News, Events, Tips and Resources from The Jamisons
Before making the decision to file bankruptcy, consider each of the following alternatives:
• Debt Consolidation
• Debt Settlement
• Debt Negotiation
If after you’ve considered each bankruptcy alternative, you still find that your personal debts are greater than the money you have available to make payments each month, you may have no choice other than bankruptcy.
If you are a home owner and have not refinanced your home in the last year, it may be possible for you to obtain additional money from the equity you have in your home, and use it to pay off your other debt. This will eliminate the monthly payments on each of your credit cards or loans that you have used your refinance to pay off, and allow you to make a single, more affordable monthly payment. If you are able to use refinancing of your home to manage your debt, make sure that you do not run right out and get another credit card or car loan, because before you know it you will be right back where you were before the refinance!
Many individuals are able to consolidate all of their monthly credit card and loan payments together by taking out a debt consolidation loan. Typically, a consolidation loan will require some form of collateral to secure it. Unfortunately, you do need to have fairly good credit in order to obtain a debt consolidation loan, but this is a viable option for someone who finds themselves in over their head before the payments start becoming late.
Sometimes you can settle your debt out of court. While it is possible to get a debt settlement on your own, it is advisable that you find a reputable company to help you negotiate with your creditors to reduce the amount of money that is owed. Typically, creditors are willing to accept less than the money that is owed to them if they believe you are going to be filing bankruptcy. They realize that a settlement is going to give them more money on the balance owed than the bankruptcy will, and it is in their favor to work with you in this situation. In order to settle your debts, you should have money on hand to immediately pay your creditors and get them to close the account, and report it as “paid as agreed” to your credit report. If you’ve just received a fairly large tax return for example, you could consider attempting to settle your debt with each creditor by offering them less than the total amount owed to close out the account.
Negotiating your debt can be helpful, although it doesn’t eliminate your debt. Call each of your creditors and discuss with them that you are having financial difficulties. Explain you are considering bankruptcy, but before you take that leap you would like to see if you can negotiate your debt with each of your creditors to obtain payment arrangements that work better with your financial situation. Some credit card companies will lower the interest rate and stop late fees and finance charges from occurring, and it really helps you start paying down on the balances. The trouble with credit cards is that once you get behind, the interest and finance charges each month are as much as or more than your minimum monthly payments, so you are paying every month and never reducing your balance. With lower interest rates, and creditors who stop the finance charges and late fees temporarily, you can start chipping away at the actual balance, and hopefully pay off a few accounts during the negotiation period.
The Jamison Team
If you have had trouble managing your money, you may find yourself in debt to credit card and loan companies. It can be stressful and even embarrassing to be in this position, but the best approach is to confront the problem head on and try and work out a solution with your creditors. Failure to pay your credit card bills or general loan repayments may result in court action and bad credit ratings, but the only time you are in danger of losing your home is if you fail to keep up your mortgage repayments.
Even the most well-intentioned homeowner can fall behind with their mortgage payments. Unexpected illness, bereavement, depression, divorce or unemployment are all reasons why many people have trouble maintaining payment. Most mortgage companies are willing to give you a chance to catch up with your payments, or work out a revised schedule, but if you don’t do this, or you fail to keep to the new schedule, you could be in danger of losing your home. How can you prevent this?
1. Don’t ignore letters from your mortgage company
After you’ve missed a number of payments, your mortgage company will write to you, asking you to contact them. It might be easy to put the letter to one side, but it can do you more harm than good in the long term. Instead, call your mortgage company and ask for a meeting so that you can explain your circumstances and work out a revised payment schedule.
2. Make every effort to pay your debts
If you have other debts as well as your mortgage and you are struggling to pay everything, look at ways you can cut your expenditure to help catch up with payments. Showing that you are making an effort to pay your debts may delay the mortgage company applying for a court order to repossess your home.
3. Talk to repossession experts
If your payment problems have reached the stage where repossession is a real threat, you may need to talk to specialist lenders. They can help arrange fast finance that allows you to repay your debts and keep your home. Alternatively, they can arrange a quick house sale so that you can clear your debts completely and start again.
Face up to your money difficulties and talk to financial experts that can help you stay in your home.
DO NOT HESITATE to call us at 215-439-5626 if you are having any problems paying your mortgage.
Darlene Jamison, Realtor
The Jamison Team
How do you find cheap homes? There are too many ways to list here, but there are five basic principles to learn. Understand these, and you can save thousands of dollars on your next home.
Cheap Homes Are In Cheap Towns
Yes, there are still beautiful towns in this country where you can see a good movie, put the kids in a good school, go shopping, enjoy nearby natural beauty, and buy homes for under fifty thousand dollars. Some realtor friends of ours brought a beautiful little home with hardwood floors, a full carpeted basement, and a garage, in a pretty mountain town in West Virginia, for $17,500, in 2002. You can still get homes for under $35,000 there.
What you can't get very easily there, is a good job. These towns with the cheapest homes usually have a bad job situation. They are great places to retire to, or to move to if you have a business or profession that isn't location-dependent. Writers and internet entrepreneurs are beginning to discover them. Of course, if you've already determined where you'll be living, or need a town with high-paying jobs, you can skip this idea.
Some Homes Are Just Cheaper
Another way to save when buying a home is to find a less expensive alternative that still fits your needs. This can mean buying in the inexpensive parts of town, or buying the inexpensive types of homes. Don't set your mind on one type of home or one neighborhood before you know what all the alternatives are.
This doesn't mean buying a cheap dump to save money, or buying in a dangerous part of town. It is more about a philosophy of defining your true needs so you can find the least expensive way to meet them. You may be surprised at what is available for less.
You Can Offer Less
No matter what you buy, you can save a lot if you know a few basic negotiating techniques. Is it worth a few minutes reading and an hour or two of practice to save thousands of dollars? Anyone can learn a few simple negotiating techniques that are used by the masters of negotiation. Somewhere, every day, people get cheap homes come through good negotiating.
Financing Can Make Homes Cheaper
You can pay the full asking price on a home and still spend thousands less than another person might. It isn't just price, but financing too that makes a home affordable. Pay a lower interest rate, and you can save many thousands of dollars. You can pay low or no loan fees, avoid mortgage insurance, save on appraisals, and more.
Save Money On Everything Else
Start learning the insider secrets to saving money at each step in the home buying process. You can learn tricks like how to use a walk-through inspection list to present with your low offer. You can learn ways to get cheaper inspections, pay lower taxes, pay less for homeowners insurance, and save on closing costs. We even financed a home without an appraisal once. There is more to buying cheap homes than just getting a low price.
Thanks for reading,
There are few purchases in life that carry the financial and psychological weight of buying a home. Whether you are buying your first home, moving up to your dream home, or downsizing your home and your life after the kids have gone, it is important to understand the ground rules for success in the world of buying a home.
Making the wrong decision in buying a home can have devastating and long lasting effects, while making a wise decision in home buying can greatly enhance the overall value of the investment. It is necessary to learn all you can about the world of home buying and mortgages before setting out to purchase the home of your dreams.
While there are plenty of web sites designed to help first time homeowners learn all they can, most financial experts say that there is no substitute for the good old one-on-one learning. Fortunately, most mortgage lenders, home inspectors and real estate agents will be able to provide this kind of one-on-one learning.
When buying a home it is often best to use a systematic approach as this is often the best way to be sure that all decisions are based on information and reason, not on impulse or emotion. Buying a home can be an emotional process, nevertheless it is imperative to keep your emotions under control and not let them cloud your judgment.
There are five basic ground rules when it comes to buying a home and shopping smart, and they are:
#1 – Get your financing before you get your home
There are few things in life as disappointing as losing out on the home of your dreams due to not being able to secure funding. While the desire to get out there are search for that great home is understandable, it is vital to line up the financing you will need before you start shopping for a home.
Getting the financing ahead of time has a number of important advantages, including knowing how much you can buy and gaining more respect from the listing agents. By knowing how much home you can afford before you shop you will avoid wasting your time looking at unaffordable properties, and the listing agent will be more than willing to show you the homes in your price range.
It is also important to take a good look at the various types of mortgage on the market before getting started in the home buying process. These days, mortgages come in far more choices than the typical 15 or 30 year. For that reason, potential home buyers need to understand how each type of mortgage works, and to gauge which mortgage is the best choice for their needs.
#2 – Look at the community, not just the home
It is a good idea to look at the entire community, instead of focusing on a single home. This can be a particularly important thing to consider for those moving to a new metropolitan area, as these buyers will be unfamiliar with the local climate and lifestyle. It is crucial to determine the areas of town that are most desirable, and to consider things like distance from work and local shopping opportunities.
We have all heard that location is the key consideration when it comes to real estate, and that is certainly the case. Buying a house in the wrong area can be a big mistake, and it is important to choose the location as well as the home. Potential buyers can learn a great deal about the nature of the various neighborhoods simply by driving around town, as well as by talking to other residents.
#3 – Be fair with your first offer
Trying to lowball a seller on the first offer can backfire, as can paying too much. It is important to carefully evaluate the local market, and to compare the asking price of the home with what similar houses in the neighborhood have sold for.
Comparing the sales of comparable homes, what are known as "comps" in the industry, is one of the best ways to determine what is fair, and to make sure that you neither overpay or underbid on the property.
#4 – Always get a home inspection
Always investigate the home for any possible defects before making an offer. Compared to the cost of the average home, the price of a quality home inspection is virtually negligible. Hence, get a good home inspection done before you buy.
To find the best home inspector, it is a good idea to seek out word of mouth referrals as many of the best home inspectors rely on word of mouth advertising.
#5 – Do not alienate the sellers of the home
Many real estate deals have fallen apart due to the personal animosity of the buyer and the seller. It is important to avoid alienating the seller of the home during the process, and to avoid nitpicking every little detail during the sale.
Keeping the good will of the seller will help the transaction go smoothly, and it will provide the best environment for seller and buyer alike.
And keep the Jamison Team in mind, we can help you with all aspects of residential or commercial real estate sales and financing. Please feel free to contact Darlene at 215-439-5626 or Kevin at 215-439-5625 with your questions or to get the ball rolling. Our general email address is firstname.lastname@example.org
With today's rising prices it's all most people can do to stay afloat financially. So how does a young couple save enough money to break into the housing market? Sometimes you have to think outside of the box and come up with creative financing options. One such example is Lease-to-Own, or Rent-to-Own house purchases.
Basically, in this scenario, the landlord and the tenant come up with an agreement to purchase the house within a designated period of time (usually 3 years or less), for a specific price. An option fee of 1 to 5% of the price is credited to the purchase price and a premium is added to the rent payment to accumulate a deposit. If the buyer backs out of the purchase agreement they lose both the option fee and the rent premium.
Typical Rent-to-Own Contract Features
The rent and home price are usually established and documented based on market value plus any negotiation between the buyer and seller.
A rent-to-own contract will have an option period where the borrower can build equity while living in the home. Once the option period expires, the borrower is counting on successfully qualifying for a mortgage to purchase the home. It is imperative that the borrower has a good idea of their ability to assume a mortgage; speak to a lender before entering on a rent-to-own agreement to have your financial situation examined. You may only have to improve your credit rating, and this can be accomplished by making timely minimum payments any loans or credit cards each month.
Often a lender will want to see that an amount above the market rent price has been set aside. This ensures that the seller is not providing the borrower with a kickback by artificially inflating the selling price. Usually the bank will also request an appraisal for this reason.
If at the end of the option period, the buyer discovers problems with the home, it may be cheaper to walk away from the deal than purchase a house which may develop into a money pit.
The selling price of the home is agreed upon at the beginning of the option period. This means that after a 3 year option period if houses prices drop the borrower may request a down payment based on the new value. For instance, a 5% down payment on a $225,000 home would be $11,250. If the home drops 3% in value, or to $218,250, the 5% down payment from this would be $10,912 – bringing the maximum loan amount to 207,338. You need $225,000, now you have to make up the difference.
However, the price may indeed go up 3% in price and the seller is out the amount of the increase. It is for this reason that some contracts are drawn up with no final price quoted, just specifying the house will be sold at fair market value at the end of the option period.
There are shady sellers out there who will create a contract with an easy escape clause, such as the right to evict a tenant with only 3 days notice. It is in the buyer's best interests to have their contract reviewed by a lawyer before entering into a binding agreement. Also, pay your rent on time and do not give the seller any opportunity to renege on the agreement.
Best of luck!
As the real estate market cools, the profit potential of home ownership has cooled as well. Here’s a strategy called “follow the builder.”
It is relatively easy to make a profit when you sell your home if the market is rising sharply like it has been in most of the country for the last three years. It becomes more difficult when a hot market slows down. It’s very difficult to make a profit on the sale of your home when prices are falling.
Is there a way to be relatively sure you’ll make a profit when you sell your home? There is under all but the most negative market conditions. In fact, We’ve seen young, energetic couples use this maneuver multiple times when they don’t even need to move.
Follow That Builder
In many areas of the country, there are builders who build hundreds of houses each year within a fifty mile radius of each other. They build entire communities or are one of three to five builders who build entire communities around big employment centers. This present you with an important opportunity.
Builders will typically sell first phases of communities for significantly less than later phases. On one hand, they need to get the cash flow moving. On the other, it is harder to sell at high prices because the community typically consists of dirt lots and construction equipment. Put the hands together and you have a great profit opportunity.
The idea is to get in on the first phase of the build out. You will purchase the home at a discount, which gives you built in equity. As the community is built up, you sell the home for a profit at a higher price. While you’re doing this, you keep tabs on the builders projects and find another location where you can do the same thing.
You’ll end up living in each house for a year or more and picking up nice profits along the way. The only real downside is you have to move repeatedly.
We’ve seen this work well for a number of people who have done it more than once. However, you need to be aware that generating profit this way can have tax consequences. You need to discuss your plans (including projected timing and profit potential) with your tax professional so that you are prepared to deal with any tax consequences.
The Jamison Team
Let's get down to brass tacks with the home buying process. You as a buyer are spending a lot of money and have the right to be comfortable and happy with your purchase right? Of course you do. So essentially the question is what needs to be done in order to ensure that this is so? Well, probably the most important things is communication. It's a good idea to remember that your realtor is there for more than simply helping with some contracts. Your realtor is your info source of information on anything that you might not know or be familiar with. The more you communicate with your realtor the smoother this process will be.
Another way to ensure that you are completely happy with the home that you have bought is to never settle for anything less than what you need. This happens a lot when buyers are too eager to purchase quickly and in that quickness, things get overlooked. Remember that this is going to be your home, take the time to learn everything you can about the home in question. Does it have enough room for you and your family? Is there some extra room in case your family grows? Forward planning is an essential part of buying a home, and should never be overlooked.
When everything is said and done you should be left feeling like you have made the most intelligent purchase of your life. You should also have a financial arrangement that fits your lifestyle and payment abilities. In order to make this happen you need to be in complete control of your financial life, you should have your credit completely sorted out and dealt with so that there are no bridges that have to be crossed in order to secure the necessary funds for the purchase. Follow the advice of your realtor and the process should be a lot more fun than it is stressful.
We hope this helps!
The Jamison Team
When buying a condo, we are all seduced by the decor, the ambiance, the view, and other visual effects, when we should really be checking something else that is not visual!
The Home Owners Association (HOA) often plays a very nondescript part in the whole process of choosing a condo, - especially for first-time condo buyers. However, the HOA can play a very large part in using up your finances if you hit an unlucky situation after moving in.
In order to avoid a surprise, ask a few pertinent questions about the HOA. One of the important factors would be 'who is running the show?' In a very small condo complex it may be run by residents, but a professional management company is preferable, especially in a condo of any size.
Professional management companies do charge for their services, but they can often save this fee by obtaining lower quotes for repairs, because they will use the same company many times. There is also less chance of the company using their influence on resident votes, so they may be construed as more fair. Finally, it is a business to them, and it the HOA will be run as such, instead of as a part-time rush before each meeting is due!
Always ask to see the rules of the HOA, the financial report, the by-laws and the minutes of the last several meetings. The conditions, covenants and restrictions (CC&Rs) will affect your lifestyle, so make sure they 'fit in' with it.
The financial report will tell you if there are any big increases in the fees coming up, or if there are any 'emergency' fees due soon. This raises the important question, what will happen if there is a big emergency? How is it paid and how much money is in the HOA kitty?
The maintenance reserves will be important; there will hopefully be approximately one third of the gross annual fees charged to all residents in the reserves. A favorable minimum amount would be $4,000 per condo, although is manageable.
Another aspect that the HOA manages is the percentage of rental units allowable. Under 20% is passable, but any more and the re-sale of the condos becomes risky. Renters often do not have the same respect for property or neighbors, so they decrease desire ability. Also mortgage companies are aware of this and are reluctant to give out mortgages to high-rental complexes.
Once you have ironed out all these questions, you can consider whether you would like to get a professional inspection done. These inspections include the common areas as well as the condo you are interested in. Once all these precautions are in place, you will feel more secure to go ahead and make an offer.
Before moving any of your belongings into your new home, its important to make sure that everything is as it should be. You may have had a list of repairs you expected – or this may be the first time you've seen the house empty.
Take some time to go around with a notepad and check all of the sockets for obvious signs of wear and tear and look for damage that you might be otherwise liable for.
Ensure that any cupboards are empty, free of damp, mold or bad smells, and keep a close note of what where the electricity, water and gas stopcocks are. While doing this, you'll also be getting a feel for where you can place any furniture, how to get it up any stairs or even just into the house.
Note down any damage or concerns you have to be discussed with whomever you're dealing with – its important to have these notes before moving anything in so that you can get the problems remedied as soon as possible.
If you're letting from a landlord, he'll give you a list of any fittings, fixtures and furniture he's leaving – its very common nowadays for landlords to leave 'white goods' – kitchen appliances, such as the fridge, freezer, washing machine and cooker.
If you're letting, your landlord should also give you contact details, emergency repair numbers and any paperwork pertaining to these emergency repairs that you may need. You may also want to get bank details or arrange a good time to come and collect rent. Any final paperwork can be signed now, and then you can start making your new place your own.
You should also ensure that the central heating and boiler are working correctly and collect any manuals for these from the previous occupant – these manuals will save you a lot of frustration in the long run.
We wish many blessings and happy years in your new home.
The Jamison Team
Sometimes it’s helpful to sell your home before you really want to move. This often happens when you are having a new home built, but aren’t sure of the completion date. Is there any way you can sell your home so you’re sure of the funds available for the new purchase, but continue to live in your old home until construction of the new one is complete. Yes, there is with the renting back strategy.
Enter the Lease-Back or Rent-Back Agreement
The particulars of this strategy vary from state to state, but in the strong seller’s market we’re experiencing, buyers will often agree to let the seller stay in the home for a period of time as long as rent is paid. In a competitive situation, the buyer willing to do this will often have the winning bid even though there is another offer as high as his.
The agreement covering the situation states the length of time the seller will remain. It can be done with a specific date named or wording that allows the seller to remain up to a specific date with the possibility of her moving sooner. The amount can be a fixed figure paid out of the proceeds of settlement or a monthly amount, or a daily amount. It is usually, but not always, tied to the amount of the mortgage payment under the buyer’s new loan. Sometimes there is a deposit against damage, sometimes not. There is usually a clause saying the seller will hold the buyer harmless for any damage to himself or his property which occurs after the sale is consummated and before the seller moves.
The attorney who draws up your contract offer can create such an agreement. If you’re using online forms, you should be able to find one for this situation. If you’re working with a real estate broker, he or she can handle it for you.
I’ve recently seen a very pleasant example of this idea in action. An elderly widow contracted to have a one level condo unit built in a new community which provides all exterior maintenance. She had had hip replacement surgery and wanted to get away from the drawbacks of the home in which she’d reared her children. The home was large, had stairs and was located on a large, partially wooded lot with many mature perennials and shrubs. Both the home and garden were beautiful, but high maintenance.
Her contract to purchase required a series of deposits and a firm indication as to her source of funds well before settlement on her new condo. The widow put her home on the market. A young couple with two sons was very anxious to buy it. The situation was competitive. They made the widow an offer. She countered their original offer. She did not raise their offer price, which was slightly below her asking price. She did not believe the young couple would qualify for a larger loan. Instead, she did something rather creative.
The widow countered with a proposal that she “rent back” for a period of “up to” a certain date (a date beyond her scheduled competition date on the condo) in exchange for a modest flat sum to be paid to the buyer at settlement. The total rent back period was less than two months. The flat fee was less than the amount of the new mortgage payment for the buyers. However, since they made no payment on their new mortgage the first month, it wasn’t too far out of line. The couple really wanted the home, so they accepted the counter offer.
Another win, win situation was created. The widow only had to move one time and the young couple got a house they probably wouldn’t have in a straight bidding war. If you find yourself in a situation similar to either the widow or the young couple, perhaps you can work out a similar solution.
Thanks for reading!
Darlene Jamison, RE/MAX