real-estate

Tips for Making Effective Contingencies

2008-08-29T16:11:00.000-07:00

Some sellers are very reluctant to accept multiple contingencies in a buyer’s offer to buy real estate. So, if you’re a buyer, try to scale down your contingencies as best as you can. Two contingencies are easy for home buyers to avoid.
For example, get pre-approved for a home loan before writing a contract (and even before you start looking seriously).
If you know that in your time frame you’re going to need to write a contract in the next two or three weeks, go ahead and get pre-approved. Many sellers’ agents make pre-approval a requirement for submitting a contract anyway. They won’t even consider an offer until they know that the potential buyer afford it. So, go ahead and knock out the contingency stating that you need to be able to get financing.
Another way to cut down on your contingencies is to make the toughest contingency more bearable. And, which contingency am I referring to?
The least acceptable contingency is probably the one that allows a buyer to sell his or her home before buying another.
In an attempt to try to get around this one, you can go ahead and list your home for sale before you make any offers. You can still go and look at homes to buy, but it is better to wait to put in an offer to buy until you have at least a serious potential buyer for you home.
And, the contingency would be more acceptable if your home was already under contract.
So, if you know that you could be limited in the number of contingencies you can use, you may as well save up your contingency power for something that is really important – like making sure you don’t tie yourself down to a home that has a bad inspection.
If you give several contingencies (meaning more than two) in your offer, the seller may turn down your offer altogether.
In order to make your contingencies (and your offer in general) more effective, don’t overwhelm the seller. You want to protect yourself from committing to a bad deal, but at the same time you want to make an offer that is acceptable to the seller. This effort can sometimes be difficult to balance. For this reason, you need an experienced real estate agent working with you. You want an agent representing you who has written plenty of contracts.
He or she should be able to talk with you to determine the most successful strategy for securing the home you really want – and at the same time, protect you and give you a way out of the contract if you need one.

What is Required in a Listing Agreement

2008-08-29T16:09:00.000-07:00

When an individual hires a real estate agent to sell his or her house, they enter into a written contract called a Listing Agreement. This agreement spells out the agent’s duties and responsibilities, and gives him or her the right to sell the property. Listing agreements vary from state to state, and like most things, they are subject to change.
Case Study: Jane Doe wants to hire a real estate agent in Minneapolis to sell her house. Before she can get started, she must sign a Listing Agreement. She has never signed a contract like this before, and she has some questions. What terms must be in the agreement? What things are prohibited?
In Minnesota, we must look to Minnesota Statute Section 82.21 subdivision 2 to help her find the answers. As of this writing (June 12, 2008) the statute says the following:
(a) Requirement. Licensees shall obtain a signed listing agreement or other signed written authorization from the owner of real property or from another person authorized to offer the property for sale or lease before advertising to the general public that the real property is available for sale or lease. For the purposes of this section "advertising" includes placing a sign on the owner's property that indicates that the property is being offered for sale or lease.
(b) Contents. All listing agreements must be in writing and must include:
(1) a definite expiration date;
(2) a description of the real property involved;
(3) the list price and any terms required by the seller;
(4) the amount of any compensation or commission or the basis for computing the
commission;
(5) a clear statement explaining the events or conditions that will entitle a broker to a
commission;
(6) information regarding an override clause, if applicable, including a statement to the
effect that the override clause will not be effective unless the licensee supplies the seller with a protective list within 72 hours after the expiration of the listing agreement;
(7) the following notice in not less than ten point boldface type immediately preceding any provision of the listing agreement relating to compensation of the licensee:
"NOTICE: THE COMPENSATION FOR THE SALE, LEASE, RENTAL, OR
MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH INDIVIDUAL BROKER AND THE BROKER'S CLIENT.";
(8) for residential property listings, the following "dual agency" disclosure statement:
If a buyer represented by broker wishes to buy the seller's property, a dual agency will be created. This means that broker will represent both the seller(s) and the buyer(s), and owe the same duties to the buyer(s) that broker owes to the seller(s). This conflict of interest will prohibit broker from advocating exclusively on the seller's behalf. Dual agency will limit the level of representation broker can provide. If a dual agency should arise, the seller(s) will need to agree that confidential information about price, terms, and motivation will still be kept confidential unless the seller(s) instruct broker in writing to disclose specific information about the seller(s). All other information will be shared. Broker cannot act as a dual agent unless both the seller(s) and the buyer(s) agree to it. By agreeing to a possible dual agency, the seller(s) will be giving up the right to exclusive representation in an in-house transaction. However, if the seller(s) should decide not to agree to a possible dual agency, and the seller(s) want broker to represent the seller(s), the seller(s) may give up the opportunity to sell the property to buyers represented by broker.
Seller's Instructions to Broker
Having read and understood this information about dual agency, seller(s) now instructs broker as follows:
..... Seller(s) will agree to a dual agency representation
and will consider offers made by buyers
represented by broker.
..... Seller(s) will not agree to a dual agency
representation and will not consider offers made
by buyers represented by broker.

.......... ...........................................
Seller Real Estate Company Name

........
Seller By:............................
Salesperson

Date : ......... ;

(9) a notice requiring the seller to indicate in writing whether it is acceptable to the seller to have the licensee arrange for closing services or whether the seller wishes to arrange for others to conduct the closing; and

(10) for residential listings, a notice stating that after the expiration of the listing agreement, the seller will not be obligated to pay the licensee a fee or commission if the seller has executed another valid listing agreement pursuant to which the seller is obligated to pay a fee or commission to another licensee for the sale, lease, or exchange of the real property in question. This notice may be used in the listing agreement for any other type of real estate.

Prohibitions
(c) Prohibited provisions. Except as otherwise provided in paragraph (d), clause (2), licensees shall not include in a listing agreement a holdover clause, automatic extension, or any similar provision, or an override clause the length of which is more than six months after the expiration of the listing agreement.

(d) Override clauses.

(1) Licensees shall not seek to enforce an override clause unless a protective list has been furnished to the seller within 72 hours after the expiration of the listing agreement.

(2) A listing agreement may contain an override clause of up to two years in length when used in conjunction with the purchase or sale of a business. The length of the override clause must be negotiable between the licensee and the seller of the business. The protective list provided in connection with the override clause must include the written acknowledgment of each party named on the protective list, that the business which is the subject of the listing agreement was presented to that party by the licensee.

(e) Protective lists. A broker or salesperson has the burden of demonstrating that each person on the protective list has, during the period of the listing agreement, either made an affirmative showing of interest in the property by responding to an advertisement or by contacting the broker or salesperson involved or has been physically shown the property by the broker or salesperson. For the purpose of this section, the mere mailing or other distribution by a licensee of literature setting forth information about the property in question does not, of itself, constitute an affirmative showing of interest in the property on the part of a subsequent purchaser. For listings of nonresidential real property which do not contain the notice described in paragraph (b), clause (10), the protective list must contain the following notice in boldface type:

"IF YOU RELIST WITH ANOTHER BROKER WITHIN THE OVERRIDE PERIOD AND THEN SELL YOUR PROPERTY TO ANYONE WHOSE NAME APPEARS ON THIS LIST, YOU COULD BE LIABLE FOR FULL COMMISSIONS TO BOTH BROKERS. IF THIS NOTICE IS NOT FULLY UNDERSTOOD, SEEK COMPETENT ADVICE."

As always, you should check to see if there have been any subsequent changes made to the above-mentioned. Also keep in mind that every state has different rules and regulations that govern these agreements. You should always consult a professional in your location. This article should not be considered legal advice. This information is provided as a public service.

Free Listings for Real Estate for Sale by Owner

2008-08-29T14:52:00.000-07:00

As the real estate market is expanding like anything, the demands of FSBO property have been increasing simultaneously.

FSBO property can be better defined as real estate property for sale by owner. The condition simply means that selling of real estate without involvement or assistance of any realtor. FSBO process includes selling anything from homes to houses to land.

Home owners can save a great deal of their money through the system of for sale by owner real estate.
Advantages of Selling Through FSBO
First of all, you can get a free one month MLS listing for real estate, homes, and land that you intend to sell through for sale by owner method on various websites.
Secondly, the system can help you to save a good amount of money that may be spend on paying off the realtors for their services. Usually, real estate agents charge a typical fee of six percent on a real estate transaction.

May be it sound very less but when you calculate in accounting terms, it may crib your pocket. By opting for sale by owner method, a person can save tens of thousands of dollars in his pocket instead of paying off to others.
FSBO is a win-win situation for any home owner. Both sellers and buyers can be benefited by this arrangement of property transaction.

Selling through FSBO help you to initiate less paperwork and you can take the charge of whole affair of property selling.

Whether you are buying or selling real estate property give a rty to for sale by owner method.
FSBO Quickens Your Home Selling Process
No doubt, FSBO can be a profitable situation for every home seller. The process quickens the whole selling process as one-month free listing in MLS can be obtained by various website. You can invite best selling prepositions and get handful of selling options and interested buyers to earn the desired profits.