their packages and how much they charge. Aside from the standard hourly fees, some tasks accomplished by the lawyer may incur additional expenses.

Some of these tasks may include title search, preparation of the deeds, and numerous other documents. Before you hire any real estate lawyer, you must negotiate and be clear on the rates. That way, there won’t be any confusion of any sort during the transaction.

Payment In Advance

It all depends on the lawyer and how he operates. Most real estate lawyers will require a 50% advance payment while others get paid on the closing day.

If the transaction is complex, expect the fee to be higher. A real estate lawyer’s work is immense, which is why you need to get everything right when hiring a real estate lawyer. That way, you don’t make any mistakes.

Conclusion

A real estate lawyer’s cost varies depending on your state, the transaction’s nature, and tasks to do. But on the other hand, you don’t look at the rate, but rather at the property. You don’t want any issues that might arise in the future, so hiring a real estate attorney should be a top priority.

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.

5 Common Real Estate Closing Problems

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You dread the thought of it, hoping you will never have to face these inevitable. But nearing that closing deal, you find yourself battling with anxiety. When something out of the ordinary strike, you’re immediately thrown off the edge.

The closing day can be relieving and anxiety-inducing at the same time. Finally, the stress will be over. But then again, what if something happens? In this article, you’re going to learn some common real estate closing problems and manage them.

  1. What Stays And What Goes?

It might not seem like a big deal, until when the new occupant shoves your favorite figurine into a box. This issue is common during real estate closing and can lead to no deal if the situation is not correctly handled.

If the item is not much of a big deal, you can let that slide. But if it isn’t, there are ways to solve the misunderstanding. To ensure something like this never happens, delineate in a contract what remains in the house. Be specific, so there won’t be any misunderstanding.

  • Credit Challenges

Everything might be working pretty smoothly at first, only for red signs to start emerging from your credit scores. There have been cases; even approved mortgages can be withdrawn due to credit score problems.

Perhaps it might have been triggered by a job change, falling behind in paying bills, and even sudden cash infusions. To mitigate this issue, contact your lender day before the closing. You’re doing this to ensure there are no problems. Also, if there were, you would be able to discuss solutions.

  • Title Insurance Issues

Most often, buyers and sellers are often ignorant of what title insurance is and why they are expensive. It could become a problem during the closing day and lead to the deal not going through since title insurance protects both parties and the transaction. Since costs are not often disclosed to buyers and sellers, it could become a problem on the closing day.

  • Uncomfortable Closing Rooms

Although it might sound unlikely, numerous closing deals have failed to pull through due to a cramped room.  If you’ve ever been in a stuffed place, you definitely wouldn’t want that to be the closing day.

There are lots of comfortable conference rooms you can hire. They will have comfortable seating and plenty of places to move around. With this, you eliminate the chances of this ever being a problem.

  • Ugly Walk-Through

The inevitable can happen a day before closing, thereby pulling a surprise stunt as you walk into your property on the closing day. Perhaps there was a massive storm, or maybe a break-in. Whatever be the case, it amounts to one of the top problems of real estate closing.

No matter the magnitude of the issue, you can fix it. Don’t be shy to ask for a look-see after maybe a storm. If all fails, your recovery plan should be asking the seller to cover the cost of repairs.

Conclusion

Being ready for the inevitable has its advantages, as it eliminates surprises on the closing day. If you’re about to close a deal on the house, ensure, you’re one step ahead. Call Chang Legal Today!

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. 

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.

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 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.