CHAPTER 1
Preliminary
Chapter one illustrates this book, industry affiliations, target audience, main objective and author statements (partial autobiography). They show the ideas of the preliminary actions.
Introduction of the Book
Real Estate Transactions & Foreclosure Control book emphasizes the need for adequate knowledge and skills before involving oneself in a real estate transaction. Continuing, it provides significant information about home buying, selling and foreclosure that everyone needs to know and understand, especially those engaging in the real estate industry. Real estate professionals, non real-estate professionals (buyers and sellers) and new-arrivals in the industry will benefit from the evidence and advice in the book.
The Industry Affiliations
Research shows that Real Estate is the most significant industries in any society. As presented with a figure, real estate has affiliations with many other organizations. It also entertains a wide scope of assistance in the employment systems. Many employment opportunities develop from the network in the real estate industry and its affiliated entities. This is one reason why the industry has immeasurable influence on the economy of a country or any other society. Unfortunately, whenever the real estate industry of the country takes a downward turn, the economy of that country yields a similar lower turn.
The Target Audience
The target population for this study is anyone who benefits or wishes to benefit in any way or manner from the real estate industry. The contents of this book reflect what everyone needs to know about real estate transactions such as, real estate negotiations and foreclosures with repossessions. Research shows that, globally, most people live in homes or houses. Homes can be built with grass, leaves, mud, cement, bricks, metals, woods, stones and other materials. Nevertheless, each style when built is recognized as a home or shelter where people reside. If the concept of a home is held constant and since shelter is regarded as a primary need, it can be said that everyone lives in a home or is looking for a home to move in. In this case, everyone is a potential home buyer or home renter. It is easy to detect the role of real estate sellers, especially the Realtors. However, some of the most important actors in the industry are home buyers and home owners. Therefore, home buyers and home owners are the core and target audience of this book.
Main Objectives
Although, one purpose of writing this book is to help anyone who works in the real estate industry, the main objective is to assist, guide, educate and direct home buyers and owners as they profoundly keep the real estate industry flourishing and successful. Hence, this target population needs to know and understand the essential plans and actions needed before, during and after engaging in the purchase of any real estate property. Research shows that the costliest investments with most families are purchases of their homes. Thus, the main objective of this study is to structure the contents of this book in a way to offer home buyers and owners enough knowledge, skills and abilities to successfully handle their home purchases, home maintenances and home mortgages.
Author Statements
The author of this book is Dr. Frank M. Igah, Sr. I earned BS, MBA and Ph. D. degrees from universities in Dayton and Cincinnati, Ohio. My study of Finance with a focus in Real Estate is accomplished to a doctoral degree level. I have practiced as a Public Financial Analyst for more than thirty years and have been rewarded in many ways. I serve as a financial consultant to real estate professionals and buyers in different ways. I provide guidance and directions on how, what, when and where to make home purchases, sales, evaluations and negotiations before and after making real estate transactions. I write short-sale analyses that assist people to buy or sell homes with better contracts. My practice has lead me to participate in diverse and potent real estate transactions and meetings. The writing of short–sale documents and analyses have exposed me to many real estate lenders with whom I have held multiple meetings while exchanging skills and techniques. Further, I am a Licensed and Certified Mortgage Loan Officer. These credentials lead me to engage with businesses and other multiple lending institutions in multiple ways. The resulting factors are successful processing and making of mortgage loans. My public practices have assisted me in acquiring resilient skills, abilities, interests and experiences in the real estate transactions. Therefore, all these attributes, coupled with working as a certified mortgage loan officer and serving as professor in colleges afford me the unique qualifications to write a book of this nature.
Disclamation
Reading, understanding this book, Real Estate Transactions, Foreclosure Control, provides interesting, helpful and rewarding characteristics. However, the text does not cover all of the activities in the Real Estate industry. Like any other book, no reader should depend on it entirely. Therefore, buyers and sellers need to acquire other helpful knowledge through consultations and research whenever possible. For instance, this book does not comment on real estate bids and bidding practices. Furthermore, it does not comment on the serious side effects of real estate taxes nor does it contain vivid accounts of many performances of real estate companies. Also, the wrong calculations of Annual Percentage Rate (APR) and its negative as well as other influences on real estate mortgage financing, are not discussed in the book. However, if the readers of this book adopt and follow the contents carefully, they will achieve results that will help them save thousands of dollars and significantly minimize stress related issues, during their real estate transactions. Finally, I wish good luck to all my readers, buyers, sellers and other professionals in their real estate activities.
Affiliated Disciplines
It is significant to know that the mastery of real estate field requires a well informed knowledge to the real estate disciplines. When conducting an important research, it is necessary to examine all related issues which are significant to the works. Unfortunately, many home buyers do not have the essential knowledge in some of the needed fields related to the real estate industry. This is a reason why buyers need all the assistance they can receive, especially, since they must conform to the requirements of owning long-term mortgage loans. This book uncovers relevant facts, which will produce the necessary advice and assistance that can help home buyers and sellers achieve fundamental success. Basic knowledge in other real estate disciplines helps to promote real estate deals. The transactions in the real estate industry include comparisons and negotiations that are treated by other affiliated disciplines. These inter-related disciplines include economics, finance, marketing, elementary law, management and accounting. The diagram below, demonstrates how real estate industry ties together with other connected disciplines.
CHAPTER 2
Real Estate Mortgage Transactions
Mortgage Loan
This book is written to assist people in promoting sales and purchases of homes or houses and to enhance real estate marketability. A typical real estate purchase transactions include buyers, sellers, real estate agents or agencies and financiers. The financiers are the mortgage banks, commercial banks, mortgage brokers and other financial institutions, which are able and willing to engage in real estate mortgage financing. In most cases, realtors represent sellers. Most of the mortgage banks and financial institutions work with mortgage brokers who interview buyers and the borrowers. A mortgage company or broker interviews the clients or initiates the loan requests and completes the loan application forms along with other affiliated documents before sending all documents to a suitable financier. All decisions about loans, other types of funding, denials, approvals and pre-approvals are made by the mortgage financiers that supply the funds. It will be very helpful for realtors, sellers and buyers to have and retain the basic information that will help mortgage brokers to approve loan requests. A lender who approves a purchase loan, collects the monthly mortgage payments.
After a real estate deal is closed, the realtor earns commission, the broker retains the origination fees and the buyer pays the sale proceeds. Moreover, the buyer acquires a new property and the mortgage loan. Sometimes, purchases are fully paid while other times, they are paid in installments for a period of up to thirty years or more. Although, different persons and entities are involved in the real estate industry, this book may be of extra benefit to buyers because they carry the biggest burden in the success or failure of the market. Most of the burden that a buyer receives concerns the monthly payments of the acquired real estate mortgage loans. A real estate purchasing contract is complete after all participants receive their necessary payments. Subsequently, the buyer becomes the borrower and the mortgagee. The binding factor is between the borrower and the lender. Therefore, the borrower, who has received a mortgage payment, the buyer (borrower) and the lender (financier) continue with the payment bonds to them together for about thirty years or more. However, it is good to note that whenever the borrower makes a monthly payment, the lender earns a monetary reward called interest. The home mortgage borrower, if well maintained, receives equity or rewards constantly.
Recommendation
It is highly recommended that a buyer ready to consummate a real estate deal should:
· Acquire the services of a qualified financial professional.
· Hire a professional realtor to assist with the transactions.
· Read and understand the contents of this book before attempting to purchase a real estate or negotiate a mortgage loan.
· Properly evaluate his and her readiness (economically, financially and emotionally) prior to engaging in the purchase of a home, house or any loan.
· It is helpful to understand this book before buying a mortgage loan because the information obtained while reading the book will save the reader a good amount of money.
Further, the acquired information will also, provide buyers and sellers with the necessary tools to deal with multiple real estate issues. Sometimes, a buyer who obtains good credit figures and concerning his or her earning believes that he or she is able and ready to buy and own a home. Unfortunately, it is not quite true because the financial readiness may not be enough or satisfactory because a buyer could be mentally, emotionally, economically and spiritually deciding to purchase a home or another type of property. If the home buyer and other conditions are not adequate, the home or house purchases may be mismanaged. It is the intention of this book to equip buyers with the requisite knowledge they need before during and after they consummated a loan.
Apart from the discussions concerning real estate transactions, this book will deviate briefly to examine the effects of the existing depressed or recessed economy where the purchases of real estate properties are concerned. For instance, in the real estate market, both buyers and sellers are needed to initiate negotiations concerning selling and buying activities. Later, these activities will extend to mortgage lenders, appraisers, title companies and other affiliated persons or entities. It is a fact that the current economy in this country has greatly affects the real estate industry in tragic ways. Also, it is creating some adverse effects toward the transactions. These effects lead to stress, frustration, disappointment, foreclosure, repossession, pressure, homelessness and significant number of real estate buyers who have suffered them. In such condition, the buyers and sellers are forced to wait for the market to improve. The ramifications of forced waiting include anxiety and lack of trust in the real estate industry. Studies show that in any situation of trickled, recessed or depressed economy, the real estate industry is usually one of the first entities to feel the critical impact and the related hardships that follow. Subsequently, the entire market or industry takes a downward swing (Igah, Sr. 1983).
The Real Estate Industry
The importance of real estate industry in our society cannot be overly emphasized. The value of real estate constitutes a significant portion of the national wealth in the United States of America (USA) and the global markets. In every country, substantial people are directly or indirectly engaged in the real estate industry. When the real estate markets flourish, the estate buyers will start seeing good living and mortgage equities.
The high deficit and depressed economy, along with other erupting negative conditions have caused severe damages that include massive unemployment, multiple lay-off s, foreclosures, home repossessions, life-style changes, acute poverty, high homelessness, avoidable deaths, suicides, abnormal frustrations and untold hardships. Essentially, people of all age groups and cultures including singles, couples, children, teenagers, youth, adults, working- classes and retired persons are adversely affected.
Significance and Justification
Below is a short list of the reasons why this book is significance and justice.
1. This book emphasizes the positive and negative relationships in the buying and selling of any real estate property. Nowadays, all people, with the exception of some homeless persons, reside in a home or an apartment building. Accordingly, each person is a potential home or house buyer. Reading and understanding how to apply this book will help a person to save millions of costly mistakes such as real money, time and effort. Undoubtedly, the savings will be beneficial to the real estate industry and the economy of this country.
2. This is a unique book that portrays systematic and contemporary work in the real estate industry. Thereby, developing and maintaining the life of real estate industry.
3. Successful selling and buying of real estate and the increased marketability, produce upward trend where many people are appropriated to become employed.
4. Real estate industry is gigantic and embraces different employment categories. Building supplies are made possible because the industry are endlessly promote to homes/houses for buying and selling activities. People who engage themselves in real estate activities include property purchasers, property buyers, real estate brokers, stock and bond brokers, mortgage brokers, sales representatives, building contractors, property builders, property developers, government licensed or certified financiers, appraisers, surveyors, mortgage lenders, accountants, insurance companies, real estate lawyers, government personnel, building construction and maintenance workers, scientific and technological organizations, research teams and other industries that help sustain the real estate industry in many was. The information in this book will assist real estate buyers, sellers and financiers to consummate their transactions smoothly and successfully.
Real Estate Purchase Contract
A buyer ready to purchase a property, makes an offer and requests to receive a purchase contract. Subsequently, the representative of the seller (in most cases, a trained realtor) will produce a complete property purchase contract. This contract is presented to the buyer for him to read, understood and sign. A real estate agreement is binding and the buyer must read and understand the contents of the documents before signing. The purchaser needs to take note of the agreement requirements such as allowable number of days for financing and closing the deal. If any item on the contract is unrealistic, the purchaser must decline the signing of the document and request an adjustment or more clarification. Next, a buyer takes a well executed purchase contract to a financier (a mortgage broker) and requests for a mortgage loan.
