Real Estate Contract Contingencies – What You Need to Know
What Are Contingencies in a Real Estate Contract?
A contingency is a formal clause in a real estate contract that enumerates particular conditions that must be met by either the buyer or the seller in order for the principals to proceed to the next step in the contract. Found in every offer-to-purchase or sell contract, contingencies protect the interests of both buyers and sellers. Failure to meet a particular contingency can result in breach of contract and possible penalties to the party at fault.
Basic Contingencies in Real Estate Contracts
Contingencies are divided into categories according to their purpose:
(1) protection for the seller
(2) protection for the buyer
(3) mutual protection of both buyer and seller. Most real estate contracts contain two universal contingencies: a mortgage contingency and a home inspection contingency.
Short Term Sales Pressures of Public Real Estate Companies Could Produce Fiduciary Breaches
There are only two aspects of perfect agency: No Conflict of Interest and Legal Fiduciary. A client seeking to be represented by an agent in real estate is – in fact and deed – seeking absolute assurance of the highest degree of agency, better known as legal fiduciary. Rarely is a client seeking or agreeable to any watered-down weakness of agency such as is found in dual agency or transaction brokers. And in real estate transactions which require many versions and levels of back and forth negotiations, only the highest level of duty to fiduciary should be brought to bear. It is extremely easy for the imperfect and weak human to violate – either knowingly or inadvertently – this level of fiduciary owed to the principal.
Conflict of Interest is one cause of reduced fiduciary, and conflict of interest can also come in numerous shades and from strange quarters. “Visible” conflict (we’ll call it) comes in the recognizable form of a landlord’s agent simultaneously representing a tenant with his own landlord (while the tenant believes it is the protected party). “Invisible” conflict can come in the form of two agents working together to form a transaction not within the framework decided upon by the principal. And now there is a new conflict player on the field, and it is the most insidious of them all: “Short-Term Sales Pressures”, where typically publicly-traded real estate brokerage companies face ever-increasing demands of stock price performance based on underlying revenues. It is one thing for market pressures to invigorate commodity sales like soda, beer, cars, etc.; it is another thing altogether for market pressures to invigorate revenues (sell more faster) in an environment where fiduciary and agency are the root of the service.
Guide to Home Information Packs!
If you are a buyer or a seller, then you can benefit by having home information packs. Home information packs (HIP) provide crucial information to a buyer and seller. This kind of information comes in handy at the initial procedure of the home buying process. It enables a buyer get a clear picture of the house that he or she would be buying. This helps you get a clear picture of the property that you are contemplating to buy or sell.
HIP, basically contains all the details pertaining to the house. It helps reduce the number of failed home sales, detecting frauds, which has been constantly on the rise. It is an excellent facility that helps compare the features of different properties. In the past, there was not much choice let to the people buying properties. It is only after the sales deed was signed that the buyer would get to know the features of the house.
This would be a risky situation to the buyer. If there were any problems regarding the property, then there was not much choice left with a buyer. There would not be left to do after the property was sold out. Moreover, the condition of the property or legitimacy of any documents provided would also not be available to a buyer that could help them in decision making. This kind of situation would also give rise to the increase in the number of failed transactions.
Real Estate Market – What Led to the 2008 Real Estate Market Collapse?
Many experts had predicted the present crash in the real estate market. Despite this most people were caught unawares and were stunned when the opportunistic market started to collapse like a house of cards.
The crash in the real estate market followed the collapse of the sub-prime market. This was the cause of sudden foreclosure of innumerable companies. Those which are not forced to close business endured billions of dollars in losses. Homeowners have been adversely affected by the news reports regarding sub-prime markets’ fall and yet many fail to understand the exact impact it has had on them, and why this has happened to them.
Sub-prime mortgages have been highly beneficial to many property buyers in the last few years. Even those who did not have good credibility could easily get sub-prime mortgages to invest in the real estate scenario to make a fast buck. Buyers with bad credit histories got these loans easily as the guidelines governing them were lax and did not follow stringent quality control. The lenders were also happy doing this as they could easily charge higher rates of interest when they sanctioned mortgages to borrowers with low credits. Some speculate that the lenders were not too bothered as, in case of payment defaults they could always make a foreclosure and resell the property for a profit.
Home Appraisal Estimate Online – 2 Big Money Saving Tips
If you are selling your home or buying a house then knowing the value of that home will save you tons of money. Getting a home appraisal estimate online could save you time, money and headaches. This article explains why every buyer needs to know the value of the home before making an offer, and why every seller needs to know the value of their house before listing the property.
Buyers – If you plan on buying a home then most likely you will have to pay for a professional appraisal before the bank will lend you money. This is to protect the bank. You should get an appraisal of the house before you make an offer. This will protect you and save you money. Most people list a home not knowing the true value of the home. As a buyer if you get a home appraisal estimate online before you make an offer you will be able to make an offer that is reasonable and based on historical data. I recommend making an offer for 3 percent less than the estimated value of the home.
Average Home Prices Fall Nationwide in the First Quarter of 2009
Ninety percent of American cities endured falling home prices in the first quarter as first – time home – buyers looking for bargains were the major influence in the market.
According to a statement made by the National Association of Realtors on Tuesday, May 11, 2009; median sales prices of existing homes declined 134 out of 152 comparative metropolitan areas compared with the same period a year ago. Prices did rise in 18 other undisclosed cities.
Foreclosures, “fixers”, REO’s, and other distressed properties contributed to about half of the market’s closed sales, even though sales did fall 3.2 percent from last year.
Tips & Tricks – Real Estate Industry in Recession
Staying afloat and keeping your job in an economic recession can prove to be tough. Everyone in the real estate industry, from agents to appraisers and even title companies, is affected by the declining economy and the lack of home sales. By taking the time to do a few small things, you can easily make sure that you have work at all times, even when things are on the slow side. For example, if you’re an appraiser, take the time to advertise to people who are looking to sell or refinance their homes. This is almost the only business going on since home sales are so slow right now, and you can actually benefit greatly from these people. Let people know how important your services are, no matter what you do, so that they feel the need to acquire your services for their real estate ventures.
Agents, title insurance companies, inspectors, mortgage companies, and appraisers alike all need to do the same thing. Find the business that is going on, and do everything in your power to convince people to work with you. Build a reputation for yourself, or use the one that you have previously built, to help people feel secure in working with you. Read more
MLS Listings Resources
The goal of MLS listings is to provide a listings brokers and realtors with a standardized home sales database that can be referred to and compared with other home listings by other broker participants in that MLS. Commissions earned by listing brokers are publicly available and can be referred to by other cooperating brokers.Although it is considered a contractual obligation to publish commissions earnings this can be negotiated between the broker representing the buyer and the original listing broker.The accuracy and prompt reporting of the published transaction data is in the best interests of the property shopping public.
Another useful resource is Google maps. Anyone can find Google real estate listings anywhere in the world using google maps. To get an aerial view of any MLS property listing on Google Real Estate, just type or paste the address in the google maps search box. Then click on the “satellite” or “hybrid” box at the top right of the map. Use the slider on the left to zoom down to view the property. Read more
Residential Real Estate Appraising Secrets – Why Do You Need an Appraiser?
There are several reasons why homeowners need appraisals on their property. From date of death, to refinance, new home equity loans and purchases, to value to sell, wills and trusts or PMI removal, there are many occasions to hire a independent third party like a professional real estate appraiser to find the value of a home.
Before May 1, 2009, many appraisers worked primarily with mortgage brokers and lenders for lending-related business. Brokers and lenders could pick and choose which appraisers they worked with and those they did not want to work with. Non-lender business, through attorneys and accountants relies on strong relationships between professionals and appraisers as well. Homeowners, in non-lending situations generally have the flexibility to work with an appraiser of their choosing as well.
Real Estate Accounting -To Make Sure Your Real Estate Worry Becomes History
Are you in the real estate business and done know what to do with your accounting problems? Is making a balance sheet and income statement causing you to lose sleep? Real estate accounting is quite different from the accounting one learns in school. For small businesses where one has to worry about how to increase customer attention, accounting problems are often taking for granted. Real estate accounting is important and vital for the company to continue existence.
Here are a few reasons why Real estate accounting becomes a necessity.
People in the real estate business don’t often have time for accounting. They are the kinds that don’t touch accounting until the time comes to pay taxes. This is a very wrong approach. Firstly, accounting needs to be done the minute a transaction is recorded. Else the amounts get distorted and the tax payment amount becomes different. Accounting is important is it is often said that accounts are the face of the business.