Author: C21Discovery Guest Blogger

So Your Client Is an Entity

The Importance of the Representative Capacity Signature Disclosure

By Amy Leonhardt
July 2, 2024

Person signing holding a pen and signing a document

Real estate transactions involving trusts require a nuanced understanding of legal procedures, one of which is the Representative Capacity Signature Disclosure (RCSD). This document (used with entities such as LLCs, POAs, or partnerships, but most often with trusts) is important when a trust is involved in a real estate transaction because it confirms the authority of an individual to sign real estate documents legally on behalf of a trust. This validation of entity and signer makes the transaction legally binding for the entity, while relieving the individual signer from any legal obligation. If the seller or buyer is correctly identified in the C.A.R. form by entity name and signer name, the full and correct Trust name is provided on the signature page, and the “Entity Buyer” or “Entity Seller” box is checked, then the RCSD is not needed. However, it is often requested by escrow due to one or more of those requirements not being met. To ensure buyer, seller, agents, their brokers, and escrow are protected, your escrow officer may request the RCSD if there are any questions regarding the signer’s legal authority. 

To complete an RCSD, agents must ensure that the trust documentation is in order. This includes the original trust agreement and any amendments that may have occurred over the years. The most recent version of the Trust is needed in order to complete the RCSD and provide for review to the title company. These documents outline who has authority to act on behalf of the trust. Getting these items at the beginning of a transaction ensures not only that the RCSD will be completed fully and accurately but also that escrow documents will be prepared correctly and quickly, with accurate signature lines. The RCSD should be completed and submitted early in the transaction process. If there are any questions regarding the RCSD completion, check with legal professionals who specialize in trusts and estates. They can provide guidance on the RCSD and ensure all legal requirements are met.

By understanding and correctly utilizing the Representative Capacity Signature Disclosure in your transactions involving trusts, you can provide exceptional service to your clients, ensuring that all legal aspects of the transaction are handled correctly and efficiently.

About the author: Amy Leonhardt is an escrow assistant for Equity Escrow Group, Ltd. in Fullerton, California. For more information on the services provided by Equity Escrow Group please contact them at 714.626.2095 or visit their website www.equityescrowgroup.com

Avoiding Delays in Escrow

By Amy Leonhardt
April 2, 2024

For Sale sign with "In Escrow" sign attached
Photo Courtesy of Canva Pro

Navigating the escrow process efficiently is crucial to ensure a smooth and timely transaction for your client. Delays in escrow can be frustrating for all parties involved and can potentially derail an otherwise-simple sale. To minimize the possibility of delays, keep the following strategies top-of-mind:

Thorough Preparation: 

Before escrow begins, ensure all necessary documents are in order. This includes Preliminary Title Reports, list of transaction details, property inspections, any entity documentation if applicable, and disclosures. Providing escrow with contact information for your client means the earnest money deposit can be sent in quickly and escrow packages can be sent out seamlessly. Anticipating what is needed and having it ready can save valuable time in the transaction.

Effective Communication: 

Keep open lines of communication with all parties, including buyers, sellers, lenders, and escrow officers. Regular updates can prevent misunderstandings and provide opportunities to address any potential issues promptly before they become major headaches. A timeline that outlines key dates, such as inspection periods and loan approval deadlines, can help keep everyone on the same page. If there are any questions during the escrow process, reach out to your escrow officer for clarification or correction.

Understanding Financing: 

Delays often occur due to financing issues. Buyer’s agents should familiarize themselves with the client’s financial situation and the specifics of their loan process. Encourage buyers to get pre-approved by a reliable lender and to understand their loan timeline.

Proactive Problem-Solving: 

Issues such as repairs following an inspection can cause delays. By proactively addressing these issues and quickly providing any addendums to escrow, the transaction moves seamlessly on to the next stage.

Expert Assistance: 

Of course, things don’t always go as planned, and when complex issues arise, don’t hesitate to seek help from experienced professionals like a title officer, tax advisor, or legal expert when needed. Their expertise can be invaluable in navigating complex situations. 

With everyone working toward the same goal–a timely closing and happy clients–keeping these simple strategies in mind will ensure a positive outcome. 

About the author: Amy Leonhardt is an escrow assistant for Equity Escrow Group, Ltd. in Fullerton, California. For more information on the services provided by Equity Escrow Group please contact them at 714.626.2095 or visit their website www.equityescrowgroup.com

Moving The Ball Forward

By Lauren Dunn
February 21, 2024

Photo courtesy of Canva Pro

Working in real estate, agents often times find they’ll wear many hats over the course of a day. Sometimes we’ll be negotiators or managing a small hiccup that’s popped up in a transaction, while other times we’ll be acting as pseudo-therapists when clients are suddenly uneasy, or we’ll don our administrative assistant caps while filing forms.

Recently, I found myself wearing the “voice of reason” hat with a client-turned-friend who needed some education and guidance – both regarding our local area market, as well as what real estate can mean years from now.

We, like our clients, are always juggling many balls and have quite a bit going on in our lives. The main difference between us and them, however, is that buying and selling real estate – something that’s typically the largest transaction in an individual’s life – is something we’re fortunate to do every day and see all sides of. To many others, however, real estate is often laced with trepidation and uncertainty. The number of forms is dizzying, while the mountain of terms and definitions is exhausting; yet this is the time when we agents have an opportunity to do our finest work.

When I think of moving the ball forward, I imagine an NFL game where extra yardage is picked up here and there – sometimes 20 yards at a time, other times maybe just half or one yard. Roughly translated to our world, this means simply taking the next step. More doing, less talking, and focusing on taking any forward motion. 

As a huge believer in the power of real estate and its ability to transform lives, here are ways we can help move the ball forward if the current market has our clients experiencing nervousness and not keeping those goalposts in sight:

Help clients avoid the ostrich syndrome

So many folks want to buy real estate and think they have an idea of what they’re able to purchase, but many never make the call to really confirm a budget or to be thoroughly pre-approved. Ensuring that a connection is made with a reputable, trusted lender is an absolute must before embarking on any of the other house-hunting tasks. For our seller clients who may want to right-size, helping them accurately understand the equity in their home, identifying a property that’s a better fit and then seeing whether they can make the move solely with the equity or in tandem with getting a loan can bring them back to reality and be the very thing that spurs them into action. Bottom line: start talking numbers in a very real sense.    

Encourage clients not to believe everything they hear

We’re fortunate to live in a market that happens to be consistently sought after. The negativity that can often be found in other parts of the county may not paint a picture of what’s happening here in Southern California, so it’s important to control the narrative and get people listening to your local market expertise – not a broad-strokes script saturated with sweeping-generalizations that’s broadcast from the East Coast. Being an expert in our area is a fantastic way to bring clients back from The Dark Side.

Nudge clients to complete smaller tasks which builds trust that naturally leads to bigger tasks

After making that crucial introduction to a lender, connect with your clients and really listen to their hopes and dreams for their first, next, or investment property. Don’t simply ask questions – listen to what they’re saying, and read between the lines if necessary. Preview properties for them, show them how attainable their goals are, and ultimately get them comfortable with looking at properties with you. Continue to paint the picture and show, show, show. You may show 50 or 100 houses before they make an offer or get one accepted, but each one gets you closer to that end goal of your client closing escrow. 

Remind clients to “start where they’re at”

One of the things my brokers often say to agents is to “start where you’re at.” Don’t look at another agent’s production and think you need to be there, too – begin where you’re planted. Same thing goes for clients! A first-time homebuyer may not want to live in a certain city, but if that’s the price point that gets them into the real estate game, it is your duty to highlight the value that investment can hold in a few years’ time, 10 years’ time, and so on. Forecast some equity and show them what they could leverage to buy a second property. Remind them that rarely is one person in one property for the rest of their life, and that getting into a property that’s attainable in the here and now will make the dream home reachable someday. 

When you begin to hear rumblings within your sphere of influence from people who might be curious about real estate, make sure they know you’re a great resource for the facts, for encouragement, and for getting them to their goal. Paint the picture, show them what’s possible, and always move the ball forward. The power of real estate is, in a word, real. 

About the author: Lauren Dunn is a full-time professional Realtor with CENTURY 21 Discovery in Orange County, CA. She is proud to bring her goal-oriented approach and client service skills from a nearly 20-year career in advertising, sports marketing, and media to the world of real estate. You may reach her at LaurenDunn@C21Discovery or by calling 714.519.4669. 

Understanding Frequently Used Terminology in Your Transactions

By Amy Leonhardt
February 2, 2024

New real estate agents may find themselves confronted with terms and acronyms that are unfamiliar. Understanding these terms is crucial for success. Here is a brief guide to some of the most-used terms and acronyms used in real estate and escrow to help newer agents: 

Real estate agent showing paperwork to clients
Photo by MART PRODUCTION on Pexels.com

APN

APN (Assessor’s Parcel Number) is a unique number assigned to a parcel of real estate. It is used to identify property for legal and tax purposes. It is included in the legal description, and will be referenced on the Grant Deed and the preliminary title report.

CMA

CMA (Comparative Market Analysis) helps determine a property’s market value by comparing it to similar properties in the area, and it is an important tool for pricing strategies.

Closing Costs

Closing Costs are the expenses, beyond the property price, that both buyers and sellers incur to complete the transaction in escrow. Some examples of these costs include title insurance, processing fees, appraisal fees, messenger fees, and taxes. Note that buyer and seller closing costs are not equal, so keep in mind that if “Both” is checked on the RPA, closing costs will be split 50/50, instead of each paying their own fees, and buyers typically have more closing costs.

COE

COE (close of escrow) is the date when buyer and seller complete the sale, and ownership officially transfers to the new owner.  This date is determined by what is agreed upon in the contract. Funds have been transferred, principals have fulfilled their contractual obligations, documents have been recorded, and the transaction is complete. 

EMD

EMD (Earnest Money Deposit) is the buyer’s deposit to escrow that shows the seller the offer was made in good faith. The agreed-on contract will determine the amount of the EMD, the form it can come in (check or wire), and the deadline for depositing into escrow. Once escrow is opened, the escrow company will contact the buyers to provide them with wire instructions. Due to increasingly rampant wire fraud, always have your buyer confirm wire instructions directly with a known verified number for your escrow company, and never take instructions via email or from an unsolicited call. This will help protect your client’s funds.

EOI

EOI (Evidence of Insurance) is a document confirming the details of an insurance policy, and will be required by a buyer’s lender. It is typically requested by escrow on behalf of the buyer, and the insurance company provides the proof of insurance.

FHA

FHA (Federal Housing Administration) is a federal agency that insures mortgages with low down-payments. These loans typically have more stringent requirements than conventional loans, and the process may take a bit longer than a conventional loan, though they are a great option for buyers with limited down-payment funds.

NHD

NHD (Natural Hazard Disclosure) Report is a statutory document that discloses potential risks such as earthquakes or floods on a particular piece of property. Buyer and seller will sign to indicate they have received and reviewed the report.

Familiarizing yourself with these terms and dedicating yourself to continuous learning and training will benefit your career in this ever-changing real estate market.

About the author: Amy Leonhardt is an escrow assistant for Equity Escrow Group, Ltd. in Fullerton, California. For more information on the services provided by Equity Escrow Group please contact them at 714.626.2095 or visit their website www.equityescrowgroup.com

Pre-Appraisal Checklist

By Chris Smith
July 24, 2018

There are some things you can do to help ensure the home appraisal process goes smooth. See this checklist provided by the residential appraisal management company PropertyRate.

 

About the Author: Chris Smith is a Senior Loan Officer (NMLS  #253394) with New American Funding. For more information about home financing you may contact him at 714.401.5921. 

Protect Your Clients From Wire Fraud

By Chris Smith
June 28, 2018

Real Estate agents are often the first line of defense in preventing wire fraud. Let your clients know upfront how you communicate. You may want to add a disclaimer on your email signature stating that you never send sensitive financial information via email. Insist they do the same. Here are some additional security measures your clients should take:

 

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About the Author: Chris Smith is a Senior Loan Officer (NMLS  #253394) with New American Funding. For more information about home financing you may contact him at 714.401.5921. 

 

 

 

 

*Reprinted with permission from New American Funding. Licensed by the California Department of Business Oversight under the Residential Mortgage Lending Act – License #4131117 Broker Solutions Inc. dba New American Funding (NMLS #6606) Corporate Office is located at 14511 Myford Road, Suite 100, Tustin, CA 92780. 800.450.2010

 

 

Home Buying: Is this the right time?

By Mariella Reyes
April 19, 2018

I recently had the opportunity to sit down with Ismael Chavez of TEAM ChavezHomes at CENTURY 21 Discovery to discuss if this is the right time to buy a home.

“Clients always ask me if this is a good or bad time to buy their home,” CENTURY 21 Discovery’s Real Estate agent, Ismael Chavez says. Eleven years after, buyers entering the market are still shaken up by 2008’s housing bubble. According to Chavez it’s unlikely another bubble will happen again soon because of the fixed interest rates the circumstances are different.

Photo Credit: Marlon Marshall Parungao

Ismael Chavez began his real estate career in 2007, right before the market crash. “Those were dark times for the real estate industry, but the experience made me a stronger and better REALTOR®. I care about my clients,” he says. Shortly after the housing bubble, he expanded his practice and formed his team of agents operating under the business name of TEAM ChavezHomes at CENTURY 21 Discovery located in Fullerton, CA.

Chavez is optimistic about the future of the industry.

Ismael, what are some tips you can give future home buyers and sellers?

“It’s a seller’s market; we get many buyers but we have a shortage of homes for sale. It’s a great opportunity for those who’ve been thinking of moving and selling their homes. Although there’s never a wrong time to buy, home buyers will have to be competitive and focused during their search!”

We’ve added some extra pointers for both Buyers and Sellers below.  Happy house hunting.

About the Author: Mariella Reyes, is an Independent Content Writer for TEAM ChavezHomes of CENTURY 21 Discovery.  She’s worked as a content writer and producer for brands in the industries of escrow, mobile, fashion, plastic surgery, and beauty, and was the Marketing Coordinator during her time on the Board of Directors for Lean IN Los Angeles in 2016-2017. You can contact her at: mariella.reyesm@gmail.com

 

Organization 101: How Long to Keep Financial Documents

By New American Funding*
January 29, 2018
Originally published January 15, 2018

(Photo courtesy of New American Funding)

For many of us, the new year comes with resolutions, and getting organized tends to be a popular one. Perhaps not so coincidently, January is also Get Organized Month. Whether your document clutter is in digital or paper form, organizing it so you can find what you need more easily saves time and frustration. But how long should you hold on to this information?

Here are some general guidelines for determining what to keep and what to discard.

Tax Records

Generally, the IRS has three years to request an audit, though that is not set in stone. (See the IRS guidelines here. State tax record guidelines vary by state.) For that reason, you may want to keep at least an electronic file of your final returns indefinitely. When it comes to saving and storing the documents supporting your returns, at least seven years is considered a good practice for straightforward returns. This would include W-2 and 1099 forms, as well as charitable donation receipts.

Bank and Credit Card Documents

In general, most ATM and credit card receipts can be thrown away as soon as they are reconciled to your monthly statement. The exceptions would be if they are needed for business or medical reimbursement reasons or to support tax deductions. Assuming you are like most people and can access old account statements online, if needed, or can request a hard copy from your bank or credit card company, keeping monthly statements for longer than a year is typically unnecessary.

Brokerage Statements and Confirmations

Quarterly brokerage statements should be kept until they can be reconciled with an annual summary. Confirmations of purchases of securities, however, need to be held until the security is sold. At that time, both the purchase and sales confirmations will be used to support either a capital gain or loss on your tax return. Once an investment position is closed out and reported to the IRS, it’s considered a best practice to keep the documentation for seven years.

Bills

In general, you can get rid of a bill once your payment has cleared. However, if you can use it to support a deduction, such as utility bills for a home office, you’ll want to hold on to it. Invoices related to larger purchases, such as a car or appliance, should be retained for as long as you own the item in case you need to file an insurance claim or your proof of purchase is required for a repair covered under a warranty.

Mortgages and Loans

Any mortgage or loan (such as student, auto, or personal) documentation should be kept at least until the loan is paid off and you’ve verified it has been updated on your credit report. After that, you may want to keep the actual document releasing you from the obligation permanently in case proof is needed that it was repaid in full.

The Essentials

There are some documents that should be safely filed away indefinitely. These include birth certificates, Social Security cards, marriage licenses, life insurance policies, legal filings, and current wills. Additionally, you may want to share copies of these important documents with the person who has your power of attorney or with your executor.

Protecting Your Information

Whether the documents you’re holding on to are digital or physical, ensure their safety. For physical documents, this means having a designated place, such as a fireproof lockbox or safe deposit box, for storage. Digital files should be backed up regularly, and it may be advisable to copy important, long-term files onto an external drive and store it with physical files.

Keeping your financial and personal documents organized and periodically purging and shredding or permanently erasing those you no longer need not only helps reduce the clutter—paper and electronic—it also can also remind you how far you’ve come financially and inspire you in setting future goals.

*Article reprinted with permission from New American Funding. Licensed by the California Department of Business Oversight under the Residential Mortgage Lending Act – License #4131117 Broker Solutions Inc. dba New American Funding (NMLS #6606) Corporate Office is located at 14511 Myford Road, Suite 100, Tustin, CA 92780. 800.450.2010

Prequalified or Preapproved: Which Is Right For You?

By Nicole Johnson of New American Funding*
September 13, 2017
Originally published on September 12, 2017

(Photo courtesy of New American Funding)

This is it. You’re ready to make the move into homeownership. From all the online searching you’ve done, you know you need to get “pre-something-ed” to prove you are a serious buyer. However, which is it: prequalified or preapproved? Both sound good, but they serve different purposes.

Getting Prequalified

When you ask a Loan Officer to perform a prequalification, you can do it online, by phone, or in person. They’ll ask you to share information, often verbally, on your credit, your income; assets (savings, investments, retirement accounts the amount of equity you have in any real estate you currently own); and the amount of debt you owe.

It’s a conversation that helps establish some financial parameters before you start looking at and making offers on homes by helping you answer two key questions:

  • What price range should I be looking in when I start my search?
  • Am I ready to do this, or do I need to save more or pay down more debt?

While the process is useful, especially for first time homebuyers, it isn’t rigorous enough to distinguish you from the other attendees at an open house or when you request a showing. The reason is that the letter is based off something akin to a “best guess” by the Loan Officer, it’s not reviewed by an Underwriter, and doesn’t address the question that matters most to sellers, Real Estate Agents, and to you: Can they/we expect to be approved for the type of mortgage needed to buy this home?  To answer that, you need to be preapproved.

Preapprovals Open More Doors

The preapproval process is like a test drive before you submit your application for a mortgage. The Loan Officer and an Underwriter will verify the facts and figures you discuss, along with your credit history. This process can also help pinpoint things you might want to improve—or errors that you’ll want to correct—before entering the formal application review process. Loan Officers will also begin looking for mortgage programs that might apply to your financial situation. The preapproval process is more rigorous than a prequalification and because it is fully underwritten, helps ensure your home buying process with go more smoothly.

In addition to ordering your credit report, Loan Officers may ask for copies of:

  • Last year’s W-2s.
  • Current pay stubs.
  • Brokerage and other savings account statements.
  • Your monthly expenses.
  • A current mortgage statement and homeowner’s policy (if applicable).

Once you are preapproved, you’ll receive a letter to share with Real Estate Agents and sellers. After you have an offer accepted on a property, you will still need to officially apply for a mortgage. That review process will involve a deeper dive into the information you’ve already provided, as well as into the specifics of the property itself. Fortunately, having a preapproval also means faster service and turn times to get you into your home sooner, so the official mortgage application is likely to be easier than with just a prequalification.

Why Bother Getting Prequalified?

The prequalification process takes very little time or effort on your part. Any cost is typically limited to that of ordering a credit report. When you already have an idea of the area where you want to look and what type of home you can afford, skipping the prequalification step can make sense. Its best use is as a preliminary step for those who need a starting point.

By comparison, for most buyers, a preapproval is a step they shouldn’t skip. Having a letter from a lender that states you are preapproved can be especially helpful in neighborhoods where the existing home inventory is tight…and when the home you are looking at is perfect. Being preapproved makes it easier for the seller to accept your offer over that of a buyer that hasn’t taken this extra step.

*Article reprinted with permission from New American Funding. Licensed by the California Department of Business Oversight under the Residential Mortgage Lending Act – License #4131117 Broker Solutions Inc. dba New American Funding (NMLS #6606) Corporate Office is located at 14511 Myford Road, Suite 100, Tustin, CA 92780. 800.450.2010

LinkedIn Pro Tips

By Guest Blogger
August 13, 2017
*This was originally published on the official blog of Century 21® on August 11, 2017

As the real estate industry continues to further embrace social media and technology in general, LinkedIn is quickly becoming one of the most valuable digital tools in an agent’s arsenal. LinkedIn is built for networking, and luckily for us, that’s one of the things we, as agents, do best. Here are a few “pro tips” that will help you become a LinkedIn expert in no time.

Choose the right photos.

When you are choosing a profile photo or an image to post with your content, make sure it is clear, professional, and consistent with your brand and your business.

Optimize your bio for real estate.

Once you upload your professional profile picture, it’s time to tackle your bio. Make sure this section lets prospects know who you (a real estate professional) are and what you will be sharing on LinkedIn. The bio is also a great place to let your personality shine through the screen.

Include your awards and accolades.

Don’t be afraid to exercise your bragging rights. In fact, LinkedIn has an entire profile section devoted to accomplishments. This section is where you share your awards, your brokerage’s awards, certifications, and courses.

Use media files efficiently.

When editing your profile, you can add media files as part of your page. These media files show up as actionable thumbnails which are great for displaying assets like your website. For the most clicks, put these files right below your summary section.

Publish content to generate leads.

One of the most important pieces of your LinkedIn profile is the content that you are sharing on it. Instead of going too heavy on listings, try to share articles that offer valuable real estate tips and advice from you or another reputable source.

Build your network.

Start by connecting with your network of realtors and brokers, then connect with their connections and so on. Your email contact list is also a great place to establish LinkedIn connections. If you would like to identify some more quality connections, use LinkedIn’s “Advanced Search” feature. It allows you to specify keywords and the location of where you would like to search for connections.

Implement these tips and techniques to establish connections and generate leads for your business through LinkedIn!

*Article reprinted with permission of Century 21 Real Estate LLC.