In typical real estate transactions, buyers and sellers are usually represented by their own separate agents. Each agent has a fiduciary duty to protect the interests of their clients.
But what happens in a scenario when one single real estate agent represents both the buyer and the seller in a transaction?
It’s called “dual agency,” and it occurs when one realtor has the role of acting on behalf of opposing parties. It’s not very common, but it does happen. For instance, it can happen if a buyer who does not have an agent visits an open house and falls in love with the home, and the seller’s agent agrees to take on the buyer as a client.
Dual agency also occurs when the buyer and seller each have their own separate agents, but both work for the same brokerage. This is more common with large agencies with lots of agents and listings.
Not every state in the country allows dual agency, but in California, it’s permitted as long as the buyer and seller are both made aware of the situation, and consent to it in writing. Before entering into a dual agency agreement, it’s critical to fully understand its legal implications and how it could impact your ability to get the best deal on a home purchase.
Obviously, the goal of a buyer is to pay the lowest amount for a home, while a seller’s goal is to get the highest possible amount. This is where it can get a little sticky when one agent represents both parties. How can a dual agent adequately represent both competing matters? Some situations can actually benefit from a dual agent, while other scenarios call for separate representation.
California’s Required Disclosure and Consent for Dual Agency Representations
In the state of California, buyers and sellers must obtain a written contract confirming the professional relationship and representation during a real estate transaction. Just about every broker in the state will present clients with a “Disclosure Regarding Real Estate Agency Relationships” document at some point before an offer is made on a property.
This form dictates the broker and agents involved in the real estate transaction, and outlines the duties of the buyer’s and seller’s agent, or an agent who represents both the parties – the dual agent.
The form will also describe the fact that all agents owe their clients a fiduciary duty to act in that party’s best interests, including being honest, acting in good faith, exercising reasonable care, and acting in full competence. The agents must also disclose all pertinent facts within the scope of the agent’s knowledge that would impact how desirable the property would be to the client.
Dual agents are in a precarious position: they need to walk a fine line that does not compromise either party’s best interests. Balancing these interests is essential, and failure to do so could put the agent at risk for infringing upon the fiduciary duty of one of the clients.
Why Would You Agree to Dual Agency?
Despite the potential downfalls of dual agency, there are some possible upsides to this scenario as well:
Streamlined process – A dual agency scenario can definitely streamline the home-buying process. When both buyers and sellers are working with the same agent, there’s one less schedule to have to work around. Documents can be signed more promptly, and all communications can be made more quickly. With one agent out of the picture, the entire process can be faster and easier.
Save on the commission – If there’s only one agent involved, the commission won’t have to be split two ways. Instead, a dual agent will keep the entire commission payment. As such, dual agents might be a little more willing to slightly reduce the commission, saving the seller (who typically pays this amount) a little bit of money.
The Bottom Line
Whether or not you agree to a dual agency, your decision should only be based on the specific details of your real estate transaction. Every situation is a little different; what may work in one situation may not necessarily work for another. For instance, if the market is somewhat slow, or you’re a newbie who’s just starting out on a home hunt, having your own separate representation might be best.
However, if the market is hot where you are, there could be a number of scenarios where dual agency can be considered, such as when you’ve done your homework and have a solid idea of what homes in the area are worth, or if you feel that you can get a better deal by using the same agent who’s representing the other party. Either way, make sure that the agent representing you has plenty of experience, and is a trustworthy figure who will ensure that your best interests are met.
California has a ton of hot markets from top to bottom. There is plenty to choose from for any real estate investor looking to snatch up valuable properties to rent out for top dollar. Regardless of precisely what you’re looking for, the Golden State certainly offers plenty.
What real estate investors should be focusing on are markets with a common denominator: upward growth. Luckily, there are plenty of centers across the state that have been on this upward swing for a while now, and continue to be headed in the same direction. Getting in sooner rather than later can help investors reap the most rewards and solidify their return on investment.
Here are some solid markets to purchase rental property in California.
Located in Orange Country, Irvine is an affluent city that boasts a ton of colleges and universities where students are constantly and actively seeking out places to rent out. With so many educational facilities in and around the area, there is a constant influx of students who typically rent a place if they choose not to live on campus. This in and of itself presents a unique and prime opportunity for investors.
Irvine is a wonderful city with a low crime rate, and offers residents a number of attractions and amenities. The driving force of rental growth in the city is the price of homes, which are continuing to increase year over year. As such, the majority of residents in the city are actually renting, which makes Irvine an excellent choice for investors who plan on buying and renting out their properties. Right now, the median rent price in Irvine is $2,316 per month.
About 110 miles southeast of San Francisco lies Merced, a Central Valley California city that RealtyTrac boasts as one of the top markets in the entire country for investors to buy property to rent out. With a current median sale price for homes sitting at $189,000, it’s an affordable place to buy. The annual gross rental yield in Merced is a beefy 7.6%, which by any standards is considered quite high for investment purposes. Median rent checks collected currently stand at $1,201, which is quite impressive considering the rather affordable purchase price of the average home in the area.
Thanks to the incredibly high demand to reside in gorgeous Santa Clara, rent prices here are among the highest in all of California at $2,925 per month. It’s heavily populated, yet has a low crime rate in comparison. Santa Clara is conveniently positioned and located in Silicon Valley, and is not terribly far from the large urban center of San Francisco. Upward growth seems to be continuing, though it’s uncertain how much further this will continue. As such, investors may want to short-list Santa Clara as more of a short-term real estate investment compared to the other centers on this list.
Very close to San Francisco is the large urban center of Oakland, which is continuing to grow. Residents flock to this city because of its plentiful amenities and close proximity to San Fran without the same sky-high cost of living. That’s not to say that living in Oakland is cheap: median home prices are $619,800. Values have increased 12.5% over the past year, and are expected to increase another 3.3% within the next year.
Investors who snatch up properties while prices are on the uptrend can take advantage of this increase in value. In addition, they can also benefit from the handsome median rental price in the city of $2,760 per month. Rent prices in Oakland have realized the biggest increase in the area. That reason alone is enough for investors to buy into Oakland today.
Riverside is currently experiencing a growth in its economy and employment opportunities, and is considered an excellent location for college and university education. For these reasons, people want to live here, which has a positive effect on demand.
Currently, the median home price in Riverside is $385,000, and values have been on the upswing over the past year. In fact, home values in the city have jumped 8.3% over the past year, and are continuing to climb. The average rent that investors can expect to collect in Riverside is $1,800 a month. which is rather decent considering the modest home prices in the area.
Another great city in California to buy investment property in is Bakersfield. It has a large, growing population, as well as a healthy and diverse economy thanks in part to its successful oil production industry. While the $904 monthly median rent isn’t as expensive as some of the other cities on this list, it is growing year over year, and investors can still reap a sizeable ROI based on the median home price in the area of $212,000.
The Bottom Line
There are seemingly endless places throughout California to invest in rental properties. And with continued increases in home values and rents, landlords literally have their pick of the litter. The key is to team up with a seasoned real estate agent who is experienced in the investment niche of the housing market to guide you in the right direction.
Sellers don’t have a crystal ball to tell them who is going to bypass their homes and who is serious enough to put in a solid offer. However, buyers do exhibit certain traits and behaviors that will allow sellers and their agents to be able to distinguish those who just aren’t in the game.
Keep an eye out for any of the following signs that likely point to a buyer who’s not serious about purchasing your home.
1. The Buyer Just Started Their Home Search
Most buyers don’t settle on the first house they see without continuing their search. If a buyer expresses interest in it but is only a few days into their search, you might want to take it with a grain of salt. It usually takes buyers about two or three months to find the home they want to buy after they’ve had the chance to see a variety of other properties. If they’re in the early stages of their house hunt, odds are not in your favor that they’ll be putting in an offer on your particular property.
2. The Buyer Makes a Ton of Empty Promises
Buyers can verbally tell you that they will likely be putting in an offer, but actions speak louder than words. If a specific buyer expresses a lot of interest in buying the home but no offer is coming in, that’s a sign that no offer will be received from that particular buyer. It’s likely that he or she is checking out other properties to compare to yours before finally putting in an offer, which might not be on your home.
3. The Buyer Hasn’t Been to a Mortgage Specialist Yet
Just because a buyer seems to be genuinely interested in your home doesn’t necessarily mean he or she can actually afford it. If buyers visit your home but haven’t even been to a mortgage broker to get the ball rolling with a pre-approval, they’re likely not anywhere near ready to make a firm purchase.
4. The Buyer Rushes Through the Home Showing
A buyer who breezes through the home during a showing and leaves within a few short minutes is clearly not interested. Prospective buyers who are serious about a home will spend as much time as they can spare to meticulously go through every space and see exactly how it will work for them. Leaving the home quickly after entering without any questions isn’t a good sign.
5. The Buyer Seems Overly Picky
Some buyers are just impossible to please. While some buyers may simply have in incredibly specific taste and are not easily won over, others may actually be looking for faults in the home to justify not putting in an offer. If all you’re hearing are complaints about minor little issues here and there, the buyer is probably not serious.
6. The Buyer Throws You a Really Lowball Offer
Many buyers will start the back-and-forth bantering with a price that’s often lower than the asking price. However, some lowball offers can be classified as completely preposterous, and are not a sign of good faith that the buyer absolutely wants the house. A serious buyer may offer under the asking price, but only within a justifiable range. If they’re definitely interested they’ll put their best foot forward to let the seller know that they are serious. If buyers are just tossing out a silly number, there’s likely no reason to further entertain the offer.
The Bottom Line
The game of real estate often involves a little psychology. Sizing up prospective buyers can give you some insight about who is serious about buying your home, and who’s just wasting your time. Luckily, your real estate agent will be experienced in deciphering who’s serious and who isn’t. If you’re selling your home, be on the lookout for any buyer who displays any of the above traits.
Keeping your home safe is a crucial component to being a homeowner. After all, we’ve all got locks on our doors and windows for a reason. Other homeowners have added other layers of protection, including installing security cameras or alarm systems. While these are very helpful, home security systems have evolved a great deal over the years thanks to the emergence of digital technology.
A number of key advancements have emerged and shaped the modern home security market, providing homeowners with much more convenient and efficient means of keeping their homes safe.
1. Remote Monitoring
Today, homeowners have the ability to keep tabs on their homes even when they are not there. Whether you’re at work, running errands, picking the kids up from school, or even away on vacation, you can still monitor your home remotely thanks to real-time videos and images of what’s happening at home. Innovative features of today’s remote monitoring systems now offer homeowners with the capability of arming and disarming home security systems, stream security camera feeds, and even send alerts of a fire, flood, or break-in.
2. Recognition Technology
The realm of biometrics is now playing a role in the world of home security. Now, you have the option to arm or disarm your home using a part of your body. With this sort of security system, homeowners are offered hands-free authentication using their fingerprints, faces, eyes, or voices.
Since no two individuals have these exact same features, recognition technology is quickly becoming one of the most effective security systems today. Authorized persons have their features stored in a database, which means only the person him- or herself is needed to disarm or arm a home. While recognition technology is still somewhat in its growing stages, it’s quickly gaining speed and popularity among savvy homeowners.
3. Sensor Technology
Sensor technology has been around for a while, but has evolved to become more efficient than ever before. Motion detectors, in particular, have long been heavily used among many homeowners in an effort to protect the home from intruders. These devices detect any movement in the sensor’s vicinity, which is very useful when the home is unoccupied at any given moment.
Also falling within this category are infrared cameras, which read thermal heat signatures of a moving body close by. These cameras have become so innovative that they can even detect heat signatures from as far away as 10 miles.
4. Smartphone Apps
These days, there seems to be an app for just about anything. Whether it’s to play games online, tally up daily caloric intake, or quickly reserve a taxi ride, apps have become heavily depended on in just about every realm you can think of.
In addition to these purposes, smartphone apps are also being used for home security. More specifically, apps are available that will allow you to unlock your front door as soon as you – and your smartphone – get close to your home. You can use this app on more than one phone if there are more family members living there. Each household member can have the app downloaded on their phone to provide easy and secure access to the property and keep the home secure when you’re not there.
The Bottom Line
There’s never been an easier, more effective way to keep your home secure than today. With the advent of digital technology, homeowners have plenty of innovative options when it comes to arming their homes. Not only are the above technologies keeping homes safer, they’re also making it a lot easier and more convenient for homeowners to protect their properties.
It takes a lot of money to run a home, but you could be spending more money than you really need to. Cutting back on how much energy your home uses can help you shave a huge chunk of money off your monthly utility bills, and it can be a lot easier than you may think. Small changes here and there can really add up to significant savings.
Here are 11 easy ways you can save energy in your home that are good for the environment, and your wallet.
1. Install a tankless water heater.
Having hot water stored on stand-by produces a lot of heat and energy loss. Instead, replace your traditional hot water tank with a tankless water heater that only provides hot water when it’s actually needed, which can save a ton of energy.
2. Turn the temperature of your water heater down.
If you’d prefer to keep your current water heater, consider turning its temperature down to about 120°F. In addition, turn it down even lower when you’re away for a few days.
3. Replace incandescent lights.
Conventional incandescent lightbulbs only convert about 10% of the energy used into light; the rest is lost in heat. Swapping these lights with more innovative LEDs can significantly cut back on energy that’s not being used for lighting purposes. Not only do LEDs use 75% less energy than incandescent bulbs, they also last about 10 times longer.
4. Skip the dishwasher.
The amount of energy dishwashers use to heat the water and dry the dishes is significant. If you can stand it, consider washing the dishes by hand. At the very least, switch off the automatic air-dry after the final rinse and open the door open slightly to help the dishes dry faster.
5. Turn off electronics when not in use.
All of your home’s TVs, computers, and other electronics are wasting energy when they’re left on and not being used. Plug your devices into a smart power strip that uses a lot less energy when they’re in standby mode.
6. Maintain your HVAC system.
Your heating and air conditioning systems should be maintained at least once a year to make sure they’re working optimally and not using up more energy than necessary to operate. About 50% of the energy used in a home comes directly from these HVAC systems, so the more efficiently they function, the less energy will be wasted.
7. Use less water.
Be careful with how much water you use when showering, brushing your teeth, and washing dishes. Shut the water off when not required, and try not to use as much hot water. These measures can help save as much as 50% less water.
8. Insulate your windows and doors.
Windows and doors that allow air leakage account for as much as one-third of energy loss in a home. Seal all these leaks with some caulking, and weatherstrip your windows and doors to prevent even further air loss.
9. Use less water and heat with your laundry.
Little changes that are made when doing the laundry can save a great deal of energy. Don’t do the laundry until you’ve got a full load, and wash each load in cold water to cut back on energy used to heat the water. Once the laundry is done, hang the clothes up to air dry rather than using the dryer.
10. Buy energy-efficient appliances.
If your budget permits and your current appliances are aging, consider replacing them with energy-efficient models that use less energy to operate and use hot water more efficiently.
11. Turn the thermostat down when you’re not home.
Instead of keeping the air conditioner running full blast all day long even when you’re at work, turn it down during daytime hours. Having a programmable thermostat installed can make this job easier for you. It’ll let you set different temperatures for various times of the day so that it will automatically adjust accordingly.
Under California law, real estate agents have a fiduciary duty to the buyers and sellers that they represent. That means the agent has a legal obligation to act in the best interest of their clients.
This fact is rather clear and widely known. After all, consumers expect that agents representing them offer accurate advice and make decisions that make the most sense for each individual client.
But what about mortgage brokers? Do they owe borrowers a similar fiduciary duty? The answer to this question where it pertains to the state of California is “yes.” Since 1979, California courts have held that mortgage brokers owe a fiduciary duty to borrower following a case taken to the California Supreme Court.
In the case of Wyatt v. Union Mortgage Co., the mortgage broker in question mislead the borrowers about the loan’s interest rate, and failed to point out the serious significance of the mortgage terms regarding late charges and the grace period in relation to late payments. Since this case, mortgage brokers have been bound by the law to provide a fiduciary duty to borrowers.
What Does a Broker’s Fiduciary Duty Involve?
By law, mortgage brokers cannot accept or charge any type of compensation that benefits the mortgage broker. All lawful instructions provided by the borrower must be carried out, and an accurate accounting of all monies received from the borrower should be provided to the borrower.
Last but not least, a mortgage broker needs to disclose to the borrower all pertinent facts of the loan that the broker knows would impact the borrower’s rights and interests.
Brokers Versus Lenders
It’s important to differentiate between a mortgage ‘lender’ versus a ‘broker’. Whereas a broker owes borrowers a fiduciary duty, a lender does not. The mortgage transaction between a borrower and lender is considered to be at “arm’s length.”
Buyers need to understand that the lender’s interests lie in making money, regardless of whether or not the transaction is beneficial to the borrower. After all, the more interest a borrower pays, for instance, the more money the lender stands to make. The lender isn’t too interested or concerned if the borrower winds up “house poor” as a result of an expensive mortgage. Lenders have the freedom to seek out economic interests in a home loan transaction.
On the other hand, a mortgage broker’s interests lie with protecting the borrower. A mortgage loan broker is in a fiduciary position to act in good faith toward a client, and doesn’t put his or her own personal economic benefits over that individual. If this duty is breached, the broker is considered to be in violation of the mortgage broker’s license law in the state.
The disclosures that fall under the fiduciary obligations of mortgage brokers include the true interest rate, the financial penalty for making a late payment, and any other pertinent components of the mortgage package.
These duties were eventually codified thanks to Assembly Bill 260, which came into effect on January 1, 2010.
If a borrower believes this duty was not upheld by the mortgage broker, a civil claim can be brought forth. Before a claim for negligence can be established, a duty of care owed by a broker to the plaintiff needs to be settled. If a plaintiff is successful in the case, special damages can be recovered, including the actual monetary value of losses that the broker’s negligence caused.
More Protection With TRID
Borrowers in a real estate transaction have had even more protection over the last year thanks to the TILA-RESPA Integrated Disclosures, or “TRID.” Commonly known as the “Know Before You Owe” act, the TRID mortgage lending rules are meant to offer borrowers more transparency when it comes to the decision-making process for mortgages.
Instead of having to sift through pages and pages of confusing documents and relying on the lender to disclose all pertinent information regarding the mortgage, TRID takes all the federal disclosures and consolidates it into all into two clear and concise disclosures: The Loan Estimate and The Closing Disclosure. That way, borrowers are able to make a more informed decision about a particular loan before signing on the dotted line.
The Bottom Line
Borrowers should always take their time to do the necessary homework about specific mortgage packages for a home purchase. Considering the magnitude of a real estate transaction, it’s in the borrower’s best interests to get firmly acquainted with this information. Luckily, mortgage brokers are legally obligated to look out for the best interests of borrowers. And with the recent TRID mortgage lending rules that help make the transaction even more transparent, borrowers are even more protected.
If you’re renting, the dwelling you live in isn’t yours. You’ve got no responsibility to insure it; that’s your landlord’s obligation.
But what is yours – and what you should consider insuring – are the belongings you’ve got within your home. The dollar value of your TV, stereo system, jewelry, designer shoes, or anything else that has some sort of value should be protected in case of a fire, theft, and so forth.
Your landlord’s property insurance policy will cover losses to the actual structure, but any of your things within it aren’t covered by this policy. You’re responsible for taking out – and paying for – renter’s insurance.
You don’t necessarily have to get a policy, legally speaking – that’s totally up to you. But if your things are torched in a fire or stolen from a burglar, you’ve got no recourse to recoup your losses.
You might not want to assume an additional expense, which is understandable. Between your utility bills (assuming they’re not included in your rent), groceries, car loan payments, and student debt payments, throwing in another expense on the pile doesn’t exactly sound appealing.
But the truth is, renter’s insurance is probably the cheapest payment you’ll have to make at the end of the month. According to the National Association of Insurance Commissioners (NAIC), the average renter’s insurance policy is only about $15 to $30 per month.
Here are some reasons why you should buy into a renter’s insurance policy.
It Covers Any Losses to Your Belongings
Aside from the fact that renter’s insurance is affordable, it also covers losses to your personal property. Even if your place is small and doesn’t fit much, the things you managed to cram in there may be worth a pretty penny when you add it all up. Even if it’s just your smartphone and high-tech headphones, that’s a few hundred bucks right there. You’d be amazed how much you would need to replace all the things you’ve spent years accumulating.
In addition to a fire or theft, renter’s insurance also typically causes losses as a result of damage caused by smoke, vehicles, explosions, lightening, the weight of ice or snow, windstorms, hail, and vandalism. It should be noted that damage caused by floods is not covered under a standard renter’s insurance policy. In this case, you’d need to take out an additional policy.
It Protects You From Liability
Not only are your belongings covered with renter’s insurance, personal liability is also covered. For instance, if someone comes into your home and is injured, they can legally come after you in court for damages. If you have renter’s insurance, you’ll be covered for any costs associated with hiring a lawyer and any judgments that are awarded to the plaintiff in court. The amount of money you’ll be given will depend on your policy limit.
It Might Be Required By Your Landlord
Before you even move into your unit, your landlord might want to see tangible proof that you’ve taken out a renter’s insurance policy. Some landlords just want you to have it for their own personal reasons. Other times their insurance provider may require it.
It Pays For Living Expenses
If your place is damaged beyond the point of being habitable, your insurance policy will cover living expenses to put you up somewhere else temporarily until your home is repaired and brought back up to par. Paying for a hotel for a few weeks or even a few months can really add up. Having a policy that covers these costs can be a real life saver. Every policy is different, so you’d be wise to check your specific policy to identify how long these additional living expenses will be covered for, and what the monetary limits are.
It Covers Your Personal Belongings No Matter Where They Are
Your belongings don’t necessarily have to be in your home at the time that they are damaged or stolen. If you take your things along with you when you’re out and about and they’re either stolen or become damaged, you may be covered for their losses. Inquire with your insurance provider about the specific details on what qualifies to be covered.
The Bottom Line
For a few dollars a month, you can give yourself some peace of mind knowing that you’ll get your money back in case all of your things are damaged, destroyed, lost or stolen. Rather than being left having to start all over and paying out-of-pocket to build up your inventory of belongings, renter’s insurance can reimburse you instead. Just make sure that you are clear on exactly what is covered under your policy, and don’t forget to ask about any potential discounts that you might qualify for to ease the financial burden.