DEAN GRAZIOSI: DEAN GRAZIOSI REAL ESTATE

In today’s real estate market, there are good deals around every corner.  However, there is a very fine line between a good deal and a bad one.  You can avoid the pitfalls of a poor real estate deal by doing your homework ahead of time.  You should always be proactive, and by knowing what to look for when you are scouting potential properties, you put yourself in a position to make much smarter decisions. 

There are four key areas of all homes that you should pay particular attention to when shopping for real estate.  Neglecting to get the true condition of any of these areas could cost you a fortune, literally.  Real estate professionals such as Dean Graziosi understand the importance of sound investments, and they no when to say no.  Just because a property is cheap, doesn’t mean you should buy it, especially if you have not gotten a thorough inspection. 

The Foundation

A home with a poor foundation is usually a bad deal.  While some foundations can be fixed easier than others if the problem is caught early enough, the associated costs are usually substantial.  Some signs that point to a poor foundation include trees in close proximity to the home (there should never be plants or trees within 12 inches of the home), large cracks in the walls and problems with doors and windows.  Keep in mind that it is common to see cracks in the walls of older homes and it does not necessarily mean there is a foundation problem.  In any case, it is best to get it inspected if you are truly interested in the property. 

Plumbing

Plumbing is often an overlooked area because the problems tend to be well hidden.  If you are seriously considering purchasing a property, make certain that sinks, dishwashers, toilets and all other plumbing fixtures are properly inspected.  Minor cracks can lead to big problems under sinks and toilets.  Concealed mold can cause serious health problems to occupants of the home as well. 

Electrical

When you are browsing a home, what may not be apparent are electrical problems.  Electrical problems are common in older homes, but have even been spotted in newly built homes so don’t assume you are safe because you are purchasing a two or three year old home.  Some signs that the electrical system may be outdated or in need of repair include an old fuse panel and lack of electrical outlets. 

Attic Space

If the home you are considering purchasing has an attic, make certain you pay close attention to it.  The attic can tell a lot about a home, and both its past and present condition.  Rotting wood is a sign that there is a leak somewhere in the roof.  Likewise, if you see new insulation in a very old home, find out why it was replaced.

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A mortgage is the exchange of property or another form of real estate to a lender for security of a debt, usually a loan for a borrower and most often referring to home or commercial loans. The mortgage itself is not a debt, more like an agreement for an exchange of funds between the lender and borrower for the purchase of the aforementioned real estate; the mortgage acts as a security for the loan to help protect the lender in the event that the borrower cannot repay their loan in accordance with the agreed-upon terms.

A mortgage is the standard method for businesses and individuals to purchase real estate, both commercial and residential, without paying the full amount immediately. The costs accrued to the borrower vary and can be measured by the Annual Percentage Rate (APR) — or the amount of interest that will be charged to the borrower per year — as well as any loan origination and document fees and/or appraisal services. Since very few individuals have enough savings or resources to buy real estate outright, it is quite normal for most homes to be purchased using a mortgage.

The mortgage is set up between two main parties — the mortgage lender (or mortgagee) and the borrower. Since the main function of the mortgage is to provide financial security for the lender, the mortgage will provide a claim that will guarantee precedence over all other creditors. The lender also maintains the title or deed for the real estate and has the ability to repossess or foreclose in the event that the borrower is not able to pay, meaning the property will default to the mortgage holder.

The borrower, legally known as the mortgagor, is required to meet the conditions of the loan in order to prevent a foreclosure of the mortgage by the mortgagee. Providing all the requirements are met and the loan is paid back to the lender in full, the borrower becomes a home-owner. Real estate is almost always purchased with borrowed funds because of the large financial impact these kinds of major purchases can have. While a property is mortgaged it is almost always required to have the appropriate insurance to help protect the mortgage.

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