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Terms You Should Know When Buying or Selling a Home

by Sonja Coffee

 

Amendments

A change—either to alter, add to, or correct—part of an agreement without changing the principal idea or essence.

Appraisal

An estimate of value of property resulting from analysis of facts about the property; an opinion of value.

Assumption

Taking over another person’s financial obligation; taking title to a parcel of real property with the Buyer assuming liability for paying an existing note secured by a deed of trust against the real property.

Beneficiary

The recipient of benefits, often from a deed of trust; usually the lender.

Close of Escrow

Generally the date the documents are recorded and title passes from Seller to Buyer. On this date, the Buyer becomes the legal owner, and title insurance becomes effective.

Comparable Sales

Sales that have similar characteristics as the subject real property, used for analysis in the appraisal. Commonly called “comps.”

Deed of Trust

An instrument used in many states in place of a mortgage.

Deed Restrictions

Limitations in the deed to a parcel of real property that dictate certain uses that may or may not be made of the real property.

Earnest Money Deposit

Down payment made by a purchaser of real property as evidence of good faith; a deposit or partial payment.

Easement

A right, privilege or interest limited to a specific purpose that one party has in the land of another.

Hazard Insurance

Real estate insurance protecting against fire, some natural causes, vandalism, etc., depending upon the policy. Buyer often adds liability insurance and extended coverage for personal property.

Impounds

A trust type of account established by lenders for the accumulation of borrower’s funds to meet periodic payments of taxes, mortgage insurance premiums and/or future insurance policy premiums, required to protect their security.

Legal Description

A description of land recognized by law, based on government surveys, spelling out the exact boundaries of the entire parcel of land. It should so thoroughly identify a parcel of land that it cannot be confused with any other.

Lien

A form of encumbrance that usually makes a specific parcel of real property the security for the payment of a debt or discharge of an obligation. For example, judgments, taxes, mortgages, deeds of trust.

Mortgage

The instrument by which real property is pledged as security for repayment of a loan.

PITI

A payment that combines Principal, Interest, Taxes, and Insurance.

Power of Attorney

A written instrument whereby a principal gives authority to an agent. The agent acting under such a grant is sometimes called an “Attorney-in-Fact.”

Purchase Agreement

The purchase contract between the Buyer and Seller. It is usually completed by the real estate agent and signed by the Buyer and Seller.

Quitclaim Deed

A deed operating as a release, intending to pass any title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title by the grantor.

Recording

Filing documents affecting real property with the County Recorder as a matter of public record.

 


 

Posted: |

 

Southern California’s residential housing market got off to a wobbly start in 2014, and is still feeling the effect of the drag from last year, a market tracker said Wednesday.

Buyers still face a scant inventory, higher prices, rising interest rates and a dearth of bargain-priced foreclosed homes, said La Jolla-based DataQuick.

Last month there were 14,471 sales on new and previously-owned homes in the six county region, which was down 21 percent from 18,415 in December and down 10 percent from 16,058 a year earlier.

 

Sales were 17 percent below the average 17,493 for a January dating back to 1988, when DataQuick began tracking the marker. That is not unusual, though, since the market collapsed in the middle of the last decade.

“Sales haven’t been above average for any month in more than seven years,” said DataQuick analyst Andrew LePage.

Sales have fallen below the year-ago level for four months in a row.

“Why? We’re still putting a lot of the blame on the low inventory. But mortgage availability, the rise in interest rates and higher home prices matter too,” DataQuick President John Walsh said in a statement.

 

“Two of the bigger questions hanging over the housing market right now are, how much pent-up demand is left out there and will inventory skyrocket this year as more owners take advantage of the price run-up?’”

The answers won’t be known until spring, he said.

The market did not vary much around the region.

In Los Angeles County the median price rose 20.5 percent to $410,000 from $340,000 a year earlier. Sales fell 7 percent to 4,913 from 5,308 in January 2013.

In San Bernardino County the median price jumped 24 percent to $220,000 from $177,500 a year earlier and sales fell 11 percent to 1,910 from 2,137.

 

Riverside County’s sales declined 10 percent to 2,576 from 2,858 and the median price increased 23 percent to $277,000 from $226,000.

Foreclosure sales — homes foreclosed on in the prior 12 months — accounted for 7 percent share of the resale market in January, up from 6 percent in December but down from down from 17 percent a year earlier. In recent months the foreclosure resale rate has been the lowest since early 2007, DataQuick said. They reached a high of 57 percent in February 2009.

 

Short sales — transactions where the sale price fell short of what was owed on the property — made up an estimated 12 percent of Southland resales last month. That was down from 13 percent the prior month and down from 24.2 percent a year earlier.

 

The drop in distressed property sales and rising prices eroded affordability but that seems to have stabilized in the latter part of last year, according to the Los Angeles-based California Association of Realtors.

The group said that price gains slowed in last year’s fourth quarter, which helped affordability.

During the last three months of 2013 in Los Angeles County 44 percent of households could afford a median priced home costing $423,090. In the Inland Empire 44 percent of households could afford a median priced home costing $263,580, the association said Wednesday.

Statewide, 32 percent of families could afford a median priced home costing $431,510 in last year’s fourth quarter.

stock_realtor_handing keys to clients

Real Estate Representation: What Are the Different Types, and What Do They Mean?

When you work with an agent in a real estate transaction, you’re either a client or a customer of that agent. There is a difference, and it’s important.

A client has a brokerage relationship with a Realtor®: The client has signed a contract and is legally represented by that Realtor® and the Realtor®’s brokerage. Every other person who’s party to that transaction is considered a customer of that Realtor®. The Realtor®’s primary fiduciary responsibility is to the client.

In real estate transactions, there are two main types of representation:

  • Seller representation: If you are selling a property and enter a brokerage agreement with a Realtor®, that Realtor® and their firm become your representative during that specific transaction. They are legally obligated to represent you and your financial interests as a seller.
  • Buyer representation: If you are buying a property and enter a brokerage agreement with a Realtor®, that Realtor® and their firm become your representative during that specific transaction. They are legally obligated to represent you and your financial interests as a buyer.

Representation is straightforward if the buyer and seller agents are affiliated with different companies. However, when the agents on opposite sides of the transaction work for the same brokerage, representation and agency become more nuanced and complex.

These are the four most common types of agency and what they mean:

  • Seller agency: A Realtor® from Brokerage A represents the seller in a transaction. This Realtor® looks out for the best interest of the seller in the transaction, and owes the buyer honesty and any material facts about the listed property that are needed to make an educated decision.
  • Buyer agency: A Realtor® from Brokerage B represents the buyer in a transaction. This Realtor® looks out for the best interest of the buyer in the transaction, and owes the seller honesty and any material facts that are needed to make an educated decision.
  • Dual agency: One Realtor® from Brokerage A represents both the buyer and the seller in a transaction. This Realtor® represents the buyer and seller equally and owes confidentiality to both parties. Realtors® in a dual-agency relationship facilitate the entire transaction and may not provide full advice to either party due to confidentiality.
  • Designated agency: Real estate Brokerage A represents both the buyer and seller, with one Realtor® from Brokerage A representing the seller and a separate Realtor® from Brokerage A representing the buyer. The brokerage represents the buyer and seller equally, owes confidentiality to all parties and may do nothing to the detriment of either the buyer or the seller.

That’s a high-level overview of representation and agency. But it’s important to note that agency law varies from state to state, and not all agency types are covered in this article.

 

Home Improvements That Pay You Back

by Sonja Coffee

HomeImprovements

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