If you are interested in wholesale real estate investing, it’s important to know that you have to have a list of viable buyers. The wholesaling process itself requires quick action, which is virtually impossible without at least having an idea of where you will be able to sell the properties. The last thing you want to get stuck with is paying for a property because were unable to find a buyer.

Because it’s so vital to have a buyers list prior to getting started with wholesaling, the following tips will help you compile a list of buyers you can contact next time you have a property deal.

First of all, there are many areas of the country that have real estate investor clubs. Look around in your area, find such a club and become a member. This is a great way to network and meet other investors. Let them know that you are into the wholesaling business, and ask if you can call them when you have properties available.

As you drive around town, look for uninhabited houses that are in the process of being remodeled. You can talk to the workers to get the owner’s contact information. Chances are, the owner is an investor who will be more than happy to be added to your buyers list.

Another great source for property buyers is a property management firm. While they may not be able to give you a list of their clients, they may be willing to give your contact information to their clients. Ask them to have their clients contact you if they are interested in being put on an exclusive contact list; when they contact you, explain that they will be put on a list of buyers who get contacted first when you have new properties available.

Look through the classified ads; often you will find houses for sale listed as "newly renovated." Words like that are usually indicative of an investor purchase. Call the number listed in the ad to see if they would be interested in getting a heads up as new properties become available.

One last idea is to buy your own classified ad. You can list them with words such as "priced below market" or other catch phrases to catch people’s attention. This won’t necessarily put you in contact with investors, but some of the responses you receive may be from investors.

All in all, finding buyers to create a contact list is a must-have for wholesale investors. This article has only outlined a few suggestions for finding interested property investors to add to your list. Remember that in order to successfully close a sale in real estate wholesaling, a predetermined buyer is vital, so have that list ready!

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About the author

Jennifer Hill and the agents at Realnet of Tampa Bay are experts at finding the best investment properties or sale. Don't fall for the trap of buying investment properties without researching a property thoroughly.

As a homebuyer, you have the choice in the type of owner’s title insurance coverage. Throughout this series of comparing the two types of coverage (Standard Coverage vs. Enhanced Coverage) you have observed that the primary difference relates to matters affecting your title post-policy date and pre-policy date.

That is, the standard owner’s title insurance coverage mostly covers only matters that occur prior to the date the policy was issued, whereas, the enhanced owner’s title insurance coverage protects you against matters arising prior to the date of the policy, as well as, matters arising after the date the policy has been issued.

In the case of mechanic’s liens, the homebuyer is covered only up to the policy date when he or she elects to purchase the standard owner’s title insurance coverage. The homebuyer who purchases the enhanced owner’s title insurance coverage is not only covered for mechanic’s liens arising prior to the policy date but is also covered for mechanic’s liens arising after the policy date so long as the labor and material was furnished before the policy date.

You might be asking "What is a mechanic’s lien?"

A mechanic’s lien is a claim filed by a contractor or sub-contractor for labor and material performed on the subject property which, by operation of law, constitutes a lien against title.

For example, let’s say a seller was a builder and prior to the sale of the property, the seller failed to pay the contractor’s final bill. In turn, the contractor cannot pay his sub-contractors. As a result, the contractor and/or the sub-contractors file a mechanic’s lien after the seller has already sold and settled the property.

The new homebuyer is now stuck with having to pay the sub-contractors in order to clear his or her title to the property. However, if the homebuyer had elected to purchase the enhanced owner’s title insurance coverage, the homebuyer would simply make a claim with the title insurance company to pay the sub-contractors.

In another example, the sales contract required the seller to perform pest inspection treatment and damage repair. Prior to closing, the seller hired ABC Pest Control to perform the required treatment and repairs and promptly issued a check for the payment of those services.

At closing, the seller provided the homebuyer with evidence of payment and an invoice from ABC Pest Control marked “Paid.” Following closing, ABC Pest Control filed a mechanic’s lien as a result of the seller’s bounced check and the seller’s subsequent refusal to make good on the check. In this case, the homebuyer purchased the enhanced coverage and the title insurance company paid ABC Pest Control on the claim. Had the homebuyer purchased the standard coverage, the homebuyer would have been required to pay ABC Pest Control in order to establish clear title.

The following is a commonly asked question for the attorneys at Federal Title regarding DC Tax Abatement:

My wife and I are buying a property for our son in Washington, DC The purchase price is $280,000, so we heard that we might be eligible for the DC Tax Abatement Program. Is this possible, and if so, what might we have to do to make sure we qualify?

Click beyond the jump for the answer.

So you’ve just completed the purchase and closing on your new “fixer-upper” home. Now it’s time to hire an architect and spend countless hours planning for a new addition to the family room.

You submit an application for your building permit. After a few weeks, your permit is denied based on a prior violation of landscaping rules established by the homeowner’s association.

As it turns out, your seller had constructed the $50,000 Arcadia-style garden in your backyard, complete with granite cascade and espalier fruit trees – and in violation of your homeowner’s association rules.

You are now faced with the expensive prospect of removing the fine landscaping to become compliant so that you can obtain your building permit. Or, you must decide to hire an attorney to argue your case to the homeowner’s association.

Few homebuyers in this situation would think about the possibility of their owner’s title insurance policy covering this sort of matter.

For the homebuyer who selected the enhanced owner’s title insurance coverage, the title insurance company will cover the homebuyer for loss.

Unfortunately, for the homebuyer who chose the standard title insurance coverage, the problem will remain that of the homebuyer without coverage for his or her loss.

The GCAAR Regional Sales Contract is widely accepted and used in the Washington, DC metro area as the standard real estate sales contract. As of January 1, 2012, some changes are going to alter the contract significantly.

In response to the growing use of e-signatures, new language has been added allowing purchasers and sellers to indicate on the contract itself whether or not they intend to execute the contract by e-signature. Previously, an addendum was used for this purpose.

Also, a separate conventional financing addendum has been created, replacing the conventional financing paragraph that is currently in the Sales Contract.

Finally, the most significant change is the removal of the infamous Paragraph 7 from the Regional Sales Contract. Paragraph 7 is the “Equipment, Maintenance and Condition” paragraph, more commonly referred to as the “Property Condition” paragraph by agents.

Currently this paragraph requires that “…except as otherwise provided, the existing appliances, heating, cooling, plumbing, electrical systems and equipment, and smoke and heat detectors (as required), will be in normal working order as of the Possession Date.”

The new contract removes this language and converts the contract into an “AS IS” instrument. This will hopefully reduce some of the confusion that currently exists since Paragraph 7 is often replaced by the Addendum of Clauses’ inspection contingency paragraphs.

Federal Title & Escrow Company intends to offer several presentations outlining the differences in the contracts and allowing for Questions and Answers in regards to contract matters. Please check our blog as we make further updates on this material.

Until then, here's a copy of the current GCAAR regional sales contract.

GCAAR Regional Sales Contract

On October 5, 2011, President Obama signed the Veterans Health Facilities Act Capital Improvement Act, which includes provisions impacting the amount active-duty military and veterans must pay upfront for a VA loan.  

It was reported that the new funding fee structure would go into effect as of October 1, 2011.  However, under the Act, the new fees actually go into effect as of November 18, 2011.  

As a result, any loans that closed based on the lower funding fee amount between October 1, 2011 and October 5, 2011, will have the difference in the funding fee waived, according to the Secretary of the Department of Veterans Affairs.  

For those loans closing after the date the Act was signed and prior to the effective date of the funding fee change, the rates remain the same as they were prior to October 1, 2011.

The new funding fee amounts are as follows:

For first-time use

Down Payment	Time Period	Veteran	Reservist/National Guard
Less than 5%	Oct. 1, 2011- Oct. 5, 2011	1.40%	1.65%
	Oct. 6, 2011- Nov. 17, 2011	2.15%	2.40%
	On or after Nov. 18, 2011	1.40%	1.65%
At least 5% but  less than 10%	Oct. 1, 2011- Oct. 5, 2011	0.75%	1.00%
	Oct. 6, 2011- Nov. 17, 2011	1.50%	1.75%
	On or after Nov. 18, 2011	0.75%	1.00%
10% or more	Oct. 1, 2011- Oct. 5, 2011	0.50%	0.75%
	Oct. 6, 2011- Nov. 17, 2011	1.25%	1.50%
	On or after Nov. 18, 2011	0.50%	0.75%

For second-time use

Down Payment	Time Period	Veteran	Reservist/National Guard
Less than 5%	Oct. 1, 2007- Oct. 1, 2011	3.30%	3.30%
	Oct. 1, 2011- Oct. 5, 2011	2.80%	2.80%
	Oct. 6, 2011- Nov. 17, 2011	3.30%	3.30%
	Nov. 18, 2011- Oct. 1, 2012	2.80%	2.80%
	Oct. 1, 2012- Oct. 1, 2013	2.15%	2.15%
	On or after Oct. 13, 2013	1.25%	1.25%
At least 5% but less than 10%	Oct. 1, 2011- Oct. 5, 2011	0.75%	1.00%
	Oct. 6, 2011- Nov. 17, 2011	1.50%	1.75%
	On or after Nov.18, 2011	0.75%	1.00%
10% or more	Oct. 1, 2011- Oct. 5, 2011	0.50%	0.75%
	Oct. 6, 2011- Nov. 17, 2011	1.25%	1.50%
	On or after Nov.18, 2011	0.50%	0.75%

The government took action last week to help more homeowners with their mortgage payments. A revamped Home Affordable Refinance Program aims to remove some of the restrictions that have made it difficult for many to qualify assistance.

Historic lows on interest rates, changes coming to government programs such as HARP, it's no wonder so many Q&A and advice columns are dedicating space to homeowners' questions about refinancing, from knowing when to refinance to tips on how to avoid a mortgage refinance misstep.

One common question about refinancing relates to the settlement process, particularly title insurance.

Some homeowners are surprised when they hear they have to purchase a new title insurance policy when they refinance their mortgage. They bought a lender's and owner's policy when they purchased the home, and they want to know why they have to purchase a new title insurance policy.

To the lender, a refinance loan is no different than any other home loan. Your lender wants to insure that the new loan is protected by title insurance, just like the original lender required on your previous loan.  Lenders are protecting their investment against title related defects.

When you refinance, you are only buying a new title for the lender (a lender's policy), so your closing costs should still be less than when you purchased your home. And, while you're shopping around for the best refinance rates, be sure to shop around among title companies.

This will ensure you get the best pricing for your refinance.

The first thing most people think of when they hear the words "real estate investing" is buying cheap houses, fixing them up and reselling them at market prices. However, if the current housing market isn’t really conducive to home sales, then it is important for an investor to be able to adapt.

A lot of investors dislike the thought of being a landlord, saying that there are just too many headaches to deal with. Luckily, there are a lot of benefits of renting out properties as well, including tax deductions. The following list details five of the available tax deductions for landlords.

1. Tax Deductible Property Repairs – If you have ever rented a home, you know that there is a lot that can go wrong. Anything that needs fixing on a rental property, such as roof repairs, tile replacements, or any other necessary repairs are tax deductible. This makes it easier to deal with costly repairs throughout the year.

2. Insurance Premiums – Insurance is a requirement; it’s nice that for investors who are renting out the property, the premiums can be deducted from the income at the end of the year.

3. Property Depreciation – Property values of real estate fluctuate, but generally houses appreciate rather than depreciate. This makes the fact that you deduct the depreciation of the property over time on your taxes.

4. Tax Deductible Interest – Interest that investors pay on mortgages and other loans used for properties is tax deductible. Not only that, but if you have a credit card used solely for spending on repairs, renovations, or anything on the property, the interest is deductible on your taxes as well.

5. Cost of Services – Perhaps one of the biggest reasons that many investors don’t want to be landlords is because they would have to deal with tenants. Hiring a project manager is the perfect way to deal with that aversion. The costs of these and other services such as lawyers and accountants are tax deductible.

These are only five of the top tax deductions available to landlords who rent out their properties. There are so many reasons to rent out properties instead of selling them: residual, steady monthly income, as well as the extra tax benefits. Many of these tax deductions are not available for the everyday home buyer. Enjoy the benefits of being a landlord, and remember not to put all of your eggs in one basket.

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About the author:

Jennifer Hill and the agents at Realnet of Tampa Bay are experts at finding the best investment properties or sale. Don't fall for the trap of buying investment properties without researching a property thoroughly.

This week the 30-year mortgage rate sunk below 4% for the first time ever, yet mortgage applications continue to drop, according to a recent article in the Wall Street Journal.

Despite the attractive rate, lending standards remain tight, making  it difficult for many would-be homebuyers and refinancing borrowers to secure funding. While it is harder now to land a loan than it was five years ago, it's not impossible.

Here are a few tips to help prospective homebuyers and borrowers secure a home loan.

Get your finances in order

Before you can ask for a loan, you should know how much money you have and how much you can afford to borrow. Knowing this up front will also save you the potential heartache of getting attached to a home you can't afford. It'll save you, your lender and your agent a lot of time, too.

You are entitled to a free copy of your credit report from each of the three major credit rating agencies once a year.  Make a habit of getting it. Each report shows if you were more than 30 days late in making a payment on any of your existing loans or bills and lists inquiries made into your credit. If you come across any discrepancies, you'll want to inquire about them before you start shopping for a loan.

You'll also want to gather your most recent pay stubs, bank statements and tax forms. Any reputable lender you work with will need this information to determine if you qualify for a loan.

Limit credit inquiries while you shop for a loan

It may sound crazy, but shopping for a loan actually does ding your credit score by a couple points. So does applying for a new credit card or taking on new debt. Since your credit score helps to determine your interest rate, try to limit your number credit inquiries. Don't open any new lines of credit or make any large purchases until after the deal is closed.

Most experts will tell you to do all your mortgage loan shopping within a two-week span, as that will show up as one inquiry.

Save for a large down payment

The more money you can put into the transaction, the better your chances of securing a home loan. For FHA loans, you'll need at least 3.5%, though FHA loans come with more restrictions.

A 30-year conventional loan typically requires 20% down, but some lenders will make an exception depending on the property type and your financial situation. Note, though, that anytime you put down less than 20%, you'll have to pay for insurance on the loan, which means added monthly expense.

As the housing crisis continues, watch out for special offers from lenders. A recent article in Smart Money describes how many financial institutions, from national banks to local credit unions, are looking for ways to entice consumers to sign up for mortgages.  

If low home prices aren't enough, some banks are waiving lender fees, lowering rates and offering to pay closing costs. You may be able to leverage a large down payment and a lender discount in your favor.

With basic understanding of today's housing market, securing a home loan is not impossible. Be prepared by getting your financial house in order, and you'll be able to take advantage of record-low mortgage rates and home prices.

Investments are never a sure thing, no matter what type of investments you're talking about. When it comes to the stock market, common belief dictates that the higher the risk, the higher the potential for profit. In a down economy, however, it can be a little daunting to take risks with your money.

Even in real estate investing, which is often considered safer than the stock market, investors may be nervous about tying their money up during a down market.

Real estate investors may have a little more security than stock market investors but when the economy is in a slump, no one feels secure taking risks with their hard earned cash. Sometimes it is best to keep investing even when things look grim and other times it is necessary to change with the times. Staying optimistic in hard times can be a challenge.

As previously stated, real estate investors have it a little easier as far as staying optimistic, even in a bad economy. Why? Because people will always need housing. The demand for a house to live in will never go away! Even if the prices fall for a short period, it's highly unlikely that the housing market will "crash" like the stock market.

While it won't "crash," the housing market will fluctuate; property prices rise and fall, based on how the economy is. As a result, property investors should keep a close eye on current market trends. Knowing whether to rent or flip a property is often as simple as knowing the current market.

If jobs are scarce and layoffs are rampant, home sales may drastically slow down. This doesn't mean that investors should stop their investing activities, however. It just means that their strategy needs to change. This is one reason why it’s so important to know the market; if homes aren't selling, it's not a good time to try to renovate a large amount of homes and sell them.

In a selling slump, homes should be renovated and rented out, rather than sold. This may not create a large lump sum profit, but it will generate a nice steady residual monthly income. Being optimistic in a down market is easy; just remember that in the housing industry, there is no such thing as a "down market." It's an ever changing market, for sure, but there will always be a need for housing.

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About the author

Jennifer Hill and the agents at Realnet of Tampa Bay are experts at finding the best investment property for sale. Don't fall for the trap of buying cheap houses for sale without researching a property thoroughly.

How much will I need for closing costs? You hear this question from your homebuyers a lot, right?

Below I have provided a quick reference for calculating closing costs in Maryland. With the exception of lender origination charges or discount points, the factors include all closing costs such as settlement fees, owner’s and lender’s title insurance, and transfer/recordation taxes (assuming a 50/50 split between buyer and seller).

This will provide a close estimate if you are on the go without online access to exact closing costs using Federal Title’s Quick Quote tool.

Montgomery County, MD

To use this chart, multiply your purchase price by the appropriate closing costs factor. (Example: For a $375,000 purchase in Montgomery County by a First-time homebuyer, expressed as $375,000 x 0.0155 = $5,812.50)

Purchase Price — in $1,000s	Closing Costs Factor Repeat Buyer	Closing Costs Factor First-time Homebuyer	Estimated Closing Costs
$100-199	0.0209	0.0184
$200-299	0.0191	0.0166
$300-399	0.0180	0.0155
$400-499	0.0174	0.0149
$500-599	0.0172	0.0147
$600-699	0.0170	0.0145
$700-799	0.0169	0.0144
$800-899	0.0168	0.0143
$900-999	0.0167	0.0142
$1.000-1.099	0.0166	0.0141
$1.100-1.199	0.0165	0.0140
$1.200-1.299	0.0164	0.0139
$1.300-1.399	0.0164	0.0139
$1.400-1.499	0.0163	0.0138

Prince George's County, MD

To use this chart, multiply your purchase price by the appropriate closing costs factor. (Example: For a $375,000 purchase in Prince George's County by a First-time homebuyer, expressed as $375,000 x 0.0170 = $6,375.00)

Purchase Price — in $1,000s	Closing Costs Factor Repeat Buyer	Closing Costs Factor First-time Homebuyer	Estimated Closing Costs
$100-199	0.0228	0.0203
$200-299	0.0207	0.0182
$300-399	0.0195	0.0170
$400-499	0.0188	0.0163
$500-599	0.0183	0.0158
$600-699	0.0177	0.0154
$700-799	0.0176	0.0151
$800-899	0.0173	0.0148
$900-999	0.0171	0.0146
$1.000-1.099	0.0169	0.0145
$1.100-1.199	0.0168	0.0143
$1.200-1.299	0.0166	0.0142
$1.300-1.399	0.0165	0.0140
$1.400-1.499	0.0164	0.0139

The D.C. Department of Insurance, Securities & Banking ("DISB") proposed new rules for governing residential mortgage foreclosures in an attempt to clarify legislation that affects the city's mortgage foreclosure process.

D.C. Council had made fundamental changes to the city's mortgage foreclosure process last year by adding (among other things) a requirement that lenders and borrowers make an attempt to mediate their disputes.

After the parties concluded their attempt to mediate, the lender was then entitled to record a "mediation certificate" and proceed to a foreclosure sale and enforce its rights under the deed of trust.

However, the requirement mandated by the "Saving D.C. Homes from Foreclosure Act of 2010," which the Council passed in an attempt to keep pace with reforms made by Maryland and other states, raised concerns among lenders and title insurers.

The raft of changes to the D.C. mortgage foreclosure law and rules thereunder opened a Pandora's Box of loopholes that increased the risk of clouded title for any property sold at, or even after, a foreclosure sale.

The aim of the new rules is to clarify the legal effect of recording a mediation certificate and make an amendment to the wording in the certificate.

Lenders and their allies have been clamoring for a change to the rules to state that recording a mediation certificate is prima facie evidence - that means presumptive validity - of all the procedural steps taken prior recording.

This change would prevent a borrower who participated in mediation and loss prevention from raising any objection to the conduct of this process after the foreclosure sale.

An aggrieved borrower could still raise objections, file a lawsuit, or take any other action to contest the lender's conduct during the process.

It will still take some initial stumbling through the maze of new rules by both lenders and borrowers to work out the kinks in the new procedure.

Hopefully, the new requirements will give borrowers increased opportunity to modify loans, and if modification isn't realistic, it will give title insurers, lenders and purchasers confidence that their title will be undisturbed.

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About the author

Jack Reid is Of Counsel with the firm Tobin, O'Connor, Ewing and handles matters in the areas of real estate, probate and business law.

In the wake of foreclosure problems stemming from improper documentation and representation, a title insurance policy has never been more valuable than it is right now in this current real estate market.

Clients often ask: What exactly does a title company do? And the easiest answer that I give them is, "Take a look at our website and view the videos."

At Federal Title, we conduct an extensive search of public records to verify the seller's right to transfer ownership. The purpose of all this research is to discover claims or defects (a.k.a. "clouds") that limit the owner’s right in transferring the property.

Lenders require title insurance when the purchaser obtains a mortgage to finance the purchase; this type of insurance is often called a lender’s title insurance policy to cover the bank’s interest in your property and to safeguard first position as a lien holder on your property.

At the time of closing an owner’s title insurance policy is also issued which protects you as the purchaser at the closing. An owner’s policy is your assurance of protection against economic loss if a title defect is ever discovered and a claim filed against your property.

The insurance premiums are only collected once, and your coverage will remain consistent for as long as you or your heirs retain an interest in your property or until you refinance the property at which point a new policy is issued.

Without the protection of an owner’s policy, you may be in jeopardy of losing your investment which stems from a cloud on title that does not appear in the public records such as:

• Forged legal instruments (deeds, mortgages, wills, releases of mortgages)
• Improperly recorded legal documents
• False impersonation of the true property owner
• Undisclosed heirs
• Issues involving improper marital status
• Documents executed under false powers of attorney
• Deeds drafted by persons lacking legal capacity
• Undisclosed spouses
• Issues of rightful possession of land; which arise when a foreclosed property owner claims that they did not receive proper notice of the foreclosure.

In the event that a claim is filed against you as owner of your property, the title insurance will cover your legal expenses, court costs and related fees. If the claim against the property is valid, then the title insurance company will reimburse you for your loss up to the amount of the policy.

At Federal Title our attorneys are diligent in reviewing all documentation in an effort to assist buyers with the often times unexpected yet frequent legal matters that arise during the purchase and sale of real property. At Federal Title and Escrow there is always an attorney title agent on each transaction that is prepared to explain, negotiate and if needed, represent your legal interests in every transaction.

One of the most frequent requests at closing is how often does the state of Maryland assess property values for tax purposes.  In Maryland, properties are reassessed every three years.  The state of Maryland provides a detailed explanation of the workings of the tax process on its website.

Also available are reassessment maps for every county in Maryland, which allow you to view when reassessments will take place. Included here is the current map for Montgomery County, Maryland:

Area 1	Assessment Area 1 will be reassessed for January 1, 2013
Area 2	Assessment Area 2 will be reassessed for January 1, 2014
Area 3	Assessment Area 3 will be reassessed for January 1, 2012

Over the weekend, the Washington Post Real Estate Section published an article by nationally syndicated columnist Ken Harney describing a sea change in the title insurance industry where transparency and honest rates are becoming more commonplace.

Toward the bottom of the story was a nice mention of Federal Title and our REAL Credit program as shining, local example of a title company rejecting the old practices of the title insurance industry in favor of a business model that benefits consumers.

Needless to say our office was pretty thrilled.

We believe consumers should know they have the right to choose their title company based on factors such as price, customer service, years in business, responsiveness and reliability.

We encourage homebuyers to shop for title services and offer them a breadth of information on our Web site to help them make the decision that is best for their situation. For years we've published our rates on our Web site and offered homebuyers and their agents a free online closing costs calculator to help them gauge how much money will be needed for settlement.

If Harney's article is any indication of the future of the title insurance industry, then it seems Federal Title's business model is finally becoming the norm instead of the brow-raising exception to the rule.

And the rest of the pack is following suit, as Harney writes: "A handful of agents in states where regulations permit discounts off closing-packages are now offering them. Plus growing numbers of title agencies are gearing up software platforms to provide services to consumers: online rate quotes, transaction updates ­notifying customers about the status of their title order. Some are even e-mailing documents in advance of closings for customers’ inspection, rather than hitting buyers with last-minute settlement surprises."