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Realtor Vs. Real Estate Agent: What’s the Difference?

January 12, 2021 By Jeremy

what is the difference between realtors and agents

Whether you’re looking to buy or sell a property, or assist people in buying or selling property,  you’re likely trying to figure out what the difference between a real estate agent and a realtor is.

Although the terms are used interchangeably by many, there is a significant difference between them. Knowing the difference can be a defining factor of your buying and selling experience, and is an absolute must for those taking on a new profession in the real estate industry.

What’s the difference between a real estate agent and a realtor?

The difference between a real estate agent and a realtor is that a realtor is an agent that is an active member of the National Association of Realtors (NAR) and a real estate agent does not have to be. While both have a real estate license, a realtor must adhere to a higher level of standards and ethical duties than an agent.

Put simply, becoming a realtor is the next step to take after becoming a real estate agent for many career professionals.

  • Real Estate Agent: A professional who assists in the buying or selling of properties. The requirements of becoming a real estate agent vary by state. State requirements typically determine the necessary coursework one must complete before taking the exam to obtain their real estate license. All agents must be knowledgeable in local, state, and national laws to obtain their license. After completing the course and obtaining their license, agents must continue their education and renew their licenses every two years.
  • Realtor: A real estate agent that is an active certified member of the National Association of Realtors. To become a realtor, an agent must have a valid real estate license and an impeccable professional conduct record. Members of the NAR are required to take and pass a code of ethics class and follow an extensive Code of Ethics to protect the association’s reputation.

Becoming a member has the benefit of making an agent more desirable to potential clients due to Realtors’ excellent reputation. Furthermore, the organization works to protect the member’s interests. [Read more…]

Filed Under: Articles, House Buying Tips

What is an Escalation Clause in Real Estate?

December 15, 2020 By Jeremy Leave a Comment

What Is An Escalation Clause In Real Estate

When making an offer on a home, you want to stay under the maximum amount you’re willing to pay but high enough to outbid other sellers. You might also want a way to track other offers so that you can continuously outbid them to increase your chances of making the deal. This is what an escalation clause does, which is an extremely effective tactic in the right situation.

What is an escalation clause in a contract?

An escalation clause is an addendum submitted in a multiple-offer situation to improve the odds that you will outbid other buyers.

For example, you might make an offer on a property for $325,000, but you can include an escalation clause that states you are willing to pay a maximum of $335,000 if a bidding war begins.

The clause also states that your offer will increase in set intervals to counter other offers up to the max offer, or escalation cap. [Read more…]

Filed Under: FSBO, House Buying Tips, Real Estate Investing

What Does Tenancy by the Entirety Mean For Couples?

December 8, 2020 By Jeremy Leave a Comment

What Does Tenancy by the Entirety Mean For Couples

Deciding how to take ownership is a critical step when purchasing real estate. It determines how your name will appear on the title and how the property is processed and protected. In some states, married couples can take a unique form of ownership known as Tenancy by the Entirety.  

What is Tenancy by Entirety?

Tenancy by the Entirety (also known as Tenants in the Entirety) is a form of ownership that legally recognizes the married couple as a single entity. In doing so, spouses hold equal ownership of the property, which arrives with many perks.  

The driving concept of Tenancy by the Entirety is to protect either spouse’s interest in a piece of property from events that exclusively involve the other. The most notable form of protection it offers is transferring full ownership to a surviving spouse when the other dies without probate. 

But the advantages are numerous, and that is precisely why many individuals view it as the best form of ownership for married couples to pursue when available to them. Here are the key benefits of this form of ownership:

  • One spouse cannot sell the property without consent from the other.
  • If one spouse dies, the other assumes full ownership without probate.
  • Debt collectors cannot put liens on the property to collect a debt from a single spouse.

And while this form of ownership has its advantages, some setbacks may force one to consider other options. As an example, many may view sharing equal ownership of a property as more of a drawback than an actual benefit.  [Read more…]

Filed Under: House Buying Tips

Clear to Close: What Does This Mean?

November 24, 2020 By Jeremy Leave a Comment

 

what does clear to close mean

You’ve received the news that you’re clear to close, and that can be as exciting as it is confusing. It does mean you’re nearly there, but some things need to occur before you can finally get the set of keys to your new home or investment property.

We’re glad to help clear the air and help you prepare for the final steps you need to take.

What does clear to close mean?

Clear to close means the lender is now ready to confirm the closing date with the title company or attorney. This also means you need to kick it into high gear and prepare for the closing date.

Before you are clear to close, you are to meet the lender’s required conditions. Having to get homeowner’s insurance and title insurance are typical examples. After completing the requirements, an underwriter approves the loan documents, and you are “clear to close.”

Can you be denied after clear to close?

Yes, you can still be denied after you’ve been cleared to close.

While clear to close signifies that the closing date is coming, it doesn’t mean the lender cannot back out of the deal. They may recheck your credit and employment status since a considerable amount of time has passed since you’ve applied for your loan. [Read more…]

Filed Under: House Buying Tips

What is Title Vesting in Real Estate?

November 17, 2020 By Jeremy Leave a Comment

What Is Title Vesting In Real Estate

Upon purchasing a new home, you and/or your spouse will come across a document that asks how you would like to take vesting on the property. Another time you’ll hear about title vesting is if you’re part of a group of friends or relatives buying a property together, such as a vacation home or cabin.

It can be a confusing question in the world of real estate, and your answer can significantly impact your rights as an owner.  That is why it is important to know the ins and outs of title vesting when buying a property. If you feel stuck, no worries; we are here to talk about what title vesting is and everything you need to know to feel comfortable when making a decision.

What is Title Vesting?

Title vesting is simply taking ownership and the official rights of the title on a property.  It is necessary when more than one individual appears as the property owner on the title.

How you hold vesting is dependent on a few factors:

  • Are you married?
  • Do you share ownership equally with another individual?
  • Do you own a portion of the property in relation to what you pay for it?

These are all factors that come into play when deciding on how to take ownership of the property.

In most states, there are four common ways to hold a title. Which you decide to take is mostly dependent on how you answered the questions above. [Read more…]

Filed Under: House Buying Tips, Real Estate Investing

How to Buy a Foreclosed Home From Start to Finish

November 3, 2020 By Jeremy Leave a Comment

How To Buy A Foreclosed Home

The buying process for a foreclosed home is reasonably straightforward. But knowing where you can find these properties isn’t—mostly because investors quickly buy them.

Like all things in real estate, tricks of the trade exist. This article is designed to help you purchase your first foreclosed home while not loading you with tons of jargon and industry based terminology.

Why Buy a Home in Foreclosure?

Foreclosed homes are an exciting opportunity for real estate investors because they almost always sell for a much lower price than market value. The reason is simple—the bank only wants to make back the money owed to them for the property and rid themselves of the burden as quickly as possible.

If this amount is less than the property is worth, you can flip it for market value and make a profit. Or you can find your next personal residence for a low price.

Where to Find a Foreclosed Home

Below are some of the places you can find foreclosed homes:

  • MLS or Traditional Real Estate Listing Sites (Zillow, Realtor, Redfin, etc.)
  • Foreclosure Databases like county websites, foreclosure.com or GreatDCDeals
  • Banks REO Department
  • HUD Store
  • Networking with Industry Professionals (Repo men, Bank REO personnel, other Agents)

But there are things to keep in mind before purchasing a foreclosed home. [Read more…]

Filed Under: House Buying Tips, Real Estate Investing

Earnest Money Deposits: Do You Need Them?

October 27, 2020 By Jeremy Leave a Comment

Earnest Money Deposits

When you submit an offer on a home, your agent may recommend making an earnest money deposit. It is a very common thing to do when you find the perfect property and do not want to lose it. If you’re nervous or looking for more information on earnest money deposits, we’re here to help.

This post will:

  • Help you understand earnest money deposits.
  • Explain when you should make one.
  • Share how earnest money deposits can help your home buying experience.

What is an Earnest Money Deposit?

An earnest money deposit is an amount of money you pledge to a seller if that seller accepts your offer. The deposit shows that you are ready to commit to the sale and aren’t going to back out after your offer is accepted.

If the seller accepts your home offer, and you don’t hold up to your end of the contract, the seller keeps the earnest money deposit. This money is not given to the seller immediately. Rather, it’s held in a third-party escrow account until closing.

A seller takes a risk by accepting your offer due to the steps of the home-buying process. By making an earnest money deposit, you’re demonstrating that you’re also willing to take a risk. The deposit helps establish a higher level of trust between both parties, which is advantageous to you.

For example, a higher offer than yours may be in place with no earnest money deposit. But because your offer includes the earnest money deposit, it will appear more legitimate. The deposit can help you get the home without making a higher offer because the seller understands that you are legitimately ready to commit to the purchase. [Read more…]

Filed Under: House Buying Tips

What is a Closing Protection Letter & What Does It Do?

October 20, 2020 By Jeremy Leave a Comment

What Is A Closing Protection Letter

Once a home is secured for purchase, the lender requires title insurance, which must be secured before the transaction closes. When selecting a title insurance company, you will be given the option of which coverages to choose.

A closing protection letter is one of these, which a title insurance company will provide to the lender, buyer, and seller.

What is it? And is it necessary?

A closing protection letter (CPL) is issued by the title underwriter. This document ensures that the underwriter will protect its client from any mistakes made by the title agent who handles the escrow accounts associated with the transaction.

The title agent is responsible for handling large sums of the lender’s and buyer’s money, and mistakes can be made. For example, a mistake could be if the agent misplaces or mispurposes the funds in your escrow account. There is also the risk of an agent being dishonest or fraudulent.

In any case, where a mistake is made on behalf of the agent, the closing protection letter is drawn up so that the title underwriter will protect a specific party to suffer no actual loss.

Put simply, a closing protection letter is a form of insurance intended to provide coverage to specific parties of the transaction. Each party will decide whether or not it is necessary. However, a lender will rarely hire a title agent without the issuance of a CPL, and the burden of the fee is typically placed on the buyer.

It is natural to feel a little uneasy about an insurance company handing you a document intended to protect you from them, but charge you for that document. But keep in mind that this is something they are legally required to do.

Also, not all accounts where these documents are put into effect are fraud or dishonesty. Human error does occur, and without this document, an honest mistake can cost you thousands of dollars.

What should the closing protection letter include?

All CPLs are transaction-specific and what they offer coverage for depends on the insurance being issues. However, there shouldn’t be much deviation from one contract to the next. Please, reference the image below for an indication of what a CPL should look like. [Read more…]

Filed Under: House Buying Tips

How Much Title Insurance Costs & How to Calculate It

September 29, 2020 By Jeremy Leave a Comment

How Much Title Insurance Costs How to Calculate It

The most common question we hear from home buyers outside of “Where are you located?” is regarding title insurance costs.

You may have heard title insurance costs roughly around $1,000 per policy. This is true, but you likely want a more accurate number before you begin to approach the closing table so you are not caught off guard and can make sure you’re getting a fair deal.

Luckily, getting a rough idea of how much title insurance will cost you is relatively straightforward. It’s based on the price of your property and where you are located.

But remember that there are two different types of title insurance – owners and lenders. A few factors also help to determine costs.

  • Owner’s Title Insurance: Primarily based on the overall sales price of the home and its location. In most cases, it’s the more expensive policy, and this is because down payment amounts, loan amounts, and even your credit history are also figured into the policy.
  • Lender’s Insurance: Solely based on the total loan amount and the state where the property is located. Less is factored into the policy, so it will almost always have a lower price than the owner’s insurance.

You can often expect title search fees to be included in the cost of your title insurance quote. This does depend on the insurance provider, but most providers will make it clear if they do. Also, if you can bundle your policies together, it’s wise to do so. Doing so can result in a reduction of the fees.

How to Calculate Title Insurance Quotes

How can you calculate it on your own? Let’s take a look at some of the details you need to be aware of.

Again, location is one of the most significant contributing factors to how much title insurance policies will cost. The good news is that each state regulates policy rates, and what you will pay with one company should closely match what you would pay with another.

However, prices will be different, and you have the right to shop around for the best rates. You should also note that you have the option to select between basic and enhanced policies. [Read more…]

Filed Under: House Buying Tips

Closing Disclosure Timelines & The Three Day Rule

September 22, 2020 By Jeremy Leave a Comment

Closing Disclosure Timelines the Three Day Rule

As you’re closing on a home, helping a client, or brokering a deal; you’ll come across a document called the closing disclosure (or CD). A closing disclosure can become very frustrating and cause anxiety when you first read it. Why? Because you’re told to act immediately upon receiving it, and let’s face it, if you’re not a lawyer this can be intimidating.

The anxiety and confusion is mostly caused because the closing disclosure will only be in your possession just a few days before your closing appointment, and you’ve already had to deal with a million papers and meetings and inspections. This just adds too your pile of work.

But never fear! We’re here to help you through the ins and outs of the closing disclosure and purchasing a property so you can comply with the three day timeline.

For starters, you already know it’s your job to review the closing disclosure immediately upon receiving it. The three day timeline exists to ensure that you have enough time to remedy any discrepancies or issues within this document.

The first and most important thing to do with your closing disclosure is to compare the loan estimate on the document with the loan papers you received after applying for your loan. You are making sure the closing disclosure matches the loan estimate as closely as possible to avoid hold ups at closing.

It’s important to note that the loan estimate is an estimation of payments and fees. Some variances are to be expected, while others shouldn’t be present at all. If they do exist, you want to address them before closing.

The timeline helps promote a smooth closing process. Nobody wants you to feel confused or frustrated at the closing table. Instead, they want you to feel prepared and collected. The agent handling your closing services will also be happy to explain anything else that has your worried at the appointment and likely before.

The Three Day Rule

But how long before closing should you be supplied with the CD? This is where the Three Day Rule comes into play. This rule is simply put into place to ensure you have received the closing disclosure three days before closing.

Receiving the closing disclosure three days in advance ensures you will have had enough time to deal with any potential issues and know what you will owe upon consummation. You know what will be expected of you well before you become legally obligated to fulfill your end of the contract.

How Does the Three Day Rule Work?

The three-day rule applies to business days, including Saturdays. But Sundays and Nationally recognized holidays do not count. This means you may technically have more than three days before closing to review the document. [Read more…]

Filed Under: House Buying Tips

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