How will this effect a new homebuyer? If you have a $193,000 FHA mortgage that requires insurance before October 4th you would only pay an insurance premium of $88.46 per month. After October 4th, that same loan’s insurance premium would jump to $148.01. That’s an increase of $59.55 taken out of your monthly income.

Original Source: >> Texas A&M’s RECON – Real Estate Center Online News – e-newsletter – August 31, 2010

This form basically summarizes the different types of representation an agent can perform and you need to know what types of coverage and service you can expect from that type of representation. A copy of the original form can be found on the Texas Real Estate Commission website at http://www.trec.state.tx.us/formslawscontracts/forms/forms-contracts.asp. Here is a breakdown of that form explained in detail with a few recommendations along the way.

Information About Brokerage Services

Before working with a real estate broker, you should know that the duties of a broker depend on whom the broker represents. If you are a prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner’s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer’s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining financing without representing you. A broker is obligated by law to treat you honestly.

When they use the term “Broker,” they mean the “Broker” and/or the real estate salesperson under that Broker you signed an agreement with. The first paragraph of the Info About Brokerage Service document basically sums up the three different types of representation you can receive as a client and warns you that these forms of representation only apply to the real estate agent you have signed an agreement with. If you haven’t signed an agreement with that agent, then that agent doesn’t work for you, nor does he/she represent you. That agent may be working for the other party you’re trying to negotiate with so don’t tell the other party’s agent anything you wouldn’t want their client to know. If you are the buyer then the seller’s agent does not work for you and must protect the seller’s (their client’s) best interests and NOT YOURS. Same goes for the buyer’s agent if you’re the seller. If you’re the seller and you tell the buyer’s agent that you are desperate to move and can’t believe no one has made an offer on this property in 90 days then you’ve just shot yourself in the foot. This paragraph also goes on to explain that an agent can assist you in finding a house, creating a contract or lease, or getting financing without your signing an exclusive representation agreement with that agent. A situation like this could occur if you are looking at a house, and do not have an agent. In this case, the homeowner’s agent could help you work through the process of buying a house to help his/her client. Once again, that agent isn’t doing this to help you, they’re doing it to help their client sell the house so don’t confide in that agent without first signing a representation agreement thereby hiring that agent. While other party’s agents can be helpful by giving advice on loans, etc. they can’t tell you how to best price your offer or anything like that. However, all agents are required to make all parties aware of pertinent facts regarding the property such as square footage, and other details like that. But, no matter what, whether you are their client or not, all agents are required to treat all parties honestly, but notice it didn’t say fairly so be sure to have an agent in your corner representing your interests.

IF THE BROKER REPRESENTS THE OWNER:
The broker becomes the owner’s agent by entering into an agreement with the owner, usually through a written-listing agreement, or by agreeing to act as a subagent by accepting an offer of subagency from the listing broker. A subagent may work in a different real estate office. A listing broker or subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner’s agent anything the buyer would not want the owner to know because an owner’s agent must disclose to the owner any material information known to the agent.

If the Broker represents the owner through a written listing agreement or as a subagent of that Broker, the agent can assist the buyer but must put the best interests of the homeowner first and anything the buyer tells the owner’s (seller’s) agent must be disclosed to the owner if it relates to that transaction. So, don’t tell a seller’s agent anything you, the buyer, wouldn’t tell the seller yourself because they are required to tell the owner who they are contracted to represent.

IF THE BROKER REPRESENTS THE BUYER:
The broker becomes the buyer’s agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement. A buyer’s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer’s agent anything the owner would not want the buyer to know because a buyer’s agent must disclose to the buyer any material information known to the agent.

If the Broker represents the buyer then the same is true, but for buyers in this case. Agents representing the buyer may assist the owner (seller) but do not represent the owner and must place their buyer client’s interests first. They must disclose to their buyer client anything the seller mentions to that agent. So if you’re selling, don’t tell the buyer’s agent about the lack of interest your property is receiving nor should you mention anything about past offers being low. You can bet their offer will be low too.

IF THE BROKER ACTS AS AN INTERMEDIARY:
A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate LicenseAct. The broker must obtain the written consent of each party to the transaction to act as an intermediary. The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker’s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction:
(1) shall treat all parties honestly;
(2) may not disclose that the owner will accept a price less than the asking price unless authorized in writing to do so by the owner;
(3) may not disclose that the buyer will pay a price greater than the price submitted in a written offer unless authorized in writing to do so by the buyer; and
(4) may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property. With the parties’ consent, a broker acting as an intermediary between the parties may appoint a person who is licensed under The Texas Real Estate License Act and associated with the broker to communicate with and carry out instructions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party.

If the Broker acts as an intermediary then they basically don’t represent any party. They can assist both parties, but they really don’t represent either. Since an intermediary agent is intimate with both parties and knows how desperate the seller may be, or how much in love with the house the buyer may be, to be fair, they can’t disclose anything but known facts such as square footage, number of bedrooms, things the owner disclosed, items discovered during a home inspection, etc. They can’t help you negotiate, or offer tips or suggestions. If you’re looking for someone to guide you and fully represent you in the purchase or sale of a home then you probably don’t want to have your agent work as an intermediary. The best way to think of an intermediary is as a referee. They can’t favor one party or the other or give either party an unfair advantage. An intermediary situation usually occurs when an agent represents a buyer and that buyer wants to buy a home owned by a client of that same agent. This is one situation where I think a reduction in commission is completely warranted since you’re not getting that agent’s full support in the negotiation and thereby not getting the “full-service” that you are paying the full commission for. Since they’ll get a commission from both the buyer and seller with this transaction, they may be willing to negotiate. However, rather than save a couple of bucks, I recommend that you ask them to assign another agent to represent you for this transaction so you can get the full representation you are entitled to.

If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker’s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding.

Always enter into a written contract with an agent and make sure that the contract clearly explains the broker’s (or agent’s) duties and obligations to you and your obligations to them. Be sure to thoroughly go over the payment and compensation terms of the contract and whether or not you allow that agent to work as an intermediary, and what should happen if an intermediary situation occurs. The important thing to know is that you shouldn’t sign anything you don’t completely understand. If an agent tries to rush you through the process without clearly explaining what each document states then don’t use that agent and don’t sign anything except for the Info About Brokerage Services form.

Make sure the real estate agent clearly explains this form and the differences between the types of representation because it’s vital you understand the difference. When an agent starts digging for details, you need to know if that agent is your agent, obliged to keep your secrets, or an agent working for the other party digging for dirt. You need to know when to talk and when to shut up. Agents are supposed to keep a signed copy of this form in their files to serve as a receipt showing that you received a copy of the form however they don’t always explain it fully.

REMEMBER, if they don’t show you this form at the first meaningful contact then do not hire that agent. It’s usually the first piece of information I talk about when meeting a potential client. Without showing you that form, they are already failing to adequately representing your interests and are also not complying with state regulations. These aren’t the qualities you should look for in an agent.

Copper thieves at work destroying your home. Photo source: CopperWatcher

As a victim of copper theft, I’m always on the lookout for new solutions.  After my theft, I was tempted to protect my copper pipes by attaching the 220 volt circuit to the copper pipe creating a copper thief version of a bug zapper, but I figured I’d probably be sent to jail as the bodies of dead copper thieves started to pile up in the backyard.  My lawyer insists I mention that I do not recommend electrifying your copper pipes or doing anything that involves killing copper thieves.  (To my lawyer:  Are you happy now?)  As tempting as copper thief trapping would be, we have to look at non-lethal methods of controlling this vermin.  Here are a few available to you.

Putting Your Condenser In A Cage

One of the most popular methods of protecting your condenser is to make it hard to steal.  Lots of houses in bad neighborhoods install their condensers in large metal cages.  By caging your A/C condenser, you are attempting to prevent the copper thief from being able to steal it.  Utterly useless!!!  I don’t recommend this because I’ve seen too many empty A/C condenser cages.  No matter how great the cage is, they all have the same weaknesses, their attachment to the slab, the hinged access door, and the lock.  Once you bust the lock, the rest of the cage is useless.  Furthermore, I haven’t seen a cage yet that couldn’t be opened with a strong chain tied to a pickup truck.  The problem with cages is that if the thief has time or doesn’t have to be discreet, then a cage just delays the inevitable.

Tying Copper To Your Alarm System

The best defense to protect your A/C condenser is to make thieves afraid to tamper with your unit for fear of getting caught.  The best way to do this is to attach it to a monitored alarm system and by posting signs saying such all around it.  I saved a condenser by doing this, while neighbors’ condensers were disappearing around me.  By having your A/C condenser tied to your alarm system, if the unit is tampered with, or if any cable running to the condenser is cut, the alarm goes off.  I recommend having a siren that sounds outside and a second siren that sounds inside to attract attention to the house.  If your alarm system has an unused “always active” zone, typically used for fire sensors, you should connect the A/C condenser sensors to that zone.  By using that zone, the unit is protected whether the alarm is armed or not.  If someone forgets to arm your alarm when they leave, you don’t have to worry about your copper being unprotected.  However, every time the AC repair guy comes over you’ll have to call your monitoring service to put the system in test mode to keep the police from storming the place.  For added protection, post signs stating that the condenser is monitored.  It’s better to discourage the copper thieves before they start tearing up the place.

How To Connect The AC Condenser To Your Home Alarm System

Have your alarm technician mount contact switches to the cover and frame, also have your technician put loop sensor cables (don’t know what they’re called) in all the cables running to the condenser so that when they’re cut, this cable is cut and the circuit is broken.  The technician can also put pressure sensors on the base of the condenser in case someone tries to lift it off the base.  My lawyer wanted to inform you that all these modifications should be performed by an alarm system installer.  I used these tactics to secure an A/C condenser in a property I was rehabbing.  The AC unit is still there today being continuously watched by the alarm system monitoring company.  I recently ran into another product on the market that connects the AC unit to the home’s alarm system by monitoring the supply and applied voltage running to the A/C condenser, and it also monitors refrigerant pressure. If the product detects an unusual change in either the voltage or coolant pressure, the alarm will be triggered.  This kit, from CopperWatcher, costs about $380 plus installation per condenser.  Small price to pay considering a condenser costs $1000s.

For more information about CopperWatcher can be found here >>> http://www.copperwatcher.com

Ways To Sell Your Rental Property

1. Wait until your tenant’s lease expires and sell the property
   This is the best option if you can afford it.  It costs more because you’re not receiving rent, but gives you the greatest chance to quicker sell at a higher sales price.  You can sell the property to investors and homeowners alike so you’re not limiting yourself.  Without the tenant, you also have the luxury of fixing up or refreshing the property to make it look its best and when unoccupied, it can always be kept show-ready and you won’t run the chance of having a tell-all tenant wanting to tell prospective buyers everything they don’t like about the house.
2. Sell Your House And Your Tenant
   This option is the cheapest, but has the most difficulty.  You will need the cooperation of your tenant to sell your house with the tenant still living in it.  You can’t sell it to someone who wants to buy a house to immediately move into because they must uphold the tenant’s lease.  You have to sell it to someone who either doesn’t mind waiting for the lease to expire, or to sell it to an investor who’s looking for an income property.  If you sell it to an investor, then DO NOT UPGRADE anything.  You can get a higher price freshening up things like paint, carpet, roofing shingles, etc., but do not upgrade anything.  Don’t upgrade appliances, just make sure they look clean and are working properly.  Don’t upgrade the kitchen, bathroom or anything expensive.  Upgrades make your house cost more and investors do not want to pay that extra cost when looking for a rental property.  For example, when I’m looking for a rental property, I know the highest price I’m willing to pay before I ever set foot on the property.  When looking for a house, the first thing I do is scout around the neighborhood to determine how many rental properties are nearby then I find out how much can I expect to collect in rent for that area.  Once I know the rental amount, I take that figure and plug it into a spreadsheet to see what my income and costs will be and then calculate the maximum I should pay for a house to produce my desired return on investment.  A simple way you can determine what investors will pay for a rent house in your area, use a multiplier of 80 to 110 times monthly rent.  I usually shoot for a multiplier between 90 and 100 for houses I don’t have to finance, and use a multiplier of 80 or less for houses I have to finance.  This formula creates a high / low range where you can expect most rental investor offers to fall into.   If I can rent a property to a tenant for $1000/month I will probably want to pay somewhere between $80,000 – $110,000 for it.  Unfortunately, this is probably a higher offer than you can expect from most investors.  I tend to look for houses that rent easier, would attract a better renter and are located in areas where rental properties are not common and where there’s still appreciation and to get that, I’m willing to pay a little more.  Yes, there are areas in Dallas, Texas where properties still appreciate.  Most investors will shoot for a lower price.  But either way, all investors base their offers on the income the property produces so you can see how upgrading to Viking appliances and granite countertops would be a poor decision on your part if you were going to sell it to an investor.
3. Sell the property to the tenant
   This option is a shot in the dark because most renters rent because they either can’t afford to buy or they simply don’t want to.  If you’re not in a hurry to cash in on the sale of your home, you may consider owner-financing but odds are if your tenant can’t find a bank willing to loan them money, there’s probably a good reason for it.  Be prepared to take back the house when they fail to keep up with the payments.  Selling the property to my tenant with owner-financing is not a strategy I’d do personally, especially as a second mortgage given today’s default rate.

Getting Your Rental Property Show-Ready

First of all, keeping the house show ready and having strangers entering the house at various hours each day is a lot of trouble to ask of your tenant.  The yard has to be kept pristine and the house should always be neat and clutter free.  Lots of homeowners fail to live up to show-ready standards with their own home so imagine how hard it will be to motivate your tenant when he knows that his tenant days may be coming to an end when the house sells, not to mention the tremendous invasion of privacy your tenant can expect for the months that follow.  Be sure to communicate everything with your tenant and introduce them to your real estate agent so everyone knows what to expect.  If the tenant is naturally sloppy, you can expect the house to not show well and you may want to just wait until the lease expires.

Make Your Tenant Your Partner

If your tenant has something to gain from the sale, he may be more inclined to promote the sale rather than detract from it.  Either way, it’s a lot to ask of a tenant and the tenant should receive some form of compensation for helping to sell your house.  Maybe offer a discount of rent while the house is on the market and if they do a really good job, you may consider giving them some money to hire a mover.  Make sure they pick and hire the mover so you’re not liable for anything.  If they’re on board with the sale, then you may also be able to do some cosmetic work on the inside of the house with their participation and agreement to maintain it.  Either way, I’d do external repairs to enhance curb appeal because renters don’t usually tear up external repairs.

Are You Really Losing Money Leaving The House Unrented During The Sale?

The answer is probably not.  Having a renter makes the house primarily appeal to landlords and they’ll only look at it if it’s priced according to a ROI based on rents.  Anyone wanting to live in the house will not be interested in dealing with a renter, even if it’s on a month-to-month lease.  By doing this, you basically reduce the pool of potential buyers significantly.  A reduction in potential buyers also reduces the potential for a higher sales price.  The amount of rent you’ll receive while the house is on the market could be much less than the overall drop in the sales price.  At the end of the day, you’ll either breakeven in rent-vs-price drop or lose money depending on the market, condition of the house and cooperation of the tenant.

Will Having A Tenant Make It More Valuable To An Investor?

It wouldn’t make your property more valuable for me unless you could demonstrate that they were a great tenant and your reasons for selling were external to the property at hand.  When I look at a home with a tenant, I usually assume that the tenant is probably the reason the landlord is wanting to sell.  I don’t know how well the landlord screened their tenant and I don’t know how faithful that tenant is at paying rent.  Also, I don’t know if there is any baggage I may be inheriting depending on the seller’s property management style versus mine.  Was the owner a softie and his tenant habitually walked all over him and expects to do the same with me?  He’s in for a shock, but I’m also in for a few problems as we set boundaries.  It’s in your best interest to show your tenant’s lease, rental application and a copy of every rent check to the prospective landlord. The more paperwork you can show the better your chances of getting a better price.  It’s important to show the landlord buyer that you are a capable landlord who picked a good tenant and that you’re not over your head wanting to get bailed out of a horrible situation that they will be inheriting.  Being bailed out comes at a price and that price is usually a lowball offer.

Where To Go For Advice

The best source for landlords looking for advice is www.mrlandlord.com.  Their landlord Q&A message board is a great source of information.  I’ve been a faithful contributor and viewer of that board for a few years and it’s filled with advice from other landlords willing to share their successes and failures with other landlords.

Source Realtor.com

Working in real estate has its share of dangers.  Real estate agents need to keep personal safety in mind when working with the public since almost everyone agents come in contact with is a complete stranger.  Worst of all, you’re all alone with this person, in unoccupied houses, in your car and in many other places where an evil client can hide a dead real estate agent body.  It’s happened before.   Here’s how you can stay on guard and protect yourself.

Read original articles:  >>> http://www.realtor.org/rmosales_and_marketing/articles/2010/1009_safety_everydaydangers