Knowledge Is Important When Buying A Home
by Kevin and Darlene Jamison, RE/MAX First, Philadelphia, PA
When you are spending hundreds of thousands of dollars for a home, you need to make sure
that what you are getting is well worth it. No home is absolutely perfect. You can always
expect to have to spend something on your new home. The average is $6,000 within the first six months, according to industry experts. In a time when you should be looking at paint
samples and new furniture, why would you want to spend your time on repairing what you
just bought?
A professional home inspection is key to truly understanding the home you are purchasing. You want to turn to a reliable inspector that is a member of an association that establishes strict requirements for membership, such as the American Society of Home Inspectors and the National Association of Home Inspectors.
The inspector should provide you with a list of what the inspection will result in. For example, some inspectors will not inspect for termites or termite damage, indoor air quality or the potential of mold to cause illness. The inspector should remind you that the inspection report is not a guarantee. The inspector is not liable for any repairs as a result of his or her performance.
But even though you hire an inspector, you are still responsible for doing a little investigating yourself. For example, even if your lender doesn't require it, hire a termite inspector. But have the inspector look for all pests. Termites aren't the only pests that cause damage. So do carpenter bees, rats, squirrels and scorpions.
You may have received a disclosure form with the signed contract for purchase. Many states require that the seller fill out this disclosure. But don't let yourself rely only on this report. Many issues are forgotten about or not considered major by the owner. Yes, the basement got wet twice in the last ten years, but they could forget about it or not consider it a problem.
Disclosure issues usually arise because buyers expect the disclosure to hold more power than it really does. Make sure that your inspector has a copy of the disclosure and will look at any issues brought up by the seller.
When it comes to buying a home, you need to know everything you can about the home, neighborhood, market conditions and mortgage options. Your knowledge will give you an added negotiating tool when dealing with agents, lenders and sellers. Make sure that you have a full understanding of each step.
Posted 9/20/09
Welcome to Real Estate Central
Education and Resources for Homebuyers, Sellers and Investors
The Basics of Real Estate Investing
by Kevin Jamison, RE/MAX First
Real estate investing may not be everyone’s cup of tea, but some people who have already tried investing in real estate know that it can be highly profitable and lead to much better quality of life. There are several keys to making significant profits in real estate investing deals. And when the deals are profitable, you will certainly be well on your way to success.
For real estate investing newbies, don’t be afraid of the challenges and pitfalls you may encounter along the way. There is definitely a lot to learn, but in the long run after you have gained some experience, you’ll hopefully become a master at closing profitable real estate deals.
There are 5 core skills that are necessary for building a real estate investing business. These will be the key factors in creating a profitable real estate investment portfolio.
These are the 5 core skills of real estate investing:
1) You must learn when and where to find the right kind of sellers.
2) You must learn the art of being a master negotiator when it comes to closing your real estate investment deals.
3) You must be able to quickly and accurately analyze each real estate investment deal so you’ll know exactly when to proceed and when to pull the plug.
4) You must become an expert in all areas of real estate investing and understand such terms as lease options, cash sales, wrap mortgages, short sales and other terminology common in the real estate investing trade.
5) You should totally understand the meaning and concept of investing in real estate, including all of the financial risks and benefits.
Now is a great time to consider investing in real estate. There are great potential rewards and the effort you put forth can yield enormous monetary returns on your investment.
Your confidence level will grow when you’ve gained some experience and closed on your first few real estate deals. But, don't stop there...
Continue to learn about real estate investing and to develop your investment skills. In a short time you may find yourself managing a profitable and growing portfolio of investment properties.
Continue to follow your real estate investing "game plan" and always keep an eye out for the hidden investment opportunities. The opportunities are definitely out there and with a little knowledge and desire can be yours for the taking. So, why not get started in what might be a new and exciting (and profitable) career today?
Posted 10/6/2009
The Power Of Appreciation
by Darlene Jamison , RE/MAX First
Learn how to have all that you have ever wanted. There is a very strong principle at work in the universe, and understanding this principle is the key to everything you desire.
If you truly want to bring into your life everything that you desire, then start with appreciating all that you have now. Here’s how it works – you bring into your life whatever it is that you focus your thoughts upon. So, if you focus on all the lack in your life, you get more lack. But if you focus appreciation on all that you have, you get more of what you want.
Of course the question is “But how can I appreciate not having something?” The answer is to appreciate the things in your life right now. Enjoy where you are right now. Then think of the things you desire, but look at them with the thrill of expectation. Think of it like this: when you plan a vacation, it’s has not happened yet, but you are filled with excitement anticipating the thrill of all you’ll see and do. You’re not depressed because you are not on vacation now. You know it is coming.
That’s how the Power of Appreciation works. Appreciate the now, and be thrilled with the anticipation of obtaining all that you desire, and more will come into your life.
Just like your goal is not to complete your vacation – it is to enjoy it. The same is true with all of your desires. You always have new desires. You’ll never fulfill them all, because no sooner is one fulfilled that ten more are born. It’s what keeps you alive. Can you imagine living each day with the thought that you have already fulfilled every desire? That there is nothing else to achieve? Of course not. There would be no purpose to life. So desires are not the lack of something; they are the promise of what is yet to come. How exciting! All that you want - you’ll have.
Knowing that there is no lack – only desires yet to be fulfilled, you can relax, appreciate, and enjoy all that is already in your life. If you want to be happier, and fulfill your desires even quicker, try this exercise: take a few moments several times a every day to notice and appreciate some of the things in your life that you would miss if they were no longer in your experience. For instance, you might appreciate the home in which you live, the electricity which powers your house, the softness of your bed, the laugh of your loved ones, the sounds around you, the multitude of colors, the smell of Thanksgiving dinner cooking, the PC on which you’re working. When you realize the importance these experiences play in your life, and the void their absence would make, it is easy to feel appreciative of all that you have.
Don’t mistake that I’m saying settle for what you have. To the contrary, I’m saying enjoy what you have, while fully anticipating the fulfillment of all you desire. The point is to fully appreciate everything you have, which will lead to experiencing everything you want.
Best of Success & Abundance,
Posted 11/3/09
Vacation Condos, A Great Investment
by Kevin Jamison, RE/MAX First, Philadelphia, PA
The advent of the condominium has created a great investment opportunity for savvy investors. Vacation rentals has become one of the more thriving aspects of the real estate industry as high-priced hotels and resorts have caused vacationers to seek a more cost-effective solution for accommodation. This is a trend that is becoming more and more popular, not only in the typical vacation locations around the continental U.S.A. such as Arizona, Florida, and California, but also in highly desirable winter locations like Colorado and Utah. This is also a trend that is making great money for investors who buy internationally in some of the world's most popular vacation areas.
One of the aspects that makes a vacation condo rental so popular is the relatively low level of upkeep that is necessary. Cleaners can be easily contracted to keep the interior of the unit in pristine condition and the owner fees see to the condition and maintenance of the exterior of the building as with any condo complex. However, investing in a vacation rental condo requires some real legwork and investigation into the area you are investing in and the building that you have chosen. One major concern is the fact that many condo developments have rules against rentals. So you must be sure to find a building where this is not the case. Also, you will need the assurance that you can easily get information about the state of your investment from wherever you reside. This can be easily done by communication with the condo association for the building or by a property management service.
As with any investment make sure that you take certain measures to protect your interests. This will include proper contracts for people staying in your condo, user agreements so to speak. Also make sure that you have the correct insurance for vacation rentals. The final step is to find a place where you can properly advertise your rental, websites are a great solution for this. If you do your homework and plan properly, a vacation rental condo can be a fantastic investment.
Posted 9/27/09
The Good Neighbor Next Door Program
by Darlene Jamison, RE/MAX First
Sometimes it seems like you can't get a break if you serve your country, even if you aren't in the military. Teachers, law enforcement officers, firefighters and other emergency personnel often get the bad end of the stick when it comes to their jobs. So it should come as a pleasant surprise that these jobs can work for you if you want to buy a home. The U.S. Department of Housing and Urban Development is making life just a little bit easier for those people who teach kids and make sure the streets are safe with the Good Neighbor Next Door Sales Program. HUD is offering “eligible single family homes located in revitalization areas” at a 50% discount from the list price of the home.
It's not all barbecues and emerald-green lawns, though. You must be a full-time employee in the approved fields. HUD requires that you live in your new home as your only home for 36 months and that you sign a second mortgage, plus a note for this discounted amount. However, there will be no interest or unexpected payments on this mortgage, as long as you live in the place for three years as your only residence.
Revitalization areas can be a challenge to mold into a working society of law abiding people. Sometimes the communities are hampered in their growth by crime or lack of work. These are challenges that need to be faced by you and your family in order to make this program work. Getting involved with your home, your neighbors and your surrounding neighborhood is what will lead to your success.
The revitalization efforts of a community are immeasurably aided by the presence of law-abiding people with a vested interest in building a thriving community. The presence of law enforcement and emergency response personnel can have an overwhelmingly positive effect on a neighborhood, both as good examples and as contributors to their local economy. The presence of families of those in service to their community also provides a good atmosphere of community involvement and pride.
Making communities safer begins in the home. Contributing to revitalization efforts by getting involved in the community along with any fellow Good Neighbors, your community might turn around faster than you first conceive. At the very least, it's worth looking into.
Posted 10/30/09
This page was last updated: March 5, 2010
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The First Impression a Buyer Gets
by Kevin and Darlene Jamison, RE/MAX First
Your home may be a great place to raise a family or just live. The problem, of course, is a buyer does not know that and instead forms an immediate opinion on what they see first.
The First Impression a Buyer Gets
Love at first sight is a cliché, but it has an underlying truth to it as do most clichés. The simple fact is we are an emotional species. Whether intentionally or unintentionally, we always form a first impression of everything we come in contact with. That impression may be conscious or subconscious. The undisputed fact, however, is our first impression determines any subsequent decisions a majority of the time. If you are selling a property, you must accept and focus on this fact.
As a seller, it is vital that you understand a buyer’s first impression of your home is everything. If the first impression is not good, the buyer will move on. It is as simple as that. There are two areas where you are going to make a first impression, so let’s take a closer look at them.
Obviously, one area is when a buyer first comes to see the property. The minute they drive up your street, they are evaluating. They are looking at all the homes, not just yours. As a result, it is important that you home looks as good as it can compared to those around you. This means you need to have the landscaping in excellent shape. Remove dead plants, edge the lawn, fertilize everything, rake up leaves and so on. If you have a driveway, you should have it cleaned before showing the property. Keep garage doors closed. The list is endless, so just make sure the first impression is impeccable.
A less obvious area where a first impression is created deals with photographs of a home. Over 70 percent of homebuyers now do their initial shopping on the Internet. If you are not listed on a site, you need to be. Regardless, the key to your web listing will be the photographs. Upload as many as you can, but make sure they look great. Avoid dark, unappealing pictures at all costs. The process is like a dating site. The buyer will be pointing and clicking through a lot of properties, so take some time with your photographs. You may even want to incur the expense of a professional photographer.
One of the best ways to evaluate your property is to ask others to look at it and offer suggestions. Friends can be a good choice, but you must make clear to them that you want only critical comments. To this end, you need to brace yourself for such comments. Don’t ask for their help and then get angry when they give it.
Posted 11/10/09
A Bit About Mold
by Kevin Jamison, RE/MAX
There are a number of little things to look out for when purchasing a new home. Normally the things to consider includes such things as location, wiring, the condition of the house itself, and several other factors. One of these factors that the home buying public is becoming more concerned with is mold. There are many different types of mold that can occur in a home and lead not only to structural damage, but some health concerns as well. Mold is difficult to find in many homes as it grows exclusively in dark and moist areas that are usually hidden somewhere in the structural areas of the home such as attics and basements. By the time mold shows up in the actual living areas, chances are that it is all through the home.
One of the most likely places for mold to form is anywhere that moisture is improperly vented. Another area of concern is if a home has ever flooded and was not completely or properly cleaned and dried after. Leaky plumbing and basement crawlspaces are other likely candidates. Mold can be a difficult thing to completely get rid of as the only thing it needs to continue growth is an organic material such as wood, and moisture. Both of these items are usually abundant in any home. The most likely was that moisture finds its way into the home is through faulty or leaky roofs and foundations. Both of these areas should be checked over by an experienced mold inspector on a fairly regular basis if there is any worry of mold beginning to grow, or if these has been mold in the past. Mold can be an expensive problem to deal with so be pro-active about looking for it, it can save you money in the long run.
Posted 11/3/09
5 Useful Tips in Buying a House
by Kevin Jamison, RE/MAX First
Buying a house is a very serious matter that comes in to people’s lives. It is very risky to invest your money in buying just any house you find. You must have some guidelines that can help you decide which house is the best for you. Read the rest of the article to have at least an idea on what are the things to consider in buying your own house. Here are some:
1.
Determine your rights
Determine your rightsWhen you are ready to buy your own house, be sure you understand your rights as a homebuyer. Knowing the process of buying a house prevents you from getting scammed. You can personally do your home work or seek for a knowledgeable person like a real estate agent or a broker. Make sure that the agent you hire is licensed and have a wide knowledge regarding the area.
2.Make sure you can afford it
Make sure you can afford itYour budget is really a big deal in buying your own house. What you want is different from what you need, so be practical. You don’t really need a big house if you’re just one person that travels everyday, right? Make sure that you make the best for your money. Seek help or ask for suggestions especially for those who have knowledge in real estate prices. If you can’t stay for at least a year, buying a house is inappropriate for you. You may save a whole lot more of money if you sell it urgently.
3.Make sure it fits your lifestyle
Make sure it fits your lifestyleMake your house a home. Be sure it really fits your way of life and you are comfortable with it. A good example of this is if you’re working in an office, a good place to find is near or in the vicinity of your office. If you love nature, a good place to find is outside the city with clean air, near parks, has a mountain view or near at the beach. Your personality really matters in finding a good house. Make sure to look at its suburbs first and try to gather some information about the area and its surroundings. Try also to consider the kind of neighbors you will have.
4.Consider your future plan
Consider your future planIf you’re newly married, you might to consider how many kids you want to have. You can assume the number of rooms or the home space you need. If you can afford a house that is near to a good school, it is better. School districts are more important to home buyers, therefore, it will increase your property values.
5.Be organized
Be organizedIt is very important to make your document files organized and safe. Because it will prove that you own the house. It will help you a lot especially when it comes in paying your house payments (taxes and amortization).
Have a great day!
Posted 11/10/09
GREAT QUOTES
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"Every failure, ostacle and hardship is an opportunity in disguise, in many cases failure is the success turned inside out."
Gary Comer, Founder Lands End
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"I failed over and over again. That's why I succeed."
Michael
Jordan, NBA Hall of Famer
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"The only place you'll find success before work, is in the dictionary."
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"You can play the role of success, dressed in the custom of failure."
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"The journey is more important than the destination."
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"Nothing worth having comes easy."
7 fast fixes for your credit scores
If you're dragging around bad credit scores, you'll pay more for car loans, credit cards and mortgages. Here's how to turn them around in a hurry. Plus: 4 credit mistakes to avoid.
So you've had a few problems getting the bills paid lately, and you're wondering what you can do to repair the damage.
You've got plenty of company. There are more than 30 million people in the United States with credit blemishes severe enough (and credit scores under 620) to make obtaining loans and credit cards with reasonable terms difficult.
Or maybe your credit is OK, but you'd like to make it better. After all, the better your credit, the lower the interest rates you can secure car loans and credit cards. And these days, having high credit scores is the one sure path to homeownership.
Know the score
In order to improve your credit scores, it's important to know where you stand currently. The three-digit numbers, which range from 300 to 850, are the key to your borrowing costs. See "How to get a credit report for free" to learn how to get a copy.
Now you're ready to take the seven steps to speedy credit repair:
1) Pay down your credit cards. Paying off your installment loans (mortgage, auto, student, etc.) can help your scores, but typically not as dramatically as paying down -- or paying off -- revolving accounts such as credit cards.
Lenders like to see a big gap between the amount of credit you're using and your available credit limits. Getting your balances below 30% of the credit limit on each card can really help.
While most debt gurus recommend paying off the highest-rate card first, a better strategy here is to pay down the cards that are closest to their limits.
2) Use your cards lightly. Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month.
What's typically reported to the credit bureaus, and thus calculated into your scores, are the balances reported on your last statements. (That doesn't mean paying off your balances each month isn't financially smart -- it is -- just that the credit scores don't care.)
You typically can increase your scores by limiting your charges to 30% or less of a card's limit. If you're having trouble keeping track, consider using a check register to track your spending, logging into your account frequently at the issuer's Web site, or using personal finance software like Microsoft Money or Quicken, which can download your transactions and balances automatically.
3) Check your limits. Your scores might be artificially depressed if your lender is showing a lower limit than you've actually got. Most credit-card issuers will quickly update this information if you ask.
If your issuer makes it a policy not to report consumers' limits, however -- as is the usual case with American Express cards -- the bureaus typically use your highest balance as a proxy for your credit limit.
You may see the problem here: If you consistently charge the same amount each month -- say $2,000 to $2,500 -- it may look to the credit-scoring formula like you're regularly maxing out that card.
You could go on a wild spending spree to raise the limit, but a more sober solution would simply be to pay your balance down or off before your statement period closes. Check your last statement to see which day of the month that typically is, then go to the issuer's Web site about a week in advance of closing and pay off what you owe. It won't raise your reported limit, but it will widen the gap between that limit and your closing balance, which should boost your scores.
4) Dust off an old card. The older your credit history, the better. But if you stop using your oldest cards, the issuers may stop updating those accounts at the credit bureaus. The accounts will still appear, but they won't be given as much weight in the credit-scoring formula as your active accounts, said Craig Watts, an executive at Fair Isaac, one of the leading credit scorers. That's why Ferguson often recommends to her clients that they use their oldest cards every few months to charge a small amount, paying it off in full when the statement arrives.
5) Get some goodwill. If you've been a good customer, a lender might agree to simply erase that one late payment from your credit history. You usually have to make the request in writing, and your chances for a "goodwill adjustment" improve the better your record with the company (and the better your credit in general). But it can't hurt to ask.
A longer-term solution for more-troubled accounts is to ask that they be "re-aged." If the account is still open, the lender might erase previous delinquencies if you make a series of 12 or so on-time payments.
6) Dispute old negatives. Say that fight with your phone company over an unfair bill a few years ago resulted in a collections account. You can continue protesting that the charge was unjust, or you can try disputing the account with the credit bureaus as "not mine." The older and smaller a collection account, the more likely the collection agency won't bother to verify it when the credit bureau investigates your dispute.
Some consumers also have had luck disputing old items with a lender that has merged with another company, which can leave lender records a real mess.
7) Blitz significant errors. Your credit scores are calculated based on the information in your credit reports, so certain errors there can really cost you. But not everything that's reported in your files matters to your scores.
Here's the stuff that's usually worth the effort of correcting with the bureaus:
•Late payments, charge-offs, collections or other negative items that aren't yours.
•Credit limits reported as lower than they actually are.
•Accounts listed as "settled," "paid derogatory," "paid charge-off" or anything other than "current" or "paid as agreed" if you paid on time and in full.
•Accounts that are still listed as unpaid that were included in a bankruptcy.
•Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your reports.
You actually have to be a bit careful with this last one, because sometimes scores actually go down when bad items fall off your reports. It's a quirk in the FICO credit-scoring software, and the potential effect of eliminating old negative items is difficult to predict in advance.
Some of the stuff that you typically shouldn't worry about includes:
•Various misspellings of your name.
•Outdated or incorrect address information.
•An old employer listed as current.
•Most inquiries.
If the misspelled name or incorrect address is because of identity theft or because your file has been mixed with someone else's, that should be obvious when you look at your accounts. You'll see delinquencies or accounts that aren't yours and should report that immediately. However, if it's just a goof by the credit bureau or one of the companies reporting to it, it's usually not much to sweat about.
Two more items you don't need to correct:
•Accounts you closed listed as being open.
•Accounts you closed that don't say "closed by consumer."
Closing an account can't help your scores, and may hurt them. If your goal is boosting your scores, leave these alone. Once an account has been closed, though, it doesn't matter to the scoring formulas who did it -- you or the lender. If you messed up the account, it will be obvious from the late payments and other derogatory information included in the file.
4 other credit mistakes
Other actions to beware when you're trying to improve your scores:
•Asking a creditor to lower your credit limits. This will reduce that all-important gap between your balances and your available credit, which could hurt your scores. If a lender asks you to close an account or get a limit lowered as a condition for getting a loan, you might have to do it -- but don't do so without being asked.
•Making a late payment. The irony here is that a late or missed payment will hurt good scores more than bad ones, dropping 700-plus scores by 100 points or more. If you've already got a string of negative items on your credit reports, one more won't have a big impact, but it's still something you want to avoid if you're trying to improve your scores.
•Consolidating your accounts. Applying for a new account can ding your scores. So, too, can transferring balances from a high-limit card to a lower-limit one or concentrating all or most of your credit-card balances onto a single card. In general, it's better to have smaller balances on a few cards than a big balance on one.
•Applying for new credit if you already have plenty. On the other hand, applying for and getting an installment loan can help your scores if you don't have any installment accounts or you're trying to recover from a credit disaster like bankruptcy.
By the way, all these suggestions work best if you have poor or mediocre scores to begin with. Once you've hit the 700 mark, any tweaking you do will tend to have less of a positive impact.
Good Luck and most importantly, stay focused and disciplined!
1031 Exchange
Section 1031 in the Internal Revenue Service is a boon for a prospective investor, selling an investment property and wanting to make a profit by reinvesting in a similar property elsewhere in the country. This wonderful concept works on the principle of gain rolling from the old to the new.
There is widespread ignorance on the modalities about this exchange; as a result, 30-40 percent of property owners end paying tax during the sale. Exchange 1031 not only fructifies into essential tax savings, but also makes possible the swapping of property in the fairest manner at places of choice. No wonder that the 1031 Exchange excites the property market so much.
The new income-generating replacement property gives the investor the double gain of added income and savings from tax that would have otherwise gone to the IRS coffers.
Besides saving the buyer from a huge tax burden coming in the guise of capital gains, the instrument offers maximum immunity and flexibility in reinvesting the money gained from the sale in a replacement property within a given period.
The exchange being time-bound is no kid’s play either. In every exchange of this kind, Qualified Intermediaries (QI) plays a crucial role connecting the buyer and seller. The Federal Tax Code makes service of QI mandatory since 1991 in any exchange.
The federal nature of the 1031 Exchange regulations make the Qualified Intermediary play a wizard in guiding and structuring the exchange, satisfying all parameters and suiting the goals of the clients. It is the QI who does the paperwork required by the IRS to document the exchange. The QI carefully prepares all documents and serves the parties with copies of the exchange agreement, novation agreement and escrow instructions.
The Exchange Agreement reads like a contract between the Exchanger and a Qualified Intermediary. The Exchanger explicitly agrees to transfer his old property to the Intermediary, in lieu of a new property to be supplied by the latter within 180 days. The contract outlines all terms and conditions under which the exchange of properties should take place.
For a 1031 Exchange to take effect, both the old property as well as the new property should be in the category of investment property, capable of generating income. The examples could be rental property, bare land, vacation homes or more.
As soon as the old property is sold, within 45 days the seller has to come out with a list containing two or three probable properties fit for replacement. And the whole process of purchasing the new property or replacement property from the list must be over in a period of 180 days.
The exchange becomes bona-fide only when the title stays intact and whosoever held title to the old relinquished property gets the title of the new property.
In between the sale and purchase of property, the seller of the old property would get no access to the money he accrued from the sale, as the money will be vested with the ‘Qualified Intermediary’ till the exchange gets over.
This 1031 Exchange process has matured and had many names in the past including Like Kind Exchange, Deferred or Delayed Exchange, Simultaneous or Concurrent Exchange, Starker Trust or Exchange, Alderson Exchange, Reverse Exchange, Two, Three, or Four Party Exchange and Baird Exchange.
Posted 11/11/09
Credit Bureaus
The Ins and Outs of Bank Foreclosures
by Kevin and Darlene Jamison, RE/MAX First
The term bank foreclosure is one which may seem mysterious to many individuals, especially if they have never experienced one and/or are unfamiliar with real estate terms. Bank foreclosures occur when a current homeowner can no longer pay their mortgage, is deemed to be in default and the bank repossesses the home. There are certain things which all individuals should know about bank foreclosures so that they can be more familiar with the term and prevent this from happening to them.
What the Lender Gains from Foreclosures
The lender will profit in various ways from foreclosing on a borrower’s home. The first profit is repossessing the home and putting a stop to any future losses that may occur as a result of the homeowner’s nonpayment from that point forward. Another way the lender profits from foreclosing on a home is that they will be able to sell the home and try to reclaim what was lost such as loan balance, attorney’s fees, court costs and more.
Condition of Title in the Home
When an individual purchases a home in a foreclosure sale, the prospective buyer wants to ensure that title in the home is good and that there will not be any issue with such a thing should they purchase the house. A good tip to keep in mind is that the lender will bid on a home at a foreclosure auction if title is good but may not do so if title is cloudy. Lenders often bid on foreclosure homes at Sheriff’s sales in order to obtain the property and sell it for a greater amount down the road. They will be less likely to do so if title is at issue.
How Lenders Dispose of Foreclosure Properties
There are a variety of ways with regard to how lenders dispose of foreclosed properties. Some lenders advertise foreclosure sales in newspapers while others retain real estate agencies to advertise the properties for them. The lender wants to choose the most effective yet least timely manner when it comes to disposing of foreclosed properties. With regard to the larger lenders, many of these companies have a department within their financial institution which deals exclusively with handling sales of this type.
Investing in Foreclosed Properties
Some individual investors make their living by investing in foreclosed properties. These individuals scan the market for possible goldmines and try to obtain the property for the least amount of money possible thereby making a good profit when they later sell the same property. A beneficial way for investors to find that perfect foreclosed property for sale is to do some independent research at the local courthouse or peruse the newspaper for possibilities. Once the investor has located some potential properties, that individual should calculate the profit margin by subtracting the default amount from the estimated market value. If the property is a good deal, the investor should go about pursuing the purchase of the property.
There are a few tips for investors who are looking to buy foreclosed property. The first is to always include relevant costs and expenses in the calculations when determining profit margin. Secondly, the investor should inspect the property to be sure that they are getting what they are paying for. Third, make realistic offers as those which are not so will be quickly rejected or bid out by another investor. Lastly, once the offer has been accepted by the lender try to sign the purchase and sales contract as soon as possible to ensure that the property will indeed be yours.
Advantages and Disadvantages to Purchasing a Bank Foreclosure Property
There are certain advantages concomitant with purchasing a property that was foreclosed upon. The first advantage is that the price of the property will be much less than many other types of properties which will allow investors to make a good profit when they resell the property. Another advantage to purchasing a home that the bank has foreclosed on is that many of the problems have been remedied by the lender and should not present an issue for the buyer. Lastly, a lower price obtained on the property will mean a lower monthly mortgage payment and accompanying costs.
As for the disadvantages, there is always a chance that an investor who purchases a property in this manner will have difficulty selling it at a later time. Another disadvantage to buying bank foreclosure properties is that the property may be sold as is and lead to the completion of multiple repairs by the new owner.
Conclusion
Bank foreclosure properties are ones which the bank is anxious to sell and the investor is more than willing to buy. With this relationship in existence, it is easy to see how foreclosure properties get sold as quickly as they do.
Posted 11/10/09
The Tax Credit Advance Loan is Back!!!
TCA is back! Effective immediately, you may begin reserving PHFA loans with requests for Tax Credit Advance Loan (TCA) funds. The program will work the same as before with one exception: eligible non first-time buyers will now be able to qualify for up to $4,000 for new construction and $3,000 for existing homes. The program has set aside $5 million for this second round of TCA—a maximum of $1.5 million of the total pot will be allocated to non-first time buyers (as permitted in Targeted areas under the Keystone Home Loan program or anywhere under the Keystone Government program). First time buyers will be able to receive up to $6,000 for new and $5,000 for existing homes, just like before. The rate for this loan is 5.625%.
