Posts Tagged ‘Buying Brooklyn Real Estate’

Consumer Red Flags When Hiring Your Brooklyn Real Estate Agent

Sunday, February 10th, 2013

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Consumer Tip – Real Estate Red Flags (1)

The majority of Brooklyn licensed real estate agents and brokers are well-trained professionals who can help make the process of buying or selling your home a successful venture rather than a stressful adventure. Occasionally, however, you may run into an unlicensed person posing as an agent, or a licensed agent who is not following the rules of the profession. In either case, your real estate experience can quickly turn sour. Here are a few Consumer Red Flags When Hiring Your Brooklyn Real Estate Agent I hope you find them helpful for your next real estate transaction.

Following are some “red flags” that may assist you in determining if you are NOT working with a legitimate or honest real estate agent. These tips are not intended to provide legal advice in drafting real estate related documents or provide detailed descriptions of the nature of relationships that may be created between agents and buyers and sellers.

Consumer Tip – Real Estate Red Flags (2)

Some “red flags” that may assist you in determining if you are NOT working with a legitimate or honest real estate agent. These tips are not intended to provide legal advice in drafting real estate related documents or provide detailed descriptions of the nature of relationships that may be created between agents and buyers and sellers.

  • RED FLAG – Agents using high-pressure tactics, especially in an attempt to have you sign a purchase or listing agreement
    Tips-

    • Do not be pressured into entering into a purchase agreement based solely on the agent telling you there are multiple offers so you need to make your purchase agreement offer immediately. Multiple offers may exist but don’t be pressured into making a decision you are not comfortable with or if you do not understand the terms of the purchase agreement. If the sellers accept your purchase offer it becomes a legally binding contract. You may have to forfeit your earnest money deposit if you get “cold feet” and later decide that you just don’t want or like the property.
    • Do not be pressured into signing a listing agreement unless you are comfortable with the agent and understand and agree with the terms of the listing agreement including any marketing strategy.
  • RED FLAG – Agents asking for earnest money or a down payment check made out to the agent…or asking for cash
    Tips-

    • Earnest money should be paid with a check or money order and made payable to the real estate company and not to the individual agent.
    • By law, earnest money must be placed in the listing company “trust account” and cannot be mixed with personal funds of the agent. Once the listing company receives the earnest money, it must be deposited within three business days. However, the buyer and seller may agree, in writing, to handle the funds differently.
  • RED FLAG Agents who do not provide answers to your questions about the property or fail to return your calls or maintain communication with you
    Tips-

    • By law agents are required to disclose all material facts they are aware of that may adversely and significantly affect your use or enjoyment of the property, such as existing structural or mechanical problems, water infiltration problems, easements or encroachments, or faulty septic systems.
    • Do not enter into a purchase agreement until your questions are answered. You also have the option of including “conditions” or “contingencies” in your purchase agreement. If your conditions or contingencies were not met, you would not be obligated to go through with the purchase. Some common contingencies are a buyer requiring a satisfactory home inspection report by a certain date and at the buyer’s expense. If the home inspection is unsatisfactory, the buyer can cancel the purchase agreement and obtain a refund of the earnest money.
  • RED FLAG Agents who don’t disclose who they represent
    Tips

    • Whether you are buying or selling, it is important to understand the different types of relationships that can be created between you and an agent. Expect agents to act in the best interests of whomever they represent.
    • Agents must provide a consumer with an “agency disclosure” form at the first substantive contact with the consumer. The agency disclosure is intended to provide a description of available options for agency and nonagency relationships and a description of the role of a licensee under each option. The agency disclosure form is not a contract. If a buyer or seller wants an agent to represent them, a written contract must be entered into such as a listing agreement or a buyer representation contract. Following are the different types of agency relationships in real estate transactions:

    Seller’s Broker: A broker who lists a property of a salesperson who is licensed to the listing broker who represents the seller and acts on behalf of the seller.
    Subagent: A broker or salesperson who is working with a buyer but represents the seller. In this case the buyer is only the agent’s customer and is not represented by that agent.
    Buyer’s Broker: A buyer may enter into an agreement for the broker or salesperson to represent and act on behalf of the buyer. In this case, the agent represents the buyer only and not the seller.
    Dual Agency: Dual agency occurs when one broker or salesperson represents both buyer and seller, or when two salespersons licensed to the same broker each represent a party to the transaction. Dual agency requires the informed consent of all parties.
    Facilitator: A broker or salesperson who performs services for a buyer, a seller, or both but does not represent either in a fiduciary capacity – meaning the facilitator is not obligated to represent the best interest of either party.

  • RED FLAG – Agents who will only show you properties they have listed
    Tips-

    • A Brooklyn real estate agent who you have entered into an agreement with should be acting in your best interest, not his or her own best interests. Agents should be willing to show you properties that they have listed as well as other company listed property and property that is For Sale By Owner (FSBO’s).
  • RED FLAGAgents who ask you to sign blank or incomplete documents
    Tips-

    • Do not sign any real estate related documents that are blank or incomplete. Most of these documents are legally binding.
    • Be wary if you are told, “Don’t worry about that section, we’ll fill it in later.”
  • RED FLAG Agents who require a listing agreement for extended periods of time
    Tips-

    • Do not be pressured into signing a listing agreement for lengthy periods of time. A typical listing period is six months but you can negotiate a shorter or longer listing period.
  • RED FLAGAgents who are difficult to contact or do not regularly communicate with the consumer
    Tips-

    • An agent who has your best interests in mind should be easy to reach.
  • RED FLAGAgents who do not provide a basis for a listing price
    Tips-

    • The agent should provide a market analysis with documentation to support the listing price.
  • RED FLAG Agents who attempt to talk you out of a home inspection or hiring a real estate attorney
    Tips-

    • Agents are prohibited from discouraging the use of an attorney. Hiring an attorney, while not required, may be desired and it’s your right to do so.
    • If an inspection is discouraged, it might be because there is a defect in the property.
  • Make sure your agent is licensed
    Tips-

  • Tip-
    If you’re thinking about selling your Brooklyn real estate and would like more tips on how to get it ready, please call Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate a call at 718/253-9600 ext 206 or email me at [email protected], for more information and a Free Market Price Evaluation without obligation!

What You Need to Know About Private Mortgage Insurance When Purchasing Brooklyn Real Estate

Monday, November 7th, 2011

If you are on the verge of buying Brooklyn real estate, you’ve probably heard the term Private Mortgage Insurance (PMI). Mortgage professionals talk about it a great deal, but you may be asking, “What is it exactly? And why should I care?”

Private Mortgage Insurance Defined

PMI is required by lenders if the down payment of a purchase is less than 20 percent of the home’s value. It protects the lender if the borrower defaults on the loan. It also makes the lender more apt to loan, even if the down payment is as low as 3%, because in the long run, the lender’s investment is protected.

You Pay For It

Unlike other types of insurance which you pay to protect your interest in an asset, you pay Private Mortgage Insurance to the mortgage company to protect its interest in your new Brooklyn real estate. (Note that PMI is not usually tax deductible. Check with a tax professional for details. )

Make It Go Away: PMI Can Be Terminated Once You’ve Paid Down Your Loan

Once you pay down your mortgage to the point where it hits the magical 80% of the original purchase price or appraised value, whichever is less, you can request cancellation of PMI. The Homeowners Protection Act requires that loans made after 1999 include notifications to the borrower when you arrive at this point in your payments.

Your PMI payments must be automatically canceled once you pay down your loan to 78%. At closing, and on a yearly basis, you should receive information from your lender about when you can request cancellation.

Whether you’re ready to buy Brooklyn real estate or need more information before taking the plunge, I can help. Give me a call today Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate at 718/253-9600 ext 206 or email me at [email protected],

Buying Brooklyn Real Estate: What Type of Mortgage is Right for You?

Sunday, July 31st, 2011

What Type of Mortgage is Right For You

You’ve been watching the news, reading real estate blogs and you know this is the perfect time for you to buy a piece of Brooklyn real estate.  You want to do all the right things to get the best deal, and you know one of the first steps is to line up your financing.

To help you pick a mortgage that matches your goals and financial situation, here’s an overview of three of the most popular mortgages available today.

Fixed Rate Mortgage

If you plan on keeping your new Brooklyn real estate for more than 10 years and you don’t expect your income to change, this is probably the loan for you.  Although fixed rate loans charge a bit more interest, the rate will never change.  This provides financial stability and the security of knowing what your monthly mortgage payment will be.  By locking in the current low interest rates, you’ll save thousands of dollars over the life of your loan.

ARM (Adjustable Rate Mortgage)

With the ARM loan, the interest rate is usually very low at the beginning but can increase over time.  If you plan on keeping your Brooklyn real estate for only a few years (up to 7) or you expect your income to increase, then this might be a better choice for you. If you expect your income to increase, an ARM loan can allow you to buy a more expensive home now. The drawback to this type of loan is that you do not know what your mortgage payment is going to be in the future; if the interest rate jumps dramatically, then so does your payment.  A particularly popular ARM is the 5/1 ARM.  The interest rate of a 5/1 ARM is fixed for a period of 5 years.  In the 6th year, the loan becomes a typical Adjustable Rate Mortgage.  So if you plan to own your Brooklyn home for less than 5 years, the 5/1 ARM may be your best choice.

FHA Mortgage

If your credit is a bit shaky, an FHA loan may be a good fit for you.  The qualifying criteria for FHA loans are not as strict as for traditional mortgages.  Also, because these loans are guaranteed by the FHA, lenders often allow you to provide a smaller down payment than they would allow for other types of mortgages.  If you’re in a time crunch, an FHA loan may not be right for you; processing times are typically longer than other types of loans because of the government paperwork involved.

If you have any questions about mortgages or need a referral to a lender, Give me a call Charles D’Alessandro Your Brooklyn Realtor® with Fillmore Real Estate at 718/253-9600 ext 206 or email me at [email protected], if you just need help deciding the right timing to sell or buy a Brooklyn home