Team LAKE Real Estate

Understanding Real Estate


Understanding Utah Real Estate:

 Agency

Every office must have a broker who is responsible for sales agents and the transactions. A licensed sales agent (realtor) cannot practice real estate without a broker.

 

 

In Utah a broker is required to be active as sales agent for a minimum of three years and to have a minimum number of transactions (24 in residential sales) in a five year period. A broker is also required to have an additional 120 hours of education and pass the state brokers exam with a 75% or better.

 

 

A sales agent (or realtor) in Utah is required to take 90 hours of class and pass a state exam with a score of 70% or better.

 

 

What does this mean to you as the buyer or seller?

 

 

An inexperienced agent is the last thing you want in the most important transaction of your life. Sales and contract experience is important in helping you to reach your goals. Team LAKE has this knowledge and experience you want in an agent.

 

 

Team LAKE continues their education by taking more classes then required by Utah law. This benefits all of us.

 

 

Franchises and Commissions

 

 

Franchises or national brand companies have a great deal of infrastructure to manage that increase cost along the way. Everything from staff salaries to required marketing, advertising and franchise fees are included in each transaction.

 

 

At Team LAKE we have the flexibility to accommodate your needs. We are a full service company that has maximum value with minimum infrastructure. We’re here to work with you and help you accomplish your goals as the seller or the buyer.

 

 

Sellers list their properties and pay commission to the listing broker. That commission is split between the listing broker and the buyer’s broker. The buyer does not pay a commission. Generally with a franchise the commissions are set and have no flexibility. In addition they have to accommodate the infrastructure as mentioned above. At Team LAKE we have created programs (hyperlink) that will work for you.

 

 

 

How the money flows:

 

 

For a national brand company the commission structure is set and goes to the agent, broker and franchise.

 

 

The commission must cover:

  • For the agent: agent expenses, marketing, MLS/Board dues.
  • For the broker has: broker expenses, rent, salaries
  • For the franchise has: franchise expenses, national commercials, salaries.

 

With Team LAKE the commission must cover:

  • Team LAKE expenses and marketing.

 

For more details see our Flexible Commission Program (for sellers) or our Buyer’s Agent Commission Program.

 

 

Finally, at Team LAKE fire us anytime – buyers and sellers – we don’t require long term contracts. Most franchises require at least a 90 day contract to work with you.

 

 

 

Short Sale vs Foreclosure – what is the difference??

 

 

Don’t assume that you’re supposed to know this! In this market and this economy most people are hearing these terms for the first time. It’s fairly new territory for banks, mortgage companies and realtors.

 

 

A Short Sale is the sale of a home or other asset for less than the loan balance to an outside buyer. Many lenders will agree to accept the proceeds of a short sale and forgive the remainder of what is owed on a mortgage when a homeowner cannot make his/her payments.

 

 

Commissions are paid by the bank and cost to the seller.

 

 

Sellers 

·         The owner is selling the home (not the bank).

·         Typically banks lose less in a short sale vs a foreclosure, so banks prefer them over a foreclosure.

·         A short sale may have less impact on your credit rating then a foreclosure does.

·         It can be a complicated process for the seller and the realtor and can take as little as 8 weeks or as long as a year or more.

·         Banks must approve the short sale because the homeowners must prove they are incapable of paying the difference on the home.

·         In many cases the seller can live in the home until it is sold.

·         Some banks make the owner repay the difference on the loan at a later date. They let the seller out of the mortgage but not out the obligation. (There are no standard requirements or rules, this varies by bank and situation.)

 

Buyers

·         Purchasing can take MUCH longer than a normal real estate transaction (as little as 8 weeks or as long as a year or more).

·         Prices may be less than market value, but not half or some other major reduction. Banks are looking to get back as much as possible and are not likely to negotiate much lower than market value.

·         Banks prefer cash payment or large down payments in order to lower their risk.

 

 

A foreclosure is when the bank takes possession of the  real property (immovable) because the owner has not made payments. When the process is complete the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs.

 

 

Sellers

  • The bank is selling the home.
  • Owners must vacate the property.
  • Foreclosure has a bigger negative impact on the owner’s credit rating.

 

Brian Lake