Buying a Home? – Be Aware of the Extra Costs

0 | August 15th, 2011 | Posted in Home Buying Tips

Housing Cost?


Photo by (Sujin Jetkasettakorn)

Are you looking at buying your first home? Are you looking at trading up to a larger house? The situation could be any one of these but the fact is that there are extra costs that are involved while you are buying a house. And yes, these costs are over and above the purchasing price. If you are not aware of these costs beforehand, they can come up as a shock to you while closing the deal. There are one-time fixed time payments and then there are monthly or annual payments. These extra costs may vary from one deal to another but knowing about them can help you get a more accurate idea of your budget.

It doesn’t matter whether you are buying a house for the first time or the fifth time, what matters is that there are a lot of things that you need to consider so as to avoid any unexpected extra financial burden. Here are a few costs that you should consider while planning your budget for buying a house:

A bank often requires that your property be appraised. For this you need to pay an appraisal fee that could cost you around three hundred dollars to a maximum.

Your bank may also want to include the property taxes in your monthly mortgage payments. However, this will depend on your down payment and whether you are able to submit a proof on an annual basis that your taxes have been paid

A survey fee is charged when you buy a home on resale rather than buy a new home. This will set you back by at least seven hundred dollars.

You will also need property insurance to cover the replacement value of your home. This includes the structure and the things in your house and is required by your lending institution to make sure that their investment is protected.

Service charges involve the installation fee of services such as cable or telephone that you will need once you move into your new house.

No home purchase should be made without the help of a lawyer who will review the paperwork and guide you along. The legal fees may vary depending on the experience of the lawyer and the kind of legal expertise that is required.

There is also a mortgage loan insurance fee that you may be required to pay depending on the equity in your home. The costs are higher than 3% of the total mortgage amount and the payments are added to your monthly mortgage payments.

A mortgage broker may also charge you a fee to get you a lender and to arrange for financing your home. This may not always be the case since often brokers do not charge you anything and in fact they get their fees paid by the mortgage institution itself.

You cannot, of course, forget about the moving costs. It will cost you a minimum of $50/hour for a van and three movers and the charges will be higher when the demand for movers is high.

There will be monthly or annual maintenance fees that you will be required to pay once you shift into your new home. These can include grounds keeping and carpet cleaning and will vary depending on the building.

Water quality and quantity certification may be required if your new house is serviced by a well. A fee may be charged for this but this totally depends on where your new house is located.

Your property taxes can go up by thousands of dollars if the town has made some local improvements such as addition of sidewalks or building of a proper sewer line.

When property is transferred from one person to the other, you have to pay a land transfer tax. The amount of this tax, however, can vary depending on the area that you live in.

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New short sale law in California

0 | July 25th, 2011 | Posted in Short Sale

Under a new state law, any lender who agrees to a short sale, which by definition will yield insufficient funds to cover the outstanding loans on a property, must accept it as payment in full for all loan balances. That is a good thing for upside-down homeowners who need to sell, says the California Association of Realtors. “The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment to subsidize the difference,” said association President Beth L. Peerce. “SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lien holders — those in first position and in junior positions — will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property,” she added.

Source (http://shortsalesriches.com/blog/)
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Top 10 Home-Staging Don’ts

0 | July 17th, 2011 | Posted in Marketing

Top 10 Home-Staging Don'ts


Photo by (Ambro)

Please Don’t:

1. Rationalize that a higher asking price means you will have more wiggle room. You could wind up sitting idle on the market with a house full of wiggle room.

2. Respond to lowball offers with a counter — instead, respond with an invitation to re-submit.

3. Refer to a leaky foundation as a central humidifier.

4. Make your house smell like a cherry orchard or a department store perfume counter.

5. Air your dirty laundry. This includes leaving bills and private papers out, or, of course, actual dirty laundry.

6. Take your prospects on A Complete History of The Kopecki Repairs & Renovations Tour.

7. “Clean up” by stuffing all the closets.

8. Leave unfinished DIY jobs for the buyers’ honey-do list.

9. Defer yard work. Your house only gets one chance to make a first impression. Overgrown shrubs and broken gutters are the real estate equivalent of dandruff.

10. Think licks from Rex the Bulldog will help generate more offers.

HGTV


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Staging for a Quick Real Estate Sell

0 | July 15th, 2011 | Posted in Marketing

Staging for a Quick Real Estate Sell. Short Sale


Photo Courtesy of (Photostock)

An empty house is a building. A house filled with furniture, the smell of baked cookies and fresh flowers is a home. When you are looking to sell house quickly, then consider investing some time in staging to take your property from just another building to a home that buyers want to purchase. Staging may not be the most important aspect of selling your home, but it can be the one that gives your property the edge over others in the market.

There is something to be said about the lived-in feel that staging a home gives to a property. Empty rooms that are perfectly painted stand very little chance against a room with the right furniture and proper decorating touches. The bare spaces of an empty house can make them feel cold and uninviting. Buyers need to be able to imagine their own lives in the home. Renting or leasing furniture from a company in order to give your property a lived-in appearance can help leave buyers with the feeling that will push them to make a purchase.

You may also be able to locate companies that specialize in staging properties for the purpose of selling. Some even offer tenants that maintain the home and insure it is ready for showing.

The areas to focus on when staging a home are the living rooms, dining area, master bedroom and all the bathrooms. The spaces are best kept neat and orderly. The whole house will give off a better impression when thoroughly cleaned. Any lived-in areas are best dressed but not crowded. It’s also important for storage spaces to be empty in order to allow any potential buyers to see how amount of space available.

The atmosphere of a home is more than furniture. Decorating touches, like pictures and mirrors on the wall, and even throw pillows on the furniture can add to the impression that buyers get when they view the house. Even the right accessories in the bathroom can make the space stand out to potential buyers. The more positive aspects buyers are able to find in the home (and in the staging), the more likely they are to make an offer. The more offers you get, the more likely you are to sell your house quickly and at a price you will be excited to accept.

Another step to take to stage a house and make it a home is providing pleasant scents. Buyers who have been touched positively by all their senses in a home will keep that home at the top of their potential buy list. Stay away from overpowering scents, like scented candles and air fresheners. Stick to natural scents. Bake a loaf of bread or batch of cookies. Pick some fresh flowers to help dress a table or desk.

Staging will not be the major factor for selling your house quickly, but it will be a contributing factor. The real estate market is highly competitive for sellers at this time. The more you have on your side, the easier it will be to sell quickly. Staging a property allows buyers to see beyond the building and investment aspects and begin to view the building as a home. Most buyers are looking to purchase a home for them and their family to live in. Staging could be that extra edge you give your property that helps it sell quickly in a crowded market.
Article source by (BestPagePublisherListing)

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Short Sale Flips and Seasoning

0 | July 12th, 2011 | Posted in Short Sale

Short Sale Flips and Seasoning


Photo by (Andy Newson)

Recently many of the financial institutions are expressing concern about flips by investors in general and specifically short sale flips.

A flip is when an investor gets control of a piece of property as the buyer and they find a third party who purchases the real estate shortly after closing. Let’s take a look at how this relates to the real estate investor who is doing a short sale flip. The investor takes control of a property from a distressed property owner. The investor negotiates a sales price which is submitted to the lending institution. The lending institution agrees on a fair market price for the property. Once the fair market price is established, the investor finds a buyer to purchase the property at a fair market value. The distressed property owner has reduced his liability by the investor taking control of the property. The lender has reduced their liability by removing the distressed property from their inventory and the ultimate buyer has received a property which is the fair market value as they see it. This seems like a very workable and smart business decision on all participants.

The banking institutions find something sinister about these transactions so they have decided to add a clause in their documentation requiring “seasoning”. This seasoning can result in the investor being required to hold the property in inventory for between 30 to 90 days before you can sell the property to the third party. In addition, they are requesting that the investor notify the lender, seller and buyer how much the investor initially paid for the property as well as how much they sold the property to the end buyer. This spread is the investor’s profit in the transaction.

Many of the business books I have studied indicate the free market system is “Where buyers and sellers can make the deals they wish to make without any interference, except by the forces of demand and supply. A stock market comes closest to this ideal.” (BusinessDictionary.com)

Now let me try to understand what the “Law of Supply and Demand” looks like. BusinessDictionary.com’s definition for “Law of Supply and Demand” is as follows: “Common sense principle which defines the generally observed relationship between demand, supply, and prices: as demand increases the price goes up which attracts new suppliers who increase the supply bringing the price back to normal. However, in the marketing, of high price (prestige) goods, such as perfumes, jewelry, watches, cars, liquor, a low price may be associated with low quality, and may reduce demand.”

Now let’s ask several questions – Why would a firm (banking institution) who sold their distressed product want to retain liability on the product for 30 – 90 days? Why would an individual, who has been distressed while owning a product, want to know what happened to the product after they no longer have responsibility for that product.

Let’s close with this: The free market system is where buyers and sellers make deals they wish to make without any interference except by the common sense principle defined as the generally observed relationship between demand, supply and prices.

Are these recent moves prolonging the recession in general and the housing crisis in particular?

Article Source: Tom Fitzgerald with Ezine Articles

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Can I Get a Mortgage After a Foreclosure or Short Sale?

0 | July 10th, 2011 | Posted in Short Sale

Can I Get a Mortgage After a Foreclosure or Short Sale?


Photo by (photostock)

If уου аrе trying tο bυу a home аftеr a foreclosure οr short sale уου аrе probably concerned thаt уου wіƖƖ nοt bе аbƖе tο ɡеt approved fοr a home loan.Though іt mау bе difficult tο ɡеt a mortgage аftеr a foreclosure οr short sale, іt іѕ nοt impossible.

Getting a Mortgage аftеr a Foreclosure
Thе housing market collapse hit аƖƖ 50 states hard аnԁ resulted іn many homes being lost tο foreclosure. Thе number οf foreclosures skyrocketed аnԁ thе housing market hаѕ changed forever. Thе housing market changes аrе οn many different levels. One way thе housing market hаѕ bееn forced tο change іѕ hοw lenders perceive foreclosures οn loan applications.

Aѕ уου саn imagine, thеrе аrе ѕοmе lenders thаt wіƖƖ nοt approve a mortgage fοr anyone whohad a foreclosure іn thеіr past. Sοmе lenders mау approve a mortgage аftеr a specified period οf time (1 year, 2 years, 5, years, 7 years, etc).
Thеrе аrе absolutely lenders thаt аrе approving mortgages fοr buyers whο hаԁ a foreclosure іn thеіr past. Thеѕе lenders wіƖƖ consider thе overall circumstances behind thе foreclosure аnԁ consider уουr overall application. Yου ѕhουƖԁ bе prepared tο give a very detailed explanation аbουt whу thе home wеnt іntο foreclosure. Supporting documentation іѕ аƖѕο helpful
Speak tο уουr loan officer upfront аbουt уουr foreclosure аnԁ mаkе sure hе οr ѕhе thinks уου саn still ɡеt approved before уου waste valuable time.

Getting a Mortgage аftеr a Short Sale
A short sale mау nοt bе аѕ damaging tο уουr credit report аѕ a foreclosure. It іѕ іmрοrtаnt tο know thаt a short sale саn bе quite damaging, nonetheless. Sοmе lenders hаνе eased thеіr guidelines fοr approving mortgages fοr people whο hаԁ a short sale іn thеіr past. Thіѕ іѕ bесаυѕе many homeowners wеrе forced tο sell thеіr homes below whаt thеу owed bесаυѕе οf thе crash іn home values.
Keep іn mind thаt thе impact οf a short sale οn уουr mortgage application wіƖƖ аƖѕο depend οn hοw іt wаѕ reported tο thе credit bureaus. Yου ѕhουƖԁ ɡеt a copy οf уουr credit report frοm аƖƖ three credit bureaus аnԁ find out hοw thе short sale wаѕ reported (іf аt аƖƖ). Thе vast majority οf mortgage applications аѕk аbουt foreclosures аnԁ bankruptcy аnԁ nοt аbουt short sales.

Speak tο уουr loan officer аbουt thіѕ upfront ѕο уου ԁο nοt waste time.
Getting a Mortgage Aftеr a Short Sale οr Foreclosure – Thе Bottom Line
Thе bottom line іѕ уου саn bе approved fοr a mortgage аftеr a foreclosure οr short sale. Find lenders thаt clearly state thеу offer mortgages tο buyers wіth a past foreclosure οr short sale. Know whаt іѕ аnԁ whаt іѕ nοt οn уουr credit report аnԁ bе upfront wіth thе lender.

If уου ԁο уουr research аnԁ find thе rіɡht lender уου саn bе approved fοr a mortgage аftеr a foreclosure οr short sale.
Thіѕ article іѕ intended fοr general information. Always seek sound financial аnԁ legal advice before mаkіnɡ аnу financial ԁесіѕіοn.

Article Source (FinancialMap.Info)

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Selling Your Houses Quickly

0 | July 8th, 2011 | Posted in Marketing

Sell Your Houses Quickly


Photo by (Sujin Jetkasettakorn)

Have you noticed the real estate market is flooded with Short Sale Listings? I have. So I thought I would share this wonderful blog post with you by one of my real estate mentors Greg Clement.

By: Greg Clement

There’s one big mistake that I see many new
investors, and even experienced investors,
make when they’re going to show a property…
setting up individual appointments for everyone
who wants to see the property.

For example, if you’ve just rehabbed a house
and it’s ready to be put on the market, once
it goes on the market, whether it’s listed
on the MLS or on your website, it’s going to
get a flurry of activity the first week that
it’s listed for sale. Once you let your buyers
know about it or it gets listed on the MLS,
the phone calls will start coming in like
crazy.

Then, and most investors do this, you will
set up a time, like Tuesday at 6:00, for one
person to come out and look at the house.

Then you’ll probably set up another person
to see it on Tuesday at 7:00 and Tuesday at
8:00 and then the next day.

This is an inefficient way to sell your properties
and it’s literally taking a lot of hours out of
your life.

There are two much better ways to do this.

The first method is to put a lock box on
the house and give interested parties the
lock box code and have them let themselves
in.

However, the way that I prefer, method
number two, is to do a variation of an open
house. But the trick is to not let the people know
that it’s an “open house.”

For example, make appointments with everyone
interested in seeing the property in 10-15
minute increments. Tell one person to show
up at 6:00, then tell the next couple to show
up at 6:10 or 6:15, then schedule the next
couple for 6:20 or 6:30, the next one 6:40,
6:45, 6:50, 7:00. You will literally book
six to ten appointments in a one-hour period.

Then when these people get to the house, you
have others in the house, which creates built-in
scarcity and puts the property in demand.
If one of your appointments doesn’t show up,
it’s not such a big deal because you have multiple
parties at the house looking at the property,
all in one evening. That’s the perfect way to
get rid of your houses quickly.

Try it and let me know how it works for you.

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Short Sale Bank Approval Process 101

0 | July 6th, 2011 | Posted in Short Sale

Short Sale Approval Process


Photo by (Digital Art)

By (BankShortSale.us)
Weather you are working with Bank of America or Chase Bank, It’s easy to get intimidated by the bank short sale process, especially with the number of applications you have to contend with. But it’s nothing the average homeowner can’t handle, especially with a bit of planning and research. Read on for a quick step-by-step guide to bank short sales and how you can get the best deal.

1) Contact your Lender.
The first step is always to get informed, and the best way to do that is to talk directly to your bank. This is because the bank short sale process varies from lender to lender. You want to make sure you follow the right procedures and have the right qualifications.

2) Find a Realtor.
You can do a bank short sale on your own and save money, but working with a realtor—especially one with short sale experience—can speed up the process and help ensure better results. Take your time to find the right agent, ask for references, and call them up to get firsthand feedback.

3) List your Home.
When your bank has approved your proposal, you can start the bank short sale process by putting your home on the market. Short sales are usually marketed the same way as regular sales, so take advantage of your resources. Besides the MLS and newspapers, get word around through the Internet and personal networks.

4) Complete the Sale.
Once you’ve found a good buyer and your bank has agreed to their offer, the next step is to close the sale. Closing day is when you sign all the relevant documents and officially turn your property over to the buyer. Make sure you have all the papers ready the day before, and ask your agent to clarify any vague terms.

5) Settle your Mortgage.
The bank short sale process ends when you forward the payment for your home to your lender. Usually, the bank will consider this full payment and write off the remaining balance, but it can vary depending on what you’ve agreed on. Once you’ve paid any amounts due, you’re free of most if not all financial obligations.

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Is A Strategic Short Sale For You?

0 | July 5th, 2011 | Posted in Short Sale

Strategic Short Sale


Photo by (Graur codrin)

By (Bryant Tutas)
Is doing a Strategic Short Sale the right thing to do? First let me define Strategic Short Sale. A Strategic Short Sale is when you can afford your mortgage payments and are making payments on time BUT you owe more than the property is worth. You make a strategic decision to sell the property and offer your Lender less than what is owed as a settlement of your debt. If the Lender accepts your offer you have just completed a Strategic Short Sale.

So is this the right thing to do? Maybe. To make this decision you have to look at your overall situation.

Does continuing to make payments and keeping the property make sense?

Are you able to continue making payments without using credit cards and savings?

Is making payments harming your family’s financial position?

Is the property close to being paid off?

Will you be happy with the situation you are in now five years from now?

If you’ve answered “No” to these questions then you may be a candidate for a Strategic Short Sale. Contrary to popular belief I do not believe that a Strategic Short Sale is shirking your responsibilities. A Strategic Short Sale is a decision to try and settle your debt with a creditor. Notice I stated “settle” NOT avoid or walk away from. Settle. As in “Mr Lender, I would like to offer you $50,000 instead of the $100,000 I owe you. Will you accept this as settlement?”.

Offering a settlement is the right thing to do. It’s just as right as continuing to make mortgage payments. You are giving your creditor an option. It’s their decision whether or not to accept it. In most cases they will.

Of course, there are negatives to doing a Strategic Short Sale. You will mess up your credit for awhile. Your lender may require you to participate in the loss by making a cash contribution, signing a promissory note or both. You may owe income taxes on the forgiven debt. And of course you will no longer own the property. You may have to be a renter for awhile.

So, folks, if you are struggling with whether or not to do a Strategic Short Sale step back and look at it as a business decision. You are in the business of looking out for your family’s welfare. Weigh the pros and cons. Then make a decision that’s right for you. I truly hope this helps.

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Tips to Pass a Home Inspection Successfully

0 | May 30th, 2011 | Posted in Home Buying Tips

Tips to Pass a Home Inspection Successfully


Photo By (Bill Longshaw)

Every home buyer has a different preference as far as their likes and dislikes are concerned. However, all buyers want to buy a house that is sturdy and is as good structurally beneath the surface as it appears to be on the outside. The home buyer will ask questions about a leaking roof, safety of the wiring, or about the plumbing and will want to get them checked by an inspector.

There are about 11 physical problems that are usually scrutinized carefully by a home inspector since they are quite common and can turn out to be very costly when you set out to repair them. The best thing to do is to look for these 11 problems your self so that they can be managed and repaired as early as possible. They will not only help you save a lot of money in costly repairs but they will also ensure that you get a good price for your property. Here are a few checks that can help you do a home inspection by your self:

Is the plumbing defective?
Leaking and clogging are the two main signs that the plumbing in the house is defective. You can easily do a visual inspection to locate a leak. Water pressure can be gauged by turning on all faucets and flushing the toilet. The sound of running water shows that the pipes are undersized and if the water is dirty when the faucet is turned on, it indicates that the pipes are rusting.

Is the basement damp or wet?
A powdery white mineral deposit a few inches off the floor, mildew odor, and do you store things in the basement are three things that an inspector is likely to look for. These are all signs that the basement is damp or wet and sealing a crack in and around the basement, adding a sump pump and pit, and complete waterproofing can prove to be very costly affairs. You will need to get an estimate of the costs to get a better idea about what you want to net on your home.

Is the wiring inadequate or are there any electrical problems?
A home should have a minimum of 100 amps service that is clearly marked and the wiring should be copper or aluminum. Inadequate circuits and potential fire hazards are indicated by faulty octopus plugs and a home inspector will definitely look at it.

Is the heating and cooling system poor?
Poor heating is often indicated by insufficient insulation and poorly functioning heating system. It is a good thing if your furnace is clean and there is no rust on the heat exchanger. However, the inspector will check to make sure that it is not over the life span of 15-25 years. If there is a forced air gas system, an inspector will look carefully for any cracks on the heat exchanger since it can release carbon monoxide into the home. Heat exchangers, if damaged, need to be replaced.

Are there any roofing issues?
Curling or splitting of the asphalt shingles and mechanical damage from a wind storm are only two of the reasons that can lead to water leakage through the roof. Leaking gutters and downspouts causing the water to run down through the exterior walls can lead to major internal problems in the roofing.

Is the attic space damp?
If there are ventilation and insulation problems or there are issues with vapor barriers, it can lead to water, moisture, and mildew in the attic space. The roof, the structure, and the building can be affected negatively due to this and fixing this damage could turn out to be a costly affair.

Is the wood rotting?
The inspector will probe the wood to see if there is any rotting in the door or window frames, trims, sidings, fences, or decks. He will pay special attention to any place that has been freshly painted.

Is the masonry work fine?
Although re-bricking is quite costly, sometimes it is required to avoid problems with water and moisture penetration which could further lead to the chimney being clogged with fallen bricks or the entire chimney falling off onto the roof.

Is the electrical circuit unsafe or over-fused?
If more amperage is drawn on the circuit than intended, it can be a potential fire hazard. In a large home that uses large appliances, 15 amp circuits are the right thing to use. The cost of replacing a fuse panel with a circuit panel can run up to several hundred dollars.

Are the security features adequate?
The inspector will be interested in looking at the locks on the windows and patio doors, dead bolts on the doors, smoke detectors in every level of the house and any other security feature that can prove to be expensive if they need to be repaired. If you want to purchase or install any of these components, make sure that you check with a local professional as these can add up to your costs.

Are there structural or foundation problems?
Since structural integrity is necessary for every home, an inspector will investigate the underlying footing and foundation carefully.

A seller needs to be careful while selling his home since these things, if neglected, can cost you to lose a potential home buyer. You should, therefore, do a thorough inspection of the house before putting it up for sale. This will not only help you get a more accurate estimate of the sale price but will also not spring any surprises on you when a professional inspector does a check for these things.

The buyer needs to be extra careful when purchasing a short sale or foreclosed home, as most of these properties are sold in “As is Condition”. Meaning the seller will not make any repairs to the property.


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