What Makes a House “Sellable?”

/1 Comment/in , , /by

We know when a person is fashionable and we know when a topic is debatable. But what makes a property sellable? If you’re worried about why your house isn’t selling, read on to see if it checks all the sellable property boxes.

Is your property listed at the right price?

Here’s the thing: every property is sellable if it’s at the right price. By “right price,” we don’t necessarily mean the exact value of your home but more so the price that buyers are willing to pay for.

Here’s an example: a beautiful mansion located in an area where there’s no demand for that kind of luxury will likely sell below its worth. You can sit and wait for the right buyer but you might end up waiting forever. Otherwise, you can keep lowering the price until someone bites. This isn’t ideal, but we have some other solutions we’ll mention towards the end of the blog.

Is your property in a good location?

This is a tough one, because you obviously can’t just up and move your house to a more desirable location. But we all know how powerful location is — people will pay a premium price for even the most rundown of homes as long as it’s in a good spot.

Do whatever you can to sell up the location you’re in. In a super remote location? Hype up the peace and quiet. Near an industrial site or an airport? Talk about being close to a lot of jobs (or consider if you’re located in a place that might one day be up and coming — it’s a trend we see with many industrial locales). 

If none of that seems to work, find a platform (such as RealtyHive) that targets a larger audience. Expanding the location of the people who see your property creates more potential to find a buyer and, ultimately, a sale.

Do you have good curb appeal?

Around the corner from where I (the writer) live is a house that used to be a Pizza Hut. The once-parking lot is now a lawn but nothing has changed the fact that when you look at it, it’s clearly a Pizza Hut. I’ve heard the interior is really modern, but I’m still not convinced that it doesn’t smell like greasy, cheesy pizza inside.

That tells you pretty much all you need to know about curb appeal. While the Pizza Hut house isn’t a lost cause, it’s undoubtedly lacking in sellability. Countless buyers looking for homes will feel the exact same way that I do, which limits maximum potential.

If the Pizza Hut house had some beautiful trees, shrubs, and other landscaping, you truly couldn’t even tell it was once a restaurant. First impressions are important, which is why it’s essential you examine your home’s exterior when trying to sell.

Does your house make foundational sense?

A house on stilts makes sense in Florida or the Caribbean — not so much in the frozen tundra that is Wisconsin. Houses without basements aren’t uncommon in warmer, drier states. In tornado country, a house lacking a basement is kind of scary.

If your house is structurally sensible for the region, you have an asset(s) that you should absolutely highlight. For all you know, a buyer from Arizona might be shocked at your green lawn or unfinished basement — what’s common for you could very well be a novelty for others.

If your house lacks structure, curb appeal, location, or any other sellable factor, don’t despair. Don’t let it sit for months on end without an offer in sight — sell with RealtyHive instead! We’ve got the exclusive marketing you need to help your home go to the right buyer. Find out today how a time-limited event can help your house for sale.

Why You Need Digital Marketing to Sell Your House

/1 Comment/in , /by

Need to buy a present for your dad’s birthday? Go on Amazon! Trying to watch a movie? Digitally stream it through Netflix or Hulu. Shopping for a new car? Check out your local car dealer’s website. Ready to sell your house? It’s time to take that online as well.

We’re living in an age where practically everything we do relates back to the internet. This holds true for selling your house. While posting listings in the paper worked wonders for previous generations, you’ve got to get online, and you’ve got to have a strategy.

Marketing online > listing alone.

These days, even posting your listing on MLS or Zillow doesn’t guarantee a successful home sale. Real estate marketing attempts to reach as many interested buyers as possible — not just the buyers who are close to your property. Here are a few reasons why listing without marketing might not cut it:

Exposure for Your Domestic Property

If your property is unique, luxury, or in the middle of nowhere, people in your neighborhood or immediate circle are likely the first to know about it and the last to go for it. Potential buyers often move into the area for a specific reason and need a house to complement their lifestyle. Your neighbors likely aren’t looking to move to your property, they have one of their own.

Exposure for Your International Property

Did you know that Zillow doesn’t list international properties? Your Bahamian beach condo or Spanish apartment need to reach a global audience in order to sell. Without the right marketing team, your international listing will sit on the market for months or longer.

Exposure for Faraway Buyers

Think the only interested buyers are the ones within a 30-mile radius? Think again. Buyers come from all over the country and even the world!

Especially if you’re in a bigger city or near a high-profile company (particularly a tech company), properly marketing your property is crucial. Global or out-of-state buyers won’t drive by your property and know it’s for sale — marketing reaches buyers where they’re at.

But what if I’m selling in a highly desirable neighborhood?

Sure, you might be able to simply list on Zillow or MLS and hear from a number of buyers. You might even get a number of offers. But what sounds better: 5 offers and the highest number is $10k above your listing price, or 15 offers and the highest number is $20k above?

Marketing reaches a wider audience, giving you the greatest chance for the greatest ROI. And who couldn’t stand to pocket an extra $10k from a home sale?

RealtyHive does it all!

International properties, vacant land, residential homes, commercial buildings — we list it all. We take on properties that sites like Zillow can’t. But our services don’t end with listing. We have a premier marketing team in place to help get your property the exposure it deserves by offering a variety of plans. In other words, you cannot pay until your house sells.

So before you try to become a marketing expert or resign to a life of little to no offers, let our team help. List with RealtyHive today!

Real Estate Investing Resources

/2 Comments/in , /by

When it comes to real estate investing, are you:

a. A complete novice who wants to get started but doesn’t know where to begin
b. A rookie who’s getting ready to buy their first investment property
c. An investment property owner who wants to grow their wealth even more
d. A seasoned vet who thinks they know it all

No matter what you answered, we guarantee this blog will help you on your property investing journey. Here’s a list of real estate investment resources to help any investor stay up to date.

YouTube Channels

Did you know that in 2019, YouTube was the most visited site on the Internet? Most people won’t be surprised by that stat, but it just goes to show how YouTube has evolved from a place of viral videos to a truly resourceful tool. Here are some of the best YouTube channels to help your real estate portfolio:

Graham Stephan

“Here’s my story of skipping college, pursuing [sic] real estate sales at 18 years old, and becoming a millionaire by the time I turned 26.” Graham Stephan’s YouTube bio says it all. While Stephan diverts his attention from real estate investing to millennials (and lots of avocado toast mentions, for whatever reason) to other financial topics from time to time, his transparency as a whole is inspiring and insightful.

Mark Ferguson

A true flip king (often balancing 15-20 property flips at a time), Mark Ferguson documents every part of his real estate investment process. Ferguson shows before and after footage, spreadsheets and other financial info, and even whether a property was ultimately worth it. 

BiggerPockets

As one BP fan writes, “BiggerPockets forum is the single greatest resource for real estate investors.” While BP also has a blog, forum, website, and podcast, their YouTube channel is perhaps a perfect compilation of each resource.

HONORABLE MENTIONS

  • Meet Kevin
  • Flipping Mastery TV
  • Max Maxwell
  • The Financial Diet (not real estate, but an excellent financial video channel)

Podcasts

Put these on during your commute, take a walk and plug in your earphones, or even just make cleaning the house a little more interesting with a good real estate investing podcast. Many of the channels listed (and sites below) also have their own podcast, but here are some lesser-known podcasts to check out.

Apartment Building Investing With Michael Blank

On top of writing for BiggerPockets, Michael Blank’s podcast has unique perspectives regarding multifamily complexes. Blank dives deep on this somewhat niche form of property investing through conversations and intriguing interviews.

The Real Estate Guys

One of iTunes’ most popular podcasts, the Real Estate Guys were once a radio show and got their start in 1997. Fast-paced and fun, you won’t start snoozing with this podcast.

Rental Rookie

Teacher-turned-investor Emily Du Plessis explains how she finessed her transition into property investing. But with more than 160 episodes as of January, 2020, this podcast title is a misnomer — Du Plessis certainly knows her stuff. This is a great podcast in general, but the fact that it’s run by a teacher means you know you’ll learn a ton.

Blogs, Sites, & Forums

REtipster

REtipster stands apart from many other blogs because it gives a lot of attention to land sales and how to sell land. Blogs, podcasts, reviews, and interviews make this an extraordinarily comprehensive site.

Afford Anything

Afford Anything tells a fascinating story of a woman, Paula, who has done it all in the pursuit of financial freedom. Paula has a podcast, a blog, a consulting service, and even a course to help investors get on their feet. Even if you’re just learning about how she scraped up $25k on a $21k salary, you’re bound to be captivated by her story.

Connected Investors

Connected Investors is almost like the Reddit of property investing. You can find topics to read up on or contribute to, or even start your own. Plus, these forums are a great way for people to network, which can absolutely help you grow your portfolio.

RealtyHive

Countless cruise through Zillow, Trulia, Realtor.com and the like. What many people don’t realize is that RealtyHive is an untapped source of potential. 

We are an exclusive resource for learning about purchasing property through time-limited events, our blog is a resource for real estate buyers and sellers, and we feature listings that other sites might not show. We know that knowledge is power, and we’re more than happy to share our knowledge with you!

New Psychology Tricks to Help Sell Your Home

/0 Comments/in , /by

Words, colors, sounds, timing, shapes — each of these things affect us on a subconscious level, and each of these things are used constantly by advertisers and businesses alike.

Psychology plays a huge role in attracting more clients and customers. But can you use psychology tricks in a similar manner to help sell your house? Try these tricks (and check out a previous psychology in real estate blog we’ve posted) to see for yourself.

Psychology Trick #1: Create FOMO.

Otherwise known as the fear of missing out, FOMO doesn’t solely exist in terms of weekend plans and brunch dates. Creating FOMO for your property is a great tip for selling your home. 

The way to do it is pretty simple: sell through a RealtyHive time-limited event. Creating FOMO is just in the nature of our auctions. In fact, the FOMO is so real that as we talked about in a previous blog, many properties listed with us actually sell before the event. 

Many times, a buyer who was only mildly interested in a property is suddenly chomping at the bit when they know it could go to auction. They don’t want to lose out on the current deal, knowing that the price could go up, so they act now instead of waiting.

Point being, you don’t have to jump through hoops to make your property highly desirable and FOMO-inducing. Just list with RealtyHive and we’ll handle the rest.

Psychology Trick #2: Play to the senses.

Playing to the senses is especially relevant if you’re in a buyer’s market (aka it’s highly competitive, the houses are similar, and your property needs to stand out). Read the following listing descriptions and see which appeals to you more:

Example 1:

Spacious 3-bedroom, 1-bath house with a yard. Close to grocery store and park. Kitchen was renovated in 2019.

Example 2:

This spacious 3-bedroom, 1-bath house has it all, and we’ll miss it dearly! Take in the sunlight in the newly renovated kitchen and watch the hummingbirds flit around the backyard. 

The mud room will come in handy as you come back from running errands (we’re just a block away from the grocery store) or the park around the corner.

It’s pretty clear which listing description stands out. While you don’t want to overwhelm potential buyers and write a novel, there are simple ways to appeal to the senses, paint a picture, and keep people interested.

Psychology Trick #3: Try your hand at price perceptions.

Nearly everything you buy ends in 99 cents. Why don’t businesses just round up the dollar? It’s because of an important psychology trick that you should absolutely apply to selling your house.

When people see a pack of Oreos in the checkout line at the grocery store is $1.99, the 1 is the first number they see. We have a habit of subconsciously ending our thought process there — most of us think “well, it’s under $2” instead of the fact that it’s basically $2. 

If your current house is listed at $250,000, it could honestly make a difference to list as $249,000 or $249,999. Plus, listing at a slightly lower rate might include your house in a higher number of searches — buyers looking solely for houses below $250,000 might miss out on your property.

Secondly, weird or random prices might get more buyers’ attention. If you list at a random price like $194,722.78, it will likely catch buyers’ eyes and help your property stand out.

Psychology Trick #4: Remember that “perfect” doesn’t exist.

To be clear: staging your house and taking photos are times where your home should look as spotless as possible. But oftentimes, people become paralyzed in the process of selling their house. They’re trying to fix too many things or write the absolute perfect listing description before taking their listing live. 

Two things to keep in mind, the first being the Pratfall Effect. People tend to like people who aren’t perfect, who make mistakes and who are genuine humans. The same can apply to houses. Remember the old adage, “If it seems too good to be true, it probably is?” Buyers are sometimes wary when a house seems *too* perfect. This is good news for anyone who has a cringe-y wallpapered room they’ve just never had time to fix.

Plus, in the era of fixer uppers, a lot of buyers like looking for potential. They like the idea of tackling on a home project. Suffice to say, don’t wait for your house to be perfect before selling — in some instances, your attempts could actually backfire.

The second thing to keep in mind: If you’re worried about your house never selling on Zillow or Trulia because of its imperfections, sell with RealtyHive instead! We’ll happily take it to a time-limited event and in the event it doesn’t sell, you don’t pay. Our real estate psychologists, erm, team is standing by.

What to Look for in a Realtor

/3 Comments/in , /by

Just as no one wants to end up marrying a malicious Malfoy or a crazy Carrie Bradshaw (sorry Carrie, we still love you), choosing the right Realtor is as crucial as choosing the right significant other. In order to avoid mishaps and desperately wanting to back out once things are “steady” and underway, you want to make sure your agent is up for the task. But what should you look for in a Realtor?

You’ll find that the characteristics of a good Realtor aren’t all that different from that of a good partner. Let the love doctors at RealtyHive give you the proper coaching to find a match made in real estate heaven.

Someone With Experience

Of course, most of us are first-timers at relationships at some point or another, and that’s OK. Just because your Realtor is fresher on the market doesn’t mean they won’t do a fabulous job. That being said, your Realtor should definitely have experience in the following areas:

  • Location: Agents should be well-versed and in-the-know when it comes to selling in your area. An agent who doesn’t know the area raises some red flags — look for someone who has lived in or near your city/neighborhood and can speak to the buyer’s market and demographic.
  • Property Type: Selling a house is very different than selling a commercial property. Make sure your agent has experience that aligns with the type of property you’re selling.
  • Licensed: This should go without saying, but do not go with a Realtor who isn’t licensed. Going with your neighbor’s friend who “knows a guy” who sold a house for someone “on the cheap” sounds about as successful as a blind date with someone 40 years your senior.

Someone Who Isn’t Afraid to Show You Off

No one puts Baby in the corner! It’s a massive red flag to date someone who won’t take you around to their family or friends, or who barely acknowledges you exist in public. You deserve more, honey!

The right Realtor has the marketing skills to make sure your house gets the traction it needs. They probably won’t just put a sign out in front of your house — they’ll likely post listings online and garner web traffic for your home. Ask your Realtor about their marketing strategy before crossing any Ts or dotting any Is.

Someone Who’s a Good Communicator

Ahh, communication. The backbone of every healthy, thriving relationship! Everyone has different needs, so it’s important you establish what you expect from a Realtor before signing a contract with one.

For example, if you prefer minimal contact, you should look for a Realtor who is compatible (or someone who is flexible and can adapt to your needs). If you need to hear daily updates, that’s also something to communicate to your Realtor. Being frank from the get-go is essential to making sure your Realtor is a good fit.

Someone Who’s the Complete Package

A kind person who makes you laugh, happens to be a great cook, is an exceptional listener, and they also serenade you with a heart-wrenching rendition of “Wonderwall?” Yes please! A Realtor who has more to offer than the bare minimum? Sign us up!

While this might not exist everywhere, it’s definitely a plus when your Realtor includes things like free staging or professional photos. However, it’s a good reminder that the extra bells and whistles aren’t as important as the foundational skills. In other words, what’s more important: a partner who plays acoustic guitar or a partner who is extremely loyal?

PS: Don’t Shy Away From Matchmaking Sites

It can be a tough world out there when you’re trying to find the One. But RealtyHive is the answer you’re looking for. We have the means to help you connect with the perfect Realtor! Find out more about Cashifyd and how you can find the perfect agent to sell your house — and even get cash back at closing. Tell us a dating site that offers that!

Can You Fire a Realtor?

/2 Comments/in , /by

When you hire a realtor to help sell your property, you expect and hope things will go smoothly. But what if that’s not the case? If something’s not working out with your Realtor, are you allowed to let them go?

When to Fire a Realtor

Before we dive into contracts and the like, it’s good to know the instances where firing a Realtor makes sense. Firing a Realtor is sometimes tricky — you want to have really good reasons to let yours go.

Poor Marketing & Photography

A Realtor needs impeccable marketing skills. If the photos of your home aren’t enough to make you want to live there, your house isn’t getting the traction it needs. 

Unethical

Did you find out your Realtor has put money in trust into their personal account? Has your Realtor shown open discrimination towards you or others? Either of these are fireable offenses. Read up on the code of ethics to see if your Realtor is upholding their responsibilities as they should.

Lack of Knowledge

If your Realtor says they’re an expert in your neighborhood but evidence points to the contrary, this is good to take note of. An example is if a Realtor says your house will sell in ___ days/weeks and things go on for much longer, or if they seem to lack the knowledge they claim.

Unprofessional

Does your Realtor consistently show up late? Are they unpleasant and/or apathetic? Are they massively uncommunicative? First off, we’re sorry that’s the case, but secondly, document any instances of unprofessionalism that show a pattern. This is good to bring up when you try to terminate the contract.

Realtor Contracts: What You Need to Know

Letting go of a Realtor is not as simple as switching to a different landscaping company or hairstylist. Sellers sign contracts with Realtors which legally bind them to work together.

However, there are some instances where you won’t have to work with them, unsatisfied, for months on end:

Protection Periods 

Most Realtor contracts have a protection period. These clauses give the Realtor a set amount of time to sell your home. If your home doesn’t sell by the end of the protection period, you should be able to back out of your contract without issue.

Contract Expiration

Whether your contract is for three, six, twelve, or another number of months, it might be in your best interest to just let the contract expire before trying to hire someone else.

Termination Fees 

Sometimes you can get out of a contract by agreeing to pay termination fees. Remember, however, that you will likely have to pay another Realtor and spend even more time trying to sell your house. Termination fees are a financial loss, but might be worth it if you’re severely displeased with your Realtor.

Contract Release 

If your contract expiration is a ways out and you’ve felt unhappy for awhile (and expressed this to your agent, talk to your agent about an amicable release. They might not go for it, but it’s worth a shot — particularly if this isn’t the first time they’re hearing about your dissatisfaction.

Something else to keep in mind: Are you severely frustrated by your Realtor? If so, consider contacting your Realtor’s broker — they could push for an amicable contract release. At the very least, they’ll probably allow you to pick a different agent in their company.

You’re No Longer With Your Realtor, What Next?

You have a couple options at this point. You can sell FSBO, but this will easily add work onto your plate. You can take on a new Realtor, but your wounds might feel too fresh — and keep in mind that a listing under your old Realtor’s name/a contract that’s not properly terminated means that Realtor will take commission when your house sells. You’ll owe the commission even if you sell the house to yourself or a family member.

The other option is working with RealtyHive. We can find you an agent (and even get cash back through Cashifyd) or help you list on your own. Whatever you need, we’ve got you covered — our time-limited events are a proven selling method to help you out.

Home Improvement List: Order of Operations

/1 Comment/in , /by

A leaking roof, a sinking foundation — these issues are about as urgent as a house fire. Hopefully you never have to encounter such problems as a homeowner. But when it comes to the smaller things, where should your priorities lie? What fixes should happen first? Where should you focus your attention when nothing is *that* wrong?

The answers lie straight ahead. We’ve got the rundown, renovation order of operations that you’re looking for.

Know Before You Buy

Before buying a house, a home inspection should tell you exactly where some of the problem areas lie.

Keep a running record or write in a calendar when you’ll need to fix these issues. Make sure you address the issues before they truly become a problem. For example, if the water heater is 6 years old, know that you have between 2 to 6 years left before you’ll need to replace it. You can start budgeting for these fixes now instead of getting slammed with financial surprises later.

General Replacement Timeline

Wondering how often you need to repaint the walls or when to repoint your brick? Let this renovation table serve as a guide:

Home TaskRedo or Replace Every…
Painting walls5-7 years
Painting home exterior5-10 years
Tuckpoint or repoint brick25-50 years, more often in wetter climates
Repipe plumbingCopper pipes: 70-80 years
Brass & steel pipes: 80-100 years
Redo insulation80 years
Replace vinyl siding40 years
Replace roof20-30 years

Here’s another guide on when to replace basic appliances (assuming that your appliance doesn’t die and need replacing sooner).

Home ApplianceLife Expectancy
Water heater10-15 years, 15-20 years if tankless
Dishwasher7-12 years
Oven15 years
Refrigerator14-20 years
Washer and dryer12-18 years (dryers usually last longer)

Aesthetic Changes

What if you just want to redo some things around your house, solely for aesthetic purposes?

While you can technically replace certain things whenever, you should try to time things around other changes. For the sake of color coordinating, for example, you might want to hold off on updating kitchen fixtures until you need new appliances.

That being said, if you’re up to date on your home improvement list, nothing major needs replacing, and you’re hankering to finally add some backsplash and update your shower, go for it! Aesthetic changes add a ton to your home’s value — sometimes they are just as important as functional changes.

How to Keep Track

Keeping track of your home’s changes and renovations is critical. Not only does it remind you of when things were replaced or renovated, but it also helps inform future buyers and get the best value for your home.

One of the best ways to keep track is to create a spreadsheet documenting changes. It’s also a good idea to keep receipts or reports as well. However, you can make tracking changes into a fun project: for those with huge renovations underway, a scrapbook is a great way to show off your hard work!

Feeling inspired to make your home the very best? Want to start buying and flipping houses? Proud of your home’s progress but feeling ready to sell and start anew? Work with RealtyHive! From buying to selling, our time-limited events can do it all.

How to Become a Real Estate Agent

/0 Comments/in , /by

Thinking of making a career change? If being your own boss, seeing beautiful homes, and helping people achieve their dreams sounds great, becoming a real estate agent should be in your cards. Take a look at the process, pros and cons of agent life to see if it’s the right career move for you.

The Process of Becoming an Agent

Steps to Becoming a Real Estate Agent

  1. Study your state’s agent licensing requirements.

    Every state has different requirements. It’s important to see what’s expected of you before diving in. Keep in mind, you can become licensed in multiple states as well.

  2. Take a prelicensing course.

    Find a school with a good reputation and an equally good track record for post-graduates.

  3. Apply for your real estate salesperson exam.

    Each state has specific rules on when you can take this exam and whether or not you qualify. Some states require background checks and fingerprints which take awhile to process — know what you need to submit far in advance before you actually are ready to take the test.

  4. Pass the exam

    Hopefully you’ve studied and feel confident for your exam, but it’s OK if you don’t pass it the first time — you can retake it.

  5. Find a broker.

    Every agent legally needs a broker. Even though agents can also become real estate brokers, it’s best to interview multiple brokers and find one to work with (especially when you’re just starting out). After a sale, you will pay this broker through something called “commission splits.”

The Pros of Becoming a Real Estate Agent

You’re an independent contractor. You get to set your own rules! Take vacations when you want, work when you like — you set the pace for your work.

You get to work with others. Becoming an agent is a great job for anyone who loves working with people. While challenging, it is insanely rewarding to help people fulfill their dreams of owning a home.

You learn a ton of valuable knowledge. Knowing the ins and outs of real estate is immensely helpful when you’re looking to buy or sell your home. 

You don’t need to go to college. While you have to take a prelicensing course, it’s much less expensive than paying for tuition. The course cost ranges by state but is usually $500 to $2,000.

You can start at the age of 18 or 19. Most decent paying jobs are unavailable to the youngest adults, but that’s not the case with agents. As long as you’re an adult who is also a legal resident, you hit the basic criteria for becoming an agent (though, as mentioned, you might have to also pass a background check, depending on state).

The Cons of Becoming a Real Estate Agent

Before diving in, we’d just like to point out that many of these “cons” could also serve as “pros,” depending on the person and the situation.

You won’t have any benefits. While there are some definite advantages to becoming an independent contractor, one of the biggest downsides is not having benefits. You’ll have to provide your own health insurance and set up a retirement fund.

You’ll need a solid network. If socializing and networking are your cup of tea, this isn’t a negative. However, you will struggle as an agent if this isn’t the case. Those living in rural areas or who just moved to a new city will definitely have an uphill (though not impossible) battle.

You probably won’t make as much as you think. At least, not at first. In fact, the median annual salary for a Realtor with 2 or fewer years of experience is $9,300. This leads us to our next point:

Most people aren’t full-time agents. Again, this isn’t necessarily a negative, but whether it’s because of the work, the time, or the lack of income (or all three), most people do other work on top of being an agent. It’s important to note that many agents don’t re-up their license once it expires for the first time (after five years).

While there are both pros and cons to becoming a Realtor, don’t let the negatives discourage you! RealtyHive works with agents, buyers and sellers alike. We can help you stand out in your market, differentiate from the competition and sell more properties. Become a member, market your properties, or represent a buyer with RH.

What Exactly Is a Title Company?

/0 Comments/in , /by

When it comes to selling or buying a house, everyone knows about real estate agents. Many people know about house offers and contingencies, and even more people know about the need for homeowner’s insurance. But there’s one very crucial element to real estate that remains somewhat of a hazy mystery:

What exactly is a title company?

What is a title?

Before buying a house from someone, you need to make sure that they legally own the property. A title company does just that. They run a search to ensure that, before a sale goes through, the current homeowners legally own the home. 

People sometimes confuse titles with deeds:

  • A deed is a legal document that transfers the property between owners.
  • A title is a legal document that states who owns the property. When you become the new homeowner, the title is now in your name — sort of like registering your car.

When is a property legally owned?

A property that’s owned free and clear has no mortgages or liens associated (the house is paid off). However, you can still sell a house when you have a mortgage.

In this event, you’ll give your money to a middle man (usually the title company that holds the escrow) and they’ll pay off the seller’s mortgage. The proceeds will then roll into a new property, their bank account, etc.

Here are some instances where a property might not be legally owned:

  • Unpaid taxes
  • Outstanding mortgages (mortgages that weren’t previously discussed)
  • Illegal boundaries or encroachments
    • Ex: A house that is not entirely on the land that it’s zoned/surveyed for (such as a house that’s partially built on a neighbor’s land) would bring up issues.
  • Restrictions, leases, or easements: A person can still legally own a property with any of these, but they must be disclosed to the buyers.
  • Problems with the deed
    • Ex: The previous sellers bought the house from someone in their family or in some other “under the table” format but there is no deed to prove they own the house.

Every homeowner needs title insurance.

The last thing you want is to buy a house with a legal issue. If that happens, the problems of the past homeowners become your problems unless you have title insurance.

Title insurance protects you in case the home you’re planning on buying is not legally owned.

Title company ≠ title agency.

A title agency represents the title company; the title company itself underwrites and distributes title insurance. When you close on a house, you’ll most likely meet with a title agency (and you can choose which agency you work with).

Can title companies get something wrong?

It’s scary to think about but it’s true nonetheless: sometimes title companies make mistakes. 

In all honesty, many times what might seem like a mistake is actually a lack of comprehension or understanding on the part of the buyer or seller. This is why it’s essential to have a lawyer or real estate agent with you to go through the closing paperwork.

However, when a title company truly is at fault, they are liable. Be sure to carefully look over everything before signing and again, bring a lawyer with you. 

Will title companies continue to play such a vital role in the future?

It’s more than likely, but the paperwork part might change. Instead of printing massive amounts of paper for reading over and signing, there’s a chance that title agencies will go paperless in the future. Cook County (where Chicago, IL is located) uses blockchain for closing transactions, eliminating paper.

Whether you’re a seasoned vet or complete novice in the real estate industry, RealtyHive has the resources you need. Sift through our listings to find a home near you (and get cash back with Cashifyd), sell with a time-limited event, or browse through our blogs for the latest in real estate info.

How to Buy a House: A Beginner’s Guide

/0 Comments/in , , /by

Congratulations! You’re pretty sure you’re ready to buy a house. You’ve done some research and you’ve been scoping out houses available in your area online. Great! So what comes next?

Buying a home is a REALLY big step — probably the biggest financial move you’ll make — and it can come with a lot of anxiety and questions. Luckily, here at RealtyHive, this is something we do Every. Single. Day. Here’s a  REALLY simplified version of the home buying process in a perfect, simplea(and often typical) transaction.

1) Get Pre-Approved

Before you even think about talking to an agent, you’ll want to talk to a few mortgage lenders about what you’re looking for and what you can afford. It’s a good idea to talk to at least three different lenders: one from a bank, one from a credit union, and one from a mortgage lending institute. This is one of the biggest steps in the process so it’s a good idea to have a little background before you set these meetings up. Check out Home Loans 101 to learn everything you were never taught about home loans in school. 

2) Find an Agent

There’s often a debate on whether or not you need to use an agent when selling a home, but when it comes to buying, the answer is clear. You need to use an agent. Among the other benefits (Check out this article on why you need a Buyer’s agent), you won’t pay anything for their services and they’ll guide you along during the process. 

BONUS: RealtyHive has a new program called Cashifyd that pairs you with a local agent who will show you homes, give you advice, and give you a cash back credit on your closing costs (saving you money)!

3) Find Contender Properties

Your agent will likely set you up with a listing cart from their MLS (an agent-only portal that shows the info on all available properties in your area). You’ll be able to set filters like number of bedrooms, bathrooms, size, location, and others to narrow down your selections. If you’re interested in possibly seeing “For Sale by Owner” properties, it’s a good idea to keep an eye out for those as they won’t show in your listing cart. When you find a property you want to see, tell your agent and they’ll set up a showing for you. 

4) Visit Properties & Fall in Love

Depending where you live and where you’re looking to buy, the market could have a plethora of properties that meet your criteria or you may be looking for awhile. If you find “the one” right away, great!, but don’t feel obligated to write an offer on a home you’re not completely sure of just because you’ve been looking for awhile. It’s important to remember that things like landscaping and paint colors can be changed easily, but major repairs and permanent features (like location) are deciding factors. 

5) Make Your Offer

Again, depending where you are and what you’re looking at, you might be the only offer the property receives or you may be one of several offers. This is where having an agent is vital. They can help you make a compelling offer and make sure you include the things that are important to you (like having inspections). You’ll sit down with them and complete the multi-page offer that covers everything from purchase price (including earnest money) to contingencies to timelines. 

5) Offer is Accepted

In the best case scenario, your offer is accepted outright. It could also be rejected or the sellers could counter your offer to try to get a more amicable deal. Assuming the offer is accepted, you are now one (major!) step closer to being a homeowner. 

6) Get Your Checkbook Ready

From this point on, things move pretty quickly. First you’ll need to submit your earnest money. This is a like a downpayment to the seller that says “I’m serious enough to put this down” Your earnest money will come back to you as a credit on the closing statement or refunded to you if the deal falls apart due to contingencies outlined in your offer, but be aware that you could lose your earnest money if you back out of the deal for no good reason. 

7) Get on the Phone

While you’re basking in the excitement of your accepted offer, there’s a few things you need to accomplish. First, you’ll need to talk to your insurance agent. You need to prove that the home is insurable and they can get the paperwork rolling on that. They’ll need to provide this to your mortgage lender and you’ll have to pay one year of homeowners insurance before closing. The next thing you’ll (most likely) need to do is schedule inspections. Depending on what type of inspections your wrote into your offer, you could be looking at scheduling a few different inspection ranging from a general home inspection to a well and septic test to a radon test. You’ll want these to be scheduled as quickly as possible so that you don’t miss any of the following deadlines (which could cause the deal to fall apart). You’ll also let you lender know that you found a home and have an accepted offer, but be sure to tell them to NOT schedule the appraisal if you’re waiting on inspections. Also during this time a floodplain check will be done by the lender. This is to ensure that the home is not in a floodplain area and you can often get out of your offer if you do not like the results of this check. 

8) Have the Lender Schedule Appraisal

If you’ve got your inspections done and you’re still wanting to proceed with the purchase, it’s time to let your lender know to schedule the appraisal. This inspection is a little different than the inspections you just had done. You can learn more about appraisals in Appraisal, Assessments, and Inspections. 

9) Money, Money, Money

When the property appraisal comes back at or above the purchase price, it’s loan commitment time. There’s nothing you need to do here, but you should be aware that this is going on. Shortly after this, your lender will let you know exactly how much money you need to bring to closing. Be aware that there are costs outside of whatever you offered on the property that you will be responsible for. These can include tax escrow, title fees, appraisal fees, and more.

10) Final Walk Through

A day or a few days before closing, you’ll get your chance for a final walkthrough. This is your last chance to make sure everything is in (roughly) the same condition as when you put in your offer. Keep in mind that minor wear and tear can happen and that if you’re planning on getting out of your offer at this time, you should have a really good reason or you’ll almost certainly be forfeiting your earnest money. 

11) Closing Time

On closing day, you’ll meet with your agent, your lender and the representative of the title company to sign papers. You’ll give them the closing cost money (your lender will provide the mortgaged amount) and sign many papers. After that you’ll get the keys. 

Congratulations, you are now a homeowner!

Simple, right?! Let us know of any questions you have in the comments section below or check out some of the amazing properties for sale now on RealtyHive!