What is the Homestead Exemption?

The Louisiana Homestead Exemption is an exemption on parish and state property taxes for the first $75,000 in value of your home.  There are some taxes that are not included in the exemption, typically those for fire and police protection.

Does everyone qualify?

All owner occupants of residential property qualify.  Investors are not eligible for the exemption.  If you own more than one residence (for example your primary home and a vacation home) then the exemption applies to only one property.

Where do I file?

Exemptions are filed with the parish tax assessor’s office.  After you have purchased a property and the mortgage has been recorded with the courthouse, you will need to bring your copy of the recorded sale documents to the tax assessor to file for your exemption.

• New Orleans Assessor
• Jefferson Parish Assessor
• Plaquemines Parish Assessor

Do I have to renew my exemption annually?

Yes.  Each year, you will receive a renewal card in the mail from your parish assessor.  Sign and return the card for automatic renewal without having to visit the office in person.

Have another question about homestead exemptions in the New Orleans area?  Contact the West Bank Living Team.

Lenders today are being very conservative with appraisals to be sure that they are not taking on collateral that is not worth the mortgage note that it secures.

As part of the loan approval process, the lender will assign someone from their approved appraiser list to provide their opinion of the value of the home being purchased.  In 2008, the guidelines for how appraisals are ordered was changed to avoid any undue influence on the values given for homes.  HVCC (Home Valuation Code of Conduct) rules state that only the lender can order an appraisal on a property – not the owner, not the REALTOR and not even the mortgage broker that may be facilitating the loan.

Once the appraisal is complete, a copy is furnished to the lender, who is responsible for making sure that the buyer also receives a copy of the report – after all, buyers are being charged for it in their closing costs.  While home sellers always want to know the details of the appraisal, that information is confidential and is not shared with anyone on the selling side of the transaction unless the appraised value comes in lower than the purchase price.

Still have questions? Contact the West Bank Living Team.  We know stuff and we’d be happy to share that knowledge with you.

I’ve advised home buyers before about not going on a shopping spree between getting their loan approval and actually moving into their new house.  Today, I was chatting with another agent who told me a story about a home purchase that fell apart only 3 days before the closing because the buyers neglected to keep all of their accounts current.

The buyer was extremely upset with their REALTOR, although how that agent could have been responsible or prevented this remains a little fuzzy to me.  Anytime you make a late payment that is reported to any of the credit bureau agencies, your credit score will suffer.  If you are just barely squeaking by when you originally qualify for a mortgage, a couple of late payments can mean the difference between being a home owner and being a tenant.

Lenders are commonly pulling new credit bureau reports shortly before closings and there are many ways that you can get caught in a bad spot.  Here are the down and dirty rules you need to follow once you have been approved for a mortgage:

• DON’T go out and run up your credit card balances
• DON’T change jobs without discussing it with your lender
• DON’T take on any new debt – no new credit cards, no new car, nothing, nada, zilch
• DON’T forget to pay your bills.  On time.  Every time.

What is a back-up offer?

When a seller has already accepted an offer from another buyer, they should still be willing to hedge their bets and accept back-up offers.  Basically, a back-up offer puts a buyer in the position of being first in line for a property if the accepted or primary offer fails for any reason (inspections, appraisal, financing, etc) and provides the seller a fall back contract.

Writing or accepting a back-up offer works just like any other offer to purchase, with the negotiations on price and terms happening before there is an accepted contract.  The exception is that there is an additional contingency for non-performance of the first offer.  In English, that means that if the first buyer can’t perform the back-up buyer’s contract becomes the primary offer and how that happens is detailed in the purchase agreement.

Hints for Home Buyers

We always recommend that inspection periods do not start until a back-up offer becomes primary, because there is no reason to spend money inspecting a home that you may not ever get a chance to purchase.  Loan approval dates and closing dates are usually based on the date that an offer is accepted.  In the case of a back-up offer, those dates would be based on when the offer becomes the primary one.  For example:  Inspections would be performed within x days of the offer becoming primary rather than within x days of acceptance of the offer.

It’s important to have an experienced agent on your side when writing a back-up offer, to be sure that all of the possible contingencies have been covered…this is usually not a do-it-yourself type of transaction.  If your mortgage interest rate lock will expire before the estimated closing date of the primary offer, you may want to consult with your mortgage lender to find out if a rate lock extension will be available to you.  Additionally, an experienced buyer agent will ensure that you have the ability to cancel the contract at any time prior to becoming the primary offer.  You don’t want to be stuck in a back-up position with no way out until the original offer closes.

Hints for Home Sellers

Don’t give away your confidential information during the negotiation of a back-up offer!  Telling a potential buyer “well, the other people offered us $xx” is never a good idea since you have no idea what the back-up buyer may be willing to pay and you could be short changing yourself.

Don’t let having a back-up offer in your pocket keep you from being fair and open minded during the inspection response negotiations.  It’s a real risk to turn away a buyer based on their repair requests when you have no idea if the next buyer will ask for even more.

Do you need to know more about back-up offers? Contact the West Bank Living Team and we will be happy to chat with you and answer any questions you might have.

After all, who doesn’t want a deal, right?

But, in their quest to find that hidden gem, many buyers are spending money signing up with pre-foreclosure sites in the hopes of getting the scoop on a property before anyone else.  Here’s the thing…lots of other buyers are signing up to get that same information and (most importantly) you’ll not only waste money but time that could have been better spent.  What the sellers of pre-foreclosure lists don’t really make clear is that their lists are of properties that have had foreclosure proceedings started against them and the majority of these homes are not for sale.

Now, I guess you could walk up and knock on someone’s door and say “hey, I heard you are gonna lose your house – want to sell it to me?” but I’m thinking that might not have the most positive outcome.

What we recommend is that you find a buyer agent to represent you and provide you with the most current information on foreclosures that are actually on the market.

A good buyer agent will not only know the ins and outs of purchasing foreclosures, but will also be able to provide you with enough market information to know if that bargain price is really a bargain.  Sometimes the savings you think you are getting on price is more than offset by the cost of repairs and improvements.  If you love to do-it-yourself, then there are definitely some candidates for makeovers out there.  If you want move in condition, then the field narrows quite a bit.

Need a list of foreclosures in the New Orleans area?  Tell us what your wants and needs are, and we’ll get you the most up to date information available and throw in some expert advice at the bargain basement price of free.

There are several roles that REALTORS can play in who they represent and they vary from state to state.  In some states, agents always represent the seller (as a sub agent) unless they have entered into a specific Buyer Representation Agreement with the buyer.  In other states, agents are transaction brokers, not representing either buyer or seller.  In yet another twist, there are some states that allow for buyer agents, seller agents, dual agents AND transaction agents.

Confused yet? If you are relocating to New Orleans, there are only a couple of things you need to know about agency.  In Louisiana, agents are assumed to represent the person they are working with, whether they have a buyer brokerage agreement signed with them or not.

Now, most agents work with both home buyers and home sellers.  Occasionally, an agent will represent both the buyer and seller sides in the same sale, but I’ve written before that we don’t recommend dual agency.  Instead, we recommend that you work with a buyer’s agent.

What Is A Buyer’s Agent?

A true buyer’s agent works only with home buyers. They are well versed in the local real estate market (as every agent should be) and have a slew of behind the scenes professionals just waiting to help you with the purchase of your home.  Lenders, home inspectors, termite inspectors, roofers, plumbers, HVAC technicians…you name it and they usually have someone at their fingertips that can assist you with any issues that arise during your home purchase.

A buyer’s agent spends a lot of time viewing homes, so they are the most knowledgeable about what upgrades and improvements that you can expect in the neighborhood of your choice and in your budget.

A buyer’s agent works tirelessly to ensure that you are getting the home you want at the best price possible and on the terms that work for you.  It’s difficult (actually, it’s almost impossible) to expect that same level of service from an agent who is also representing a home seller.

Finally, the services of a buyer’s agent are included in the commission already being offered by the listing agent.  There is no cost to you, but the benefits of having your own representation are priceless.

When you work with an experienced and professional buyer’s agent, you get more than just someone who opens doors to homes for you. You gain an advocate, who can educate you on the buying process, the local real estate market and how to get the most bang for your buck when choosing a home.  You get someone who is vigilantly protecting your best interests through the entire transaction.

From the National Association of REALTORS:

After a close brush with the deadline, Congress has passed an extension of the Homebuyer Tax Credit closing deadline, the Homebuyer Assistance and Improvement Act (H.R. 5623). The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet closed.  The legislation is designed to create a seamless extension and the new closing deadline for eligible transactions is now September 30, 2010.  There is will be no gap between June 30 and the date the President signs the bill into law.

In a nutshell, if a qualifying buyer was under contract by the April 30th deadline, they now have an additional 90 days to close on their home.

This is NOT an extension of the credit, but of the required closing date.

Most of the buyers taking advantage of the credit in the New Orleans area have already closed on their homes, but there are always exceptions and delays.  Home buyers waiting on a short sale approval by a bank or those buyers that are still waiting for their own lender to finish the approval process can breathe a sigh of relief, knowing that they have an extra 90 days to get it done.

Normally, I’m a little hesitant about why someone is changing agents.  Did they not follow the professional advice they were given?  Did they ignore the market indicators and price their home too high?  Is the house not in show ready condition?

Apparently, the reason they were agent shopping has nothing to do with any of that.

When mom and dad first decided to sell the house, their daughter offered to do some research for them and find a REALTOR that is familiar with the area and has recently listed and/or sold homes there.  Mom and dad didn’t want any help and instead went to…the phone book.

It’s not how I would start my own search, but I guess there are worse things than using the phone book as a starting point.  The downside was that they hired the first agent they talked to without digging a little deeper.

What they were surprised and disappointed to find out during the course of the listing was that their agent was:

Bad tempered

Everyone has a bad day now and then, but there is absolutely no excuse for being unnecessarily rude to a customer.  Whenever the agent was asked questions or pressed on any issues, he would blow up at the sellers.

Technology impaired

Sadly, not every REALTOR is tech savvy.  But you don’t have to be a rocket scientist to master the basics.  Email was a struggle for this agent and the ability to work a scanner was way beyond his capabilities.  In this day and age if you don’t have the ability to make communication easy with a home seller then it’s time to find a line of work that doesn’t involve anything more technical than a flip phone.

Speaking negatively about the house

No house is perfect – they all have a flaw here or there – some of them are big and some of them are small.  A listing agent’s job is to market the property to the best of our ability, highlight the best features and provide recommendations to improve your chances of a sale.  Instead, during the course of the listing, Mr. Bad Temper informed the sellers that if he was a buyer, he wouldn’t buy their house.

Whoa!  Really?

Someone entrusted him with the sale of what is probably their largest asset and he actually had the nerve to say that?  If he was willing to voice this opinion to the home owner, what in the world might have been said to potential buyers?!?  I’ve sold many, many houses that I wouldn’t have bought for myself.  Whether it was location, condition, size…it doesn’t matter what the listing agent personally thinks, it only matters what the buyers think.

We, as REALTORs, have a code of ethics that includes the phrase “When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client.” While not directly in violation, if a listing agent is speaking poorly of the listing to potential buyers then, in my opinion, they are not promoting the interests of their client.  Note: this does not mean that we don’t have to disclose any known defects with a property, only that our personal opinion shouldn’t cloud our professionalism.

Are we perfect?

Absolutely not.  We’re human.  We make mistakes.  We’ve had clients that we just didn’t gel with.  We’ve lost clients because we weren’t on the same page as the buyer or seller and no amount of good humor or technology or ethics can change that.

That’s why every buyer and seller should take the time to do a little research, interview more than one agent and choose the one that fits you best.  Please don’t just choose a name from the phone book!

When is the Act of Sale?

In Louisiana, the closing date, like so many other things, is negotiated between the buyer and seller as part of the purchase agreement.  Typically, buyers want to close as near to the end of the month as possible, because they will be pre-paying interest between the act of sale date and the end of the month.  The closer to the end of the month, the less in pre-paid interest that they have to bring to the table.

An unfortunate reality today is that closing dates are changed more often than not.  Delays in loan approvals and appraisals can push everything back, sometimes by a day or two, sometimes by weeks.

While the agents work hard to keep things on track, there are some things that are beyond our control (lenders and appraisers being a couple of them) and that may result in you being asked to sign an extension to the closing date.  As noted in the purchase agreement, any changes to the date must be agreed to in writing by both the buyer and the seller.

Where is the Act of Sale?

The Louisiana purchase agreement requires that all real estate closings be held by either a settlement agent or a Notary Public. The settlement agent is usually a real estate attorney who works in conjunction with the title company.  Occasionally, a title company may use a Notary instead of an attorney.

Typically, the closing takes place at the title company office, but there are title companies that will close off site if needed.  I’ve been to closings that were held at real estate brokerage offices because that was more convenient for the buyer and seller.

The choice of title company is up to the buyer, because the bulk of the fees being charged by them are on the buyer’s side of the transaction.  The exception to this rule is when the seller is a bank.  Often, they have one title company that does all of their closings and they make it a condition of the sale that their closing company is used.  When buying new construction, builders will sometimes offer a discount or help with closing costs in return for using their title company or attorney to perform the closing.

Jumping through all of the FHA hoops was tiring enough, but dealing with an out of state Wells Fargo underwriter served to make almost everyone involved in the process want to scream…including the loan originator who worked for the same company.

Lapses in communication by the underwriter, repeated requests for documents and information that had already been provided and an apparent inability to actually review the documents they had in hand all served to draw out a closing a full 30 days past the date set in the original purchase agreement.  Keeping the buyer from moving in, the seller from moving on and everyone else in a reactive mode, cringing at what new hell they might dream up as the torture de jour.

While the loan originator (who is the front line contact with the buyer and the agents) has a local office, the underwriter sat waaaaay over in Jacksonville, Florida.  They didn’t have to make small talk at the water cooler with the originator, they didn’t pass each other in the hall and get a quick update on the status of the loan approval.  The underwriter had no incentive to actually get the deal done within the deadlines of the contract.  Instead, they focused on the minutiae and stopped or stalled the process over and over again as they requested item after item above and beyond their original request list.

I got tired of asking “is there anything else you need to finish processing this loan?” only to find out days later that yet another document was required – or, even worse, that they were asking for things that had already been sent to them.  They even had the gall to throw in a last minute, previously undisclosed seller FHA fee while we were sitting at the closing table signing the settlement statement.

Get to the point, Lisa

The point is that when a buyer uses an out of state lender, everyone in the transaction is faceless to the underwriting staff.  You are just another file that they have to get processed instead of being a customer.

That’s why we always, always, always advise our buyers to use a local lender. Someone you can get face to face with.  Someone who is working with you, not just on your file.  Someone who isn’t reliant on phone calls and email to communicate with the underwriter, but instead can walk down the hall and poke their head into an office for an update.

If you need someone like that, we’d be happy to give you a referral to some New Orleans area lenders we have successfully worked with in the past that didn’t make everyone want to beat their head against a wall.  Buying a home is supposed to be fun and we don’t like to work with people who suck the fun out of it.  You shouldn’t either.