Duties of an Escrow Officer

An escrow officer, also known as the loan officer, is a neutral third party. He is generally appointed by the title company that you and your seller are working with in Maryland. Their main duty is to look over the escrow process that goes with the closing of a deal. They take care of the paperwork, check that the documents are duly signed and the transactions duly executed. They witness the closing of a deal and see that everything is carried out as per the requirements of the laws in Maryland.

The escrow officers in Maryland are vested with varied range of responsibilities. They are enlisted below.

The escrow agent acts as the neutral stakeholder or depository for the money and the documents required to close a real estate deal in Maryland. When a deal is finalized, the seller passes the title to the escrow officer for security. The escrow agent then transfers the property to the buyer after receiving the purchase price of the property.

He prepares the instructions relating to the escrow and documents in terms with the sale in Maryland. If the title company or the principal real estate agent in Maryland orders him, he orders requests for information about the prevailing trust deeds, liens or judgments against the property.

He is responsible to review documents such as the preliminary report, the loan package, the assumption statements or other instruments. He presents the required documents, loan package, buyer’s mortgage statement, estimated costs, and other related documents to the title company for approval. He secures the signature of the title company, the seller and the buyer to close the deal. Furthermore, he requests the buyer to pay-off the balance of the purchase price.

The escrow officer assesses the proceeds of loans taken by the buyer from the lender in Maryland. He is responsible to prepare the final statements before the closing. He takes the cash from the buyer, disburses any obligations of the seller with that amount and hands over the left over amount to the seller.

Raw Land Deal – How to Find it and What to Check Before Investing

A raw land deal should be properly investigated and evaluated before making a final decision. Finding raw lands in Maryland may be easy but knowing if they are really worth investing involves immense efforts.

You can find a raw land deal easily through real estate brokers, reading newspapers, attending auctions or taking drives to the potential areas in Maryland. Typically, raw land is available at much lower rates than constructed properties. The biggest advantage of investing in a raw land is that you can use the land as per your will. Once you have found a raw land in Maryland, next step is to check and evaluate if the land is worth investing.

To sum up, gather all possible information about the land as well as its owner. Buying a raw land may not be an attractive investment for an amateur investor. But most experienced investors in Maryland find it profitable. This is because they can construct a property and flip it. Secondly, they can lease or rent the land and earn monthly income. Just make sure that you pay the right value. Inspect the entire lot of land physically and know the value of land per acre.

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Bird Dogging

The term ‘Bird Dogging’ may sound funny, but it can mean serious business and can get a real estate investor in Maryland some serious profits. This is how it works: the investor is the ‘bird dog’ here. He identifies real estate investment opening in Maryland that has potential but is currently distressed. He puts the property under contract and assigns the contract to another party who will fix the property and flip it and the bird dog gets the assignment fee.

Let’s understand this deal with an example. A bird dog identifies a property in Maryland and makes a contract with the owner to sell the property. He looks for a rehabber who would renovate the property and sell it for a profit. Here are the calculations they need to make:

Cost of the property: $ 100,000

Acquisition cost: $5,000

Cost of repairs: $10,000

Expense for holding the property (90 days): $4000

Misc. Expenses: $5000

Min estimated Profit (15%): $15,000

Closing cost: $5000

Selling Price: $ 144,000

The figures might alter depending on any unforeseen changes, but a rehabber must make these calculations and a bird dog has to keep it in mind while looking for a potential property in Maryland.

However, these are not the only considerations that a bird dog has to keep in mind. Finding the right rehabber is equally important. It is possible that you find a rehabber who might hand over the deal to another rehabber and this way there is hardly any profit for anyone in the deal. This leaves you with a deal that might never close and you never get the assigning amount you had planned to get. An experienced birddog also knows the importance of getting an experienced rehabber, who understands the importance of cost cutting.

Finally, a successful bird dog knows when to walk away. A real estate deal in Maryland can hardly have any profit if there are too many mediators involved or has been dragging for too long.

Home Buying Tips you Haven’t Heard

The following are not your usual home buying tips. For example, almost everyone will tell you that you should buy a home, but the first tip below suggests an alternative.Consider Renting

This is all about time and place and your own situation. Are you going to be in one place for long? If you are likely to move within a few years, you may be better off renting. Transaction costs of buying and selling will likely eat up any equity gains you get. It may seem profitable to buy at $200,000 and sell at $220,000 two years later, but commissions, closing costs and loan costs can easily add up to $20,000, so where is the gain? Also, there is no guarantee that prices will rise, and if they don’t you suffer a real loss.

Also, it is a matter of the ratio between rental rates and the costs of buying, and what is likely to happen in the market. For example, suppose you are in a slow-growing stable area, and your total monthly cost to buy a home is going to be around $1,200. If rent is anywhere near that for the same size home, you should probably be buying a house.

On the other hand, let’s look at the example of Tucson, Arizona in late 2005. You could buy a small home for about $190,000, with mortgage, taxes and insurance running about $1,325 per month. But you could rent the same home for just $675 per month. Now add to this the fact that home prices had been rising at 20% or more per year for years, and 12% of all recent sales were to speculators, not owner-occupants (a sure sign of a market top).

In this case, it would have made more sense to rent. Had you bought there two years ago, you would have paid $650 per month extra to be a home owner, or $15,600 over these last two years. In addition, the house would probably be worth a little less now than when you bought it. Better to have banked that $15,600 and bought the home today.Other Home Buying Tips

Compare ALL costs when you look at various homes. It is easy to consider just the price of a home, or what that means in terms of a mortgage payment. However, there are other costs. If the home is in a flood zone, for example, insurance could be $200 per month higher than for other homes. Look at taxes, insurance, utility costs (big homes cost more to heat) and any other regular costs, so you can honestly compare houses according to what they will cost you monthly.

Go to online forums to learn about a new town. Many people like to talk about where they live. They get to do this in various online forums, which you can search for by entering the name of the town and “forum” into any search engine. Be aware that these are often places where locals complain about their town, but you can also find interesting and useful information, and ask questions.

If your real estate agent doesn’t represent you, don’t be loyal. If she is really a seller’s agent, she is obligated to pass on comment you make to the seller, like “I think we can go higher if they reject our first offer.” Even if she represents you, be sure she does it well. If you are shown three houses that have nothing to do with the criteria you laid out, show the agent the door. By all means stick with a good agent who really helps you, but otherwise you can also call the listing agent for each house you want to see.

Inspect the home yourself. You probably plan to have a home inspection done by a professional before you buy. But you should also visit the home a second time yourself, and do your own inspection. Bring a checklist and look over everything, even if this takes an hour or more. In this way you can tell the professional inspector what your concerns are, and be ready with questions for him.

There is another reason to do this inspection. It has to do with a concept called “time investment.” Sellers are more likely to accept an offer if they have invested more time and hope into a buyer. Negotiation secrets like this are a whole other area of home buying tips – one that you may want to learn about.

What’s your Zoning?

Are you aware about the zoning laws when it comes to real estate investment in Maryland? Ensure whether you are allowed to have a business in your home before starting, by investigating your zoning ordinance. Breaking zoning laws by starting a business at home could put your business in a problem. Determine your zoning laws in your city or your county. For example if you are in Maryland then check out the zoning laws of that place. Determine which government body maintains your zoning laws and familiarize yourself with these regulations. In this way you will be prepared to deal with any problems that may arise.

Zoning problems in Maryland usually arises with home based businesses that deal with public. Usually, it is your neighbors who bring your business to the notice of the zoning boards. The neighbors complain when they are disturbed by the noise that the customers make while coming in and out of your home, occupying the parking space.

Your abnormal working hours may also disturb the neighbors. In addition to their complaints, you can also run into problem if you occupy more space for the business then what is allotted. A zoning issue may pop up after determining the ‘space percentage’. Find out what your Maryland local zoning laws suggest about your specific home business by going online, in your library or through your city’s chamber or commerce. Understand zoning laws before investing in real estate in Maryland.

Incase, you are unable to get a copy through these resources the contact the city hall indirectly with the help of a friend or call from a telephone other than your home number. Once you get in touch with city hall, ask if there is a home occupation regulation and if they can provide a copy of it. Some towns say they have a regulation but they do not enforce it. But it is not true.

If you find your business in problem then you have only 3 options left with you: shut down, go undercover, or attempt to have the law changed. Hence, it becomes necessary to know zoning laws in Maryland, especially if you are investing in real estate, before putting up a business at home.

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