What is a Short Sale?

Published by julia | Filed under Buyer / Seller Tips, Listings, Real Estate

What is a short sale in real estate? It’s probably a term you’ve heard a lot lately. If you’ve been looking for a house to buy, you’ve no doubt noticed the plethora of advertisements proclaiming a short sale. If you’re trying to save your home, this option may have been presented to you. But what is it?

A short sale in real estate is when the bank handling the mortgage on a property decideds to allow the property to be sold for less than the amount owed. While more and more banks are turning to this option lately, don’t assume it’s a given if you’re late on your loan payments. In order to get a bank to agree to a short sale, your house’s value must be incapable of meeting the amount of the mortgage. This means your chances of getting an offer on your home for the amount you owe on it are almost non-existent. Next, you must genuinely be unable to make payments on the mortgage and need a way out in order to avoid having a foreclosure on your credit report.

Short sales have become more common due to the continuing mortgage crisis. Many houses that were purchased for outrageous sums several years ago when the market was good are now worth only a fraction of what was paid for them. Also, a lot of buyers got into adjustable rate mortgages at that time. These mortgages were attractive at first, with low interest rates, but those rates went up drastically after a few years, increasing monthly payments beyond what the owners could afford. Many owners need a way out now without taking too severe of a hit to their credit, and a short sale is a good option. For bargain hunters in a position to buy, it’s like the gold rush all over again.

Timing in Real Estate is Everything

Published by julia | Filed under Buyer / Seller Tips, Listings, Miscellaneous, Real Estate

Even when it is upgrading or remodeling

We all hear about how to wait for the right time to buy a home. Or when is the perfect time to sell a home. But what about the perfect time to upgrade your house? When will it start and when will it end? Very valid questions. I have the answers.

In these unprecedented times in our lives, everything has a perfect time where there is a lull in the action. A leveling out if you will. That time is now. Prices of building materials is lower and in greater supply. And finding someone to do the work is much easier than it has been in several years.

There are skeptics that will tell you not to hire ‘Joe the Plumber’ from the local classifieds to do any of your work. “If they aren’t licensed they can’t do the job” they will say. While probably true if you are building a house or adding a room. But if you need to change the fixtures in your bathroom because they are dripping circa 1980, Joe is your guy.

Regardless of who you want to do your task, whether it is a simple toilet change out or a complete bathroom upgrade, getting it done right and on a set time table is key. You don’t have to pay thousands more for labor just because Joe’s competition is a licensed general contractor. They need the work too and need to be reminded that you can have 5 other contractors at your door in a day.

And that is the next point, when to do this upgrade or remodel. If you think that the market for selling in your neighborhood is getting more favorable for sellers, then seriously consider the time in the very near future. If it is still a few months away, you have a bit more time. But you need to consider this so your house can be at the top of the list when the market is ready.

Another important point is to nail your plumber or contractor or whomever is doing the job down to a timeframe. If it is going to take 3 weeks to complete, from the first handshake to last mopping of the floor, they need to be held to it. Each remodeling job or upgrade comes with it’s own set oif problems, but a qualified person knows that from experience and will account for that in their bid.

Don’t get sidetracked and don’t let the jobsite go cold until the end is in site. You are the customer, but you are the boss too. Crack the whip if you need to keep the pace moving. Most remodelers understand this concept well, but need a little prodding sometimes. They know they don’t get paid until the job is finished and your seal of approval is put on it.

Now, here is where the timing can get touchy. Try to plan the end of this project a couple of weeks before an open house. This will keep the project looking brand new and not used. The sooner the better. If you coordinate this before you start the project, you have a better chance of having a good turnout after the project. Your due diligence will pay off here. Hire the right person that has the track record and references to back him up. Make sure he knows of this timeframe. Do it right and do it right the first time.

And finally, whatever you decide needs to be done to your house, make sure that you are as prepared as you expect the person doing the work to be. Bathroom projects require you to make other arrangements, maybe even staying at a friend’s house or a hotel. Be totally prepared for the cost, time, and possible setbacks that will accompany this undertaking. But if done right, your timing will be impeccable and will pay off in a shorter time.

How to Sell Your House Quickly and Easily With Home Staging

Published by julia | Filed under Buyer / Seller Tips, Listings, Real Estate, Shout Outs

Let’s face it — the real estate market is at an all-time low right now. If you’re trying to sell a house, that can spell bad news for you. However, just because your neighbors are sitting on their properties and taking a loss for months at a time doesn’t mean you have to. You can go the creative route and use a home staging company to get your house sold ASAP.

The fact is, most real estate experts have found that houses sell faster and for more money when the look like they’re being lived in. This is where the home staging company comes in. The company gets a responsible renter into the property….renters who are heavily screened beforehand and who have attractive furniture and good decorating skills so they can make the home look like a showplace. The renters get the property for a significantly reduced monthly rate, with the stipulation that they may get a call at any moment to leave for the afternoon while the house is shown. The renter must make sure the house is clean and neat, and is often asked to bake some cookies before leaving, if there’s time (people are more likely to buy when there is a homey smell in the house).

The people who rent through home staging companies know their situation is temporary, but find it attractive because it fits it with their current transitory cirucumstances, while allowing them to live in a much nicer house than they could afford in the meantime.

Real estate professionals love home staging because it’s been proven to result in at least a 15% increase in the amount of money a house sells for, and often means a house sells months sooner than it would have otherwise. The home staging company helps the temporary resident decorate in the most attractive manner, using colors and arrangements that are proven to increase sales. Even though the resident is not present when the house is shown, potential buyers love it that a house looks so lived in and cared for. It’s a very psychological thing, and it works.

With the real estate market the way it is today, using a home staging company makes sense. If you have a luxury home, or even an average home, and are having difficulty selling it, contacting your local real estate professionals about using a home staging company could make a big difference in how soon you sell your home and how much money you make on the deal. It’s a solution that’s well worth looking into.

House Flipping: Making Money Even in a Down Market

Published by julia | Filed under Buyer / Seller Tips, Listings, Real Estate, Shout Outs, Uncategorized

Even in a depressed real estate market, house flipping is still an excellent source of income if you know how to do it right. The best way to achieve profit through flipping houses is with fixer-uppers. These are houses that are owned by homeowners in financial distress and that need cosmetic repairs, either major or minor. Because of the need for repairs that the homeowner often can not afford to make, you can often easily purchase these homes for pennies on the dollar, fix them up yourself, and sell them at a premium price.

House flipping is like finding a diamond in the rough, polishing it and setting it in a ring or pendant, and selling it for big bucks. Everyone wins! The homeowner gets out of the home with his credit more or less intact and you make a pretty profit.

Plenty of real estate investors have gone on to become quite wealthy using the house flipping model. On the outside, it seems pretty basic, but ther ARE some risks you should be aware of before jumpting in. You’ll have to pay to make any necessary repairs to the property, whether you do them yourself or hire others to do them for you. You’re also taking a risk that the fixed up property will sell at the price you want. You’ll need to do some serious market research ahead of time and make sure that you have the financial resources available to make the repairs.

Doing appropriate research and planning ahead greatly reduces your risk and increases your chances of success. If you know that houses in a certain area usually sell for a certain price if they’re fixed up, you can be reasonably sure of making a profit. You can also look into hard money loans that  will give you the short term cash you need to fix the property up without cutting into your profit too much when you pay it back. If the house only needs minor repairs and is in a good neighborhood, your chances of making a success out of your house flipping venture are very high indeed, even in a down real estate market. After all, people are always looking for bargains on good houses in good neighborhoods,and you can give them that.

How to Protect Yourself from Foreclosure

Published by julia | Filed under Buyer / Seller Tips, Miscellaneous, Real Estate, Shout Outs, Uncategorized

The foreclosure crisis is at an all-time high. With the era of easy mortgage loans, 100% financing, and sub-prime lenders coming to an end, many people are finding themselves with house payments that they can no longer afford. This can be due either to an adjustable rate mortgage that suddenly went way up, or from the loss of a job in a rough economy. Either way, if you’re facing a mortgage payment that’s becoming beyond what your budget can handle, there are ways to overcome it and possibly save your house.

First, don’t ignore the problem and hope it will go away.  It won’t. The farther you become behind in your mortgage payments, the harder it will be to catch up. If you become so far behind that your mortgage company won’t even work out a payment arrangement with you, then you’ve got real problems. So, take charge and make some calls as soon as you see a problem beginning to develop.

Next, try to work something out with your lender. You don’t have to wait until a foreclosure notice is filed against you to try to work it out with your mortgage company. Lenders don’t want to foreclose, as this is a big hassle for them. They would prefer you pay your mortgage so they can recoup their investment. If you contact your lender as soon as you know there is a problem, then they’ll be much more willing to offer you options to help you get back on track.

Finally, keep in close contact with your lender regarding your financial situation. Read and respond to any correspondence they send you, especially the first few letters, because these will give you lots of good information on ways you can avoid foreclosure with tem. If you don’t keep in contact with your lender, the lender will assume you’re not even going to try to pay the loan back, and you’ll end up in foreclosure court a lot sooner than if you’d tried to work something out. Most lenders are reasonable, especially these days, so your chances of working out a way to stay in your home through special payment arrangements are much higher now than in years past. Talk to your lender, keep in touch, and follow all of the options available to you, and you just might be able to keep your home.

The Government Wants You to Buy a House

Published by julia | Filed under Buyer / Seller Tips, Real Estate, Shout Outs

This isn’t anything new, just worth repeating

In case you haven’t heard, the Federal Government wants you to buy a house, and they are giving you a great incentive to do just that. Free money from the government. Yes you heard right, free money.

There are a couple of stipulations to this free money. You have to be a first-time home buyer, or have not owned a home for the 3 years previous to the purchase. And your income has to be less than $75,000 for a single person or $150,000 if you are married.

This is a tax credit worth 10% or up to $8,000 towards the purchase on the home you choose to buy. Not a bad deal considering that is probably enough with combined savings to purchase that home you really want.

Time is of the essence on this deal. The program ends December 1, 2009. Don’t delay, act today. If you are serious about buying a home this year, take advantage of this deal. The government doesn’t hand out money to taxpayers very often, so use it or lose it!

Any real estate professional in your neighborhood can steer you in the right direction and get you the info you need. Please be sure to ask for the First-Time Home Buyer’s Program. There are other incentives as well that you may qualify for. The Government really does want you to buy a house, and they have given your local realtor all the details. Give them a call, or submit a question via this blog, and we will answer your questions.

Good Luck and Happy Buying!!!

The Roller Coaster Ride Continues

Published by julia | Filed under Buyer / Seller Tips, Miscellaneous, Real Estate

But the end to this ride is right around the next turn

When we look back at the past 18 months, we see one common thread-falling home prices. But we also see inventories rise and fall, and with them the prices are fluctuating as well. Now we are seeing an upturn of sales but the prices are dropping again. What is the cause?

Not enough houses being sold in the same neighborhoods to keep the comparable pricing sustained. When one house sells for $100,000 and another across the street sells for $105,000, the trend is for an increasing sale price. This isn’t happening right now. Short sales and foreclosures are keeping the median pricing lower than it could be.

Many builders are also adding to the issue with market-driven lower prices as well. When all of the 3-bedroom houses in any given community sell for the same price, the prices never increase. Add to this the fact that fewer people are as trusting of real estate as they were 2 years ago, and we have lower prices. Builders are doing there best to sell off their inventories so they can be liquid, or simply be able to borrow more money from their lenders.

But what we aren’t seeing right now is what really lies ahead. The market is gaining strength, much like a baby does, a little at a time. But the amount of strength and the time it takes to get back going are uncertain. Many analysts and professionals say it could be late 2010 before the recession is truly done. I think in some cases, that is feasible. But it will differ from market to market.

Los Angeles and Tampa Bay will see 2 very different results from the ‘end of the recession’. Los Angeles is a market that is fragile by itself without having falling prices thrown into the mix. Tampa Bay’s real estate sector will recover quicker because of the prices themselves beginning lower anyway. As long as the trend to sell more properties continues, both markets will emerge better and stronger.

These are just 2 examples of what the housing slump has done to each and every market. There aren’t many cities or towns that have been insulated from this crisis. But in each case, the professionals pull together and help to shore up the local landscape as it were to keep each other viable. The strong will survive this recession. The real estate market is no place for the weak at heart anyhow.

Regardless of how many more times the market rises and falls and rises and falls, one thing is for certain…the stability will be back and it will be better. Fair prices and closer scrutiny of the buyers and sellers will be of the utmost importance. Ethical business practices and better trained professionals will result in a better overall experience for all parties concerned.

The bottom line in this up and down market is fundamentally simple. Be fair and trustworthy and you will be busier than ever before. Word of mouth will be your best friend. Stay focused and be diligent in all endeavors. And keep a positive attitude at all times. What doesn’t kill you will make you stronger. Better times are on the way.

Do Renters Benefit from High Mortgage Rates?

Published by julia | Filed under Buyer / Seller Tips, Real Estate, Shout Outs, Uncategorized

Despite the effects of recession the real estate mortgage rates have been following a continuous rising trend. In fact recently the home mortgage rates augmented for three weeks continuously striking an eight month high.

30 year mortgage rates averaged 6.42% and 15 year mortgage rates rose from 6.06% to 6.12%. Each of them carried an add-on fee of 0.4 points. 5 year adjustable mortgage rates rose from 6.02% to 6.19%. Its add-on fee is 0.5 points.

The rising mortgage rates have changed the real estate market from a sellers or buyers market into a renters market. Home owners are finding it difficult to meet mortgage payments. To prevent defaults and foreclosures their only option is to sell the house.

The slump in the economy has triggered a downward spiral in the home sale prices. Home owners would always like to sell their homes at a price that matches the actual worth of their homes. Since that price is not forthcoming at present they are deferring sales of real estate in the hope that prices will level out soon and they will get a better deal in a sale transaction. Sales have fallen by 2.6 %- 5.99 million units annually.

Meanwhile they rent their homes so as to recover the high mortgage payments at least partially. Hence more and more homes are available for rent for the renters at very low rent rates.

Renting a home is turning out to be cheaper than buying it in today’s market conditions. This explains the huge spate in the number of renters in the market. They are able to save up to half of the monthly mortgage rates they would have had to pay had they bought the house rather than rented it.

Renters are able to obtain like or better homes for rent for the same amount of money they spend on buying the home with a mortgage loan. Hence they are suspending decisions to buy homes in favor of renting homes.

It is also more advantageous to be a renter than a buyer in the scenario of rising mortgage interest rates, because the home prices are expected to drop further and buying in future will lead to bigger savings and profits for purchasers. It is also better to resort to buying homes after the tornado season that can damage your home and prove expensive if you are not well insured. Renting is thus a cheaper proposition than buying at present.

The Benefits of Learning HOA Rules

Published by julia | Filed under Buyer / Seller Tips, Miscellaneous, Real Estate, Shout Outs

HOA or home owners association is a feature of developments and condominiums. Created by the developers, they are basically a co-operative society of the home owners living in the particular condominium. The HOA prescribes CCRs or covenants, conditions and restrictions to ensure protection of group interests of the home owners. It also lays down rules for garbage disposal and maintenance of common areas like pools, landscapes and street lights. When you set out to buy a home in a condo or development it is very important to learn the HOA rules due to various reasons.

Your Home Is an Asset for a Lifetime

Your home is valuable and you perhaps invest your life’s savings for buying it. If you are opting for a home in a condominium, you must obtain a copy of the CCRs, byelaws and financial statements of the HOA and go through the rules thoroughly.

Also the price of a condominium house depends on how well the development is maintained which in turn depends on the HOA rules. Studying the HOA rules helps you identify if the price is right.

Is the Membership Fees Justified?

HOAs collect fees from the home owner members for its operation. The HOA provides several services in return. For instance restrictions on parking must be backed by arrangements with a towing company. The HOA should organize security staff; make provisions for garbage disposal, pool and garden maintenance, cable TV, water and insurance. By reading the HOA rules about all these aspects you can see if the fees are reasonable.

The Condominium May Not Suit Your Lifestyle

Some times HOA rules may be too strict and may be unsuitable for your lifestyle. For instance, some HOAs don’t allow certain pets or restrict number of pets. Others limit holiday decorations, number of cars that can be parked on the driveway, renting of town houses or self maintenance of vehicles inside the condo. Some curb small children from playing in front of the house.

Penalties for Violation

HOAs can legally enforce their CCRs and penalize you for breaking their rules by imposing huge fines. These fines can turn into a lien on your home preventing you from selling it until dues are paid. Reading the HOA rules before buying the house can thus save you from unnecessary hassle and fine expenses.

The HOA rules of your development can make or mar your life in your new home. So make sure you learn them well before you take the plunge and buy the home.

Senators, GM and the Effect on Rural Communities

Published by julia | Filed under Miscellaneous, Real Estate, Uncategorized

Last night, I was watching the senatorial meetings on regarding GM and the closings they are proposing. I was appalled by the choices made by the GM leaders to close some of the oldest and most performing dealerships in the United States. But, more than that, I was interested in the effect these closings would have on the local community, over and above the inability to buy a new GM car or truck.

Service, Service, Anywhere?

When buying a new car, that car is covered by a service plan that keeps the buyer from having to pay for repairs out of pocket. I never once thought of these plans when GM announced they were going bankrupt. For some reason, my mind was focused on the future of so many cars that were sitting on lots just taking up space. Of course, I thought about trading in my vehicle in hopes of getting the best deal on Earth, but I digress.

These dealerships are franchises and they are being TOLD they will no longer be able to work with GM. Some are being given a year to shut down, some only 26 days. But behind the story is the fact that these dealerships do more than just sell cars, they service the cars still under warranty. What happens to the local consumer when they can no longer have their car serviced? Imagine the towing bill to have the car towed 100 miles to the next dealer.

Why Florida?

One major display of angst came from a representative from Florida. This representative was speaking about two dealerships in particular that were the best selling dealerships in Florida. These dealerships are being CLOSED.

So here is the question that we all must face. Why is GM closing the dealerships that are making money, turning a profit and offering steady jobs to a given area? If this continues, the people in the area will no longer be able to afford their homes and we will have another rash of foreclosures. GM does not have any clue, it seems, how to fix the problems they are having. But the answer is not forcing people out of work that are making money for the company. Instead, the company may need to sit down and evaluate more than the invisible bottom line and think about the choices they are making. The dealerships close, the people lose their jobs and they move away. More than that, they lose their homes and the real estate market is nearly full in terms of foreclosure capacity.