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When you start the process of buying a home or any type of real estate, you’ll no doubt hear the term “earnest money deposit” (EMD). So what exactly is an EMD?

An EMD becomes relevant when you are ready to make an offer on a property. In most states, your Real Estate Agent prepares the offer on your behalf. The offer usually takes the form of a written contract that is submitted to the seller by way of their agent.

In addition to the offer document, sellers typically expect an EMD. An EMD is a monetary deposit submitted via check to demonstrate to the seller that you are a serious buyer. In some regions of the country, only a photocopy of the check is submitted with the offer, and the original check is delivered to the appropriate entity if the offer is accepted. Ask your Real Estate Agent to clarify how deposits are handled in your region of the country.

The check is usually made out to an independent third- party such as a Title Company, Escrow Company, Real Estate Attorney or your Real Estate Broker. Ask your Real Estate Agent to clarify who will hold the EMD.

The amount of the EMD sellers expect varies by region. The EMD amount is based on the customs and practices for a region, but is generally from 1% to 2% of the purchase price. In a competitive market place where demand exceeds the supply of homes, some buyers may offer a higher EMD than expected to impress the seller of their intent. In determining the amount of your EMD, consult your Real Estate Agent and balance the need to demonstrate your serious intent, against the good business practice of minimizing the deposit amount.

The amount of the EMD is usually applied to reduce the purchase price of the property or to cover closing costs, as you dictate. For example, if you are purchasing a $300,000 property and you give an EMD of $3000, then the remaining balance owned at closing is $297,000 (plus closing costs). Alternatively, you may direct that the EMD be applied toward the closing costs.

Once a valid contract for purchase is created, an independent third-party usually holds the EMD until the purchase is either completed or cancelled. At this point, the money belongs jointly to both the seller and the buyer.

In cases where you make an offer that is accepted but later decide to cancel the offer, the terms specified in the contract (or state law) will dictate if, and under what circumstances, the EMD is returned to you. Be aware that you could loose your deposit if you do not not comply with the terms of your contract. Your Real Estate Agent can provide you information about how EMDs are dealt with if a contract is cancelled.

Since state law varies by region and practices can differ even within the same state, be sure to consult your Real Estate agent about the rules that apply to EMDs in your region of the country. You should also be aware that the EMD is not related to any down payment that you make toward your home loan.

The real estate market tends to be cyclical with some periods favoring buyers and other periods favoring sellers. As with other free markets, the pricing and availability of real estate is directly related to the forces of supply and demand. While many real estate markets in the United States are experiencing a substantial slowdown, other markets remain robust, and some even continue to grow. What makes the situation even more complicated is that even within a particular city or county, there may be some areas that are hot and others that are cold.

In regions of the country in which the real estate market is slowing, there are some things homebuyers can do to increase their chance of getting the property that they want on terms that are favorable. Below are some strategies to consider:

1. Clarify What You Want. Be sure to understand what kind of property you want (e.g. bedrooms, bathrooms, size, yard, location, etc.). Identify items that you “must have” and items that you would be willing to forego if your other priorities were met.

2. Consult Experts. You’ve no doubt heard the saying that “all real estate is local,” so arm yourself with the best information available. Consult a local real estate expert who can guide you about what communities are hot and which ones are not. Obviously, you are more likely to find deals in communities that have excess supply and limited demand than vice versa.

3. Understand Market Data. Obtaining and evaluating data can be one of the most powerful tools in your arsenal. Identify communities that you find desirable and ask your real estate agent to provide you relevant sales statistics. For example, your agent can provide you:

a. A summary of how many properties are available in communities that you deem desirable.

b. How long properties are taking to sell this month, last month, last quarter, last year, etc.

c. How many properties have sold this month, last month, last quarter, last year, etc.

d. Changes in the median and average price of properties for a community this month, last month, last quarter, last year, etc.

e. Data on the sales price to list price ratio (SP: LP). This ratio provides information about how much, on average, sellers are reducing their price.

f. Detailed data on properties that are similar to the type of property you desire (often known as “comparables” or “comps”).

4. High Inventory Communities. Identify, or ask your agent to identify, communities that appear to be particularly slow, and that have an unusually large inventory of homes. You will have a broader variety of options in these communities, and you may increase the likelihood of finding a better deal.

5. Loan Pre-Approval. Be sure to consult with your bank or mortgage broker and obtain a loan pre-approval document. This not only let’s you know how much you can afford, but it also demonstrates to sellers that you are a serious buyer and that your offer is worthy of serious consideration.

6. Seller’s Motivation. While information about why a seller is selling is usually confidential, there are situations in which the seller will allow their agent to disclose important factors regarding their personal situation. Be sure to ask your agent to inquire about any information that the seller has disclosed to his/her agent that can be conveyed to your agent. This information may help you decide on making an offer on a property and the price you wish to offer.

7. Home Inspection. A home inspection conducted by a qualified inspector can provide you valuable information about the condition of a property. Moreover, if there are items that need repair or replacement, you can use this information to modify your offer price or terms.

8. Expand Search Scope. As mentioned above, even within a particular city or county, there may be some areas that are hot and others that are not. Be sure to provided detailed information about what you want to your agent, so that he/she can provide you a variety of community options.

9. Be Patient. Time is on your side when there is excess supply and insufficient demand. Try not to “fall in love” with a house so much that you cannot be objective. It may be that multiple offers and counter-offers occur before you either get the property you want or decide to walk way from a deal. You may also want to look at more properties than you normally would, so that you are exposed to a variety of options.

While the above is not an exhaustive list of strategies, it is a good starting point of issues to consider when buying real estate, particularly in a market that favors buyers. Obtain the services of a knowledgeable Real Estate agent who can provide you with additional strategies to help you reach your real estate objectives.

Real Estate business has seen tremendous growth and so has been the need of Real Estate agent. Today more and more people are getting interested to become home owner and as the demand for real estate need increases the role of Real Estate Agent becomes more important. In the past one agent use to provide services to both seller and buyer but as the real estate market changed people started to realize that specialized service is more logical and beneficial. In Real Estate industry now buyer/seller are looking for specialized agents who can provide specialized related expertise, information and services required to complete the process. When a real estate agent represents both buyer and seller it really restricts agents to provide impartial service to either party.

Let’s look at the both (Seller/Buyer) scenario separately. A real estate agents who is a listing agent of seller has a fiduciary, ethically and moral duty to represent seller only.

By getting Exclusive Right to Sell Listing, the real estate agent is promising seller that he will live no stone unturned to market the home and find the best buyer at maximum possible market value for the home.

As a Buyer’s real estate agent he need to find the right home for buyer along with should all information of the community. When a buyer is exploring to buy a real estate property in new community, he is very much interested to find out several information related to that particular community such as population, crime, climate, schools, traffic, living standards etc. Buyer’s real estate agent should be well informed with all these information so that he can provide that information to buyer. It will be easier for buyer to make the decision based on these information. Once the buyer is ready to buy real estate property in the community then other part of the real estate agent’s duty starts. As buyer’s agent it is his responsibility to find a real estate property, as per buyers requirement. It is also buyer’s real estate agents duty to negotiate the best market price with seller.

So if seller and buyer are represented by their own specialized agent then both agents can play a partial and specialized role for their client..

So it is quite clear that one real estate agent representing both seller and buyer can not justify providing specialized service to both party. Both buyer and seller are in different need of services. That’s why specialized real estate service has become more in demand where buyer/seller can get impartiality specialized service during the process.

Never before has the role of specialists in the world of real estate been more important. With buyers and sellers requiring more services, the industry has seen an explosion of agents who specialize in either the representation of sellers or buyers. These specialist agents can provide a wealth of services and maintain a complete impartiality during the sales process as there is only one client to concern them.

Historically the sales transaction and the concerns of the buyer were the purview of a single realtor. However, as the industry has progressed so have the needs of each party and so the specialist arose. Buyers have some very particular needs, and specifically the need to feel that their best interests are seen to. Listing agents are representatives of the home’s owner and in that role they have a primary responsibility to that owner. How could they properly look after the needs of an interested buyer as well?

So what is it that a buyer’s agent does? Primarily the buyer’s agent will begin with the location of suitable properties for their clients. This is usually based upon a list of requirements and desires that the client has communicated to the agent. They will then arrange viewings and recap their findings with their clients and assist in deciding upon a good candidate for an offer. This will be based on the wealth of community information that a buyer’s agent commands. As specialists, they are experts on their given area which is critical in the education of clients on the areas that they are considering. Once a property is decided upon, the buyer’s agent changes significantly, evolving into an overseer-negotiator role. They will typically coordinate the inspections and conduct the negotiations with the listing agent. This includes the execution of the buyers subjects and the closing of the actual contract.

There is an art to representing a buyer. It is a role that has become ever more crucial in an industry where customer service is the single most important thing that an agent can offer. If you are in the market for a home then the buyer’s agent is the friend that you need to make sure that you are given the service that you deserve.

Many people complain bitterly about estate agents. Some of the complaints are valid, some really aren’t fair. If you want to successfully buy through an estate agent it’s essential that you understand what information you give them, how to ensure they want to sell a property to YOU and that you know when an agent is telling the truth – and when they might be telling some porky pies!

Is the Property you want Available at a Price you can Afford?
When we start looking for a home, we often have our ‘ideal’ property in mind. It might be a classic country cottage in the country or a penthouse apartment in the city. And we tend to give this ‘specific’ description to estate agents, expecting them just to hand over the property we have been dreaming of at the exact price we want to pay.

If the agent doesn’t give it to us, then we tend to think they are ‘holding it back’ for someone else, or that they are doing their job. However, it’s really not the agent’s fault if no-one is selling the property you want at the time you are buying, nor is it their fault if it’s out of your price range. That I’m afraid is down to the market and sellers!

Lesson One: How to Work with Estate Agents

Be realistic and fair! Don’t ask agents for properties at prices that don’t exist! Do your research first, even if that’s asking them the following questions:-

1.     This is what we’d like

2.     This is where we would like to buy

3.     Here is our budget

4.     Can we afford what we are looking for?

5.     If not, can we afford the home we want somewhere else, or what could we afford in the area we are looking in?

What information to give to agents
When we give information to agents, we often complain that they don’t ‘listen’ as they send us to view properties that are not suitable. For example, we asked for a three bedroomed home, but they showed us a home which had two doubles and one single when we wanted all doubles. If you don’t tell them exactly what you need – how do they know? So make sure you give a brief that explains the minimum property requirements you need, eg you’d like a garage, but it’s not essential versus you need three double bedrooms and a garden is essential as you have a dog.

Lesson Two: Give the agent a decent property brief

You’ve seen it on Channel 4’s Location, Location, Location, the buyer gives Phil and Kirstie a list of 35 things that they want in a home. Would you feel motivated to find it (especially if you earned your money from the seller)? However if someone gave you a list of ‘this is the minimum’ we need ie our must haves and our nice to haves. This is especially the case if you’ve also researched what properties are for sale at what price and know that you have the budget required.

Do Agents ‘hold back properties’?
Most of the time they don’t do this as it’s not in the interest of the seller as it can restrict the price they receive and therefore their own commission. However, there are, as in any industry, some unscrupulous agents that will risk doing this.

The best way to avoid this happening to you is to ensure that you keep weekly contact (not harass) the agent, just ask ‘have you anything that’s coming up’ etc. If they don’t show you a property you would have been interested in, it’s worth then taking it up with the agent and indeed approaching the owner of the property.

All agents’ now have to belong to an Estate Agent Redress Scheme. If you think that an agent has sold a property to someone that you would have been interested in, then it’s essential to report it to the scheme they belong to. If they don’t, then you need to report them anyway as they are operating illegally!

Lesson Three: Make sure you keep your eye on the market

If it’s possible, keep an eye on internet sites, local newspapers and even drive up and down roads you are keen on, or put leaflets through doors of properties you are interested in. Don’t 100% rely on agents to always think of you when they have a property available, they make mistakes like everyone else.

Why do agents accept Offers when you’ve made one already?
It’s odd that, because the seller accepts a higher offer than the one you made, the agent is often the one to blame. However, it’s the seller who is the one to have a go at – the agent has a legal duty to the seller to pass on offers, even if you have made one and it’s been accepted.

Lesson Four: Understand how to ensure your offer is the last one made!

You can make your offer ‘subject to the property being taken off the market’ so that no-one else is shown around. It won’t stop previous viewers making an offer. Also keep in touch with the seller directly at this stage so that if the agent does accidentally (or on purpose) introduce another offer, hopefully the buyer will call you.

Make sure agents WANT to sell a property to YOU!
It might seem a daft statement, but think about how you work. If you had two neighbours both who wanted to buy your property, which one would you tell first the property was available? The nice one who is always willing to help out and a pleasure to have as a neighbour or the other one that is often argumentative, fussy and not too nice to deal with. Despite media reports, agents are definitely human (!) and it’s essential to get on with them.

1.     Be realistic about what you want, don’t make demands that are impossible to fulfil.

2.     Always feed back to agents post a viewing. What you liked, what you didn’t like.

3.     Thank them for organising viewings for you.

4.     If the seller cancels a viewing – don’t have a go at the agent, it’s not their fault!

5.     Always turn up on time for viewings and only cancel if essential – give them a good reason as the agent is the one that has to ‘let down’ the excited seller that was looking forward to your visit.

Lesson Five: Be honest with your agent!

Many people don’t tell agents the truth about what they want; change their mind half way through the process; take a property from another agent or pull out of a deal at the last minute. All this ‘buyer’ activity frustrates agents as they don’t get paid a penny by the buyer, nor anything from the seller if they don’t actually sell the property.

The more open and honest you are with an agent and the easier you are to work with (ie form a relationship with) the more likely they are to think of you first and want to sell a property to you versus other people that have messed them around.

Not all agents will reciprocate, but most will and they will be the best ones that are most likely to find you the property you want. And don’t forget, if you find an agent doing something dodgy, report them to the Estate Agent Redress Scheme they belong to.

Kate is one of the top property experts in the UK and regularly quoted in the press including the Telegraph, Independent, Times, Daily Mail and Express, and has appeared on BBC2, as well as featured on BBC Radio 4 and a number of local BBC Radio stations.

Kate has also been a consultant to the property sector for a number of years and is the author of a number of books, including four for Which? – Buy, Sell, Move House, Renting and Letting, Develop your Property and the Property Investment Handbook.

Contact Kate Faulkner at http://www.designsonproperty.co.uk/

Article Source:http://www.articlesbase.com/real-estate-articles/how-to-buy-via-an-estate-agent-1520931.html

Craigslist is an Internet phenomenon that brings millions of people to its local pages to peruse the latest deals. For the enterprising home seller, listing their home on Craigslist may mean that they get more potential buyers looking at the property. It certainly doesn’t hurt, but sellers beware, Craigslist isn’t a miracle working home selling device. Without the aid of a professional agent, your home may just join the rest of the discarded listings.

The problem with sites that claim that you can sell your home through Craigslist “without the help of an agent!” is that they don’t take into consideration the many details that are involved with real estate transactions. It may be easy to find a buyer for your property via Craigslist, but negotiating a home sale is a different situation. Many home buyers are not equipped to deal with the minutiae of a home sale while they’re trying to juggle a job, family and other commitments. Also, an agent has more contacts in the real estate world than the average mortal and can connect a seller with a buyer very quickly using them.

Will Craigslist supplant the MLS? It’s not likely. Craigslist has only a limited search capability – number of beds & baths and specific keyword searches. The keywords aren’t that useful for finding one’s dream home, either. Also, one has to wade through incorrectly classified ads and ads that are purposefully placed in the “real estate” category to get leads for buyers. Craigslist’s search parameters are not to be compared to the MLS’ more comprehensive searches and filters.

Craigslist is, admittedly, wildly popular and many people use it. Should you? As a part of a campaign that involves the MLS and other advertising, Craigslist can be very effective. Good photos, a comprehensive description and a link to the MLS or agent’s page are a must. The Craigslist post should contain words to the effect of “For more information, go to this link…” If there are fancy things like virtual walkthroughs on the agent’s page, those should be mentioned as well.

Craigslist is a great place for selling your old furniture and other belongings, but as the sole medium of advertising a home for sale, it falls short. It’s best used in conjunction with the services of a competent agent as an additional form of advertising instead of the only advertising. Good pictures and clear copy can help people searching for their perfect home narrow it down to yours.

Carolyn Capalbo is an expert military relocation specialist and real estate agent serving Prince William County real estate. Visit Just4Real.com to find updated market information about areas in Prince William, including Leesburg real estate.

Article Source:http://www.articlesbase.com/real-estate-articles/should-you-sell-your-home-on-craigslist-1343032.html

For those who have played in the real estate game, the term earnest money deposit may be old hat. However, for those new to buying a home, the phrase may be completely foreign.

In simple terms, an earnest money deposit is a good faith deposit – a signal that the buyer is seriously interested in a property. While this can be a negotiable amount, it is not to be confused with a down payment.

How much do you need to deposit?

The amount of money acceptable varies from purchase to purchase, and may take in a number of factors. In areas where the market is hot, or strong, the buyers with the larger earnest money deposit offer may show the seller that they are more serious than others vying for the home.

Depending on the part of the country, such as coastal cities, earnest money deposits could be as high as 5% (or more) of the sale price. In smaller communities, it could be as low as $500 to $1,000.

Monies can be in the form of a personal check, a cashier’s check, a money order or cash.

Don’t make your check payable to the seller!

If the seller accepts the offer, a real estate broker, or a lawyer, holds the earnest money in escrow. Once the sale reaches the closing stage, the monies are applied to the remaining costs.

Do your research before you write the check.

One story tells of a woman who claims she lost a $2,500 earnest money deposit when she gave it to a person claiming to be a real estate broker, with official business cards and office stationery. He was a fraud and disappeared soon after. When she contacted the police, she learned she was not his first victim. Unfortunately, her money was gone.

Once a contract for the offer has been signed and the earnest money has been accepted by the seller, the buyer then has a finite amount of time to come up with the rest of the deposit. During that time, factors such as securing financing, home inspections, or other considerations can be handled.

In some states, buyers can pay an Option Fee, allowing them to walk away from a deal for any reason at all, within a certain period – usually 5 days to 2 weeks. If the deal goes ahead, this fee is applied to the purchase.

If the deal falls through, both the buyer and the seller must instruct the escrow company in writing to cancel the transaction. The funds are then returned to the buyer, minus a small cancellation fee.

If the buyer retracts the offer without reason, or at some point fails to meet the terms of the contract, the earnest money is forfeited.

For information about Minnesota condos, go to MinnesotaLoftsAndCondos.com. There you can search all Downtown Minneapolis condos for sale, in addition to getting the latest market information for the Twin Cities area.

Article Source:http://www.articlesbase.com/real-estate-articles/what-the-heck-is-an-earnest-money-deposit-1304442.html