definitions: Real Estate Term: FHA Loan - 05/12/10 01:21 PM
Definition: A loan made by an approved lender in accordance with the FHA's regulations and insured by the Federal Housing Administration.
From "About.com":
The Federal Housing Administration (FHA) runs several programs to promote home ownership. In most cases, FHA loans are mortgages obtained with the help of the FHA. With a small down payment, buyers can purchase a home. FHA loans make it easier for people to qualify for a mortgage, but they're not for everybody.
What is an FHA Loan?
An FHA loan is a loan insured against default by the FHA. In other words, the FHA guarantees … (2 comments)
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definitions: Real Estate Term: Equity - 05/10/10 03:23 PM
Definition: The interest or value which an owner has in real property over and above any liens against it.
Discussion: Equity in a house is the difference between the value of the property and the liens (loans) on the property. An owner may access that equity by obtaining a "Home Equity Line of Credit" (HELOC), or a "Second Mortgage".
Equity grows as (1) the market value increases or (2) as mortgage payments are made and therefore the principal is paid down.
Home equity is how our parents gained wealth. They bought a home, lived in it for 30+ years. They would … (0 comments)
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definitions: Real Estate Term: Easement - 04/28/10 11:32 AM
Definition: A right, privilege or interest limited to a specific use or control purpose which one party has in the land of another party and which run with the land and are not a personal right of an individual.
Discussion: When a property has an easement, it means that the described entity has the right to use that part of the property for a given purpose. Example: a "Utility Easement" along the south line of a property means that the Utility Company has the right to go onto that part of the property and maintain the utilities therein. The property owner … (1 comments)
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definitions: Real Estate term: Deed Restrictions - 04/26/10 11:19 AM
Definition: The limitations in the deed to a property that dictate specific ways that a property must or must not be used.
Discussion: Deed restrictions are similar to covenants in that they are rules of what can and cannot be done on the property. They run with the land no matter who owns the property. Typical restrictions may include "no manufactured homes" or "land may not be divided into less than 5 acres parcels."
The Seller's Realtor should have a copy of the restrictions available for a potential Buyer. Occasionally a deed restriction is not known about until a title search … (1 comments)
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definitions: Real Estate term: Community Property - 04/21/10 11:45 AM
Definition: In eight western states, the property acquired by husband and/or wife during a marriage when not acquired with the intent of being the separate property of either spouse and where each spouse has equal rights similar to property owned by a partnership of management, alienation and testamentary disposition.
Discussion: New Mexico is a "Community Property" state which means that if a Husband purchases a property, it is automatically property of the spouse unless a "Sole and Separate" document is signed by both parties acknowledging that the property is the sole property of the one party. This is becoming more important … (0 comments)
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definitions: Real Estate Term: Bureau of Land Management - 04/13/10 10:41 AM
Definition: A federal bureau within the Department of the Interior that manages and controls certain lands owned by the U.S.
Discussion: BLM land is public land owned and managed by the government. We have a large amount of BLM Land in this area.
To learn more about the Bureau of Land Management, click here:
http://www.blm.gov/wo/st/en/info/About_BLM.html
And for New Mexico BLM information, check this: http://www.blm.gov/nm/st/en/info/about_blm.html
Today's Saying: May flowers always line your path and sunshine light your day. May songbirds serenade you every step along the way. May a rainbow run beside you in a sky that's always blue. And may … (1 comments)
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definitions: Real Estate Term: Tax Assessment - 04/09/10 01:43 PM
Definition: The official valuation placed on property for ad valorem taxation or public improvements.
Discussion: The County Assessor assesses the value of your property for purposes of determining how much property tax you will pay. It has nothing to do with the Market value of your property or the Appraised value of your property.
For more information on the Grant County Tax Assessor, click on this link:
http://www.grantcountynm.com/grant_county_nm_info.php?CID=381
For more information on Property Valuation, check out the Grant County Assessor's website at:
http://www.grantcountynm.com/grant_county_nm_info.php?CID=382
Today's Saying: Courage is going from failure to failure without losing enthusiasm.
Linda Ferrara - … (0 comments)
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definitions: Real Estate Term: Appraisal - 04/07/10 11:44 AM
Appraisal:
Definition: An estimate or opinion of value of a specific property as of a specific date resulting from an analysis of the facts about that property by a qualified impartial third party.
Discussion: There are several benefits to having an Appraisal.
•- Assists the Buyer in knowing that they are not over-paying for the property.
•- Insures to the Mortgage Company that the loan amount does not exceed the value
*****Note: When you look at the current economic situation around the country, you may notice that an Appraisal can be useless to a Mortgagor. The home may be worth … (3 comments)
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definitions: Surveys - Part 2 - Kinds of Surveys - 04/01/10 01:21 PM
Kinds of Surveys:
Below is a list of the most commonly known types of surveys on our area.
ALTA Survey
A survey made for the purpose of supplying a title company and lender with survey and location data necessary for the issuing of title and/or mortgage insurance. A detailed map is required to be done to "ALTA" specifications. The acronym "ALTA" stands for American Land Title Association. Specifications of this type of Survey include (but are not limited to) determining property lines, location of improvements, identifying all easements, utilities and other conditions affecting the property. ALTA surveys are very comprehensive surveys … (0 comments)
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definitions: Surveys - Part 1 - 03/31/10 01:40 PM
A survey is used to measure and identify the property boundaries. Certain kinds of surveys also will show the improvements on the land including fencing, buildings, easements, etc. It is important to the property buyer to ensure that you are purchasing the amount of land and in the location you intended. In the case of a mortgage, the mortgage company will require a survey (no more than 6 months old) to protect them from any issues. Potential issues include: - Encroachments of someone else’s property onto the subject property. This may be someone’s fence or shed encroaching onto your property. - Encroachment … (2 comments)
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definitions: Lead Based Paint Information - 03/17/10 11:41 AM
Lead-Based Paint Addendum - Lead was used in paint prior to 1978. If lead is ingested, it can be deadly or harmful. Any house that was built prior to 1978 may contain lead-based paint. Because it can be harmful, there is a lead-based paint disclosure that must be signed by all parties. The Disclosure must be signed, with date and time, prior to writing the Purchase Agreement. You will receive a pamphlet explaining Lead-Based paint hazards and you will also receive the opportunity to obtain an analysis.
Please remember that it can be harmful if ingested (not inhaled).
Today's Saying: … (1 comments)
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definitions: Explanation of the Insurance Contingency - 03/15/10 02:36 PM
After Hurricane Katrina, two paragraphs were added to the Purchase Agreement giving the Buyer the opportunity to get insurance quotes and determine that home insurance is affordable. Hurricane Katrina made insurance in some areas very expensive. We have not observed this in our area. I usually put a 2 week time frame in this area to give the Buyer some time to get quotes and determine affordability. They then have a few more days to object. To date, I have not had anyone object due to an insurance price issue.
I will help you keep track of all your Due Dates … (1 comments)
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definitions: Definition of "Prorations" in a Purchase Agreement - 03/08/10 02:32 PM
Prorations - One of the items in a Purchase Agreement is an item called "Prorations". Prorating is dividing or distributing a sum of money proportionately. The most common prorated item is property taxes. The taxes would be divided up like this: The Seller would pay taxes from the beginning of the year to the closing date. The Buyer would be responsible for the property taxes after closing. Since New Mexico collects their dues in arrears (2008 taxes due in 2009), the buyer would receive a credit for the taxes from the beginning of the year until the closing date. When the … (1 comments)
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definitions: 1031 Tax-Deferred Exchanges - 03/02/10 12:41 PM
A Tax-Deferred Exchange is a way of deferring capital gains tax. If you are selling one real estate investment and buying another of the same kind, you can perform a 1031 Tax-Deferred Exchange and defer paying capital gains tax. There are certain time requirements so using a Realtor who is detailed oriented is important.
The two major rules to follow are:
•1. The total purchase price of the replacement "like kind" property must be equal to, or greater than the total net sales price of the relinquished, real estate, property.
•2. All the equity received from the sale, of the relinquished … (1 comments)
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definitions: The Closing Process - 02/26/10 02:31 PM
When we talk about ‘closing' we are actually talking about a series of events. A closing takes place at the Title Company or through the mail. (We don't require an Attorney to close in New Mexico).
Here are the steps to the Closing Process:
•1. The Title Company creates the Final HUD (Housing Urban Development) Statement and gathers all other required documents with information from the contract and the Lenders.
•2. The Title Company sends the statement to the Lender and the Realtors for review.
•3. Lenders and Realtors make any required changes.
•4. Title Company updates statement.
•5. Buyer and … (0 comments)
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definitions: Seller's Disclosure Description - 01/28/10 10:59 AM
A Seller's Disclosure is a multi-page document that the Seller completes to show all the details about their property. In New Mexico, a Seller is not required to complete this form. However, if the Seller HAS completed the form, the Buyer is required to receive and sign it. There are times when it is not appropriate for the Seller to complete the form. For example, the Owner passes away and the Brother of the Owner is selling the property. He has never seen the house and certainly doesn't know anything about the property.
Sellers are required to disclosure any material facts … (0 comments)
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definitions: Difference between Appraisal and Home Inspection - 01/26/10 11:50 AM
I sometimes have customers confusing an Appraisal and a Home Inspection so I thought that I would clarify this for you.
An Appraisal is an opinion of value used most often by a bank who wants to ensure that they are not giving a loan for more than the value of the property. If a Buyer is paying cash, they may request an Appraisal to ensure that they are not overpaying for the property. Generally, The Bank requests the Appraisal and the Buyer pays for the Appraisal which is sent directly to the Mortgage processing department.
A Home Inspection is not … (1 comments)
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definitions: What is Earnest Money - What is it for? - 01/15/10 10:30 AM
Earnest Money is a deposit given when making an offer to show the seller you are intending to carry out the terms of the agreement. The amount should be enough to discourage the buyer from walking away, compensate the seller for taking the property off the market, and cover any expenses the Seller might incur if the Buyer fails to close.
When the Buyer gives their Agent the earnest money, the office deposits the money into a Trust Account. The money is kept there until the contract closes or the contract is terminated. When the property closes, the agent delivers … (0 comments)
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definitions: An Offer VS. a Contract - 12/28/09 11:33 AM
December 28, 2009
The words ‘offer' and ‘contract' are often interchanged or misused.
An ‘offer' is a demonstration by the buyer showing intent to purchase. An ‘offer' is made using a ‘Purchase Agreement'.
A ‘contract' is a legally enforceable document where both parties have signed and agree to abide by the points in the contract. Once both parties have signed the ‘Purchase Agreement', it becomes a ‘contract'.
When you make an ‘offer', the Seller can do 3 things:
•1. Accept it
•2. Decline it outright
•3. Counteroffer
If there is a counteroffer, it means that they agree to everything in … (3 comments)
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definitions: Earnest Money Explained - 12/16/09 04:36 PM
December 16, 2009
If you are planning on buying property, there is a lot to know. So today (and in the future) I will be talking about different aspects of the buying process and the Purchase Agreement.
Today's topic - What is Earnest Money - what is it for?
Earnest Money is a deposit given when making an offer to show the seller you are intending to carry out the terms of the agreement. The amount should be enough to discourage the buyer from walking away, compensate the seller for taking the property off the market, and cover any expenses the … (0 comments)
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