Tag: real estate

Housing Basics: What is Escrow?

Posted on Glenn S. Phillips

Many people have heard of escrow, but do not know what it is. The reason for that is quite simple actually; it has several different meanings in estate transactions (i.e., buy/sell houses).

Escrow is something of high value such as a check, document, or precious artifact that is/are given to an impartial third party to keep until the conditions specified in the transaction are met.

Whenever the conditions are done, and everybody is paid, the escrow will close. The valued item will be returned to the person who owned it initially.

Examples of Escrow:

  • When someone makes an offer on his new home, he/she writes a money check and uses it as an escrow. The funds are given to an impartial third party while the purchase contract is still under negotiation. Real estate agents most often take care of creating and controlling the escrows.
  • The lender wants to create an escrow, where the money for taxes and home insurance will be kept. The lender will have a department that will handle this kind of escrow.
  • There are also escrow officers, people who get paid to create and control escrows between two parties. They must be impartial.

Who Is the Third Party?

Who will be your escrow creator depends on the place where you live. It could be escrow agent, attorney, title agent, or even an estate agent. They will take care of all the paperwork being thrown at you, arrange meetings, give instructions, disclose funds, and make sure of the completion of the transaction. Note that this person or group MUST be impartial; otherwise it will be regarded as illegal.

Funds Being Withheld

In some rare cases, the funds will continue to be held in the third party when the ownership gets transferred from the previous owner to the buyer. This usually happens if the agreement or part of it was not met or changes in the agreement have taken place where both parties have agreed.

Examples could be the buyer allowing the seller’s family to stay in the house for an additional week while the seller is paying a daily rate to the house. Another example is if something wrong was found within the house and a repair takes place, the cost of the repair is reimbursed by the funds in the escrow.

Enclosing Escrow

When both parties have agreed to a move-in date as well as cost and ownership having filled all the paperwork, and all funds have been transferred, the closing agent will disburse all funds and will oversee the document record within the county where the house/estate is located.

When the final step is taken, the deed is filed. That signals that the property has been transferred to the new owner. The deal is complete and escrow is finished. Both the seller and the buyer will receive final statements and documents by mail. Both of them must check the statements in case an error has gone unnoticed. If not, they must file the statement for tax purposes in their next income tax return.

Escrows are very useful in estate marketing because they make sure that no error has taken place during the transaction, both parties have agreed on buying/selling the property, and the required documents have been signed and met by them.

Real Estate Agents: Build Your Personal Brand

Posted on John Sims

Being known socially does not equate to being known professionally. This is especially true for those who concentrate on lake property as a large portion of your potential clients and do not live in the community.

Personal branding and reach is key in engaging all potential clients. Investments in personal branding highlights your experience and expertise for local clients while letting all others know you are the person to contact regarding your lake.

Protect Your Personal Brand

Register your own domain and establish your on-line presence. Notice I did not say get a really nice page on your broker’s site. A brokerage incurs the time and monetary expense of developing a website to market the brokerage…not you.

Consider the odds of a client selecting you among all other agents on the brokerage site versus selecting you on your own site.

Get Active in Social Media

You don’t have to be on every social media platform. Choose those you feel best reach your potential clients. A professional Facebook page may be a great platform for engaging local clients while a fully updated and informative LinkedIn profile will provide the professional qualification of interest to others.

Link your social media to your website and stay active and updated. Nothing says quitter like an unfinished profile or page last updated in June 2013!

Industry Sites May Be Beneficial

As with social media, you don’t need to be on each and every one. Choose those that work best for you in terms of cost vs. exposure and quality leads. A portion of your marketing budget will be spent on this. Carefully plan where you want those dollars to go.

With all that said, having a great online presence will do little in terms of bringing clients, especially those who aren’t in the area, if you’re invisible on the web. If finding you isn’t convenient, you won’t be found.

One of the best ways to ensure clients do find you is working with a brokerage that invests in a real, national reach and is laser focused on your lake properties. Unfortunately, the brokerages that have the ability to do so are few and far between. When one claims to provide this, make them prove it. If they do, jump on that platform!

 John Sims is the Director of Development at Lake Homes Realty

Real Estate Agents – Never Stop Creating Value

Posted on John Sims

Great service providers never stop creating value. Wouldn’t you agree that for true professionals, service doesn’t stop when the deal is done? This is especially true in real estate as the closing table is really an open door for future client referrals.

Many lakes homes are purchased as second homes or retirement homes. These homeowners may not know who the best plumber or electrician is. Who do they call for trash collection?

Your knowledge of the best businesses in your market is an extremely valuable tool that provides continual value. And, with today’s technology, makes your expertise easier to share.

Refrigerator magnets with emergency contact numbers ensure your presence in the home. An occasional e-news letter providing updated contact information for the goods and services all homeowners should have can be a great way to engage clients.

How about an app that does the same? Who leaves home without a smart phone? You may even be able to get local businesses to help pay for the associated cost given the new marketing platform you provide!

If clients recognize the never-ending value you offer, they are your clients for life. Their network becomes your network. You are afforded the opportunity to earn the business and affect the lives of many more in a positive way!

 John Sims is the Director of Development at Lake Homes Realty

4 Easy to Miss Items to Look for When Shopping for a Lake Home

Posted on Glenn S. Phillips

There are lots of people in the world who would simply jump at the chance to purchase a lake home, but like purchasing any piece of property, it should never be rushed.

It is advised that you should consider a home inspection for your potential lake home, before you decide to splash the cash on your dream retreat. This will ensure that you will get the maximum value from your investment and will not live to regret the decision to purchase the lake home. So if you are considering purchasing a lake home, then you should look for the following things in a home inspection for a lake home:

The Water Counts

A lot of people don’t consider checking the actual lake when they are purchasing a lake home, which is probably one of the biggest mistakes that you can make. It may seem like only water to you at first, but there are certain water lots, which you don’t want at all with your lake home. Check to see how much waterfront footage you have on your lake, which should ideally be 100 feet or more.

Door Facing the Water

If you were living in the city, you would want to have curb appeal with your home. But, when you are living on a lake, all you should care about is pier appeal.

Check to see if there is a main door facing the lake, since you are going to want to see a whole lot of lake in your lake home. This means that every room in the house should provide you with a view of the lake, whether it is the kitchen, the dining room or the bedroom. A lake home without a great view of the lake from all rooms is less than ideal.

Topography is Essential

Not many people know this, but when you are living at a lake house, you have to consider the topography of the water lot as well. If you are going to go swimming and floating, then you should have a flat lot, which means that the water in the lake will not be deep.

If, however, you want to take your boat out every day, then you would need a steeper lot, which would mean deeper water. It may seem as a simple choice, but it all counts towards the appeal of your lake home.

Docks Are Important

It is also important to check the quality of the docks. Make sure that boards aren’t missing or loose and there are no jagged nails.

Living on the lake is a lifelong dream of most people and it is one of the best ways to spend your retirement days in comfort and relaxation as well.

Prepare Your Lake Home for an Open House

Posted on Glenn S. Phillips

If you are looking to prepare an open house for your lake home, then you need to get a lot of things in order so that the entire process goes through smoothly.

There are lots of people who end up making the wrong decisions and then have an open house for their lake home that doesn’t provide them with the results they expected. So in order to help you avoid those costly errors, here are the top things you should be doing when preparing for an open house.

Repair or Replace the Docks & Decking

It is very important to present a good first impression on your open house and therefore you should get to work on docks & decking by replacing broken boards and decks. You should reapply paint on them, and spruce up the surrounding area to make it more presentable for buyers. It is important that you don’t have any broken boards or decks when the buyers come for the open house.

Clearing the Beach

If you have a beach area you should remove all weeds and rake the area surrounding the beach prior to the showing.

You can also add children’s toys and build a small sand castle in order to entice prospective buyers. This will add a nice touch to the property, while multiple parents are checking out the lake house. A nice clean beach near the lake house will always ensure that the entire property looks enticing to the buyers.

Clean the Boathouse

If you have a boathouse at your lake home, then you should have it cleaned and painted as well.

Make sure that there are no animals residing in the boat house. Also, remove oversized boats from the boathouse, since it will make the boathouse appear smaller and cramped. Have the boat parked outside the boathouse so that the buyers can have a good look inside of it as well.

Staging the Waterfront

The most important thing to do when preparing for an open house is to stage the waterfront properly. This will raise the appeal of the entire lake house.

You should place flower pots on strategic places such as shorefront decks and patios. Then carefully set up lawn furniture and try to create multiple entertainment area, since that will paint a pretty picture in the minds of the buyers. You can even set up a BBQ area. And, if possible, have the waterfront area landscaped by a professional.

Maximize the View

People are very perceptive when they are purchasing property, particularly if it is a waterfront property. Therefore, to increase the odds of having a successful open house you will have to maximize the view from the lake house. Try to remove things that may block the view. Clean all the windows that are facing the water to maximize the view.

Apply for New Permits

If you are hoping to sell your lake house home in the near future then you should apply for any additional permits for the following (if available):
• Perched beaches
• Permanent docks
• Breakwaters
• Boathouses
• Covered boat docks

This will ensure that potential buyers don’t have to face any hassles and will also add value to the listing price of the lake home as well.

Should You Consider Refinancing Your Mortgage?

Posted on Glenn S. Phillips

There are any number of reasons to refinance your existing mortgage or mortgages. Start by considering what you hope to get out of a refinance and whether a refinance will save you in the long run.

If the list of reasons to refinance is longer than the list of reasons not to, or if your cost savings will be significant, then it’s a good time to consider refinancing.

What are some of the reasons to refinance your current mortgage?

*  First, if it gains you a better interest rate and/or it changes the term of the mortgage, then a refinance makes good sense. No refinancing plan will ever pay off your debt; rather it modifies the current loan. Lowering the interest rate is one of the top reasons people refinance. Now that banks are more willing to lend to people again, even those who owe more than their home is worth are more likely to be eligible.

*  Debt consolidation is a second reason. Some people have a lot of credit card debt that runs them hundreds of dollars a month in minimum payments. It makes good financial sense for some to refinance their mortgage and lower the overall amount they pay each month. Also, if you have a home equity loan or line of credit as well as a mortgage, it sometimes makes good sense to put the two together. This will lower the payments each month.

*  Third, many people got into loans with attractive entry level rates that then ballooned when the adjustable rate portion kicked in. Being able to lock in their interest rate at a consistent rate for the remainder of the loan period is very appealing and should be strongly considered.

*  Another major reason is because people need some extra cash. Though it might not necessarily be a refinance, a restructuring of an existing loan can mean a substantial check sent to the homeowner. This can be used to start a business, care for an aging parent, buy investments, or do home repairs.

*  Sadly, sometimes a divorce can mean a need to refinance, if for no other reason than to remove the other spouse’s name from the title. It sometimes helps the person who will be staying in the house by giving him or her a lower monthly payment, since now there is only one income paying the bills.

Some factors to consider when refinancing include the costs of the fees and any title paperwork filings. These can sometimes eat up any savings that might otherwise be realized.

Also consider that the house will still always be the item the bank holds as collateral. This can be especially important if the refinance is being done as a way to get additional funding for something else and not just saving money each month.

For many, though, refinancing can be a good answer to a tough financial situation.

Preparing for War – A Bidding War

Posted on Staff

You’ve found the lakeside home of your dreams. You put in a bid on it, but the next thing you know you’re in a bidding war for the home. How does this happen? What should you do next? Perhaps more importantly, what shouldn’t you do next? Here are a few tips to help you out if you find yourself in the middle of a bidding war.

Bidding wars are most common in popular areas or cities, but can also happen on lakes which often have limited inventory.

As the economy recovers in areas where properties are scarce, it’s harder to find desirable homes. With reduced inventory comes increased competition, hence the bidding war.

Now, here are some tips to help you get the home you want.

1. Do your homework and hire an experienced real estate professional. You will want someone who is familiar with not only the area, but the lake in particular. Their knowledge of the local market, real estate regulations, and the overall process will be invaluable throughout the experience.

2. One tactic that can get you ahead of the competition is to get your loan pre-approved. Pre-qualification is not the same thing, as it just means you could get a loan for a given amount. Pre-approval, on the other hand, means you have the finances ready. So when you make an offer, you can pay for the home.

3. Another piece that can help you is if you have a significant down payment. Having that cash on hand shows that you are a serious buyer, and puts you ahead of the potential buyers who are not as financially set. Your offer should be firm, and your best one. If it is, the seller will be more likely to think of you first.

4. If you have done your research on homes in the area, you know what similar homes have sold for, so you can put in an accurate bid. It keeps you from low-balling, or from coming in too high.

5. When you make your offer, try to keep out any extraneous restrictions or requirements. Those can slow down the process and frustrate the seller, putting your offer at the bottom of the list. If there are legitimate things you need to have addressed, like repairs to the home, that is a different matter.

6. That said, you should have a proper inspection conducted on the house that is thorough enough to check all structural issues and things like plumbing and wiring. That can help keep you from looking at properties that will need much work done. It would be best if you planned on paying for this yourself and not put that cost onto the seller.

7. Come back to the home after doing your first walk-through to see if you still love it. It could even be at a different time of day to check how the light looks in the evening, or what that brown paint does on a rainy day. This step helps you be rational about your bid instead of getting swept up in the emotion.

8. Have your agent find out from the seller what the magic trigger is that would make them close now. Is it a matter of changing the closing date? Should you include closing costs to help the seller out? What is the key motivating factor for the seller to complete the sale?

9. Don’t get caught up in a bidding frenzy that takes you out of your budgeted range. Stay calm and logical. Do your best to keep your emotions in check.

It takes some strategizing, and a great real estate agent will prove invaluable, but you can be successful in a bidding war, and come out ahead with the home you have always wanted.

5 Tips for Staging the Outside of Your Lake Home

Posted on Glenn S. Phillips

Selling a home can be a lot of work, and a lake home is no exception. While many people think about staging the inside of their home for potential buyers, the outside of a lake home can be just as, if not even more important.

So to help you sell that home faster, here are 5 tips for staging the outside of your lake home to make it more enticing for buyers.

Have a Well-Defined Pathway to the Water

Most lake home buyers generally consider the pathway to the water to be important, and therefore you should make preparations in order to make the pathway more attractive and welcoming. This will ensure that you make a good impression on the buyer, who will be more interested in purchasing your home.

Check the Docks and Deck

Replace any loose or rotting boards and nail down any protruding nails from both your deck and your dock. For many, this area will be the “living room” for their lake experience, the place to spend the majority of their time with family and friends.

Increase the Curb Appeal of the Shoreline

The shoreline near the lake house can quickly catch the attention of potential buyers. If you want to sell your lake home faster, then you will have to spruce up the shoreline.

Make sure that there is no debris or muck floating in the water and that your shoreline is in immaculate condition. Make sure that the landscaping in your lakeside lawn is as good or better cared for than the front yard!

Lifestyle Staging

People who are interested in purchasing lake homes are mainly interested in the type of lifestyle that they can lead if they choose to purchase a lakeside home. You need to help the buyer visualize the type of life they will be leading at your particular lake home, and therefore you should stage the shoreline with fishing equipment, kayaks, fire pits, beach towels, and more.

Don’t go overboard with the lifestyle staging though, since you don’t want to force your lifestyle onto them and want to them to be able to see themselves enjoying the lake!

Offer Lake Tours

Another thing you can do is to take prospective buyers to a lake tour around your lake home. This will provide them with a good view of the home, as well as give them a fair idea about what it will like being on the lake. The excitement of launching a boat from what could be their future lake home is sometimes enough to make a prospective buyer decide to take the plunge!

When it comes to selling a lake home it is all about selling the lake experience. Create a fun, inviting atmosphere in which your potential buyers can see themselves and their family enjoying the lake for years to come!

Lake Property and Shoreline Ownership

Posted on Glenn S. Phillips
Person holding set of keys with house keychain in the air

Every lake home buyer has the same question when it comes to shoreline ownership. Do you own this land, or lease it? The choice does not always belong to you.

Who Legally Owns the Land?

The owner of the lakebed and the shoreline property may have stipulations on the way they can legally offer building lots. Most owners of major, developed lakes in the United States are public utilities. Utilities such as power companies or government agencies like the U.S. Army Corps of Engineers.

In fact, some estimates show that these kinds of shoreline ownership accounts for about 90 percent of the approximately 41 million acres of lakes and reservoirs in the United States.

When a public utility builds a lake because it needs water for industrial use, such as hydroelectric power, cooling of industrial power plants, etc., the public utility, within Federal Energy Regulatory Commission (FERC) agreements, retains possession of much of the land around the lake, including shoreline areas.

The FERC may allow the public utility to only lease shoreline lots to homeowners. In other cases, the public utility is able to actually sell the lots to homeowners.

Whether they lease or sell the lot is based on the individual public utility’s agreement with the FERC regarding a particular lake. Additionally, highly detailed state or local lake protection ordinances contain restrictions covering many concerns. These concerns include how many homes can be built along shorelines, how close to the water they can be, and how wide visibility buffers must be between them.

Things to Consider with Leased Land and Shoreline Ownership

Potential lake home residents are cautioned to read the fine print on land lease documents. For instance, a lease may stipulate that if “improvements” are not made within a certain number of years, the lease could be terminated.

This means that a person who intends to eventually build a retirement home on leased land, let’s say in 40 years, may not be allowed to do so. This is because the lease could stipulate that “improvements” or building of the home must occur within 5 years.

Land leases can run for a maximum of 99 years, while some lake leases are much shorter. Sometimes running 35 or less. A mortgage lender will typically not issue a mortgage to buy or build your lake home for longer than the length of the lease on the lot. For instance, seeking a 30-year mortgage to build on a lot that is leased for 25 years is futile.

Person holding house and keys in hand while homebuyer signs leased land contract

Consideration for inheritance must include the length of the property lease and whether it is renewable. With many leases, after the lease term expires and there is no renewal option, all land and “improvements” (inclusive of houses and other structures) revert back to the organization who has issued the lease to the person.

So don’t build a lake home on leased land with no ability to renew. Also don’t expect your heirs to automatically have ownership of the lake home.

At some lakes, ownership of the ground might be an option when deciding to build a new home or purchase an existing home. There is usually more opportunity for this on a privately-owned lake, although many publicly-owned lakes offer ownership as well.

Some public utility officials say the trend at public utility-owned lakes is moving more toward selling the lots, rather than leasing them. But, only if it is allowed in the FERC agreement.

Floodplains and Your Shoreline

Keep in mind that whether leasing or buying land to build on, power companies by law must retain ownership of the floodplain. In practical terms, a floodplain is a certain number of feet of land extending from the shore of a lake.

This boundary is determined by federal and state agencies. It is vital for storm runoff, vegetation diversity, water quality, wildlife habitat, and aesthetic qualities.

Turn to an Expert

There can be many complications when it comes to purchasing or leasing property on a lake. This is why it is always best to enlist the help of a real estate agent. Specifically one who focuses on lake real estate.

A true lake specialist will be very familiar with all of the details of their lake. They will be glad to walk you through all available options and what each will mean to you as a buyer.