I Saw It On TV!

 Posted by at 10:37 am
May 172010
 

I’ve been reading a book based on a TV series about real estate. It’s actually fairly well written and in many cases downright funny.  But there are also a number of places where it is just plain wrong. That’s one of the joys of receiving advice (whether it’s from a book, TV show, or the agent you are working with). Sometimes it’s just plain wrong.

I chuckled a bit when a potential buyer called me recently to announce that she was ready to buy a house because she’d been watching all the real estate programs on TV and knew “how it worked.” I envied her because I’ve been at this for a while and I still don’t know how it works. Not every time anyway.

Students in my real estate classes learn to remember that we have two hands and that should remind us to consider both sides of a question when giving clients advice. When a buyer asks, “Should I make a really low offer?” we do well when we consider both possible answers. “Yes, because the seller might accept it. But on the other hand… there are some risks associated with really low offers…”

In other words, you should be getting all the information necessary to make a decision that is ultimately yours. If I could give a buyer only one “tip” it would be just that. Get all the information—the pros and cons—before making an informed decision. In simplest form the tip is “be a smart buyer” and that includes surrounding yourself with professionals willing to educate you.

In addition to being a smart buyer, here are some other recommendations—many of which will apply to sellers as well.

  • Read every piece of paper and take everything seriously. This is especially important regarding the offer you sign. Don’t be intimidated into just signing and don’t be too proud to ask questions about any points you don’t understand.
  • Keep legible copies of all paperwork in an organized file. Remember that a real estate transaction is complex. Be prepared to consult professionals: lenders, home inspectors, attorneys, accountants.
  • Don’t just look for a house; look for a community or neighborhood. Unless you are a hermit, what’s around you will have importance. You can add a family room. Changing a community isn’t quite so easy.
  • Be prepared to act quickly and be available to do what needs to be done. Taking a few days off to go to the islands might sound good, but remember your priorities. It’s actually a good idea to set a timetable. I once worked with a buyer who had been looking for seven years. (Not with me!)
  • It will sound self-serving, but have some loyalty to the agent you choose.
  • In Maine, you should be given a one page “Real Estate Relationships Form” that describes various types of relationships the law permits and requirements for them. Selecting the agent and type of relationship is an important decision that should be made early in the process.
  • Understand that there is an emotional and financial component to selecting a home to purchase. In the ideal world, these will be in balance. In the real world they’ll require some juggling. The home you fall in love with may not make the best economic sense. That doesn’t mean you should reject it. (Think, “On the one hand—on the other hand.”)

Ultimately this really is about making an informed decision—your informed decision. Don’t let somebody else tell you the right answer. Oh… and don’t believe everything you see on TV!

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Title What?

 Posted by at 10:11 am
Nov 112009
 

A recent question from a buyer client suggests it might be a good time to review some very basic concepts regarding title. Let’s start by understanding the word “title” is describing the evidence one has of right of ownership. A “clear title” basically means the ownership of the land is clear and without question.

When a buyer purchases a property, some assurance that the current seller has “clear title” is in order. I could sell you the Brooklyn Bridge, couldn’t I? How do you know whether or not I own it and have the right to sell it? (I could create a fake deed and register it–the existence of a deed is not a guarantee I truly own the property.)

There are three important terms we use when we talk about title.

A title search is performed to establish the links in the chain of title and discover any potential clouds or problems (such as liens) with the title. This is the service buyers and lenders commonly get. (If you are mortgaging your property it will be required by the lender.)

A title opinion may be issued by an attorney. This becomes the attorney’s legal opinion that the title is “good” or clear. Because the attorney is assuming risk; these tend to be expensive. Do not confuse a title search with a title opinion.

Title insurance is a policy issued by a Title Insurance Company. Typically the policy is issued based on the title search. It ultimately is about risk management. Nobody really says “you have a great (clear) title”—the insurance company says “based on the title search we are willing to insure your title.”

If something or someone comes along after you’ve purchased that brings your title/ownership of the property into question, the Title Insurance Company will either defend your title or pay you for the loss of your property – up to the face amount of the policy. The premium for this coverage is a one-time charge and there are numerous options available to the buyer including an “escalating” policy in which the face amount increases automatically.

Don’t let your eyes glaze over when the topic of “title” comes up. These are not difficult concepts, really and you should insist on explanations that you understand well enough to make good decisions.

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Orange Isn’t Just For Pumpkins

 Posted by at 9:50 am
Oct 262009
 

The Irish have the wearing of the green; Maine has the wearing of the orange. When venturing into the woods some orange clothing is always a good idea, but it becomes a requirement during hunting season. In fact, for a few dollars you can pick up a vest, clip a compass to it and maybe carry a small survival kit in one of the pockets. You carry a spare tire in your car, right? Do you think more of your car than you do yourself?

Fall means shorter days, colder weather and a number of hunting seasons. Deer season is open the entire month of November and there will be a lot of hunters in the woods. Think orange! Be safe and be smart.

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