The purpose of this section is to acquaint investors with what they can gain from experts in their community. The section goal is to help investors begin their own quest to become an expert in their comfort zone. After introducing some key terms, the section will explain five aspects of working with brokers and agents that you need to understand, including how to use brokerage methods to your advantage, what investors need from their broker or salesperson. how to interview brokers and salespeople, how to get maximum benefits from a real estate agent, and where brokers and agents tend to work against your best interests.
In this section, the following terms related to becoming an expert in your comfort zone are defined and explained:
• Deed search
• Short sale
• Exclusive listing
. Exclusive right of sale
• Licensed broker
• Market analysis
• Multiple Listing Service (MIS)
. Open listing
Knowing and understanding these terms and issues related to them will help you to learn and apply the concepts presented in this section.
A deed search is a search of property records. These records contain much information that is helpful to buyers and sellers alike. Brokers who have computer access to the county property records can easily access this information and can provide this data to prospective buyers or sellers. The data contained in property records may vary from place to place, but the usual information available should include the following:
. Legal description: A typical legal description would be ‘Lot 10 of Block 5 of Royal Hills Subdivision, Unit A, as recorded in Plat content (PB) 22. page 108 of Winston County Records, North Dakota.” This legal description follows the usual lot and block format of recorded (or unrecorded) subdivisions.
• Street address: The actual street address of the property. as well as the address of the owner, if it is different.
. Owner’s name: The name of the person or entity registered as the legal holder of title to the subject property. This can be a person. a corporation, or another form of legal entity. When a name is followed by the letters TR. such as “Paula Robins, TR, this indicates that the properly is held by Paula Robins as trustee for someone else. Other forms of ownership may also be shown, and include JTROS. which is short for “joint tenants with rights of survivorship.” This is typically a husband and wife relationship, although it is not limited to married people. it means that each party listed as JTROS has ownership rights to the entire property and automatically gains the rights of a deceased party. Another common form of holding title is with an LLC. or limited liability corporation. Any form of title may have slightly different ramifications depending on state laws, which vary. Foreign forms of title likewise can vary even though the format or name appears the same as that used in the United States. Because of the importance of how title is held it is a good idea to make sure to discuss the method in which you take and hold title with your lawyer prior to the closing. Question the different methods you can use and what, if any. positive or negative impact the form used has toward the attainment of your investment goals.
. Owner’s phone number: This is not always available, but the owner’s phone number can be a very important part of the information when it is provided. It is possible that the owner is a corporation that may not have a published phone number.
. Dale the owner acquired the property: Generally, the deed search will show the date the current owner acquired the property. If the property was vacant when it was purchased and the owner built on it. the deed search should indicate the improvements made and the (late of those improvements.
. Price owner paid: There are several different methods by which property records report the price last paid. In some cases, this is done by showing the deed transfer stamps that were affixed to a deed when it was recorded. This often occurs when local or state authorities require that a lax, in the form of deed stamps, be paid on a sale. To translate the amount of the stamps into a price paid. one would have to know the formula for such deed stamps. A call to the county clerk in charge of property records would be the quickest way to ascertain the formula. When Stamps are required on the deed this is a form of a sales tax and is calculated as a percentage of the purchase price. It may be possible. therefore, for the seller or the buyer to increase the amount of the stamps to show a greater amount than the actual sale price. The only benefit this could have would be to hide the actual amount paid if the seller’s intention was to flip the property to another buyer as quickly as possible.
• Square footage or front footage of the property: The total square footage of both the property and the improvements are frequently part of the property records. This data is used by the tax assessor’s office in determining the tax assessment of the property. Commercial and other unique properties may be listed with front footage, the dimension that the property fronts on a specific road, waterway, or other important boundary.
. Property tax data: The most recent ad valorem tax amount would be the usual information provided, as well as the most recent tax assessment value. Property taxes can vary greatly, and a higher sale price does not necessarily mean a higher assessed value. This occurs for many reasons such as different tax zones or changes in the millage (rate charged on tile assessed value) among cities or unincorporated areas within the county or different counties. Tax data can become a very important factor in choosing between two nearly adjoining properties that front on the same highway. for example. but are in different tax zones. In areas where there are restrictions to the amount a taxing authority can increase the assessed value, the amount of taxes may not reflect the market value of a property. A review of the complete assessment should have the full information that shows the assessed value prior to calculation of the discounted or reduced value.
Homestead laws, which govern a property owner’s personal residence, are laws that offer some reduction in the tax that owner is obliged to pay. These may have different levels of deduction based on whether or not the property owner exceeds a certain age or is handicapped in varying ways. widowed, or blind.
. Previous owner’s name: When the current owner cannot easily be reached, it may be possible to contact the present owner through the previous owner.