One more Advantage of a Land Contract

Written by;

Nicholas D. Perrino
Attorney at Law
Prodigy Title Agency

A Seller was thinking about entering into a Land Contract, but they were afraid they would have to do a Foreclosure Action if the Buyer defaulted on the payments. This scared him into wanting a lease instead.
 
I explained that a Land Contract can be like a Lease which allows an eviction or it can be like a sale and a loan, requiring a foreclose.

Whether the owner can evict or foreclose depends on either 1.) how long the buyer has been making payments or 2.) how much money the buyer has put down up to that date.

The rule is 5 years or 20%. Once a Buyer has made payments for 5 years or has paid 20% of the purchase price, then owner becomes a Lender. Until then, the owner is a Landlord.



Therefore, before the buyer has paid for five years, and before he has paid in at least 20% of the price, the owner can EVICT him if he breaches the contract.



After the buyer has paid for five years or more, OR has paid at least 20% of the price, the owner must file a FORECLOSURE ACTION upon a buyer default.



Land Contracts can have benefits over leases, so don't let the prospect of a foreclosure be the decision-maker.

Tips for Appraisals

Tuesday Feburary, 1/2011

Cincinnati Real Estate

Appraisals allow for homeowners and buyers to establish what is fair market value of a property. In addition, an appraisal allows a lender to know how much they can safely lend.


According to The Appraisal Institute, a global membership association of professional real estate appraisers, "Appraisals are especially important because they are an objective and unbiased source of information. Unlike others involved in real estate transactions, the appraiser is an independent professional who performs a service for a fee rather than for a commission."

This process, however, can be trying and even frustrating. Recent declines in the housing markets have spawned scapegoats across the industry, including appraisers. And increased caution from lenders has slowed the buying process.

"Too many consumers in this struggling real estate market face problems with appraisals when attempting to buy or sell a home," said Appraisal Institute President Joseph C. Magdziarz, MAI, SRA. "But rather than passively endure delays in closing a sale, homeowners and buyers can take proactive steps to avoid pitfalls."

To reduce your stress during this time, consider these simple tips from the AI®.

Understand the role of appraisals. It is neither in your interest nor the interest of your lender for you to purchase a property that is over-priced for its value.

Make sure the lender hires a qualified appraiser (such as a designated SRA, SRPA or MAI member of the Appraisal Institute). The lowest priced appraiser does not necessarily equate with the most qualified. This is a time to get the numbers right.

Accompany the appraiser during the inspection of the property if possible. The more active of a participant you are in the process, the more you will understand it, and be able to catch any errors.

Request a copy of the appraisal report from the lender. Federal law requires that you receive a copy of the appraisal within 30 days.

Examine the appraisal report and ask questions. Be sure to examine the report for errors. According to "Appraising the Appraisal: The Art of Appraisal Review," 2nd edition, common errors in appraisals include: misuse of adjustments to comparables, disregarding special financing and concessions, or miscalculation of gross living area.

Appeal the appraisal if appropriate. Market conditions do change, especially in these economic times. If you feel that new information may change the appraisal, be sure to contact them!

Ask the lender to order a second appraisal by a qualified and designated appraiser.

File legitimate complaints with appropriate state board or professional appraisal organizations.

For more information on appraisals, you may wish to visit The Appraisal Institute's website at www.appraisalinstitute.org.

Selling And Buying All At Once

Cincinnati Real Estate



For many people this can be a true nightmare but it doesn't have to be. And that's a good thing because a lot of people find themselves in the position of needing to sell and buy all at once.

If you're in this situation then you know that timing and money are two critical issues. What you do or don't do, can affect whether you have a successful sale and purchase of your next home.

Here are some important tips to expediting and effectively navigating the sell and buy process.

Collaboration. The real estate process is about collaboration and teamwork. When you begin the process, experts advise that you use a notebook to record your timeline of important dates such as when you absolutely must be relocated. For instance, if you're moving to another city for a job, when are you starting? When do you have to have the kids in school, etc? In this notebook, jot down details of conversations with experts and any transactions. Also, use the notebook to write down your questions that you have for your team of experts so that you're certain to get the answers you need.

Meet with your team which likely includes a real estate agent, lawyer, lender, inspector, appraiser, and advise them of your needs and time frame.

First things first–must sell that home. Many homeowners need the money from their homes in order to purchase their next one. With that in mind, be proactive. Get a home inspection so that you can find out any potential issues that will slow the sale process. Then repair or adjust your asking price before you list your home for sale.

Get your home on the market as soon as possible. Delaying listing your home will result in a shorter time-frame to get it sold.

When it comes time to sell, if you're not ready to move in to your next home, work with your agent to arrange a long close or a rent-back option. This will help to avoid the hassle of an interim move.

It's not always all about the price. When you're in a situation that has some very particular time constraints, you might find that it's not always all about the price. Prepare for the best possible offer by screening your potential buyers, make sure they're pre-approved “within five to 10 days of accepting their offer,” writes Lendingtree.com.

Sometimes a slightly lower offer may be the one that offers greater flexibility and just what you need when it comes to the closing schedule.

Get your buyer of your old home and the seller of your new one on the same page. Put in writing the specific window of dates. Lendingtree.com suggests, “negotiate financial penalties to encourage both stick to those dates.”

Know your price point. This is really important regardless of whether you're selling a home in order to buy another one. However, when you're in a time crunch, it's even more critical to know and shop for the home that's in your price range. And, of course, just like you're asking for with your buyers–get pre-approved.

Get an inspection and make sure the new home can be insured.

Having a buyers notebook where you can record all of your notes on your home search and jot down questions is an excellent tool to have handy when choosing which home you want to make an offer on.

Ultimately, selling and buying a home is a lot to handle but it can be a smooth transition. Be clear about your time frame, new home purchase price, and any other details that are specific to your needs

Written by Phoebe Chongchua