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A foreclosed home is one in which the home owner was unable to pay his home loan so that the lender took over home ownership through the foreclosure process. These bank owned properties are also known as REOs (real estate owned).

The process in Arizona is similar to that in other states and will be the basis for this article. When you work with a real estate agent he will write up your purchase offer with you on a standardized contract which was developed by the Arizona Association of Realtors. The contract allows the agent to customize the contract for your particular purchase and has many built in protections for both the buyer and the seller.

When you make an offer for a foreclosed property, you can expect to receive back from the seller (the bank currently owning the property) an addendum to the contract. These addendums are in essence a counter offer that the buyer must accept if he wants to purchase the property. In some cases the seller will negotiate with the buyer over these terms but most sellers expect the buyer to agree to their terms. We have seen a wide variety of addendums in the past year as we have worked with buyers. In all of them, many of the protections for the buyer in the standard contract are eliminated or modified. Here are some of the things we are seeing.

Inspection Period

In the standard contract, the inspection period lasts ten days from the date the contract has been signed by both parties. We have seen addendums that change that to be ten days from verbal acceptance of the contract and have even seen a five day inspection period that must be completed before the buyer signs and accepts the addendums.

Title/Escrow Company

The seller will typically require the buyer to utilize the escrow company of the seller’s choice. Usually using this company helps facilitate the timeliness of the transaction because the escrow company is familiar with the seller’s requirements.

AS/IS & Disclosures

When you purchase an owner occupied property, you will usually get a Seller’s Disclosure Statement. This will provide information about the property and a history of repairs done. When you buy a foreclosure property, the seller has not occupied the property and typically will not provide any disclosure statements. Additionally, the buyer is generally required to purchase the property in its current condition “as is” and the seller will not make any repairs. If something is missing such as a kitchen appliance or garage door openers the seller will not provide it. What you see is what you get. Read the addendum carefully to understand what the seller will be responsible for if the property is damaged during the escrow period. The escrow period spans the time from when the contract is agreed upon by both parties until the sale records (close of escrow).

Cost for Extension of Close of Escrow

Most of these addenda have a per diem charge if you need to extend the close of escrow beyond the date in the original contract. The most common reason buyers need to ask for an extension of the closing date is that the lender has not completed loan processing and delivered loan documents to title several days prior to closing to allow time for both the seller and the buyer to sign. We have seen costs ranging from $40 to $100 per day.

Loan Approval

The Arizona contract allows for a return of earnest money deposited by the buyer if after a good faith attempt to obtain a loan at prevailing market rates to purchase the property the buyer is unable to do so. Some addendums are limiting the buyer’s time to obtain loan approval to a set number of days from contract acceptance, for example 25 days. If the buyer does not notify the seller of his inability to obtain a loan within that time frame, he will forfeit his earnest money to the seller. This holds true even if the inability to obtain the loan had nothing to do with the buyer’s financial qualifications. We have seen loans turned down in the past few months for condo purchases because the community had too low a percentage of owner occupied units or the HOA was not financially solid or some cases for both of these reasons.

Tenants or Other Occupants

Most of these properties will be vacant; however, if you see evidence that someone is living in the property when you are viewing it and prior to writing an offer, you need to ask questions. Who is living in the property? If the property has been rented, what are the terms of the lease? We’ve seen addenda that indicate that the seller will not evict any occupants of the property and that it will be the responsibility or the buyer once he has purchased the property. You should also be aware that tenants have rights too. Be very cautious about writing an offer for a foreclosure property that is occupied.

What Does the Buyer Need to Do?

It is very important for the buyer to read the entire addendum provided by the seller prior to signing. If he has questions about the addendum he should ask his real estate agent for clarification. He should also verify that his real estate agent has read the entire addendum and made note of key dates.

These laws legally force the seller of a home to disclose to the potential buyer any serious defects of the property. The laws were created to help protect the buyer from any defects that were not noticed until they closed on the house and become the owners. Many times it is hard to enforce real estate disclose laws because what is considered serious defects may be open to interpretation. Because of this, the laws are constantly changing resulting in many states not having effective disclosure laws. If the state does not have mandatory real estate disclosure laws, they will usually have a voluntary disclosure.

These laws can cover many different subjects so you should consult with a qualified lawyer or real estate agent to find out the specifics of what they cover. In regards to real estate disclosure there are both state and federal laws regarding these laws. Some brokerages have additional regulations for listings they accept. In the United States, Federal law requires disclosure in regards to using lead paint in homes constructed before 1978. The disclosure laws generally cover toxic or hazardous materials and the presence of asbestos and radon gas.

These laws are designed to help protect a potential buyer from buying a home that has known defects or issues. For example, if the home you are considering buying has suffered from earthquake or flood damage these laws will typically require the seller to provide you with this information. In addition to real estate disclosure law protection the buyer should also have a home inspection done by a professional. This inspection can possibly find other potential issues. Sometimes, the lender will require that a home inspection be done before they approve the loan.

In some states, there are long questionnaires that the property owner has to fill out before they can sell the property. This questionnaire does ask about any potential issues or defects with the property. These questionnaires typically cover everything from issues with the land to the wiring and plumbing inside the home. Some of the things that the seller has to disclose include, but not limited to, are:

• Water damage caused by a leaking roof
• Presence of wetlands on a part of the property
• Recent deaths on the premises

Generally, these laws only require that the sell reveal issues that they are aware of. This means that they cannot be held responsible for any problems they were unaware of before putting their home on the market but not every state provides this protection. There have been some cases that the seller can be sued by the buyer after they buyer becomes the homeowner. This is why you need to have expert advice about real estate disclosure laws in your state.

Real Estate is anything related to the construction and development of land and buildings either commercial or residential. This seems to be a very simple concept, but there are many legal disciplines included. Real Estate Law governs who may use an own the land or buildings.

Some terms to note in the Real Estate Law:

• The title is the official legal term which describes the owner of the property

• The mortgage is lending money at interest in exchange of title on the debtor’s property. After the successful completion of the debt payment, the conveyance of the title becomes void.

• Foreclosure is the term used if the lender takes control of the house or any property used for mortgage if the debtor fails to pay back the amount

• The official meeting for transferring the ownership of the land or property is termed as closing

• Escrow is the term used for money or property withheld with the third party for safekeeping

• Real Estate Agent is the person licensed for negotiating and conducting real estate transactions

The much awaited regulation in the realty sector has been announced by the Government of India last year, which is the introduction of the RERA Act (Real Estate Regulatory Act). Under the act the home builders have to deposit about 70% of the amount in the Escrow account. This will ensure the buyers that the amount is not diverted to some other projects.

Benefits of the RERA Act:

• As mentioned earlier, the builder will divert 70% of the amount taken from the buyers to Escrow account and this will ensure the buyers that their amount is only being used for this project and safe as well without being transferred to other projects.

• With the introduction of this new act the buyers doesn’t have to pay for the area over the carpet area. It is one of the important things to remember.

• All the clearances both from the buyer and the builder should need to be made before selling. The builder needs to disclose the information regarding the apartment.

The builders are allowed to sell the property only after getting proper clearances
RERA, is the central law, but as Real Estate is subjected to state, the state governments have a major role in implementing this act. However the various other related practice area to the Real Estate law include Tax Law, Landlord Tenant Law, Accidents and Injuries, Estate Planning, Insurance Law.

Whether you are buying or selling a property, choosing a real estate agent may be the most important decision you make. Good real estate agents can save you a substantial amount of time and money. They can also ensure that the buying or selling process is an enjoyable and memorable experience. Here are some tips for choosing a real estate agent:

1. Ask Friends/Family for Referrals
Ask family and friends for their advice on local agents. This way you will be sure to find an agent with a good reputation.

2. Consider More than One Agency
There is an array of agents that will kill for your business. That is why you should interview as many agents as you can. Compare agents with regard to their knowledge of the area, experience and qualifications. Also, ask for references from previous clients.

3. Choose an Agent that Knows the Importance of Customer Care
While interviewing different agents you will be able to establish their level of customer care or how far they will go to satisfy the customer. Look at things like their attitude towards returning phone calls and their willingness to meet with you.

4. Choose an Agent that Handles Homes in Your Price Range
When you opt for an agent that deals with homes in your price range, you will be sure to end up with an agent that will give his or her best effort. Some agents deal only with high-end properties and are used to high commissions. They are more likely to attend to these properties first.

5. Choose an Agent that Respects Your Time Schedule
If you will not be able to view properties during office hours, you need to find an agent that is willing to do business after hours or over weekends.

6. Look for an Agent that You Can Communicate With
Communication is vital when buying or selling real estate. Make sure that you choose an agent that understands your needs and that communicates them well. You will be best off if you choose and agent that registers a high level of comfort with you or with whom you are compatible with.

7. Choose an Agent that Provides Multiple Services
It will be a bonus if you can find an agent that can handle the buying/selling process as well as other additional services like arranging property inspections or who can refer you to a trustworthy real estate attorney.

8. Choose an Agent That Can Negotiate
Negotiating skills is an essential quality of a good real estate agent. Make sure you choose and agent with impeccable and proven negotiating skills.

9. Choose an Agent with Lots of Resources
Ask agents where your property will be advertised. Make sure that the agency uses print advertising (newspaper/magazines) as well as other promotional material such as brochures. Also check if the agency makes use of the Internet for advertising their listings.

10. Follow Your Instinct
Choose an agent that makes you feel comfortable and whom you trust. You level of comfort and satisfaction will let you know if you’ve met the right agent.

In the United States, there are well – over, one – million, licensed real estate professionals, although, only a relatively, small percentage of them, are responsible for, the vast – majority, of closed – transactions. Therefore, whether, you seek to sell you home, or are a potential, qualified buyer, it is wise, to carefully, choose, your agent, based on, your personal, best – interests, and, after interviewing them, feeling, they have the combination of attitude, aptitude, skills, persistence, professionalism, and expertise, to serve your needs, goals, and priorities! After, over 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I strongly, believe, these 6 things, you must demand, of the individual, you hire. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, what this means, and represents, and, why it matters.

1. Integrity: The real estate professional, you choose, must, consistently, exhibit, absolute integrity! To serve and represent you, you need, and deserve, someone, you feel confident, you can, consistently, trust, in good – times, or less!

2. Allegiance: Nearly every state, as well as Realtor Board’s, include a Code Of Ethics, regarding, the conduct, required by a realtor, to his clients, and customers, etc! One of the key components is, owing a client, complete allegiance, and protecting their privacy, etc. Your chosen professional must put – you – first, consistently, and never provide, any information, which might harm or compromise, your interest (however, that does not mean, violating the law, and/ or, providing any material misstatements!)

3. Tell what they need to know: My service – marked, slogan, is, I will always tell you what you need to know, not, just, what you want to hear. You need, and deserve, someone, who will inform you, in a realistic manner, rather than, wearing, rose – colored, glasses!

4. Prepare a client: Agents owe their clients, a readiness, and willingness, to thoroughly, consistently, prepare them, for potential, possibilities, in order to make this process, as stress – free, as possible! When one prepares his clients, properly, the transaction period, becomes, an easier one!

5. Negotiating expertise: One of the reasons, to hire, a specific agent, is their degree of negotiating expertise, in order to achieve the best price, in the shortest period of time, with a minimum of hassle! This requires the individual, to thoroughly, understand, and know the local, real estate market, etc.

6, Handling details: The transaction period, is, often, full of challenges, and requires, handling the details, effectively, and efficiently, on a consistent basis!

Since, for most, the value, of their house, is their single – biggest, financial asset, doesn’t it make sense, to do, whatever, possible, to ensure, you protect it, and make the best decisions, and take the smartest actions! Consider these 6 things, when you hire your real estate agent!