Jesus (Jesse) Gonzalez, RDCPro

Because the country is seeing an unprecedented amount of foreclosure, I thought it might be a good idea to cover some of the basic terms and concepts of foreclosure. One of these concepts that every Realtor and Homeowner should be aware of is the Acceleration Clause.

The Acceleration Clause can be found in most all real estate mortgage agreements and what it says is, the lender has the right to demand for payment of balance in full if certain circumstances come to rise.

The thing to remember here is that most Acceleration Clauses include not only principal but interest as well, so it is truly the balance in full.

Now, your mortgage agreement will outline the details as to when the lender can Accelerate your loan however, some common reasons that most all of us are under do exist, and they are......

1. Default: This is when you fail to make a payment. Keep in mind, default typically is defined as any missed payment. Default doesn't mean you have to be three months behind. Default is the most common reason for a lender to enforce the Acceleration Clause and the Acceleration Clause is most widely used in cases of Default because it speeds up the foreclosure process.
2. Bankruptcy: Most lenders will Accelerate the loan when you file for Bankruptcy.
3. Fraud: If you are suspected of Mortgage Fraud lenders can Accelerate the loan.
4. Unpaid Taxes: Don't pay Uncle Sam and you can expect the loan will be Accelerated.

Other reasons a lender can Accelerate the loan do exist however, they aren't as common as the ones I have outlined above. If you want to know the details of your specific mortgage, you need to read over your agreement.

The opinions expressed in my blog, are just that...my opinion. I am not an Attorney so do not consider my opinions as legal advice. As a Realtor, I obviously have a working knowledge of common real estate practices however, as it pertains to law, I suggest you speak with an Attorney, which I am not!

When listing your home, you should always ask for Earnest Money. Now the question becomes, just how much Earnest Money should you ask for well, let me share some insight with you.

1. Make the buyer think twice about backing out:
   1. Simply put, you need to have the buyer pay enough Earnest Money that it would act to discourage him from backing out of the contract. If the buyer only puts down $250.00 of Earnest Money on a $100,000.00 home, do you really thing that is enough to make him think twice about backing out of the purchase, I don't think so. Where as, $1,000.00 Earnest Money on a $100,000.00 would cause any purchaser to give it some serious thought before he deiced to precipitously back out. The key to remember here is, Earnest Money is applied to the buyer's benefit upon closing so, whatever he puts down now will go to pay his any monies he needs to close the deal. In short, the more Earnest Money, the more of a commitment the buyer has to close the deal.
2. Compensation for taking the property off the market:
   1. If you didn't reserve the right to continue to market the property during negotiations and execution of the Purchase and Sale Agreement then, during this time, your home should be off the market and placed in "Pending" status. Earnest Money should be enough to act as compensation to you and your Realtor if during this down time the buyer decides to back out and you are holding a home that was off the market for 10-20 days to execute the agreement.
3. Earnest Money should cover any and all expenses you might incur if the buyer decides to back out:
   1. Well, this point can cause some disention in the ranks because, many people realize that if they follow this rule then the amount of Earnest Money could sky rocket. True, that is possible so, you and your Realtor will need to have a heart to heart discussion about staying competitive in your market while still being able to cover any expenses you might incur. For the purposes of this discussion, I am making this point simply to educate you, not to suggest that on a $100,000.00 home you ask for $20,000.00 Earnest Money. In this economy and this local market, here in Nashville, that would be unreasonable and you would never get a showing.

So, all in all, Earnest money does 3 things.

•1. Signifies to the Seller the level of realized interest the buyer has in the property.

•2. Compensates the Seller for the time the property is off the market during the execution of the agreement

•3. Covers all expenses the seller incurs if the buyer backs out.

Don't be bashful when asking for Earnest Money. It is a delicate balance between covering the three points above and staying competitive in your market. An experienced Realtor can truly help here and their knowledge and expertise will be invaluable. Good luck.

First off, I am not an Attorney so any opinion I offer is just that, my opinion and should not be considered legal advice. I am a Realtor working and living in Tennessee.

Ok, in this day and age with Domestic Partnerships on the rise, the discussion on what Joint Tenancy is and how it works is becoming more and more common place for Realtors to know. Now, before I get into details about Joint Tenancy, let me clarify just exactly what it is.

Joint Tenancy is when 2 or more people share ownership or real estate or other property. When 2 or more people own property as Joint Tenants and one owner dies, the other owners automatically own the deceased owner's share. ...Because of the Right of Survivorship, no will is required to transfer the property; it goes directly to the surviving joint tenants without delay and cost of probate.

(Provided by Nolo.com)

So, how does one enter into a Joint Tenancy?

1. Automatically Joint Tenants: The most common use of Automatic Joint Tenants is if you are a legally recognized married couple. Your state may have laws that when you buy a home, you are automatically entered into that purchase as Joint Tenants. If you don't want this type of Tenancy, it will be very important for you to notify your Closing Agent / Title Agent when you are prepared to close the deal.
2. Requesting Joint Tenant Ownership: For Domestic Partnerships....of any kind, Mother and Daughter, Son and Father, Lifestyle Partners, or any other combination of 2 or more people who share ownership of a property, it may be important for you to ask for Joint Tenant Ownership. In situations where you are not automatically given the Joint Tenant status and, your Title Agent or Closing Agent doesn't ask, then they will follow the instructions of the lender (if one is involved) and, may not provide your spouse, mother, father, son, daughter, significant other or business partner, the Right of Survivorship.

The key to Joint Tenancy is The Right of Survivorship, to the best of my knowledge, Joint Tenancy is the only way to hold property with more than one person and be able to provide them with the Right of Survivorship without a will. Specifically what The Right of Survivorship means is, if you die, your Survivors will inherit your owner share equitably, immediately, without cost and without probate....no questions asked.

**Special Note**

In many states, if not all of them, a Joint Tenancy Right of Survivorship will override any will. So, for example, if Grandpa George dies and his surviving wife is the other "Joint Tenant", she automatically owns the home, immediately, without cost and without probate......even though Grandpa George wrote in his will that he was leaving the house to his 25 year old mistress, Angeline. So, check your deeds people and make sure it is set up the way you want it.

A fixture is Personal Property that has been so affixed to land or a building that by law, it becomes part of the real property. (Modern Real Estate Practice 17 Edition)

To help you understand this a bit better, let me give you some examples of what a "fixture" is.....

•1. Heating and cooling system.

•2. Kitchen cabinets.

•3. Built in entertainment cabinetry or built in electronic systems.

•4. Anything that has been added as a permanent part of the building is considered a fixture.

To help you determine if personal property is a fixture a simple test can be done to determine the intent, they are.......

•1. Method of Annexation: Was the Personal Property installed in such away that it was meant to be permanent. Just ask, "Can we remove the Personal Property without damaging the surrounding property?" If the answer is No, then most likely, it is a fixture and should be conveyed with the property.

•2. Adaptation to real estate: How is the Personal Property being used? A great example is your refrigerator. Many would consider this item as Personal Property however, that wouldn't be the case if the refrigerator was designed to un-questionably match the cabinets. In many high end homes, the appliances are styled in such a way that they hide and appear as part of the actual cabinets.

•3. Agreement: What did the parties involved agree to? What was stated in the Purchase and Sale Agreement as to what would and would not convey. If you ever have a question that something is or isn't a fixture.....it's always important to list it out in the Purchase and Sale Agreement if you want to ensure you get it.

The ultimate lesson here is Test 1 (Method of Annexation) and Test 2 (Adaptation to real estate) is subjective at best. I can say that with confidence because the truth of the matter is that courts have been very inconsistent with their rulings. Most of the time, they rely on Test 3 (Agreement), I can't stress how important it is, if you want it, you better include it in the Purchase and Sale Agreement.

Yes, that's right, don't get offended but, before my seller will seriously consider your buyer's offer, they want them to get pre-approved by my seller's lender.

Once that is done, you can choose any lender you want but, the truth of the matter is, most pre-approval letters aren't really "approval" letters at all!

So, before you put an offer on my seller's home, you best bring us an approval letter from our lender first!

True, this once was offensive to me until I started listing more and more homes. I would get well meaning Realtors submitting me offers from buyers who had "approval" letters but, around the time the banks appraisal was completed, all of a sudden these buyer's weren't so "approved". Come to find out, your buyer failed to mention to anyone that they hadn't paid back taxes or they weren't completely hones about their debt to income ratios.

Let me be more specific, just in case you don't understand. If the bank / lender printed out a "pre-approval" letter without once allowing a underwriter to look at the buyers application......well, then........you got suckered into working with someone who may not be approved. I am not going to lock up the listing and change it to pending in the MLS for a buyer who ultimately HAS ABSOLUTELY NO APPROVAL!

Unless you have an approval which states the buyer's application has been reviewed by the underwriter for the lender and it has been approved, then be prepared to get a 2^nd approval from my lender as well.

Trust me, it's nothing against you or your client......it's just I have experienced enough "pre-approvals" that now I know better.