As is periodically the case, the California Association of Realtors (CAR) purchase contract has been revised once again. There are new, separate agreements for single family residential and income properties.
Although most buyers and sellers leave the details to their agent, it is beneficial if you have a sense of the latest contract.
Substantiating funds. The buyer is now required to provide the seller with written verification of the availability of his down payment and closing costs. This could include a letter from the buyer's lender, or bank/money market statements. A note from the buyer simply saying he has the necessary resources will not suffice.
If some or all of the funds are coming from others (relatives, friends), prudent sellers will insist on a contingency that they be deposited into the buyer's account soon after the escrow begins.
For most buyers, confirming funds will not be difficult as their lender's pre-approval process would have already verified them. Those who make an offer without loan pre-approval, however, will most likely have a harder time getting their contract accepted.
Ways to back out. Buyers usually have contingencies for financing and inspections, or others, such as the close of escrow of another property. A contingency is a condition that must be fulfilled in order for the contract to proceed. If the buyer is not satisfied with inspections, or cannot obtain the loan within the contingency time frame, he may cancel the contract and request a refund of his deposit.
Despite the buyer's duty to act in good faith, principals to a contract should be clear that buyers have great latitude in rescinding. The buyer must not only be willing to accept the property's condition, but “any other matter affecting the property.”
Thus, noisy neighbors, illegal activity in the area, concern about a shared driveway or a larger than expected expense to modify the dwelling, are only a few of the myriad reasons a buyer may have for choosing not to continue. According to several local legal experts, this latest contract version makes it even easier than previous ones for a buyer to cancel. Needless to say, if a buyer is going to withdraw, it is preferable to do so early in the escrow, thereby minimizing damage to the Seller.
My Viewers.
Monday, August 31, 2009
Renegotiating loans
The economic recession has too many people wondering how they can possibly pay their loans and debts the way they agreed. Too many people have lost jobs or are dealing with a pay decrease, or may even have new expenses they have to meet. These are very stressful situations for everyone. There is some hope, though, in finding that loans can be renegotiated, fees can be removed, payment schedules rearranged, and payments reduced so that paying the debt is manageable once again.
In the absence of criminal liability for debt and debtor prisons, the lenders realize that their options are limited. If a debtor refuses to pay a debt, the lender only has a few courses open to them. Reporting the default to a credit bureau hurts the borrowers credit ranking, but does not necessarily result in repayment. A lender may also resort to seeking a remedy in court, but this process is time consuming and expensive and only makes sense for large loans. Further, a court remedy may not necessarily result in repayment.
Because they are aware of these limitations and the fact there is no guarantee of payment many lenders have become open to renegotiating loan terms and payments. They know that this route has a greater chance of having the outstanding balance repaid. Of course, lenders wish to regain as much as possible from the outstanding loan amount without losing any more money to courts and collection agencies. Negotiating reduced payments and loan terms can make it possible for the defaulting debtor to pay off their debt and begin rebuilding their credit standing.
In the absence of criminal liability for debt and debtor prisons, the lenders realize that their options are limited. If a debtor refuses to pay a debt, the lender only has a few courses open to them. Reporting the default to a credit bureau hurts the borrowers credit ranking, but does not necessarily result in repayment. A lender may also resort to seeking a remedy in court, but this process is time consuming and expensive and only makes sense for large loans. Further, a court remedy may not necessarily result in repayment.
Because they are aware of these limitations and the fact there is no guarantee of payment many lenders have become open to renegotiating loan terms and payments. They know that this route has a greater chance of having the outstanding balance repaid. Of course, lenders wish to regain as much as possible from the outstanding loan amount without losing any more money to courts and collection agencies. Negotiating reduced payments and loan terms can make it possible for the defaulting debtor to pay off their debt and begin rebuilding their credit standing.
New beginning in real estate
A New Year is so psychologically interesting. For many, it's like a pardon from what they didn't get finished. They can close the door on what wasn't and create a new beginning around what they are now going to achieve.
For others, a New Year is the next paragraph in their continuing story. The New Year doesn't bring a new chapter, just a new paragraph to the same story they have been writing for several years. Each paragraph begins with a positive beginning, but soon gets lost in a maze of excuses. Oh, they don't see them as excuses, but they are words designed to make it okay that they didn't get things finished.
For a very few, a New Year is not a new beginning; it is the continuation of the journey they have been traveling. It provides them with more todays in which to fulfill their dream. For this select group, life is not about having to start over. Life is about a today in which they can apply what they learned from their yesterday. This one fact separates them from the masses.
Many of you know I have a mental challenge with the way goal setting is taught. Most of the goal setting teaching allows those who listen to have a reason to procrastinate. Teachers ask the listener to write what they want to achieve in the upcoming year and each day review it.
For others, a New Year is the next paragraph in their continuing story. The New Year doesn't bring a new chapter, just a new paragraph to the same story they have been writing for several years. Each paragraph begins with a positive beginning, but soon gets lost in a maze of excuses. Oh, they don't see them as excuses, but they are words designed to make it okay that they didn't get things finished.
For a very few, a New Year is not a new beginning; it is the continuation of the journey they have been traveling. It provides them with more todays in which to fulfill their dream. For this select group, life is not about having to start over. Life is about a today in which they can apply what they learned from their yesterday. This one fact separates them from the masses.
Many of you know I have a mental challenge with the way goal setting is taught. Most of the goal setting teaching allows those who listen to have a reason to procrastinate. Teachers ask the listener to write what they want to achieve in the upcoming year and each day review it.
Key to real estate success
How did you get into real estate investing? Did you read a book on it? Was it a seminar? A meeting of some sort with speakers selling courses? Did you get really, really jazzed and pumped up by these simple concepts that were delivered to you in parable form from the stage by a charismatic speaker? Did you find yourself levitating to the back of the room, powerless but to slap down your plastic to buy the kits that were being sold there.
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