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_ Understanding Agency |
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It's
important to understand what legal responsibilities your real estate
salesperson has to you and to other parties in the transactions. Ask
your salesperson to explain what type of agency relationship you have
with him or her and with the brokerage company.
1. Seller's Representative
(also known as a listing agent or seller's agent). A seller's agent is
hired by and represents the seller. All fiduciary duties are owed to
the seller. The agency relationship usually is created by a listing
contract.
2. Subagent
A subagent owes the same fiduciary duties to the agent's principal as
the agent does. Subagency usually arises when a cooperating sales
associate from another brokerage, who is not representing the buyer as
a buyer's representative or operating in a nonagency relationship,
shows property to a buyer. In such a case, the subagent works with the
buyer as a customer but owes fiduciary duties to the listing broker and
the seller. Although a subagent cannot assist the buyer in any way that
would be detrimental to the seller, a buyer-customer can expect to be
treated honestly by the subagent. It is important that subagents fully
explain their duties to buyers.
3. Buyer's Representative
(also known as a buyer's agent). A real estate licensee who is hired by
prospective buyers to represent them in a real estate transaction. The
buyer's rep works in the buyer's best interest throughout the
transaction and owes fiduciary duties to the buyer. The buyer can pay
the licensee directly through a negotiated fee, or the buyer's rep may
be paid by the seller or by a commission split with the listing broker.
4. Disclosed Dual Agent
Dual agency is a relationship in which the brokerage firm represents
both the buyer and the seller in the same real estate transaction. Dual
agency relationships do not carry with them all of the traditional
fiduciary duties to the clients. Instead, dual agents owe limited
fiduciary duties. Because of the potential for conflicts of interest in
a dual-agency relationship, it's vital that all parties give their
informed consent. In many states, this consent must be in writing.
Disclosed dual agency, in which both the buyer and the seller are told
that the agent is representing both of them is legal in most states.
5. Designated Agent
(also called, among other things, appointed agency). This is a
brokerage practice that allows the managing broker to designate which
licensees in the brokerage will act as an agent of the seller and which
will act as an agent of the buyer. Designated agency avoids the problem
of creating a dual-agency relationship for licensees at the brokerage.
The designated agents give their clients full representation, with all
of the attendant fiduciary duties. The broker still has the
responsibility of supervising both groups of licensees.
6. Nonagency Relationship
(called, among other things, a transaction broker or facilitator). Some
states permit a real estate licensee to have a type of nonagency
relationship with a consumer. These relationships vary considerably
from state to state, both as to the duties owed to the consumer and the
name used to describe them. Very generally, the duties owed to the
consumer in a nonagency relationship are less than the complete,
traditional fiduciary duties of an agency relationship. |
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_ 10 Ways to Make Your House More Salable |
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1. Get
rid of clutter. Throw out or file stacks of newspapers and magazines.
Pack away most of your small decorative items. Store out-of-season
clothing to make closets seem roomier. Clean out the garage.
2. Wash your windows and screens to let more light into the interior.
3. Keep
everything extra clean. Wash fingerprints from light switch plates. Mop
and wax floors. Clean the stove and refrigerator. A clean house makes a
better first impression and convinces buyers that the home has been
well cared for.
4. Get rid of smells. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Open the windows.
5.
Put higher wattage bulbs in light sockets to make rooms seem brighter,
especially basements and other dark rooms. Replace any burnt-out bulbs.
6.
Make minor repairs that can create a bad impression. Small problems
such as sticky doors, tom screens, cracked caulking, or a dripping
faucet may seem trivial, but they'll give buyers the impression that
the house isn't well maintained.
7.
Tidy your yard. Cut the grass, rake the leaves, trim the bushes, and
edge the walks. Put a pot or two of bright flowers near the entryway.
8. Patch holes in your driveway and reapply sealant, if applicable.
9. Clean your gutters.
10. Polish your front doorknob and door numbers. |
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_ 5 Ways to Speed Up Your Sale |
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1. Price it right. Set a price at the lower end of your property's realistic price range.
2. Get your house market ready for at least two weeks before you begin showing it.
3. Be
flexible about showings. It's often disruptive to have a house ready to
show on the spur of the moment, but the more often someone can see your
home, the sooner you'll find a seller.
4. Be ready for the offers. Decide in advance what price and terms you'll find acceptable.
5.
Don't refuse to drop the price. If your home has been on the market for
more than 30 days without an offer, be prepared to lower your asking
price. |
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_ 7 Steps to Preparing for an Open House |
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1. Hire a cleaning service. A spotlessly clean home is essential; dirt will turn off a prospect faster than anything.
2. Mow your lawn, and be sure toys and yard equipment are put away.
4. Serve
cookies, coffee, and soft drinks. It creates a welcoming touch. But be
sure the kitchen has been cleaned up; use disposable cups so the sink
doesn't fill up.
5. Lock
up your valuables, jewelry, and money. Although the real estate
salesperson will be on site during the open house, it's impossible to
watch everyone all the time.
6. Turn on all the lights. Even in the daytime, incandescent lights add sparkle.
7. Send
your pets to a neighbor or take them outside. If that's not possible,
crate them or confine them to one room (a basement or bath), and let
the salesperson know where to find them.
8. Leave. It's awkward for prospective buyers to look in your closets and express their opinions of your home with you there.
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10 Ways to Make Your Home Irresistible for an Open House
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1. Put fresh or silk flowers in principal rooms for a touch of color.
2. Add a new shower curtain, fresh towels, and new guest soaps to every bath.
3. Set out potpourri or fresh baked goods for a homey smell.
4. Set the table with pretty dishes and candles.
5. Buy a fresh doormat with a clever saying.
6. Take one or two major pieces of furniture out of every room to create a sense of spaciousness.
7. Put away kitchen appliances and personal bathroom items to give the illusion of more counter space.
8. Lay a fire in the fireplace. Or put a basket of flowers there if it's not in use.
9. Depersonalize the rooms by putting away family photos, mementos, and distinctive artwork.
10. Turn on the sprinklers for 30 minutes to make the lawn sparkle.
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_ 7 Items to Watch for in a Purchase Contract |
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1. The closing date. See if the date the buyer wants to take title is reasonable for you.
2. Date of possession. See if the date the buyer wants to move in is reasonable for you.
3. The
earnest money. Look for the largest earnest money deposit possible;
since it is forfeited if the buyer backs out, a large deposit is
usually a good indication of a sincere buyer.
4. Fixtures
and personal property. Check the list of items that the buyer expects
to remain with the property and be sure it's acceptable.
5. Repairs.
Determine what the requested repairs will cost and whether you're
willing to do the work or would rather lower the price by that amount.
6. Contingencies.
See what other factors the buyer wants met before the contract is
final; inspections, selling a home, obtaining a mortgage, review of the
contract by an attorney.
7. Set time limits on contingencies so that they won't drag on and keep your sale from becoming final.
8. The contract expiration date. See how long you have to make a decision on the offer.
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_ What You'll Net at Closing |
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To
find out how much money you'll net from your house, add up your closing
costs and subtract them from the sale price of the house. |
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| Closing Costs for Sellers |
| Mortgage payoff and outstanding interest |
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| Prorations for real estate taxes |
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| Prorations for utility bills, condo fees, and other items in arrears |
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| Closing fees charged by closing specialist |
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| Title policy fees |
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| Home inspections |
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| Attorney fees |
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| Survey charge |
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| Transfer tax or other government registration fees |
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| Brokerage commission |
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| TOTAL |
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_ Moving Tips for Sellers |
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1. Give your forwarding address to the post office, usually 2-4 weeks ahead of the move.
2. Notify your charge cards, magazine subscriptions, and bank of the change of address.
3. Develop a list of friends, relatives, and business colleagues who need to be notified of the move.
4. Arrange to have utilities disconnected at your old home and connected at your new one.
5. Cancel the newspaper.
6. Check insurance coverage for moved items. Usually movers only cover what they pack.
7. Clean out appliances and prepare them for moving, if applicable.
8. Note
the weight of the goods you'll have moved, since long-distance moves
are usually billed according to weight. Watch for movers that use
excessive padding to add weight.
9. Check with your condo or co-op about restrictions on using the elevator or particular exits.
10.
Have a "first open" box with the things you'll need most-toilet paper,
soap, trash bags, scissors, hammer, screwdriver, pencils and paper,
cups and plates, water, snacks, and toothpaste.
Plus, if you're moving out of town...
1. Get copies of medical and dental records and prescriptions for your family and your pets.
2. Get copies of children's school records for transfer.
3. Ask friends for introductions to anyone they know in your new neighborhood.
4. Consider special car needs for pets when traveling.
5. Let a friend or relative know your route.
6. Carry traveler's checks or an ATM card for ready cash until you can open a bank account.
7. Empty your safety deposit box.
8. Put plants in boxes with holes for air circulation if you're moving in cold weather.
Six Items to Have on Hand for the New Owners
1. Owner's manuals for items left in the house.
2. Warranties for any items left in the house.
3. A list of local service providers-the best dry cleaner, yard service, etc.
4. Garage door opener(s)
5. Extra sets of house keys
6. Code to burglar alarm and phone number of monitoring service if not discontinued.
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_ Does Moving Up Make Sense? |
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1. How
much equity do you have in your home? Look at your annual mortgage
statement or call your lender to find out. Usually, you don't build up
much equity in the first few years of paying a mortgage, but if you've
owned your home for a number of years, you may have significant
unrealized gains.
2. Has your income increased enough to cover the extra mortgage costs and the costs of moving?
3.
Is the neighborhood still a good one for your needs? For example, if
you've had children, the quality of the schools may be more of a
concern now than when you first purchased.
4.
Can you add on or remodel? If you have a large yard, there might be
room to expand your home. If not, your options may be limited. Also, do
you want to undertake the headaches of remodeling yourself?
5.
How is the home market? If it's good, you may get top dollar for your
home. How are interest rates? A low rate not only helps you buy more
home, but also makes it easier to find a buyer.
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_ Remodeling That Pays |
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Upgrading
your home is always appealing, but which enhancements really get you a
good return for your money when it's time to sell? A 2002 survey by
Remodeling Magazine and REALTOR© Magazine has the answer. CLICK to see the complete article. |
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| Project |
Amout You Recoup at Sale |
Average
Cost |
| Bathroom Remodeling |
91% |
$22,639 |
| Basement Remodeling |
79% |
$33,911 |
| Master Suite Addition |
77% |
$131,471 |
| Bathroom Addition |
81% |
$37,639 |
| Family Room Addition |
79% |
$41,514 |
| Roof Replacement |
67% |
$7,644 |
| Siding Replacement |
79% |
$5,622 |
| Window Replacement |
77% |
$15,502 |
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_ 12 Tips for Hiring a Remodeling Contractor |
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1. Get at least three written estimates
2. Get references and call to check on the work. If possible, go by and visit earlier jobs.
3. Check with the local Chamber of Commerce or Better Business Bureau for complaints.
4. Be sure that the contract states exactly what is to be done and how change orders will be handled.
5. Make as small a down payment as possible so you won't lose a lot if the contractor fails to complete the job.
6. Be sure that the contractor has the necessary permits, licenses, and insurance.
7.
Be sure that the contract states when the work will be completed and
what recourse you have if it isn't. Also remember that in many
instances you can cancel a contract within three business days of
signing it.
8. Ask if the contractor's workers will do the entire job or whether subcontractors will do parts.
9. Get the contractor to indemnify you if work does not meet any local building codes or regulations.
10. Be sure that the contract specifies the contractor will clean up after the job and be responsible for any damage.
11. Guarantee that materials used meet your specifications.
12. Don't make the final payment until you're satisfied with the work.
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_ 20 Low Cost Ways to Spruce Up Your Home |
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Make your home more appealing for yourself and for potential buyers with these quick and easy tips.
1. Trim bushes so they don't block windows and cut down on light.
2. Buy a new doormat.
3. Put a pot of bright flowers (or a small evergreen in winter) on your porch.
4. Put new doorknobs on your front door.
5. Put a fresh coating on your driveway.
6. Edge the grass around walks and trees.
7. Keep your garden tools out of site.
8. Be sure kids put away their toys.
9. Buy a new mailbox.
10. Upgrade your outside lighting.
11. Use warm, incandescent light bulbs for a homey feel.
12. Polish or replace your house numbers.
13. Clean your gutters.
14. Put out potpourri or burn scented candles.
15. Buy new pillows for the sofa.
16. Buy a flowering plant and put in a window you pass by frequently.
17. Make a centerpiece for your table with fruit or artificial flowers.
18. Replace heavy curtains with sheer ones that let in more light.
19. Buy new towels.
20. Put a seasonal wreath on your door.
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_ What is Appraised Value? |
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It's
an objective opinion of value, but it's not an exact science, so
appraisals may differ. For buying and selling purposes, appraisals are
usually based on market value - what the property could probably be
sold for. Other types of value include insurance value, replacement
value, and assessed value for property tax purposes.
Appraised value is not a constant number. Changes in market conditions
can dramatically alter appraised value. Appraised value doesn't
consider special conditions, like the need to sell rapidly.
Lenders usually use either the appraised value or the sale price,
whichever is less, to determine the amount of the mortgage they will
offer.
Used with permission from Kim Daugherty, Real Estate Checklists and Systems, www.realestatechecklists.com |
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_ Understanding Capital Gains in Real Estate |
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When
you sell a stock, you owe taxes on your gain - the difference between
what you paid for the stock and what you sold it for. The same is true
with selling a home (or a second home), but there are some special
considerations.
How to Calculate Gain
In real estate, capital gains are based not on what you paid for the
home, but on its adjusted cost basis. To calculate this:
1. Take the purchase price of the home: This is the sale price, not the amount of money you actually contributed at closing.
2. Add Adjustments:
---Cost of the purchase - including transfer fees, attorney fees, inspections, but not points you paid on your mortgage
---Cost of sale - including inspections, attorney fee, real estate commission, and money you spent to fix up your home just prior to sale.
--Cost of improvements
- including room additions, deck, etc. Note here that improvements do
not include repairing or replacing something already there, such as
putting on a new roof or buying a new furnace.
3. The total of this is the adjusted cost basis of your home.
4. Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.
A Special Real Estate Exemption for Capital Gains
Since
1997, up to $250,000 in capital gains ($500,000 for a married couple)
on the sale of a home is exempt from taxation if you meet the following
criteria:
1. You have lived in the home as your principal residence for two out of the last five years.
2. You have not sold or exchanged another home during the two years preceding the sale.
Also
note that as of 2003, you may also qualify for this exemption if you
meet what the IRS calls "unforeseen circumstances" such as job loss,
divorce, or family medical emergency.
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Reprinted from REALTOR© Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS©.
Copyright 2003. All rights reserved. |
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©
2011 Street & Company disclosure |
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