Entries for February, 2011

What are The Bylaws of a Condominium Association?

The bylaws is a document that describes the operational requirements of the association.  It provides for the administration of the association including procedures for calling meetings, determining voting requirements, and so forth.  Each purchaser, by accepting title to his or her unit, automatically becomes an association member and is bound by the association rules and [...]

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What is a Condominium?

A condominium is a form of real property consisting of condominium units and common elements.  An individual owns a unit exclusively and owns an undivided fractional share of the common elements.   Common elements are legally attached to each unit and are transferred with the unit when it is sold.    A deed to a unit conveys [...]

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What is MARS?

MARS stands for Mortgage Assistance Relief Services and is a new FTC (Federal Trade Commission) ruling to protect distressed homeowners from mortgage relief scams.     MARS Final Rule

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What is the Difference Between a Buyer’s and a Seller’s Market?

The difference between a Buyer’s market and a Seller’s market is supply and demand. A Buyer’s market develops when there is an excess supply of real estate.  The number of excess units in that particular market allows a potential Buyer to shop among anxious owner-Sellers to obtain better prices and terms.    A Seller’s market develops [...]

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What is a Vacancy Rate?

A vacancy rate is the percentage of rental units that are not occupied.  Vacancy rates are one indicator of the need and demand for housing in a certain market area.  An increase in vacancy rates in rental housing indicates a surplus of housing space. Typically, as the occupancy rate increases, rental rates tend to increase [...]

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What Does it Mean to Prorate?

Prorate means to divide various charges and credits between Buyer and Seller.   Every sale contract should specify a date and time for prorating items. Prorating is usually required when rents are paid in advance; property taxes are paid in arrears (at the end of the period for which payment is due); and interest on mortgages [...]

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How Does Supply and Demand Affect Real Estate?

Supply is the amount and type of real estate available for sale or rent at differing price levels in a given real estate market.  Demand is the amount and type of real estate desired for purchase or rent in a given market at a given period of time. Variables that influence supply: availability of skilled [...]

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What is the Difference Between a Qualified and Unqualified Sale in the Property Appraiser?

Sales are determined to be qualified if the sale price reflects an accurate dollar amount relative to the actual market value of the property.   Sale are unqualified if the sale price is not reflective of the market value, involve multiple properties or those between family members.

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What is Cash Flow?

Cash flow is the total amount of money generated from an investment after expenses have been paid. To estimate cash flow, determine the major expected cash outflows (taxes, principal, interest, expenses, vacancies, fees, repairs) and compare it with the income that the property produces.

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What if the Appraisal is Below the Purchase Price?

What happens if the appraisal comes back lower than the agreed upon purchase price? For example, your offer to purchase a house is $300,000.   The appraisal comes back with a value of $280,000.    The Lender will consider the value of the property to be $280,000.     You can contribute more of your own money to make [...]

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