Photo Tips For Real Estate

Photo Tips For Real Estate

Homestead Title Company provides a unique touch at closings table, showing slide-shows of the homes being sold. We see some beautiful photos. A quick survey of the MLS and FSBO sites, however, will show some dismal listing photos.

As an avid, amateur photographer, I am sometimes dismayed at the quality listing photos. Realtors and FSBO sellers often post some terrible photos and do themselves and their hopes of selling a disservice. The following tips are compiled from great Realtors, some great photographers we’ve worked with, and materials listed below.

1. Understand the photo’s purpose: The purpose of a real estate photo is to sell real estate. Buyer’s viewing the picture should be drawn in and want to see more. Focus on parts of the property that will sell and do not photograph parts of the property that are less desirable.
   
2. Simplify! Simplify your photos by removing everything from the picture that distracts from your purpose of making the home look attractive. Particularly avoid including chair backs, door frames, pets, people, toilets, and clutter in photos. The photographer should keep an eye out for things that can be done to improve the photo. Sweep floors and patios and remove clutter. If you use a stager or professional cleaner, try to take photos immediately after they complete their work.
   
3. Use a wide-angle lens to shoot interiors: If possible, use at least a 24mm equivalent lens – anything higher than 28mm is not wide enough. Few off-the-shelf or point-and-shoot digital cameras come with lenses that are wide enough to truly, effectively shoot interiors. Consider hiring a professional or investing in a digital SLR camera with a good wide-angle lens
   
4. Shoot Bright Interiors: Bright interiors are more attractive to buyers than dark moody ones. Use a flash, interior lights, and window lighting to brighten the photos.
5. Don’t let bright windows distract:
   Bright is better.  But, windows can be hundreds of times brighter than other parts of interiors, causing them to appear completely white or “burned-out.”  Avoid this by using a flash, shooting at twilight when the light level outside is near the inside light level or using photo-editing techniques to darken the windows.
   
6. More is better. Home buyers want to see more than just the front of the house. Buyers also want to get a look at the living room, kitchen, dining room, family room, master bedroom/bathroom and the backyard. For condos, consider shots of attractive common elements.
   
7. Change With The Weather. Out-dated photos send the message that this is an out-dated listing. Don’t include snow pictures in spring and summer, or summer pictures in winter. Also, be aware of the mood of the scene. A gray, cloudy day offers great lighting conditions, but may convey gloom and despair in outdoor photos. New fallen snow can be beautiful (and difficult to photograph) but will obviously convey a chilly feeling. Include warm interior photos along side such pictures (fireplace or a bright room with warm colors).
   
8. Go Pro. Professionals are surprisingly affordable and should provide much higher quality, sharper, properly lit images. They will often also provide other services, including virtual tours and web-ready photos).
   
9. Invest In Good Equipment:
   If you insist on doing it yourself, invest in good equipment. Professionals use SLR cameras (single lens reflex camera with interchangeable lenses), a tripod, and an external flash unit. This equipment is expensive, but worth the investment. Consider that a Cannon or Nikon DSLR with a wide angle lens, a tripod and flash will cost under $1,000. Paying a professional for 10 listings will likely cost more. In other words, you could pay for your investment in less than a year.
   
   
10. Consider Leveraging Your Talents:
    If you have good photography equipment, a little talent, and time to prospect, offer your services to FSBO Sellers. Take a look at FSBOMADISON.COM for an example of hundreds if not thousands of horrible real estate photos. Offering free photo services allows you to spend a lot of time with prospects while selling your services and building incredible good will.
    

     

Good Photography Resources:

 

The Digital Photography Book, By Scott Kelby

Excellent, easy to read book with outstanding and understandable advice for amateurs.

The Ditigal SLR Book, by Jon Canfield

Good book with good information for all levels of experience

http://www.bhphotovideo.com

Best, low-cost outlet for all things photography

http://photographyforrealestate.net

Photography resource for Realtors and the source for much of this publications

http://www.all-things-photography.com

Resource for professional photographers, but may have some helpful links and ideas

http://www.squidoo.com 

Good Educational content posted by blogger/readers

The Camera Company

Excellent, local (Madison, WI) source of equipment and expertise.

 

Finally, if you really want to see some AWFUL pictures, check out:
https://www.facebook.com/BadMLSPhotos

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Social Security Number Information Breach

State of Wisconsin Accidentally Releases Social Security Numbers

Many Wisconsin residents who sold their homes last year are receiving ominous looking letters from the Wisconsin Department of Revenue (DOR). The letters warn that the DOR is “taking precautions to protect confidential information pertaining to your 2011 real estate sale.” Specifically, the state inadvertently included social security numbers in sales data that is routinely posted on their website. This data is intended for use by appraisers and Realtors to track property sales and values. The information remained on the site from April 5 through July 23, 2012 and only related to 2011 real estate sales.

The data was included in an embedded file (it was not readily apparent or readable) and was only downloaded 138 times. The State insists that there is no sign that criminals accessed the information. “We have a responsibility to protect the sellers who had their personal information included in the report, and we have reached out to the real estate and appraiser organizations to contact their members to destroy the file. We know the individuals who downloaded this file are using it for their own business purposes and have no malicious intent, yet we will be offering free credit monitoring for a year for the individuals who may have been impacted by this situation,” said Secretary Richard G. Chandler.

The DOR has been mailing letters to sellers that may have been impacted and offering them one year of free credit monitoring. Sellers can also contact the DOR directly at 888-947-3452 or realestate@wisconsin.gov.

For more information, see:

http://www.revenue.wi.gov/news/20120724_01.pdf

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2011 December Home Sales Report – Wisconsin REALTORS® Association

2011 December Home Sales Report – Wisconsin REALTORS® Association.

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Good Deeds, Bad Deeds

A deed is the legal document that transfers ownership rights (called “Title”) from one owner to the next. There are many different kinds of deeds in Wisconsin, and the type of deed used has important legal ramifications. A clear understanding of the different kinds of deeds also illuminates why title insurance is so critical.

What Deeds Do

A deed transfers an interest in property from one party to another. In addition, a deed may contain other important language that can affect the new owner, including among others, warranties and reservation of rights.

Warranties

A deed may contain certain warranties or promises. Warranties are the Seller’s promise to the Buyer regarding the title interest that the buyer will receive. The standard Warranty Deed contains the following warranty:

Grantor warrants that the title to the Property is good, indefeasible in fee simple and free and clear of encumbrances…

Thus, a Warranty Deed offers a legal promise that the buyer will receive good title. By contrast, a Quit Claim Deed contains no warranties at all. Other deeds may have limited warranties.

Reservation of Rights

Deeds may also contain reservations of rights. For instance, a deed may reserve interest or rights in the seller or grantor, such as a life estate. A deed might also contain provisions for easements or other restrictions. In other words, deeds may contain limitations on the rights the new owner will receive.

Various Types of Deeds

There are many different types of deeds, including Warranty Deeds, Quit Claim Deeds, Trustees Deeds, Sheriff’s Deeds, and Personal Representative Deeds. The major difference between each kind of deed is the level of warranties provided.

Type of Deed	When Used	Warranties
Warranty Deed	In most standard sales.	Warrants good, indefeasible title in fees simple, free and clear of encumbrances. This is the strongest warranty and generally gives the new owner the right to seek redress or damages from the seller in the event of most title problems.
Quit Claim Deed	Many inter-family transaction, between neighbors, divorce	Contains no warranties at all. A seller conveys, and the buyer receives, whatever interest the seller has in the property, even if that interest is nothing at all.
Sheriff’s Deed	Sale at the end of Foreclosure	Like a Quit Claim deed, there are no warranties. The Buyer gets whatever interest the sheriff was able to convey (which could be nothing at all).
Personal Representative’s Deed	Used to transfer property rights from a deceased person’s estate. Involves Probate Court.	Like a Quit Claim deed, there are no warranties. Generally, the Personal Representative is unwilling to warrant or promise anything relating to property that he/she has never personally owned.
Special Warranty Deed	REO (Bank Owned) Sale	Provides very limited warranties. Generally only warrants that the Bank had title sufficient to sell the property.

 

Title Insurance and Deeds

A title insurance policy insures that the new owner will receive good, indefeasible title, free and clear of encumbrances other than exceptions noted in the policy. You may notice that this is almost exactly what a seller Warrants in a warranty deed. Title insurance can be viewed as an insurance policy in the event that a seller breaches a warranty and is unable to pay. And, after all, how many sellers could come up with the kind of money needed to pay for a breach of a warranty?

But what if the seller gave no warranties at all? What if the deed is a Quit Claim Deed, a Sheriff’s Deed, or a Personal Representative’s deed. Then title insurance becomes even more critical. The Title policy would be the buyer’s only recourse in the event of a title defect.

Title Insurance policies always protect buyers against certain unforeseen title problems. This is often added protection above and beyond the buyer’s right to seek redress from the seller. Whenever the buyer has no right to seek redress from the seller – when there are no warranties – it becomes imperative that the buyer receive a title insurance policy.

Giving Legal Advice

This information is intended to serve as a warning to Realtors and other non-attorneys to steer clear of giving legal advice. It is important to understand the characteristics and limitations of each kind of deed. It is even more important to leave the legal advice to attorneys. If a question or issue arises involving which type of deed is appropriate, always consult an attorney.

This information was provided by Attorney Peter Zarov. The information provided is not to be construed or used as legal advice and may not be accurate outside of Wisconsin.

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Tax Deadline Extended… sort of

Congress Extends the Deadline to CLOSE

Last year, Congress passed a tax credit for first time homebuyers and many “long-time” homebuyers. This credit provided for two deadlines:

• Receive a binding offer to purchase on or before April 30, 2010
  
• Close the sale on or before June 30, 2010.
  

Lenders, title companies, and real estate professionals worked feverishly to close transactions before that June 30^th deadline. All the while congress was working (less feverishly, we are sure) to pass an extension of the bill.

Hours before it was set to expire, the Senate finally approved an extension to the June 30 closing deadline for the homebuyer tax credit, The move will give buyers who signed a purchase agreement by April 30 more time to close and still receive the tax credit of up to $8,000. Once signed by the President, the new deadline will be Sept. 30, 2010.

This extension will benefit those home-buyers who’s deals stalled or financing ran into trouble.  Many homebuyers could not close on short-sales or other distressed properties because of delays in lender approval.  The extension will be a welcome relief to those buyers.

Buyers, Realtors, and other professionals should be aware that this extension only affects home buyers who are in a binding contract that was signed before May 2010. It will not benefit those potential homebuyers who are still shopping for a home.
Interest Rates at Historic Lows

Nevertheless, today’s unprecedented interest rates may amount to a savings almost equal to the tax credit. Indeed, in January, a home-buyer might have locked in on a 30 Year Mortgage at 5.4%, a wonderfully low rate by historical standards. Today, that same 30 Year Mortgage might be at 4.6%. On a $200,000 mortgage, this amounts to a monthly savings of about $97.75 or $4,600 in just four years. While the tax credit might not be available for those still shopping for a home, the savings are still there.

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Buying An REO or Sheriff’s Sale Home – Why You Need Title Insurance

Foreclosures continue to rise in 2010, and with them, we continue to see more REO and Sheriff’s Sales. A sheriff’s sale is the judicial auction at the end of the foreclosure process. If there are no bidders, the bank retakes the property and sells it from its “Real Estate Owned” Department, or REO for short.

Both of these sales occur after a foreclosure, a judicial proceeding designed to end all ownership rights in former owners. This raises the question:

Do buyers of these properties really need title insurance?

The Answer is a resounding YES!

A Sheriff’s sale is designed to “strip” all interests and liens from the property and sell it free and clear to a new buyer. But, that does not always happen. Lien holders, like mortgages and judgments, that are not properly named or served in the foreclosure proceedings may retain an interest in the property. Taxes likely will remain due against the property. And, certain federal liens can be enforced months after the sale.

The Sheriff’s deed provides no warranties. This means that any title problems are solely the buyer’s responsibility. While title insurance will not entirely take the place of a warranty, it provides a level of protection and insurance in the event of a title claim.

Similarly, a Bank generally will transfer the property by “Special Warranty Deed” or “Quit Claim Deed.” These deeds also lack the full warranties of an ordinary deed. The warranty is the seller’s promise of good title.  Without a full warrenty, buyers will not be able to go after the seller for most title problems.

Thus, the need for title insurance.  A title insurance policy can protect buyers from liens such as past mortgages, judgments, taxes, or construction liens that might attach to the property.

Buying a property out of foreclosure without title insurance – whether at Sheriff’s sale or through REO – is a risky proposition. The cost of an owner’s policy of title insurance is a small price to pay to substantially minimize the risk.

Title insurance, however, is not the perfect solution.  It won’t eliminate all risks.  Title policies usually include certain “exceptions” or “exclusions” from coverage. The policy may not cover for some title risks such as adverse possession, boundary line disputes, construction liens, or matters not shown in the public record (among others). A full warranty deed would be the only protection from all title claims. But, Banks and Sheriff Sales don’t generally offer full, warranty deeds.

The trade-off when buying an REO or Sheriff’s sale is a great price in exchange for a little risk… unless you don’t bother with title insurance, in which case you’ll get a great price with a whole lot of risk.

This discussion is not intended as legal advice and should not be used outside of Wisconsin.  Buyers of REO or Sheriff sale properties are urged to seek the advice of a qualified attorney.

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HAFA Explained – The New Federal Short Sale Program

Home Affordable Foreclosure Alternatives Program (known as HAFA) went into effect on April 5, 2010. HAFA allows owners to participate in a “short sale” with standardized procedures and expedited timelines. Short sales are traditionally the hardest and longest transactions to complete and involve dozens of hours of phone calls and paperwork and a very high level of expertise. HAFA, it is hoped, will streamline this process. It is important to note, however, that HAFA does not replace the traditional short sale. Rather, it is a stream-lined short sale process that applies to specific owners who have mortgages with specific, participating lenders.

HAFA Is Not For Everyone

HAFA is not a mandated program that all lenders must follow. Nor does it apply to all distressed home owners. HAFA only applies to lenders that voluntarily participate in the HAMP Mortgage Modification Program. The good news is that this includes most major, national lenders, such as: Citi, Bank of America, Wells Fargo, GMAC Mortgage, Chase, Litton, and many others. The bad news is that the program does not apply to Fannie Mae or Freddie Mac loans, which account for a huge percentage of home loans. Nor does it apply to most smaller, local lenders.

In addition, the program does not apply to the following:

• Loans originated after January 2009,
• Loans with a balance over $729,750,
• Property that is not the seller’s principal residence,
• Loans where the total monthly mortgage payment does not exceed 31% of the seller’s gross income.

In other words, HAFA may make a difference for some distressed home owners. But, it may not even apply for a large group of owners and their lenders. In that case, the traditional short sale process may still be a viable option.

How It Works

HAFA is a short sale program designed to work with the Federal home loan modification program called HAMP. The HAMP program is intended to allow distressed homeowners to stay in their homes by using mortgage modifications that lower their monthly payment. The Federal government recognized that many (if not most) homeowners either did not qualify for HAMP or could not even pay the lowered mortgage payment. HAFA is intended to offer these home owners an option to sell their home through a streamlined short sale process.
Traditional Short Sale

In a traditional short sale, the home owner needs to request a short sale from the lender. The process, in a nutshell, goes something like this:

1. Sellers and/or Realtor contact lender and initiate discussions about short sale.
2. Sellers collect reams of documents to prove to the lender that they cannot pay the mortgage.
3. The Realtor lists the property and tries to find a buyer, having no idea how much the lender will demand or what purchase price will be enough for a short sale.
4. Once a buyer has signed an offer to purchase, the seller submits a “short sale package” to the bank. The package contains all financial information and documentation showing the seller is unable to pay and the offer to purchase.
5. The bank often (usually) requests additional documents and follow up documents and it can take many efforts, phone calls and faxes to finally confirm that the bank has what it needs.
6. The Seller, Realtor, and perhaps attorney spend weeks or months negotiating with the bank over the terms of the short sale, including the purchase price, what closing costs and commissions will or will not be paid, how much money the seller might need to contribute at closing, and whether the bank will forgive the debt or demand a deficiency after closing.
7. The Bank finally approves the short sale based on the purchase price, offer to purchase, and any amendments that needed to be negotiated to get bank approval;
8. The sale finally closes.

This process can take months, and in some cases more than a year. Every lender has slightly different requirements and they each handle transactions differently. Most short sales require dozens upon dozens of long phone calls and an unbelievable level of persistence, patience, and hard work. And, Sellers and Realtors must repeat this process for every second mortgage. Up Until the moment of closing, the seller may not know if the lender will demand a deficiency. If the lender does demand a deficiency, the Seller will still owe the bank after closing.

HAFA Short Sale Process

HAFA is intended to streamline and standardize the procedures for short sales. The HAFA process goes something like this:

1. Seller applies for mortgage modification through HAMP program and is either denied or misses payments;
2. The lender must proactively notify the Seller about the option of a HAFA short sale (or the seller can ask);
3. The lender sends a Short Sale Agreement (SSA) and a blank document called a Request for Approval of Short Sale (RASS);
4. The Seller has 14 days to sign the SSA and return it to the lender along with the Realtor’s listing agreement and a title search showing any other mortgages or liens;
5. The Lender will inform the Seller (even before any buyer submits an offer) what it will take to get short sale approval – either a purchase price or the amount of proceeds needed
6. Once a buyer has signed an offer to purchase, the Seller and Realtor have 3 days to fill out and submit the Request for Approval of Short Sale (RASS) to the lender.
7. The lender has 10 days to accept or deny the RASS;
8. Upon acceptance of the RASS, the Seller proceeds to closing.

The fact that we were able to summarize both processes into 8 steps does not mean that HAFA will be just like an ordinary short sale. Step one will require the seller to submit much of the same documents as a traditional short sale. Indeed, a Mortgage Modification also requires financial disclosures and reams of documentation. But, once this step is done, the rest of the process is much smoother, much faster, and standardized.

Differences Between HAFA and Traditional Short Sales

HAFA improves the short sale process in a number of important ways. But it also comes with some trade-offs. The following chart highlights the differences between HAFA and traditional short sales:

Traditional Short Sale	HAFA
The home owner generally does not make mortgage payments up to the date of closing. They live “rent free” during the short sale process.	Under HAFA, the owner must make mortgage payments up to 31% of their income. Failure to pay the mortgage will disqualify the owner from participating in HAFA.
Lenders can demand a deficiency for the amount of the short-fall. In other words, the debt is not forgiven after closing.	First-Mortgage lenders must waive the deficiency and must negotiate with second-mortgage lenders to waive their deficiency as well.
The Seller could receive no funds at closing.	Sellers can receive “cash incentives” at closing for up to $3,000.
Lenders generally budget up to $3,000 to pay second mortgage holders.	Lenders are given a government incentive of up to $6,000 to pay to second mortgage holders.
The property could be sold by a Realtor or For Sale By Owner (FSBO)	Property must be listed with a Realtor.
Lenders can take as long as they wanted to approve or deny the short sale	HAFA imposes strict and short time-lines on participating lenders
Lenders will not begin to “negotiate” a short sale or even initiate the process until a buyer has signed an offer to purchase	Lenders must start the process at the time or even before the property is listed with a Realtor.
Lender does not give short sale approval until days before the closing.	Lender must approve the short sale, including the amount they will receive within 10 days of receiving the accepted offer.

 

These differences are important to understand. More importantly, it is critical to understand that HAFA
does not replace the traditional short sale. It is an additional tool that applies to certain lenders and certain home owners.

Homestead Title is always available to answer questions and help you with your short sale closings. Look for additional posts in the coming days and weeks.

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Life Without Title Insurance

“Why do I need title insurance?”   This is one of the most common questions we receive.  A recent lawsuit by Bank of America may provide some insight.

In the height of the real estate boom, lenders loosened standards and sometimes recklessly approved loans.  Some even approved “liar loans” or “stated income loans” — loans in which the only real documentation to support the loan was the borrower’s good word (or sometimes not so good word).  As it turns out, some title companies were also loosening standards in an effort to win businsess and streamline practices.  One such practice was replacing true “title insurance” with something called a “lien protection plan.” 

A traditional title policy generally requires a title search to discover all liens, rights, and interests in the property.  Then, at closing, the parties can assure that all past liens are paid and no liens remain against the property.  Under the lien protection plans, by contrast, no title search was ever conducted.  Rather, the title company relied upon credit reports and promises and statements (affidavits) of the borrowers that they had no liens.  As it turns out, large numbers of these borrowers did in fact have liens and title problems.  

Bank of America is suing First American Corp. for thousands of unpaid title claims based on this lien protection program called QuickClose.  See LA Times Article, BofA Seeks To Pin Losses on Title Insurer.  The lawsuit is in its early stages and it remains to be seen whether the claims will stand up in court.  Regardless, the moral of the story is clear:  don’t discount the services and value of title insurance done right. 

Homestead Title has, of course, always conducted title searches for all policies.  When we issue title commitments before closing, we make a point of highlighting any potentially problematic items so that none of the parties are unpleasantly surprised at closing…. or worse, unpleasantly surprised after closings.

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