Category: Buying a Home


FAN CEO Educates Title Agents at a Statewide Conference on eClosing

Aaron M. Davis presenting to title agents at Alliant Conference

As technology progresses, title agents must stay up-to-date on trends and advancements – or risk getting left behind. At FAN, we have embraced the digital age and are helping title agents across the State of Florida learn the ins and outs of title closings in this digital era.

Earlier this month, our CEO, Aaron Davis, led a presentation at a conference for licensed title agents at the Gaylord Palms Conference Center in Orlando with the aim of providing resources for title agents to get ahead of the game on upcoming legislation and the changes that will soon sweep the industry.

 

At the conference, attendees enjoyed learning more about the various types of eclosings available. They were also educated on the different types of eClosings, including hybrids, in person, and RON, or Remote Online Notarization, and discussed numerous digital closing topics, such as:

  • Ethics, Laws & Rules Governing RON
  • Multi-Factor Authentication
  • Securities of the Paperless Closing
  • Effects of eClosing on the Industry
  • The digital Closing Room Experience
  • and More!

The attending agents were able to earn CE credit as a result of their participation and are now better prepared to transition into the era of eClosings and remote online notarization.

How are you and your team preparing for the upcoming legislative changes? Are you prepared to offer eClosings and accommodate closers who wish to utilize RON during their closing process? If not, you can now request a course from FAN to better prepare you and your agents before the New Year. Email us now to find out more information or to schedule your course.


5 Safety Tips for Every Real Estate Agent

Picture of a woman being followed

As a real estate agent, leads never take a day off. September is Realtor Safety Month, and we want you to keep safety a priority when meeting with potential leads & clients. According to the National Association of REALTOR® 2018 Member Safety Report, 33% of real estate professionals experienced a situation that made them fear for their safety. Do not become complacent with your safety!

Here are 5 safety tips you can use this month, and beyond:

  1. Meet first in public. While real estate agents are becoming more and more mobile, it’s important to set your initial meeting somewhere public like your broker’s office where you can confirm their professionalism and introduce your potential customer to a few others in your office. If this isn’t available, meet somewhere with lots of activity like a coffee shop or restaurant, and ask for identification as part of your process with all new customers.
  2. Let the client lead the way. During a showing, allow your client to walk in front of you and guide you where they want to see. If you need to lead them to a feature or room, direct them where to go as they walk in front. When leaving open houses have a coworker meet you to check all rooms before locking up together.
  3. Let your smartphone be your safety net. Add your emergency contacts, coworkers and a few family members as favorites in your phone, giving you easier access to the dial them quick, in case of an emergency and research safety apps for further reassurance. Apps like Facebook Messenger, Share My Location, Google Maps and more can share your location with selected friends, while Lifeline Response and bSafe can contact emergency services silently, or even fake a phone call to get out of uncomfortable situations. Find what works for you and your business model.
  4. Keeping it old school. Before the advent of smart phones, the “buddy system” was used to help keep realtors safe. Work with at least one other agent closely to share plans for your day, contact information of new clients, and for hosting events like open houses. Joining networking groups is a great way to make these types of connections.
  5. Automobile maintenance. Be sure to keep up with your car’s maintenance and always keep at least a half a tank of gas. Some agents cover the bottom half of their gas gauge with a post-it note to remind them to fill up sooner. Keeping your car up and running will help prevent breakdowns in areas you might not know very well and get in practice of locking your doors every time you leave the car.

Above all else, trust your instincts! If something doesn’t feel right do not hesitate to cancel a showing, open house or meeting.

 

 


Swipe Right and Match with the Perfect Title Company

Tips on finding the right title insurance company for your real estate transaction.

It's a Match with Florida Agency Network

In a world full of left-swipe worthy businesses, it’s difficult to know which title insurance company to choose for your transaction. Before you swipe right and do business with the wrong title insurance company, here are some things to consider before you choose your perfect match in a title company.

 

Company Longevity

We see it time and time again, a title company seems to pop up overnight and is ready to do business. However, can you trust the work that is being done throughout your transaction? How do you know your private information is protected?

Find out how long the title insurance company has been doing business. A title insurance company that’s been in the industry for a longer period knows the ins and outs and can speak to common questions or issues that come up, with ease. A title insurance company’s longevity shows efficient and effective processes in place. And with experience comes stability and peace of mind for all those experiencing the closing process. That leads to the next point.

 

Company Accommodations

Life can get busy. Going out of your way to get to, or handle anything thing for your closing can become a hassle. Look for a title insurance company that has multiple locations or can accommodate you during the closing process. Do they offer mobile closing or mobile notary services to their clients? Do they offer e-closings or remote online notaries (RON)? These are just a few of the points you’ll want to discuss with your title insurance company.

 

Company Strength & Support

“A great captain is great only if he has a great team.”

Your title insurance company is only as good as the team they provide to their clients. Choosing a title insurance company with a large, experienced, and dedicated staff are the qualities you want in your closing team. It’s critical that your closing team has the correct licensing and educational background to get you through the entire closing process.

Don’t forget to inquire about the title insurances company’s support; Who do they underwrite with? What type of errors & omissions (E&O) policy do they carry? This may all sound foreign to you as a buyer or seller, but this information shows the strength of a title company when difficult situations arise.

 

Company Reputation

A title company with longevity and experience has built a reputation within the real estate industry. You should place your trust in a title company that is the leader in customer and employee satisfaction.

Ask your real estate professional about their experience(s) with the title insurance company. Don’t forget to do your online research. Read through online reviews on their social pages, Google and more. It’s common to have a problem here or there, but is there a trend your finding with each customer experience?

 

There are many points to consider when swiping right on your perfect title insurance company. Florida Agency Network brands not only can close your real estate transaction at any of the many locations throughout the State of Florida, but also close your transaction at any place convenient to you with mobile notaries, e-closing and remote online notarization (RON) partners, FAN brands have the large footprint you want to have on your side.

Our closing staff has many years of experience in title insurance and closings.  We also work with several underwriters which gives us the resources to close deals other title insurance companies cannot.


Do you have the POWER?

When and how a power of attorney for a spouse works in a real estate transaction.

 

Wooden figures hugging

Contrary to popular belief, a marriage license doesn’t necessarily give a spouse automatic power to make decisions on the other spouse’s behalf. While spouses may have rights to things like joint bank accounts and medical records, property rights can be restricted. To conduct a real estate transaction on behalf of a spouse or other person, an approved power of attorney is necessary.

 

 

WHAT IS A POWER OF ATTORNEY?

A power of attorney is a document which gives a person, called an “agent”, legal authority to act and make decisions on behalf of the spouse. The amount of power given to the agent can be limited, depending on what is agreed upon.

For real estate transactions, a power of attorney would need to specify the agent is authorized to make the specific decisions for the buyer or seller’s spouse.

 

WHY DO I NEED A POWER OF ATTORNEY?

Most real estate transactions will not need a power of attorney. However, if your spouse is unable to sign the mortgage or the deed or any other documents needed for various reasons, you will need to have an approved power of attorney.

If there is a power of attorney already created, it’s best to get that over to your title company and lender, if applicable, as soon as possible. That way, your closing team and lender has time to review and make sure the power of attorney is approved and ensuring your closing goes as smooth as possible.

 

WHAT ARE COSTS ASSOCIATED WITH A POWER OF ATTORNEY?

If you’re closing with any title brand in The Florida Agency Network and it involves the issuing of your title policy, there is no charges to you for drafting a specific power of attorney for the real estate transaction.

If you need a power of attorney drafted for other reasons or you’ve made arrangements directly with an attorney, there are possible charges for this. Fees may vary, based on the attorney or law office you and your spouse do business with.

 

Before starting your real estate transaction, where a power of attorney is needed, make sure the power of attorney is ready or there is a plan in place to get one drafted. Contact any of our offices for more information on how to get the processes started for your closing.


Darn that DODD-FRANK!

Cropped image of businesswoman writing on checklist

Just imagine, after years of struggling to complete college, your son, little Johnny has finally has his head on straight. He graduated, he’s worked for the family business for two years and is doing well. He met a nice girl and they have married.

He wants to buy a home. Unfortunately, Johnny has not always made the best decisions. His credit is not where it needs to be. Based on the fact that he is now making better decisions, you decide to loan Johnny the money to buy the home. The title company you’re working with will prepare a note and mortgage to secure your loan, what could be easier, right?

That Darn Dodd-Frank! Your loan is probably in violation of this Act. Based on this violation, your note and mortgage may not be enforceable.

Dodd-Frank is federal legislation that came about as a result of the real estate crisis of the last decade. The Act created the Consumer Financial Protection Bureau (“CFPB”) and other laws that regulate all consumer loan transactions.

One of the other laws is the Loan Originator Rule. In general terms, if the borrower will use the home for residential purposes (whether a primary residence, a second home or a vacation home) then the person arranging the loan is defined as a “loan originator.” A loan originator must have a mortgage originator’s or broker’s license. Pursuant to the Act, any person who offers and negotiates terms of a residential mortgage is deed to be a mortgage loan originator. Unfortunately, for mom and dad above, there are no exceptions for a person, who is not a Seller, to secure a mortgage with a residential property.

The Act does provide for certain exceptions. Namely, Seller financing, these exceptions are as follows:

One property exception: A Seller may extend credit, secured by a mortgage encumbering residential property and is not considered a loan originator if:

(a) they are a natural person, estate or trust;

(b) they provide financing for only one property in a 12 month period;

(c) they own the property securing the mortgage;

(d) they did not construct or act as the contractor for the construction of a residence on the property;

(e) repayment of the loan must not result in negative amortization;

(f) balloon payments are allowed, however the term of the balloon is not clear. Most practitioners believe that no shorter time period than 5 years should be used.

(g) while the Act does not prohibit adjustable rates, a fixed rate is suggested. The Act has restrictions, limitations and caps on rate charges.

(h) the seller is not required to investigate the buyer’s ability to repay the loan.

Three Property Exception: A Seller may extend credit, secured by a mortgage encumbering up to three residential properties and is not considered a loan originator if:

(a) they are a natural person, estate, trust or an entity;

(b) they provide financing for three properties or less in any twelve month period;

(c) they own the property securing the mortgage;

(d) they did not construct or act as the contractor for the construction of a residence on the property;

(e) the loan must be fully amortizing and there are no balloon payments or structures allowed;

(f) while the Act does not prohibit adjustable rates, a fixed rate is suggested. In this context, limits and caps are required’

(g) the Seller is required to make a reasonable investigation regarding the Buyer’s ability to repay the loan. Although formal documentation is not required, the investigation should be done in good faith and the results should be maintained.

While other exceptions exist, they are very complicated and are not practical for ordinary Seller financers.

Good news is Dodd-Frank does not apply to every loan. First, it only applies to residential loans. So, if you’re dealing with vacant land, commercial properties, rental properties or properties used solely for investment purposes, Dodd-Frank simply does not apply. Moreover, Dodd-Frank does not apply to non-residential buyers. So, if the buyer is a corporation, limited liability company or partnership etc., Dodd-Frank will not apply and the loan can be made without consideration to its restrictions.

So, now that we know that mom and dad have a problem trying to help little Johnny buy his home, what are we to do?

One solution would be for the mom and dad (the lender) to purchase the property from the underlying Seller first. Then mom and dad as the Seller could sell little Johnny the home and take back the note and mortgage under the one property exception. Yes, the transaction costs would increase, but the creative closers at the Florida Agency Network will work with you to keep these costs down.

Another solution would be for mom and dad to work through a mortgage broker. The mortgage broker will be required to comply with all of the various lending laws and regulations. While the broker will likely charge a fee for this service, it is another option that will allow the transaction to go forward.

What Is A Rate Lock?

Mortgage rates change constantly through an unpredictable combination of government policies and economic conditions. This video explains the common term ‘rate lock.’

A “Rate Lock” is a guarantee that a lender will honor a specific combination of interest rates and points for a given period of time. A lock protects a buyer from rate increases but commits them to a higher rate if mortgage rates fall below the locked rate.

As of 2014, rate locks aren’t usually an option until a purchase offer for a specific property – new-home or resale – has been accepted by the seller. The borrower’s credit score, the loan-to-value ratio property type, location and other factors plus, of course, market rates and market conditions will also affect rate-lock decisions.

Decide whether to lock or “float” based on your capacity for risk and your best rational knowledge about construction and closing schedules. If your rate lock expires an extension might be available but both you and the lender will be looking at current mortgage rates to decide the best option.

 

What Should I Look Out For During The Final Walk-Through?


Well, as this story shows, this will likely be the first opportunity to examine the house without furniture giving you a clear view of everything.
Check the walls and ceilings carefully as well as any work the seller agreed to do in response to the inspection.
Any problems discovered previously that you find uncorrected should be brought up prior to closing. It is the seller’s responsibility to fix them.

What Are “Home Warranties”, And Should I Consider Them?

You’ll see some pictures in this video to help you remember later, but essentially, home warranties offer you protection for a specific period of time, such as one year, against potentially costly problems like unexpected repairs on appliances or home systems which are not covered by homeowner’s insurance.

Warranties are becoming more popular because they offer protection during the time immediately following the purchase of a home a time when many people find themselves cash-strapped.

What About A Home Located In A Flood Plain?

A flood plain is an area of land adjacent to a stream or river that experiences flooding during periods of high discharge. Watch this video and it’ll make sense.

If you live in a flood plain lenders will require that you have flood insurance before lending any money to you. But if you live near a flood plain, you may choose whether or not to get flood insurance coverage for your home.

Check the National Flood Insurance Program site  at FloodSmart.gov  for more information. And work with an insurance agent to construct a policy that fits your needs.

What Does A Home Inspector Do, And How Does An Inspection Figure In The Purchase Of A Home?

As we show you in this video, an inspector checks the safety of your potential new home.

Home Inspectors focus especially on the structure, construction and mechanical systems of the house and will make you aware of only repairs that are needed.

The Inspector does not evaluate whether or not you’re getting good value for your money.

Generally, an inspector checks (and gives estimates for repairs on):

  • the electrical system
  • plumbing and waste disposal
  • the water heater
  • insulation and ventilation
  • the heating and AC system
  • water source and quality
  • the potential presence of pests
  • the foundation, doors, windows, ceilings, walls, floors, and roof.

Be sure to hire a home inspector that is qualified and experienced. It’s a good idea to have an inspection before you sign a written offer since once the deal is closed you’ve bought the house as-is.