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141	Do Homeowners Owe Money After a Foreclosure? Do Homeowners Owe Money After a Foreclosure? By Dwan Bent-Twyford and Sharon Restrepo
142	Plan on Buying a Home Next Year Plan on Buying a Home Next Year Then Keep Holiday Spending to a Minimum Source: Michele Dawson - December 9, 2002 If you're close to buying a home in the coming year, then you'll want to keep an especially close eye on your holiday spending - you don't want to hamper your chances of getting a loan...
143	Do You Want to Make Money or Make Excuses? Do You Want to Make Money or Make Excuses? By Lonnie Scruggs
144	Documenting Your Assets & Verifying Your Down Payment Documenting Your Assets & Verifying Your Down Payment Source: RealEstateABC.com - 2002 You can't just "come up" with the money. Checking, Savings, & Money Market Accounts. Borrowing to Come up with a Down Payment...
145	"Doing Business by Telephone: A New Twist" "Doing Business by Telephone: A New Twist" by Bernice Ross, Ph.D., MCC and Byron Van Arsdale, MCC
146	Don't Buy a Car - or Did You Already Buy One Don't Buy a Car - or Did You Already Buy One Source: RealEstateABC.com - 2002 When Income Grows and You Want to Buy "Stuff". Debt-to-Income Ratios and Car Payments. How Buying a Car Reduces Your Purchase Price...
147	Don't Hesitate To Make A Low Bid To A Seller Don't Hesitate To Make A Low Bid To A Seller Source: Benny L. Kass - July 28, 2003 Q. I am a first time home buyer, and have been pre-approved for a $255,000 mortgage purchase. In my search, I have seen a number of houses in the $300,000 - $500,000 range in good, move-in condition...
148	Due Diligence Matters! Due Diligence Matters! Darius Barazandeh:
149	Tax Foreclosure Sales in Texas Tax Foreclosure Sales in Texas Darius Barazandeh:
150	Eleven Ways To Raise Your Credit Score Right Now! Eleven Ways To Raise Your Credit Score Right Now!
151	Equity Loans For Employment Emergencies Equity Loans For Employment Emergencies Source: Broderick Perkins - June 4, 2003 Tap your equity before you are laid off if you plan to get a second mortgage to see you through hard times...
152	Equity Share Your Way to Ownership By J.P. Vaughan Equity Share Your Way to Ownership By J.P. Vaughan
153	Equity Sharing Arrangements by William Bronchick Equity Sharing Arrangements by William Bronchick If you are low on cash or have cash and are low on time, a partnership or equity-sharing arrangement may be for you. Using partners to finance real estate transaction is the classic form of using “OPM” (other people’s money). Experienced investors are always willing to put up money to be a partner in a profitable real estate transaction. As with many businesses, talent is more important than cash; if you can find a good real estate deal, the money will find its way to you! Partnership arrangements work in a variety of circumstances. The most common scenario involves one party living in the property while the other does not. Another scenario may involve all of the parties live in the property. These arrangements are common among family members. Parents often lend their children money for a down payment on a house, with a promise of repayment at a later date. If the repayment of the debt is with interest and/or relates to the future appreciation of the property, we have a basic equity-sharing arrangement. Another common financing arrangement between multiple parties is a partnership wherein none of the parties live in the property. This article will discuss the basic partnership investment. Larger investments through limited partnerships and other corporate entities in a “pool” of money are known as “syndications.” These investments are generally classified as securities, so compliance with state and federal regulations is complex. Thus, syndications are generally not recommended for financing smaller projects, since the legal fees for compliance with securities law will far exceed the benefit of raising capital through multiple investors. BASIC EQUITY SHARING ARRANGEMENT The common equity sharing arrangement involves one party living in the property and the other putting up cash and/or financing. Both the occupant and the non-occupant enjoy tax benefits and share the profit, as described later in this chapter. First time homebuyers make the best resident partners while family members, sellers and real estate investors fill the non-resident partner role. Scenario #1: Buyer with credit, no cash A lot of potential homebuyers have the income to qualify for a mortgage loan, but only with a substantial down payment. With a small down payment, the monthly loan payments may be too high. A potential homebuyer could borrow the money for the down payment, but nobody but a fool (or a parent) would lend $25,000 or more unsecured. Furthermore, loan regulations generally do not permit the use of borrowed money as a down payment. An equity-sharing partner could put up the money in exchange for an interest in the property. The resident partner would obtain the loan, live in the property, make the monthly loan payments, and maintain the property. The non-resident partner that puts up the down-payment money is free from management headaches and negative cash flow. After a number of years (typically five to seven), the property is sold, the mortgage loan balance is paid in full, and the profits are split between the parties. Obviously, the strategy works best in a rising real estate market. Scenario #2: Buyer with cash, no credit The second equity-sharing scenario would be a buyer with cash, but an inability to qualify for institutional financing. The resident partner would put up the down payment, the non-resident partner would obtain the loan. After a number of years, the property is sold, the mortgage loan balance is paid in full, and the profits are split between the parties. If you are low on cash or have cash and are low on time, a partnership or equity-sharing arrangement may be for you. Using partners to finance real estate transaction is the classic form of using “OPM” (other people’s money). Experienced investors are always willing to put up money to be a partner in a profitable real estate transaction. As with many businesses, talent is more important than cash; if you can find a good real estate deal, the money will find its way to you! Pitfalls A joint ownership arrangement can be problematic if the resident does not maintain the property or make the mortgage, insurance or property taxes payments. Furthermore, the property may not go up in value, so the non-resident party who put up his credit or cash may not realize any profits. Like any real estate investment, the shared equity arrangement should be approached with profit, not just financing in mind. In other words, make sure you buy the property at a good price and/or in the right neighborhood at the right time. Alternatives For the non-resident investor, there are several alternatives to the equity sharing arrangement. The first is the lease/option, an arrangement by which the non-resident owner is on title and the resident owner is a tenant. This arrangement does not allow the tenant to reap the tax deduction, but does allow him to share in future appreciation by having a fixed option price. The second is a contract for deed, which does allow the resident to claim the interest payments, but does not allow the non-resident to share in future appreciation.
154	Essential Contract Clauses by William Bronchick, Esq. Essential Contract Clauses by William Bronchick, Esq. In a previous article, we discussed the importance of learning to use the "standard" real estate broker contract rather than the "seminar" contract when dealing with real estate agents. The following are some essential clauses and modifications I use when selling a property: Limited Inspection Clause. Most standard broker contract give the buyer the right to make the contract contingent upon your right to do a thorough inspection before a certain date. Make certain that the inspection period is short and that the inspection must be done by a licensed (if they are in your state) professional inspector. Limit objectionable items to roof, plumbing, electrical heating and structural defects. An open-ended inspection clause will permit the buyer to "weasel" out of a contract because the garage door squeaks. Choice of Escrow Company. As the seller, insist on the right to choose the title or escrow company so that I remain in control. A conservative or uncooperative escrow or title company can make life very difficult if you are trying to do a creative deal. Qualification of Buyer. The most important thing to keep in mind when selling is that time is money! The single biggest mistake sellers make is allowing an unqualified buyer to tie up their property under contract for two months. Do not believe any claims of the buyer, his agent or mortgage broker about their ability to qualify for a loan. You should know exactly what the qualifications are for an FHA or FNMA loan in your area and qualify the buyer yourself. I use the following clause: "Within 48 hours, buyer shall provide seller with buyer’s complete financial and credit information for seller’s approval. Within 72 hours after receipt of such information, Seller may terminate this contract and refund buyer’s earnest money if, in seller’s sole opinion, buyer does not have the creditworthiness to qualify for a loan from a third party. Seller’s decision and opinion shall be final in this regard, and buyer shall have no further recourse after return of this earnest money deposit." NOTE: Be certain you do not engage in illegal discrimination in rejecting a buyer's credit worthiness. Permission to Contact the Lender. I hate being in the dark! I always want the have the ability to control the entire loan process and be able to get information from the lender along the way. The buyer's lender won't talk to you directly, without express written permission of the buyer. To remedy this problem, insert the following clause: "Buyer hereby gives express permission to all parties, including lenders, employers, financial institutions, credit agencies, mortgage brokers and real estate agents to release any appropriate financial information to the seller." Now you can take control, get on the phone and scream "What's holding up this loan!"
155	Estimating the Market Value of Your Home Estimating the Market Value of Your Home Written by Roselind Hejl Professional appraisers sum it up in three words -- buyers make value. Ultimately, the value of your home is what a reasonable buyer is willing to pay within a reasonable time. Setting an asking price for your home requires that you anticipate what most buyers would be willing to pay. This requires a close look at comparable home sales in your area, as well as making an assessment of the state of the real estate market itself. Pricing correctly is fundamental to the successful outcome in the sale of your home. Market Analysis Homes listed for sale and recent closed sales in your area will usually provide relevant comparable data for pricing your home. Closed sales show market confirmed prices, while listing prices indicate the current trend in pricing. Later, when your home is appraised for the buyer's loan, the appraiser will only consider recent closed sales. Asking prices will not be considered. A sales price that is solidly based on recent sales of similar homes will not have a problem when the price is later reviewed by an appraiser. If your home is superior or inferior to most homes in the neighbourhood, or if there are few or no nearby sales, then anticipating the responses of potential buyers will be more difficult. In this case, a trial and error strategy may be necessary. This is a sensitive area and requires a realistic assessment of your home and its market. For example, one very nice home was continually rejected because it had the master bedroom upstairs, and it was located in an area where most buyers were over the age of 45, with older children. Real Estate Market An important aspect of pricing is an assessment of the state of the real estate market. The market may favor buyers or sellers, or be in balance. An indicator of the quality of the market is the number of months of standing inventory in your market and price range. Consider your market area to be all neighbourhoods that offer competing choices for your potential buyer. Here is how to do that: Count the number of sales in your market area and price range for the past 12 months. Divide the number of sales by 12, to get the number of sales per month (sales rate). Count the number of homes on the market now. Divide the number of homes on the market by the number of sales per month (sales rate). This will show you the number of months it will take to clear the current inventory. Seller's Market Less than 6 months of standing inventory is considered a seller's market. In a seller's market the number of buyers is large in proportion to the number of homes for sale. The demand for homes is greater than the supply. Buyers must compete with each other for the available inventory. There may be multiple offers received shortly after a property goes on the market. Buyers will submit the highest possible price and terms that the market will support. Prices will trend upward. In a climbing market, pricing slightly above recent sales is appropriate. Buyer's Market More than 8 months of inventory is considered a buyer's market. In a buyer's market the number of buyers is small in proportion to the number of homes for sale. This situation can be created by high interest rates, employment decline and excessive building. A low number of buyers equals a lower price. Sellers must compete with each other for available buyers. Prices trend downward. In a falling market, prices should be set at the lower end of the range, because time works against you. In six months prices may be lower. This may be difficult to do, especially if your home was purchased at a higher price. Price Per Square Foot Dollars per square foot is often used as tool for comparing homes of varying sizes to determine a list price. When price per square foot is used, it is important to keep in mind that you must make a sliding scale adjustment from larger to smaller homes. In other words, the larger the house, the lower the price per square foot for comparable homes. This is because the core square footage of a home has a higher value than the peripheral area. For example, the price per sq. ft. on a 1,000 sf home will be much higher than a 5,000 sf home, with other things being equal. We usually graph the neighbourhood prices per sq. ft. to get a visual picture of the market in the neighbourhood, as well to see how much the price per square foot declines from smaller to mid-sized to larger homes. Should you price high, and hope for an offer? Houses should not be priced over the market. This is not the best way to position your home for several reasons: Your home will be shown to the wrong group of buyers, from whom you need an aggressive negotiator - someone who will make a low offer. You will inadvertently help to sell the competition. Your high price will convince buyers that another home is a good value. Your days on the market is evident to buyers, and is a subtle but important factor in their decisions. Your best leverage occurs during the early marketing period. How will you know if the price is correct? The best affirmation of correct pricing is second looks from buyers. This indicates that your home appeals to buyers in your price range. There may be a few nibbles before a buyer comes forward who is ready to act. It helps to get feedback from Realtors and potential buyers. Keep in mind that they will often be reluctant to say negative things. The summary of feedback is more important than what they say. Are you getting nice rejections or are you getting second looks? How will you know if the price is incorrect? You may have steady showings, but lukewarm responses. This indicates that are buyers, but they have other choices with more competitive prices. Or, you may have very few showings. In this case, the buyer pool for your area, or for the style or condition of your home is small. This will require a strategy of more competitive pricing and a longer marketing time. Remember that a small buyer pool, for any reason, is a "buyer's market" and requires more aggressive pricing. How long should you market a home at a given price? There is no uniform time frame for marketing at set price. I think about 8-10 showings is a reasonable number for feedback regarding the price. This usually corresponds to about 2 - 6 weeks for an average home in a balanced market. About 30 days marketing time for a given price could be good a rule of thumb. However, this may be too short for your home if you have an unusual or very high end home for which there is a small market. Or, 30 days may be too long for your home if you need to move fast. What happens if your home does not sell in a reasonable time? If your home has been on the market for months with no offers, you have been given a clear message that the price is set too high. This is particularly true if showings have slowed down and there are few prospects coming to see it. What you do at this point depends on whether you really need to sell. If you're not really motivated to move soon, you can always wait for the market to catch up to the price you want. It would be best to take your home off the market and wait for better conditions. Buyers become suspicious of a house that's been for sale for a long time. If you need to sell, consider a schedule for dropping your price until it reaches a level that attracts buyers. There's no reason to say, We simply can't sell our house. Houses will sell if the price is right. How can you get top dollar for your home? Although buyers will not pay more than market value, they will pay a premium for homes that are in excellent condition and well presented. With good condition and presentation, you can reach the high end of the price range achievable for your house. We will work with you to “create value” before your house goes on the market. When it goes on the market, we will make sure that your home is show beautifully to a wide audience. Roselind Hejl, CRS, is a Realtor with Coldwell Banker United in Austin, Texas. Her website - http://www.weloveaustin.com/ - offers a wealth of knowledge about the City of Austin, homes for sale, real estate market trends and buying and selling tips. Top 25 Residential Agents - Austin Business Journal View their website at: http://www.weloveaustin.com/
156	Every Real Estate Investor MUST Understand "Paper" Every Real Estate Investor MUST Understand "Paper" By Michael Morrongiello
157	Everything You Need to Know about FICO Scores By Terry Light Everything You Need to Know about FICO Scores By Terry Light
158	Exchanging a '15' For A '30' Year Mortgage Exchanging a '15' For A '30' Year Mortgage Source: Broderick Perkins - May 19, 2003 The sluggish economy and low mortgage rates have combined to spawn a trend of mortgage borrowers who are turning in 15-year mortgages for longer 30-year mortgages...
159	Explaining Your Credit Explaining Your Credit Source: David Reed - May 9, 2003 I was in Chicago this past week giving a speech to some mortgage industry professionals...
160	Extra Space Without Moving House Extra Space Without Moving House Written by Sara Felice Come on, we all know that a little extra space in the house would be nice, but finding spare room is one tough job. Perhaps you've always fancied your own home gym or play room for the kids, or maybe you need space for a home office to do all that boring work stuff, and wouldn't your own games room be awesome. Hang on - Before you start rushing off to the estate agents or calling the builders take a look at all the options available to you, and weigh up the possibilities of how to gain extra space in your home. You may not have considered an outdoor room before, but I recommend you find out why buying a Log Cabin makes so much sense. House prices are continually on the rise, so most of us can rule out the option of moving. You can guarantee that when you do finally find the house that's right for you it will be so ridiculously expensive that you won't be able to afford it. As anyone who's ever moved house will tell you, moving day is the most stressful day in your life, an added stress that most of us could do without. It takes so long to redecorate and organise the chaos and settle in - and it would be just your luck to end up next door to the neighbours from hell. You may want to ask yourself, is moving house really worth all that hassle just to gain an extra room? If you don't want to move house there's always the option of adding to what you already have by building an extension or loft conversion to add extra space or provide another room. But these types of projects take time and planning, not to mention money, and think about all that upheaval and mess, it'd feel more like you're living on a building site than in your own home. By far, the quickest, easiest and cheapest way to extend a property and add extra space is by erecting a Log Cabin. Log Cabins are both attractive and practical, making them a brilliant and natural feature in the garden - They won't look out of place and they are great for so many different uses. Life's complicated and stressful enough as it is, so why add unnecessary bother when you can gain that extra room almost instantly without any of the hassles of moving or upheaval and mess. A good Log Cabin Kit should be supplied with clear instructions and everything needed for construction, making it easy to assemble. Within a day you can extend your property for a lot cheaper than moving house or building an extension. id:54l87u159k452i Sara Felice works in Marketing for UK company Dunster House Ltd., suppliers of timber garden products, including log cabin kits and climbing frames. Visit http://www.dhleisureandgarden.com/ for further information. View their website at: http://www.dhleisureandgarden.com/
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