Important Terms Relative to Real Estate Purchase Agreements

Whether you are considering a real estate purchase agreement as an offer, or are drafting one to purchase property, there are several terms you should know. The real estate professionals at Sunwest Escrow are here to serve as a trusted resource for those who may be new to the process of buying or selling a home. We have developed a list of elements that will likely be included in a real estate purchase agreement.  We believe that all parties should be familiar with these basic terms prior to engaging in negotiations.

Important Terminology

  • Appraisal: The estimated value of the property determined by a professional appraiser. This value may be different than the perceived value or asking price.
  • Contingency: The conditions agreed upon by the seller and buyer which must be met in order for a sale to be finalized.
  • Escrow: This third-party service holds the earnest money deposit and the title of the property until all conditions of the contract are met by the buyer and seller.
  • Lien: A legal claim placed on a property because of a pre-existing debt.

Terms & Conditions You Should Know

  • Sale of Current Home Contingency: A condition that states that the purchase of property will only take place upon the sale of the intended buyer’s current home.
  • Clear Title Contingency: A condition which states that the property sale can only take place if the title is free and clear of all liens, which shows that the seller legally owns the property.
  • Home Inspection Contingency: A condition which gives the buyer the opportunity to exit the sale if the home inspection highlights repair work that is costly or extensive.
  • Seller Assist Contingency: A condition in which the seller agrees to pay for certain costs associated with the transaction, for instance, closing costs, escrow fees, or certain taxes.
  • Home Appraisal Contingency: A condition which allows for a buyer to renegotiate the purchase price or terms if the property is appraised at an amount lower than the asking price.

To learn more about the terms, conditions, and details that are often included in real estate purchase agreements in Albuquerque, call Sunwest Escrow today.

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Guidelines To Buy A House Through Sale By Owner

If you have discovered that the home of your dreams is listed as a For Sale By Owner Albuquerque property, you will need to understand how this real estate transaction is different from a home sale aided by a real estate agent or brokerage firm. The team at Sunwest Escrow has been helping For Sale By Owner sellers and buyers navigate their way around this process for years. We have created a helpful set of guidelines that will aid you as you buy a home that is listed as For Sale By Owner.

Step #1: Decide if you need to hire a real estate agent.

Just as the owner can sell their house without a real estate agent or brokerage firm, the prospective buyer can also enter into this process without representation from a real estate firm.

Step #2: Determine if you need legal representation.

Depending on the state, laws may require the seller or buyer to have legal representation during a For Sale By Owner transaction.

Step #3: See if you can get pre-approval for your mortgage.

In many cases For Sale By Owner sellers need to make quick sales. Getting pre-approved for a mortgage from a financial institution can speed up this process.

Step #4: Hire an escrow service to manage the funds.

Always invite a third party into the real estate transaction that will be responsible for the funds. An escrow account protects both the seller and buyer from a financial standpoint.

Step #5: Consider requesting a C.L.U.E. report.

This Comprehensive Loss Underwriting Exchange report can be obtained by the seller. It details any insurance claims that were made on that property within the last five years.

Step #6: Get an appraisal and inspection completed.

To ensure that you are getting a fair value, as well as a home without significant problems, have a professional appraisal and inspection completed before moving forward with the sale. Ask the seller to repair any areas that you do not believe pass the inspection report.

Purchasing a For Sale By Owner Albuquerque home can be streamlined and safe if you follow the advice in the guidelines above. For more information concerning the For Sale By Owner process, contact Sunwest Escrow today.

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5 Facts About Real Estate Contracts Every Buyer and Seller Should Know

Sunwest Escrow, the real estate contract Albuquerque resource, has identified five facts that we believe all potential home buyers and home sellers should know before entering into a real estate transaction.

Fact #1: All contracts are negotiable by the buyer and seller.

Although a real estate contract is drawn up, that does not mean it cannot be modified. The buyer and the seller have the right to request changes to these documents as they move forward with the real estate transaction.

Fact #2: The buyer can ask for a home sale contingency to be added to the contract.

A home sale contingency clause is a modification to a contract that states that the finalization of the contract is contingent upon the sale of the buyer’s initial home. This protects buyers who were planning to use their home’s sale to finance their next home purchase.

Fact #3: The buyer can also ask for a right of first refusal clause to be added to the contract.

Drawn up before the house is put on the market, the right of first refusal allows the seller to market the house however they want but the original interested buyer gets the first option to purchase the property should other potential buyers want to make offers.

Fact #4: Inspection, appraised and financing contingencies can also be added.

An appraisal contingency ensures that the home is valued at a minimum amount, if it isn’t, the buyer can pull out. The inspection contingency allows the buyer to request repairs or pull out of the sale should an inspection report come back unfavorably. A financing contingency lets the buyer back out of the sale if they are unable to secure adequate financing.

Fact #5: Kick-out clauses can be added to protect sellers.

A kick-out clause protects sellers against home sale contingencies, allowing them to continue marketing the home to find other qualified buyers. If one is found, the seller can request that the original interested buyer remove the home sale contingency or forfeit the offer.

It’s important that buyers and sellers remember these five facts prior to entering into a real estate transaction. For more real estate contract Albuquerque information, call Sunwest Escrow today!

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Points to Keep in Mind Before Offering Owner Financed Homes

Owner Financed Homes in Albuquerque

In today’s real estate market, many owners are selling their homes with only the help of an escrow company.  These sellers could also offer to finance the home for the buyer.  This enables the buyer to avoid getting a loan from the bank because the original owner will lend the buyer the total purchase amount.

Owner financed homes can help both the buyer and the seller.  The buyer has the advantage of a faster closing process with lower closing costs, a flexible down payment and the ability to work directly with the previous owner until the contract is fulfilled. The seller also benefits because they can sell the home faster, minimize carrying costs and use the buyer’s down payment to pay their own debts or put a down payment on another property.  But before offering owner financing, Sunwest Escrow of Albuquerque believes that there are a few points both buyers and sellers should know.

Points to Keep in Mind Before Offering Owner Financed Homes

  • Always run a credit check. Even though it’s not necessary, owners should always run a credit check on their buyers. It’s also a good idea for the buyer to do some investigation of their own to make sure that the seller is the legal owner of the house and that there are no liens or owed debts on the property.
  • Understand loan amortization and balloon payments. A seller will typically not agree to a 30-year payment plan.  Instead, they’ll shorten the amortization period and expect balloon payments which allow the buyer to pay set payments for a certain period then pay the remaining balance when the period concludes.
  • Secure the loan with the property. If the buyer defaults, the seller can legally foreclose on the buyer and take ownership of the property.

Sunwest Escrow Owner Financing Homes Albuquerque Advice

Owner financing can be a beneficial way for buyers and sellers to conduct a real estate transaction, however, they must be aware of the pros and cons of the process.  For more information about owner financing options, call Sunwest Escrow at Albuquerque today!

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Why You Should Go For Sale By Owner?

Now is the perfect time to sell your home.  Instead of using a real estate company, homeowners can work with an escrow agent to quickly and conveniently sell their property. Sunwest Escrow, New Mexico’s most trusted escrow company, believes that many homeowners can benefit from For Sale by Owner Albuquerque listings.

Why You Should Go for Sale By Owner?

1: You Know Your Neighborhood Better Than a Realtor

You’ve lived in your home for years, maybe even decades.  Not only do you know the ins and outs of your home, but you also know the community and the neighbors.  For homebuyers, “the perfect home” is much more than just the home itself.  Buyers want the home of their dreams to be in a neighborhood that aligns with their needs, values, and lifestyle.  A realtor may know the area, but unless they’ve lived on your street, you as the homeowner are the expert in this field.

2: You Don’t Need to Spend Money on a Service You Can Accomplish Yourself

Today’s technology gives you access to all the tools and resources you need to successfully sell your home.  Think of a real estate agent as a middle-man in the process — they’ll get you from listing to close, but it will cost a premium.  However, you can list and sell your home on your own, avoiding that unnecessary expense.

3: You Know What Your Home is Worth

During the negotiation or listing process, a real estate agent may encourage you to lower your asking price or make certain deals as incentives to the buyer.  You deserve top dollar from your home.  An appraiser can provide you with the current market value of the property and you can list the home at a price you believe it’s worth.

For Sale by Owner Albuquerque

You can successfully list and sell your home without a real estate agent. Contact Sunwest Escrow today and allow us to help you through the contracts and financing process on your For Sale by Owner home!

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Need of Real Estate Purchase Agreement

Sunwest Escrow is here to help you through the home buying and selling process. We’re available to answer all your questions regarding real estate contracts and owner financing. We recommend that all prospective buyers and sellers first understand the details of a real estate purchase agreement and why it’s perhaps the most important contract in the transaction.

The Need of a Real Estate Purchase Agreement

A real estate purchase agreement, also referred to as a real estate contract, is a key part of your real estate transaction. This is a written contract between buyer and seller confirming that the property will be sold for an agreed-upon amount. To be legally classified as a real estate purchase agreement, this contract must meet four specific requirements:

  1. It needs to follow all legalities regarding the purpose of the agreement.
  2. It must be in writing.
  3. It must list proof of offer and proof of acceptance.
  4. It must identify which articles of value will be exchanged for the property.

What to Verify on a Real Estate Purchase Agreement

There are other items that should be listed to ensure that the buyer and seller both understand and agree to the vital details of the contract. We insist that your real estate purchase agreement should contain the following seven items:

  1. Earnest Money Amount: Deposit that shows the buyer’s commitment to the property and limits the risk of loss on both sides.
  2. Contingency: Allows each party to retain their investment should an important aspect of the contract not be met.
  3. Settlement Date: Agreed upon time that the money and deed will exchange hands.
  4. Possession Date:  Signifies when the buyer has access to the property.
  5. Escrow: A good faith investment that protects the seller.
  6. Delivery: Agreed upon method of communication and document delivery.
  7. Home Warranty: Policy that covers damages to the home after purchase.

Real Estate Purchase Agreement Albuquerque

When the time comes for you to buy or sell a property, trust Sunwest Escrow to create the detailed real estate purchase agreement in Albuquerque that buyers and sellers can invest in.

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Why Opt For Owner Financing Homes?

Why Opt for Owner Financing Homes Albuquerque?

Instead of borrowing money from a commercial lending office and obtaining a mortgage, a buyer can choose to purchase an owner financed home.  During this process, the current property owner lends either a portion or all the funds required for purchasing the house. This is becoming a popular alternative to normal real estate transactions, especially in times when the area is considered to be in a buyer’s market.

Types of Owner Financing

There are many types of owner financed homes.  The three most common are land contracts, lease-purchase agreements, and mortgages.  Land contracts provide the buyer with an equitable title until the buyer has paid the owner for the full amount of the property.  At that time, the new owner would then receive the deed.

The seller and buyer could also choose to commit to a certain type of mortgage known as an all-inclusive mortgage or all-inclusive trust deed.  In these instances, the seller carries the mortgage and receives an interest override on the underlying loan that accompanies the mortgage.  In cases of a junior mortgage, the seller carries the first new mortgage and the buyer takes out a second mortgage to give to the seller as payment.

A third option is a lease-purchase agreement which essentially leases the property to the buyer.  The buyer gets an equitable title and will receive the full title after paying the seller the full purchase price for the property.

Pros of Owner Financed Homes

  • Faster and cheaper closings
  • Flexible down payments
  • No pre-qualifying needed from the buyer and financing is tailored to their needs
  • The home can be sold as is
  • The owner retains the title in the event the buyer defaults

Owner Financing Homes Albuquerque

Sunwest Escrow is ready to help you secure the owner financed homes Albuquerque has to offer. Opting for an owner financed home will provide you with many benefits including a faster close and better financing options.  Speak with one of our knowledgeable escrow agents today to learn more about this advantageous buying option.

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