Dallas Appraiser L.L.C. wants your help and commentary on our Real Estate Blog

Title: 

Increasing Cash Flow

Word Count:

258

Summary:

If you have an income producing property, the amount of money you are left with at the end of your property expenses is considered cash flow.

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Article Body:

If you have an income producing property, the amount of money you are left with at the end of your property expenses is considered cash flow.

Here is how it works . . . 

Lets suppose you own a duplex and your monthly mortgage payment including taxes and insurance is approximately $1200.00.

Now lets suppose you have a tenant on each floor with a one year lease, and you charge each tenant $850.00 a month to live there. This is a total of $1700.00 paid to you on a monthly basis.

Once you have paid your mortgage of $1200.00, you are left with a balance of $500.00, this would be your monthly cash flow from the income producing property.

If you are looking to increase your monthly cash flow, one of the easiest ways to do it would be to raise the rent. This is by far one of the most effective and common ways of increasing cash flow.

Another way to increase cash flow depending on the amount of equity you have established in a property would be to use some of that investment propertyís equity to purchase another income producing property.

Using the same principal of charging more than the amount of your total expenses on the property, you will once again be increasing your cash flow.

Keep in mind, when doing any kind of repairs to the home, including landscaping, make sure you save the receipts to be used as a write off. This to will help to reduce earnings, resulting in cash flow in the way of an annual tax return.

Title: 

Increase You Home Value With Bathroom Improvements

Word Count:

326

Summary:

Many home owners look for ways to add value to their homes through improvements. One of the best ways is to have a go at your bathrooms.

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Article Body:

Many home owners look for ways to add value to their homes through improvements. One of the best ways is to have a go at your bathrooms. 

The Almighty Bathroom 

Today’s bathrooms are wonderful. Showers that ‘rain’ on you, warm air hydrotherapy bathtubs, sinks that look like water worn boulders. You can pamper yourself now and smile on your way to the bank when you sell because homes with good kitchens and bathrooms are in demand. The only caveat is do not make it so grand that it is above your neighborhood’s standards. It is hard to get your money out when yours is the most expensive house in the neighborhood. 

Explore and Plan 

The scope and style of your bath update needs to fit the style and price range of your home and your family, and you will face space constraints. One way to approach the project is to canvass various places that sell bathroom fixtures, see what you like, comparison shop, and then see if there is an outlet for your price range with a good design staff to help you on a ‘freebie’ basis if you buy from them. 

Lowe’s and Home Depot are useful if you are very price conscious. They carry brands we are all familiar with. It can be fun to explore some of the avant-garde fixtures in some of the high end outlets, and then see if something similar can be achieved for less. And if the budget (and the neighborhood) can take it, go for a truly luxurious spa of a bath. 

Simplicity is prized today. I think it may be because life tends to be so rushed and complicated. Simplicity does not mean boring. Far from it. The simple can pamper and provide great visual appeal. 

Put together a plan within your budget and you are on your way. Improved bathrooms can actually add tens of thousands of dollars in equity to your home.

Mortgage Advice for Residential Real Estate

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When it comes to owning property many people around the world will tell you that this is a lifelong dream. While once an opportunity that seemed to be reserved for either the wealthiest or the most miserly among the general population home ownership is now something that is accessible to a larger segment of the population than ever before. 

This is good news for many but for some can lead to confusing encounters with mortgage brokers and serious sharks along the way. The best advice that anyone can give someone attempting to embrace the dream of real estate ownership is to deal with a reputable company when it comes to obtaining a mortgage. Even when dealing with reputable lending companies you must watch out for those who do not have your best interest at heart.

If you would like some very practical advice when it comes to getting a mortgage, then you are at the right place. First of all, avoid lenders that are encouraging you to take a loan for more money than you are comfortable repaying. Foreclosures are at a record high when it comes to the mortgage industry at the moment because of predatory lending practice on behalf of some mortgage brokers. These practices include convincing people to borrow more money than they could realistically hope to pay over time and have any quality of life as well as convincing homebuyers to take out adjustable rate mortgages in the beginning in order to procure lower rates.

Shop around before you decide to buy when it comes to mortgages. This doesn't mean to actually apply for mortgages all over town but do the research and compare rates before applying with any one company. Talk to several different brokers and find out what they have to offer you that the other company down the road cannot or will not offer. Keep in mind that mortgage companies will offer everything under the sun from free toasters to free vacations in order to get you to go with their company. The proof is in the terms however. It is simply not worth that free toaster if you are going to end up paying a 6.9% interest rate instead of a 5.9% rate. You will have paid for that toaster many times over in the process of paying the mortgage. 

Even after you've applied for a mortgage, if the deal seems to be going south check out your other options. There are all kinds of problems that crop up along the way. You are not marrying the mortgage broker. Nine times out of ten you aren't even making any sort of commitment at all to your mortgage broker. You will however be living in the house you select. If there is a problem with the mortgage company for the specific home you want do not hesitate to change in order to get the home you desire for your family rather than allowing the mortgage company to dictate what kind of home you can buy. 

I mention this because we had a very similar problem when we purchased our turn of the century home. The mortgage company didn't think the home was worth the risk because of its age. We saw the beauty and the potential in our home that is coming along quite nicely and managed to be approved and financed in short order with another mortgage company. If this was the case in our situation, chances are that it will work for others as well.

In all honesty, it is nearly impossible to buy a home in this day and age without taking out a mortgage. It is best however if you see the process as a learning experience rather than an abject lesson in intimidation. This is your home and your money that will be spent in order to purchase the home. You are asking them for a loan but quite frankly, they need your business. Do not hesitate to shop around for the best deal with a mortgage just as you did when finding your home. 

Title: 

Mortgage Officer Training vs Short Sale Training

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975

Summary:

A career in the short sale mortgage industry these days has a very high demand in the market. You can take a mortgage officer training course and add some weight to your resume, especially if you are in finance. This may help you to stand out while applying for jobs in the mortgage industry. Now-a-days, short sale is the best way to do mortgage business. The old way is cumbersome and limiting. Therefore, people must look for a training course that can offer them expertise on short sales.

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Article Body:

Many financial and mortgage training institutes offer these mortgage officer training courses which are available in a new pattern. The old pattern followed was considered inefficient by the experts and thus, theses days new and revised pattern of teaching is followed which includes imparting practical knowledge instead of theoretical knowledge. This is managed by showing the students video clips which helps them make their ideas clear about all the things and get to know the actions that they should take at precise conditions. Such video clips give a student the first hand experience of handling various situations. Thus, the revised pattern of these mortgage officer training courses is extremely efficient and to the point.

The mortgage officer training course involves subjects like loan origination, mortgage products, under - writings and appraisals and many such important subjects from the point of view of the mortgage industry. The course also allows the trainees to pick up values like time management, getting and retaining customers, solving problems efficiently and avoiding mistakes. These values are extremely important from the point of view of a mortgage industry career. 

Mortgage officer training courses are available live as well as online. The online courses can be used by people who work but wish to learn as well. The online course provides the user some specific time limit to complete a specific part of hi or her work thus teaching them to manage their time. The user may access the website any time he wishes to as they are kept accessible round the clock to their users. The online mortgage officer training program has been developed to match an average learner’s pace. This allows the people who have joined the mortgage officer training course at the speed a comfortable pace, and at the time they want. The online course too contains video clips to provide more practical expertise to the user along with mere theoretical knowledge. 

The mortgage officer training course can also be taken by trained mortgage officers in order to brush up their existing knowledge and get some new knowledge. This may help the person in making his or her work more efficient and gain more income. The mortgage officer training course offers a 12 month valid license after the completion of the course. In these 12 months, the trainees may revise the mortgage officer training course by repeating the course. 

Short Sale Training

In today’s real estate market, the once lucrative opportunity of being a loan officer or mortgage broker originating loans and refinancing homeowners is no longer so lucrative. The sub prime mortgage meltdown and the mortgage credit crunch has really put a damper on that traditional business model, and few areas of the country like Texas are seeing a re - bound. 

What all of the mortgage news sources do not tell you is that the short sale mortgage business is doing fantastic right now. There are more defaulted mortgages in the marketplace right now than we have ever seen before. The transition from a residential mortgage broker business to a short sale mortgage business is very easy. The mortgage brokers and loan officers that use my short sale mortgage system are making ten times more now per file than they used to make by only originating loans. The opportunity to make big money in real estate short sales is now. 

A mortgage loan officer has to know everything about short sales, defaulted mortgages and foreclosure investing. The short sale mortgage business is the best mortgage business opportunity right now in the mortgage market. The traditional mortgage business is not nearly as lucrative as it used to be. The big money in the mortgage business is being made with defaulted mortgages. 

You can get started in the Short Sale Business Today with no cash, no credit and no previous experience. Also, there are no licenses needed like there is with a traditional mortgage business. This allows you to get started immediately because you do not have to prepare for a test or anything like that. You can start making money now and continue learning along the way. 

Traditional mortgage loan officer training classes do not cover short sales, defaulted mortgages or foreclosure investing. For years the traditional mortgage broker training or mortgage lending training classes did not need to cover foreclosures or pre - foreclosures. Now that the sub prime mortgage meltdown has created this huge opportunity for us, I have prepared a free online short sale course to show you how to make a fortune with foreclosures and short sales in today’s market. 

Once you implement my strategies that you ca not get from any other mortgage loan officer training program, you will be the envy of all of your loan officer friends. What do you think they are going to say why you are bringing home $40,000 to $200,000 paydays on your deals and they are still faring around with the same old lifestyle because they have not taken the time to get short sale mortgage training. Those who fail to adapt to our new and improved real estate market will fail to get the results you will see once you start using real estate short sales in your mortgage business. 

If you are just now starting in the mortgage business, you should skip the traditional mortgage business, and start a real estate foreclosures investing business instead. The market is ripe with foreclosures and you should take advantage of the situation while it lasts. My Free Online Mortgage broker training course shows you how to start a mortgage business with a short sale business model. If you already have a mortgage business, you will discover how to leverage your current business relationships by adding short sales as a service you offer to your customers and referral partners. 

Title: 

Knowledge When Properly Applied in your Real Estate Profession

Word Count:

351

Summary:

You must know your business, which means you must know the power of Network Marketing.  You must also know how to prospect and recruit Champions, handle objections and deal with rejection.  Most importantly, you must know in your heart that you can and will achieve your dreams in the industry of Network Marketing.

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Article Body:

Knowledge When Properly Applied in your Real Estate Profession

What is a Champion of industry? Champion; I know that you heard this statement many, many times.  Get ready to learn a little trick to help you learn how a sort of networking "knowledge" can boost your connections and help you become a Champion of networking in Real Estate !  Let us begin by breaking down this word - 'knowledge'.

Know -  You must know your business, which means you must know the power of Network Marketing.  You must also know how to prospect and recruit Champions, handle objections and deal with rejection.  Most importantly, you must know in your heart that you can and will achieve your dreams in the industry of Network Marketing.  

L - Listen:  You must listen to those that have walked in your shoes.  For example, a football coach that coaches a NFL team usually has many records under his belt and has proven himself as a Champion in the game of foot ball.  You would not see a world renowned hockey player coaching a NFL football.  In Network Marketing, you would not take direction from anyone that has not built a group of their own.  There are many so-called coaches out there attempting to coach Network Marketers yet they have NEVER built a group or made any money in the industry.  You must listen and learn from those that have been where you are now and have gone all the way to the top!

E - Edge:  You must have the edge and live on the edge to truly succeed in your business.  That means you are willing to dedicate yourself to your business and become the best that you can be.  This includes filling your mind with motivational, business building strategies on a daily basis to constantly be one step ahead of others in the industry.  You must also attend events, seminars and boot camps hosted by those that have built a Networking Marketing group.  This will give you the ”edge” that you need to be more successful than other Networkers or other entrepreneurs.

If you live by these keys, then Knowledge when applied to your Real Estate business will create Action and rock your future!  Make today the day to truly understand the word Knowledge and how it could help you in your etreprenuerial  pursuit.  

Article written bye.

John Di Lemme

Title: 

Five Stumbling Blocks To Successful Networking in Real Estate And How To Overcome Them

Word Count:

748

Summary:

Overcome these five stumbling blocks to successful networking and supercharge your career and your business.

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Article Body:

The ability to connect with people is essential to success in any business, especially Real Estate.  Professional networking events present opportunities to interact with others on a personal level and to develop profitable relationships.  These occasions are critical for anyone who wants to grow a business or promote a career.

Many people are simply not comfortable walking into a room full of strangers and striking up conversations.  Here are five common stumbling blocks that you may face and tips to help you overcome them.

A RELUCTANCE TO TALK TO STRANGERS.  You were taught at an early age not to speak to people you don't know.  It's not safe.  In certain situations today this is still good advice.  In business, however, talking to strangers is a way to generate interest and support for your products and services.  If you only talk to the people you already know, you will miss out on opportunities to make new connections and establish valuable contacts.

To get past your discomfort in talking to strangers, set a goal for yourself before you attend any networking event.  Decide how many new contacts you want to make or how many strangers you want to meet.  In some cases, you may specifically target individuals whom you'd like to know.

Next come up with some icebreakers or conversation starters. Have questions prepared that you can ask anyone you meet at the event.  You may want to inquire about other people's business, their connection to the sponsoring organization or their opinion of the venue.

LACK OF A FORMAL INTRODUCTION.  It's much easier to make a new contact when there is someone else to handle the introduction and pave the way.  If you wait for another person to make the move you may not meet anyone.  At networking events, the goal is to meet as many people as possible.

This is the time to take the bull by the horns, walk up to people you don't know, introduce yourself and start a conversation.  You can do this if you have prepared your self-introduction in advance.

You will not introduce yourself the same way on every occasion. Perhaps it is your first time to attend an association meeting. In that case, you might want to say that as part of your introduction.  Let people know who you are, why you are there and give them a reason to ask more abut you.

FEAR OF BEING SEEN AS PUSHY.  You may think that you will turn people off if you are assertive and that if they want to talk to you, they will make the first move.  If this is your line of thinking you will find yourself spending your time alone at the reception or meeting function and leaving without a single new connection.  Being open, friendly and interested does not turn people off.

You will not come across as overly aggressive if you seek out the "approachable" people.  These are the ones who are standing alone or who are speaking in groups of three or more.  Two people talking to each other are not approachable because they may be having a private conversation and you would be interrupting.

THINKING THAT OTHER PEOPLE MAY NOT LIKE YOU.  There is always the risk that the other person is not interested in you and doesn't want to meet or talk to you.  It happens. If that is the case, don't take it personally.  Nothing ventured is nothing gained.  When you get a cold shoulder, smile, move on and say to yourself, "Next?"

HAVING YOUR INTENTIONS MISUNDERSTOOD.  Approaching someone of the opposite sex to begin a conversation may seem more like flirting than networking.  This is more of an issue for women than men.  Women have an equal place in the work arena and need to make professional connections the same as men do. Women in business can no longer afford to hold back when there is opportunity at hand.

Neither men nor women will have their motives misinterpreted if they present themselves professionally in their attire and if they keep the conversation focused on business issues or topics that are not personal or private.

Whatever your stumbling blocks, face them before the next networking event and devise a personal plan for getting past them.  Once you do, you will find yourself connecting with confidence and courtesy on every occasion and the results will be reflected in your bottom line.

(c) 2005, Lydia Ramsey.  

Title: 

Business Networking and Marketing Ups and Downs - Real Estate

Word Count:

827

Summary:

The last couple of days have been hot, but beautiful. The weather is near perfect for a Texas Summer, and some of us are suffering from the "end of summer Blues" while others are simply struggling with the pollen levels. This time of the year reminds me that fall is coming and things are about to slow down in Real Estate networking. I would like to take just a moment and discuss this trend and what I believe may be the cause of it.

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Article Body:

The last couple of days have been beautiful for Texas in the summer; the weather near perfect compared to the typical killer heat. This time of the year reminds me that fall is coming and things are about to slow down in real estate networking. I would like to take just a moment and discuss this trend and what I believe may be the cause of it.

Let us begin in the fall. At this time of the year we are working feverishly trying to procure new business because we realize that around the holidays things will slow down. As December draws closer, some of us become preoccupied with things like parties and shopping and our attention turns from building our business. Others find it increasingly difficult to make contact as people begin long vacations.

Then the holidays pass. We put our marketing and networking efforts into high gear, going to several meetings a week, trying to get things cranked up again. The result is increased business and increased profits. Have you ever noticed that in the early part of February that things begin to pick up almost at a maddening pace? When this occurs, unless we are prepared for growth, we start to back off on our promotions as we scramble to complete the work that has been generated by our marketing efforts.

In effect, we stop networking. We lose contact with those we have been making and asking for referrals, and they begin to feel as if we are not interested in them any longer. When this happens, they may look for someone else to refer when that target prospect comes along. 

By early to mid summer, we are starting to crawl out from under the workload and we again look for opportunities. Unfortunately, the vacations have started again as children are released from school for the summer. Thus it is very difficult once again to find the contacts that were out there just before our business picked up again late last winter.

By mid August, school is back in session and people are coming back out into the networking world again. Of course we are seeing some of the same people that were there before, but there are also a lot of new faces as well. Because we had slacked off from our promotion efforts, we were not there to greet the new faces as they started their new business. So the people who have a balanced networking and marketing strategy are there to greet them.

These are the people who have businesses that seem to be growing. They have a marketing and networking plan that is consistent year round. When many businesses are experiencing that new business rush in the spring, these business owners are ready to absorb the new business with new employees or temporary help. They realize that to maintain growth means to be ready for any upswing in the economy that could propel their business to the next level.

So how do we accomplish this? First plan for growth. Have a system ready for when you have more business than you can handle so that there is help you can call. This is managed by building relationships with temp agencies, headhunters, and placement firms. Hire people on a contractor basis if necessary. This saves money on benefits and salaries when thing are a bit slower. It also reduces the amount of paperwork when it comes to payroll processing and taxes.

Next, develop a plan for networking that is manageable. Set a goal for the amount of meetings that you would attend when business is just OK and stick to it when business gets better. Attend functions year round, even during the holiday seasons. 

Plan vacations when necessary, but do not assume that everyone is going on vacation simply because it is summer. Most people have to accommodate the schedules of others and entire companies usually do not go on vacation at the same time. Notice that larger corporations always have staff on hand to do business while an employee is on vacation. Also take note that large corporations do not stop promoting just because it is the month of July or December. They are consistent year round.

The lesson here is that, if you want to grow into a large company, take a look at what large companies do. Emulate them if they are successful and you may be able to duplicate their success. You must be constantly marketing, networking and promoting to ensure consistent business year round. If you decide to slack off now because business is good, I guarantee that when autumn comes you will be working twice as hard to get things going again. If, on the other hand, you keep on consistently marketing the way you did when times were slow, you should be able to experience the growth of both your company and your bank account during the entire year.

Signs to Look for in the Real Estate Market 

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Finding the signs outside of the door that say 'for sale' aren't enough when you are looking at properties for any type of investment.  Real estate is a profession that works off of the economy and how the flow of cash is moving through the economy. If you want to make sure that you are getting the right deal, you will also want to make sure that you are moving into the right market.  

The first thing you will want to do when looking at the market is to see what trends are taking place at the time.  Typically, there will be two markets to look into.  One is a buyer's market, where the prices of real estate will be lower.  The second is a seller's market, where it will be better to sell your home.  These will be dependent on the economy at the time and the conditions that are linked to the different neighborhoods.  

Another sign to look for with any type of real estate is the environment that you will be in.  Communities will usually be linked with specific types of people and demographics.  For example, one area may have more families than older people, while other areas will have retired people or farmers.  While there may be some diversity, it is typical that specific types of people will be linked to the real estate prices and markets.  If you know the demographics of an area, you will also be able to tell when the best time to move is and can make observations about the rates of the homes.  

If you are able to link the different marketing trends to your real estate, then it simply becomes a matter of time before you find exactly what you want.  By observing and researching, you can be certain to find exactly what you need for your real estate investment.   

Title: 

Should you use a lease/purchase (rent to own) approach to sell/rent your home?

Word Count:

784

Summary:

Whether you are a home owner trying to sell your home or an landlord trying to lease it, you should consider the lease/purchase approach. It can result in higher cash flows, larger profits and fewer headaches.

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Article Body:

Have you ever dealt with bad renters? Late payments? Stains on the carpet? Calls late at night about a stopped toilet? Sometimes being a Landlord is not a fun game, especially when you have a nice home and bad tenants.

Have you taken advantage of the recent low interest rates and refinanced your home to the maximum? What about a home equity loan or other form of second mortgage? Do you know how much you can walk away with from the closing table after paying all mortgages and associated costs, like realtor fees? Many people walk away with very little or nothing. Some even have to pay. If this scenario applies to you, it may make sense to delay the sale of your home. It may be possible to generate positive cash flow and lock in a higher selling price with a FSBO (for sale by owner) lease/purchase agreement.

Here's another scenario: You want to sell your own home, but it's not moving as fast as you would like (or as fast as the "fast-talking" realtor who convinced you to list it). You've thought about renting it to cover your mortgage payment, but nobody wants a short-term rental with no idea when they have to move out. And what if the tenant WON'T move out when you have it sold? A FSBO lease/purchase agreement could be a solution.

So you decide to leave it vacant. You make two, three even four mortgage payments. Your insurance company cancels your homeowner's policy because it has been vacant for more than 30 days (it's true, they can do it so read your policy!). You don't want to severely discount the price, yet you need to do something NOW! Here's a FSBO solution - lease with option to buy or lease/purchase (also referred to a rent to own).

What does the FSBO lease/purchase of a home mean?

-LEASE + PURCHASE OFFER = LEASE/PURCHASE AGREEMENT

At some time in your life, you have rented a house or apartment, so you are familiar with a lease agreement. If you have ever bought or sold a house, you are familiar with a purchase offer. The lease/purchase agreement is a hybrid of the two - a lease agreement combined with a purchase offer (sometimes called "rent to own" or an "option," or that is, the right to buy at an agreed upon price).

Here's an example of how lease/purchase works. Let's say you have a house worth $100,000. The "going rent" in your market for that house may be about $800 per month. A lease/purchase agreement would read essentially as follows:

Lease Term: Two Years Monthly Rent: $800 

Purchase Price: $100,000 Rent Credit: $400/month 

Usually, part of the monthly rent will be credited towards the price of the house. In the above example, 50% or $400 per month is being credited. So if the tenant decides to buy after one year (lawyers call this "exercising their option to buy"), they would pay $100,000 - $4,800 = $95,200. If the tenant/buyer does not purchase the property, the owner would keep all of the monthly rent. The best part is, the $400/month is considered "option consideration" by the IRS and does not have to be reported as income until the house is sold or the lease/purchase agreement expires!

As you can see, there are many benefits a lease/purchase can provide you, including:

Immediate relief from mortgage payments 

Fast Solution to the "Nice House in a Slow Market" scenario 

Guaranteed no vacancy 

No need to severely discount the purchase price 

Tax deduction (since the property can be treated as "rental" for tax purposes) 

WHY DON'T I JUST LIST IT WITH A REAL ESTATE AGENT?

It can't hurt to list with a real estate agent or broker. However, most real estate brokers simply "list" your property. This means they stick it in the multiple listing computer and wait for a bite. The first problem with this method is that there are thousands of other homes in the computer that read just like yours. If you want to move your house FAST, you have to offer something different. The lease/purchase is that special something that makes your house attractive.

The second problem is that most Realtors don't know what a lease/purchase is, how it works, and how to market such a deal. Most Realtors will not get involved with a lease/purchase, because they simply want a higher fee (after all, they have to make enough money to pay for those large display ads with their picture on it!).

Title: 

Should You Tell Everything when Selling?

Word Count:

534

Summary:

You may not know exactly how much to tell the potential buyer of your home about the property. Disclosure to potential home buyers about problems and issues has been a much debated subject.

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Article Body:

You may not know exactly how much to tell the potential buyer of your home about the property. Disclosure to potential home buyers about problems and issues has been a much debated subject. Many areas actually have laws that require certain disclosures to be made at the time the real estate contract is entered into.

Personally, I tell all. Everything from the once or twice the wind blew down the chimney the wrong way one windy spring to the small little hole in the guest room window screen. Nothing is too small and nothing is to large.

Caveat Emptor -- "let the buyer beware" -- used to be the law when it came to real estate transactions. Unless the buyer specifically asked about the defect, the seller didn't need to disclose any problems.

But over the years, the Courts noticed that this was unfair. Car buyers get to test drive cars, so why should home buyers be so blind? If a seller knows about a problem in the home, the problem should be corrected or disclosed to a potential buyer.

Modern consumer protection acts have led to disclosure requirements for sellers.

Although the laws vary from place to place, the purpose of these disclosures remain the same. Sellers of residential real estate must disclose to their purchasers any known defects or information concerning the water and sewer systems, insulations, structural systems, plumbing, electrical, heating and air-conditioning systems, fixtures and much more.

These laws require the seller to complete a disclosure form at the time the real estate purchase contract is entered into and give it to the purchaser. If the purchaser has not recieved the form, he or she will have the right to terminate the contract and receive a full return of the earnest money.

What is considered a defect? Must it be something large? Do bones in the backyard really qualify as a defect?

Yes, they do. The courts have even ruled that land discovered to once be a graveyard or a scene of a heinous crime must come with a disclosure.

For example, in 1964, Mr. Louis Hickman created and recorded a piece of land that was once a graveyard. Mr. Hickman had removed the tombstones and all other surface evidence, leaving the graves underground.

In the 80's, a couple built a house on the lot. Fifteen years later, they discovered the graveyard.

The case (Carven vs. Hickman) used the Statute of Repose. This statute basically is designed to protect builders from perpetual liability for defective conditions due to the improvement of a property. The graveyard did not count as an improvement and did not protect Mr. Hickman from liability for the "defect".

This case isn't your technical lack of disclosure case, but it gives you an idea of what you should disclose -- everything. Otherwise, thirty-one years later, you or your estate could be sued for non-disclosure.

Caveat Emptor has no place in today's real estate market. Disclosure of all known problems isn't just being honest, it is beneficial for the home seller. You can protect yourself from litigation by simply stated everything. Yes, the price might drop a few hundred dollars, but it may save you tens of thousands in lawyer fees later.