Historically, one of the main benefits of being a real estate property owner is the investment opportunity that comes with it. You may be pleased to know that the return of investment that comes with becoming a homebuyer and selling real estate is a lot greater than in other investments. Through accelerating appreciation, being a homeowner yields significant capital proceeds through appreciation. However, you may also need to be aware that any appreciation that has accrued may be eroded by the potential of an equally rapid decline in value. As seen yet painfully during the Great Recession, a down-cycle does not eliminate the possibility that the real property may be sold less than the purchase price.

What this article will focus on are the basics of a real estate transaction involving an investment. Specifically, it will include:

  • The real estate investment
  • Real estate professionals involved
  • The need for mortgage loans
  • Risks that must be taken into account
  • The need for reliable legal assistance

A real estate investment is not liquid 

The services of licensed real estate agents and brokers are crucial for both home buyers and sellers. A licensed real estate agent or realtor can send properties from the multiple listing service to a first-time home buyer or seller. However, real estate brokerage is just one of the many negotiations that you need to be involved in. It is still a long, long way before closing documents checking and actual real estate settlement statement. This is especially true if you take into account the investment factor involved. Seeing a property as your dream first home is very different from buying a home as an owner-occupied business property. Keep in mind that the business cannot operate with the property which “houses” it.

You need a real estate professional for every real estate need

Real Estate Transactions and InvestmentsA home buyer looking into a property for sale by an owner or an estate seller selling a new home must work with several real estate professionals. First on the list is a reliable Calabasas real estate attorney. Keep in mind that the home buying process is more than simply making payments (the agreed-upon down payment, monthly mortgage payment, and the interest rate). Remember that any negotiation for a home purchase should be pursuant to federal housing and state law. A legal real estate professional can help with this matter.

Most of the time, owning and buying a house would mean having to borrow money (that must be repaid in countless monthly payments) and make these hefty mortgage payments each month. On top of it, you are also obligated to make real property tax payments and pay your mortgage insurance premium.

There is no guarantee that financing will be available

A real estate transaction involving lenders is never easy, but if the buyer needs a home loan with monthly payment terms, such is unavoidable. An aspiring homeowner must work on borrower requirements to get a mortgage loan. Additionally, one must work with an escrow company or escrow agent. However, many buyers are unaware of the need for an escrow fund and escrow accounts that involve a neutral third party 

A home mortgage company will usually obligate the borrower to go through the escrow process. Because the earnest money deposit to be placed in escrow is held by a third party, such reduces risks associated when one decides to buy a house or a lot. The money (the total amount of the escrow deposit could vary) is held in escrow until conditions are met by both parties involved. An experienced Calabasas real estate lawyer can explain how such can protect the mortgage lender, the borrowers, and all parties that negotiate.

Risks involving real estate investments must be taken into account

Homebuyers who are into buying real estate must be familiar with basic real estate information. Included here are local real estate market conditions that will factor into the purchase and sale of real property. Additionally, contingencies, including the home inspection conducted by a qualified home inspector, appraisal and appraiser fees, and closings all involve certain levels of risks for both a home buyer or seller.

Upon fulfilling obligations with the closing agent and title insurance company, one can proceed with the closing process. Escrowed funds that were deposited are released and may be used for closing costs. First-time homeowners, however, sometimes get too excited and forget to prepare for risks associated with the investment that finally becomes legally theirs. Here, a hands-on Calabasas real estate attorney can explain things in great detail.

It is crucial to contact reliable Calabasas real estate lawyers for legal help

Since there is no 100% guarantee that a real estate property will be resold at a sale price that comes with a significant return of investment, you should always be ready for the possibility of it being sold for a total amount that is less than the original price. Given this lack of guarantee that the real estate property will lead to profit from renting it out to the anticipated amount of appreciation, it is important to get a good local attorney who can make sure you get the most out of your money in every step of the way. He or she can explain funds in escrow and good faith estimate, check down payment and interest rate vis-a-vis the sales price and help you walk through escrow instructions and mortgage company paperwork.

For clarifications on the above or for questions on mortgage escrow payment, closings, or real estate taxes and insurance payments, give us a call. Consult with experienced Calabasas real estate attorneys at Moschetti Law Group for assistance.

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