Do You Have One Minute?

I think we would all agree, knowledge is power!  When you have the proper information, the decisions you make can be the right ones.  In my efforts to help educate my clients on the current state of our local real estate market, I have come across a wonderful resource.  Check it out!

The 1 Minute Housing Market

Single-Family Homes for Rent

Single-family homes used for rental property have distinct advantages over other types of investments.

 
An investor can borrow 75-80% at fixed interest rates on appreciating assets with definite tax advantages and reasonable control. The financing alone is attractive compared to some investments that require 50% cash and have floating rates at prime plus for one or two years.

Home prices have adjusted 30-40% around the country, mortgage rates are incredibly low and rents have risen in the past two years due to more demand and shorter supply. Indicators like these point to a strong and sustained rental market.

Consider you bought a $125,000 home for cash that would rent for $1,250 per month. With $15,000 income and allowing for property taxes, insurance and maintenance, it is still reasonable to expect $10,000 net income. You'd have an 8% return on investment without considering tax savings or future appreciation compared with 5-year CDs paying less than 1.5% and a 10-year Treasury yield at 1.65%.

The reasonable control has a lot of appeal to many investors who find the volatility of the stock market unacceptable and don't want the risk associated with some of the alternative investments. Please contact me if you'd like to know more about available opportunities.

Which Value Do YOU Use?

What your home is worth depends on why you ask the question. It could be one value based on a purchase or sale and an entirely different value for insurance purposes.


Fair Market Value is the price a buyer and seller can agree upon assuming both are knowledgeable, willing and unpressured by extraordinary events. This value is generally indicated by the comparable market analysis done by real estate professionals.

Insured Value is determined for the proper insurance coverage. Replacement cost could actually exceed the cost of new construction when additional expenses are incurred for demolition and the added complexities of matching existing construction.

Homeowners are generally more familiar with their home's market value. Since it can be lower than the replacement cost, owners should review the insured value with their property insurance agents periodically. Under-insuring could invoke a co-insurance clause that may limit the settlement and increase your out-of-pocket-expenses. 

Announcing...

Source: Texas Association of REALTORS® 5 New Rights for Property Owners in HOAs Nearly 20% of Texans live in neighborhoods that have homeowners associations (HOAs), and new laws that went into effect earlier this year have provided more rights to those property owners regarding the use of their property. Here are FIVE property-related upgrades or additions that HOAs CAN NO LONGER PREVENT homeowners from doing the following: 1. Installing a solar-energy device on the property. 2. Installing and use of rain-harvesting devices. 3. Displaying certain religious items on the entry of the property. 4. Installing roof shingles that are wind and/or hail resistant, energy efficient,  or solar generating. 5. Flying the U.S., Texas, or a branch of the U.S. armed forces flag. *Each of these rights applies to condos as well. **It's important to note that a homeowners association may place some parameters on these rights. Learn more about these new laws governing homeowners associations in "Taming the HOA" from the May 2012 issue of "Texas REALTOR®."

Chocolate...YES, I Said Chocolate!

If I have 10 chocolate cakes and someone asks me for one, how many cakes do I have left? That's right, 10. YUM!  The dog days of summer are among us!

Here is a list of 21 Quick Tricks to Feel Better Instantly

1. Wash your hands & face, and brush your teeth. It’s reinvigorating and relaxing.
2. Change your socks. It’s an odd trick, but it works.
3. Call a close friend. A quick conversation with someone you care about is a boost.
4. Stretch. Reach for the sky and touch your toes.
5. Go outdoors. Fresh air is great for the senses.
6. Take a light exercise break. A short walk can re-energize your mind.
7. Dress to feel your best. When we look good we feel good.
8. Listen to your favorite music. Elvis always works for me.
9. Watch or read something that inspires you. Browse Youtube: “surprise military homecomings.”
10. Enjoy a good laugh. The best medicine!
11. Take a few deep breaths. Deep breathing controls stress.
12. Clear a stuffed nose. Trust me, on this one.
13. Cook a tasty meal. Or splurge at a favorite restaurant.
14. Walk away from vampires. People who suck the energy from you with their problems.
15. Complete an important piece of unfinished business. Remove a burden.
16. Work on something meaningful to you. Volunteer!
17. Assist someone in need. Great for karma too!
18. Think about your latest or greatest success. It reminds you that you can accomplish anything.
19. Act like today is already an awesome day. Research shows, the way we act is related to the way we feel.
20. Notice what’s right. Stay positive and learn from mistakes.
21. Take a moment to acknowledge how far you've come. Remember, you started with nothing.

And the best news of all:  Mortgage interest rates continue to drop, according to Ed Kampft!

BIG News!!

Well, I hinted at this announcement back in April, but now, we are more than ready to shout it from our own little corner of the web!!!  Read on folks...

Jim Bartz, a sales professional in the Dallas area, has joined the Keller Williams Realty Plano Market Center in partnership with his spouse, Sally Bartz.  He brings an extensive background in finance and people skills to their partnership; having been a CPA working in the tax area for 10 years, and then 25+ years in the sales and training area with the Dale Carnegie Courses and The Sales Edge Training Group.

“We are truly luck to have Jim join us here in Plano,” says Team Leader Heather Garinger.  “Keller Williams Realty offers its associates unparalleled career growth and lifelong learning opportunities in the real estate industry.  We know that Jim, combined with the experience of Sally, will be a great fit and our clients will truly benefit from his joining us.”

Welcome, Jim Bartz!

Sally chose Keller Williams Realty seven years ago and I have seen nothing but caring, coaching, and helpfulness from this group.  It was a natural for me to join her.  The synergy will be awesome!  We are truly blessed to be able to work together again, helping clients to live their dreams.

Gift or Inherit?

Transferring the title of a home from one person to another may seem simple but it could have a significant tax implication. 

When a person inherits property, the basis is "stepped-up" to fair market value at the time of the decedent's death. On the other hand, a gift has a carry-over basis which means that the recipient receives the unrealized gain also.

As an example, let's say an elderly parent, in an attempt to get their affairs in order, gives their home to their adult child. The rationale might be that they are the sole beneficiary and will get the property eventually. In an effort to settle things early, unnecessary income tax may be incurred.

If the home was purchased for $20,000 and worth $100,000 at the time of transfer, there is a possible gain of $80,000. However, if the adult child inherited the property at the time of the parent's death, their new basis would be $100,000 or the fair market value at the time of death and the possible gain would be zero.

This is meant to be an example and many other variables could be involved. If you're concerned about a situation, you should seek specific advice from a tax professional. As always, I'm here to help you as your real estate professional.

Assumption Opportunity

The low interest rates secured by borrowers recently on FHA mortgages may become valuable in a different way in the future. FHA and VA mortgage are assumable at the existing interest rates subject to buyer qualification.

Buyers wanting to assume an existing FHA mortgage must be owner-occupants and meet the current FHA guidelines. Applicants should have a minimum 600 credit score, total debt with house payment to be assumed not to exceed 41 of their monthly gross income and meet other standard income, credit and qualifying requirements.

The benefits are not only assuming a lower interest rate resulting in lower payments but the closing costs on an assumption are much less than originating a new loan. The fact that the mortgage is already into an amortization schedule and that lower interest rate loans amortize faster than higher interest rate loans make it build equity faster than a new mortgage.  When interest rates eventually rise, assumptions will provide an opportunity for buyers to lower their cost of housing significantly while improving their wealth positions.

Protect Yourself!

Home is a place you should feel safe and secure. Sometimes, we take it for granted and unfortunately, we do need to remain vigilant about things we do that could compromise our well-being. Here are a few tips you might want to consider.

1. Everyone loves an inviting home including burglars. Make sure it looks occupied and is difficult to break in.
• Always lock outside doors and windows even if you're gone only a short time.
• Turn lights on when you leave. Consider timers to automatically control the lights.
• Keep your garage door closed even when you’re home; don’t tempt thieves with what you have in your garage.
• Suspend your mail and newspaper delivery when you're out of town or get a neighbor to pick it up for you.
2. Posting that you're out of town or away from home on social networks is like advertising your home is unprotected. 
3. Equally dangerous could be allowing certain social network sites to track your location.
4. Don't leave keys under doormats, in flowerpots or the plastic rocks; thieves know about those hiding places and even more.
5. Trim the shrubs from around your home; don’t give criminals a place to hide.

From my home to yours, stay safe and happy!

Regards,

Sally B. Real Estate Queen

Pre-approval Gives Everyone Confidence

The benefits of buyer's pre-approval are without question; it is good for the buyers, the sellers and the agents. It saves time, money and removes the uncertainty of knowing whether the buyer is qualified. The direct benefits include:

• Amount the buyer can borrow decreases as interest rates rise
• Looking at "Right" homes - price, size, amenities, location
• Find the best loan - rate, term, type
• Uncover credit issues early - time to cure possible problems
• Bargaining power - price, terms, & timing
• Close quicker - verifications have been made

There a big difference in sitting down with a trusted mortgage professional compared to going through calculators on a website. The cost of being pre-approved is a bargain and generally, limited to the cost of the credit report.
Even if you have been pre-approved, a suggestion that can't hurt but may help is to get a second opinion from a different lender. It will either verify that you have a good deal or you’ll discover that you can improve it. Either way, it works to your advantage. Contact me if you'd like a recommendation.

Just a Thought...

Whether you're refinancing your current home or buying a new one, something worth considering is a 15 year loan rather than a 30 year term. The payments will be a little higher but you'll get a lower interest rate and you'll build equity much faster.

Let's look at an example of a $200,000 mortgage with the choice of a 30 year term with a 3.75% rate compared to a 15 year term with a 2.875% rate. The payments would be $442.94 higher on the shorter term but the equity would be considerably higher even after you adjust for the higher payments.




Another benefit is that the shorter term loan creates a forced savings situation where the savings on a longer term loan might end up being spent rather than being saved and invested. Contact me if you'd like a recommendation of a trusted lender.

Judge Learned Hand

This opinion refers to federal income tax but the logic and spirit can easily be applied to any tax including property tax. Most property tax is based on a valuation called an assessment placed on the property by a government taxing authority.
When property values rise due to appreciation, the assessments usually rise. However, when values decline as they have done in many areas in the past few years, the assessments should follow accordingly.
If you don’t believe your assessment reflects market value, put together proof to support your position. Recent comparable sales, similar in size, condition and location are very persuasive. Check to see if the square footage on the assessment is accurate. If the home is not in good condition, take pictures to show that.
As your real estate professional, I can supply the comparables, filing deadlines and other pertinent information needed to make a challenge. Lowering your assessment will result in lower property taxes and more money in your pocket.

Save Money...Be Comfortable

Automatic thermostats can lower your monthly utility costs while conveniently regulating your comfort by adjusting temperatures on your heating and cooling systems. These can be particularly effective in homes with zoned systems where you live in one area during the day but sleep in a different zone.
There are programmable thermostats available at home improvement stores that can make the adjustments for specific times during the day and specific days of the week. They'll allow you to override the setting when needed without tampering with the programming. They'll even remind you to change your filter.
An exciting development is the Wi-Fi enabled thermostat that allows adjustments from any Internet connection such as computer or Smartphone. Imagine how convenient it can be to change your temperature from the car before you get home.
Reasonably priced under $100 for most models, it makes it easy to recapture the cost of the thermostat quickly. Most of the thermostats are designed for do-it-yourselfers; check out my website's vendor list to find a heating and cooling professional that could install it for you.

Expect Great Things!

Sally Bartz, Realtor

ABR, GRI, SRES, CHMS, SFR, TAHS

Can You Really Ever Know Too Much?

It is of the utmost importance to me to provide my clients with the tools they need to make informed decisions.  In so many circumstances in life, knowledge IS power.  The same is true when researching your next home purchase.  Please take a moment to browse my website to explore the following tools. 

The Powerpage- This link provides up-to-the-minute new listings, the all important price changes and foreclosures for your convenience. 

Local School Reports/Ratings- This link is a wealth of information and statistics on local school districts.

Moving to Dallas /Ft.Worth- This link provides a great introduction to the area, complete with city websites, sports entertainment and dining options. 

My YouTube Channel-  Want to SEE what I have to say?  Check it out!

Buyer Resource- This link is a catalogue of helpful information for home buyers.

Seller Resource- This link is a catalogue of helpful information for home sellers.

The above links are just a few of the features my website has to offer.  May the information I have gathered serve you well. 

Best regards,

Sally

Coming Soon!  Big news about Sally's Real Estate team.  See you next week!

I Plan To Live Forever....

Thus far, my plan seems to be working!  Do you want to live a happy life? Just give up #15 easy things. No need for psychotherapy, avoiding chocolate, or pretending you are happy when your best friend loses weight!  Ha! 

1. Give up the need to always be right. Is your ego really that big?

2. Give up your need for control. Let it go! Everything gets done anyway.

3. Give up blame. Stop giving away your powers and take responsibility.

4. Give up your self-defeating self-talk. The mind is a great instrument when used correctly.

5. Give up your limiting beliefs. If you think you can, you can!

6. Give up complaining.  The power of positive thinking!

7. Give up the luxury of criticism. We are all the same and different.

8. Give up your need to impress others.  It doesn't work anyway.

9. Give up your resistance to change. Change is good.

10. Give up labels. Your mind only works when open.

11. Give up on your fears. Fear is an illusion. (False Evidence Appearing Real)

12. Give up on excuses. 99.9% of them aren't even real.

13. Give up the past. Be present in everything you do and enjoy life.

14. Give up attachment. Attachment and love cannot coexist.

15. Give up living your life to other people's expectations. You have one life,don't let other people's opinions distract you from your path.

provided courtesy of Edward Kampf, Houston TX

A Great Investment Is One That Invests In You!!!

If you invest in a savings account, you'll make less than 1% and will have to pay income tax on the earnings. On the other hand, contribute something extra to your house payment on a regular basis and you'll essentially, earn at the mortgage interest rate which is certain to be more than you're earning in the bank.
Making additional principal contributions on your mortgage will save interest, retire debt and build equity. An extra $100 a month in the example shown below will save thousands in interest and shorten the term of the mortgage as well.

Reducing your cost of housing is another way to improve the investment in your home. Becoming debt-free is a worthy goal that is achieved with discipline and good decisions. Suggestions like this are part of my commitment to help people when they buying, selling and all the years in between.

Risk Determines Rate

Regardless of what a lender quotes on mortgage rates, the actual rate paid by a borrower is based on a number of variables. Lenders determine whether to loan money and at what rate based on the risk involved with the transaction.

Factors that increase the risk that the loan will be repaid will proportionately increase the interest rate charged to the borrower. If the risk becomes too high, the loan will not be approved.

• Loan amounts - conventional loans for more than the conforming limits set by Fannie Mae are considered jumbo loans and generally have a higher interest rate.
• FICO score - the lowest interest rate is reserved for the highest credit scores; the lower the score, the higher the rate borrower will pay.
• Occupancy - borrowers occupying a home as their principal residence are considered a better loan risk than second homes and investment properties.
• Loan purpose - purchase transactions generally have the lowest interest rate while refinancing a home is generally higher.
• Debt-to-Income ratio - a borrower's monthly liabilities divided by their gross monthly income develops a ratio that helps lenders to assess the borrower's ability to repay the mortgage.
• Loan-to-Value ratio - the lower the percentage of the loan to the appraised value of the property will generally lower the interest rate.

Any combination of these factors could limit a borrower's ability to secure a mortgage at the rate initially quoted. Being pre-approved by a trusted mortgage professional is the best way to know what rate you can expect to pay. Please call me for a recommendation.

Sally Bartz 214-448-3835

The IDEAL Investment

The IDEAL Investment - 2/20/2012

Rental homes can be the IDEAL investment in today's market because they offer a much higher rate of return than alternatives without the volatility of ups and downs in the stock market.
IDEAL serves as an acronym to identify the advantages of rental properties:

• Income from the monthly rent contributes to paying the expenses and a return on the investment
• Depreciation is a non-cash deduction that contributes a tax shelter
• Equity grows monthly as the mortgage amortizes due to some of each payment being applied to the principal
• Appreciation is achieved as the value of the property goes up
• Leverage can increase the return on investment by using borrowed funds to control a larger asset

The combination of these characteristics working together makes rental real estate a very good investment for today's economy and years to come. Increased rents, high rental demand, good values and low non-owner-occupied mortgage rates contribute to positive cash flows and very favorable rates of return.

Contact me for more information about actual opportunities in our local market.

Are You KIDDING Me? No...Not Again!

If you have been thinking about refinancing an FHA loan or buying a new home with FHA financing, now is the time to act!

Buying a home?

For the potential homebuyers out there, don’t delay if you plan to use FHA financing. You will save money by placing a contract on a home and starting the financing process now, because the FHA’s Up-Front Mortgage Insurance Premium (MIP) and Annual MIP will increase for applications submitted on or after April 9.

Already have an FHA loan?

For those with an existing FHA loan endorsed on or after June 1, 2009, you may be able to save thousands with a lower rate and monthly payment if you apply now for an FHA streamline refinance. Don’t wait; the process is often quick and easy.

After April 9, 2012:

• The Up-Front MIP will increase from 1% to 1.75% of the base loan amount.
• The Annual MIP for 15-year or longer loan terms will increase to 1.25% for loans with LTVs higher than 95% and to 1.20% for loans at less than or equal to 95% LTV.

New fee structure for refinancing older FHA loans.

For those with older FHA loans, i.e., endorsed before June 1, 2009, you may also save money with an FHA streamline refinance. However, the fees for refinancing these loans will be reduced on June 11, 2012 to 0.55% for the Annual MIP and 0.01% of the base loan amount for the Up-Front MIP.

If you are in this group, call for an assessment of your loan to determine if the changes to the FHA fee structure may make it more advantageous to wait to refinance until June 11, 2012.

FHA fees will increase in April.

To take advantage of the current FHA fee structure, you must act now. Call today me today 214-448-3835 and I will help you assess your options to determine if you’ll save with an FHA loan or refinance.

This information is provided by SWBC Mortgage Company

Fix It Anyway

"If it isn't broke, don't fix it" is certainly popular advice, but if you've ever had a serious plumbing leak, you certainly wished you had taken care of the problem earlier.
Washing machines, like all appliances, are supposed to work and when they don't, it's time to have them fixed or replaced. However, there is a critical connection from your water supply that may even be older than your washing machine itself.
Ask someone whose hose broke while they were asleep or out of town and you'll hear stories of how quickly the water can damage walls, flooring and furniture. Almost anyone can replace the hoses with a pair of pliers for under $30.00 to avoid this potential catastrophe.
As you're shopping for the replacement hoses, consider the braided stainless steel connectors. The advantage is that the stainless steel offers additional protection should a soft spot develop in the hose beneath. They'll cost a little more but offer considerably more protection for a nominal price.

Uh Oh...Not Again!

FHA Fees Going Up April 1st


FHA has raised the annual Mortgage Insurance Premium to 1.25% beginning April 1st.  MIP is required on all FHA loans and used to fund losses by lenders for borrowers who default on their mortgages.  As of June 1st, FHA loans in excess of the standard maximum of $625,500, in high-cost areas, will have a premium of 1.5% of the loan amount.

In addition to the increase in the annual MIP, FHA also announced it plans to raise the fee on the up-front MIP from 1.00% to 1.75%.  No date was reported for its implementation.

The bottom line will result in a borrower’s payments going up.  However, it might not be restricted to the MIP.  Freddie Mac’sPrimary Mortgage Market Survey showed that both 30 year and 15 year mortgages have gone up too.

One way to avoid the increase is to have a completed sales contract and have your lender order the FHA commitment prior to April 1, 2012.  If you plan on buying a home this spring, there is a reason to do it earlier rather than later.

In Search of An Honest Man

Similar to Diogenes’ search for an honest man, homeowners want someone to do quality repairs at a fair price.  The task appears reasonably easy but if you’ve ever tried to locate someone to fix something, you know just how difficult it can be.

Finding a list of companies from a phone book doesn’t mean they’ll be reasonable and reliable, it just means they have a phone and are willing to pay for an ad.  And let's face it...that's  oh SO 2000.  Searching on the Internet may direct you to a website that appears to be a local company but really is a marketing company who will sell the lead to a repair person or company who will pay a referral fee.  You are never truly certain with whom you are connecting or where?  There are consumer organizations like Angie’s list who rate repair professionals and contractors but they usually require an annual membership fee to be able to access the information.  Services like Renovation Experts or Service Magic are registries for contractors, however, they may not be the most competitively priced.
THE best recommendations are going to come from your friends, family, and neighbors... those you trust and who have actually used the repair professional.  The problem here is that you might have to make multiple calls before you can find a friend who can recommend the type contractor you need.

Repairs are a normal part of selling homes.  I certainly come in contact with lots of contractors.  This experience leads me to understand who is reputable and reasonable as well as who to avoid.

As part of my commitment to helping you from the time you buy your home until you sell it, I am more than happy to make a recommendation of a good repair professional. Give me a call or a click on over to my website…I want to help.

Check out my Vendor List for your next home improvement project. 

My Country Tis of Thee....REALLY?

Subject:  I have a friend who takes vitamins A, C, D, E, F and still needs, B, G, and O.  (B.G.O.= a Bright Glimpse of the Obvious)

Interesting Fact:  In January 2009, the average price of gas was $1.84 a gallon.  Today's average is $3.52 a gallon.  For every penny increase per gallon, $1 billion less is spent every day by consumers in our economy.  Today's price-per-gallon reflects $170 billion lost per day.

Economy Report:  Local chief economists Ted Jones and Mike Inselmann have been on the speaking circuit spreading the great news about our local economy.  NOT SO FAST!!! Year-to-date, 4 million homes have been foreclosed in the U.S.  Currently, there are 10 million homes underwater, of which, 4 million are over 90 days late.  Within the next few years, we could see an economic tsunami if home buyers aren't rescued.  Texas will be slightly spared as our worst days are behind us, however as we didn't secede from the Union, this will have a rippling effect. 

*Information provided by
Ed Kampf, Mortgage Banker
Hancock Mortgage,
Houston, Texas

Wake up America!  The good news:  the election is coming again, soon.  THINK FIRST and then vote wisely.  We always have a choice-let's get ready to run the good race and win this one. 

Great Investment - 2/13/2012

If you invest in a savings account, you'll make less than 1% and will have to pay income tax on the earnings. On the other hand, contribute something extra to your house payment on a regular basis and you'll essentially, earn at the mortgage interest rate which is certain to be more than you're earning in the bank.
Making additional principal contributions on your mortgage will save interest, retire debt and build equity. An extra $100 a month in the example shown will save thousands in interest and short the term of the mortgage as well.

Reducing your cost of housing is another way to improve the investment in your home. Becoming debt-free is a worthy goal that is achieved with discipline and good decisions. Suggestions like this are part of my commitment to help people be better homeowners when they buy, sell and all the years in between.   

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Do YOU Know?

Announcing....

New Changes to the HOA Laws

Kelly Milligan, attorney at Chicago Title, delivered a highly informative message on HOA changes recently

Here's a snippet of a few of them:

Thanks to our representatives...

• It now only takes 66% of the homeowners to call a Board Meeting
• If ONLY 10% of those homeowners vote against HOA foreclosing, the HOA loses their power to old foreclosure practices!

A Few New practices HOA must perform

1. Must give notice to homeowner AND Leinholder
2. Must give sufficient time for homeowner to respond
3. Must have court order to proceed further
4. Must have accountability
5. Homeowner gets option to set up payment plan

GET IN THE KNOW!!!

Many Thanks to Anita with Kissee Home Inspections for providing this helpful information.

The point is...what's "The Point??" 

Did you ever wonder what the mysterious charge is for  “Points”  when it comes to your mortgage loan amount for your purchase?  It is definitely something to consider because if you “buy down” your points, you can usually lower your interest rate!  Want to know more?  Read the rest of my blog.

Deductible Is the Point - 1/23/2012

Points refer to prepaid interest on a home mortgage and can be fully deductible by the buyer in the year paid if the right conditions exist. The points must be used to buy, build or improve a taxpayer's principal residence but not all fees charged by the lender are necessarily deductible.
According to IRS Publication 936, "The term 'points' is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. A borrower is treated as paying any points that a home seller pays for the borrower's mortgage."
If you purchased a home in 2011, have your tax professional evaluate your closing statement to see if there are loan fees that may be used as a deduction on your tax return regardless of whether you or the seller paid them.
Refinancing a principal residence or purchasing an investment or income property require that points must be deducted ratably over the term of the mortgage rather than deducting them fully in the year paid. Borrowers in these situations should consider the benefits of lower interest rates from paying point to higher interest rates without points.
This article is meant to provide information that can be discussed with your tax professional about your specific situation and is not to be considered tax advice.

Welcome back readers!  Here is the second installation in our two-part series on Closing Cost Terminology. 

Recording Fees- charged by County Clerk to record documents in the public records.

Document Preparation- fee charged by attorney for preparing legal documents for transaction.

Survey- confirms lot size and any encroachments or restriction violations.

Inspections- an examination of property for various reasons such as termite inspections;  inspection to see if required repairs were made before funds are received, etc. 

Real Estate Fees- an amount paid of real estate agents as compensation for their services.

Private Mortgage Insurance- insurance against a loss by a lender in the event of default by a borrower (mortgagor).

Interest- always paid in arrears(debt).

Homeowner's Insurance- protects property and contents in case of loss; must be for at least loan amount or for 80% of the value of the improvements, whichever is greater.

Escrow Account- Funds held by lender for payment of taxes, maintenance and insurance when due.

Maintenance Fee- charged by home owners association as set out in subdivision restrictions.

Assumption Transfer Fee- fee assessed by lender to buyer to assume present loan.

Amortization Schedule- schedule showing principal and interest payments throughout the life of the loan.

Prepayment Penalty-  charged by lender to premature payment of conventional loan balance. 

We hope this two-part installment has been informative.  Remember readers, Knowledge IS Power!

Taking the Mystery out of Real Estate terminology (words!)

Many times, financial terms are thrown around in the world of Real Estate.  I have a two-part "primer" to prepare you.  If you have never heard these terms before, I guarantee you that it is going to happen sometime - not just to someone else, but to you!  Heads up!

Definition of Closing Costs

Appraised Value- an opinion of the value of a property at a given time, based on facts regarding the location, improvements, etc.  of the property and surroundings.

Loan Application Fee- paid to lender at time of application; cost varies by lender

Credit Report- a report on the past ability of a loan applicant to pay installment payments

Point- 1% of loan amount

Origination Fee- fee buyer pays lender to originate new loan.

Loan Discount- points lender charges; may be paid by either  buyer or seller on conventional loans; number of points fluctuates with mortgage money market. 

Photos-  charged by lender for photographing property.

Tax Certificate- certificates issued by taxing authorities showing the current years' taxes and the last year that taxes were paid. 

Mortgagee's Title Policy-  required by lender to ensure that lender has a valid lien; does not protect the buyer.

Owner's Title Policy- insures that buyer has title to property.

Escrow Fee-  charged by the title company to service transaction and to escrow money and documents; amount varies with company; usually split between buyer and seller.

Restrictions- certified copy of deed restrictions required by lender.

Tax Proration-  seller pays buyer taxes from January 1st to closing. 

Make sure you visit my blog next week for part 2 of Definitions of Closing Costs.

Real Estate Trivia

Are you smarter than.....a fifth grader...or a real estate agent (no smart remarks here!)?  I picked these gems up from a fellow realtor named Marilyn Wier.  The first one to correctly answer these questions earns the title: "I am smarter than a fifth grade real estate agent"!

Here goes:

Q:  What are the characteristics of classic Queen Anne architecture?
A:  Queen Anne homes are the most elaborate, romantic and feminine of all Victorian Homes.

Q:  What kind of home construction is considered to be the safest in seismic areas? 
A:  Straw-bale homes in seismic zones have proven resilient enough to withstand the shock of earthquakes.

Q:  Which estate has two pools-  one on the east side for the morning sun and one on the west for afternoon enjoyment?
A:  The former estate of John Lennon in Palm Beach has two pools plus guest quarters. 

Q:  What holds the title as the tallest reinforced concrete building hi the United States?
A:  311 South Wacker Drive in Chicago was completed in 1990 and is 65 stories high. 

Q:  What are three of the best indicators of real estate market trends? 
A:  Existing home sales, new home building and mortgage interest rates

Well, how did you go?  Now, who is first to claim that title??

Happy 2012!

Best wishes for the New Year!  May 2012 be your best year ever – beyond your expectations! 

Song of the Birds