By Susie Bigelow
Premier Realty Group
8010 W. Sahara Ave, Suite #150
Las Vegas, NV 89117
(702) 328-1131
e-mail: SusieBinVe...
Chapter 1 Introduction
Chapter 2 Rely on a Professional
Chapter 3 Utilizing Your Realtor’s Team of Experts
Chapter 4 Fees ...
More wealth has been created through real estate than probably any other single
source. Real estate can be a retirement pr...
There is a common belief that using a Realtor will cost you more money than if you
didn’t, but the facts don’t support tha...
Think about what kind of real estate professional you want. Some real estate agents
have a big name in town; they have ass...
When you choose a Realtor you get not only the Realtor, but their team. This is
extremely valuable and important. Given th...
There are many things to consider when getting a loan: whether interest rates are
rising or falling, if you will be making...
The inspector for the purchaser is also an important team member. I was just
watching a show on HGTV where the homebuyers ...
Keep in mind that everything in real estate is somewhat negotiable. Fees change
from year to year, as well as from state t...
Every step in a real estate transaction is up for re-negotiation all the way until the end.
The best thing buyers and sell...
If I could have a dollar for every time a seller said, “Let’s start a little high so we can
leave room for negotiating,” I...
If a home is priced too high and sits on the market for longer than the average time
for sales in the area, it becomes sta...
In a market where prices are rising, it’s OK to price a little
higher than the most recent sales. In a market that is goin...
 Start packing and boxing up your personal items. Rent a storage shed for a few
months, if need be. Leave only the clothe...
The first step in looking for a home is to determine your personal needs. Everyone
has different needs, priorities and des...
Below are some questions you might want to consider prior to beginning your search.
Be sure to share the answers with your...
17. What are the 3 most important things you want when selecting your new home?
1.)
2.)
3.)
18. What, if anything, would y...
“Why do these homes sit vacant for long periods of time?” you might ask. Some
people simply abandon the property; others f...
the best they can for the builder, their employer. You will be on your own. The commission
remains the same, but this time...
Viewpoint and perspective are everything. To one person, new carpet and paint look
like a lot of work. To another person, ...
These may have been small fixes for a handy person who was going to live in
the home; but for an out-of-the-country buyer/...
The world of financing is constantly changing, depending on the times. Back in 2004,
I remember a lender saying, “If you’r...
 Assumable Loan – This is a loan that the new buyer takes over from the seller.
Today’s interest rates are so low that in...
Most people don’t know enough about loan terms to determine if it’s a good deal or
not. The rate is only a portion of the ...
 3 months of statements for IRA/Keogh/401K/profit sharing
 Transcript or diploma, if you were a student in the last 2 ye...
When you think about it, any house is an investment. The goal is to gain equity and
pay off the note. Sometimes people inv...
My grandfather came to this country from Sweden as a middle-aged man. He spoke
broken English, yet was smart enough to buy...
Our country has been inundated with short sales during the last several years due to
the decline in real estate values nat...
When dealing with a short sale, the number of people involved in a transaction and the
steps involved go up significantly,...
What you will need to provide for a short sale:
 Last 30 days of paystubs or profit and loss statement, if self-employed
...
There are a few types of taxes involved with real estate you should be aware of:
1. There is a yearly property tax that is...
About the Author:
Susie is a dedicated, honest, hard working
agent who has been serving Las Vegas residents
for over 10 ye...
“I pride myself on giving my clients the
individualized attention they expect and deserve.”
Susie services all of the Las ...
Susie Bigelow
Premier Realty Group
8010 W. Sahara Ave, Suite #150
Las Vegas, NV 89117
(702) 328-1131
e-mail: SusieBinVegas...
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10 Things You Must Know Before Your Next Real Estate Transaction

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Susie is a dedicated, honest, hardworking agent who has been serving Las Vegas residents for over 10 years. She believes in working with her clients one on one so they receive the best care possible. A fun-loving person who enjoys life and laughter, you will recognize immediately how knowledgeable she is and how comfortable she makes you feel.

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10 Things You Must Know Before Your Next Real Estate Transaction

  1. 1. By Susie Bigelow Premier Realty Group 8010 W. Sahara Ave, Suite #150 Las Vegas, NV 89117 (702) 328-1131 e-mail: SusieBinVegas@gmail.com You can also visit my website and shop the MLS: www.SusieB.remaxagent.com "I pride myself on giving my clients the individualized attention they expect and deserve.”
  2. 2. Chapter 1 Introduction Chapter 2 Rely on a Professional Chapter 3 Utilizing Your Realtor’s Team of Experts Chapter 4 Fees Involved Chapter 5 Commit, and Then Become Flexible Chapter 6 Selling Chapter 7 Buying Chapter 8 Is the Property a Good Fit for You? Chapter 9 Financing Options Chapter 10 Investments Chapter 11 Short Sales Chapter 12 Taxes
  3. 3. More wealth has been created through real estate than probably any other single source. Real estate can be a retirement program, an investment vehicle, a source of income, or a place to live. The process of buying and selling property, however, can be overwhelming, stressful and make us second-guess ourselves. I’ve come up with my Top Ten Tips to save you time, money and headaches in order to help you, the consumer, avoid many of the pitfalls in an ever-changing market. This is a general guide that is written in easy-to-understand language. It is very basic. Laws and regulations in real estate, lending, short sales and foreclosures change constantly. I have been careful not to go into exact timelines or details; giving you instead, a general sense of what you can expect. After reading this book, feel free to contact me with your specific questions. I would love to help you with your next real estate transaction! RE/MAX and Susie Bigelow – a winning combination Click for Video
  4. 4. There is a common belief that using a Realtor will cost you more money than if you didn’t, but the facts don’t support that idea. Many people don’t realize that the buyer doesn’t actually pay the Realtor, the seller does. Okay, so using a Realtor when buying is a smart idea, but if you’re the seller, then it is more expensive. Right? No, not really. Statistically, sellers net thousands of dollars more when using a Realtor. Why? Below are just a few reasons: 1. Homeowners who list their homes as “For Sale By Owners” (FSBO) are trying to save a buck. Bargain hunters are trying to make a buck. It’s very common for a bargain hunter to strike a deal with a FSBO and prey on their inexperience. If they are lucky, they will net the same amount they would have going through a professional Realtor, but they take on all of the contractual liability. 2. When markets change, they can change very quickly. For the last 6 ½ years, the market prices have been either dropping or stagnant, but 6 months ago they started going up. Many times the news, Zillow.com, or your friend isn’t up-to-date on the latest market conditions. Kind of like timing the stock market, it’s important to strategize your purchase or sale for “today’s” market, not the market 2 months ago. 3. I’ve been working in the residential real estate market for almost a decade, and what I’ve learned is that while each transaction comes with its unique challenges, sometimes the market conditions cause similar issues to come up again and again. Wouldn’t you want to take advantage of having a professional on your side who has walked down the road many times in the past? Issues like appraisal conditions, inspection items, lending conditions, and other hoops you will have to jump through before the transaction is complete are all things the Realtor has dealt with before.
  5. 5. Think about what kind of real estate professional you want. Some real estate agents have a big name in town; they have assistants and teams who work with them. This could be a good thing because it means they've been successful to the point of needing extra help in their booming business. It also means you might be working with several different people on the team throughout the process of buying or selling your home. If you go with a real estate agent who has a smaller volume of business and works solo, you might get more hand-holding and personalized service. Think about your personality and style and interview a few agents before committing. However, once you are working with someone, stick with that agent unless you are not getting the kind of service you want. It’s not viewed kindly to use several agents at a time, when only one will be paid. Many times a Realtor can save the deal by using creative, outside-the-box thinking when an issue comes up. Trust your professional, but use your own logic too! Think of it like a team being stronger together than you all by yourself. The best agent is one whom you can work with and one who will listen to YOUR needs. Video: Tips for choosing a GREAT Real Estate agent Click for Video The following two videos are funny…but extremely relevant when choosing a Real Estate agent. RE/MAX Reject The Disappearing Agent
  6. 6. When you choose a Realtor you get not only the Realtor, but their team. This is extremely valuable and important. Given that Realtors have many transactions each year, year after year, it makes sense that they have found good venders to work with for every real estate need, doesn’t it? They have a team of partners they can recommend to you for landscaping, escrow closing, repair work, etc. I have a team of industry professionals who are tried and true. I have my favorite lenders, my favorite home inspector and my favorite title and escrow companies. This makes your transaction run smoother because there is familiarity and trust. If someone I have worked with time and time again tells me something, I tend to believe them. There is also a sense of partnership and an eagerness to go above and beyond in helping resolve problems. If I’m working with someone new and unknown, I have no way of knowing how competent or trustworthy they are. I want my clients to have the best service throughout the entire real estate process. If your Realtor recommends a lender, please do yourself a favor and listen. The lender might be the single most important person in the whole real estate transaction. Of course, you want the best rate possible, but you also want to choose the right kind of loan for you, and the right company to follow through on delivering the money. It’s not unheard of to be quoted one rate, then at the last minute to be told it’s going to be slightly more because the program that was quoted is no longer available, or some such thing. Working with someone who comes through a recommendation is both safer and smarter than shopping based on interest rate alone, which is kind of like driving a car at night with sunglasses on; you simply will not be seeing the full picture or all of the details. Shop around for a trustworthy agent, and you’ll also find other trustworthy service providers in the process.
  7. 7. There are many things to consider when getting a loan: whether interest rates are rising or falling, if you will be making more money or about the same in the future, how long you plan on keeping the home, etc. There are many different loans to choose from, so getting the right loan for you, based on your personal needs and goals is important. You want someone who has the patience to explain the options. Too often buyers get fixated on the interest rate. They choose a lender because their quoted rates are good, but after tacked-on fees, or changes in X, Y or Z, it ends up costing the buyer more, both in time, frustration and money. Typically, when getting a loan, you can either pay more money upfront, getting a lower rate, or pay less money up front, but pay slightly more per month. Think about how long you expect to keep the loan and what your break-even point will be, and then decide which loan program to go with. Video: Tips for Securing a Mortgage Click for Video The escrow and title company is another important member on your team. The escrow officer’s job is to figure out the financials of the file and allocate the funds to the right places: Home Owner’s Association pro-ration’s, pre-paid taxes, insurance, commissions, etc. There are times when the underwriter for the lender needs the HUD (the financial document) to include something or exclude something; sometimes the escrow officer needs to think outside-the-box, making the HUD look the way the underwriter needs it to look in order to fund the loan. There have been many unfortunate stories about escrow companies and lending institutions going under in the middle of transactions. At best, it’s a terrible inconvenience; at worse, deposit money disappears and the transaction does not close. Go with reputable, local companies that have a good track record. Service and performance are, ultimately, more important than simply the best interest rate.
  8. 8. The inspector for the purchaser is also an important team member. I was just watching a show on HGTV where the homebuyers bought a house for $500,000, and after they moved in, discovered the whole house had numerous code violations and was structurally unsound! Their inspector, clearly, was not very thorough or skilled. Here is another example worth considering. I had a client who was purchasing a rehabbed house, luckily, they opted for the more expensive inspection which included thermal image testing for water leaks. On the surface everything appeared to be fine. The house had been vacant for several months and there was no sign of any leaks, but when the inspector ran the shower upstairs and tested for leaks with his thermal imaging device, lo and behold, the shower/tub drain was leaking from the upstairs into the downstairs ceiling. That inspector saved the day! Had we not used a fabulous, tried-and-true inspector, the client would have been in store for a potentially huge repair bill down the road after closing escrow. As it was, the seller fixed the leak prior to closing escrow. It pays to use quality, trusted partners! A good real estate agent will help you find them.
  9. 9. Keep in mind that everything in real estate is somewhat negotiable. Fees change from year to year, as well as from state to state, and often adjust based on the economic climate. That said, the seller is the one to pay the Realtor fees. The seller hires a listing broker to market their property and pays the broker a fee for successfully bringing them a buyer, usually somewhere between 4-8%. This fee is only paid after the sale has been successful. All of this happens through the closing process. The listing broker then pays the buyer’s broker a part of the fee they collected. Most of the time the fee is split 50/50 although sometimes the listing broker gets more and sometimes the buyer’s broker gets more. Again, it depends on the real estate climate at the time. There are other fees that you need to expect. Both the buyer and the seller will pay the escrow company, a neutral 3rd party who figures the file and distributes the finances. On the east coast, closing attorneys are used instead of escrow companies, although the service provided is similar. There will also be a fee for the title insurance company, which insures that the title is clear prior to transferring ownership. It is also common for each brokerage to have an administrative fee for paperwork, document storage, etc. My company’s fee is $500. If you are a buyer getting a loan there will be a loan origination fee, an appraisal fee, and the cost for inspection. The fees could run between 2-5% over and above the purchase price. Seller’s fees are generally a total of 7.5-8%, including the brokerage fee.
  10. 10. Every step in a real estate transaction is up for re-negotiation all the way until the end. The best thing buyers and sellers can do is to remain “open and flexible.” Let’s suppose the listing sheet says “as is”, but during the inspection a big problem is discovered. As the seller, would you want to start out with a new buyer and have to disclose the “issue”, or just fix it for the current buyer? Buyers, what if you are buying a short sale, (where the seller has to ask the bank to accept less than what is owed) and the bank counters at a higher price? If the prices are going up, you may want to go with the higher price; at least you know you have a property you like. In an upward-moving market where prices are rising, there is usually a lack of inventory which is why the prices are going up (not enough supply for the demand). If you were to cancel the contract because the bank countered at a higher price, you may not be able to find something else, or you may end up paying more for less of a house. The appraisal that your lender will insist you order is for your own safety. Let’s say you agree to go up in your purchase price, yet feel it may be a mistake, wondering if the price is justified. In a short sale, you usually don’t get your appraisal done before the bank grants the short sale. Imagine that the original purchase price was $200,000 and the short sale bank returns a counter-offer at $220,000, so you agree to go up in your price. However, the appraisal, which your lender required, comes in at a value of $210,000. Now what? Armed with your new appraisal, you now go back to the selling bank and ask for a lower sales price of $210,000. Most often, they will agree to lower the price. The moral of the story is, don’t get fixated on the agreement you made today; it could change as more information is revealed, whether it’s a loan, an inspection, a bank, a lender, an appraisal, the seller or the buyer. It’s all up for change until it’s officially recorded. Only then is it a “sure thing”.
  11. 11. If I could have a dollar for every time a seller said, “Let’s start a little high so we can leave room for negotiating,” I would have been able to retire years ago! Let’s talk about pricing real estate and how to do it correctly. Sellers get really concerned about the “asking price” or “list price.” Let me tell you a secret: neither the seller nor the agent chooses the sales price - the buyer and the market do. If you list a house worth $200,000 for $250,000, guess what will happen? You’ll get: 1. Few, if any, showings 2. No offers 3. Low-ball offers That is the market telling you that your product is not worth what you want for it. In the meantime, homes that are priced right are selling all around you. Typically, when that scenario takes place, the seller will blame the Realtor for not “marketing the house well enough.” The internet is the first place homebuyers go, even before they hook up with an agent. If you are using an agent with a big company like RE/MAX, Coldwell Banker, Prudential etc., your home will be linked to many real estate marketing sites automatically. Your home will be advertised all over the internet: Zillow, Tulia, Realtor.com, the Multiple Listing Service (MLS), and many other effective sites. Ninety-nine times out of a hundred, the problem is the price, not the agent.
  12. 12. If a home is priced too high and sits on the market for longer than the average time for sales in the area, it becomes stale and then perspective buyers think there must be something wrong with the house. Buyers also think that as time goes on, the sellers will become desperate and will agree to a low-ball offer. Neither of these scenarios are good for a seller. It’s best to price as closely to the going market as possible right from the start. If the market is dropping, it’s best to price a bit lower than the recent sales in order to stay in front of the dropping prices. It’s hard to catch a buyer if you are lowering your price behind the trend. If it would have been priced correctly from the beginning you would have gotten an offer straight away. If you wait several months and then agree to drop to the price the agent suggested to begin with, you may be following the market down and still not get an offer. Six months prior, it may have been the right price, but now it has dropped more and you are still going to be high because of the further drop in values. In a falling market it is IMPERATIVE to price aggressively from the beginning. The house attracts the most showings and gets the most interest the first few weeks on the market. Take advantage of that and have a price tag that attracts, rather than repels. Video: Tips for Selling Your Home Click for Video If you have to sell because of relocation, divorce, death, or because you bought another home already, my best advice is to price it similarly to recent sales. So many times sellers want to hold on to the idea that their home is worth more than it is. If it doesn’t suit your needs any longer, then let go. Holding on to your house will only have you lose in the end. I’ve seen countless sellers’ prices too high, and then as the market falls, they lose money each month while they still have to pay the mortgage and stay stuck with a house they don’t want anymore. One of the worst mistakes a seller can make is chasing the market down. It’s like surfing, and if you’re paddling after the momentum of the wave you will never catch up. You have to be in front of the wave.
  13. 13. In a market where prices are rising, it’s OK to price a little higher than the most recent sales. In a market that is going up, appraisers are not sure whether it’s a temporary rise or a permanent trend. They don’t want to stick their necks out and appraise the property for significantly more, but most will go with a moderate increase. If you are waiting for a cash buyer who doesn’t need an appraisal, you are limiting your buyer pool. Again, if the house is worth it, you will get multiple offers, and some may even be more than the listed price! A common thing I hear is that sellers think they should get $30,000 more (or whatever figure they come up with) because they spent that much in upgrades, such as backyard landscaping, interior crown molding, or new flooring, etc. Basically, the upgrades you did were for your own enjoyment, not necessarily a financial investment in real estate value. You may get a faster sale and a little more money, but not the same amount that you put into it. The neighborhood and the square footage of your home will determine the value of the home more than almost anything else. Don’t go crazy in over building your house for what is common to the neighborhood. Let’s talk briefly about how to make your home ready for selling. Two words: Clean and declutter.  Begin by having all of the windows professionally cleaned. It will let more light in and the whole house will look fresher and more inviting.  Change the filters in your HVAC. Dirty filters give the buyer the impression that the home has not been well maintained.  Take everything off the countertops and then put only three items back. That's it. Buyers want to see the home, not your personal items. Keep your toothbrushes and grooming items under the sink.
  14. 14.  Start packing and boxing up your personal items. Rent a storage shed for a few months, if need be. Leave only the clothes you will need for the next few months in your closet. Closets look bigger when the clothes have a little air to breathe surrounding them. The fewer items you have in your home and garage, the larger those spaces will look. The fewer personal items you have in your house, the more easily buyers will be able to picture themselves living in your home. When you hold an Open House for buyers, open all of the blinds and turn on all of the lights. Go for a light, bright, airy feel where the outside becomes an extension of the inside. This makes the space visually larger, and please, make the bed and have the house in good showing condition. Now, let’s consider some exceptions. Let's suppose you have out-of-town company visiting with suitcases everywhere, including a blow-up mattress on the floor, kids running around the house, etc., and someone calls for a showing. Do you let them come or not? Ultimately, it's your choice, but I say yes and I’ll tell you why. Let them come, even though things are in disarray. It's always better to have a showing than to put someone off. The floor plan may be exactly what they have been looking for, or the backyard may win them over. Some buyers are in town for only a few days, so if you don't let them come when they can, your house may be skipped over completely. The other exception is when you are doing a short sale and don’t have the money to improve the property and make it more appealing. Don’t stress. You won’t be making any money on the sale, so ultimately it doesn’t matter if it sells for a bit less. Do “Open Houses” sell homes? Usually not. Only on a rare occasion will a buyer happen upon a perfect home that meets their needs at an Open House. More often, it’s a chance for the listing agent to meet buyers and sell them a different home. The agent would like to sell the buyer the one they are holding open if they could, but chances are, it’s not exactly what the shopper is looking for.
  15. 15. The first step in looking for a home is to determine your personal needs. Everyone has different needs, priorities and desires. For example, a property like a condo or townhouse might be perfect for someone who travels often; it’s usually fairly secure, sometimes gated, sometimes with security. The neighbors are in close proximity and might be more apt to notice any suspicious activity in your absence. This type of property may also be ideal for a young professional who does not enjoy yard work. Usually the common areas are maintained by the association. A community pool and work-out room may also be nice perks for some, while others would never use them. It’s best not to pay for something you would never use. Video: Tips for Buying a New Home Click for Video The buyer who requires a large lot and backyard might end up in a different part of town than the person who wants a certain prestigious zip code. Sometimes land in the more desirable zip code sells at a premium; therefore, the builders try to squeeze in more homes per acre. The point is, know yourself, your values, why you are buying, and your top must-haves.
  16. 16. Below are some questions you might want to consider prior to beginning your search. Be sure to share the answers with your Realtor. Help your Realtor help you by giving them as much information as possible. Print out the following questions so that you can provide your agent with the answers: 1. How many actual bedrooms do you need/want? 2. Would you prefer a one story or two story home, or would either be fine? 3. Is a pool a plus, a minus, a necessity, or can you add one later? 4. Do you know what area of town you want to live in? 5. Is a particular school district important to you? 6. Where is your work/school, and what commute time are you comfortable with? 7. How many adults, kids, and pets will be living in the home? 8. Is lot size important to you? 9. How will you use the yard? 10. Would you be willing to put in the backyard landscaping yourself after you purchase the home? 11. Can you handle minor repairs such as paint and carpet? Can you handle a major fixer-up (at a great price), or do you want the house move-in ready? 12. Would you be interested in looking at brand new homes? 13. Is the age of the home important to you? 14. How much are you used to paying monthly for housing? 15. Do you have a purchase price range for your new home? 16. Are you currently selling another home in order to purchase the new one? How much money (approximately) do you plan to put down?
  17. 17. 17. What are the 3 most important things you want when selecting your new home? 1.) 2.) 3.) 18. What, if anything, would you like to stay away from (something besides “bad neighborhood”, which everyone says)? 19. How long do you anticipate staying in the home you are currently shopping for? Sometimes I get a call from someone who wants to buy a foreclosure. Usually what they really want is to get a great deal on a property. Sometimes that’s a foreclosure and sometimes it's not. It may turn out that a desperate seller, or short sale seller, may be offering a property for sale that is a better deal than a foreclosure. A foreclosure is a property that the bank has foreclosed on and now owns. Other names for these properties could be REO or Bank Owned. Just because it’s owned by the bank does not mean it’s the best deal. It may be the least expensive property in the neighborhood or it may not be. If it is, how much work does it need? Often times, by the time the bank has taken possession of the house and put it back on the market, the property could have been vacant for several months or even years. That is not always the case, but often times it is. Houses deteriorate when not maintained. Rubber seals on appliances dry out, O-rings and washers on the faucets dry out and crack. Usually the property will need some work due to deferred maintenance, which may include pool repairs and new landscaping if the water has been shut off. It’s imperative to factor in the lower price of the bank-owned home with a similar property that may cost a bit more money, but be in much better condition. Is the foreclosure really such a bargain? Maybe yes, maybe no. Again, each situation and each house is different and must be evaluated on its own.
  18. 18. “Why do these homes sit vacant for long periods of time?” you might ask. Some people simply abandon the property; others file bankruptcy and figure the property will disappear. It is important to know that even if a person files bankruptcy, they are still technically on title as the owner of the home. Only the debt has been discharged. If the property is no longer wanted, they may proceed with a short sale after the bankruptcy has been discharged. Properties don't just go away because someone has filed bankruptcy. Something eventually has to happen to that property; either it will be foreclosed on or the owner can do a short sale or a “deed in lieu” (giving the property back to the bank). All of this takes time, many years in some cases. Now you can see why some bank-owned properties have been sitting vacant for years. Rest assured, when buying a foreclosure or a short sale, the title will be clear and you will be assuming no liens or debts. It is the escrow and title company’s job to make sure that all liens and debts have been settled properly prior to the buyer taking possession. So, to sum it all up, when looking for a property, I suggest you consider all properties that meet your criteria of location, size and price. Don't limit yourself to foreclosures, short sales or traditional sales. Consider them all and see which property best fits what it is you are looking for. Now, let’s discuss buying auction property. This is property that is in the process of being foreclosed on. There will be an auction where there may be purchasers willing to buy the property, instead of the bank taking the property back. In order for a purchaser to buy at auction, they must pay cash (no financing) and they also must pay a 5% premium on top of the sales price. If no bidders bid on the house, that is when it goes back to the bank and becomes an REO or bank-owned property. When shopping for a home, looks are not everything. Have you heard the expression “the three most important things are location, location, and location”? Paint and carpet can be changed, location cannot. However, know your limits. If you’re not a handy person and don’t have extra cash, don’t look at fixer-uppers. Paying a little more money for a move-in ready home or a brand new home will probably suit you better. Speaking of new homes, let your Realtor help you. Realtors can help you buy a brand new home just as easily as a resale. There will be NO extra cost to have representation from your own Realtor. If you go into a new subdivision on your own, you are working with the builder’s representative. While that agent may be very nice to you, he or she is going to do
  19. 19. the best they can for the builder, their employer. You will be on your own. The commission remains the same, but this time there is no 50/50 split; the builder’s agent gets it all. A Buyer’s Agent will represent YOU and be able to guide you through the process, letting you know what is custom and ordinary vs. unusual. If a problem occurs towards closing, your Realtor can help negotiate you through that. I recently had a situation where the appraisal on a new home came in low. Instead of lowering the sales price, (which the builder did not want to do because it would drop values in the neighborhood) we were able to negotiate a substantial amount of extras from the design center in order to bridge the gap. The buyer was going to put that extra money into the house anyhow; it just got shifted so that it was included in the purchase price vs. being an extra out-of-pocket expense. It is common to have an inspection done on the home you are buying. Inspections range between $250 and $450. Good inspectors are worth every penny. Every house has some issues. As a buyer, you want to know what they are. If there are major issues, you may be back to the negotiating table. Even though you may have a contract stating “no repairs” or “as is”, if you find a major issue, sometimes it needs to be fixed in order to close. That will all need to be negotiated with the seller. Should you do an inspection on a new home? Usually builders will give you a great warranty. If you move in and then discover an issue they will fix it; however, it may be more of a hassle for you after you have taken possession and moved your belongings in. If you have the money, it will give you peace of mind to have an independent inspector do a thorough inspection prior to closing. Some builders frown on this, some are OK with it. Your Realtor will help you determine your course of action when the time comes.
  20. 20. Viewpoint and perspective are everything. To one person, new carpet and paint look like a lot of work. To another person, a home in a good location with a good floor plan and one that is priced well is all they care about. So what if they have to buy all new appliances, light fixtures, fix holes in the walls or redo the landscaping. Someone handy might find this to be a fun project, rather than a daunting deal breaker. A house might be perfect for one person and a total disaster for another. I was working with a young Australian couple about a year ago, they were looking for a retirement home to rent out. We began searching around the city. In the meantime, we found a great house in an older neighborhood that had been completely redone. When they walked in they fell in love with the new, modern appearance. We wrote an offer to purchase the house and it got accepted. After we hired a certified home inspector, we found out that there were a number of issues with the house that made them uncomfortable. We discovered the home’s addition was not permitted and there were a few structural problems. The washer and dryer had been moved and the new location was not vented. The venting for the old location was cheaply capped. The house was missing GFCI outlets where required, the smoke alarms were not hardwired and did not connect to each other to meet code requirements, and so on.
  21. 21. These may have been small fixes for a handy person who was going to live in the home; but for an out-of-the-country buyer/landlord, there were too many fixes and safety/liability issues to overcome. Also, buying a home of this age meant more upkeep and ongoing maintenance, due to things becoming old and needing to be replaced. So, even though the house looked beautiful with all of the modern design trends already in place, the home was not a good fit for that particular buyer. I ended up finding them a newer home that had minimal inspection issues. The $350 they spent on the first inspection was well worth the price and saved them thousands of dollars down the road. Figure out what resources you have and buy according to those resources. If cash is your resource, then spend a bit more on a move-in-ready home. If you are the handy type, you may want to save or make money by buying something not many people would want to tackle. Figure out what works for both your personality and skill set.
  22. 22. The world of financing is constantly changing, depending on the times. Back in 2004, I remember a lender saying, “If you’re breathing, you can get a loan.” That was pretty much true. Now in 2013, we are still suffering the backlash of those policies. Today, getting a loan is not a fun or easy process. Underwriters study every detail of the borrower’s financial situation, questioning things we consider picky and over the top. I am not a lender and don’t claim to understand all of the in’s and out’s of the lending practice, but will go over some of the basic and various loan options.  VA Loan – For people who are currently in the military or previously served. Typically, the borrower can put down as little as a $1 on a piece of property and finance the rest.  FHA - A government-backed loan. A 3½% down payment is standard.  Conventional – Typically, the buyer must have 20% of their own money to put down, but you can now get conventional loans by paying only 5% down.  Mortgage Insurance Premium – This is an extra amount a borrower will pay monthly if they don’t put 20% down.  203K Rehab Loans – This is often used where rehab costs are built into the loan. The buyer is able to take possession of the house and the lender releases the rehab money as the work gets done. The loan is based on what the house will be worth after the repairs are finished.
  23. 23.  Assumable Loan – This is a loan that the new buyer takes over from the seller. Today’s interest rates are so low that in 10 years when rates may have gone up, a new buyer of the home may be able to assume, or take over the seller’s loan payment and terms. This can be a huge selling feature in the future. Imagine if rates go up to 10% and a seller has a loan for 3½%. The new buyer, if he qualifies, will be able to assume that loan at a 3½% interest rate.  Wish Loans or Down Payment Assistance Loans – Certain buyers may qualify. If they stay in the house for X number of years and make each payment on time the “gift” amount is forgiven.  Hard Money Loans – These are loans given by a hard money lender or an individual who has a private business lending money. It is not through a Bank or Savings and Loan or a Credit Union. It is a private loan, usually designed for short-term use because the interest rate is substantially higher than normal.  Rates – You can either get a fixed rate loan where the interest stays the same for the entire time you have the loan or you can get an adjustable rate loan. These are more common when interest rates are high. The starting rate is usually lower than a fixed rate loan, thus making it attractive to the buyer who wants to stretch his money. The problem is that if rates continue to rise, so will the payment. However, if the rates drop, so will the payment. Let’s discuss the importance of finding a good lender. If your Realtor recommends a lender, please interview them and consider that lender very seriously. You don’t have to use that lender, but past success and professionalism is probably why your Realtor recommended that person and company. Video: Tips for Securing a Mortgage Click for Video
  24. 24. Most people don’t know enough about loan terms to determine if it’s a good deal or not. The rate is only a portion of the overall loan. There can be hidden fees and loan costs that are not obvious until it’s too late. It is not unheard of that one rate will be quoted, but then when it comes time to close, that program is no longer in place or rates have gone up. Now the buyer is paying either more per month than anticipated or more in upfront fees. A reputable lender is imperative for a smooth, successful transaction. It is also a good idea to stick with a local lender. Someone you find on the internet, who promises a great rate, will not likely know the intricacies of your local market. The process will have many more bumps in the road, due the fact that rules and regulations vary from state to state. It’s also the first time all the parties have worked together. You have the title company, the Realtor, the lender and the buyer. How these parties communicate with each other, and how often are completely unknown. I’ve worked with lenders in the past who simply don’t communicate. They are working out an issue on their end, but they don’t bother sharing any of the details of what’s going on with the buyer, Realtor or title company. The buyer and seller are all in the dark and the lender simply says they need an extension. All parties are frustrated, including the seller and their Realtor. I can’t stress enough the importance of the lending company and their part in a smooth transaction. What you will need to apply for a loan:  Last 30 days of paystubs or profit and loss statement, if self employed  2 most recent years of W-2’s  2 most recent years of tax returns  Information on residency history for the last 2 years  Coupon book or statements on all outstanding loans and credit cards  3 months of bank statements for all accounts
  25. 25.  3 months of statements for IRA/Keogh/401K/profit sharing  Transcript or diploma, if you were a student in the last 2 years  Addresses, loan information & leases, if applicable, for real estate you already own  Current landlord’s name and contact info, if you were renting a home  Copy of sales contract, if you are currently selling another home  Divorce papers or legal separation agreement (if you pay or receive child support or alimony)  Relocation agreement, if you are being transferred into the area  Award letter and copy of your most recent check (if you receive Social Security, retirement or disability)  Pink slips on cars, if cars are newer than 5 years  Copy of driver’s license and social security card (FHA loans only)  Check for appraisal and credit report fees
  26. 26. When you think about it, any house is an investment. The goal is to gain equity and pay off the note. Sometimes people invest intentionally and sometimes they end up owning a rental house unintentionally. When purchasing a home for you to live in, the criteria will be different. You will be more concerned with the floor plan and the neighborhood. When making an investment you should be looking at cash flow. In today’s Las Vegas market, it’s less expensive to buy a home than it is to rent. Interest rates are currently about 3½%. Don’t know if you want to buy because you might not stay for the long-haul? How much can you rent the house out for? Even if the buyer only lives in the home for a short time, they can rent it out for more than their mortgage. Now they are a successful “investor” without even meaning to be. You’ve probably heard horror stories about being a “landlord”. We all have. The fact remains, though, that one of the best ways to get wealthy is to own real estate. Sometimes the value goes down, but over the long-haul it almost always goes up. Video: Purchasing Homes via REO/Short Sales/Bankruptcy Click for Video
  27. 27. My grandfather came to this country from Sweden as a middle-aged man. He spoke broken English, yet was smart enough to buy houses whenever he could (in Santa Barbara, CA nonetheless). By the time he died, he left his four daughters over 2 million dollars’ worth of real estate! So what if the tenants do a little damage. Fix it and get a new tenant. Do not be personally attached to the home; it’s all about the numbers. You have someone else paying your mortgage and one day you will own a house free and clear. Property managers typically charge 8-10% for managing your property. Find a good one and leave the headaches to them. Pay extra money towards the mortgage each month and before long you will own the house free and clear. Even if you sell it after ten years, you will have paid down a big portion of the mortgage and, more than likely, property values will have gone up. It’s like having a savings account; the appreciation and reduction of principal balance are like an automatic savings plan that one day will pay big dividends. One of the smartest things you can do as a landlord is to charge on the lower side of the going rate for a rental. First off, you will have more applicants to choose from, so you can be more selective, versus having to take the first and only applicant. Keeping the property occupied is a key component to being a successful real estate investor. Each month the house is vacant is a month you lose money. Take a little less in order to keep the tenants longer and have less turn over and, therefore, fewer repairs. If the property is turned over every year, you may have to repaint each year. If you get a tenant to stay 5 years at a slightly lower rent you will be money ahead financially, as well as having less stress.
  28. 28. Our country has been inundated with short sales during the last several years due to the decline in real estate values nationwide. A short sale is where the market value and asking price is less than what is owed on the home to the bank. Simply put, the seller secures a buyer and then asks the bank to accept their sales price and forgive the negative debt. A short sale decision from a bank can be as short as two weeks or as long as two years. Now that banks have gotten up to speed with staff and have a process for handling a large load of short sales, the average time is around 1-4 months. There are various reasons a short sale might take longer or go more quickly. The number one reason for delay is that the bank is missing either some documentation (paycheck stubs, tax returns or simply a signature or date). Other factors that affect the length of time a short sale may take are:  Who the lender is (servicer)  Who the investor is  If the loan is insured  How many loans the seller has (each one must be dealt with separately)  How skilled the real estate agent and lawyer are at working with the bank  How skilled the negotiator at the bank is (it’s a high burnout job and it’s not unheard of to lose the negotiator halfway through the process, then a new person must take over and get up to speed)  What condition the house is in
  29. 29. When dealing with a short sale, the number of people involved in a transaction and the steps involved go up significantly, potentially causing delay and red tape. Getting a short sale approved is similar to getting a new loan. Sellers must build a case, convincing the bank to forgive the debt. Just because a homeowner is upside down on their loan does not mean the bank will grant a short sale. There must be a hardship or financial change from the time the borrower originally secured the loan. This could be a loss of job, reduced income, increased expenses, a move required for work, divorce, ailing parents who need help, etc. Some sellers choose to work with an attorney when doing a short sale and some do not. Chances of getting your short sale accepted do not necessarily increase with the help of an attorney, but in certain cases they may. If it’s a fairly simple and straight forward situation, an attorney is not usually needed. However, if there are multiple loans and the reason the seller claims to need a short sale is not clear cut, it may be a good idea to hire an attorney. Many Realtors, including myself, are extremely proficient at negotiating short sales and have short sale designations such as SFR (Short Sales and Foreclosure Resource) or CDPE (Certified Distressed Property Expert). It is a good idea to speak with your Realtor prior to hiring an attorney. The goal in a short sale is to walk away from the debt and not have to come out of pocket with any cash. Some banks will not deal with a seller unless they are late on their mortgage. The government has bailout funds available to give to the bank once the borrower is sufficiently late on the mortgage, thus, they don’t even want to consider a short sale unless the borrower has missed payments. Each bank and each loan is different, so talk to your bank before deciding anything. Some banks have a streamline program where they have a predetermined price they will accept and will actually give the seller some cash to do a short sale, as long as the owner leaves the property in good condition. You may notice that I am being a little vague about numbers and timelines. The reason for this is that the programs keep changing and I don’t want to lead anyone astray with information that may not apply to them or that may have become out-of-date. Each person’s situation is different and different rules apply. Using a professional real estate agent can help you navigate these tricky waters.
  30. 30. What you will need to provide for a short sale:  Last 30 days of paystubs or profit and loss statement, if self-employed  2 most recent years of W-2’s  2 most recent years of tax returns  Information on residency history for the last 2 years  Coupon book or statements on all outstanding loans and credit cards  HOA statement showing you are current or not current  2 months of bank statements for all accounts  2 months of statements for IRA/Keogh/401K/profit sharing  Addresses, loan information & leases, if applicable, for other real estate you own  Copy of sales contract  Divorce papers or legal separation agreement (if you pay or receive child support or alimony)  Relocation agreement if you are being transferred into the area  Award letter and copy of you most recent check (if you receive Social Security, retirement or disability)  A hardship letter stating why you need to do a short sale  A financial worksheet itemizing household expenses  4506-T (request for Transcript of Tax Return)  Authorization to Release Information to a 3rd party (Realtor or attorney) In addition to the above items, your Realtor will need to provide the listing agreement, the purchase contract, listing history, current market statistics and comparable sales, and a preliminary closing statement (HUD) provided by the title company. It looks daunting at first, but if you take it one step at a time, you will get through it!
  31. 31. There are a few types of taxes involved with real estate you should be aware of: 1. There is a yearly property tax that is used to fund education and such in the area. 2. There is a transfer fee that is paid each time a property is transferred from one owner to another. In the state of Nevada, the transfer fee is paid by the seller, unless it’s a new home purchase, then it is paid by the buyer. 3. There could also be capital gains tax. If a property goes up in value a great deal and is then sold, the seller must pay taxes on the gain. The exception is if the owner has lived in the property for 2 out of the last 5 years, then it is considered their primary residence and they are exempt for the first $250,000 if single or $500,000 for a couple. If the gain was on an investment property and the seller would like to avoid (or delay) paying taxes, they can do a 1031 exchange and purchase another property with the proceeds in order to avoid the tax. There are strict rules that must be followed and a 1031 exchange company must be used. If you have a situation where your property has gone up in value, please talk to an accountant prior to completing the transaction so that you do it correctly and know how it will affect your finances and tax situation. Short Sale, Taxes & The Debt Forgiveness Act. At this time (beginning of 2013), Congress has extended the Debt Forgiveness bill that states sellers who do a short sale on their primary residence will not be taxed on the forgiven amount. The law will be up for review again at the end of the year. So, if you are thinking of doing a short sale, it might be best to complete it within this year to be safe.
  32. 32. About the Author: Susie is a dedicated, honest, hard working agent who has been serving Las Vegas residents for over 10 years. She formerly lived in Santa Barbara, CA where for over 12 years she helped run her families kitchen & bathroom remodeling business. She believes in working with her clients one-on-one so they receive the best care possible. A fun-loving person who enjoys life and laughter, you will recognize immediately how knowledgeable she is and how comfortable she makes you feel. Commitment and tenacity are two characteristics Susie possesses. She has been married to her husband, John, for over 20 years and they have two wonderful teenagers. On occasion, John’s construction skills help Susie in her real estate dealings. There are instances when a house needs a little something to get it sold, both on the buying side and the selling side. John has helped a number of times in handling these tasks quickly and efficiently so that she can close on time. “Real estate can sometimes be an emotional roller coaster. My job is to guide my clients through each step of the process quickly and efficiently. Our goal is to have the process of buying or selling run smoothly. I am able to remain calm in the midst of a transaction that may be facing obstacles and figure out how to overcome challenges and stay on track.”
  33. 33. “I pride myself on giving my clients the individualized attention they expect and deserve.” Susie services all of the Las Vegas Valley including Pahrump. If you live in another part of the country, Susie can help you find a top agent in your area. One of the benefits of being with Re/Max is a great referral network. Re/Max agents sell more real estate than any other company, and have top agents and offices world-wide. Like choosing any service professional – from an accountant to your family doctor – it’s important to do your homework before deciding on a real estate agent. Your home purchase or sale likely represents one of the most significant financial transactions of your life, and you definitely want to find the right person for you. Abilities matter. Production matters. You want someone with experience, education and a proven track record of successful closings. On all counts, RE/MAX and Susie Bigelow are a solid place to start your search. Nobody in the world sells more real estate than RE/MAX, and RE/MAX agents collectively hold more professional designations than agents at any other national real estate brand. Susie has won numerous awards (including the Horizon Award and the Presidents Circle Award), and currently holds an SFR (short sales and foreclosure resource), and CDPE (certified distressed property expert) designations.  Horizon Award  President's Circle Award  Referral Excellence  Sterling Society  Circle of Excellence  Certificate of Recognition
  34. 34. Susie Bigelow Premier Realty Group 8010 W. Sahara Ave, Suite #150 Las Vegas, NV 89117 (702) 328-1131 e-mail: SusieBinVegas@gmail.com When you hire me to be your agent, you get all my knowledge and experience to help guide you through your Real Estate transaction. If you ever need my assistance, I’m only a phone call away in case of any problems or concerns that you may ever have. I’ll be your person of contact and I’m here to help. You can also visit my website and shop the MLS: www.SusieB.remaxagent.com

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