People in today’s society will have differing attitudes to debt and debt repayment. There will always be those individual’s who take a very ‘relaxed’ attitude to debt and debt repayment, however the vast majority will take the matter very seriously and in the case of property ownership, they will take any realistic action to make their mortgage repayments on time. Unfortunately there will always be situations out of the control of even the most conscientious borrower.
Individuals fall into arrears on their mortgage for many different reasons; accident or sickness, redundancy or unemployment, death of a spouse, insolvency or hikes in mortgage interest rates to name just a few. The most common reason for property repossession in current times can be attributed to general high levels of consumer debt. This comes in two forms, secured and unsecured debt. Whether this is due to the borrower making payments on their unsecured debts in priority over their mortgage or a level of mortgage borrowing taken out which their income cannot afford.
But how can a few missed payments on the mortgage lead to property repossession?
Very rarely will a property be repossessed over an isolated incident of a couple of missed payments. The advice given to borrowers who fall behind on their mortgage repayments is to contact their lender at the earliest possible opportunity. Speedy action on the part of the borrower can often reduce the potential arrears and put them on the road to recovery. Delaying action is likely to result in increased mortgage arrears and ultimately could lead to property repossession.
Borrowers have a number of options available to them in the early stages of mortgage arrears. These will include:
* Capitalising the arrears;
* Coming to an agreement with the lender to make good the missed payments over an agreed period of time. This is usually only a viable solution if the borrower can afford to increase the monthly mortgage payments;
* Paying the mortgage on an interest only basis for an agreed period. Of course this will only be an option open to those paying the mortgage on a repayment basis. This method is viewed as an immediate short term solution to relieve the immediate pressure as the arrears will still be outstanding;
* Increasing the term of the mortgage. This will take the effect of reducing the monthly payments, thus making them more affordable;
* Downsizing to a cheaper property. This could allow the borrower to use the cash raised to settle the arrears. This of course is not always a viable option as it is dependant on the seller finding a buyer for the property and so on;
* Surrendering an investment policy – such as an endowment or an ISA attached to the mortgage. Surrendering such policies will usually result in a significant loss to the investor as very rarely will he or she receive the full value of the policy. Consideration must then be given as to how the mortgage will be repaid at the end of the term with no repayment vehicle;
But what happens if an agreement with a lender cannot be made, or a solution found to clearing the arrears?
Handing back the keys to the lender is rarely a good idea. The borrower will still be responsible for paying the mortgage until the lender has sold the property. This will lead to more arrears and arrears charges being made. It must also be understood that prices obtained for repossessed properties will usually less than the market value – The lenders primary aim in this case is to sell the property as quickly as possible in order to recoup their funds.
If an arrangement is not made and the arrears situation escalates then it is highly likely that the lender will seek a legal remedy through the County Courts. The borrower will first be notified of this through a letter from the lender’s solicitor.
In order for the lender to take possession of a property, it is first necessary to petition the County Court for a possession order. The borrower will usually receive a court date for the hearing. Before the County Court will even consider granting a possession order it first has to be satisfied that every avenue has been explored by the lender and borrower. The County Court will take the view that possession should be the very last resort.
The County Court may take one of three course of action:
* It can grant an outright possession order. This will enable the lender to take possession of the property which will usually happen within 28 days;
* It can grant a suspended possession order. This will place an obligation on the borrower to make payments in accordance with the court’s decision, with the suspended possession order enforceable if the borrower fails to keep up the repayments.
* It can adjourn the case until a later time.
Once a possession order has been granted the court will also decide a date on which this order is enforceable. The lender can then take steps to take possession of the property.
Once the lender has obtained vacant possession of the property, they will then follow there possession procedures which will include; changing the locks, disconnecting utility services, taking gas and electric meters and informing the local police of the possession.
Even after the property repossession, the borrower can still redeem the mortgage up until the point of sale. This can sometimes happen if the borrower has been organising a remortgage during this process.
In the event of the lender losing money on the proceeds of the sale, it may take further action if it believes the borrower has the financial means to make good the loss.
Wednesday, February 11, 2009
5 Things You May Be Surprised To Know That Help You Get Approved Or A Lower Rate For A Mortgage Loan
Buy Life Insurance - Although life insurance is not a requirement for most mortgage lenders, it is definitely something that many lenders will take into consideration when evaluating your mortgage application. By demonstrating that you have enough life insurance to cover the mortgage, there is a higher likelihood that they will approve your application, because they know there is less of a chance they’ll have to go through the difficult process of handling your mortgage if you were to suddenly pass away.
Don't Close Any Accounts During the Mortgage Process - Since lenders are evaluating your present financial situation, the closing or canceling of any existing accounts, regardless of balance, may trigger a red flag with the lender. If you want to close any accounts or cancel any contracts, do this either before or after the mortgage application has been approved.
Request That Credit Bureaus DO NOT Accept Unauthorized Credit Checks - If you’re like many average Americans, you receive countless “pre-approved” credit card solicitations and loan ads in your mailbox every day. This is because these companies have software that scans consumer credit reports based on criteria that they feel will result in a list of good potential new customers. Although these inquiries may not directly lower your credit score, it does show up when a mortgage company pulls a copy of your report. Your best option is to prevent these companies from accessing your credit report altogether.
Don't Move Your Money From One Bank Account To Another - Any transfer of money from one account to another generates a paper trail that will require further explanation when the mortgage company receives copies of your account statements. Even if the transfers are within your own accounts, try to avoid moving the money if at all possible. This is especially true when moving money from a savings account to a checking account because it may appear to the lender that you’re preparing to use that money.
Avoid Using “Credit Repair” Services - Many people with credit that is less than perfect are attracted to organizations that offer to fix your credit in record time and improve your overall score. This is not always the case. When lenders see on your credit report that you are working with a consumer debt counseling company they actually look less favorably upon such notations. To the lender, the only way to interpret this information is to assume the borrower cannot pay the existing bills, therefore how could they possibly afford a mortgage payment? Your best bet is to work directly with the credit card or loan companies to arrange a repayment plan.
Don't Close Any Accounts During the Mortgage Process - Since lenders are evaluating your present financial situation, the closing or canceling of any existing accounts, regardless of balance, may trigger a red flag with the lender. If you want to close any accounts or cancel any contracts, do this either before or after the mortgage application has been approved.
Request That Credit Bureaus DO NOT Accept Unauthorized Credit Checks - If you’re like many average Americans, you receive countless “pre-approved” credit card solicitations and loan ads in your mailbox every day. This is because these companies have software that scans consumer credit reports based on criteria that they feel will result in a list of good potential new customers. Although these inquiries may not directly lower your credit score, it does show up when a mortgage company pulls a copy of your report. Your best option is to prevent these companies from accessing your credit report altogether.
Don't Move Your Money From One Bank Account To Another - Any transfer of money from one account to another generates a paper trail that will require further explanation when the mortgage company receives copies of your account statements. Even if the transfers are within your own accounts, try to avoid moving the money if at all possible. This is especially true when moving money from a savings account to a checking account because it may appear to the lender that you’re preparing to use that money.
Avoid Using “Credit Repair” Services - Many people with credit that is less than perfect are attracted to organizations that offer to fix your credit in record time and improve your overall score. This is not always the case. When lenders see on your credit report that you are working with a consumer debt counseling company they actually look less favorably upon such notations. To the lender, the only way to interpret this information is to assume the borrower cannot pay the existing bills, therefore how could they possibly afford a mortgage payment? Your best bet is to work directly with the credit card or loan companies to arrange a repayment plan.
Sunday, February 8, 2009
Understanding How a Buyer's Agent Can Help You
When purchasing a home, most people will have an opportunity to interact with one or more real estate sales people (often referred to as real estate agents or "realtors"). It is very important for a home buyer to understand the roles and responsibilities of a real estate sales person, especially who they represent in the real estate transaction. This article provides a brief overview of "typical" representation in a real estate transaction, and describes a buyer's agent and the valuable contributions that they can make helping a home buyer to purchase a home.
A real estate sales person acts as an "agent" for one or more of the parties (buyer and/or seller) in a real estate transaction. An agent is an individual who works on behalf of another individual. Under the law of agency, which governs client/agent relationships, an individual acting as an agent for another individual must work to protect the "best interests" of their client (the person for whom they are acting as an agent). They are said to have a "fiduciary" responsibility to their client.
Typically in a real estate transaction, a real estate agent will obtain a listing from the seller of a home. The realtor and seller enter into a listing agreement whereby the realtor agrees to act as the agent for the home seller to help them to sell their home (listing their home in a listing service, marketing their home, holding open houses, showing their home etc.). This realtor is often referred to as the listing agent, listing realtor, or listing broker. In the listing agreement the home seller agrees to pay the listing agent for their services, typically a percentage of the selling price of the home. Since the listing agent often is not the individual to actually sell a home, the home seller also typically agrees to pay the agent who actually sells their home (the selling agent) for their services, also typically a percentage of the selling price of the home.
It is important for a home buyer to understand, that in the absence of any disclosure to the contrary, the listing agent acts as an agent of the home seller. The selling agent acts as a sub-agent to the listing agent. This means that both the listing and the selling agent are working for, and looking after the best interests of the home seller. Many buyers mistakenly assume they are being represented by the real estate agent who is showing them homes, when in fact that individual is usually working for the home seller. For this reason, many states require by law that real estate sales people disclose who they are working for to all parties to a real estate transaction at the beginning of any relationship. The National Association of Realtors (NAR) also requires in their "Code of Ethics" that realtors disclose who they are working for at the first meeting between a realtor and a seller or buyer.
Many home purchasers are not happy with the typical "arrangement" whereby real estate agents are representing the seller, and they are left to represent themselves. Many home buyers prefer to have a trained, experienced real estate professional representing them in their real estate transactions. It is for this reason that many home buyers choose to hire a buyer's agent (also referred to as a buyer's broker or buyer's representative). A buyer's agent is an individual who is hired by a home buyer to represent them in a real estate transaction. Similar to a home seller, a buyer typically enters into a contract with the buyer's agent. The contract should stipulate what services the buyers agent will provide, and what compensation the home buyer will give to the buyer's agent if they successfully help them to purchase a home. Buyer's agent compensation is typically a percentage of a home selling price. Buyer's agent contracts typically have a term and provisions for how either party (the buyer or the real estate agent) can sever the contract.
A buyer's agent acts as the agent for the buyer in a real estate transaction. Services that they provide include:
Understanding a buyer's home buying needs and desires.
Helping buyers to understand what they can comfortably afford.
Researching and helping to locate suitable homes in the appropriate communities that meet their buyer's needs.
Answering questions about homes, communities, the home buying process, and more.
Helping a buyer to understand if a prospective home is fairly priced and helping them to formulate an offer for a home.
Filling out all of the appropriate purchase offer documents and presenting them to the selling agent and home seller.
Helping the buyer with negotiations or negotiating on behalf of the buyer.
Providing lists of qualified individuals for other services needed such as attorneys, and home inspection services.
Facilitating the flow of contracts between seller and buyer attorneys.
Assisting the buyer in obtaining financing for their home purchase.
A buyer's agent should not, however, provide advice on matters for which they have no training or expertise. They should not, for example, be providing legal advice. Buyers should work with qualified attorneys for legal advice. Buyer's brokers can, however, assist a buyer in finding an appropriate attorney.
For their services, a buyer's agent is compensated by the buyer. What typically happens in practice, however, is that the buyer and buyer's agent will build into the offer a provision for the seller to provide the compensation to the buyer's agent. Remember that a typical seller has already agreed to pay a selling agent commission when they entered into a listing contract. That means that there is typically money available to compensate the buyer's agent for their efforts on behalf of the buyer. If the seller has made available less money than the buyer's agent is entitled to by contract with the buyer, then one of several things can happen:
The seller can agree as part of the negotiations to pay the discrepancy in order to sell their home.
The buyer pays the additional amount out of their own pocket.
The buyer's agent agrees to accept less compensation than was originally agreed to to allow the transaction to go through.
Dual Agency, A Special Condition
A special condition can sometimes arise where a real estate agent is contractually obligated to both parties in a real estate transaction, as would be the case of a buyer's agent showing one of their own listings. In this case "dual agency" is said to exist. The real estate agent is an agent to both parties. When this condition arises, a realtor should disclose the dual agency condition and obtain consent from both buyer and seller that they accept this condition. In many states, failure to disclose dual agency is a violation of the law for which a real estate agent can lose their license, be fined, and potentially receive a jail sentence. In a dual agency condition, the real estate agent acts as a neutral third party, not representing the interests of either party, but simply facilitating the transaction. Many consumer advocates are not happy with such arrangements because nobody is looking after the best interests of the consumers, in this case the buyer and the seller.
Conclusion
Buyer's agents serve a very useful purpose helping to protect the interests of real estate buyers in real estate transactions. Individuals seeking to purchase a home who do not have a lot of experience with real estate should seriously consider hiring a buyer's agent to represent them, and help them through the process, negotiations, and real estate transaction.
REALTOR® is a trademark of the NATIONAL ASSOCIATION OF REALTORS®.
A real estate sales person acts as an "agent" for one or more of the parties (buyer and/or seller) in a real estate transaction. An agent is an individual who works on behalf of another individual. Under the law of agency, which governs client/agent relationships, an individual acting as an agent for another individual must work to protect the "best interests" of their client (the person for whom they are acting as an agent). They are said to have a "fiduciary" responsibility to their client.
Typically in a real estate transaction, a real estate agent will obtain a listing from the seller of a home. The realtor and seller enter into a listing agreement whereby the realtor agrees to act as the agent for the home seller to help them to sell their home (listing their home in a listing service, marketing their home, holding open houses, showing their home etc.). This realtor is often referred to as the listing agent, listing realtor, or listing broker. In the listing agreement the home seller agrees to pay the listing agent for their services, typically a percentage of the selling price of the home. Since the listing agent often is not the individual to actually sell a home, the home seller also typically agrees to pay the agent who actually sells their home (the selling agent) for their services, also typically a percentage of the selling price of the home.
It is important for a home buyer to understand, that in the absence of any disclosure to the contrary, the listing agent acts as an agent of the home seller. The selling agent acts as a sub-agent to the listing agent. This means that both the listing and the selling agent are working for, and looking after the best interests of the home seller. Many buyers mistakenly assume they are being represented by the real estate agent who is showing them homes, when in fact that individual is usually working for the home seller. For this reason, many states require by law that real estate sales people disclose who they are working for to all parties to a real estate transaction at the beginning of any relationship. The National Association of Realtors (NAR) also requires in their "Code of Ethics" that realtors disclose who they are working for at the first meeting between a realtor and a seller or buyer.
Many home purchasers are not happy with the typical "arrangement" whereby real estate agents are representing the seller, and they are left to represent themselves. Many home buyers prefer to have a trained, experienced real estate professional representing them in their real estate transactions. It is for this reason that many home buyers choose to hire a buyer's agent (also referred to as a buyer's broker or buyer's representative). A buyer's agent is an individual who is hired by a home buyer to represent them in a real estate transaction. Similar to a home seller, a buyer typically enters into a contract with the buyer's agent. The contract should stipulate what services the buyers agent will provide, and what compensation the home buyer will give to the buyer's agent if they successfully help them to purchase a home. Buyer's agent compensation is typically a percentage of a home selling price. Buyer's agent contracts typically have a term and provisions for how either party (the buyer or the real estate agent) can sever the contract.
A buyer's agent acts as the agent for the buyer in a real estate transaction. Services that they provide include:
Understanding a buyer's home buying needs and desires.
Helping buyers to understand what they can comfortably afford.
Researching and helping to locate suitable homes in the appropriate communities that meet their buyer's needs.
Answering questions about homes, communities, the home buying process, and more.
Helping a buyer to understand if a prospective home is fairly priced and helping them to formulate an offer for a home.
Filling out all of the appropriate purchase offer documents and presenting them to the selling agent and home seller.
Helping the buyer with negotiations or negotiating on behalf of the buyer.
Providing lists of qualified individuals for other services needed such as attorneys, and home inspection services.
Facilitating the flow of contracts between seller and buyer attorneys.
Assisting the buyer in obtaining financing for their home purchase.
A buyer's agent should not, however, provide advice on matters for which they have no training or expertise. They should not, for example, be providing legal advice. Buyers should work with qualified attorneys for legal advice. Buyer's brokers can, however, assist a buyer in finding an appropriate attorney.
For their services, a buyer's agent is compensated by the buyer. What typically happens in practice, however, is that the buyer and buyer's agent will build into the offer a provision for the seller to provide the compensation to the buyer's agent. Remember that a typical seller has already agreed to pay a selling agent commission when they entered into a listing contract. That means that there is typically money available to compensate the buyer's agent for their efforts on behalf of the buyer. If the seller has made available less money than the buyer's agent is entitled to by contract with the buyer, then one of several things can happen:
The seller can agree as part of the negotiations to pay the discrepancy in order to sell their home.
The buyer pays the additional amount out of their own pocket.
The buyer's agent agrees to accept less compensation than was originally agreed to to allow the transaction to go through.
Dual Agency, A Special Condition
A special condition can sometimes arise where a real estate agent is contractually obligated to both parties in a real estate transaction, as would be the case of a buyer's agent showing one of their own listings. In this case "dual agency" is said to exist. The real estate agent is an agent to both parties. When this condition arises, a realtor should disclose the dual agency condition and obtain consent from both buyer and seller that they accept this condition. In many states, failure to disclose dual agency is a violation of the law for which a real estate agent can lose their license, be fined, and potentially receive a jail sentence. In a dual agency condition, the real estate agent acts as a neutral third party, not representing the interests of either party, but simply facilitating the transaction. Many consumer advocates are not happy with such arrangements because nobody is looking after the best interests of the consumers, in this case the buyer and the seller.
Conclusion
Buyer's agents serve a very useful purpose helping to protect the interests of real estate buyers in real estate transactions. Individuals seeking to purchase a home who do not have a lot of experience with real estate should seriously consider hiring a buyer's agent to represent them, and help them through the process, negotiations, and real estate transaction.
REALTOR® is a trademark of the NATIONAL ASSOCIATION OF REALTORS®.
The Most Important Form in Real Estate
Those who are involved in real estate are aware that the process of transferring ownership of properties is a very sensitive matter. From the time the home owners decide to sell the house to the time you relinquish the keys to new owners, expect every step of the process to be recorded and formalized through the use of various real estate forms.
However, of all the forms home sellers will encounter, nothing will give them greater joy than the much anticipated “offer to purchase real estate form”. Once home sellers receive an “offer to purchase” form, it means that they one of the several buyers whom they have entertained through phone or met during one of the open house events, is seriously considering to buy the property.
The offer to purchase form is very important, not just because it could signify the start of a sale, but also because this piece of paper will have a marked effect on the lifestyle of the buyer and the seller. The offer to purchase will indicate the price which the buyer is willing to pay for the property, and will also outline how the money will be paid. The proposed down payment, deadline for payment of the balance, the method of payment (cash, bank cheque, bank transfer) and deadline of payment are but a few of the details that should be indicated in an offer to purchase form.
The details included in the offer to purchase form are not yet final. The seller, if he is not particularly pleased about the details indicated, can present their own counter offer, for the buyer’s approval. The process of sending counter offers will continue until both parties reach a compromise, or find a middle ground where both are happy and satisfied.
Though individual home buyers can opt to prepare their own offers to purchase documents, it is best that they consult with a real estate lawyer or real estate agent first, in order to verify if the format and contents conform to state or federal standards. Another option that can be taken is to use the ready-made offer to purchase forms which can be purchased or downloaded from the internet.
The ready to use offer to purchase forms are as good as those prepared by lawyers or agents. These contain all the information that are vital in the purchase transactions and follow the standard formats of traditional documents. If a particular state has a specific offer to purchase format, there are state-specific forms that can be obtained from the internet as well. Offer to purchase real estate forms can be purchased per piece or as part of a complete set. The choice on whether or not the full set or individual pieces are to be downloaded will depend on the user.
Incidentally, all counter proposals to the first offer to purchase should be recorded and attached to the first document presented to the home seller. These supplemental documents will serve as additional support and will form part of the final purchase contract.
However, of all the forms home sellers will encounter, nothing will give them greater joy than the much anticipated “offer to purchase real estate form”. Once home sellers receive an “offer to purchase” form, it means that they one of the several buyers whom they have entertained through phone or met during one of the open house events, is seriously considering to buy the property.
The offer to purchase form is very important, not just because it could signify the start of a sale, but also because this piece of paper will have a marked effect on the lifestyle of the buyer and the seller. The offer to purchase will indicate the price which the buyer is willing to pay for the property, and will also outline how the money will be paid. The proposed down payment, deadline for payment of the balance, the method of payment (cash, bank cheque, bank transfer) and deadline of payment are but a few of the details that should be indicated in an offer to purchase form.
The details included in the offer to purchase form are not yet final. The seller, if he is not particularly pleased about the details indicated, can present their own counter offer, for the buyer’s approval. The process of sending counter offers will continue until both parties reach a compromise, or find a middle ground where both are happy and satisfied.
Though individual home buyers can opt to prepare their own offers to purchase documents, it is best that they consult with a real estate lawyer or real estate agent first, in order to verify if the format and contents conform to state or federal standards. Another option that can be taken is to use the ready-made offer to purchase forms which can be purchased or downloaded from the internet.
The ready to use offer to purchase forms are as good as those prepared by lawyers or agents. These contain all the information that are vital in the purchase transactions and follow the standard formats of traditional documents. If a particular state has a specific offer to purchase format, there are state-specific forms that can be obtained from the internet as well. Offer to purchase real estate forms can be purchased per piece or as part of a complete set. The choice on whether or not the full set or individual pieces are to be downloaded will depend on the user.
Incidentally, all counter proposals to the first offer to purchase should be recorded and attached to the first document presented to the home seller. These supplemental documents will serve as additional support and will form part of the final purchase contract.
State Real Estate Auctions - Tips for Buyers
State real estate auctions sell off real property that has been seized, abandoned, or forfeited. The Department of Treasury has been designated as the state department to handle such auctions. Typically, they conduct 100 auctions a year.
The funds obtained at state real estate auctions help support local and state police and other areas of the city. The placement of a successful bid at a Department of the Treasury auction establishes a legally binding contract between the successful bidder and the Government.
Here are some basic rules and policies:
To be eligible to bid you must be 18 years of age and not an employee of the state.
You cannot be the contractor, subcontractor or vendor or their agent who has access to information about the property.
A bidder registration form must be submitted for approval. If bidding for someone else, the form must be notarized.
Buyer is to inspect property prior to placing a bid.
Changes may be made on the day of the sale.
The Government reserves the right to withdraw from sale any of the property listed.
The buyer understands the property is sold on the “AS IS” basis.
A lot of rules and regulations govern state real estate auctions, and it is wise if you take the time to research them prior to attempting to attend. Each registered bidder will be issued a bidding number. This is your lifeline to what is important on that day. Don't lose it.
Most importantly enjoy yourself at a state auction. The properties auctioned off are very valuable and should bring you a good return.
The funds obtained at state real estate auctions help support local and state police and other areas of the city. The placement of a successful bid at a Department of the Treasury auction establishes a legally binding contract between the successful bidder and the Government.
Here are some basic rules and policies:
To be eligible to bid you must be 18 years of age and not an employee of the state.
You cannot be the contractor, subcontractor or vendor or their agent who has access to information about the property.
A bidder registration form must be submitted for approval. If bidding for someone else, the form must be notarized.
Buyer is to inspect property prior to placing a bid.
Changes may be made on the day of the sale.
The Government reserves the right to withdraw from sale any of the property listed.
The buyer understands the property is sold on the “AS IS” basis.
A lot of rules and regulations govern state real estate auctions, and it is wise if you take the time to research them prior to attempting to attend. Each registered bidder will be issued a bidding number. This is your lifeline to what is important on that day. Don't lose it.
Most importantly enjoy yourself at a state auction. The properties auctioned off are very valuable and should bring you a good return.
How Appraisals and Assessments Differ
Many people think appraisals and assessments are the same thing or at least that they should be for the same amount. The truth is they can vary greatly. Let’s look at each of them.
Appraisals
An appraisal is an estimate of market value. An appraiser can use many methods for coming up with this estimate. For income producing property, the appraiser may capitalize the value of the income stream. (It would take “x” dollars of capital invested at a “y” rate of return to produce an income equal to the rental income generated by this property.) For other properties, an appraiser may use “replacement value.” (It would cost “x” dollars to build this structure if it were being built today.)
Appraisers usually use “comparable sales” when evaluating the market value of a home. They look at nearby properties with similar characteristics, which have sold in the recent past to see at what price they sold. They typically give the most weight to the property they deem to be most like the property they are appraising.
Buyers and sellers generally encounter appraisals when the buyer’s lender has an appraiser make an evaluation of the market value of the property being sold. The lender wants to be sure of the value of the collateral for the loan. An interesting feature that comes into play in this situation is that one indication of value is at what price two unrelated parties will agree to buy and sell the same property. In other words, what is the contract price the seller and buyer of this property agreed on (if they are not relatives).
Assessments
An assessment is the value your local government puts on your property for the purpose of taxing it. How this value is derived varies from jurisdiction to jurisdiction. Some communities say the value is the same as market value. Some say the value is a percentage of market value. Some appear to actually do what they say they do, and some do not.
I was once a partner in an investment property that we were offering for sale at the time the county re-assessed it. Imagine my annoyance when the assessment came in at one hundred and forty percent of the offer price. We weren’t dummies. The partners were real estate professionals. I appealed the re-assessment, but my appeal was turned down. I offered to sell the property at the assessed price to the appraiser the county had hired to handle the appeals when he was telling me why he could not reduce our assessment. He did not take me up on my offer. Our property sold at the listed price months later. We had paid six months’ taxes on the property at a higher than market value.
On another occasion I helped some elderly people sell a farm they’d lived in all their adult lives. The farm sold for a price a great deal higher than the value at which it had been assessed.
I believe the two examples are fairly typical. Many jurisdictions will “puff up” assessments for businesses and investors and “low ball” assessments for people who have lived in their homes for a long time. Sometimes there are formulas for doing this. “Land use” is one such concept, i.e., the property is taxed at its value as a farm and the fact that it is ripe for dense residential and commercial development is ignored or deferred. Sometimes there are no formulas. It is just done.
For these reasons, it is usually not a good idea to put too much credence in the assessed value of a property when you are trying to figure out market value. They may be the same. They may be vastly different.
Appraisals
An appraisal is an estimate of market value. An appraiser can use many methods for coming up with this estimate. For income producing property, the appraiser may capitalize the value of the income stream. (It would take “x” dollars of capital invested at a “y” rate of return to produce an income equal to the rental income generated by this property.) For other properties, an appraiser may use “replacement value.” (It would cost “x” dollars to build this structure if it were being built today.)
Appraisers usually use “comparable sales” when evaluating the market value of a home. They look at nearby properties with similar characteristics, which have sold in the recent past to see at what price they sold. They typically give the most weight to the property they deem to be most like the property they are appraising.
Buyers and sellers generally encounter appraisals when the buyer’s lender has an appraiser make an evaluation of the market value of the property being sold. The lender wants to be sure of the value of the collateral for the loan. An interesting feature that comes into play in this situation is that one indication of value is at what price two unrelated parties will agree to buy and sell the same property. In other words, what is the contract price the seller and buyer of this property agreed on (if they are not relatives).
Assessments
An assessment is the value your local government puts on your property for the purpose of taxing it. How this value is derived varies from jurisdiction to jurisdiction. Some communities say the value is the same as market value. Some say the value is a percentage of market value. Some appear to actually do what they say they do, and some do not.
I was once a partner in an investment property that we were offering for sale at the time the county re-assessed it. Imagine my annoyance when the assessment came in at one hundred and forty percent of the offer price. We weren’t dummies. The partners were real estate professionals. I appealed the re-assessment, but my appeal was turned down. I offered to sell the property at the assessed price to the appraiser the county had hired to handle the appeals when he was telling me why he could not reduce our assessment. He did not take me up on my offer. Our property sold at the listed price months later. We had paid six months’ taxes on the property at a higher than market value.
On another occasion I helped some elderly people sell a farm they’d lived in all their adult lives. The farm sold for a price a great deal higher than the value at which it had been assessed.
I believe the two examples are fairly typical. Many jurisdictions will “puff up” assessments for businesses and investors and “low ball” assessments for people who have lived in their homes for a long time. Sometimes there are formulas for doing this. “Land use” is one such concept, i.e., the property is taxed at its value as a farm and the fact that it is ripe for dense residential and commercial development is ignored or deferred. Sometimes there are no formulas. It is just done.
For these reasons, it is usually not a good idea to put too much credence in the assessed value of a property when you are trying to figure out market value. They may be the same. They may be vastly different.
Home Foreclosures and Big Profits? Just Another Myth
Everyone would like to find a way to make a lot of money without doing a lot of work. Getting rich quickly seems to be the American dream. And if you watch a lot of late night television, you might think that you have found the ticket to fast riches by investing in foreclosed homes. There are advertisements that offer to tell you the "secrets" of buying distressed property with no money down and five figure profits in as little as 48 hours. Other advertisements state that foreclosed houses are available "in your area" at rock-bottom prices or that some troubled owners are "desperate to sell." Can this be true? Is there easy money to be made buying and selling foreclosed property?
Home foreclosure is the process by which a home is taken from a buyer by someone with a lien against the property. Most of the time, the lender initiates this when the buyer has not made payments on the mortgage for an extended period. Lenders are not really interested in taking back houses; they would much rather have cash. As a result, foreclosed houses are usually sold at auction in so that the lender might recoup their investment.
Due to rising interest rates and rising house prices, many people have found themselves with mortgages that they cannot afford. But are people really letting houses go at auction for pennies on the dollar? Can you buy a foreclosed home today and sell it next week for a huge profit?
The truth is quite a bit less exciting then the advertising would suggest. Here are some reasons why buying and selling foreclosed property isn't all it is made out to be:
There is tremendous competition at the auctions. Believe it or not, you will not be alone if you appear at a real estate auction. In fact, in these times of sky-high prices, bidders will be plentiful as everyone is trying to save a few dollars. Most of the time, the hammer price on such auctions will be very close to, and sometimes higher than, average market prices. The competition is fierce.
You must pay, in full, right away. If you do purchase a home in a real estate auction, you will be expected to pay for it, in full, immediately. If you don't have six figures in liquid cash sitting around, this might not be for you.
A lot of such property is damaged. Property damage is common, and you may not be permitted to do a full inspection of the property or the damage ahead of time. This is truly a case where "buyer beware" can apply.
There may be title issues. It may or may not be possible to obtain a clear title on the property. Most professionals who buy such property spend countless hours doing title research, thus putting a dent in the notion that you can make money this way on a part time basis.
What about the owner who is desperate to sell before the lender forecloses? The current market is still pretty lively. No one is going to sell you property at one third off when they can just put a "for sale" sign in the front yard.
The idea of making a fortune buying and selling foreclosed property is lucrative for those people who market books about the topic. For everyone else, it's an expensive, risky, time consuming job. If you are looking for a quick dollar, you won't find it in foreclosed property.
Home foreclosure is the process by which a home is taken from a buyer by someone with a lien against the property. Most of the time, the lender initiates this when the buyer has not made payments on the mortgage for an extended period. Lenders are not really interested in taking back houses; they would much rather have cash. As a result, foreclosed houses are usually sold at auction in so that the lender might recoup their investment.
Due to rising interest rates and rising house prices, many people have found themselves with mortgages that they cannot afford. But are people really letting houses go at auction for pennies on the dollar? Can you buy a foreclosed home today and sell it next week for a huge profit?
The truth is quite a bit less exciting then the advertising would suggest. Here are some reasons why buying and selling foreclosed property isn't all it is made out to be:
There is tremendous competition at the auctions. Believe it or not, you will not be alone if you appear at a real estate auction. In fact, in these times of sky-high prices, bidders will be plentiful as everyone is trying to save a few dollars. Most of the time, the hammer price on such auctions will be very close to, and sometimes higher than, average market prices. The competition is fierce.
You must pay, in full, right away. If you do purchase a home in a real estate auction, you will be expected to pay for it, in full, immediately. If you don't have six figures in liquid cash sitting around, this might not be for you.
A lot of such property is damaged. Property damage is common, and you may not be permitted to do a full inspection of the property or the damage ahead of time. This is truly a case where "buyer beware" can apply.
There may be title issues. It may or may not be possible to obtain a clear title on the property. Most professionals who buy such property spend countless hours doing title research, thus putting a dent in the notion that you can make money this way on a part time basis.
What about the owner who is desperate to sell before the lender forecloses? The current market is still pretty lively. No one is going to sell you property at one third off when they can just put a "for sale" sign in the front yard.
The idea of making a fortune buying and selling foreclosed property is lucrative for those people who market books about the topic. For everyone else, it's an expensive, risky, time consuming job. If you are looking for a quick dollar, you won't find it in foreclosed property.
Getting your dream home was never so simple
With the excessive amount of pressure to find an ideal place for living, it has really become so emphatic that you invest your money in the right kind of option. As you can see that getting a place for living is the need for every one and if you are looking for a place that would be more close to a natural environment , then you must not worry about it as it is quite simple nowadays. You will find hundred of people offering you their services; however, you must only try the one who suppose to give you the best value for your money. As, it is your hard earned money and only you can understand that where you should utilize it to get most out of it, to get the best, you can switch to Rainforest Holdings.
When you will consult with Rainforest Holdings you will certainly be amazed to know about the enormous amount of land they have on offer and that is also with the best view of greenery around as they place the special emphasis on that, so you can get the refreshing experience. You will certainly be able to find the resorts, villas and apartments without much ado and that’s too in diverse regions.
You can also fancy living in the place that can be rated as most happening and attractive for every one who visit India, the place is GOA. An amazing residential project is ongoing in Goa that can certainly provide you with the best of the locations where you can have a home of your own and can also feel the beauty and grandeur of the Sea and the waves that will leave you thunderstruck for sure.
You must keep one thing in mind that investing on your dream home is not something like a waste of money, however, you should be discreet enough in choosing the right one for you that can let you make some of up gradation as easily as possible, as every one needs to get a step forward in life so that should be the case with your house as well, after all, it is not something that you will change after every single month, will you? And that is the very point that people at Rainforest Holdings keep in mind and endeavor to provide the best utility home for every one. With the industrious frame of mind, they come up with the best solution that would be appropriate for you. Whatever you have in mind, they have the tricks and the zeal to bring your imagination to life.
So, whatever, your plans are about your home and about the location; you can certainly come to them with all the confidence as they will respond in the best possible way and you will be able to achieve the most desirable dream of your life, also, another good reason to go to them is that they know the technicalities that you will have to go through while finalizing a decision about a property, so, you best chances of doing it in the easy way is with their collaboration.
When you will consult with Rainforest Holdings you will certainly be amazed to know about the enormous amount of land they have on offer and that is also with the best view of greenery around as they place the special emphasis on that, so you can get the refreshing experience. You will certainly be able to find the resorts, villas and apartments without much ado and that’s too in diverse regions.
You can also fancy living in the place that can be rated as most happening and attractive for every one who visit India, the place is GOA. An amazing residential project is ongoing in Goa that can certainly provide you with the best of the locations where you can have a home of your own and can also feel the beauty and grandeur of the Sea and the waves that will leave you thunderstruck for sure.
You must keep one thing in mind that investing on your dream home is not something like a waste of money, however, you should be discreet enough in choosing the right one for you that can let you make some of up gradation as easily as possible, as every one needs to get a step forward in life so that should be the case with your house as well, after all, it is not something that you will change after every single month, will you? And that is the very point that people at Rainforest Holdings keep in mind and endeavor to provide the best utility home for every one. With the industrious frame of mind, they come up with the best solution that would be appropriate for you. Whatever you have in mind, they have the tricks and the zeal to bring your imagination to life.
So, whatever, your plans are about your home and about the location; you can certainly come to them with all the confidence as they will respond in the best possible way and you will be able to achieve the most desirable dream of your life, also, another good reason to go to them is that they know the technicalities that you will have to go through while finalizing a decision about a property, so, you best chances of doing it in the easy way is with their collaboration.
For Sale By Owner Check List
Many people believe that in order to get the best price for their home they need to sell it themselves. Why pay thousands of dollars to a broker for a job that they can do themselves? Even though close to 25 percent of the homes sold last year were sales by owner, at least half said they would hire a professional the next time around.
This is not to say you cannot complete a successful sale without a professional, but a home owner needs to understand the risks and be as organized and as knowledgeable about the sales process as any agent. Here are some of the main points to consider before you make your decision to fly solo:
Property Value
Realistic pricing of your home is crucial to the successful sale of your property. If it's priced too low, you could potentially lose money. If it's price too high, you may also lose money due to accumulated costs from the home remaining on the market for an extended length of time. Two years ago, when I sold my last home, there was a sale by owner in the same neighborhood. The property was priced much higher than it was worth, and last I heard, the place was still for sale.
Determining the value of your home involves an in depth understanding of your market area. You can begin by doing comparative studies of similar properties that are for sale or that have sold recently in your area. It's probably a good idea to hire an appraiser to give you an accurate market value.
Marketing
A good realtor will advertise your home on their own web site, the MLS web site, in print, as well as through word of mouth. You have to compete with this strategy in order to effectively promote your property. Your home needs to stand out amongst all those realtor listings and the longer it remains for sale, the more it will cost you in marketing.
A good place to start is with one of the numerous online 'sale by owner' type sites that offer reasonable advertising packages. You may also want to promote a cash incentive for a sale initiated by a realtor; otherwise you may experience some sparse open houses.
Commitment
One of the key contributors to a home remaining on the market longer than necessary is the owner's lack of commitment to show the home regularly, and this includes organizing and promoting open houses. A certain amount of time needs to be dedicated each day to selling your home.
Dealing With the Customers
One thing realtors do very effectively is filter out the serious buyers from the window shoppers or lowballers. You will have to learn how to deal with these people and not fall for an offer that you'll regret down the road.
Providing useful information to the potential buyer will lend to your credibility. A realtor is always waiting in the wings to field questions on financing options, costs of home repairs related to the purchase, recommendations for house inspectors, lawyers, etc.
Meet the Professionals
Get familiar with any inspectors, lawyers or title reps involved in your sale. You don't want a delay in process because you've chosen the wrong people to deal with.
Knowledge of the Legal Process
Many closings have fallen apart due to inaccurate or incomplete paperwork. Have the necessary legal documents ready and know the process inside out. Any financial incentives, or inclusions need to be documented, signed and dated; verbal agreements don't count.
If this all sounds like a lot to think about, it is. Don't worry, many successful sale by owner transactions are completed every year, by home owners who took the time to educate themselves on the process and details of an effective property sale.
This is not to say you cannot complete a successful sale without a professional, but a home owner needs to understand the risks and be as organized and as knowledgeable about the sales process as any agent. Here are some of the main points to consider before you make your decision to fly solo:
Property Value
Realistic pricing of your home is crucial to the successful sale of your property. If it's priced too low, you could potentially lose money. If it's price too high, you may also lose money due to accumulated costs from the home remaining on the market for an extended length of time. Two years ago, when I sold my last home, there was a sale by owner in the same neighborhood. The property was priced much higher than it was worth, and last I heard, the place was still for sale.
Determining the value of your home involves an in depth understanding of your market area. You can begin by doing comparative studies of similar properties that are for sale or that have sold recently in your area. It's probably a good idea to hire an appraiser to give you an accurate market value.
Marketing
A good realtor will advertise your home on their own web site, the MLS web site, in print, as well as through word of mouth. You have to compete with this strategy in order to effectively promote your property. Your home needs to stand out amongst all those realtor listings and the longer it remains for sale, the more it will cost you in marketing.
A good place to start is with one of the numerous online 'sale by owner' type sites that offer reasonable advertising packages. You may also want to promote a cash incentive for a sale initiated by a realtor; otherwise you may experience some sparse open houses.
Commitment
One of the key contributors to a home remaining on the market longer than necessary is the owner's lack of commitment to show the home regularly, and this includes organizing and promoting open houses. A certain amount of time needs to be dedicated each day to selling your home.
Dealing With the Customers
One thing realtors do very effectively is filter out the serious buyers from the window shoppers or lowballers. You will have to learn how to deal with these people and not fall for an offer that you'll regret down the road.
Providing useful information to the potential buyer will lend to your credibility. A realtor is always waiting in the wings to field questions on financing options, costs of home repairs related to the purchase, recommendations for house inspectors, lawyers, etc.
Meet the Professionals
Get familiar with any inspectors, lawyers or title reps involved in your sale. You don't want a delay in process because you've chosen the wrong people to deal with.
Knowledge of the Legal Process
Many closings have fallen apart due to inaccurate or incomplete paperwork. Have the necessary legal documents ready and know the process inside out. Any financial incentives, or inclusions need to be documented, signed and dated; verbal agreements don't count.
If this all sounds like a lot to think about, it is. Don't worry, many successful sale by owner transactions are completed every year, by home owners who took the time to educate themselves on the process and details of an effective property sale.
Easy Way To Sell Your Home
It is not pleasant when you want to sell home but nobody is interested in. Selling a home need not be a bitter encounter. We should healthily treat it as a source of marketable commodity, a money-generating property, a real estate. We should see our property as not just a plain house or a shelter, but as a fortress! In selling a home, we should also let other people (especially prospective buyers) get the same home sweet home experience we had.
Here is the first action you should do to have a good move in selling a home is to first cut off your personal attachment from it. Have it ready for others to see and in time, they’ll consider buying it.
Most people usually are not searching for big houses. They might consider the size more important if they have a large family, but most probably they’ll look for the comfort and homey feeling it brings. In selling a home, remember to restore its best features – just like the way it looked when you first stepped in.
You should remove all posters and frames of photos and de-personalize before selling a home and presenting it to prospective buyers. Make sure you have a final walkthrough to see if all personal memorabilia has been removed. Then try to see the parts of your home that need some re-conditioning.
All the clutter should be removed too as it is also a major step in selling a home. Sadly though, this part is also the hardest to do for homeowners as they have become emotionally attached to it. On the part of the buyer, seeing clutter is a very negative thing that will drive them away from the idea of buying. In selling a home, highlight all spacious area of the house and clear away all visible clutter.
In selling a home, you will most likely meet two types of realtors. Realtor Type #1 will present and come up with prices much lower than what you’ve estimated and will strongly strengthen their statements with sales records of homes similar to yours. Then here comes Realtor Type #2 who perfectly agrees and matches with how much value you are expecting to get, or sometimes they may even declare a higher value. Study their Competitive Market Analysis before you decide.
A last tip for selling your home is to take action now! Review your plans, pair up with the right realtor, and in just a short time you will feel much more comfortable in buying and selling real estate.
Nowadays, home buyers are having more choice about the homes they will buy. In the real estate market, competition is tough now to find a buyer that sees the potential in a home that needs a little work, without substantially lowering your asking price.
There is a reason why you cannot get a fair price. In many cases buyers expect your home to be in 'move-in' condition before parting with their money. They see new carpets and freshly painted walls in showrooms and are judging your home with the same measuring stick. It changes what people are willing to pay. You receive offers subject to negotiations - meaning you have more work to do before the sale takes place. Others may simply try to give you a ridiculously low offer if they buy 'as-is'.
If you have pressing circumstances that mean you cannot do the work or cannot afford the time it would take to have the work done you may take one of these offers, losing thousands of dollars of value just because it was the best offer on the table.
Real estate investors know the market you are selling in. They are not put off by stains on the carpets, fading paint or any of the other typical wear and tear that comes with lived-in homes. You can find real estate investors who will take on all of the hassle of cleaning and prepping your home for new buyers - all the while taking over your payments so you don't have to wait for the closing before moving on.
You save yourself the hassle of finding a buyer that's willing to give you a fair price for your home while also being relieved of the work involved to make it look what its worth. This can be very important when a move needs to be made right away but you simply don't have the time or ability to fix things up.
It is better to find a realtor that can sell your home on the date you choose, giving you a fair price and doing the fixing up for you! All they can do is listing your home to the market - the market will decide what they will pay, not the realtor. Instead you may be talked into doing the work yourself or lowering your price - not always an option.
Remember that an investor is a buyer - you will not be paying them to list your property, they will be purchasing it from you or taking over the payments until a buyer is ready to purchase. You will not pay commission fees and other usual closing costs - you just sell your home. Have your home evaluated and find out the process involved - its easier than you think!
Here is the first action you should do to have a good move in selling a home is to first cut off your personal attachment from it. Have it ready for others to see and in time, they’ll consider buying it.
Most people usually are not searching for big houses. They might consider the size more important if they have a large family, but most probably they’ll look for the comfort and homey feeling it brings. In selling a home, remember to restore its best features – just like the way it looked when you first stepped in.
You should remove all posters and frames of photos and de-personalize before selling a home and presenting it to prospective buyers. Make sure you have a final walkthrough to see if all personal memorabilia has been removed. Then try to see the parts of your home that need some re-conditioning.
All the clutter should be removed too as it is also a major step in selling a home. Sadly though, this part is also the hardest to do for homeowners as they have become emotionally attached to it. On the part of the buyer, seeing clutter is a very negative thing that will drive them away from the idea of buying. In selling a home, highlight all spacious area of the house and clear away all visible clutter.
In selling a home, you will most likely meet two types of realtors. Realtor Type #1 will present and come up with prices much lower than what you’ve estimated and will strongly strengthen their statements with sales records of homes similar to yours. Then here comes Realtor Type #2 who perfectly agrees and matches with how much value you are expecting to get, or sometimes they may even declare a higher value. Study their Competitive Market Analysis before you decide.
A last tip for selling your home is to take action now! Review your plans, pair up with the right realtor, and in just a short time you will feel much more comfortable in buying and selling real estate.
Nowadays, home buyers are having more choice about the homes they will buy. In the real estate market, competition is tough now to find a buyer that sees the potential in a home that needs a little work, without substantially lowering your asking price.
There is a reason why you cannot get a fair price. In many cases buyers expect your home to be in 'move-in' condition before parting with their money. They see new carpets and freshly painted walls in showrooms and are judging your home with the same measuring stick. It changes what people are willing to pay. You receive offers subject to negotiations - meaning you have more work to do before the sale takes place. Others may simply try to give you a ridiculously low offer if they buy 'as-is'.
If you have pressing circumstances that mean you cannot do the work or cannot afford the time it would take to have the work done you may take one of these offers, losing thousands of dollars of value just because it was the best offer on the table.
Real estate investors know the market you are selling in. They are not put off by stains on the carpets, fading paint or any of the other typical wear and tear that comes with lived-in homes. You can find real estate investors who will take on all of the hassle of cleaning and prepping your home for new buyers - all the while taking over your payments so you don't have to wait for the closing before moving on.
You save yourself the hassle of finding a buyer that's willing to give you a fair price for your home while also being relieved of the work involved to make it look what its worth. This can be very important when a move needs to be made right away but you simply don't have the time or ability to fix things up.
It is better to find a realtor that can sell your home on the date you choose, giving you a fair price and doing the fixing up for you! All they can do is listing your home to the market - the market will decide what they will pay, not the realtor. Instead you may be talked into doing the work yourself or lowering your price - not always an option.
Remember that an investor is a buyer - you will not be paying them to list your property, they will be purchasing it from you or taking over the payments until a buyer is ready to purchase. You will not pay commission fees and other usual closing costs - you just sell your home. Have your home evaluated and find out the process involved - its easier than you think!
Descriptive Terms in Real Estate Ads – What Do They Mean?
If you are buying or selling a home, the chances are good you struggle with the meaning of descriptive real estate terms. Here’s the first in a series of articles explaining them.
The Wise Seller
Be very truthful if you are a seller advertising your home. Mention your home’s best features, but do not exaggerate. If someone comes to look at your home and feels disappointed, they are not apt to buy. You are probably wasting your time and advertising money if your ads mislead.
The Wise Buyer
Take advertisements with a grain of salt and don’t get too excited until you’ve seen the property. Many sellers do not take the advice given above.
Now let’s examine some of the terms themselves and what they commonly mean.
“Open Floor Plan”
Describes a home in which rooms open out of each other and it’s possible to see from one room to another. Often entertaining rooms (living room, dining room, sun room, entrance foyer) are open to each other, and family living areas (kitchen, breakfast room, family room) are open to each other, while bedrooms have doors and open off a hall in a more traditional way.
“Traditional Floor Plan”
Used to describe a home with rooms opening off a hall or halls. Each room can usually be closed off with a door.
“Split Bedroom Plan”
A term often used to describe a home (usually one level) with the master bedroom on one side of the living areas and the rest of the bedrooms on the opposite side.
“Dormer Window”
A window in an upstairs room that has a slanting ceiling which follows the slope of the roof. The window is in an upright position, but that causes it to stick up above the roof, so it gets its own little roof (usually a gable roof) that is tied into the main roof where they meet at right angles.
“Shed Dormers”
These are often seen in Dutch colonial style houses and are flat roofed dormers. Sometimes these dormers are single windows, but often they are two or three windows side by side with one flat roof.
“Blind Dormer Window”
Sometimes builders construct fake dormer windows to add architectural interest to new houses. They are at attic level but can’t be seen from the attic because the roof of the house covers access to them.
“Oversize Garage”
Ads often say how many cars a garage will hold. Then they add the word “oversize” as in “oversize 2-car garage.” What is usually meant is that there is room for storage, or a work bench in addition to space for the cars. Occasionally it simply means you can open a car door wide enough to actually get out with both cars in the garage!
“Gourmet Kitchen”
This phrase is intended to convey the idea that a very good cook can happily work here. That may or may not be the case, but it does usually mean that the kitchen is fairly large and attractive.
“Great Room”
I’ve seen this used in two distinctly different ways. The first is to describe a living room, dining room, and kitchen in a very open floor plan. The area typically has a high ceiling. The second way I’ve seen it used is when what we’d normally call a family room has a high, often coffered, ceiling, a fireplace with a dramatically massive mantle, and perhaps an upstairs balcony overlooking it. I think this may stem from the idea of a “great hall” in old English houses.
“Living Room” & “Family Room”
When a home has both a living room and a family room, we know which is which. It used to be that when an ad mentioned a family room, we could assume it also had a living room. Now some builders are building houses with something akin to the first use of “Great Room” above and calling it the “Family Room” on the floor plan. Thus houses and their terminology seem to be evolving. I suppose in the new builder speak we should just think of the room as an informal family living room.
“Patio” & “Terrace”
Both are outdoor living areas paved with something like slate or brick. A patio is level with the ground around it. A terrace has adjoining areas of ground which are higher, or lower, or perhaps both.
“Solarium,” “Sun Room,” “Florida Room”
These terms are used to describe rooms with lots of windows (often on three sides). Many times these areas also have skylights. The choice of what to call them seems purely personal. They tend to be charming, bright, sunny places in which to over winter plants and sit in the garden in chilly or downright cold weather.
“Jack and Jill Bath”
A bathroom with two doors into it. It is frequently situated between two bedrooms with doors to each. Sometimes the doors are into a bedroom and into a hallway.
“Waterfront” vs. “Water View”
Waterfront property actually has a common boundary with (frontage on) the water. Sometimes the property line actually goes into the water. Water view just means water can be seen from the property. Sometimes there is a beautiful view. Sometimes it means the water can be seen from one upstairs window when the leaves are off the trees! Also, many times a new structure might block the view at some time in the future unless there is a protective covenant or something to prevent it.
“Plantation Shutters”
Refers to interior shutters with large, moveable louvers that can be used much like Venetian blinds. Often they’re used only on the bottom half of the window.
“Palladian Window”
A tall window that is rectangular except for an arched top and has wooden muntins separating the panes of glass. It is based on a revived classic style of architecture and the work of Andrea Palladio. Builders often use them as the window over the front door in homes with two story entrance foyers.
“Pocket Doors”
Doors that open by sliding into a slot in the wall much as a serving tray fits into a vertical slot built into a kitchen cabinet. It leaves wall space unaffected by opening and closing doors. I’ve seen them on bathrooms in modern houses. I’ve also seen them used in pairs that meet in the middle when closed as they were in older houses. Between a living room and dining room might be a good place. My grandmother had one between the front and back parlors in her home in Richmond, Virginia. Now that was a neat old house. It could always expand to accommodate one more family member or friend.
“Fireplace,” “Wood Stove,” “Wood Stove Insert”
A fireplace can burn wood, coal, or gas (natural or propane). If gas, it may or may not be vented to the outdoors. It is generally thought to be dangerous to have a non-vented gas fireplace in a bedroom and is against “code” in many areas. A wood stove burns wood, is free standing (on a non-flammable surface), and is vented to the outside. A wood stove insert is generally fitted into an existing fireplace designed to burn wood or coal. Preferences have to do with perceived beauty, convenience, heat production, and safety.
The Wise Seller
Be very truthful if you are a seller advertising your home. Mention your home’s best features, but do not exaggerate. If someone comes to look at your home and feels disappointed, they are not apt to buy. You are probably wasting your time and advertising money if your ads mislead.
The Wise Buyer
Take advertisements with a grain of salt and don’t get too excited until you’ve seen the property. Many sellers do not take the advice given above.
Now let’s examine some of the terms themselves and what they commonly mean.
“Open Floor Plan”
Describes a home in which rooms open out of each other and it’s possible to see from one room to another. Often entertaining rooms (living room, dining room, sun room, entrance foyer) are open to each other, and family living areas (kitchen, breakfast room, family room) are open to each other, while bedrooms have doors and open off a hall in a more traditional way.
“Traditional Floor Plan”
Used to describe a home with rooms opening off a hall or halls. Each room can usually be closed off with a door.
“Split Bedroom Plan”
A term often used to describe a home (usually one level) with the master bedroom on one side of the living areas and the rest of the bedrooms on the opposite side.
“Dormer Window”
A window in an upstairs room that has a slanting ceiling which follows the slope of the roof. The window is in an upright position, but that causes it to stick up above the roof, so it gets its own little roof (usually a gable roof) that is tied into the main roof where they meet at right angles.
“Shed Dormers”
These are often seen in Dutch colonial style houses and are flat roofed dormers. Sometimes these dormers are single windows, but often they are two or three windows side by side with one flat roof.
“Blind Dormer Window”
Sometimes builders construct fake dormer windows to add architectural interest to new houses. They are at attic level but can’t be seen from the attic because the roof of the house covers access to them.
“Oversize Garage”
Ads often say how many cars a garage will hold. Then they add the word “oversize” as in “oversize 2-car garage.” What is usually meant is that there is room for storage, or a work bench in addition to space for the cars. Occasionally it simply means you can open a car door wide enough to actually get out with both cars in the garage!
“Gourmet Kitchen”
This phrase is intended to convey the idea that a very good cook can happily work here. That may or may not be the case, but it does usually mean that the kitchen is fairly large and attractive.
“Great Room”
I’ve seen this used in two distinctly different ways. The first is to describe a living room, dining room, and kitchen in a very open floor plan. The area typically has a high ceiling. The second way I’ve seen it used is when what we’d normally call a family room has a high, often coffered, ceiling, a fireplace with a dramatically massive mantle, and perhaps an upstairs balcony overlooking it. I think this may stem from the idea of a “great hall” in old English houses.
“Living Room” & “Family Room”
When a home has both a living room and a family room, we know which is which. It used to be that when an ad mentioned a family room, we could assume it also had a living room. Now some builders are building houses with something akin to the first use of “Great Room” above and calling it the “Family Room” on the floor plan. Thus houses and their terminology seem to be evolving. I suppose in the new builder speak we should just think of the room as an informal family living room.
“Patio” & “Terrace”
Both are outdoor living areas paved with something like slate or brick. A patio is level with the ground around it. A terrace has adjoining areas of ground which are higher, or lower, or perhaps both.
“Solarium,” “Sun Room,” “Florida Room”
These terms are used to describe rooms with lots of windows (often on three sides). Many times these areas also have skylights. The choice of what to call them seems purely personal. They tend to be charming, bright, sunny places in which to over winter plants and sit in the garden in chilly or downright cold weather.
“Jack and Jill Bath”
A bathroom with two doors into it. It is frequently situated between two bedrooms with doors to each. Sometimes the doors are into a bedroom and into a hallway.
“Waterfront” vs. “Water View”
Waterfront property actually has a common boundary with (frontage on) the water. Sometimes the property line actually goes into the water. Water view just means water can be seen from the property. Sometimes there is a beautiful view. Sometimes it means the water can be seen from one upstairs window when the leaves are off the trees! Also, many times a new structure might block the view at some time in the future unless there is a protective covenant or something to prevent it.
“Plantation Shutters”
Refers to interior shutters with large, moveable louvers that can be used much like Venetian blinds. Often they’re used only on the bottom half of the window.
“Palladian Window”
A tall window that is rectangular except for an arched top and has wooden muntins separating the panes of glass. It is based on a revived classic style of architecture and the work of Andrea Palladio. Builders often use them as the window over the front door in homes with two story entrance foyers.
“Pocket Doors”
Doors that open by sliding into a slot in the wall much as a serving tray fits into a vertical slot built into a kitchen cabinet. It leaves wall space unaffected by opening and closing doors. I’ve seen them on bathrooms in modern houses. I’ve also seen them used in pairs that meet in the middle when closed as they were in older houses. Between a living room and dining room might be a good place. My grandmother had one between the front and back parlors in her home in Richmond, Virginia. Now that was a neat old house. It could always expand to accommodate one more family member or friend.
“Fireplace,” “Wood Stove,” “Wood Stove Insert”
A fireplace can burn wood, coal, or gas (natural or propane). If gas, it may or may not be vented to the outdoors. It is generally thought to be dangerous to have a non-vented gas fireplace in a bedroom and is against “code” in many areas. A wood stove burns wood, is free standing (on a non-flammable surface), and is vented to the outside. A wood stove insert is generally fitted into an existing fireplace designed to burn wood or coal. Preferences have to do with perceived beauty, convenience, heat production, and safety.
Cut Utility Bills By Auditing Your Home
Most people are shocked these days when they open their utility bill. By auditing your home, you can turn a monstrous utility bill into a minor annoyance.
Home Energy Audit
It happens every month. You pick up the mail and see an envelope from the utility company. Oh, the agony! Should I open it now and ruin the day or just wait. An energy audit can make the pain of getting your utility bill go away or at least become a dull ache.
Unlike a tax audit, you can conduct an energy audit by yourself. Simply walking through your home and paying close attention to energy issues can really pay off. Let’s take a look at some obvious problems that can save you a bundle.
The number one energy waster is a leak. Much like a leak in the tire of a care, even one leak from the interior to exterior of the home can raise your utility bill by as much as 30 percent. The most common area you will find such leaks are windows and doors.
Windows and doors are undisputedly the area where most air leaks occurs. The first issues is whether air is actually leaking out through the framing of windows or the area around the bottom of the door. You can typically tell this by feeling for a notable temperature difference in these areas. If is significantly cooler, you have a leak.
As people in cold climates know, having sealed windows is simply not enough to control heating costs in the winter. Most windows on homes are designed for year around use, which makes them huge energy wasters in the winter. Going with energy-efficient windows can make a huge difference in keeping the heat in and the cold out.
If you’ve walked through your home and haven’t found any significant problems with your windows and doors, you may still have one. To really give your home an efficiency test, you can hire contractors to perform a pressurization test. The test essentially raises the pressure in your home and looks for leaks.
Fixing any leaks you find will depend entirely upon the nature of the problem. Some fixes only require additional caulking or insulation while others are unique. Regardless, making your home more energy efficient will significantly cut your utility bill this year and for years to come.
Home Energy Audit
It happens every month. You pick up the mail and see an envelope from the utility company. Oh, the agony! Should I open it now and ruin the day or just wait. An energy audit can make the pain of getting your utility bill go away or at least become a dull ache.
Unlike a tax audit, you can conduct an energy audit by yourself. Simply walking through your home and paying close attention to energy issues can really pay off. Let’s take a look at some obvious problems that can save you a bundle.
The number one energy waster is a leak. Much like a leak in the tire of a care, even one leak from the interior to exterior of the home can raise your utility bill by as much as 30 percent. The most common area you will find such leaks are windows and doors.
Windows and doors are undisputedly the area where most air leaks occurs. The first issues is whether air is actually leaking out through the framing of windows or the area around the bottom of the door. You can typically tell this by feeling for a notable temperature difference in these areas. If is significantly cooler, you have a leak.
As people in cold climates know, having sealed windows is simply not enough to control heating costs in the winter. Most windows on homes are designed for year around use, which makes them huge energy wasters in the winter. Going with energy-efficient windows can make a huge difference in keeping the heat in and the cold out.
If you’ve walked through your home and haven’t found any significant problems with your windows and doors, you may still have one. To really give your home an efficiency test, you can hire contractors to perform a pressurization test. The test essentially raises the pressure in your home and looks for leaks.
Fixing any leaks you find will depend entirely upon the nature of the problem. Some fixes only require additional caulking or insulation while others are unique. Regardless, making your home more energy efficient will significantly cut your utility bill this year and for years to come.
Creative Financing - Ten Ways
How many ways are there to finance real estate? Who knows, but here are ten creative financing techniques to get you started.
Do all the creative financing techniques you hear about really work? Yes, actually. They probably have all worked somewhere for someone at least once. The point isn't if they will all work for you. The point is to know what is possible, so you can find your own creative ways to invest in real estate. Here are ten methods to get you thinking.
1. Hard money lenders. You can ask around or find these online. They specialize in short-term loans at high interest. You typically use this type of financing for a "fix and flip." You can often get the money fast, and if you make $30,000 on a project, who cares if you paid $10,000 interest in six months.
2. No-doc and low-doc loans. No (or low) documentation of your income or credit required. Again, you can find banks that do these online now. The catch is that you will only be able to borrow up to 80% of the purchase price or property value. If you have 10% in cash, you might be able to borrow the other 10% from a friend or the seller.
3. Seller-carried second mortgages. Sometimes a bank will loan you 90%, and allow the seller to take back a second mortgage from you for 5%, leaving you needing only 5% for a downpayment.
4. Land contract. Called "contract for sale" or other names as well, this just means the seller lets you make payments, and delivers the title upon payment in full. I sold a rental this way for $1,000 down, because I wanted the 9% interest, and the higher price I got this way.
5. Credit cards. If a seller will take $10,000 down on a fixer-upper that you expect to make $20,000 on, why not use credit cards? This is a true 0-down deal for you, and if you turn the project in six months, you will have paid $900 in interest on an 18% credit card. Don't let $900 get in the way of making $20,000.
6. Retirement accounts. The laws get pretty complex in this area, but you can check with a tax attorney to see how you might borrow from your own retirement account to finance real estate investments.
7. Friends and family. Keep it all business, if you use this source, but loaning you money at 7% isn't a gift if their money is getting 2% in the bank.
8. Note buyers. The seller needs cash. He raises the price, and sells to you for $100,000 with no money down, taking back two mortgages from you for $90,000 and $10,000. He arranged (or you did) for a note buyer to pay him $80,000 cash for the first mortgage at closing, getting him the cash he wanted. You pay two payments now, one to each note holder.
9. Get a loan on other property. Interestingly, if you take out a home equity loan for a vacation, and then forget to use it for that, you can use it for the downpayment on an investment property, without violating the rules of the bank that gives you the primary mortgage. In other words, you got in with no cash of your own.
10. Partnerships. For bigger projects, you could arrange for five investors to each put money into a partnership, with your share being the management responsibility instead of cash.
Do all the creative financing techniques you hear about really work? Yes, actually. They probably have all worked somewhere for someone at least once. The point isn't if they will all work for you. The point is to know what is possible, so you can find your own creative ways to invest in real estate. Here are ten methods to get you thinking.
1. Hard money lenders. You can ask around or find these online. They specialize in short-term loans at high interest. You typically use this type of financing for a "fix and flip." You can often get the money fast, and if you make $30,000 on a project, who cares if you paid $10,000 interest in six months.
2. No-doc and low-doc loans. No (or low) documentation of your income or credit required. Again, you can find banks that do these online now. The catch is that you will only be able to borrow up to 80% of the purchase price or property value. If you have 10% in cash, you might be able to borrow the other 10% from a friend or the seller.
3. Seller-carried second mortgages. Sometimes a bank will loan you 90%, and allow the seller to take back a second mortgage from you for 5%, leaving you needing only 5% for a downpayment.
4. Land contract. Called "contract for sale" or other names as well, this just means the seller lets you make payments, and delivers the title upon payment in full. I sold a rental this way for $1,000 down, because I wanted the 9% interest, and the higher price I got this way.
5. Credit cards. If a seller will take $10,000 down on a fixer-upper that you expect to make $20,000 on, why not use credit cards? This is a true 0-down deal for you, and if you turn the project in six months, you will have paid $900 in interest on an 18% credit card. Don't let $900 get in the way of making $20,000.
6. Retirement accounts. The laws get pretty complex in this area, but you can check with a tax attorney to see how you might borrow from your own retirement account to finance real estate investments.
7. Friends and family. Keep it all business, if you use this source, but loaning you money at 7% isn't a gift if their money is getting 2% in the bank.
8. Note buyers. The seller needs cash. He raises the price, and sells to you for $100,000 with no money down, taking back two mortgages from you for $90,000 and $10,000. He arranged (or you did) for a note buyer to pay him $80,000 cash for the first mortgage at closing, getting him the cash he wanted. You pay two payments now, one to each note holder.
9. Get a loan on other property. Interestingly, if you take out a home equity loan for a vacation, and then forget to use it for that, you can use it for the downpayment on an investment property, without violating the rules of the bank that gives you the primary mortgage. In other words, you got in with no cash of your own.
10. Partnerships. For bigger projects, you could arrange for five investors to each put money into a partnership, with your share being the management responsibility instead of cash.
Do This Before Listing Your Home
Want to Increase Your Equity When Selling Your Home? - Think of Your Home as a Financial Asset
A transition takes place when you begin the process of selling your home. You see your home not as a home, but as a financial asset, and the question becomes how do your get the most equity out of your house?
This one piece of advice will make all your home selling decisions come into sharp perspective. When selling a home, the biggest reason that a home doesn't sell at the best price on the market, or within a reasonable time frame, or with equitable terms, is because of this one simple decision isn't make by the seller(s).
Your first decision when you decide to sell your home is to separate yourself from the personal feelings you have about the house. Often when you talk with realtors about buying real estate, we'll refer to your new property as a "home." When you sell a property, we'll often refer to your property as a house. While buying a home is often an emotional decision, selling a house is a financial decision, one for which emotional detachment is needed. Potential home buyer don't care and don't want to know about the memories, or sentimental attachment you have in your home. In fact, the best way to sell your home is to make it seem like you don't live there. More about that in the next section.
When you decide to sell your home, resolve to yourself that your home no longer belongs to you. When you think of your house as another financial transaction such as a currency trade or a commodity trade, you think more clearly about all the decisions you need to make before you close on escrow. Buyers, on the other hand, invest emotion into the purchase of their new home and it is in your best financial interest to do everything possible to allow them to see your house as their new home. The downside to not detaching yourself emotionally from selling your house is that the process becomes more difficult for you, and at times, unconsciously, you can either drive potential buyers away, reduce to opportunity for all potential buyers to see your house or unintentionally create other situations that take it longer than need be to sell your house.
A transition takes place when you begin the process of selling your home. You see your home not as a home, but as a financial asset, and the question becomes how do your get the most equity out of your house?
This one piece of advice will make all your home selling decisions come into sharp perspective. When selling a home, the biggest reason that a home doesn't sell at the best price on the market, or within a reasonable time frame, or with equitable terms, is because of this one simple decision isn't make by the seller(s).
Your first decision when you decide to sell your home is to separate yourself from the personal feelings you have about the house. Often when you talk with realtors about buying real estate, we'll refer to your new property as a "home." When you sell a property, we'll often refer to your property as a house. While buying a home is often an emotional decision, selling a house is a financial decision, one for which emotional detachment is needed. Potential home buyer don't care and don't want to know about the memories, or sentimental attachment you have in your home. In fact, the best way to sell your home is to make it seem like you don't live there. More about that in the next section.
When you decide to sell your home, resolve to yourself that your home no longer belongs to you. When you think of your house as another financial transaction such as a currency trade or a commodity trade, you think more clearly about all the decisions you need to make before you close on escrow. Buyers, on the other hand, invest emotion into the purchase of their new home and it is in your best financial interest to do everything possible to allow them to see your house as their new home. The downside to not detaching yourself emotionally from selling your house is that the process becomes more difficult for you, and at times, unconsciously, you can either drive potential buyers away, reduce to opportunity for all potential buyers to see your house or unintentionally create other situations that take it longer than need be to sell your house.
Beware of Being Fooled By Home Staging
According to a report just out, it is too easy to be fooled by home staging. Home staging is a term that we are gradually becoming familiar with. It is the idea that we try to create the best impression of our home when selling the house. It used to be just run the vacuum over it and do the dishes but nowadays there is a whole set of rules to follow!
The idea is, that a staged home stands out from all the others and therefore gets sold more quickly. It certainly can be carried to extremes with reports of sellers hiring storage units to cart their junk off to. Larger items of furniture are encouraged to be put into storage by professional 'home stagers' so that the house looks bigger and more spacious
Another instruction is to remove anything personal like photographs, so that the prospective buyer can visualize the house as their own. Closets are de-cluttered so that they look more spacious and all bathroom paraphernalia is supposed to be gone from the counter top! Garbage bins are even removed and hidden from sight.
However it has been suggested that home staging can also be deliberately used to hide a multitude of sins!
The National Association of Exclusive Buyer Agents (NAEBA, who solely represent buyers in the realty business) has suggested that as much as 82% of buyers are sidetracked from the important issues by a well-staged house. This organization also concedes that home staging nets more cash and faster sales - so it works!
Some of the underhand tricks used in staging can include using smaller furniture to make a room look larger, placing rugs over damaged parts of the floor, or using curtains to hide rotting sills. Also specified is the practice of putting a cheap paint job on to cover defects. Your realtor is legally obligated to let you know of any defects, but only if he actually knows about them!
Buyers are urged by the NAEBA to be cautious and to remember that when the house is sold, the stage is taken away. The tricks of home staging do not improve the floor plan, or the square footage of the home or the quality of the neighborhood, and these are the qualities that you will be re-selling at a later date.
The idea is, that a staged home stands out from all the others and therefore gets sold more quickly. It certainly can be carried to extremes with reports of sellers hiring storage units to cart their junk off to. Larger items of furniture are encouraged to be put into storage by professional 'home stagers' so that the house looks bigger and more spacious
Another instruction is to remove anything personal like photographs, so that the prospective buyer can visualize the house as their own. Closets are de-cluttered so that they look more spacious and all bathroom paraphernalia is supposed to be gone from the counter top! Garbage bins are even removed and hidden from sight.
However it has been suggested that home staging can also be deliberately used to hide a multitude of sins!
The National Association of Exclusive Buyer Agents (NAEBA, who solely represent buyers in the realty business) has suggested that as much as 82% of buyers are sidetracked from the important issues by a well-staged house. This organization also concedes that home staging nets more cash and faster sales - so it works!
Some of the underhand tricks used in staging can include using smaller furniture to make a room look larger, placing rugs over damaged parts of the floor, or using curtains to hide rotting sills. Also specified is the practice of putting a cheap paint job on to cover defects. Your realtor is legally obligated to let you know of any defects, but only if he actually knows about them!
Buyers are urged by the NAEBA to be cautious and to remember that when the house is sold, the stage is taken away. The tricks of home staging do not improve the floor plan, or the square footage of the home or the quality of the neighborhood, and these are the qualities that you will be re-selling at a later date.
Are You Ready For A Home?
Have you spent years renting homes or apartments and have grown tired of paying all that rent money to someone else? If so, then it might be your time to consider purchasing a home, and keeping that cash for yourself. However, you do need to ensure that you are prepared on more than one level before jumping into the equity market. There are many financial considerations to make note of before you start looking for a home. But, if you can arrange your finances into a sensible plan and secure a mortgage then this can ultimately be the most rewarding purchase you have ever made or will make.
Finance plays a huge role in the decision to purchase your first home. This is to be expected as if you are purchasing your first home you will not likely have a few hundred thousand dollars sitting around and will have to find a mortgage of some sort. You should really make sure that you are prepared for the application for a mortgage as it will involve a thorough investigation of your past credit history. If there are any issues that you know of with your credit then you should take care of them before you apply for the mortgage. Sometimes this is a simple case of oversight, some things have been taken care of and not recorded as such, and sometimes there can be some debts that you will need to see to. Once these are taken care of, be sure to get a letter of release that you can show to the mortgage broker or company if necessary. If there are no issues with your credit then that will only make the process easier.
There is no stronger tool in the home buying process than having all your financing in line before you start shopping. This is a great attraction for sellers as they want their homes to sell quickly and without incident or trouble in the money phase, a buyer with ready-to-go financing's offers will hold greater favor with almost any seller. If you are mindful of these things then when the time comes to make your offer, the whole affair will go much more smoothly and you will be able to dedicate your time to what is important. How to decorate your new home.
Finance plays a huge role in the decision to purchase your first home. This is to be expected as if you are purchasing your first home you will not likely have a few hundred thousand dollars sitting around and will have to find a mortgage of some sort. You should really make sure that you are prepared for the application for a mortgage as it will involve a thorough investigation of your past credit history. If there are any issues that you know of with your credit then you should take care of them before you apply for the mortgage. Sometimes this is a simple case of oversight, some things have been taken care of and not recorded as such, and sometimes there can be some debts that you will need to see to. Once these are taken care of, be sure to get a letter of release that you can show to the mortgage broker or company if necessary. If there are no issues with your credit then that will only make the process easier.
There is no stronger tool in the home buying process than having all your financing in line before you start shopping. This is a great attraction for sellers as they want their homes to sell quickly and without incident or trouble in the money phase, a buyer with ready-to-go financing's offers will hold greater favor with almost any seller. If you are mindful of these things then when the time comes to make your offer, the whole affair will go much more smoothly and you will be able to dedicate your time to what is important. How to decorate your new home.
Avoid Foreclosure: An Option That Many Do Not Know About
Avoiding a home foreclosure is one of the hottest topics in the real estate market, however many do not understand that you have options to avoid a home foreclosure. One of these options is a Lease Purchase Agreement, or commonly called a Lease Option it may be one of your best options.
Looking down the barrel of a foreclosure, if you are among one of the over 1.4 million homeowners facing this same issue, there may be a creative technique to save your home. Save your home and salvage your equity so that you can fight again. The last thing that you want to do is give your home back to the lender.
If your financial hardship has left you in a position whereby you are not able to pay your mortgage payment, whatever the reason may be, then you cannot afford to live in your home. Foreclosures are growing dilemma for many homeowners in the Untied States today; foreclosures are at an all time high. Alan Greenspan has made comments that the US may be heading for a recession in 2008.
Some lenders out there have not been playing fair, and some even to the point of unethical practices. These unethical practices are a primary reason that foreclosures are at an all time high and not expected to slow down in 2008, from what most experts have said.
On the bright side of things, you may have an option that may allow you to keep your home, even if the foreclosure process is already under way. Something that has been around for many years, and you may possibly utilize to save your home and equity. You may need to wait a year or two in order to cash out the equity on the property, but it is better then the alternative.
This option is referred to as a Lease Purchase Agreement, find a tenant to lease your home from you, with an option to purchase the home at the end to the agreed period or time; usually 12 to 24 months. You set a price for them to buy the house when the agreement is signed; this will allow you to set the price so you can save the equity and by some time to recover. With a tenant that has the option to buy your home you may be able to:
1) First and foremost is the avoidance of a foreclosure
2) Since renters are paying less today due to the high foreclosure rates, this may be a way to increase the monthly rent, due in light of the purchase agreement
3) A one-time payment, up-front as a non-refundable deposit, this is usually 1% - 3% of the sales price. The best part of this is that even if they decide not to buy your home, you still keep the money
4) Quickly locate a buyer for your property, most times faster then trying to sell you home in the traditional manner
5) Someone else will be paying the mortgage payment, and potentially a few hundred dollars a month more
Lease Purchase Agreements usually work well in any real estate market; these agreements referred to as a "lease option" as well. This is a very valuable strategy to keep in mind, especially during market that in a distress.
While there may be many other reasons to take advantage of a lease option, they are definitely an excellent way to avoid foreclosure, and salvage your home from the bank. In a foreclosure, your credit will be destroyed for years to come, and the additional financial repercussions can take a tool on your personal life.
Looking down the barrel of a foreclosure, if you are among one of the over 1.4 million homeowners facing this same issue, there may be a creative technique to save your home. Save your home and salvage your equity so that you can fight again. The last thing that you want to do is give your home back to the lender.
If your financial hardship has left you in a position whereby you are not able to pay your mortgage payment, whatever the reason may be, then you cannot afford to live in your home. Foreclosures are growing dilemma for many homeowners in the Untied States today; foreclosures are at an all time high. Alan Greenspan has made comments that the US may be heading for a recession in 2008.
Some lenders out there have not been playing fair, and some even to the point of unethical practices. These unethical practices are a primary reason that foreclosures are at an all time high and not expected to slow down in 2008, from what most experts have said.
On the bright side of things, you may have an option that may allow you to keep your home, even if the foreclosure process is already under way. Something that has been around for many years, and you may possibly utilize to save your home and equity. You may need to wait a year or two in order to cash out the equity on the property, but it is better then the alternative.
This option is referred to as a Lease Purchase Agreement, find a tenant to lease your home from you, with an option to purchase the home at the end to the agreed period or time; usually 12 to 24 months. You set a price for them to buy the house when the agreement is signed; this will allow you to set the price so you can save the equity and by some time to recover. With a tenant that has the option to buy your home you may be able to:
1) First and foremost is the avoidance of a foreclosure
2) Since renters are paying less today due to the high foreclosure rates, this may be a way to increase the monthly rent, due in light of the purchase agreement
3) A one-time payment, up-front as a non-refundable deposit, this is usually 1% - 3% of the sales price. The best part of this is that even if they decide not to buy your home, you still keep the money
4) Quickly locate a buyer for your property, most times faster then trying to sell you home in the traditional manner
5) Someone else will be paying the mortgage payment, and potentially a few hundred dollars a month more
Lease Purchase Agreements usually work well in any real estate market; these agreements referred to as a "lease option" as well. This is a very valuable strategy to keep in mind, especially during market that in a distress.
While there may be many other reasons to take advantage of a lease option, they are definitely an excellent way to avoid foreclosure, and salvage your home from the bank. In a foreclosure, your credit will be destroyed for years to come, and the additional financial repercussions can take a tool on your personal life.
Bankruptcy And Buying A House - Is It Smart To Buy A House After Bankruptcy?
Each year, millions of people file bankruptcy as a means of erasing their consumer debts. While this approach may relieve stress, a bankruptcy is damaging, and will hang over your head for the next ten years. Still, it is possible to overcome bankruptcy. The key is making smarter financial and credit decisions. With this said, some people choose to purchase a home after a bankruptcy. Here are a few pointers to consider when buying a home.
Reasons to Delay the Buying Process after Bankruptcy
If you consult with mortgage or financial experts, they will likely discourage you from buying a home following a bankruptcy. After your bankruptcy is discharged, there is a black cloud that looms over your credit report.
When any prospective lender reviews your report, they will be notified of your recent or past bankruptcy. In some instances, this justifies an immediate denial. On the other hand, there are lenders eager to help you establish or rebuild your credit. Thus, they will approve a loan request. Nonetheless, the penalties are steep.
Higher mortgage rates can be anticipated when purchasing a home after bankruptcy, especially if you have not established other credit accounts. Mortgage lenders consider two factors: credit scores and credit reports.
Although a bankruptcy appears on your credit report, having a high credit score will increase your odds of getting a comparable rate. Unfortunately, if you buy immediately following a bankruptcy, you will not have the opportunity to boost your score.
Reasons to Buy a Home after Bankruptcy
Lenders will approve mortgage loan applications one day following a discharge. Therefore, it is possible to get a home after a bankruptcy. Buying a home is perfect for rebuilding credit. Moreover, it is the quickest way to increase your credit score.
After a bankruptcy, the average person has a credit score below 600. Good credit consist of credit scores 650 and above. Maintaining current mortgage payments will gradually increase your score. After two years of regular payments, you will have established a good payment history. Hence, you may qualify for a low rate refinancing, which may lower your mortgage payments.
Reasons to Delay the Buying Process after Bankruptcy
If you consult with mortgage or financial experts, they will likely discourage you from buying a home following a bankruptcy. After your bankruptcy is discharged, there is a black cloud that looms over your credit report.
When any prospective lender reviews your report, they will be notified of your recent or past bankruptcy. In some instances, this justifies an immediate denial. On the other hand, there are lenders eager to help you establish or rebuild your credit. Thus, they will approve a loan request. Nonetheless, the penalties are steep.
Higher mortgage rates can be anticipated when purchasing a home after bankruptcy, especially if you have not established other credit accounts. Mortgage lenders consider two factors: credit scores and credit reports.
Although a bankruptcy appears on your credit report, having a high credit score will increase your odds of getting a comparable rate. Unfortunately, if you buy immediately following a bankruptcy, you will not have the opportunity to boost your score.
Reasons to Buy a Home after Bankruptcy
Lenders will approve mortgage loan applications one day following a discharge. Therefore, it is possible to get a home after a bankruptcy. Buying a home is perfect for rebuilding credit. Moreover, it is the quickest way to increase your credit score.
After a bankruptcy, the average person has a credit score below 600. Good credit consist of credit scores 650 and above. Maintaining current mortgage payments will gradually increase your score. After two years of regular payments, you will have established a good payment history. Hence, you may qualify for a low rate refinancing, which may lower your mortgage payments.
Are FSBO's Worth The Time & Effort?
Many people have asked whether or not FSBO's are really worth the time and effort involved in the sale. The simple answer is, Yes! It stands to reason that the FSBO industry is based on some amount of success or else it would never have grown to the size it currently is. And the industry is growing in size every year. Part of the reason for this phenomena is the fact that home sellers are becoming more and more educated on the involved process and as such are demanding a level of service that many real estate agents are not willing to provide, or able to provide due to a high number of clients.
The resolution to this problem has been the education of sellers and the drive to eliminate the middle man. For years people were convinced the the only way to sell a home was to contact their local realtor and then wait for the offers. But what if that agent was not providing enough service to sell the home in a timely manner? Was there any real way to ensure that this was being done? It can be hard to trust someone in such a way when nothing appears to be happening. But you can trust yourself right? So, why not give yourself the tools you need to become your own real estate agent?
The part that cannot be stressed enough is the need to educate yourself on the process before you undertake the selling of your own home. Start investigating the rules and regulations concerning real estate contracts and conveyance. Find out about liens and easements and inspections. In selling your own home there are a lot of hats that you will have to wear. Of course it never hurts to get legal advice and guidance from a lawyer educated in real estate law. There is also an abundance of information available online to help guide your education. The web is a great resource for almost every aspect of the home sale process so take the time to investigate these things to the full extent. Good luck!
The resolution to this problem has been the education of sellers and the drive to eliminate the middle man. For years people were convinced the the only way to sell a home was to contact their local realtor and then wait for the offers. But what if that agent was not providing enough service to sell the home in a timely manner? Was there any real way to ensure that this was being done? It can be hard to trust someone in such a way when nothing appears to be happening. But you can trust yourself right? So, why not give yourself the tools you need to become your own real estate agent?
The part that cannot be stressed enough is the need to educate yourself on the process before you undertake the selling of your own home. Start investigating the rules and regulations concerning real estate contracts and conveyance. Find out about liens and easements and inspections. In selling your own home there are a lot of hats that you will have to wear. Of course it never hurts to get legal advice and guidance from a lawyer educated in real estate law. There is also an abundance of information available online to help guide your education. The web is a great resource for almost every aspect of the home sale process so take the time to investigate these things to the full extent. Good luck!
Basics Of Home Buying
The most important investment you will ever make is probably the purchase of a home. Finding the right home for you can be a long and arduous process, but there is no getting around that.
Know Your Wants And Needs
Before embarking on your journey of house hunting, you must know what you really want to find. Sit down with pen and paper and list all the features you care most about, such as:
- Location (in a particular city, school district or neighborhood)
- Size -- how many bedrooms and bathrooms
- Parking -- a 1-car garage or 2?
- Style -- 2-story house or ranch style home?
- Heating -- central heating and/or air conditioning?
Equally important, on a new sheet of paper list all the features you absolutely do not want in a house. For example:
- high-traffic area.
- high noise area (airport, train station or highway in close proximity)
- maintenance -- major repairs needed
As you look at houses, keep both lists in mind. Your lists may change over time as you do more looking. You'll want to add or remove features, or perhaps you'll become willing to make compromises. Realize that you most likely will not find the "perfect" home. Experienced homebuyers will tell you, perfect homes are not found, they are made perfect through hard work.
Get Your Credit Report In Order
Prior to looking at properties, you must get your finances in order. This is the time to review your credit report and clean it up, if need be, to maximize your credit score. Many people do not realize how important it is to check your credit report periodically to make sure it is accurate. You should pay off any past due amounts, or negotiate a settlement price to close the debt. Get such agreements in writing, before paying any settlement. Keep all receipts for any settled items from your credit report since it may take months to get the debt actually removed.
Research Your Home-Buying Options
Decide what kind of property you are interested in. Do you want a HUD property, a foreclosure, real estate, or property for sale by owner?
A number of web sites list homes according to city, state, or price range. Visit these sites to see pictures of homes, many with virtual tours, and review the listing features.
Get Pre-Approved For A Loan
You're ready now to find a lender and get yourself pre-approved for the loan. Being pre-approved offers a number of advantages. It will clarify the price range you can afford. Also, once you find the home you want, you can place an immediate offer. If you have to wait for pre-approval, someone could buy the house right out from under you.
Several special programs are often available from lenders, such as the FHA or Ameri-Dream, that can save you money in the closing. Ask the lender about any special programs before you decide on a loan.
Find A Good Real Estate Agent
It is wise for the first time homebuyer to work closely with a real estate agent, no matter what type of property you're looking for. A knowledgeable real estate agent will make your house-hunting much easier. A good real estate agent is usually a good negotiator, and will be able to help you with the complicated paperwork involved in placing an offer on a house or in closing a deal.
It's essential that you have a real estate agent working for you as the buyer, rather than relying on the seller's agent for the house you want to buy. The latter can involve a conflict of interest, which usually works to your disadvantage.
To select a real estate agent, you should check with your friends and neighbors for recommendations. Find an agent you feel comfortable with and who is knowledgeable about the area you hope to buy in.
These are just the basics of home buying. You will find many details you need to master as you move through the buying process, but having these basics under your belt will give you a head start.
Know Your Wants And Needs
Before embarking on your journey of house hunting, you must know what you really want to find. Sit down with pen and paper and list all the features you care most about, such as:
- Location (in a particular city, school district or neighborhood)
- Size -- how many bedrooms and bathrooms
- Parking -- a 1-car garage or 2?
- Style -- 2-story house or ranch style home?
- Heating -- central heating and/or air conditioning?
Equally important, on a new sheet of paper list all the features you absolutely do not want in a house. For example:
- high-traffic area.
- high noise area (airport, train station or highway in close proximity)
- maintenance -- major repairs needed
As you look at houses, keep both lists in mind. Your lists may change over time as you do more looking. You'll want to add or remove features, or perhaps you'll become willing to make compromises. Realize that you most likely will not find the "perfect" home. Experienced homebuyers will tell you, perfect homes are not found, they are made perfect through hard work.
Get Your Credit Report In Order
Prior to looking at properties, you must get your finances in order. This is the time to review your credit report and clean it up, if need be, to maximize your credit score. Many people do not realize how important it is to check your credit report periodically to make sure it is accurate. You should pay off any past due amounts, or negotiate a settlement price to close the debt. Get such agreements in writing, before paying any settlement. Keep all receipts for any settled items from your credit report since it may take months to get the debt actually removed.
Research Your Home-Buying Options
Decide what kind of property you are interested in. Do you want a HUD property, a foreclosure, real estate, or property for sale by owner?
A number of web sites list homes according to city, state, or price range. Visit these sites to see pictures of homes, many with virtual tours, and review the listing features.
Get Pre-Approved For A Loan
You're ready now to find a lender and get yourself pre-approved for the loan. Being pre-approved offers a number of advantages. It will clarify the price range you can afford. Also, once you find the home you want, you can place an immediate offer. If you have to wait for pre-approval, someone could buy the house right out from under you.
Several special programs are often available from lenders, such as the FHA or Ameri-Dream, that can save you money in the closing. Ask the lender about any special programs before you decide on a loan.
Find A Good Real Estate Agent
It is wise for the first time homebuyer to work closely with a real estate agent, no matter what type of property you're looking for. A knowledgeable real estate agent will make your house-hunting much easier. A good real estate agent is usually a good negotiator, and will be able to help you with the complicated paperwork involved in placing an offer on a house or in closing a deal.
It's essential that you have a real estate agent working for you as the buyer, rather than relying on the seller's agent for the house you want to buy. The latter can involve a conflict of interest, which usually works to your disadvantage.
To select a real estate agent, you should check with your friends and neighbors for recommendations. Find an agent you feel comfortable with and who is knowledgeable about the area you hope to buy in.
These are just the basics of home buying. You will find many details you need to master as you move through the buying process, but having these basics under your belt will give you a head start.
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