RealEstate-Elvincom

The real estate contract is the most often used, yet little understood tool in the real estate business. Whether you are a real estate professional or just an amateur, there is no excuse for not knowing and understanding real estate contracts.

A real estate sales contract is a “bilateral” (two-way) agreement. The seller agrees to sell, and the buyer agrees to buy. Compare this with an option – which is a unilateral (one-way) agreement in that the seller is obligated to sell, but the buyer is not obligated to buy – it is in the buyer’s option to do so.

There are some basic requirements that must be present to make a real estate contract valid:

1.Offer & Acceptance – There must be an offer and acceptance. If the offer is not accepted in the time frame and manner set forth by the buyer (offeror), then there is no contract.

2. Mutual Consent – There must be mutual agreement or “meeting of the minds” between the buyer and the seller.

3. In Writing - With few exceptions, a contract for purchase and sale of real estate must be in writing to be enforceable. Thus, if a buyer makes an offer in writing and the seller accepts orally, and then backs out. The buyer may find difficulty to establish legal binding and not be able to claim compensation or specific performance.

4. Identify the parties – The contract must identify the parties. Although not legally required, a contract commonly sets forth full names and identities of the buyer and seller. If one of the parties is a company or corporation, it should so state with company name and company number.

5. Identify the property – The contract must identify the property. Although not required, the legal description should be set forth. A vague description such as “my dream home” may not be specific enough to create a binding contract.

6. Purchase price - The contract must state the purchase price of the property or a reasonably ascertainable figure (e.g., “appraised value as determined by ABC Appraisal Company”).

7. Consideration - A contract must have consideration to be enforceable. Consideration is the benefit, interest, or value that induces a promise. It is the glue that binds a contract. The amount of the consideration is not important, but rather whether there is consideration at all. It is common for a contract to state that “3 % of the purchase price or a specific amount of money and other good and valuable consideration has been paid and received.”

8. Signatures – A contract must be signed to be enforceable. The party signing must be of legal age and sound mind. A notary’s signature or witness is not required. A facsimile signature is usually acceptable, as long as the contract states that facsimile signatures are valid.

Mortgage Loan

Nothing can deflate the joy of buying a new home more than worrying about being turned down for a mortgage loan. Avoid disappointment by sharpening your credentials before you go hunting for a loan. The following steps apply to both spouses if both your incomes are being used to qualify for a loan.

1. Job stability. Lenders look for stability of employment. Two years in the same job or at least the same occupation is considered the minimum. It is usually best not to change employment if you have a home purchase in mind unless it’s going to increase your income. Whatever you do don’t start a new business within two years before applying for a mortgage. As much as everyone else loves an entrepreneur, lenders do not.

The best type of loan for a self employed borrower is what is known as a no income verification loan. The lender will make the loan based on what the borrower states as income. Of course, the income stated must make sense for the type of business in which the borrower is engaged. These loans are more difficult to find among local lenders but they are available so check with several sources. You must have excellent credit to obtain this type of loan.

2. Credit. Lenders judge you on how you have paid back your previous loans. Your credit report will show your lender all of your past and current debt. It will also show if you paid on a timely basis. The best advice is to make all of your credit payments on time. You will be asked to explain any late payments on your credit cards, car payment, or mortgage. Don’t say you forgot. Lenders don’t accept this as a reason to be late. If you presently have a mortgage be sure you don’t make payments after the thirty day grace period. Conventional lenders will not make you a mortgage if you have been delinquent in the past twelve months.

There are lenders who will make loans to people with bad credit, such loans usually come with a high cost. If you have bad credit, tell your lender up front. Seek out lenders who will accept your credit problems. Once you establish good credit you can always refinance and get a lower interest rate. Beware of adjustable rate loans that can cause you problems when they adjust.

3. Don’t buy anything new. If you know you are going to be buying a new home, it is not wise to go out and buy a car or make other major purchases on credit. Your total monthly bills will be added up to see if can afford the home payment. The higher your monthly bills, the lower the amount of mortgage for which you will be qualified. Don’t buy anything even if you are going to pay cash. Lenders like to see money in the bank.

4. Savings. When you start thinking about purchasing a home, all of your efforts should be directed to saving money. The more you put down on the purchase price, the lower your monthly payments. A larger down payment also makes it easier to qualify for a loan. There are also many costs associated with home loans that generally add up to about 5% of the loan amount. The lender is going to want to verify that you have enough money to pay these closing costs in addition to your down payment.

In today’s market there are loans available that have no closing costs if you are willing to pay a higher interest rate. A good idea when money is tight at closing, but it could be more expensive if you live in the home for a long period of time. Don’t get your down payment money from a sock under the mattress. You should be able to show that you saved the money yourself so it is best to keep all of your savings in one account. The lender is going to want to see at least two consecutive months of bank statements verifying your savings. Lenders will typically allow you to receive part of your down payment as a gift. The gift giver will be asked to provide a letter stating that he or she made the gift to you and do not expect repayment.

5. Income. Your income is one of the most important ingredients for qualifying for a home loan since it will be used to determine the amount of mortgage you can afford. Your employer will be asked to verify your employment by completing a written verification form. Alternatively, you can provide a current payroll check stub and two year’s tax returns to prove your income. If you are self employed you will be required to pro?vide a copy of two years tax returns. For qualifying purposes, only the income you show on your tax return will considered.

6. Property. Look for a sound home in a good neighborhood where property values are steady or rising. The home you contract to buy will be appraised. The appraised value should be close to your purchase price. If the appraised value is less than the amount you are paying, consider renegotiating your purchase contract. A low appraisal will mean the lender will use the lesser of the purchase price or appraised value in determining the maximum loan that will be made on the property. Thus you would have to put more money down.

On used homes, a termite inspection and roof inspection may be required by the lender. This protects both you and the lender and typically is nominal in cost. You may be able to negotiate with the seller to pay for these inspections. If repairs are needed, the lender will require that they be completed before you can close on the loan. Such repairs are usually the obligation of the seller, but the terms of your purchase contract will prevail.

7. Pre qualify. Visit a lender who will show you what type of financing is available and the maximum payment you will be able to afford. That will tell you how much home you can afford. Arranging your financing in advance will give you a strong bargaining position with a seller and will help you be realistic in your home hunting.

8. Shop around. Talk to several lenders. Work with someone who you are comfortable with, who has intelligent responses to your questions and does not use high pressure tactics. Look for a lender that has several different types of loans to offer and then ask lots of questions.

9. Educate yourself. Learn as much as you can about mortgage financing and you can save tens of thousands of dollars over your lifetime. Read articles, search the internet, check out books from the library, attend lender seminars for new home buyers or ask your local financial institution for information that may be available.

10. Alternatives. If all attempts to finance your new home fail, ask your Real Estate Agent to identify property where the seller is willing to stretch the financing. Most sellers offering this type of financing are anxious to sell and might not be so fussy about a cloudy credit history and other institutional lender concerns.

Shop-Apartments are small rental units that normally can be office-use or residential-use; strata-titled above retail stores or shops where businesses of stores, restaurants, goods, wares, drugs etc are sold by retail for the convenience of those who live in the building or near-by areas.

What accounts for the primary of Shop-Apartments over other types of real estate investment; especially with little or no money down? The main reasons can be realized in a number of ways:

1.    Cash Flow – is such a vital element of the power of real estate investments to have excess of cash received from rents over cash expenditures. Smaller apartments have an advantage in that, because of demand, they are usually more readily salable that larger units would be. Excellent financing is also often available for these smaller units.

2.    Demand – people always need a place to live, as shelter is one of the basic requirements of existence. At the present times, there may be great opportunities in buying those run-down or foreclosed units. Many of these properties can be purchased at prices and terms where reasonable management can result in a good positive cash flow. One caution is to buy closer to where you stay. It must make economic sense.

3.    Affordability – smaller shop-apartments are always cheap to rent and cheap to buy. With the leverage of using bank’s money, shop-apartments can be extremely affordable as compared to other types of real estate investments; as shown in the real case below.

4.    Business Cycles – the occupancy rate of shop-apartments are normally not affected by business cycles traditionally view as negative. With current financial turmoil and recession, more people are looking for cheap housing. As demand increases, occupancy rates and rents increase.

The only disadvantage I can think of about investing in apartments is the low appreciation in long term. Furthermore, there may be more apartment or low-cost housing to be built when land is scarce. The old apartment might not be favourable when new project with better facilities is launched.

As we are moving into today’s fast changing world of the internet, real estate professionals are often at a loss for where they should start in order to get the most bang for their money. With the real estate market cooling off at the current financial downturn, many people are finding themselves in an awkward situation that the value of their property is less than what they own on the mortgage. Uncertain economic times, changing legislation, the proliferation of new development and lack of time make it more difficult for consumers to use their resources effectively.

Buying property is essentially the biggest financial commitment of our lives. With inventory diminishing daily and multiple offers being extremely common, it is of great importance that we position ourself to have the “Best Chance” to get our offer accepted. We enhance our chance of buying property of our choice by getting pre-approval for the purchase. This takes very little time and is of great value. At this time, identify the price range for which we qualify that fits our lifestyle.

Be prepared to preview a new property quickly. When buying property, time is essence and be sure to always be prepared and ready to be on the go. Homes sell sometimes in hours. Be prepared to make decisions quickly and be accessible to change the terms instantly. It is a must that buyer and agent must have instant communication access. Maintain instant access to each other via office phone, email, fax, handphone or sms. Whether we are buying property for investment or to live in, extreme care should be exercised to ensure our purchasing experience is stress free and risk free. These few buying tips will make us aware of some of the pitfalls and ways to avoid them.

If we intend living in the property that we intend to buy, we must ensure that the said property really suit at our needs. If we have young children or elderly people living with us, we might wish to avoid stairs and prefer a level floor. Do we intend to install a pool in the future? Is the garden too big or too small? Will we need more bedrooms in the near future?

Can we deflate the joy of buying a new home more than worrying about being turned down for a mortgage loan? Avoid disappointment by sharpening our credentials before we go hunting for a loan. The following steps apply to both spouses if both our incomes are being used to qualify for a loan:
1. Job stability – Lenders look for stability of employment. Two years in the same job or at least the same occupation is considered the minimum. It is usually best not to change employment if we have a home purchase in mind unless it’s going to increase our income. Whatever we do, don’t start a new business within two years before applying for a mortgage. As much as everyone else loves an entrepreneur, lenders do not.
2. Credit – Lenders judge on how we have paid back our previous loans. Our credit report will show our lender all of our past and current debt. It will also show if WE paid on a timely basis. The best advice is to make all of our credit payments on time. We will be asked to explain any late payments on our credit cards, car payment, or mortgage. Don’t say we forgot. Lenders don’t accept this as a reason to be late. If we presently have a mortgage, be sure we don’t make payments after the thirty days’ grace period. Conventional lenders will not offer us a mortgage if we have been delinquent in the past twelve months.
3. Don’t buy anything new – If we know we are going to be buying a new home, it is not wise to go out and buy a car or make other major purchases on credit. Our total monthly bills will be added up to see if we can afford the home payment. The higher our monthly bills, the lower the amount of mortgage for which we will be qualified. Don’t buy anything even if we are going to pay cash. Lenders like to see money in the bank.
4. Savings – When we start thinking about purchasing a home, all of our efforts should be directed to saving money. The more we put down on the purchase price, the lower our monthly payments. A larger down payment also makes it easier to qualify for a loan. There are also many costs associated with home loans that generally add up to about 5% of the total loan amount. The lender is going to verify that we have enough money to pay these closing costs in addition to our down payment. In today’s market there are also loans available that have no closing costs if we are willing to pay a higher interest rate or included in the principal amount. A good idea when money is tight at closing, but it could be more expensive if we live in the home for a long period of time. Don’t get our down payment money from a sock under the mattress. We should be able to show that we saved the money ourself so it is best to keep all of our savings in one account. The lender is going to want to see at least two consecutive months of bank statements verifying our savings.
5. Income – Our income is one of the most important ingredients for qualifying for a home loan since it will be used to determine the amount of mortgage we can afford. Our employer will be asked to verify our employment by completing a written verification form. Alternatively, we can provide a current payroll check stub and two year’s tax returns to prove our income. If we are self-employed, we will be required to provide a copy of two years tax returns. For qualifying purposes, only the income we show on our tax return will be considered.
6. Shop around – Talk to several lenders. Work with someone who we are comfortable with, who has intelligent responses to our questions and does not use high pressure tactics. Look for a lender that has several different types of loans to offer and then ask lots of questions.
7. Educate ourself – Learn as much as we can about mortgage financing and we can save tens of  thousands of dollars over our lifetime. Read articles, search the internet, check out books from the library, attend lender seminars for new home buyers or ask our local financial institution for information that may be available.
8. Alternatives – If all attempts to finance our new home fail, ask the Real Estate Agent to identify property where the seller is willing to stretch the financing with no problem on outsourcing for end financing.

Above all, make sure we understand and are comfortable with every aspect of the transaction. The real estate agent or realtor can be an invaluable asset in helping us to make educated decisions on buying property.

Guess what I took the next big turn to get ahead of the rat race, even after my retirement at the age of 60, to open my new estate agency firm – Elvincom Realtor located at No 38-5B, Jalan PJU 1/3A, Sunwaymas Commercial Centre, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia.

I am now the registered Estate Agent, registered with the Board of Valuers, Appraisers and Estate Agents under the purview of the Ministry of Finance, Malaysia. To become such a professional in Malaysia, I have to sit for a two-part real estate examinations offered by the Board of Valuers, Appraisers and Estate Agents, serve a two-year apprenticeship with a registered Real Estate Agent and pass the Test of Professional Competence(TPC) including an Oral Examination before I can be designated as an Estate Agent in Malaysia. As defined under Section 22C of the Valuers, Appraisers and Estate Agents Act 1981, only registered estate agents can practise, carry on business or take up employment as an Estate Agent.

At the age of 61, I am very excited about the move and wish to share with you a brief summary of my career change to enter into this Real Estate Agency Profession.

1)     I started my teaching career in Vocational School, lpoh; Technical Institute, Penang; Polytechnic Ungku Omar, lpoh  from 1970 to 1975.
2)     I worked with Hunter Dougles International Company in Malaysia, Singapore and Hong Kong as Technical Executive in promoting and providing solutions in relation to metal strip ceiling and associated works from May 1975 to October 1977.
3)     I joined BHP Steel Building Products (M) Sdn Bhd (formally known as John Lysaght (M) Sdn Bhd) from Nov 1977 to April 1980 as Senior Technical Executive in promoting Lysaght full range of products to consultants, contractors and building professionals.
4)     I spent 21 years of my working career with Atapan Ace Sdn Bhd from May 1980 to April 2001 and significantly contributed to the business growth of the company with ISO accreditation in  the year 1999.
5)     I came on board Kemuning Group of Companies from 1st May 2001 to 30th April 2003. I was the Managing Director of Kemuning System Sdn Bhd and also as an alternate Director of Kemuning Structure Sdn Bhd which I had assisted to develop the New Proprietary K-Steel Newtruss System  to be endorsed by JKR (Public Work Department) as one of the System Providers for Prefabricated Cold-Formed Steel Roof-Truss System to upgrade and enhance the company business growth and development.
6)     I was offered employment contract with BHP Steel Lysaght (M) Sdn Bhd (having its name now changed to BlueScope Lysaght (M) Sdn Bhd) as Contracts Manager on a yearly fixed-term contract basis effective 16th September, 2003; with major focus on new set-up of Contracts Department to develop and teach an understudy for future candidates, business model for contracting, providing tutorship and guidelines for incumbents to take on positions/responsibilities in Contracts Management.
7)     I opted to be registered as Probationary Estate Agent on a full time basis effective 15th September 2004 to pursue my new career in the profession of estate agency practice.
8)     Upon completion of my real estate examinations, apprenticeship and pass the Test of Professional Competency (TPC) including an oral examination, I was successful to register as an Estate Agent with the Board of Valuers. Appraisers & Estate Agents and further incorporated my firm – Elvincom Realtor on January 2008.

Focus can be a scary word to most people; but it can help us make good and informed decisions. As the saying goes: what the mind can perceive and believe it can achieve. This applies to both the good and the negative in our lives.

“In order for someone to grow, he can’t just take value from the market, he has to provide it as well.” This is the main aim of this blog to share what we see, what we know and what we learn in a combination of information, inspiration and motivation of our real estate needs in this wonderful community….