FSBO Jane

When you’re selling your home, market value is a term that comes up pretty regularly. You want to determine a fair market value so you can list your property appropriately; you need to know what the market value of similar homes is; and so on.

So what is market value, anyway?
Essentially, market value is what a home is worth.

You can determine it in one of two ways:

1. Market value is what a seller is willing to pay, period. Because even a perceived home value means nothing when no buyer will pay it, many agree that a home is actually worth only what a buyer will actually pay.
2. Market value relates to what similar homes have been selling for, in the last six months. The two key terms here are similar homes—homes around the same size and with about the same type of amenities—and last six months—because the market is always changing due to all kinds of outside factors, you have to look at the immediate selling past.

For more information on market value, check out this article, “How to be realistic about price.”

Joint tenancy (also called Joint Tenancy with Right of Survivorship or, JTWROS) basically means two or more people (joint tenants) own property together equally and when one of them dies, the other(s) receives the deceased person’s share.

Advantages of a JTWROS
• Can help avoid probate court
• Both (or all) parties are equal

Disadvantages of a JTWROS
• Commitment with other people = risk
• Less control for deceased (at death, partner gets everything)

This type of tenancy is closely related to:
• Tenancy in Common: More loose, sometimes happens when join tenancies cease to exist
• Tenancy by the Entirety: Just for married couples

CMA stands for a Comparative Market Analysis

Designed to aid home sellers, a CMA can be used to determine the appropriate selling price for a residence.

In it, the following pieces of information will likely be provided, compared with one another to see what a fair market value for the area and the home may be:

* Similar homes that have sold recently.
* How long those homes were on the market.
* Homes that have not sold (i.e., expired listings).
* Homes like yours that are currently for sale (i.e., the competition).

When obtaining a mortgage loan, it’s important to find a lender who is willing to offer a rate lock. A rate lock, also referred to as a lock-in, means that the lender issues a commitment to a specific interest rate for a specific period of time. During that period of time, the interest rate cannot fluctuate. This is especially important during the time it takes to file your application, process the loan and approve the loan, which could add up to a few weeks. If you don’t have a locked rate, the interest rate could increase by the time the process is complete. However, with a rate lock, it usually means that you will also not benefit if the interest rate decreases. Your mortgage lender may also require that you pay a fee to lock in your interest rate. Talk to your mortgage lender about what they offer and what rules they follow.

When you take out a mortgage loan, you are required to pay a certain amount per month until that loan is paid off. However, a prepayment is an amount that you pay before the due date, to reduce the principal balance of the loan. This could mean that you pay more than you need to each month or just some months, you send in extra money at a random time of the month, or you pay the mortgage amount in full. You could pay the mortgage in full if the property was sold, if you acquired a large sum of money and want to use it toward the mortgage, or because of a foreclosure.

Because this prepayment occurs before the loan has fully amortized, you may have to pay a prepayment penalty. Still, if you can get the mortgage paid off and not have to worry about it each month, it may be worth paying the penalty. Discuss the rules and options with your mortgage lender to find out what is the best way for you to pay off your mortgage loan as soon as possible.

As its name suggests, a quitclaim deed is a document that removes claim on jointly held a piece real estate from both parties and places it on just one of those individuals. Essentially, the person giving up rights to the property is called the grantor, and he/she is giving up his/her interest in the property to the other homeowner (the grantee, and soon to be sole owner of the property).

Quitclaim deeds are by lots of people involved in various relationships.

• Family members may use a quitclaim deed to gift a piece of property (parent to a child) or as a way of keeping a home in the family after a loved one has passed away.

• Business partners may use a quitclaim to turn a residential property into a business or because one of them is leaving the business.

• The most common use for a quitclaim deed, however, is among divorcees. Here’s the situation: A husband and wife own a home together. One person eliminates his/her rights to the property by granting full ownership rights to the other party. So, for example, if the wife owned the home after the divorce, but enacted a quitclaim to give the home to the husband, she would not be entitled any money from a future sale of the home (and vice versa).

However, a grantee can never assume that a property his or hers outright. If other interested grantors (especially in collective situations with families or business partners) have not signed the quitclaim deed, there may still be joint ownership on said property.

Also, the actual information in quitclaim deeds can vary. For example, in that husband/wife divorce situation, the wife could have relinquished her rights to the house, but there could be a stipulation that she receive some percentage of the profits if the home is ever sold.

Best case scenario? Always read the fine print and never assume anything. Ask questions if you don’t understand.

A property’s walkability refers to its proximity to destinations within walking distance, from shops and restaurants to parks and entertainment. According to Wikipedia, it’s a measure that’s hard to quantify because it’s based on so many factors like presence of sidewalks, traffic conditions, building accessibility and safety.

Today, it is also a significant consideration in urban development, largely because of the benefits it offers. A city that is walkable provides strong health benefits to its residents, as well as increased social interaction and, even, less crime—because more people are out and about watching over things. More walking and less driving also means less carbon emissions in the air, better use of land and financial savings.

Curious to know how walkable your home or a home you are considering purchasing is? Check out this walkability calculator at walkscore.com.

When a home buyer applies for a mortgage loan, he or she usually will find the lender obtains a consumer report. This is the same report that companies use to do background checks on potential employees, and what insurance companies and personal loan companies use to find out a person’s background. These reports provide information on where you live, where you work, your credit score, how you pay your bills and whether you’ve committed a crime, been arrested, filed for bankruptcy, been sued, etc.

This is very personal information. In order to regulate who can obtain this information, to protect the person’s privacy and to keep the person informed, the Federal Trade Commission (FTC) created the Fair Credit Reporting Act (FCRA).

The FCRA contains rules that must be followed, concerning your consumer report. If you ask to see your report, the credit bureau must give you all of the information in the report and each source that provided the information. They also must give you the names of everyone who requested a copy of your report within the past year.

If you find information that you can prove is inaccurate, the credit bureau and information provider must change this information so that it is correct. You can provide the information to the credit bureau through writing, or you can send the information in writing to the involved lender or creditor, and that person would have to inform the credit bureau.

No one can receive your information without your approval. When you request a mortgage loan, for example, the company must first get your permission before they request a copy of your consumer report. This makes sure that random people aren’t getting a hold of your information for no reason and without you knowing.

In conjunction with this act, if your credit application is denied, the Equal Credit Opportunity Act allows you to ask the creditor why, and the creditor must tell you.

For a copy of the complete FCRA text, visit http://www.creditinfocenter.com/legal/FCRA.shtml.

A multi-dwelling unit is a commercial or residential building that contains multiple living quarters but only one mortgage. A multi-living unit, or MDU, could be just two dwellings under one roof, or any number of dwellings in an apartment for condo complex. They could also be considered mobile home parks, retirement homes, fraternity or sorority houses, college dorms, or any type of building or property that contains only one mortgage payment. This is different than duplexes or townhomes, which might share a roof but are usually owned by separate owners and contain separate mortgages.

When searching for a new home or an investment opportunity, remember to keep the term multi-dwelling unit, or MDU, in mind. If you’re looking for a new home, steer away from this term and look for single duplexes or townhomes for sale, or an apartment or condo unit for rent. If you’re looking for an investment opportunity, a MDU will provide you with numerous units for you to own and rent out to others. You’ll pay one mortgage for the building, while receiving numerous rent payments from each unit’s resident.

HUD is an acronym for the Department of Housing and Urban Development in the United States. Started in 1965, it now primarily deals with housing matters.

What is a HUD home?
A HUD home is a residential property (with one to four units) that has been acquired by HUD because of a foreclosure on an FHA-insured mortgage. After it’s been acquired by HUD, it is sold to recover the loss.

Who can buy a HUD Home?
Anyone who has the cash or ability to quality for a loan to buy the HUD home! Usually these residences are offered to people who will use it as their main residence first; but if they don’t sell, investors are given the chance to buy.

For more information about HUD properties, click here.