What pops in your mind when you think of a real estate contract? The price, right? It’s the critical term, but far from the only important factor to be considered by buyers or sellers. There are costs, finances, conveyances, and consequences to consider.

Typical costs include commissions, inspections, legal fees and so on. Your representative should firmly negotiate and explain who pays for what.

How about the escrow deposit and financing contingencies? Unless the buyers pay cash, an escape clause should release them from obligation if financing falls through. Specifying that the loan will be secured at a certain interest rate or lower provides further protection.

Also pay close attention to conveyances of personal property, such as some appliances, lighting or window treatments, or furnishing. Avoid argument and further negotiation by assuring there is zero confusion about what is included in the sale price.

Another factor that should be clearly spelled out is the consequences of a breach in contract by either side. This is a binding legal document, whereby buyers in breach can lose their deposit, or sellers in breach can be sued for “specific performance” to force the sale of the home.

It’s best for you and your REALTOR® to review a standard contract before you make or consider a Purchase Agreement. Know what to expect and be prepared to negotiate to a “Yes”!

Call me at locally at 363-5464 if you need information to assist you with your real estate decisions. For Long Distance, call me at 1-800-724-7149 or e-mail me, if you prefer, at donkingsley@kingsleyrealestate.com. We will be happy to share our knowledge with you at no cost or obligation.

Whether the market is up or down (and particularly if it’s down), buying a “fixer-upper” and updating it can prove to be a profitable venture. As with any real estate investment, however, it’s wise to enter with eyes wide open. Knowledge and caution will help you avoid common pitfalls.

The ideal candidate for such a purchase would be priced roughly 30 percent below the value of nearby homes, and located in a community with low crime rates and good schools. The only thing you can’t repair or improve is a poor location.

Just because you can improve almost anything doesn’t mean that you should! Avoid homes in need of truly major (and unprofitable) repairs such as the foundation, structural plumbing, or complete kitchen and bath renovations. Because these features are simply expected by buyers, they won’t necessarily add any value to your offering.

Another aspect that is often overlooked is your fixer-upper’s proximity to where you live. Keep it within an hour’s drive, because you’ll want (and need) to check in regularly, probably daily, while your repairs and renovations are in progress. The cost of fuel is high enough these days that you don’t want to blow your profits on your gas tank!

There are many fine homes being offered at lower prices by motivated sellers. Don’t overlook the opportunity these properties present!

Call me at locally at 363-5464 if you need information to assist you with your real estate decisions. For Long Distance, call me at 1-800-724-7149 or e-mail me, if you prefer, at donkingsley@kingsleyrealestate.com. We will be happy to share our knowledge with you at no cost or obligation.

If you’re not a homeowner, you might be confused by the commotion surrounding loan defaults and foreclosures. Learn more by understanding the basic terms used to describe a mortgage.

A mortgage is a loan to finance your purchase, and uses the home as your collateral, which the lender can take back if you don’t pay your debt. That debt is usually paid monthly or by-monthly, and payments always include Principal and Interest and quite often Taxes and Insurance. (Referred to as PITI)

Principal is the sum you borrow, reduced by how much you can offer as down payment. Interest, as a percentage rate, is what the lender charges as a fee to use the money you’ve borrowed. These two items make up most of your payment, and “amortization” over the life of the loan makes early payments mostly interest, while later payments mostly apply to principal.

Taxes are the local levies, based on the value of your home, used to fund schools, roads, and other services in your community. These are paid directly by you or by your lender on your behalf from funds held in an escrow account if your payments do include Taxes and Insurance.

Insurance is required by the lender to protect your home against loss and damage. Private Mortgage Insurance protects the lender against riskier loans, and many buyers couldn’t qualify to buy a home without it. Thus begins your education toward a smart and secure home purchase!

Call me at locally at 363-5464 if you need information to assist you with your real estate decisions. For Long Distance, call me at 1-800-724-7149 or e-mail me, if you prefer, at donkingsley@kingsleyrealestate.com. We will be happy to share our knowledge with you at no cost or obligation.