Mortgage Broker: One who, for a fee, brings together a borrower and lender, and handles the necessary applications for the borrower to obtain a loan against real property by giving a mortgage or deed of trust as security. Also called a loan broker.

Mortgage Banker: A company providing mortgage financing with its own funds. These funds are usually borrowed and the financing is either short term or, if long term, the mortgages are sold to investors within a short time.

There are advantages to both. A Mortgage Banker, since they are lending their own money, MIGHT be able to get you better terms or lend you money if you've got marginal credit. Might is the key word. You'll need to shop around if that's what you need. Shopping around is exactly what a mortgage broker does. They work with multiple lenders, so they are often able to find the best terms and conditions. Many brokers (and bankers) specialize in areas such as "sub-prime" loans, second mortgages, commercial lending, etc.

It is important to remember that the promise to get you the lowest rate isn't the only thing that makes for a good loan/lender. A 5% loan may sound better than a 6% loan, but after paying points and fees, you have to ask yourself if it is really a better deal. Be cautious of a lender with unusually high or hidden fees. An experienced Realtor has a general idea of what your lender should charge you.

The best thing to look for in a mortgage banker or broker is someone who is professional, who will work hard for you and knows what they are doing.

The Internet is a great way to find out about population, demographics, crime rates, home sale trends, local schools and much more.

You should also ask your real estate agent about the area. Keep in mind that the law prohibits your agent from making specific comments about race, religion, and economic status. A Realtor will stick to the facts and point you in the right direction to answer your questions.

Most importantly, drive through the area at all times of the day on different days of the week. First hand knowledge will be the most powerful information that you can collect. Since you are the one that may be living in the neighborhood, seeing the conditions first hand will help you decide whether or not to make your offer.

Handling a real estate transaction can be a difficult task so you will need an agent that is a hard worker and willing to tend to the transaction from beginning to end. A good agent will work diligently behind the scenes to ensure that your transaction appears to be effortless.

It’s okay to interview your agent prior to signing a Buyer Agency Agreement or a Listing Agreement. If an agent won’t talk to you without signing an agreement first, find a new agent. It is okay to sign an Agency Disclosure form because it is simply a disclosure explaining representation but if for any reason you feel uncomfortable, you can decline to sign the disclosure form as well. For more information about Agency, be sure to read my article-explaining Agency.

A home inspector will inspect the property inside and out including the furnace, roof, overall structure, appliances, wiring, and plumbing summarizing all of the findings in a detailed report. A good inspector will have you follow along during the inspection, which is especially helpful for first time homebuyers. The Home Inspectors report will help you and your agent decide whether you are going to proceed with sale, terminate the agreement based on the findings, or negotiate the terms of sale.

A home inspection generally costs between $275 and $500 depending on the size of the property and the tests that you have the inspector complete. I consider it money well spent!

An agent can only give you an estimate in regards to how long your home will be on the market. There are too many factors that influence whether or not a home will sell quickly. My advice is to listen to your agent. Since your agent should be someone you can trust, you should trust your agents’ judgement and follow their advice.

I am not going to say that open houses are never successful however, it is highly unlikely that your home will sell due to an open house. I would suggest spending the time to prepare your home for sale. Opening your home to anyone that walks in the door is something that should be considered carefully. Personal items have been taken from open houses, and I always recommend removing small valuables, personal information, money and prescription medications. Theft is rare, but it can happen.

The amount of earnest money is a negotiated item on the contract. Typically the Buyer will state an amount of earnest money on the initial offer. The Seller has the option of accepting that amount or to counter with another amount. Earnest money is not required in a real estate transaction but most Sellers will not accept an offer without it. I would suggest a deposit totaling 1% of the purchase price to be divided in two payments. The first half to be presented with the initial offer and the second half after the home inspections are complete or within 14 days of acceptance.

Realistically, the amount of earnest money needed will depend on whether or not it is enough to convince the seller that you are a serious buyer.

Earnest money is usually applied to the Buyer’s down payment or closing fees at the time of closing.

Keep in mind that it is possible to keep a sentimental chandelier, you need to either remove it before the home is listed, or have your agent be VERY SPECIFIC in listing the home. A frequent concern is often in regards to the window coverings. Curtains are not considered fixtures but curtains rods, mini-blinds, shades, and screens are fixtures. If an item is attached to the walls, floors, or ceilings using screws, nails, or glue, it’s a fixture. If you have a question about a specific fixture, feel free to contact me!

A good real estate agent can show you what homes in the area are renting for. Another excellent, low-tech, method is to simply look at the "For Rent" ads in the local paper. Look at the “For Rent” ads carefully! These are listings for rentals that are not rented. It is possible that the ads do not reflect the current rental market for your area.

Rental rates in a neighborhood don't really vary all that much. Once you know what a couple of homes have been rented for, you'll have a good idea of what you can rent your property for. Just remember to adjust for any "amenities" that your property may include such as a garage, washer/dryer hookups, or yard maintenance that other rentals may not have/include.

If an Exchanger intends to perform an exchange that is fully tax deferred, they must meet two simple requirements:

(1) Reinvest the entire net equity (net proceeds) in one or more replacement properties.

(2) Acquire one or more replacement properties with the same or a greater amount of debt.

An alternative approach for complete tax deferral is acquiring property of equal or greater value and spending the entire net equity in the acquisition. One exception to the second requirement is that an Exchanger can offset a reduction in debt by adding cash to the replacement property closing.

GENERAL ASSET CLASSES

(1) Office furniture, fixtures, and equipment; (2) Information systems (computers); (3) Data handling equipment, except computers; (4) Airplanes and helicopters; (5) Automobiles and taxis; (6) Buses; (7) Light general-purpose trucks; (8) Heavy general-purpose trucks; (9) Railroad cars and locomotives; (10) Tractor units for use over-the-road; (11) Trailers and trailer-mounted containers; (12) Vessels, barges, tugs, and similar water transportation equipment; (13) Industrial steam and electric generation and distribution systems.

UNEXCHANGEABLE ITEMS

Another aspect of personal property exchanges that differs from real property exchanges is that certain items of the sale transaction, such as “goodwill” “covenants not to compete” and “inventory” do not qualify for tax deferral under IRC Section 1031. Thus, these items may not be attributed to the value of the sale for the exchange and the capital gain or loss must be recognized by the Exchanger.

MIXED EXCHANGES

There are also many transactions that involve the sale of both real property and personal property, such as the sale of hotels, restaurants, and gas stations, wherein the Exchanger owns both the land and the personal property. In this case, the Exchanger can allocate the proceeds specifically for real property and personal property and purchase “like-kind” property with the respective funds. In a complex combined real and personal property exchange, it is important to maximize potential tax deferral benefits in advance. Asset Preservation, Inc. encourages Exchangers to always work closely with an accountant or attorney to ensure that the transaction is structured properly.