Real Estate Agent Training

Real Estate Agent Training

Real Estate Agent Training

Real Estate Agent Training

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What can go wrong...

If you are considering selling on your own, you should be aware of the many problems that can crop up. The selling or acquisition of a home involves quite an assortment of individuals, businesses and professionals. You need to learn to be a team player, keep a close eye on what's going on, and be able to deal with whatever can go wrong without alienating anyone. Here is a list snags that I have successfully overcome in the past.

The Buyer:

* Did not tell the truth on loan application
* Did not tell the truth to their realtor
* Submits incorrect tax returns to the lender
* Looses motivation
* Source of down payment changes or dries up
* Family member doesn’t like the purchase
* Is too picky regarding condition
* Finds another property that is a better deal
* Always trying to renegotiate with seller, realtor, lender, lawyer
* Brings a lawyer into the picture to see if they can get out of the contract
* Does not execute the paperwork in a timely manner
* Does not deliver a certified check at closing
* Changes job, illness, divorce, or other setback
* Comes up short on money
* Forgets to insure property
* Scared and gets buyers remorse

The Inspection Company:

* Too picky or not picky enough
* Scares buyer
* Infuriates seller
* Makes mistakes
* Delays report

The Appraiser:

* Is not local and misunderstands the market
* Comparable sales are not really comparable or no comparable available
* Delays (too busy) and is late
* Incorrect appraisal
* Appraisal too low
* Appraiser doesn't discuss transaction with realtor

The Lender:

* Lender does not properly pre-qualify borrower
* Lender decides at the last minute they don't like the borrower's
credit history
* Lender decides at the last minute they don't like the property
* Lender wants property repaired prior to closing
* Lender loses the file
* Lender does not receive all information simultaneously and gets
it in bits and pieces
* Lender pulls bait and switch on buyer (raises rates or cost)
* Borrower does not qualify because of a late addition of information
* Lender requires a re-appraisal at the last minute
* Lender doesn't check credit bureau when pre-qualifying
* On a “stated income” loan, Lender asks for a 4056 form at the last minute. (4056 form allows the lender to obtain a copy of the
borrower’s tax returns from the IRS)

The Lawyer:

* Fails to notify realtors of necessary signatures
* Fails to obtain information from beneficiaries, lien holders, title or insurance company or lender
* Lets principal leave town without getting all necessary signatures
* Misfiles paperwork under wrong closing date
* Incorrectly prepares paperwork
* Double books client's appointment
* Valuable information not passed on fast enough
* G.S.T problems not solved timely
* Does not find liens or pay out penalties until last minute
* Miscalculates Property Purchase Tax

The Seller:

* Loses motivation (ie job transfer did not go through)
* Suffers illness, divorce, death, etc.
* Has hidden defects that are subsequently discovered
* Unknown defects are discovered
* Home inspection reveals above average amount of small defects
* Removes items that the buyer believes to be included
* Is unable to clear up finances, liens etc
* Last minute problems with title
* Seller didn't own 100% of property as previously disclosed
* Sellers partners, spouse , does not want to sign documents
* Seller leaves town without giving anyone power of attorney
* Seller does not move out of property, or misreads possession date

Lenders' Access To Your Tax Returns: How Much Is Too Much?

Lenders' Access To Your Tax Returns: How Much Is Too Much?
by David Reed

There's a new scam going around, or maybe it's the same old scam except it's making new rounds. Whatever it is, it involves the now-infamous IRS Form 4506. If you've gotten a mortgage, you've likely not only seen this form you may have even read the thing. You certainly signed it.
The 4506 is an IRS form that lets your lender (or your future lender should the loan get sold) compare the income information you put on your home loan application with what you reported to the IRS. With the advent of Turbo Tax and other tax software it's a lot easier to cheat on taxes than it used to be. Need to make more money on your tax returns to qualify for a home loan? Voila! Open up the old tax file, up the income a little and Hello, Mansion!
Of course, this really only works for the self-employed or those not paid with earnings reported on a W2 form. Paycheck stubs and last year's W2 can iron out most income questions. The Form 4506 gives the lender specific permission to pull old tax returns and compare what you filed with what you provided. But this permission can only last for a short period, up to 60 days from the date you signed the form. Some lenders ask that you not date the form, but just sign it. That gives them some extra time to dig up your old taxes in case they need them. Don't do it.
There are a couple of ways that you can protect yourself from possible abuse and unnecessary tax return reviews. First, always sign AND date the form and get a copy of what you signed. It's been an increasing request by some lenders and mortgage brokers to get permission from a borrower to sign something and leave off the date but there's also another question that might be asked such as "Did your lender ask you to sign any blank forms?" that could cause an audit problem.
The second thing you need to do is to limit the tax years the lender can review. The Form 4506, left untouched, lets the lender review up to four years of returns. But if your lender only asked for your previous two years, only give permission for those two years. If that's what the lender used to qualify you, there's no reason to go snooping around other tax years, is there? In section 7 of the 4506, you'll see four places for you to put dates. If your lender is asking for 2003 and 2004 tax returns, enter those dates then "line through" the other remaining fields, leaving them blank. Your lender didn't use the other years to qualify you.
Published: January 7, 2005

Buying New Construction

The first step in buying a brand new home is no different than buying any other home for the first time. It is crucial that you spend time researching and gathering as much information as possible concerning your future purchase. You want to be the most informed buyer when the time is right. Getting in Touch with the Developer When it comes to newly constructed homes, it is best that you scout out the different areas to see where new constructions are taking place. If you see any new developments, find out who the developers are and contact them as soon as possible. To narrow down your search, you should find out how big the homes are going to be, what the likely price range will be, and when the homes are expected to go on sale. Also, find out what type of homes the developer specializes in. Determine if they can address your needs and preferences. Check out their reputation and financial strength. If you are interested, identify yourself as a potential buyer and make sure that the developer has a way to contact you and that you are in constant contact with them. In addition, find out as much as you can in terms of new home constructions, warranties, financing, and differences in pricing, quality and lot selections. The best buyer will usually know what to do and how to handle the purchase of a new home because they have made contact early on with the developer and are well informed. Be prepared when the developer is ready to accept purchase offers. Know which model you want and whether or not you have enough financing and down payment to cover the home and the closing costs. Getting in Touch with Your Agent It may be helpful to get advice from a buyer’s agent. They can offer insight and information, which you may have overlooked in your own home search. By combining your information and their professional experience, you should come up with a detailed buying plan. Figure out your price range and find out if you are qualified to make the down payment and the monthly payments for the new houses you are interested in. Choosing Options and Upgrades Options are items the builder installs during construction such as a sunroom or a powder room. Upgrades are above “builder standard” items that may add quality to your home such as kitchen fixtures, granite counter tops, and extra detailing. Many builders will offer free upgrades with the sale price. When you buy upgrades, always try to have them included in the negotiation over the price. You may find that the price of the upgrades, when calculated into the overall purchase price, drops significantly. Check into all the options and upgrades that the builder offers and at what cost. What to Expect 25% of homebuyers will purchase a new home and the competition for a new home can be quite fierce. Not only do you need to be well informed, you need to be ready to compete with other well-informed homebuyers. In most cases, there will usually be a list of potential homebuyers for a new construction. Either the developer will contact each person on the list or they will set up a date when the sales office will accept purchases. In the most extreme cases, which are becoming more common in hot markets, you will find potential homebuyers lining up a few days before the sales date. Anticipate that the house price will increase if the market is hot and that there will be fierce competition. Always figure it will cost more and be prepared with additional financing and down payment. It is not uncommon for a developer to demand a big deposit. It is then up to you to decide whether the house is worth the down payment or not. If you have researched the market and are well informed, the decision to purchase should be relatively less stressful. At the same time, even when the market is hot, you do have some room for negotiation. If you’re pre-approved and fully qualified to get the financing, and are ready to pay the down payment and closing costs, you may have some options to work with. The price may be non-negotiable, but the terms of the contract can be worked in your favor. Builders may also offer discounts or special financing to help close a sale.

For more info go to http://www.healtor.com/ For help buying or selling a home contact: Stephen Horrillo e-mail: steve@HEALtor.com

You CAN Afford a Home

80/10/10 Mortgages

To reduce the risk of losing money, lenders select well-qualified buyers with a strong credit history, low income-to-debt ratio, and income stability.

Loan programs that help lenders reduce their risk are 80/10/10 or 80/15/5 loans. These combine a first mortgage and a second mortgage to spread the risk between two lenders. The numbers represent the first loan percentage, second loan percentage, and the down payment.

Here's how it works. The first lender offers a mortgage for 80% of the value. Another lender offers a second mortgage for 10% of the value. The borrower puts down 10%. With 80/15/5, the second lender offers 15% and the buyer puts down 5%.

With only 80% of the loan invested, 80/10/10 and 80/15/5 loans reduce the first lender's risk. The buyer makes a payment to the first lender and a second payment to the second lender.

Since neither lender lends more than 80% of the value, private mortgage insurance (PMI) is not required. PMI is only necessary when a lender lends more than 80% of the value. No private mortgage insurance means a lower monthly payment.