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What Is The Difference Between A REALTOR® And A Real Estate Agent?

January 11, 2018 by admin

Whether you are selling or buying a home, hiring a competent real estate professional to assist you is a top priority. As you search for representation, you may come across agents with various titles. What is the difference between a real estate agent, REALTOR® or broker, and which one is right for you?

The terms REALTOR® and real estate agent are frequently used interchangeably, but that is incorrect. Not every real estate agent is a REALTOR®.

Real Estate Agent, Associate or Salesperson. If an individual holds a real estate license in the state in which you are buying or selling, he or she has earned the designation of real estate agent – and may also use the term real estate associate or salesperson. While requirements may vary from state to state, there is a minimum number of class requirements and a state test to be passed in order to earn a real estate license.

REALTOR®. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to the 17 Articles in the REALTOR® Code of Ethics.

To earn the REALTOR® designation has taken the requisite coursework and demonstrated specific skills, performance and knowledge in a particular area of the real estate industry.

Real Estate Broker. A broker has taken courses beyond the agent level that are required by state laws and has passed an additional broker’s license exam. Some brokers work independently, while others hire real estate agents to work for them. In a practical sense the Broker is usually referred to the as the manager as well. Every real estate offices is required to have a Real Estate Broker associated with the office. A broker bears responsibility for the actions of the real estate agents under his or her supervision.

Real Estate Associate Broker. An associate broker has taken additional courses and earned a broker’s license, but works under the management of another broker.

While individuals with any one of the previous designations will be qualified to help you buy or sell a property, performing your due diligence on their background is the most crucial aspect of hiring the right real estate representative. Conduct interviews, research sales track records and seek out references before hiring a real estate representative.

Wallingford PA Real Estate – Wallingford, PA 19086

What Makes A Bedroom A Bedroom?

March 10, 2017 by admin

Bedrooms are one of the most important selling features of a home, and there are a number of factors that determine whether a room qualifies as a bedroom. Sellers and agents are known to be creative in calling rooms bedrooms, and will push the envelope and tag rooms that do not meet the criteria as a bedroom. So what makes a bedroom a bedroom?

Required Features Of A Bedroom:

Ways to tell if a room qualifies as a bedroom – criteria can vary by state and local laws

– Egress: A bedroom needs at least two methods of egress. Traditionally this means a door and a window. According to the International Residential Code (IRC), a bedroom window must be between 24 and 44 inches from the floor, it needs at least 5.7 square feet for the opening, and it must measure no less than 24 inches high and 20 inches wide

– Ceiling Height: A bedroom ceiling needs to be at least 7 feet in height. It’s okay if some portions of the ceiling are below this level, but at least 50% of the ceiling needs to be a minimum of 7 feet in height.

– Minimum Square Footage: The room should be at least 70 square feet.

– Minimum Horizontal Footage: A bedroom must also measure at least 7 feet in any horizontal direction. That is why you can’t call a hallway a bedroom!

– Heating and Cooling: A permanent heat source is required – a space heater won’t qualify – as well as a way to cool it down, whether that’s by opening a window or air conditioning.

– Electricity: a bedroom needs to have a source of electricity.

Does a bedroom need a closet?

Technically a bedroom does not have to have a closet to be considered official. The IRC does not mandate a bedroom to have a closet. So the lack of a closet does not necessarily mean a room cannot be a bedroom. However most housing guidelines, lenders, and buyers expect a bedroom to have a closet. If it does not it should be labeled as something else like a “bonus room” or office.

Wallingford PA Real Estate – Wallingford, PA 19086

Real Estate ABC’s – Earnest Money Deposit

March 5, 2017 by admin

In real estate earnest money refers to the deposit money that accompanies an agreement of sale that exhibits a buyer’s “good faith” and shows the seller that they are serious about purchasing a property. It can also be referred to as earnest money.

The amount of earnest money that a buyer puts down varies widely with factors such as competition for the property, overall market strength, and local practices, playing a big role. Legally in Pennsylvania a buyer does not need to pony up any earnest money, but it would be very difficult to get an agreement signed without it.

While buyers will generally want to part with as little as possible to limit their potential loss, a seller needs to ensure the earnest deposit reflects the buyer’s commitment to close on the property. Earnest money serves as monetary damages if the buyer breaches or defaults on the contract. The agreed upon earnest deposit total is a result of the negotiation between buyer and seller.The earnest money is typically deposited and held in an escrow account by the listing broker.

Earnest money is often confused with down payment money but they are not the same. The earnest money is credited to the buyer at settlement and serves first as funds that are applied to closing costs. Of course with a large earnest money that exceeds the amount required for closing costs such funds do make up a portion of the down.

Contract contingencies offer the buyer the legal means to terminate a sale and have the earnest money returned to them, buyer’s remorse is not among them. The most common contract contingencies include:

Mortgage Contingency: If a buyer is unable to obtain mortgage financing

Home Inspection: A buyer can terminate the deal if there are inspection issues that can not be resolved between them and the seller

Title Search: If a clear title can not be obtained

Appraisal: If the appraisal does not come back at contract value and the buyer and seller can not successfully negotiate a resolution

With every contract there are specific actions and time frames the buyer must adhere to. Be sure to ask your agent for a clear outline of your milestone dates. Do not put yourself in jeopardy as a buyer by blatantly ingoing contract timeframes. Such actions can put you in breach of contract and your earnest deposit can legally be retained by the seller.

Wallingford PA Real Estate – Wallingford, PA 19086

Real Estate ABC’ s – The Appraisal Process

January 6, 2016 by admin

By definition, appraising a home is the act of assigning monetary value to a property to determine its “fair market value”. It is a subjective judgment of value albeit by a licensed professional. An appraisal generally takes place within 3 weeks of the execution of the agreement of sale. The mortgage lender place an appraisal order with an appraisal servicing company and an appraiser is assigned the job from a pool of real estate appraisers.

For a home buyer, an appraisal establishes a value for the home for both you and the lender, The lender is keenly interested in the current market value of the property in the event that the buyer defaults on their mortgage and they in turn become the property owner. You as a buyer want the home to appraise for the agreed upon sale price in order to finalize the transaction. An appraisal determine whether the price negotiated by buyer and seller accurately reflects the value of similar homes.

Appraisals are performed by licensed home appraisers and the method most commonly used to determine a home’s value is known as the Sales Comparison approach.

Via the Sales Comparison appraisal approach, a home appraiser will compare your home to similar homes in the immediate vicinity with similar physical attributes. In the majority of appraisals homes being used for comparative purposes must be located within the same school district – exceptions can be made in such cases as a unique historical property where there are no comparable homes in the area – be of similar size and possessing similar features, and having been recorded as sold within the past 6 months.

Examples of such common traits that are used for comparison purposes are number of bedrooms, number of bathrooms, age of home, quality of home finishes, and square footage. Location matters as well. For instance if two homes are exactly alike but one is located on a main road with a double yellow line that home will be appraised at a lower value due to it’s less than favorable location compared to the home within a neighborhood on a less traveled street.

Appraisers use recent sales data of similar homes, and will assign a value to the property based on available data, and with adjustments made for variances between homes. A home with a finished basement, for example, may be adjusted to a higher value; as might a home with recent renovations.

As a buyer what can you do if the appraisal comes in low?

– Dispute the appraisal

The dispute process known as a “rebuttal of value” starts with the examination of the appraisal report. Check for key items such as usage of comparables older than 6 months, missing features of the subject property, incorrect square footage of the subject home or comparable homes, location of comparable homes – are they within the same school district?

If relevant differences and/or new data can be uncovered the mortgage loan officer will submit an appeal to the appraiser with the new data and a negotiation process begins.

An appraisal rebuttal is difficult to win, estimates are that only 3% to 5% of appraisals go into rebuttal, and of those only 10% get adjustments.

– Order a second appraisal

It will cost you – you are not only paying for the first appraisal but you’ll pony up for any additional appraisals as well. They can range between $450 and $800 depending on the property. You also could end up with a value in line with the first appraisal.

– Negotiate with the seller

Perhaps buyer and seller can and are able to both budge a little on the price.

You might go back to the sellers and ask them to reduce the price or split the difference. As a buyer you can contribute additional money in order to cover the gap between the appraised value and the amount the lender will loan to you. Contractually the seller is under no obligation to do so, but they may prefer to do this rather than take a chance of losing you as a buyer, and starting over again. They may reason that is likely that another buyer will have the same issue, so the seller might be better off renegotiating with you unless they have other offers.

Sellers might be more willing to cooperate, especially if a Federal Housing Administration (FHA) mortgage is involved. A FHA appraisal and it’s value are “locked in” to the subject property for six months.

– Walk away from the deal

There is always the option of terminating the contract if a resolution can not be reached. This is a difficult decision, as a buyer you have already shelled out maybe $600 – $700 for home, termite, and radon inspections and perhaps $500 for the appraisal, but you may have no other course of action.

Wallingford PA Real Estate – Wallingford, PA 19086

203(K) Loans – When Your Dream House Needs Some TLC

April 8, 2015 by admin

The Federal Housing Administration (FHA), which is part of the Department of Housing and Urban Development (HUD), administers various single family mortgage insurance programs. The Section 203(K) program is the Department’s primary program for the rehabilitation and repair of single family properties. As such, it is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities.

Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a mortgage is issued.

When a home buyer wants to purchase a house in need of repair or modernization, the home buyer usually has to obtain financing first to purchase the dwelling, additional financing to do the rehabilitation work, and a permanent mortgage when the work is completed to pay off the interim loans. Often the interim financing involves relatively high interest rates and short amortization periods. The Section 203(K) program was designed to address this situation. The borrower can get just one mortgage loan to finance both the acquisition and the rehabilitation of the property.

Cost estimates for the proposed work must include labor and materials sufficient to complete the work by a contractor. Home buyers doing their own work cannot eliminate the cost estimate for labor, because if they cannot complete the work there must be sufficient money in the escrow account to get a subcontractor to do the work. HUD also stipulates that certain basic energy coservation and saftey improvements are included in the rehab process.

At settlement, the proceeds designated for the rehabilitation or improvement are to be placed in an interest bearing escrow account. Each phase of the improvements is funded via a “draw” from this account. An inspection of the work is performed by a HUD inspector who must sign off on the scope and quality of the work before the next phase can begin.

203(K) loans do involve quite a lot of paperwork, and you need to work with both a lender and contractor who have experience with the program.

Wallingford PA Real Estate – Wallingford, PA 19086

S. Clark Kendus