Sunday, March 9, 2014

Real Estate Investing In Short Sale - How to Do It the Right Way

Real Estate Investing In Short Sale

Real estate investing is relatively straightforward and you can easily make a fortune if you hit it on target. Moreover, real estate provides a bigger profit potential but some risks are involved which calls for careful research and knowledge about the business.

There are actually various methods and real estate investing strategies that thousands of investors have tried to use just to succeed and get ahead in the business and doing short sales is just one of them. Some investors have never go about working on a short sale and they are those who have probably had a bad experience which may include declined offers, trouble getting the seller to correspond, and delays with the mortgage companies. It may be because everything they know about short sales is absolutely untimely and incorrect.

Some of the strategies introduced by real estate gurus simply don't work. Most of the lessons they taught on short sales may be ineffective and out-of-date. So let us first understand the basics of short sales.

What is a Short Sale?

A short sale takes place when a bank or mortgage lender agrees to discount a loan balance due to financial or economic difficulties on the mortgager's part. Doing short sales is nothing more than negotiating with lien holders a payoff for less than what they are owed, or sort of a sale of a debt, in general on a piece of real estate, short of the full debt amount.

As the foreclosure rate remains high, short sale continues to be a popular strategy. That is why a lot of aspiring investors grab the opportunity on how to earn using an effective short sale system. Fortunately, there is an easy way to recession-proof real estate investing using a proven system of short sale in real estate even without money, without credit, without previous experience and without dealing with banks.

Saturday, March 8, 2014

Homeowners associations: Good or bad?

Homeowners associations: Good or bad?

If you buy a condo or a home in a planned community, chances are it will be subject to the rules and regulations of a Homeowners' Association (HOA). HOAs can be a benefit and a foil for homeowners. Read this guide to figure out if you'd enjoy living with an HOA:

HOA pluses

  • The covenants, conditions and restrictions of an HOA are designed to protect the value of your home, maintain order in your community and your enjoyment of it. An HOA might prevent your neighbor from erecting an unsightly fountain in his front yard, parking his used vehicles on his lawn or having a pet.
  • Homes in HOA-governed communities are generally well maintained.
  • An HOA will see to the maintenance of the common areas of your community or development -- the front lobby and the pool, or the drive leading into your development.
  • Homeowners in HOA communities often have the shared use of pools and party facilities that are maintained by the association. Think "private pool" without the work.
  • If you have a dispute with a neighbor over the use or look of his or her property or his barking dog, you can take the matter to the homeowners' association for intervention.
  • HOA dues may pay for shared services like security, trash pickup lawn maintenance and snow removal. (Think of Saturdays by the pool instead of mowing the lawn.)
  • The HOA may sponsor community events and get-togethers.

HOA minuses

  • Membership is mandatory for all homeowners in an HOA community.
  • You must pay HOA membership dues. These dues may increase -- before moving into such a community, you should find out when payments are due, what they cover, what they don't cover and how likely they are to rise.
  • You may have less say in how you can change the appearance of your home. Your HOA may have a regulation against fencing your backyard, installing a pool or painting your front door red. It may even restrict when you can water and cut your lawn.
  • An HOA might not allow pets.
  • If the community is an age-restricted community, the homeowners' association might not allow people under a certain age to reside with you or to move into your home.
  • Homeowners looking to rent out their residence may not be able to do so under HOA rules.
  • If you don't meet an HOA's requirements -- say, if you do paint that door red or get a German shepherd -- the HOA can levy a fine.
  • If you don't pay your HOA dues or fines -- the HOA may even try to foreclose on your home.
  • At times, there have been charges of unscrupulous behavior against HOAs. Check to see if there is any litigation pending against the HOA and check its financials as well as its recent assessments (for community fixes or upgrades).

The real costs of home ownership

The real costs of home ownership

The true costs of owning a home can be staggering for a first-time homeowner. In addition to the expenses you might expect (like your mortgage) other costs, like maintenance and utilities, can run up the bill. Here's a list of what you can expect to pay beyond the traditional mortgage and property tax bills.

  • Homeowner's insurance

  • In 2006, the average yearly premium in homeowner's insurance was $804, according to the Insurance Information Institute. That's an average increase of 5.2% from 2005. You can expect that premium to be higher now, since it's been a few years since the institute collected their data. (Plus, insurance premiums almost always go up.)
  • Utility bills

  • When you own a home, you'll have to pay for electricity, heating, cooling, water and sewer. While utility prices vary widely across the U.S., you can expect to pay hundreds of dollars for these services throughout the year.
  • Internet/cable/phone bills

  • Unless you drop your land line and go Internet- and cable-free at home, you'll have to pay for these services as well. Prices for these vary across the U.S. (and can be higher or lower, depending on the level of the plans you carry), but expect to pay at least $100 to $150 a month for all three.
  • Repair/maintenance costs

  • They call it Murphy's Law, but perhaps it should be called "Homeowner's Law." When you own a home, something is bound to break or need replacing. And when repairmen charge a fee just to take a look at a problem (not to mention the cost of fixing it), a homeowner should always hold at least some cash in reserve to cover unforeseen expenses and emergencies.
  • Cleaning supplies

  • Keeping a home clean costs money. There's the expense of buying a vacuum cleaner (and keeping it in good repair), plus the extra cost of purchasing cleaning must-haves like vacuum bags, sponges, paper towels and cleansers. Even if you go green and just use vinegar and water and old rags to clean, the vinegar still costs you something and you may want to re-use and wash those rags (at your expense).
  • Lawn maintenance/cleaning services

  • If you'd rather bring in a cleaning service, expect to pay about $80 a week or more. If you don't want to cut the lawn, either, expect to throw in an extra $20 to $40 a week.
  • Decorating/furnishing/landscaping expenses

  • Once you purchase a home, no doubt you're going to want to furnish and decorate it. You may also want to improve the landscaping or add a deck or patio. Furnishing just a single room doesn't come cheap -- think a few hundred dollars if you buy new -- and adding just a small patio to your backyard could cost a few thousand dollars ($6,000 to $8,000 isn't unheard of, depending on the style of the patio and the materials) if you bring in a professional.
  • Homeowners' association fees

  • If you live in a community with a homeowner's association (HOA), you'll also have to pay homeowners' association fees. These fees vary according to where you live and the services offered by the HOA, but they can run from less than $100 a month to several hundred dollars monthly. That hurts.

Wednesday, February 26, 2014

Real Estate Clients Need Trusted Realtors And Problem-Solving skills

Real Estate Clients Need Trusted Realtors And Problem-Solving skills

The best Realtors are the best networkers. As cliché as that might sound, great Realtors are really good at connecting people. They always know how to find someone or something that may solve their client’s problem.

My takeaway is that Realtors are a great source of knowledge on the community and real estate in general. This is the reason you hire a Realtor. It also presents a great opportunity for Realtors to leverage this knowledge to gain more leads and build a great reputation.

With clients often scouring the Internet in search of their next home, Internet advertising is an attractive option for Realtors to spend their marketing dollars. However, it is very difficult to track the return on investment. For example, the chances of an individual Realtor popping up as one the top search results for the keywords “NYC real estate” are slim to none. Let’s be honest — unless you have unlimited money to spend on search engine optimization, there is little chance to pop as the top Realtor in any of the top real estate markets.

Having talked with hundreds of Realtors over the past few months, the recurring theme is that buyers find their home on the Internet and ask for a referral from a friend or colleague when they are ready to buy. I suggest Realtors focus on cultivating a network around their knowledge and who they know in order to become the top Realtor choice.

To do this, Realtors need to create lasting value, and here are three ways to do that:

1. Become more than just an MLS

The MLS as a differentiating factor among Realtors is almost a nonfactor. All Realtors have access, and there are thousands of Realtors servicing the large real estate markets. For example, a Realtor in San Diego who is also a surfer will probably know all the best surf spots. As a surfer myself, and with the plethora of Realtors available to choose from here in San Diego, I would be more inclined to list with him or her. Tip: Figure out what a lot of people are passionate about in the area you serve and take an interest.

2. Share your network

As a Realtor, you often know whom to call in case of a plumbing emergency. A trusted vendor you can share with your client is something of lasting value to them. A recommended vendor list you are able to easily share with your clients is something they will remember you by.

3. Follow up

Technology has made it easier than ever to connect with people. However, I often feel it is harder to continually stay in touch with people. The problem is social media has made it too easy to connect with so many people to the point that you feel like you don’t have to reconnect with that person. Just look at Facebook and you will have a summary of that person’s life in about five minutes. To combat this, personalize the connection and follow up with a phone call or letter. The effort is what counts.

Tips For First Time Home Buyers

Tips For First Time Home Buyers

You started the process of buying your first home by choosing a real estate agent and mortgage lender that meet your qualifications and feel like a good fit.  Before you take off, excited to find the perfect home, step back and set some expectations for your home search.  What you expect to happen during your house hunt will affect how you react to what actually does happen.  Setting realistic expectations for yourself now can save head aches and money later.

This won’t be the last home you ever buy.  Most first time home buyers can’t afford their dream home.  If this is the case for you then try thinking of your first home as an investment in your future homes.  As an investment, the most important aspect of your first home will be appreciation/re-sale value.  At some point you will likely want or need to sell this home and your best bet to make money on it is to have bought a home that others will find attractive.  Look for homes in well kept neighborhoods, close to public transportation, near shopping and amenities and in school districts with good reputations.

Be prepared to set emotions aside.  Approach buying a house as a financial decision not an emotional one.  There is so much money involved in buying a house that you can’t afford to make an emotional decision based on modern styling or high end finishes that cause you to overlook the four lane highway outside the front door.  Be analytical.  It might be useful to make a list of pros and cons for each house.

Tips For First Time Home Buyers

Expect added pressure.  Remind yourself that you don’t need extra pressure from yourself or anyone else.  Buying a house carries enough pressure on its own. Don’t let anyone add pressure on top of that.  We recommend leaving family and friends at home during showings.  While they usually mean well, more often than not their comments do nothing more than muddle your thoughts and make you feel like you can’t think for yourself.

Some times pressure can come from a Realtor.  Your real estate agent should never put pressure on you to buy a house.  If it is ever anything other than trying to convey a sense of urgency in a potential multiple offer situation then it might be time to find a new real estate representative.  Listen to advice but don’t let anyone tell you what house to buy.  You are the one who will be living there, not them.

Extra pressure can also come from you.  Expect that you aren’t likely to find the home you will buy the first time you look at houses.  After multiple showings and weeks of looking, buyers some times convince themselves that the house they are looking for just isn’t out there so they should settle for something less.  Starting your house search with the knowledge that it can take weeks or even months to find the right house (especially in this market with little inventory) will help keep you from pressuring yourself to settle.

Having set some reasonable and realistic expectations now it’s time to start your home search!

Monday, February 24, 2014

Buying Process - Here Are Few Things To Considerere

Buying Process - Here Are Few Things To Considerere

Buying a home may be a great option and a good long-term investment, but only if you’re ready for the financial commitment and responsibility of home ownership. Buying a house is the largest financial investment you will probably make, so you want to make sure you’ve done your homework and are prepared to take that next step.

What can I afford?

You’ll first need to determine what’s affordable. Keep in mind, when you’re buying a home, you’ll have upfront costs—down payment, closing costs—and you’ll need to be prepared for these expenses. We’ll go through more details in the Qualify for a Mortgage section and you can use our Mortgage Calculator to help estimate what you can afford.

Where do I want to live?

It’s helpful to narrow down your search to the key neighborhoods where you want to live. Keep in mind, you may need to expand your search (based on what’s affordable for the area), but it helps to have a starting point. If you have children, check the available school options in your area.

Buying Process - Here Are Few Things To Considerere

What do I want/need?

Make sure you have a good idea of what you’re looking for in a new home and prioritize accordingly. There are many quality and affordable homes—from townhomes and condominiums to single-family or multi-family homes—so make sure you conduct a thorough search. You may not be able to get everything on your wish list, but knowing what your requirements are before you get started will make your search easier.

What do I need to start?

Before you get serious with your search, you’ll want to find a real estate agent and get your financing in order. We’ll go through these steps in detail, but it’s a good idea to start gathering your financial records (Pay Stubs, W2s, Bank Statements, etc.) and have them ready. Have a co-borrower? Their information will be required, too.

How much do I need to put down?

Most lenders prefer a down payment of 20%. However, that’s not always feasible for every homeowner. Check with your lender about mortgage programs that may allow for lower down payments. For example, the Federal Housing Administration (FHA) requires as little as 3.5% down. One important thing to note, if you do not make a down payment of at least 20%, you may need to pay what’s called Mortgage Insurance each month until you reach 20% equity in the home.

What about my credit?

You should take a look at your credit report before you start the homebuying process. This is the time to clean up any past issues and make sure there are no inaccuracies or mistakes. To qualify for a mortgage, you’ll need to meet the lender’s credit qualifications (which may vary by lender but you typically need a minimum credit score of 620). If you’re not in that range, you may need to spend time rebuilding your credit or come up with a larger down payment (i.e., 10% vs. 3.5%).

First Look™ Program From Fannie Mae

First Look™ Program From Fannie Mae

Fannie Mae's innovative First Look marketing period was created to promote homeownership and contribute to neighborhood stabilization — allowing homebuyers to bid and purchase foreclosed properties before they are made available to investors.

Details include:

- First Look is typically the first 20 days a property is listed on HomePath (Nevada is 30 days).

- Properties in the First Look period have a countdown clock on the property information page of HomePath displaying the days remaining to purchase.

- Eligible buyers during First Look are owner occupants, public entities and their partners, and some non profits.

First Look™ Program From Fannie Mae

Owner occupants are those buyers that will occupy the property as their principal residence within 60 days of closing and will maintain their occupancy for at least 1 year. Owner-occupant purchasers are required to sign an Owner Occupant Certification as a rider to the Real Estate Purchase Addendum. A buyer purchasing in the name of a trust, purchasing as a vacation/part-time residence, or purchasing so another person or relative can live in the property will typically be considered an investor and not eligible during First Look.

Investor offers submitted after the First Look period expires will be considered along with all other offers.

If you can't find the First Look house you want, don't give up. Freddie Mac, the other giant federal mortgage investor, also has thousands of foreclosed homes that it's trying to dispose of — and its own First Look program — at its HomeSteps marketing site. Though Freddie currently has no closing cost incentive offer, it does provide a $500 allowance toward the purchase of a home warranty policy, and it promotes special mortgage financing options on houses in some areas. If you qualify, that could mean a loan with no mortgage insurance, no appraisal and a 5% maximum down payment.