Tuesday, October 21, 2014

How To Create A Favorable First Impression

What makes a buyer want to preview a house? There are many factors, but one is most common. It’s also the most logical. The buyer saw the listing on the Internet, that listing appealed to the buyer and caused the buyer to drive by the house. Creating a favorable impression from the curb is first step toward getting a buyer to reach the closing table. Let’s discuss improving curb appeal.

How Does A House Look From A Distance – A property owner might invest thousands of dollars to update counter tops – install new carpeting, replace fixtures, paint and so forth. Those are all great projects. When done at the expense of the neglecting the front and side yards, those updates could become a bad investment.

With tree leaves falling, make it a priority to cut (and mulch) the grass and fallen leaves at least once a week, but preferably twice. Make your house shout out “Please buy me!” with a great looking yard. This is a simple solution to gain an advantage over the competition.

Easy Projects – See if there are any dead limbs and branches. Cut them down. It’s also time to cut back on shrubby. Don’t let a shrub hide too much of the house. Here is a general rule of thumb for trimming trees and shrubs.

Any tree branch easily touched by an upwardly extended hand is too low. Trim it. That leaves about 9-10 feet below the tree for easy access to the trunk. Prune any tree branches that extend over the roof.

Let shrubby accent the house rather than hide it. Trim shrubby so that it hides no more than one-fourth of the house. Expose the top three-fourths or more of the house to buyer’s eye. That sends the message the seller is not trying to hide anything. Cut any shrubbery that blocks even a small portion of a sidewalk or porch.

This Is A House Not A Cemetery – Don’t let dead trees, shrubs or plants ruin an otherwise great listing. Remove them. It may seem like a waste of money to incur an expense now. Consider the profitability of all projects.

If spending $200 to remove a dead tree or plant results in adding $1000 to the sale price that is a great trade. Avoid the reverse. Don’t spent more for the project than the realistic payback. With any project, spending involves risk. That is part of home ownership. Taking calculated risks that achieve financial rewards.

How Does The Ground Appear – Planting the right flowers can be the difference to getting a buyer inside the house or just passing by without taking any action. Almost any colorful flower sends a bright and cheery message. There are several autumn bloom flowers that can differentiate you from the competition. Remember it’s about getting a buyer inside your home.

Unnatural Things – Trees, shrubs, flowers and grass form the basis for just about every yard. Look at the non-living things outside your home.  Did the summer sun fade the colors on a porch swing cushion? Rather than buy new ones, simply remove the old cushions. You probably won’t be living there when the warm weather returns.

Some owners like to display cheery flags. Again, look for color fading. Maybe it’s time to display a new flag.

Look at the front porch. Can a visitor or guest walk easily from the driveway to the front door without having to hurdle porch chairs, large decorative vases or other objects? Relocating some of these objects can improve curb appeal. Ask the children to place bicycles and other toys into the backyard. Curl up all hoses and sprinklers.

Most buyer form their first impression of a house based on the outside appearance. Buyer’s reason that a house maintained well on the outside has the same maintenance inside. A sloppy or careless outward appearance may give a hint what is behind the front door. Make a favorable yet cost-effective first impression.
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Andy Kalinowski is a REALTOR, an Accredited Buyer’s Representative®, a Short Sales and  Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of Realtors®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail – andyk@dorishardy.com.  He is also available for web video chat.

Monday, October 20, 2014

Home Buying Tips

There are less than two and half months left in the calendar year. If buying a home in 2014 is a goal, time is running out. Here are a few tips to achieve that goal before the year ends.

Act Now – Don’t delay any more. Unlike other types of purchases, buying a home takes at least 30 days and closer to 60 days. Give yourself time to find an acceptable house, negotiate a fair price and then provide all the information that lenders require today.  Sometimes the current owner needs time to find a home. Waiting adds additional stress. Avoid that by acting now. What does “acting now” mean?

Get Mortgage Pre-Approval – Let a professional financial expert, who can write a mortgage, determine the maximum amount of the purchase. The lender can easily convert a monthly payment into a total purchase price. As an example, if a borrower can afford a maximum monthly payment of $750.00 that means that probably most houses priced under $150,000 are affordable.

There is one small caveat to this example. This also means that the borrower’s existing recurring debt is only about 10 percent of the monthly income. That is why using just a rent a payment may not be an accurate gauge. The lender does not want a borrower living paycheck to paycheck. They want the borrower to enjoy living in the house.

Getting pre-approved for a mortgage is easy today from a mechanical standpoint. Just about every reputable lender has an on-line mortgage application. It’s possible to submit an application 24 hours a day, 7 days a week.

Know What To Buy – Before contacting a real estate professional, have a good idea of the type of house that fits the needs of every person in the household. This is more than just needing 3 bedrooms and 2 baths. Give thought to the area of town to buy a home. What is the commuting distance to work, school, shopping, other family members, and quality of life services such a church, the gym, piano or dance lessons, parks and so forth.

Forecast into the future. What will the family look like 10 years? Today’s first-grader will be a high school junior in 2024. Older children require more space. Also remember that by 2029 today’s first grader will probably be married and living elsewhere. The point is to make intelligent decisions about housing needs today and tomorrow.

Hire A REALTOR® – When driving by a house that has a “for sale” sign in front of it, understand what the sign really says.  The sign says one of two things. The “For Sale By Owner” sign says the owner decided to not hire a REALTOR® for the transaction. The sign of a real estate company says the seller saw the value that a REALTOR® brings to the transaction.

In either case, the buyer retains the option to hire a REALTOR®. The buyer’s agent has two basic jobs. One is to put the buyer’s best interest at the forefront of all actions. The second is to eliminate or reduce any buyer risk in a professional manner.

The buyer’s agent can work with any real estate company. That means a Coldwell Banker agent can sell a house with ReMax sign in the front. A Century 21 agent can sell a Coldwell listing. A ReMax agent can sell a house with a Century 21 sign, or any other combination. Those transactions happen every day. Real estate is one of the few professions where a competitor can also be business partner.

Helpful Hint – If a “For Sale By Owner” seller does not want a REALTOR® involved in the transaction for any reason, there is a logical reason.  No matter what the FSBO owner says, he knows deep down that a real estate professional will expose something that puts the seller at a distinct disadvantage.

Quite often the FSBO seller appeals to a financial motive – save the brokerage fee. Here is what a buyer needs to remember. Buying a home is the largest and most complicated financial transaction of a lifetime. It deserves the best representation to insure it’s not only mistake free, but also the purchase itself is the best choice from among several alternatives. That is the job of the buyer’s agent.
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Andy Kalinowski is a REALTOR®, an Accredited Buyer’s Representative®, a Short Sales and Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He is a Mississippi Real Estate license. Andy is also a member of the National Association of REALTORS®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail – andyk@dorishardy.com.  He is also available for web video chat.


Friday, October 17, 2014

A Festive October Weekend in Columbus, Mississippi

One of the reasons to highlight community activities each week is to show newcomers and even local residents that there are plenty of local activities that suit just about every possible interest. Let’s see what is happening in Columbus and Lowndes County this weekend.

The third weekend of October the small town of Caledonia in northeast Lowndes County celebrates Caledonia Day. This year all the activities take place in Ola J. Pickett Park on Wolfe Road, just south of the YMCA and the schools.

The Friday night concert features the 2012 X-Factor winner Tate Stevens. The 2013 X-Factor winner Alan Sibley and the Magnolia Ramblers get things started at 7:00 p.m. Bring a lawn chair to better enjoy the concert.

Saturday features several events.  There is a 5K fun run with registration at 7:00 a.m. and the race an hour later. This is not an ordinary fun run. All the profits help fund a Vo Tech school in Belieze.

The most important member of the household is the king or queen this morning. Registration begins at 8:30 a.m. for the Caledonia Day pet parade an hour later. After all the pets arrive at the main stage, there is a pet blessing from a local clergyman. That leads to announcing the winners of the largest pet, the smallest pet, the most unusual pet and best pet costume. The Columbus-Lowndes Humane Society will be on hand to accept donations for their facility.

The pets give way to motorized vehicles – actually antique cars is a better description. During the afternoon there will also be lawnmower races, power wheel races and bicycle races, with prizes awarded in each category.

What would Caledonia Day be without numerous food and craft vendors? They have plenty of items to purchase and enjoy.  Remember that this year all Caledonia Day activities take place at Ola J. Pickett Park on Wolfe Road, south of the YMCA.

Want to stay in Columbus? Then head out to the Columbus Fairgrounds on Highway 69 in East Columbus for the annual Roast n Boast barbeque cook-off. This is an officially sanctioned event by the Kansas City Barbeque Society. Teams compete for cash prizes.

American Idol Top Ten finisher Dexter Roberts from nearby Fayette, Alabama performs at 8:00 p.m.  Other Friday entertainers include Charlie Burgin and the Southbound Train plus the always popular Keith and Margie.

Saturday has two types of entertainment.  During the afternoon watch daredevil car stunts by American Daredevils. There is also pig racing. As for music, Ian Faith performs at 7:00 p.m. followed by Trademark at 9:00 p.m.

It’s the middle of October and that means it’s time for a Mississippi University for Women tradition. The W’s Student Programming Board has their annual Oktoberfest celebration on Friday stating at 5:00 p.m. This event is at the Shattuck Lawn on the corner of College and 15th Streets, in the extreme northeast corner of the MUW campus. This event allows students to raise money for their campus organizations by selling treats and hosting a variety of activities such as face painting and bumper cars. There is also a costume contest for children 10 and under beginning at 6:00 p.m. along with performances by the Masker Washboard Band and Elite Modeling Squad.

Friday night also means high school football.  The Columbus Falcons (1-6) travel across the state for a game with the Greenville Hornets (1-6). The New Hope Trojans (7-0) visit the Oxford Chargers (6-1). The Caledonia Confederates (5-3) are on the road for a game against the Kosciusko Whippets (6-2). The West Lowndes Panthers (3-5) host the East Oktibbeha Titans (0-7).

In private school football, the Heritage Academy Patriots (4-4) host the Leake Academy Rebels (4-4) from Greenwood. The Columbus Christian Academy Rams (5-3) visit the Newton Academy Generals (6-2). The Victory Christian Academy Eagles (8-0) goes on the road for a game with the Tuscaloosa Christian Warriors (6-3).

Looking for the freshest locally grown vegetables? There is only one place to shop. Visit the Hitching Lot Farmers’ Market on the corner of Second Avenue North and 2nd Street. Farmers sell tomatoes, peppers, squash, radishes, eggs, honey, fresh cut flowers, blackberries, blueberries, peaches and watermelons around. Plus there are baked goods and arts and crafts vendors.

The Coffee House on 5th Street donates the coffee each Saturday morning for market shoppers. There is a juice bar with watermelon and apple juice, peach and carrot juice, kale, pineapple and cucumber juice or apple, carrot and ginger juice. The market opens at 7:00 a.m. on Saturday.

October is breast cancer awareness month. The Frank P. Phillips YMCA on the corner of Main and 6th Streets is doing their part. They have a fund-raiser called Girl Power For a Cure. Come join the fun. Make a small donation to the Baptist Cancer Center and pound with other girls to honor those with this illness. The fun starts at 9:00 a.m.

Country Pumpkins is open daily for the remainder of the month. Get your seasonal flowers, pumpkins or other gourds while the children have fun playing in a safe family-oriented type of environment. Country Pumpkins is on Spruill Road in Caledonia. Watch for the signs off Wolfe and Ridge Roads.

Three major universities with membership in the Southeastern Conference are within a two-hour drive (or less) of Columbus. Each has a Top Ten national ranking by the Associated Press. Texas A&M visits #7 Alabama for a mid-afternoon game. Tennessee visits #3 Ole Miss for an early evening game. #1 Mississippi State takes the weekend off.

For those loving true classical music, the Starkville-Mississippi State University Symphony Orchestra presents Southern Talent String Symposium at the Rent Auditorium on the MUW campus Saturday at 7:30 p.m.

Enjoy an evening of music of Mendelssohn, Saint-Saens and Valentin Bogdan. Dr. Michael Brown conducts the orchestra with feature performances from guest artists Julia Mortyakova and Valentin Bogdan. Best of all this is a free event. Rent Auditorium is on the corner of College and 11th Streets in the extreme northwest corner of campus.

Anyone have a real estate need this weekend? Please make a private preview appointment at least 24-hours in advance. Your REALTOR® knows how to do that.
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Andy Kalinowski is a REALTOR®, an Accredited Buyer’s Representative®, a Sales and Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of Realtors®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail – andyk@dorishardy.com.  He is also available for web video chat.


Thursday, October 16, 2014

How to Replace Weather Stripping

When weather stripping on doors and windows gets worn out, cold air comes sneaking in. Here’s how to replace weather stripping and stop air leaks.

Weather stripping on windows and doors protects the home from air leaks while increasing comfort and saving energy. But as weather stripping ages, it loses its effectiveness. Stay ahead of the game by checking for worn-out weather stripping and replacing it.

Identifying Worn Weather Stripping – Weather stripping deteriorates due to age, friction, and exposure to the elements. It also can be damaged by people, pets, and pests. At least once each year, inspect your windows and doors to check for air leaks that indicate your weather stripping isn’t doing its job.

Self-adhesive foam tape loses its grip over time, causing it to pull away from the door or window frame — or fall off completely. Foam also can lose its resilience, no longer springing up to fill the gap.

Rubber and vinyl weather stripping becomes dry, brittle, and cracked. Over time, it can also lose its shape and effectiveness.

Spring-metal V-shaped weather stripping bends out of shape, cracks in spots, and comes loose thanks to missing nails.

How to Remove Old Weather Stripping – For peel-and-stick-type weather stripping, simply pull the foam strips off the door or window by hand. Stripping that is fastened in place with nails or screws requires a more tedious process of locating and removing all the fasteners.

Options for New Weather Stripping – There’s no shortage of weather stripping options at hardware stores and home improvement centers. As is often the case, the cheaper and easier the product is to install, the less effective and durable it probably is over time.

Adhesive-backed foam tape is inexpensive — costing less than a buck a foot — and peel-and-stick types are easy as pie to install. It works best where the bottom of a window sash closes against a sill, or a door closes against a doorframe. It’s the compression that produces the seal. Don’t expect this product to survive longer than 3 to 5 years.

V-shaped weather stripping, sometimes called tension-seal weather stripping, is the best option for the side channels of a double-hung window or a tight-fitting door. This product springs open to close gaps and plug leaky windows and doors.

Inexpensive peel-and-stick V-shaped vinyl (as little as $0.50 per foot) is easy to install but won’t last much longer than foam tape. More expensive copper or bronze styles cost as much as $2 per foot and must be nailed into place, but they look better and will last decades.

Tubular rubber or vinyl gaskets prove the most effective for sealing large and irregular gaps, such as around an old door. These hollow tubes are large enough to plug big gaps but soft enough to compress nearly flat. Types that are nailed in place last longer than peel-and-stick varieties. Prices range from less than $1 per foot for peel-and-stick to $1.25 per foot for nail-in-place.

Prepare the Surface – Before installing any new weather stripping, start with a smooth, clean, and dry surface. Remove all old adhesive using an adhesive cleaner and perhaps a light sanding. Fill and sand old nail holes. If old screw holes can’t be reused, fill and sand those as well.

Installation Tips – Some peel-and-stick types should only be applied when the temps are at least 50 degrees. Check the product label.

Start with one small area to make sure the door or window opens and closes without difficulty before completing the entire job.

Measure twice before cutting to prevent mistakes and waste.

Cut rubber and vinyl varieties with shears or a utility knife, and metal types with tin snips. Be careful not to bend the thin metal while cutting it.

Make sure to face the opening of V-shaped weather stripping out toward the elements to prevent moisture from getting inside.

Installing Weather StrippingAdhesive-style weather stripping: Remove the backing and press firmly in place. Removing the backing as you go helps prevent the sticky part of the strip from accidentally adhering to something it shouldn’t.

Nail-in weather stripping: Fasten the strips in place by nailing through the pre-punched holes. For double-hung windows, you’ll need to install the lower half, drop the sash, and then install the upper half.

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Douglas Trattner wrote this copyrighted article that appeared on National Association of Realtors® web site and is used with permission. He has covered home improvement for HGTV.com, DIYNetworks, and the Cleveland Plain Dealer. He lives in a 1925 Colonial.

Visit Houselogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.


Andy Kalinowski is a REALTOR®, an Accredited Buyer’s Representative®, a Short Sales and Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of Realtors®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail – andyk@dorishardy.com.  He is also available for web video chat.

Wednesday, October 15, 2014

Real Estate Glossary (Part 3 of 3)

Monday we began a series to explain and define certain words, phrases or acronyms that make communicating in a real estate transaction easier. We don’t want people to wonder exactly what someone means but are afraid to admit ignorance. Monday we defined the words “agent,” “pre-approval” and “good faith estimate.” Yesterday we explained the words “comp,” “CMA,” “Fair Market Value” and “Negotiation.” We conclude this series with six other words.

Purchase Offer – A buyer writes and signs a document that may say, “this is a legally binding document.” In reality that document may become a legally binding document, as discussed below.

The purchase offer is just that. It is an offer to purchase real estate. The offer contains a lot of decision points for the seller other than the number behind the dollar sign.

When does the buyer want to close the transaction? How much earnest money does the buyer bring to the table? Who pays for what inspections? Is the buyer pre-approved by a reputable lender? Those are just some of the things on a purchase offer for a seller to consider.

A seller has three options on a purchase offer. The seller can accept the offer. The seller can reject the offer. The seller can make a counter offer. The counter offer basically accepts all items contained in the original offer except as noted in the counter offer. The buyer then has the same three options.

Purchase Contract – This is a very short explanation. The purchase offer becomes a legally binding and an enforceable contract to purchase real estate only when both the buyer and the seller agree in writing to every word on the purchase offer. That agreement includes any written counter offers.

The purchase contract is a performance based contract. It requires both parties to do certain things by a certain date to achieve the ultimate goal of legally transferring ownership by a specific date.

Earnest Money – When a buyer writes a purchase offer, he wants to demonstrate to the seller that this is not an impulsive decision. Earnest money shows the seller that the buyer is “earnest” about making the purchase.

The purpose of earnest money is to make it very difficult for a buyer to voluntarily walk away from the transaction. If a buyer fails to perform the tasks specified in the purchase contract, he breaches the contract.

In the event the buyer voluntarily breaches the contract, the seller has the legal right to file a civil law suit. Rather than go through the legal process, the seller has the option to accept the earnest money in lieu of civil breach of contract damages.

The actual amount of earnest money varies by the amount of the purchase and is one of the items subject to negotiations.

Inspections – Many times a real estate buyer wants a professional opinion about the property. This can be from a home inspector, a termite inspector, a septic inspector, a surveyor, an environmental inspector and so forth. These inspections give the buyer the assurance that the owner is selling a quality product. If an inspection identifies defects, both sides negotiate a solution.

Appraisal – If there is a mortgage lender involved, the lender hires the appraiser. The appraiser is the “eyes” of the lender. It is the appraiser’s job to determine the market value of the house for the bank. No bank will write a $200,000 mortgage on a house worth $150,000. The appraiser also must insure the house meets the requirements of the loan. As an example, some government loans require a certain amount of insulation.

Closing – This is an event normally officiated by an attorney. The closing is where the property legally changes ownership from the seller to the buyer. Even after the seller signs the deed he retains full legal ownership until the instant where the buyer accepts the signed deed.

The closing is also when the new owner (or buyer) formally accepts the terms of the mortgage. There is a second deed that only the new owner signs. It is the Deed of Trust. The deed of trust pledges the property as collateral for the mortgage. It is the deed of trust that gives the lender the legal authority to begin foreclosuring should the buyer fail to make a mortgage payment.
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Andy Kalinowski is a REALTOR®, an Accredited Buyer’s Representative®, a Short Sales and Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of Realtors®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail – andyk@dorishardy.com.  He is also available for web video chat.

Tuesday, October 14, 2014

Real Estate Glossary (Part 2 of 3)

Yesterday we began a series to explain and define certain words, phrases or acronyms that make communicating in a real estate transaction easier. We don’t want people to wonder exactly what someone means but are afraid to admit ignorance. Yesterday we defined the words “agent,” “pre-approval” and “good faith estimate.” Let’s define four new words today.

Comp – This is a short word for comparable. The agent uses MLS data to find comparable or somewhat nearly identical properties that recently sold or are currently on the market. Why?

First understand that there are no two identical pieces of real estate. Every house is different and unique. Even a house with a “cookie cutter” floor plan in the same subdivision has slight variations that make it unique.  Perhaps the land dimensions are slightly different.  The difference can even be in elevation rather than in length and width.  Again, each real estate parcel is unique. No two houses are maintained in identical fashion either. That is why two 1500 square foot houses in the same subdivision could have a different market value.

The comp tries to best match the subject house with comparable housing. There are a number of real estate web sites that attempt to provide so-called comps to people working without an agent. Here is the problem. These non-MLS sites have no accountability for accuracy. That can lead a consumer to make a decision based on faulty and unreliable information.

Wise real estate consumers hire a real estate professional (an agent). That agent uses the MLS to find reliable comps of recent sales and current competition. The phrase “recent sales” means demand. The phrase “current competition” means supply. In a free market, both supply and demand help determine the fair market value or pricing.


CMA – This is not the country music awards. In real estate, the CMA means Comparable Market Analysis. The main reason a real estate consumer pays a real estate agent a fee is primarily for this one service alone. The CMA uses accurate comp information to determine a pricing and terms strategy. Here is an example.

A non-MLS real estate web site might correctly reflect a comp sale price of $175,000.  What the site did not reveal is the amount of seller concessions that change the true purchase price. That means the non-MLS real estate web site provided inaccurate information. That is how transactions fall through. That is how negotiations become bogged down into personality conflicts. Avoid web sites that cannot guarantee the accuracy of their information.

A real estate agent’s pricing and terms recommendation comes after diligently preparing and examining a CMA. A carefully prepared CMA benefits both the buyer and the seller. It prevents either side from paying too much or too little in a huge financial transaction.

Fair Market Value – This is a term sometimes abbreviated FMV or sometimes called market value. The market value is an acceptable price to the seller and the buyer at a specific point in time due to certain conditions by both. The acceptable price takes into consideration any type of seller concessions requested by the buyer. Here is an example.

If the comps for a specific house show it has a $125,000 value but the buyer also wants the seller to pay an additional $5,000 in closing costs, the actual value of the house is $120,000. A seller can negotiate a $130,000 purchase price with the $5,000 in closing costs. That maintains the actual $125,000 value suggested by the CMA. This is fair to both the buyer and the seller.

Negotiations – There is one constant theme to remember about negotiations. Each side gives up something valuable to achieve something of even greater value. There are two ways to look at negotiations. There are either two winners or there are two losers.

In negotiations there are only guiding principles – motivation and financial capability. Those two guiding principles are the same for the buyer and the seller. Both principles work hand-in-hand also. As an example, a seller might be willing to sell a vacant house for slightly less than the amount he owes on it in exchange for a quick closing. A buyer might be willing to pay slightly more than the seller asks to insure that he gets the house by a certain date.

Each contract negotiation is unique. The agent simply reminds his client of the overall objective and discusses the alternatives for success or failure in negotiations.
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Andy Kalinowski is a REALTOR, an Accredited Buyer’s Representative®, a Short Sales and  Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of Realtors®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail – andyk@dorishardy.com.  He is also available for web video chat.

Monday, October 13, 2014

Real Estate Glossary (Part 1 of 3)

Every profession has certain words, phrases or acronyms that make communicating easier. Sometimes people wonder exactly what those words mean, but they are too shy to admit ignorance. We’ve used all these words and phrases many times in this blog. Starting today and continuing for the next few days let’s explain what those words and phrases mean.

Agent – Ever wonder why someone needs a real estate agent? What is an agent? What does a real estate agent do that is supposed to bring value to the transaction. Let’s quickly explain.

The simple definition of an agent is someone hired and authorized to act on behalf of another. That definition applies to a talent agent, a sports agent a real estate agent or any other type of agent. The client gives the agent the authority to act. An agent represents the best interest of the client. The agent owes the client many fiduciary responsibilities. These include loyalty, confidentiality, obedience, disclosure, accounting and the duty to use skill, care and diligence.

Every real estate transaction always has two people – the seller and the buyer. It is possible that each principal may hire an agent. If so, the agent owes the client the fiduciary responsibilities mentioned above.

A seller’s agent is sometimes called the listing agent. Besides representing the seller, the listing agent is primarily responsible for effectively marketing the property so a buyer finds it and contacts someone. The buyer’s agent is sometimes called the selling agent. The buyer’s agent insures the buyer takes all the steps to make a wise purchase.

Preapproval – Mortgage preapproval is nothing more than a commitment in writing from a lender that after the buyer finds a house within a certain price point, the lender will very likely approve a mortgage. Notice the key words “very likely.”

Lenders review a lot of documents and corroborate many of them. As an example, the lender needs pay stubs. The lender also makes direct contract with the employer to validate the accuracy of those stubs. Perhaps a prospective home buyer has a pre-approval letter, wrote an acceptable offer, made a formal loan application then bought a new car before closing the real estate transaction. That could impact the closing in a negative way.

The preapproval letter does not obligate the borrower to make a formal loan application at the financial institution. The buyer has no contractual obligations until they make a formal loan application, which comes after the written purchase contract.

Good Faith Estimate – To prevent any misunderstandings about the actual cost of the monthly mortgage payment, federal law mandates the lender provide a “good faith estimate” or GFE to a potential borrower, should the lender approve the lender approve the loan. The real purpose of the GFE allows a borrower to make an apples-to-apples comparison of loans from different financial institutions.

The GFE provides an accurate estimate on the monthly payment. This is extremely important, especially considering the amount of money borrowed, the length of repayment, and the amount of the monthly payment. An accurate GFE does more than prevent surprises at the closing table. It prevents surprises after the sale closes when the new owner receives the payment notice.


MLS – This is not major league soccer. In a real estate transaction, the listing agent puts the seller’s house into a database called the Multiple Listing Service or MLS. The buyer’s agent uses the MLS to know what houses are available for sale.

The listing agent places a tremendous amount of facts about the seller’s house into the MLS. The number of bedrooms, baths, square footage, lot size and structural age is just the beginning. Facts like school district, amount of annual property taxes, type of foundation and even information about the windows are in this database, plus even more facts. The listing agent probably included pictures and decision making documents like maps and floor plan sketches. All of these have one common goal – to make the house appear to be of such a great value that a buyer contacts someone about the house.

The prospective buyer probably contacts a real estate agent. This agent becomes the buyer’s agent. The buyer’s agent can use the MLS information and talk intelligently about the property. It is also possible that the buyer’s agent has been inside this listing already, so the MLS information is merely a refresher.
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Andy Kalinowski is a REALTOR®, an Accredited Buyer’s Representative®, a Short Sales and Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of REALTORS®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail – andyk@dorishardy.com.  He is also available for web video chat.