Billings Real Estate Blog

In today’s market, sellers have to work harder to persuade buyers that their property is worth the bite.
By Barbara Ballinger
Landscape designer Michael Glassman has cooked up a recipe for guaranteed curb appeal.

1. Add splashes of color. With every changing season, a landscape should provide a new display of colors, textures, and fragrances. “It’s best to use one or two and repeat them,” Glassman says. Example: white iceberg roses that bloom in spring, summer, and fall as a backdrop; in front, a contrasting punch of purple salvia or lavender that will flower at the same time; and as an accent, a crape myrtle tree that provides changing leaf colors in fall and interesting branches come winter.

2. Size trees and shrubs to scale. These should be planted in the right scale for the house so that they don’t block windows, doors, and other architectural features on the home’s facade. A large two-story house can handle a redwood, Chinese pistache, sycamore, or scarlet oak, but a one-story cottage is better paired with a flowering cherry, crabapple, or eastern redbud. Too many trees cast too much shadow and cause potential buyers to worry about maintenance and costs.

3. Maintain a perfect lawn. A velvety green lawn demonstrates tender loving care, so be sure sellers’ homes don’t have brown spots. Some rocks, pebbles, boulders, drought-tolerant plants, and ornamental grasses will generate more kudos, especially in drought areas.

4. Light up the outside. Good illumination allows buyers to see a home at night and adds drama. Sellers should use low-voltage lamps to highlight branches of specimen trees, a front door, walk, and corners of the house. But less is better. The yard shouldn’t resemble an airport runway.

5. Let them hear the water. The sound of water appeals to buyers, and you shouldn’t just reserve this for your backyard. A small fountain accented with rocks provides a pleasant gurgling sound, blocks street noise, and is affordable.

6. Use decorative architectural elements. A new mailbox, planted window boxes, and a low fence wrapped in potato vines add cachet, particularly during winter months when fewer plants blossom. Colors should complement the landscape and home. Just don’t overdo it: Too much can seem like kitschy lawn ornaments.

Create your own video slideshow at animoto.com.

Water damage can be very expensive and is often avoidable. Perform the following inspections to detect water leakage and minimize damage:

Critical: Before testing water valves or working on plumbing issues, you must know where the main shut off valve to the home is and whether it works. A plumber’s key (T-wrench) should be on hand in case water needs to be turned off at the meter (know where your water meter is).

* Check the triangle dial on your water meter regularly for movement. If the triangle is turning, water is flowing!
* Test angle stops (valves below sinks and toilets) for leakage and to be sure that they work. If these valves are old and have not been used, do not use excess pressure to operate; have them changed.
* Test sinks and tubs monthly for leakage. Observe drain plumbing while a full sink is draining. Observe feed pipes when the water is running full force.
* Check the water feed plumbing to the refrigerator
* Observe the feed and drain plumbing behind the washing machine as well as the wall below the drain box
* Check the water heater for both leakage and rust. Rust is a sign of slow leakage. Be sure to open access panels and look for leakage or rust. Replace rusted or leaky water heaters.
* Check the AC condensate drain area for signs of leakage. Most of these systems are “out of sight, out of mind” as they are located in the attic, in closets, etc.
* Review walls and ceiling for moisture stains (usually roof related)
* Review areas around doors and windows for staining
* Review walls and baseboards proximate to bathrooms (don’t skip the closet that backs up to the bathroom)

To be very pro-active, have a plumber change the angle stops, washer hoses, and  shut off valves to more modern, robust types.

The tax credit extension new dates are as follows: November 7 – April 30, 2010. Rules as enacted November 2009.
Tax Credit Rules:
1. First time buyer amount of credit will remain the same $8,000 ($4,000 married filing separate)
2. First-time buyer definition for eligibility: May not have had an interest in a principal residence for 3 years prior to purchase.
3. Current Homeowner amount of Credit: $6500 ($3250 married filing separate).
4. Effective Date Current Owner: November 7, 2009.
5. Current Homeowner Definition for Eligibility: Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years.
6. Termination of Credit: Purchases after April 30, 2010.
7. Binding Contract Rules: So long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
8. Income Limits: $125,000-single, $225,000-married, additional $20,000 phase out .
9. Limitation on Cost of Purchased Home: $800,000 November 7, 2009.
10. Purchase by a Dependent: Ineligible.
11. Anit-fraud Rule: Purchaser must attach documentation of purchase to tax return.

Housing Tax Credit Working, So Keep Momentum Going, NAR Urges Congress Washington, October 20, 2009 Consumers are just starting to see the first glimmers of a bright future for the housing market and the overall economy. It’s up to Congress to make that glimmer a reality by building on the momentum created by the $8,000 home buyer tax credit. One of the key ways to do that is for Congress to extend the home buyer tax credit, said National Association of Realtors® First Vice President Ron Phipps today to the Senate Banking, Housing and Urban Affairs Committee during a hearing on “The State of the Nation’s Housing Market.” “The data on the present home buyer tax credit show that the credit has had its intended impact—sales have jumped in recent months to a projected 5.1 million for the year and housing inventory has been trimmed, thus stabilizing home prices noticeably,” Phipps said. He also pointed out that each home sale generates approximately $63,000 in additional economic activity, providing a tremendous economic boost to the national economy. “But it is a fragile recovery, and now is the time to build on home sales momentum by extending the tax credit throughout 2010 and expanding it to all home buyers,” he said. The present credit, due to expire on November 30, cannot help new purchasers now who write a contract today—they won’t be able to close before the deadline, and will lose out on the credit, said Phipps. “Without congressional action now, the market and our national economy may freeze again—possibly as soon as this month.” Phipps called upon Congress to take action on a number of additional fronts to strengthen the recovery. First, make the FHA and Fannie Mae/Freddie Mac loan limits permanent; these are set to expire on December 31. “Maintaining current loan limits would ensure that families have access to low-cost financing to purchase homes and can refinance problematic loans into safer, more affordable mortgages,” Phipps said. In addition, Congress should continue federal government involvement in the secondary mortgage market. “Without the government’s involvement in the secondary mortgage market, market participants will have no incentive to reach out to lower income, creditworthy consumers. We must ensure that the housing market works in all markets and at all times, and that mortgage capital is provided to all potential and qualified purchasers in a way that promotes sustainable homeownership,” said Phipps. Congress must also adequately address: • The lack of liquidity in the jumbo mortgage market; • Tight credit in the commercial real estate market; • The Home Valuation Code of Conduct’s unintended side effects that are hindering sales; • Increased funding to help FHA upgrade their technology and for Congress to ensure that funding be included in the final version of the FY2010 appropriation for HUD; • Administration incentives and uniform procedures for speeding short sales under a new Foreclosure Alternative Program; and • The potential for significant spikes in interest rates or disruptions to the flow of mortgage capital as the Federal Reserve unwinds the mortgage-backed securities purchase program to ensure that this does not happen. The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

This post from Mark Dunning Real Estate Loan Officer for US Bank.

Forget November 30, 2009 — Make November 16, 2009 Your Personal First-Time Home Buyer Tax Credit Deadline

The $8,000 First-Time Home Buyer Tax Credit expires November 30, 2009.  In order to claim the tax credit, the IRS requires that you’ve closed on or before that date.  December 1, 2009 is too late.

But that doesn’t mean that first-time home buyers should target November 30, 2009 as a closing date. In fact, there may not be a worse day in 2009 on which to try to close on a home.  The optimal time is during the week of November 16, 2009 and the earlier in the week, the better.

To understand why, let’s start with the fact the home sales volume is through the roof, and then we’ll look at a calendar.

New Home Sales data and Existing Home Sales data has been unexpectedly strong and first-time buyers account for nearly 1/3 of all transactions.  Furthermore, the Pending Home Sales reports tell us sales volume is still growing.

It’s reasonable to infer, therefore, with home prices still low and with mortgage rates still down, buyer interest will stay strong all the way through the November 30, 2009 deadline — especially as trade groups trumpet “The End Of The Incentive”. There will be a mini-panic as everyone tries to close in time to claim their $8,000.

This is when it starts to get messy.  Check out the calendar.

·        November 30, 2009 is the Monday after Thanksgiving Weekend.

·        November 28-29, 2009 is a weekend.  No closings on weekends.

·        November 27, 2009 is the Friday after Thanksgiving — an unofficial holiday.

·        November 26, 2009 is Thanksgiving — an actual holiday. No closings.

·        November 25, 2009 is the day before Thanksgiving — a national “half-day”.

So, that backs up the November 30, 2009 first-time home buyer tax credit deadline by 6 days to November 24, 2009 — a Tuesday.

And I won’t tell you that closing on Tuesday, November 24, 2009 is a bad idea, but I’ve been in this business long enough to know that there’s always a chance for something to go wrong. And when it does, you’re going to want some sort of a cushion between the “the problem” and “the deadline”.

Maybe it will be a problem on your final walk-through, or with your mortgage loan documents.  But as the buyer of a home — the largest purchase you’ve made in your life to-date — the last thing you’re going to want is to feel pressured into signing your paperwork because of worries over an $8,000 tax credit.

Therefore, don’t mess.  Schedule your closing for the week of November 16, 2009, instead.  That way you’ll have plenty of time to work through whatever needs to be worked out in connection with your home and your home loan. With a closing set for the 16th, you’ll meet your tax credit deadline with plenty of time to spare.

That said, the clock is winding down.

If you haven’t started your home search yet or aren’t under contract, it’s seriously time to get cracking.  Purchase closings now should come 45-day default with the new regulations, and 60 days is the standard if you’re buying a short sale.

Counting backwards from November 16, therefore, renders September 22, 2009 the last day to go under contract and be sure of collecting that $8,000 tax credit.  

It’s a scant 24 days from now.

If you’re a first-time home buyer and just starting your research, I encourage you to call or email directly with your First-Time Home Buyer Tax Credit questions about how the program works.  The IRS has a straight-forward form you can read but it may not be “personal” enough to address your particular needs.  

Eco-friendly. Carbon footprint. Global warming. Energy-efficient. These catch phrases have become part of our lexicon as we’ve become more aware of our impact on the environment and our role in protecting it. As a homeowner, there are some simple, inexpensive steps you can take to make your home energy-efficient. Get started on the road to being “green” with these five tips:

 

Change Your Light Bulbs

By replacing just five incandescent light bulbs with compact fluorescent (CFL) bulbs, you can save $100 per year on electric bills while using up to 75 percent less energy and removing greenhouse gases from the environment.

 

Buy ENERGY STAR® Appliances

ENERGY STAR-qualified appliances, such as refrigerators, washers and air conditioners, meet a higher level of energy efficiency set by the Environmental Protection Agency and U.S. Department of Energy than standard models. According to ENERGY STAR, if just one in 10 homes used ENERGY STAR-qualified appliances, the impact could be compared to planting 1.7 million new acres of trees. And, switching to these appliances is not only good for the environment, but easy on your pocketbook. Although these appliances may costs more, you can reduce your energy bill by $80 per year.

 

Seal Up

Cracks and air leaks represent cash seeping from your doors and windows. Get rid of air leaks in doors, windows and other areas by caulking gaps and cracks. This will help decrease your heating and air conditioning bill. But make sure you use silicone sealants. Acrylic caulk tends to shrink, while silicone sealants are waterproof and won’t shrink or crack, creating less waste.

 

Use Less Water

Did you know that roughly 60 percent of a home’s water consumption takes place in the bathroom, according to the California Urban Water Conservation Council? The largest culprit is the toilet, which accounts for 27 percent of your household supply every year. By installing low-flow toilets, showerheads and faucets, you can save thousands of gallons of water each year. In addition, replace leaky fixtures. That slow-dripping faucet can waste as much as 2,400 gallons of water per year.

 

Adjust the Thermostat

When adjusting your home’s thermostat, the rule of thumb should be: turn up the dial in the summer and down in the winter. Lowering the temperature by just one degree will reduce your electrical costs. And if you use a programmable thermostat, you can program your air-conditioning and heating systems to reduce output while no one is at home or at night while you sleep. Ceiling fans are also helpful in circulating the air to keep the room cool in the summer and warm in the winter.

 

Going green doesn’t have to be overwhelming or costly. By making just a few small changes within your home, you can help decrease energy consumption and help make the world a “greener” place.

 There is no question that in many parts of the country, houses are currently on the market longer. As a seller, this slow-down means there is more competition for a limited pool of potential buyers. Consider the following five tips to place your home on the fast track to sale:

 

Price It Right

The first 30 days are the most critical. If your home is priced too high, interested buyers may never even tour your listing. The longer the property is on the market, the fewer the prospects.

 

Deciding the value of a home isn’t an exact science. Yet, there is data to help you determine a fair asking price that is right on target. You may want to hire a real estate appraiser for an objective, unbiased estimate. Then consult with a real estate professional who can help you determine true market value based on a comparable market analysis, which will include recent home sale transactions as well as homes currently on the market. From your analysis, you may want to price your home conservatively to give it a competitive edge.

 

Make Your Home Irresistible

Unless they are looking for a fixer-upper, most homesellers are more likely to make a bid on a home that they can enjoy immediately. Therefore, you need to create an environment the buyer can’t resist. In other words, do everything you can to make the home so attractive, charming, cozy, inviting, comfortable and exciting that a buyer will want to buy that lifestyle for himself.

 

Evaluate the home from a buyer’s point of view. An experienced real estate professional will be able to offer an objective view and will also know what buyers are asking for. Get your home in tip-top shape by making repairs and cosmetic improvements, and removing clutter. This may mean investing in a few upgrades to modernize your home’s look such as installing newer carpet and light fixtures and painting the walls a neutral shade.

 

Create Traffic

If you want buyers to see your home, you must first find the buyers. Work with your real estate professional to design a marketing plan that is flexible and capitalizes on your property’s most desirable features. Your strategy should include ways to reach buyers online and offline – such as word of mouth, the Internet, yard signs, direct mail, open houses and so on.

 

Go with a Professional

Selling a home is more than just putting a sign in your yard and having a listing on the Internet. And in a competitive market, you don’t really want to take the chance of making novice mistakes that can slow the selling of your home. By hiring Laura and Ryan, you will get the benefit of experienced marketer’s  and negotiator’s who are familiar with real estate issues in our community. We can offer worthy advice on pricing and staging your home based on our vast experience.

 

Plus, there’s the added value of the peer-to-peer networking among real estate professionals, which can bring buyers and sellers together – sometimes even before the property goes on the market.

 

Offer Incentives

Offering incentives can be just the impetus a potential buyer needs to select your property over others. You may want to consider offering a carpet or paint allowance. Or, pay for a professional home inspection or a home warranty – and, depending on your market and budget, offer to pay some of the closing costs.

 

Don’t be discouraged if there are competing homes for sale in your neighborhood. With just a few smart moves, you can turn a buyers’ market in your favor.

Prepared by the U.S. Department of Housing and Urban Development
Washington, D.C. 20410

March 1987
HUD-383-H(8)
(Previous Edition Current)

 

Preface

The potential home buyer will find this Vocabulary helpful for understanding words and terms used in real estate transactions. There are, however, some factors that may affect these definitions:

• Terms are defined as they are commonly understood in the mortgage and real estate industry. The same terms may have different meanings in another context.
• The definitions are intentionally general, non-technical and short. They do not encompass all possible meanings or nuances that a term may acquire in legal use.
• State laws, as well as custom and use in various States or regions of the country, may modify or completely change the meanings of certain terms defined.

Before signing any documents or depositing any money preparatory to entering into a real estate contract, the purchaser should consult with an attorney of his choice to ensure that his rights are properly protected.

A

Abstract (Of Title)

A summary of the public records relating to the title to a particular piece of land. An attorney or title insurance company reviews an abstract of title to determine whether there are any title defects which must be cleared before a buyer can purchase clear, marketable, and insurable title.

Acceleration Clause

Condition in a mortgage that may require the balance of the loan to become due immediately, if regular mortgage payments are not made or for breach of other conditions of the mortgage.

Agreement of Sale

Known by various names, such as contract of purchase, purchase agreement, or sales agreement according to location or jurisdiction. A contract in which a seller agrees to sell and a buyer agrees to buy, under certain specific terms and conditions spelled out in writing and signed by both parties.

Amortization

A payment plan which enables the borrower to reduce his debt gradually through monthly payments of principal.

Appraisal

An expert judgment or estimate of the quality or value of real estate as of a given date.

Assumption of Mortgage

An obligation undertaken by the purchaser of property to be personally liable for payment of an existing mortgage. In an assumption, the purchaser is substituted for the original mortgagor in the mortgage instrument and the original mortgagor is to be released from further liability in the assumption, the mortgagee’s consent is usually required.

The original mortgagor should always obtain a written release from further liability if he desires to be fully released under the assumption. Failure to obtain such a release renders the original mortgagor liable if the person assuming the mortgage fails to make the monthly payments.

An “Assumption of Mortgage” is often confused with “purchasing subject to a mortgage.” When one purchases subject to a mortgage, the purchaser agrees to make the monthly mortgage payments on an existing mortgage, but the original mortgagor remains personally liable if the purchaser fails to make the monthly payments. Since the original mortgagor remains liable in the event of default, the mortgagee’s consent is not required to a sale subject to a mortgage.

Both “Assumption of Mortgage” and “Purchasing Subject to a Mortgage” are used to finance the sale of property. They may also be used when a mortgagor is in financial difficulty and desires to sell the property to avoid foreclosure.

B

Binder or “Offer to Purchase”

A preliminary agreement, secured by the payment of earnest money, between a buyer and seller as an offer to purchase real estate. A binder secures the right to purchase real estate upon agreed terms for a limited period of time. If the buyer changes his mind or is unable to purchase, the earnest money is forfeited unless the binder expressly provides that it is to be refunded. Broker

(See real estate broker)

Building Line or Setback

Distances from the ends and/or sides of the lot beyond which construction may not extend. The building line may be established by a filed plat of subdivision, by restrictive covenants in deeds or leases, by building codes, or by zoning ordinances.

C

Certificate of Title

A certificate issued by a title company or a written opinion rendered by an attorney that the seller has good marketable and insurable title to the property which he is offering for sale. A certificate of title offers no protection against any hidden defects in the title which an examination of the records could not reveal. The issuer of a certificate of title is liable only for damages due to negligence. The protection offered a homeowner under a certificate of title is not as great as that offered in a title insurance policy.

Closing Costs

The numerous expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate. These costs are in addition to price of the property and are items prepaid at the closing day.
This is a typical list:

  BUYER'S EXPENSES                     SELLER'S EXPENSES
  Documentary Stamps on Notes          Cost of Abstract
  Recording Deed and Mortgage          Documentary Stamps on Deed
  Escrow Fees                          Real Estate Commission
  Attorney's Fee                       Recording Mortgage
  Title Insurance                      Survey Charge
  Appraisal and Inspection             Escrow Fees
  Survey Charge                        Attorney's Fee

The agreement of sale negotiated previously between the buyer and the seller may state in writing who will pay each of the above costs.

Closing Day

The day on which the formalities of a real estate sale are concluded. The certificate of title, abstract, and deed are generally prepared for the closing by an attorney and this cost charged to the buyer. The buyer signs the mortgage, and closing costs are paid. The final closing merely confirms the original agreement reached in the agreement of sale.

Cloud (On Title)

An outstanding claim or encumbrance which adversely affects the marketability of title.

Commission

Money paid to a real estate agent or broker by the seller as compensation for finding a buyer and completing the sale. Usually it is a percentage of the sale price–6 to 7 percent on houses, 10 percent on land.

Condemnation

The taking of private property for public use by a government unit, against the will of the owner, but with payment of just compensation under the government’s power of eminent domain. Condemnation may also be a determination by a governmental agency that a particular building is unsafe or unfit for use.

Condominium

Individual ownership of a dwelling unit and an individual interest in the common areas and facilities which serve the multi-unit project.

Contract of Purchase

(See agreement of sale)

Contractor

In the construction industry, a contractor is one who contracts to erect buildings or portions of them. There are also contractors for each phase of construction: heating, electrical, plumbing, air conditioning, road building, bridge and dam erection, and others.

Conventional Mortgage

A mortgage loan not insured by HUD or guaranteed by the Veterans’ Administration. It is subject to conditions established by the lending institution and State statutes. The mortgage rates may vary with different institutions and between States. (States have various interest limits.)

Cooperative Housing

An apartment building or a group of dwellings owned by a corporation, the stockholders of which are the residents of the dwellings. It is operated for their benefit by their elected board of directors. In a cooperative, the corporation or association owns title to the real estate. A resident purchases stock in the corporation which entitles him to occupy a unit in the building or property owned by the cooperative. While the resident does not own his unit, he has an absolute right to occupy his unit for as long as he owns the stock.

D

Deed

A formal written instrument by which title to real property is transferred from one owner to another. The deed should contain an accurate description of the property being conveyed, should be signed and witnessed according to the laws of the State where the property is located, and should be delivered to the purchaser at closing day. There are two parties to a deed: the grantor and the grantee. (See also deed of trust, general warranty deed, quitclaim deed, and special warranty deed.)

Deed of Trust

Like a mortgage, a security instrument whereby real property is given as security for a debt. However, in a deed of trust there are three parties to the instrument: the borrower, the trustee, and the lender, (or beneficiary). In such a transaction, the borrower transfers the legal title for the property to the trustee who holds the property in trust as security for the payment of the debt to the lender or beneficiary. If the borrower pays the debt as agreed, the deed of trust becomes void. If, however, he defaults in the payment of the debt, the trustee may sell the property at a public sale, under the terms of the deed of trust. In most jurisdictions where the deed of trust is in force, the borrower is subject to having his property sold without benefit of legal proceedings. A few States have begun in recent years to treat the deed of trust like a mortgage.

Default

Failure to make mortgage payments as agreed to in a commitment based on the terms and at the designated time set forth in the mortgage or deed of trust. It is the mortgagor’s responsibility to remember the due date and send the payment prior to the due date, not after. Generally, thirty days after the due date if payment is not received, the mortgage is in default. In the event of default, the mortgage may give the lender the right to accelerate payments, take possession and receive rents, and start foreclosure. Defaults may also come about by the failure to observe other conditions in the mortgage or deed of trust.

Depreciation

Decline in value of a house due to wear and tear, adverse changes in the neighborhood, or any other reason.

Documentary Stamps

A State tax, in the forms of stamps, required on deeds and mortgages when real estate title passes from one owner to another. The amount of stamps required varies with each State.

Downpayment

The amount of money to be paid by the purchaser to the seller upon the signing of the agreement of sale. The agreement of sale will refer to the downpayment amount and will acknowledge receipt of the downpayment. Downpayment is the difference between the sales price and maximum mortgage amount. The downpayment may not be refundable if the purchaser fails to buy the property without good cause. If the purchaser wants the downpayment to be refundable, he should insert a clause in the agreement of sale specifying the conditions under which the deposit will be refunded, if the agreement does not already contain such clause. If the seller cannot deliver good title, the agreement of sale usually requires the seller to return the downpayment and to pay interest and expenses incurred by the purchaser.

E

Earnest Money

The deposit money given to the seller or his agent by the potential buyer upon the signing of the agreement of sale to show that he is serious about buying the house. If the sale goes through, the earnest money is applied against the downpayment. If the sale does not go through, the earnest money will be forfeited or lost unless the binder or offer to purchase expressly provides that it is refundable.

Easement Rights

A right-of-way granted to a person or company authorizing access to or over the owner’s land. An electric company obtaining a right-of-way across private property is a common example.

Encroachment

An obstruction, building, or part of a building that intrudes beyond a legal boundary onto neighboring private or public land, or a building extending beyond the building line.

Encumbrance

A legal right or interest in land that affects a good or clear title, and diminishes the land’s value. It can take numerous forms, such as zoning ordinances, easement rights, claims, mortgages, liens, charges, a pending legal action, unpaid taxes, or restrictive convenants. An encumbrance does not legally prevent transfer of the property to another. A title search is all that is usually done to reveal the existence of such encumbrances, and it is up to the buyer to determine whether he wants to purchase with the encumbrance, or what can be done to remove it.

Equity

The value of a homeowner’s unencumbered interest in real estate. Equity is computed by subtracting from the property’s fair market value the total of the unpaid mortgage balance and any outstanding liens or other debts against the property. A homeowner’s equity increases as he pays off his mortgage or as the property appreciates in value. When the mortgage and all other debts against the property are paid in full the homeowner has 100% equity in his property.

Escrow

Funds paid by one party to another (the escrow agent) to hold until the occurrence of a specified event, after which the funds are released to a designated individual. In FHA mortgage transactions an escrow account usually refers to the funds a mortgagor pays the lender at the time of the periodic mortgage payments. The money is held in a trust fund, provided by the lender for the buyer. Such funds should be adequate to cover yearly anticipated expenditures for mortgage insurance premiums, taxes, hazard insurance premiums, and special assessments.

F

Foreclosure

A legal term applied to any of the various methods of enforcing payment of the debt secured by a mortgage, or deed of trust, by taking and selling the mortgaged property, and depriving the mortgagor of possession.

G

General Warranty Deed

A deed which conveys not only all the grantor’s interests in and title to the property to the grantee, but also warrants that if the title is defective or has a “cloud” on it (such as mortgage claims, tax liens, title claims, judgments, or mechanic’s liens against it) the grantee may hold the grantor liable.

Grantee

That party in the deed who is the buyer or recipient.

Grantor

That party in the deed who is the seller or giver.

H

Hazard Insurance

Protects against damages caused to property by fire, windstorms, and other common hazards.

HUD

U.S. Department of Housing and Urban Development. Office of Housing/Federal Housing Administration within HUD insures home mortgage loans made by lenders and sets minimum standards for such homes.

I

Interest

A charge paid for borrowing money. (See mortgage note)

L

Lien

A claim by one person on the property of another as security for money owed. Such claims may include obligations not met or satisfied, judgments, unpaid taxes, materials, or labor. (See also special lien.)

M

Marketable Title

A title that is free and clear of objectionable liens, clouds, or other title defects. A title which enables an owner to sell his property freely to others and which others will accept without objection.

Mortgage

A lien or claim against real property given by the buyer to the lender as security for money borrowed. Under government-insured or loan-guarantee provisions, the payments may include escrow amounts covering taxes, hazard insurance, water charges, and special assessments. Mortgages generally run from 10 to 30 years, during which the loan is to be paid off.

Mortgage Commitment

A written notice from the bank or other lending institution saying it will advance mortgage funds in a specified amount to enable a buyer to purchase a house.

Mortage Insurance Premium

The payment made by a borrower to the lender for transmittal to HUD to help defray the cost of the FHA mortgage insurance program and to provide a reserve fund to protect lenders against loss in insured mortgage transactions. In FHA insured mortgages this represents an annual rate of one-half of one percent paid by the mortgagor on a monthly basis.

Mortgage Note

A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof of an indebtedness, and states the manner in which it shall be paid. The note states the actual amount of the debt that the mortgage secures and renders the mortgagor personally responsible for repayment.

Mortgage (Open-End)

A mortgage with a provision that permits borrowing additional money in the future without refinancing the loan or paying additional financing charges. Open-end provisions often limit such borrowing to no more than would raise the balance to the original loan figure.

Mortgagee

The lender in a mortgage agreement.

Mortgagor

The borrower in a mortgage agreement.

P

Plat

A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land, and easements.

Points

Sometimes called “discount points.” A point is one percent of the amount of the mortgage loan. For example, if a loan is for $25,000, one point is $250. Points are charged by a lender to raise the yield on his loan at a time when money is tight, interest rates are high, and there is a legal limit to the interest rate that can be charged on a mortgage. Buyers are prohibited from paying points on HUD or Veterans’ Administration guaranteed loans (sellers can pay, however). On a conventional mortgage, points may be paid by either buyer or seller or split between them.

Prepayment

Payment of mortgage loan, or part of it, before due date. Mortgage agreements often restrict the right of prepayment either by limiting the amount that can be prepaid in any one year or charging a penalty for prepayment. The Federal Housing Administration does not permit such restrictions in FHA insured mortgages.

Principal

The basic element of the loan as distinguished from interest and mortgage insurance premium. In other words, principal is the amount upon which interest is paid.

Purchase Agreement

See agreement of sale.

Q

Quitclaim Deed

A deed which transfers whatever interest the maker of the deed may have in the particular parcel of land. A quitclaim deed is often given to clear the title when the grantor’s interest in a property is questionable. By accepting such a deed the buyer assumes all the risks. Such a deed makes no warranties as to the title, but simply transfers to the buyer whatever interest the grantor has. (See deed.)

R

Real Estate Broker

A middle man or agent who buys and sells real estate for a company, firm, or individual on a commission basis. The broker does not have title to the property, but generally represents the owner.

Refinancing

The process of the same mortgagor paying off one loan with the proceeds from another loan.

Restrictive Covenants

Private restrictions limiting the use of real property. Restrictive covenants are created by deed and may “run with the land,” binding all subsequent purchasers of the land, or may be “personal” and binding only between the original seller and buyer. The determination whether a covenant runs with the land or is personal is governed by the language of the covenant, the intent of the parties, and the law in the State where the land is situated. Restrictive covenants that run with the land are encumbrances and may affect the value and marketability of title. Restrictive covenants may limit the density of buildings per acre, regulate size, style or price range of buildings to be erected, or prevent particular businesses from operating or minority groups from owning or occupying homes in a given area. (This latter discriminatory covenant is unconstitutional and has been declared unenforceable by the U.S. Supreme Court.)

S

Sales Agreement

See agreement of sale.

Special Assessments

A special tax imposed on property, individual lots or all property in the immediate area, for road construction, sidewalks, sewers, street lights, etc.

Special Lien

A lien that binds a specified piece of property, unlike a general lien, which is levied against all one’s assets. It creates a right to retain something of value belonging to another person as compensation for labor, material, or money expended in that person’s behalf. In some localities it is called “particular” lien or “specific” lien. (See lien.)

Special Warranty Deed

A deed in which the grantor conveys title to the grantee and agrees to protect the grantee against title defects or claims asserted by the grantor and those persons whose right to assert a claim against the title arose during the period the grantor held title to the property. In a special warranty deed the grantor guarantees to the grantee that he has done nothing during the time he held title to the property which has, or which might in the future, impair the grantee’s title.

State Stamps

See documentary stamps

Survey

A map or plat made by a licensed surveyor showing the results of measuring the land with its elevations, improvements, boundaries, and its relationship to surrounding tracts of land. A survey is often required by the lender to assure him that a building is actually sited on the land according to its legal description.

T

Tax

As applied to real estate, an enforced charge imposed on persons, property or income, to be used to support the State. The governing body in turn utilizes the funds in the best interest of the general public.

Title

As generally used, the rights of ownership and possession of particular property. In real estate usage, title may refer to the instruments or documents by which a right of ownership is established (title documents), or it may refer to the ownership interest one has in the real estate.

Title Insurance

Protects lenders or homeowners against loss of their interest in property due to legal defects in title. Title insurance may be issued to a “mortgagee’s title policy.” Insurance benefits will be paid only to the “named insured” in the title policy, so it is important that an owner purchase an “owner’s title policy”, if he desires the protection of title insurance.

Title Search or Examination

A check of the title records, generally at the local courthouse, to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue special assessments, or other claims or outstanding restrictive convenants filed in the record, which would adversely affect the marketability or value of title.

Trustee

A party who is given legal responsibility to hold property in the best interest of or “for the benefit of” another. The trustee is one placed in a position of responsibility for another, a responsibility enforceable in a court of law. (See deed of trust.)

Z

Zoning Ordinances

The acts of an authorized local government establishing building codes, and setting forth regulations for property land usage.

Concentrate first on curb appeal.  Curb appeal is your first chance to entice buyers.  Focusing your efforts on the front of your house will assist in grabbing buyers attentions.  Here are some suggestions experts recommend to make your exterior grab potential buyers’ attention:                                               

1. Mow, weed, trim and water your lawn regularly.
2. Paint or thoroughly wash your house’s exterior.
3. Place a new welcome mat at the door.
4. Make sure your house address numbers are large enough to read.
5. Wash the windows so they’re transparent.
6. Remove extra vehicles from driveway.
7. Repair damaged screens and glass and add new hardware.
8. Spuce up your yard with landscape lights
9. Hang a new wreath on the front door.
10. Add a top layer of fresh mulch to trees.

Create neutral and welcoming living areas.  Your house may fulfill all the criteria potential buyers want for location, price, style and amenities, but it still needs to make an emotional connection.  Inspire buyers by creating scenarios where they can picture themselves.

1. Ensure a clean, clutter free and classic entryway for appeal.
2. Paint walls a neutral color scheme. Remember, white never fails!
3. Rearrange furniture in the family room and living room for openness.
4. Repair wall and ceiling cracks.
5. Make sure carpet is spotless and fresh smelling.
6. Clean draperies and blinds.
7. Scale back family photos to a few tastefully framed pictures.  You want the potential buyers looking at your house not your pictures!
8. Play soft music on the stereo to create a comfortable atmosphere.
9. Wipe down all light fixtures so each room sparkles.
10. Scrub and wax or seal floors.

Highlight the kitchen and the bathrooms.  Two key areas that buyers tend to focus on are the kitchen and the bathrooms.  A clean kitchen sends a positive message.  And a beautiful bathroom is compelling.  Many buyers prefer to purchase a house classified as “move-in condition.”

1. Place seldom used small appliances in cupboards.
2. Wipe down insides of drawers and install dividers.
3. In the kitchen, fill a large bowl with fresh fruit.
4. Inspect the cabinets and unclutter the countertops.
5. Check for leaky faucets, and caulk sinks and tubs.
6. Deodorize garbage disposal, dishwasher and trash can
7. Lay an open cookbook on the counter.
8. In the bathroom, create a mini-spa with guest soaps, bath oils and thick towels.
9. Repair missing grout and tiles.
10. Roll several new towels and place in a basket on the counter.

Next, focus on the bedrooms, the basement and the backyard.  Turn your attention to the rest of the house. A clean house sends a positive message that you also took care of major items such as the roof and the furnace.  If you can’t get something clean, paint it, remove it or replace it.

1. Vacume under beds.
2. Organize closets
3. Place scented candle on the nightstand, and fold a quilt at the end of the bed.
4. Use lots of pillows in every bedroom.
5. Make sure your pet is out of the house and secured during all showings!
6. Hang a picture in laundry room.
7. Beautify your entertainment center by adding a few boods, art and pottery.
8. Put tools in bins in the garage or shop.
9. Refresh patios by powerwashing and give wood decks a boost with a fresh coat of stain.
10. Hang miniature white lights in tress and around upbrellas to create a warm glow.

By making potential buyers feel welcome and comfortable, you can subtly influence their attitude toward your house…turning it from a house for sale into a house sold!!