The second round of the dot com boom is upon us and this time it is bigger and better. Web 2.0 as its being called has all kinds of portals, services, forums etc coming up and doing well. First it was the friendship sites - from social networking to dating and then online job websites that picked up very well. But now it is the turn of online real estate websites which are witnessing tremendous growth and the best part is they are not just growing but are getting rave reviews for being comprehensive, easy to use and setting up an overall standard for web based services.
As per the statistics by certain web analysts, the online property market is expected to grow further at a massive pace worldwide. In Australia, this market of online property is growing beyond expectation and currently covers about fifteen percent of total market transactions. In more developed internet markets like the US and Canada, almost ninety percent of property transactions happen online. This covers buying, selling, rent, lease and even business sales.
There is no doubt that the internet has started to become the preferred choice for online buying and selling of property. The growth of these online real estate portals has many solid reasons behind it. Let us take a look at some of the reasons why these sites have become so popular.
Well the first reason is probably the biggest reason and it doesn't take a genius to figure it out that online real estate websites completely negates the need for having a property agent for your requirements. It gives total control back to the owner of the property and even the buyer. Property agents take a significant part of the transaction costs hence any solution which helps increase the property value by decreasing costs is a welcome solution.
The second reason is the fact that you can now search for various properties from one end of the country to the other from the comfort of your house. It has never been easier to get information on your dream house or the perfect office space and what makes it even better is that you can compare between various properties sitting at home. Pretty much any information you can think of are present on these sites. From property details to images, costs, location, potential value of investment and even videos can be found.
The range of properties available is also impressive. From luxury villas, apartments, houses in beautiful suburbs to finding houses to rent, a room to share or sub let etc. These sites are a real boon to investors who are looking out for the next best property deals and want to take advant�ge of the booming property market.
Apart from details of the actual property, users of these sites can also get valuable information on other important aspects of the real estate market such as mortgages, various options available for financing, interest rates, information on the surroundings of the property such as distance to schools, hospitals, recreation areas etc. Online property transactions are on the rise and it won't be too long before the majority of all deals happen on the internet or at least get initiated via a trusted online real estate portal. Given the fact that the number of users is increasing everyday, it is the best time for listing your property on a real estate website.
by Jacqui Smith
Tuesday, June 12, 2007
Tuesday, June 5, 2007
Real Estate Investing Unplugged
People invest in real estate for selling at a later stage for a handsome profit. For this they need to have a marketing strategy in place. Many new entrants in real estate investing have entered the business because they saw someone else do the same, and make lots of money. But it may not work for you.
There are more ways than ever before to profit from real estate investment:
1. Flipping:
In the industry, flipping is a term used to describe the act of buying, fixing up, and then reselling a piece of property. To flip a property in short term usually requires a large investment of capital, whereas long term flipping relies less on fixing up and more on the value of the area appreciating over time.
2. Offsetting Costs:
Many costs associated with renting the property can be offset even while the home is being renovated. If you are a long term investor after the renovation is complete you will rent to new tenants. You also have to take care of the hassles of finding tenants, the damage tenants might cause to your property, up keeping the property and performing repairs, etc. But still you are holding to your property and this can earn for you for the life time.
3. Garner the Foreclosed Properties:
A great way to make a bigger profit on your real estate is to purchase only properties that are foreclosing. A foreclosure happens when a property owner is no longer able to make payments on a mortgage. These people have likely been evicted from their home and, unable to rent the property, the owner is trying to sell it to recover at least some of their costs. Foreclosed properties tend to be in need of heavy repairs, but they are usually sold for a bigger profit.
4. Investment From Afar:
It is also possible to invest in real estate without buying any particular property. Many banks allow people to purchase trusts, bonds, or stocks oriented towards real estate specifically. You will be sure to want to talk to a broker before getting into this kind of real estate investing. It's always more risky to invest in a property that you've never seen before. If you're able to, it might be a good idea to visit the property before investing any kind of significant amount into it.
Real estate investors must develop a marketing strategy for their properties. Depending alone on the forecast that all property prices will always go up and never come down, it is not a safe idea, as there are times of slump in the markets. Real estate prices do come down occasionally, and real estate investors should not believe in blind faith
by Nate Rodnay
There are more ways than ever before to profit from real estate investment:
1. Flipping:
In the industry, flipping is a term used to describe the act of buying, fixing up, and then reselling a piece of property. To flip a property in short term usually requires a large investment of capital, whereas long term flipping relies less on fixing up and more on the value of the area appreciating over time.
2. Offsetting Costs:
Many costs associated with renting the property can be offset even while the home is being renovated. If you are a long term investor after the renovation is complete you will rent to new tenants. You also have to take care of the hassles of finding tenants, the damage tenants might cause to your property, up keeping the property and performing repairs, etc. But still you are holding to your property and this can earn for you for the life time.
3. Garner the Foreclosed Properties:
A great way to make a bigger profit on your real estate is to purchase only properties that are foreclosing. A foreclosure happens when a property owner is no longer able to make payments on a mortgage. These people have likely been evicted from their home and, unable to rent the property, the owner is trying to sell it to recover at least some of their costs. Foreclosed properties tend to be in need of heavy repairs, but they are usually sold for a bigger profit.
4. Investment From Afar:
It is also possible to invest in real estate without buying any particular property. Many banks allow people to purchase trusts, bonds, or stocks oriented towards real estate specifically. You will be sure to want to talk to a broker before getting into this kind of real estate investing. It's always more risky to invest in a property that you've never seen before. If you're able to, it might be a good idea to visit the property before investing any kind of significant amount into it.
Real estate investors must develop a marketing strategy for their properties. Depending alone on the forecast that all property prices will always go up and never come down, it is not a safe idea, as there are times of slump in the markets. Real estate prices do come down occasionally, and real estate investors should not believe in blind faith
by Nate Rodnay
Wednesday, April 18, 2007
Real Estate Leads: Comparing Lead Generation Sources
Real estate leads are as good as gold to a real estate professional – literally. The real estate leads you follow up with today are your clients tomorrow and your paycheck a month from now. Much of your time as a real estate professional is spent generating real estate leads and converting those leads to clients. The advent of the Internet and its emergence into main stream culture brought a new tool to real estate agents in the late 90s: online lead generation services.
Nowadays, the majority of people looking to buy or sell a home or do anything real estate wise are going to the internet first. Years ago, people would get ready to buy or sell, and then walk into a local Realty office and get themselves a real estate agents. Now, they can start researching real estate anywhere from 3 months to 5 years before they actually make a move! That means real estate professionals need to come up with new ways to catch these real estate leads early, so they have time to work them and turn them into clients. There are two major ways to do that now: purchasing a lead generation service and paying for real estate leads and creating your own website with contact pages to generate your own real estate leads.
Which way is better? Truthfully, if you're not doing both, you're not being as successful as you could be. Any real estate professional who wants to be a top producer NEEDS their own personal website with homeowner information, contact forms, a blog, etc. That way real estate leads can FIND you on the web.
On the other end, the majority of top producers out there not only have their own website, but they also subscribe to one or more lead generation service, such as HouseValues or GetMyHomesValue. Companies such as these sell real estate leads to agents either at a monthly subscription price, or having the agent pay per lead. These services set up websites offering homeowners free home value information in exchange for their contact information. Basically, a homeowner goes and fills out a simple form about themselves, their contact information and their home and submits it to the company's website. The company in turn, gives this “lead” to whatever real estate professional they have subscribed in that lead's area and it is up to the real estate agent themselves to work up the value and follow-up with these real estate leads.
Each lead generation company does things a bit differently: for instance, GetMyHomesValue offers exclusive leads – where the lead is given to one and only one agent in the area, whereas other companies out there will sell the same real estate leads to several different agents. HouseValues has extensive e-mail drip campaigns and scripts to make follow-up a bit easier for agents, while GetMyHomesValue has their staff attempt to contact the leads several times for the agent and then leaves the rest of the follow-up to the individual agent.
The criticism most of these lead generation companies receive has to do with what actually constitutes real estate leads. Because these “leads” are filling out information online, they can often give fake information to avoid being contacted. This then makes it harder for the agents to follow up with the leads.
The successful agent, however, does not give up with confronted with real estate leads that give a property address and e-mail address, but a bad name and number. A great agent will exhaust all options of follow up before scrapping ANY lead, such as using public directories like the White Pages online, tax records of the property, reverse look-ups, etc. They will e-mail the lead on a weekly basis and even stop by the property listed in order to determine who actually submitted the lead.
What happens when the owners of the property claim they did not request their home value information, nor are they looking to sell? The no-so-hot agent will be angry at the waste of their time and blame the lead generation company for selling bogus real estate leads. The HOT agent will introduce themselves anyway, offer their services in any way they can and hand out a business card, then lead the home content in the knowledge that although they may not have gotten to the bottom of the lead, they did just add another prospect to their pipeline of real estate leads.
Online lead generation tools are a HUGE asset to real estate professionals – when used correctly. To be successful with real estate leads gathered online, you've got to be ready to work hard and long. You may not convert the lead for 6 months, a year, even two years, but as long as you're working your real estate leads and keeping your name in their head, you've got a leg up on the competition.
By: Ashley Lichty
Nowadays, the majority of people looking to buy or sell a home or do anything real estate wise are going to the internet first. Years ago, people would get ready to buy or sell, and then walk into a local Realty office and get themselves a real estate agents. Now, they can start researching real estate anywhere from 3 months to 5 years before they actually make a move! That means real estate professionals need to come up with new ways to catch these real estate leads early, so they have time to work them and turn them into clients. There are two major ways to do that now: purchasing a lead generation service and paying for real estate leads and creating your own website with contact pages to generate your own real estate leads.
Which way is better? Truthfully, if you're not doing both, you're not being as successful as you could be. Any real estate professional who wants to be a top producer NEEDS their own personal website with homeowner information, contact forms, a blog, etc. That way real estate leads can FIND you on the web.
On the other end, the majority of top producers out there not only have their own website, but they also subscribe to one or more lead generation service, such as HouseValues or GetMyHomesValue. Companies such as these sell real estate leads to agents either at a monthly subscription price, or having the agent pay per lead. These services set up websites offering homeowners free home value information in exchange for their contact information. Basically, a homeowner goes and fills out a simple form about themselves, their contact information and their home and submits it to the company's website. The company in turn, gives this “lead” to whatever real estate professional they have subscribed in that lead's area and it is up to the real estate agent themselves to work up the value and follow-up with these real estate leads.
Each lead generation company does things a bit differently: for instance, GetMyHomesValue offers exclusive leads – where the lead is given to one and only one agent in the area, whereas other companies out there will sell the same real estate leads to several different agents. HouseValues has extensive e-mail drip campaigns and scripts to make follow-up a bit easier for agents, while GetMyHomesValue has their staff attempt to contact the leads several times for the agent and then leaves the rest of the follow-up to the individual agent.
The criticism most of these lead generation companies receive has to do with what actually constitutes real estate leads. Because these “leads” are filling out information online, they can often give fake information to avoid being contacted. This then makes it harder for the agents to follow up with the leads.
The successful agent, however, does not give up with confronted with real estate leads that give a property address and e-mail address, but a bad name and number. A great agent will exhaust all options of follow up before scrapping ANY lead, such as using public directories like the White Pages online, tax records of the property, reverse look-ups, etc. They will e-mail the lead on a weekly basis and even stop by the property listed in order to determine who actually submitted the lead.
What happens when the owners of the property claim they did not request their home value information, nor are they looking to sell? The no-so-hot agent will be angry at the waste of their time and blame the lead generation company for selling bogus real estate leads. The HOT agent will introduce themselves anyway, offer their services in any way they can and hand out a business card, then lead the home content in the knowledge that although they may not have gotten to the bottom of the lead, they did just add another prospect to their pipeline of real estate leads.
Online lead generation tools are a HUGE asset to real estate professionals – when used correctly. To be successful with real estate leads gathered online, you've got to be ready to work hard and long. You may not convert the lead for 6 months, a year, even two years, but as long as you're working your real estate leads and keeping your name in their head, you've got a leg up on the competition.
By: Ashley Lichty
Friday, March 23, 2007
Investments In Rental Properties
There is no mistake about it, investing in real estate makes money. Agreed, you have to spend money to make money, but that is true in all areas of investment. Historically one of the most secure ways of making a profit in the real estate industry is the investment of capital in rental properties. That's right, being The Landlord. However, being a landlord can be a trying experience if you don't know what to expect and don't have any experience. So before you dive into the land lording game, take some time to find out what will be required of you and what the duties of a good landlord consist of.
Once you have found the property that you are going to rent, spend a little time and money doing any necessary repairs and upgrades. Make sure that there is nothing that does not operate as it should and that you have a clean and welcoming property to offer. Next don't be afraid to ask for and indeed require references from prospective tenants. Be sure to check them thoroughly to make sure they are genuine. After all, you want the highest quality of tenant available for the price range that you are asking. Also don't be afraid to deny prospective tenants if there is limited interest at the start. Renting successfully is all about finding the right tenants, not any tenants.
Ideally you will be able to find the proper long-term tenants that are little or no trouble on an ongoing basis. But sometimes, this is not the case. Will you be able to protect your investment property and remove a problem tenant? If not then you may want to reconsider this type of investment. Sometimes being a landlord is not easy and there are some tough decisions that have to be made and carried out. Keep this in mind and investing in rental properties could be the gold mine you have been searching for.
By: M Peterson
Once you have found the property that you are going to rent, spend a little time and money doing any necessary repairs and upgrades. Make sure that there is nothing that does not operate as it should and that you have a clean and welcoming property to offer. Next don't be afraid to ask for and indeed require references from prospective tenants. Be sure to check them thoroughly to make sure they are genuine. After all, you want the highest quality of tenant available for the price range that you are asking. Also don't be afraid to deny prospective tenants if there is limited interest at the start. Renting successfully is all about finding the right tenants, not any tenants.
Ideally you will be able to find the proper long-term tenants that are little or no trouble on an ongoing basis. But sometimes, this is not the case. Will you be able to protect your investment property and remove a problem tenant? If not then you may want to reconsider this type of investment. Sometimes being a landlord is not easy and there are some tough decisions that have to be made and carried out. Keep this in mind and investing in rental properties could be the gold mine you have been searching for.
By: M Peterson
Saturday, March 10, 2007
3 Classic No Down Payment Strategies
Everyone has heard a story or read about someone who bought a property without paying a single dime as a down payment. But how does this work?
There are several "classic" methods commonly used to purchase real estate with no money down. There are an infinite variety of situations in a real estate transaction that could lead to a deal with no down payment. But for the sake of reality, I will focus on those that are most commonly seen in the current market.
1. Seller second - The buyer obtains a new first mortgage for most but not all of the total purchase price. The seller finances the rest.
Purchase price: $100,000
Buyers loan: $90,000 (90% LTV) (new first mortgage)
Sellers finances $10,000 (in the form of a new second mortgage)
The buyer has borrowed 100% of the purchase price. Thus, you have100% financing, and no down payment was paid by buyer.
This is not a difficult strategy to employ if the seller has enough equity, is willing to hold a second, and the first mortgage lender approves.
One thing that is not mentioned in most articles about this strategy is the requirement for lender approval. The lender who is making the 90% loan will have to agree to allow the seller to take back a second mortgage. In cases where the buyer has better credit, this is usually OK with the lender. But if the buyer has a lower credit score, the lender may not approve of this. If your credit score is on the lower side, but you have good documented income, you may still qualify.
Talk to your lender ahead of time and find out if creative financing options such as a seller second would be allowed. Make sure you have a lender who is used to working on investment property loans. Some mortgage companies only have programs for owner occupants. You need to go to a lender who specializes in loans for investors.
2. Another common way to obtain a no down payment loan is to utilize one of the many low or no down payment programs that exist. Many of these are intended for owner occupants, but some are available for investors. Again, it is important to talk to the right lender.
If you have an investment property that you want to sell, consider taking back a second mortgage for 5-10%. This is not a huge amount, and it can help you sell your property faster.
When it comes to finding a seller who will help you create a no money down deal, consider buying from an investor who is willing to be flexible. Some investors are willing to do creative financing simply because they understand that it helps them sell houses. It never hurts to make an offer that includes a seller second. You never know until you ask.
There are some points to remember when purchasing investment property with no money down. A key point is the comparison of monthly payments to expected rental income. When you are financing 100% of the purchase price, your payments will be higher. If you have a second mortgage payment to add to a first mortgage, your payment may be even higher. Be sure your rental income will cover the entire monthly payment.
3. More common among professional investors is buying wholesale properties, using hard money to purchase and rehab.
When the rehab is completed, you want to get a new mortgage that pays off the hard money loan. Since this is a refinance, you can take cash out of the property. You may have to bring some money to closing on the hard money loan, but you get it all back when you refinance, so you end up with no money out of pocket. This becomes not only a "no down payment" deal, but also a "cash back at closing" deal.
It works like this:
Purchase price $100,000
Repairs $15,000
Hard money loan $115,000
Purchase and repair, then get new loan to pay off hard money.
New loan is based on 90% of After Repair Value.
For our example, the ARV is $150,000
90% of $150,000 is $135,000.
New loan for $135,000. Subtract hard money loan pay off of $115,000 leaves $20,000.
You keep the extra $20,000 in cash, tax free since it is a loan, rent your house out and let the tenant pay the loan back.
Your gross profit is $20,000 cash and $15,000 equity. Total gross profit $35,000. Not too bad for a couple months work.
Down payment by definition means specifically money that is used to "pay down" the total purchase price. This does not include money for closing costs, points, interest, and other items such as insurance. But if you are buying wholesale properties, fixing them and refinancing to pull cash out, you should be able to pay all your expenses and have a nice profit at the end of the day. (Just keep some of that cash in reserve for emergencies)
If you do 3 houses per year, and you only net $25,000 total, after paying all expenses on each of the 3 houses, you are still netting $75,000 cash and equity in about 6 to 8 months. Plus, if you are renting these properties, you are also creating additional streams of income through monthly cash flow as well as accumulating equity in each property.
This is a solid strategy to achieve a retirement nest egg and ongoing income for life in less than 10 years. If you look around at the real estate investors who are wealthy, the vast majority own rental property, be it residential or commercial.
They understand the concept of buying at a discount, then holding their properties for years. They get to the point where their holdings are worth double or triple the price paid. This is free money that you can earn simply by buying and holding long term. No, this is not as easy as it sounds, but nothing worth doing is ever easy. If it were, everyone would be wealthy.
There are wholesaling companies in every major city that specialize in selling fixer upper properties that fit with strategy number 3 in this article. Look for their signs on the side of the road, their ads in the paper, or ads in local thrifty nickel type shopping papers.
Most deals do require some out of pocket cash, even if it is only temporary, until you refinance.
True no down payment opportunities are pretty rare these days, with interest rates at historic lows. If interest rates go back up, (and they will) we will see more creative financing and more no down payment opportunities in the future.
By: Donna Robinson
There are several "classic" methods commonly used to purchase real estate with no money down. There are an infinite variety of situations in a real estate transaction that could lead to a deal with no down payment. But for the sake of reality, I will focus on those that are most commonly seen in the current market.
1. Seller second - The buyer obtains a new first mortgage for most but not all of the total purchase price. The seller finances the rest.
Purchase price: $100,000
Buyers loan: $90,000 (90% LTV) (new first mortgage)
Sellers finances $10,000 (in the form of a new second mortgage)
The buyer has borrowed 100% of the purchase price. Thus, you have100% financing, and no down payment was paid by buyer.
This is not a difficult strategy to employ if the seller has enough equity, is willing to hold a second, and the first mortgage lender approves.
One thing that is not mentioned in most articles about this strategy is the requirement for lender approval. The lender who is making the 90% loan will have to agree to allow the seller to take back a second mortgage. In cases where the buyer has better credit, this is usually OK with the lender. But if the buyer has a lower credit score, the lender may not approve of this. If your credit score is on the lower side, but you have good documented income, you may still qualify.
Talk to your lender ahead of time and find out if creative financing options such as a seller second would be allowed. Make sure you have a lender who is used to working on investment property loans. Some mortgage companies only have programs for owner occupants. You need to go to a lender who specializes in loans for investors.
2. Another common way to obtain a no down payment loan is to utilize one of the many low or no down payment programs that exist. Many of these are intended for owner occupants, but some are available for investors. Again, it is important to talk to the right lender.
If you have an investment property that you want to sell, consider taking back a second mortgage for 5-10%. This is not a huge amount, and it can help you sell your property faster.
When it comes to finding a seller who will help you create a no money down deal, consider buying from an investor who is willing to be flexible. Some investors are willing to do creative financing simply because they understand that it helps them sell houses. It never hurts to make an offer that includes a seller second. You never know until you ask.
There are some points to remember when purchasing investment property with no money down. A key point is the comparison of monthly payments to expected rental income. When you are financing 100% of the purchase price, your payments will be higher. If you have a second mortgage payment to add to a first mortgage, your payment may be even higher. Be sure your rental income will cover the entire monthly payment.
3. More common among professional investors is buying wholesale properties, using hard money to purchase and rehab.
When the rehab is completed, you want to get a new mortgage that pays off the hard money loan. Since this is a refinance, you can take cash out of the property. You may have to bring some money to closing on the hard money loan, but you get it all back when you refinance, so you end up with no money out of pocket. This becomes not only a "no down payment" deal, but also a "cash back at closing" deal.
It works like this:
Purchase price $100,000
Repairs $15,000
Hard money loan $115,000
Purchase and repair, then get new loan to pay off hard money.
New loan is based on 90% of After Repair Value.
For our example, the ARV is $150,000
90% of $150,000 is $135,000.
New loan for $135,000. Subtract hard money loan pay off of $115,000 leaves $20,000.
You keep the extra $20,000 in cash, tax free since it is a loan, rent your house out and let the tenant pay the loan back.
Your gross profit is $20,000 cash and $15,000 equity. Total gross profit $35,000. Not too bad for a couple months work.
Down payment by definition means specifically money that is used to "pay down" the total purchase price. This does not include money for closing costs, points, interest, and other items such as insurance. But if you are buying wholesale properties, fixing them and refinancing to pull cash out, you should be able to pay all your expenses and have a nice profit at the end of the day. (Just keep some of that cash in reserve for emergencies)
If you do 3 houses per year, and you only net $25,000 total, after paying all expenses on each of the 3 houses, you are still netting $75,000 cash and equity in about 6 to 8 months. Plus, if you are renting these properties, you are also creating additional streams of income through monthly cash flow as well as accumulating equity in each property.
This is a solid strategy to achieve a retirement nest egg and ongoing income for life in less than 10 years. If you look around at the real estate investors who are wealthy, the vast majority own rental property, be it residential or commercial.
They understand the concept of buying at a discount, then holding their properties for years. They get to the point where their holdings are worth double or triple the price paid. This is free money that you can earn simply by buying and holding long term. No, this is not as easy as it sounds, but nothing worth doing is ever easy. If it were, everyone would be wealthy.
There are wholesaling companies in every major city that specialize in selling fixer upper properties that fit with strategy number 3 in this article. Look for their signs on the side of the road, their ads in the paper, or ads in local thrifty nickel type shopping papers.
Most deals do require some out of pocket cash, even if it is only temporary, until you refinance.
True no down payment opportunities are pretty rare these days, with interest rates at historic lows. If interest rates go back up, (and they will) we will see more creative financing and more no down payment opportunities in the future.
By: Donna Robinson
Wednesday, March 7, 2007
Top 3 Reasons to Delay Purchasing a Home
So you have set aside enough funds for a down payment on a house and closing costs? And you are curious to know if there is ever a time when you shouldn't buy? Regardless of all the benefits of buying a home, it is still a major and life changing purchase and a buyer should go forward with an cautiously optimistic but informed attitude.
An important thing to honestly evaluate before you purchase is the average appreciation rates of your local market and your own personal circumstances. Historically, the average appreciation rate for real property has been roughly 6%; however, as the nation is huge your local market appreciation rates can obviously vary. Your main objective should be to stay in your house long enough so that you are not placed in a position where you will have to sell your home at a loss. If you have to sell a home before it has appreciated enough to cover the costs and commissions of selling, you could find yourself in a serious, financial bind. This especially applies to those who buy a home with a down payment of ten percent or less. In the market of the past five years, many who purchased homes with zero down payments are finding themselves in exactly that position, basically "under" their loan.
Real estate commissions traditionally run around six percent of a home's sales price. The seller's closing costs generally amounts to about one and a half percent. Adding all the costs you would incur if you were forced to sell, you can see how this can easily exceed the first year's appreciation of your home. If you made a minimal down payment (from 3% - 5%), you could actually have to come up with cash out of pocket to sell your home. In addition, if the value of the houses in your neighborhood has dropped considerably, you may also find yourself owing a deficiency judgment. A deficiency judgment is a judgment for an amount not covered by the value of the security( in this case your house) put up for a loan or installment payments. In general, with the final sale of the house, the owner is still left with a balance owing on the original amount of the loan and is liable by law to pay it. While this is the worst case scenario, it still is prudent to know that such situations can occur and realistically evaluate how you can avoid them.
The three occasions when it is much better to hold off on buying a home are the following:
New to the Area
A very good to reason to delay buying a home is if you have just moved to an unfamiliar area or region of the country. It makes sense to rent for a number of months before deciding on exactly which neighborhood you desire and can afford to live in. Often when people are too hasty to buy a home immediately, they find that they might have made a better decision if they had waited awhile and had become more familiar with the surrounding neighborhood and local community. They would have additional leisure time to evaluate home values and find the best bargain in the neighborhood they desired to live in.
Uncertain or Unstable Job Future
You could have just graduated from college or you are expecting a promotion and a transfer. Or perhaps, your company has announced an impending "restructuring" or "downsizing". If any of these apply to your situation, it might be best to forego buying a home until your job and financial situation stabilizes. It is much easier to dissolve a lease on an apartment or condo, than to try to sell a home in a financially difficult or pressing situation.
Marital Problems
While not advertised on national real estate ads, real estate agents are often participants in the real unfolding life drama of clients who have to sell their houses due to foreclosure, divorce, and deaths in the family. One of the saddest scenarios occurs when recent former clients undergo a divorce and are forced to sell a recently purchased house. For whatever reason, many couples in marital turmoil, are steeped in denial and often decide that buying a new home may help resolve their difficulties. Perhaps it is inevitable that such problems should then occur, but selling a home before it appreciates can create an additional emotionally draining financial burden in an already difficult situation.
While this certainly isn't meant to discourage the prospective buyer, it certainly is intended to inform the buyer of the serious decision they are about to undertake and to evaluate his or her circumstances honestly. Taking the time to be forthright at the outset will assure a purchase they will be happy with in the long run. For more information visit http://www.nefcortez.com
by Nef Cortez
An important thing to honestly evaluate before you purchase is the average appreciation rates of your local market and your own personal circumstances. Historically, the average appreciation rate for real property has been roughly 6%; however, as the nation is huge your local market appreciation rates can obviously vary. Your main objective should be to stay in your house long enough so that you are not placed in a position where you will have to sell your home at a loss. If you have to sell a home before it has appreciated enough to cover the costs and commissions of selling, you could find yourself in a serious, financial bind. This especially applies to those who buy a home with a down payment of ten percent or less. In the market of the past five years, many who purchased homes with zero down payments are finding themselves in exactly that position, basically "under" their loan.
Real estate commissions traditionally run around six percent of a home's sales price. The seller's closing costs generally amounts to about one and a half percent. Adding all the costs you would incur if you were forced to sell, you can see how this can easily exceed the first year's appreciation of your home. If you made a minimal down payment (from 3% - 5%), you could actually have to come up with cash out of pocket to sell your home. In addition, if the value of the houses in your neighborhood has dropped considerably, you may also find yourself owing a deficiency judgment. A deficiency judgment is a judgment for an amount not covered by the value of the security( in this case your house) put up for a loan or installment payments. In general, with the final sale of the house, the owner is still left with a balance owing on the original amount of the loan and is liable by law to pay it. While this is the worst case scenario, it still is prudent to know that such situations can occur and realistically evaluate how you can avoid them.
The three occasions when it is much better to hold off on buying a home are the following:
New to the Area
A very good to reason to delay buying a home is if you have just moved to an unfamiliar area or region of the country. It makes sense to rent for a number of months before deciding on exactly which neighborhood you desire and can afford to live in. Often when people are too hasty to buy a home immediately, they find that they might have made a better decision if they had waited awhile and had become more familiar with the surrounding neighborhood and local community. They would have additional leisure time to evaluate home values and find the best bargain in the neighborhood they desired to live in.
Uncertain or Unstable Job Future
You could have just graduated from college or you are expecting a promotion and a transfer. Or perhaps, your company has announced an impending "restructuring" or "downsizing". If any of these apply to your situation, it might be best to forego buying a home until your job and financial situation stabilizes. It is much easier to dissolve a lease on an apartment or condo, than to try to sell a home in a financially difficult or pressing situation.
Marital Problems
While not advertised on national real estate ads, real estate agents are often participants in the real unfolding life drama of clients who have to sell their houses due to foreclosure, divorce, and deaths in the family. One of the saddest scenarios occurs when recent former clients undergo a divorce and are forced to sell a recently purchased house. For whatever reason, many couples in marital turmoil, are steeped in denial and often decide that buying a new home may help resolve their difficulties. Perhaps it is inevitable that such problems should then occur, but selling a home before it appreciates can create an additional emotionally draining financial burden in an already difficult situation.
While this certainly isn't meant to discourage the prospective buyer, it certainly is intended to inform the buyer of the serious decision they are about to undertake and to evaluate his or her circumstances honestly. Taking the time to be forthright at the outset will assure a purchase they will be happy with in the long run. For more information visit http://www.nefcortez.com
by Nef Cortez
Wednesday, February 21, 2007
Home Selling Tips: Maximize Your Home's Sales Potential
Home Selling Tips
Home selling tips are everywhere - some are suggestions you might never have thought of. Others, are general ones you're likely to find everywhere. However,just because they're common doesn't mean they don't work.
Here are some home selling tips of our own:
· When advertising your property, never use the words "asking" or "negotiable" with your selling price. This will only make it seem like you're not sure of the value of your home. Why bother setting the price in the first place if further negotiation is likely to change it?
· When preparing your house, try to see it from the buyer's point of view. Would you want to buy a house like your own?
· Unless you're sure you're up to the challenge, hire a good agent and attorney to do the home selling for you. It may cost more, but it can save you a lot of aggravation in the long run.
· Make sure you have full Multiple Listing Service coverage - this is a powerful tip to remember. Multiple Listing Service (MLS) is the strongest selling tool for your home. Some people would not even advise you to check for any offers before you see you home on MLS!
· Home showings through an open house are a good idea, especially if you live in a small town.
· Getting clutter out of the way will not only improve home showings, but also make it easier to pack once the home has been sold.
· Finish any renovations you've started on the house. No buyer wants to finish a job the seller started!
· When negotiating with the buyer, throw your bad mood away. It's hard to discuss price when you're still upset about the buyer's plans to cut down the tree you love. Maintain an interactive discussion and build up trust. Even if the offer doesn't work out, keep up a good impression.
· Don't let buyers' offers sway you - consult with your attorney about the price offered. Usually there's a period of three days for you to accept or reject an offer. Also be prepared for home inspections, as usually this happens during this stage of the home selling process.
As I mentioned in the beginning of this article: home selling tips are endles. Choose only the tips that would best suit your needs and situation.
To Your Success,
by Dan Giordano
Dan Giordano http://www.FreeRealEstateDeals.com
Home selling tips are everywhere - some are suggestions you might never have thought of. Others, are general ones you're likely to find everywhere. However,just because they're common doesn't mean they don't work.
Here are some home selling tips of our own:
· When advertising your property, never use the words "asking" or "negotiable" with your selling price. This will only make it seem like you're not sure of the value of your home. Why bother setting the price in the first place if further negotiation is likely to change it?
· When preparing your house, try to see it from the buyer's point of view. Would you want to buy a house like your own?
· Unless you're sure you're up to the challenge, hire a good agent and attorney to do the home selling for you. It may cost more, but it can save you a lot of aggravation in the long run.
· Make sure you have full Multiple Listing Service coverage - this is a powerful tip to remember. Multiple Listing Service (MLS) is the strongest selling tool for your home. Some people would not even advise you to check for any offers before you see you home on MLS!
· Home showings through an open house are a good idea, especially if you live in a small town.
· Getting clutter out of the way will not only improve home showings, but also make it easier to pack once the home has been sold.
· Finish any renovations you've started on the house. No buyer wants to finish a job the seller started!
· When negotiating with the buyer, throw your bad mood away. It's hard to discuss price when you're still upset about the buyer's plans to cut down the tree you love. Maintain an interactive discussion and build up trust. Even if the offer doesn't work out, keep up a good impression.
· Don't let buyers' offers sway you - consult with your attorney about the price offered. Usually there's a period of three days for you to accept or reject an offer. Also be prepared for home inspections, as usually this happens during this stage of the home selling process.
As I mentioned in the beginning of this article: home selling tips are endles. Choose only the tips that would best suit your needs and situation.
To Your Success,
by Dan Giordano
Dan Giordano http://www.FreeRealEstateDeals.com
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