The Loan Application
If you're like most people, you'll probably need to secure a mortgage loan for your new house. Application for a home loan can take as little as one week and up to a month, depending on the type of mortgage.
Your lender or mortgage broker will be able to give you a better idea of the actual time it will take from application to approval. However, in general, conventional loans are processed more quickly than FHA or VA home loans.
Read more about types of mortgage loans.
The following is a step-by-step outline of what to expect during the loan application process:
1. Application
Bring all required documentation. (Also, see the Application Checklist.)
Good Faith Estimate of Closing Costs
Truth-in-Lending statement
2. Processing
Verification of employment
Verification of deposits
Credit report
3. Underwriting
Clear conditions
4. Purchase Homeowner's Insurance
5. Escrow
Determine funds needed for closing
Schedule appointment for closing
Prepare deed and mortgage note
Closing and Title Transfer
Application Checklist
To speed up the application process, bring the applicable following items to your loan application appointment.
Signed copy of Purchase Agreement plus all Addendums.
Tax and Legal description on subject property.
Residence addresses for the past two (2) years.
Past two years' W-2 statements or 1099’s.
Computer generated paycheck stubs for last 30 days.
Names, addresses and phone numbers of Employers for past two (2) years.
Past two (2) month’s statements for all Checking, Savings, IRAs, 401Ks, Money Markets, Profit Sharing and evidence of Stocks and Bonds. Document all recent large deposits.
In income received for commissions, bonuses, partnership(s), corporation(s), or if self-employed, requires two (2) year’s Personal Federal Tax Returns with all Schedules along with a current P&L Statement and Business Balance Sheets and past two (2) years’ Partnership and/or Corporate Returns, if applicable.
Cancelled checks from rent or mortgage for the last 12 months, and name and address of any landlord(s) within the last 12 months.
Names, addresses, account numbers, monthly payments and balances on all open loans and revolving credit accounts.
Copy of Bankruptcy Petition listing all creditors and copy of Bankruptcy Discharge Papers (if applicable). Please provide letter of explanation as to why the Bankruptcy occurred.
Copy of Driver’s License and Social Security Card (VA Loans Only).
Certificate of Eligibility and DD214 Discharge Paper (VA Loans Only).
Application fee (check or money order).
Copy of divorce decree and/or separation agreement.
A "Friend of the Court" letter stating the amount of any alimony/child support payments and notification that the account is current.
1040 tax forms (if you’re self-employed) for the past two years, 1120 Corporate Tax Returns (or Form 1065 for Partnerships) for the previous two years, year-to-date profit-and-loss statement and balance sheet signed by your accountant.
1040 tax forms for the past two years (including schedules) if you own income properties or if your income is based on commission or bonuses.
Fortunately, as you work one-on-one with your chosen home mortgage consultant, he/she should be able to offer valuable lending expertise and advice and answer all your questions while ensuring that your loan application process progresses as smoothly and quickly as possible.
Century 21 JRS Realty is affiliated with Century 21 Mortgage, LLC.
Thursday, September 17, 2009
Tuesday, August 25, 2009
Loan Process
Loan Process
The Loan Application
If you're like most people, you'll probably need to secure a mortgage loan for your new house. Application for a home loan can take as little as one week and up to a month, depending on the type of mortgage.
Your lender or mortgage broker will be able to give you a better idea of the actual time it will take from application to approval. However, in general, conventional loans are processed more quickly than FHA or VA home loans.
Read more about types of mortgage loans.
The following is a step-by-step outline of what to expect during the loan application process:
1. Application
Bring all required documentation. (Also, see the Application Checklist.)
Good Faith Estimate of Closing Costs
Truth-in-Lending statement
2. Processing
Verification of employment
Verification of deposits
Credit report
3. Underwriting
Clear conditions
4. Purchase Homeowner's Insurance
5. Escrow
Determine funds needed for closing
Schedule appointment for closing
Prepare deed and mortgage note
Closing and Title Transfer
Application Checklist
To speed up the application process, bring the applicable following items to your loan application appointment.
Signed copy of Purchase Agreement plus all Addendums.
Tax and Legal description on subject property.
Residence addresses for the past two (2) years.
Past two years' W-2 statements or 1099’s.
Computer generated paycheck stubs for last 30 days.
Names, addresses and phone numbers of Employers for past two (2) years.
Past two (2) month’s statements for all Checking, Savings, IRAs, 401Ks, Money Markets, Profit Sharing and evidence of Stocks and Bonds. Document all recent large deposits.
In income received for commissions, bonuses, partnership(s), corporation(s), or if self-employed, requires two (2) year’s Personal Federal Tax Returns with all Schedules along with a current P&L Statement and Business Balance Sheets and past two (2) years’ Partnership and/or Corporate Returns, if applicable.
Cancelled checks from rent or mortgage for the last 12 months, and name and address of any landlord(s) within the last 12 months.
Names, addresses, account numbers, monthly payments and balances on all open loans and revolving credit accounts.
Copy of Bankruptcy Petition listing all creditors and copy of Bankruptcy Discharge Papers (if applicable). Please provide letter of explanation as to why the Bankruptcy occurred.
Copy of Driver’s License and Social Security Card (VA Loans Only).
Certificate of Eligibility and DD214 Discharge Paper (VA Loans Only).
Application fee (check or money order).
Copy of divorce decree and/or separation agreement.
A "Friend of the Court" letter stating the amount of any alimony/child support payments and notification that the account is current.
1040 tax forms (if you’re self-employed) for the past two years, 1120 Corporate Tax Returns (or Form 1065 for Partnerships) for the previous two years, year-to-date profit-and-loss statement and balance sheet signed by your accountant.
1040 tax forms for the past two years (including schedules) if you own income properties or if your income is based on commission or bonuses.
Fortunately, as you work one-on-one with your chosen home mortgage consultant, he/she should be able to offer valuable lending expertise and advice and answer all your questions while ensuring that your loan application process progresses as smoothly and quickly as possible.
Century 21 JRS Realty is affiliated with Century 21 Mortgage, LLC.
The Loan Application
If you're like most people, you'll probably need to secure a mortgage loan for your new house. Application for a home loan can take as little as one week and up to a month, depending on the type of mortgage.
Your lender or mortgage broker will be able to give you a better idea of the actual time it will take from application to approval. However, in general, conventional loans are processed more quickly than FHA or VA home loans.
Read more about types of mortgage loans.
The following is a step-by-step outline of what to expect during the loan application process:
1. Application
Bring all required documentation. (Also, see the Application Checklist.)
Good Faith Estimate of Closing Costs
Truth-in-Lending statement
2. Processing
Verification of employment
Verification of deposits
Credit report
3. Underwriting
Clear conditions
4. Purchase Homeowner's Insurance
5. Escrow
Determine funds needed for closing
Schedule appointment for closing
Prepare deed and mortgage note
Closing and Title Transfer
Application Checklist
To speed up the application process, bring the applicable following items to your loan application appointment.
Signed copy of Purchase Agreement plus all Addendums.
Tax and Legal description on subject property.
Residence addresses for the past two (2) years.
Past two years' W-2 statements or 1099’s.
Computer generated paycheck stubs for last 30 days.
Names, addresses and phone numbers of Employers for past two (2) years.
Past two (2) month’s statements for all Checking, Savings, IRAs, 401Ks, Money Markets, Profit Sharing and evidence of Stocks and Bonds. Document all recent large deposits.
In income received for commissions, bonuses, partnership(s), corporation(s), or if self-employed, requires two (2) year’s Personal Federal Tax Returns with all Schedules along with a current P&L Statement and Business Balance Sheets and past two (2) years’ Partnership and/or Corporate Returns, if applicable.
Cancelled checks from rent or mortgage for the last 12 months, and name and address of any landlord(s) within the last 12 months.
Names, addresses, account numbers, monthly payments and balances on all open loans and revolving credit accounts.
Copy of Bankruptcy Petition listing all creditors and copy of Bankruptcy Discharge Papers (if applicable). Please provide letter of explanation as to why the Bankruptcy occurred.
Copy of Driver’s License and Social Security Card (VA Loans Only).
Certificate of Eligibility and DD214 Discharge Paper (VA Loans Only).
Application fee (check or money order).
Copy of divorce decree and/or separation agreement.
A "Friend of the Court" letter stating the amount of any alimony/child support payments and notification that the account is current.
1040 tax forms (if you’re self-employed) for the past two years, 1120 Corporate Tax Returns (or Form 1065 for Partnerships) for the previous two years, year-to-date profit-and-loss statement and balance sheet signed by your accountant.
1040 tax forms for the past two years (including schedules) if you own income properties or if your income is based on commission or bonuses.
Fortunately, as you work one-on-one with your chosen home mortgage consultant, he/she should be able to offer valuable lending expertise and advice and answer all your questions while ensuring that your loan application process progresses as smoothly and quickly as possible.
Century 21 JRS Realty is affiliated with Century 21 Mortgage, LLC.
Friday, August 7, 2009
Steps to Buying a Home
Steps to Buying
Buying on Your Terms
Buying a home is all about you. What you need. What you want in the house you'll call home sweet home. So naturally the buying process should be all about you, too.
That's why working with an agent is such a good idea - it puts the focus on what's important to you. Century 21 JRS Realty agents work hard to make your home buying experience just as good as you imagined it; and since they have the most innovative tools in the industry, they're well-equipped to do so.
Here's the Century 21 JRS Realty 10-step plan to buying on your terms:
1. Conduct a Comparative Market Analysis
A Century 21 JRS Realty agent can deliver a Comparative Market Analysis (CMA), which is a breakdown of homes in a particular location that are currently on the market, expired from the market, pending a sale, or already sold. The CMA helps you accurately determine a home's value by comparing homes in the same area that have already sold.
2. Start the Financing Process
Unless you're planning to buy with cash, you'll need to secure a mortgage loan. Your Century 21 JRS Realty agent can help you select a lender and coordinate the timing and paperwork of your loan. Working with our lending affiliate, Century 21 Mortgage may be a good option for you since we can help consolidate the many aspects of the home-buying process.
3. Narrow Your Search
The right agent will work to find your new home, first by opening up your options, then by helping you narrow the field. S/he will come up with a suggested list of homes that match your needs, and can even show you homes online, before arranging for home tours, and providing maps and directions to the homes you wish to visit.
4. Document Assistance
Your Century 21 JRS Realty agent can help you write and present your purchase offer on the home of your choosing. Rely on your agent's expertise in managing the paperwork that's a necessary part of the home-buying process.
5. Evaluate and Negotiate Offers and Counteroffers
While it may be true that anything is negotiable, it may not always be in your best interest. An agent skilled in negotiation is your best ally in a competitive market, helping you get the best purchase price on your new home.
6. Get Objective Advice
Your Century 21 JRS Realty agent is a professional dedicated to guiding you in your new home purchase. While emotion might color your judgment, you can rely on your agent to provide an impartial viewpoint and advise you of options and alternatives throughout the process.
7. Set Up a Home Inspection
Some states require sellers to disclose material facts about their home's condition to potential buyers. A home inspection can help you protect your interests by determining if there are any problems or repairs that need to be taken care of before you complete your new home purchase. Your Century 21 JRS Realty agent can arrange for an inspection appointment, accompany you (or fill in for you) at the inspection, and determine additional needs.
8. Negotiate Disputes and Issues
Even the smoothest, simplest real estate transaction involves two parties with needs and objectives that often differ. Your agent should negotiate, mediate and provide conflict resolution to help you and the seller come to a mutually beneficial outcome.
9. Prepare for Contingencies
Contractual contingencies are terms that must be met before an agreement can be binding. Written contingencies must be removed (in writing and by a specified date) before a contract can be in full effect. Whether it's financing, inspection, or any other item in your agreement, your Century 21 JRS Realty agent can help you understand how to fulfill or remove any contractual conditions.
10. Get to Closing
Taking possession of your new home is always top of mind. But unanticipated difficulties at closing can be downright annoying. Your Century 21 JRS Realty agent will help you resolve issues and finalize the transfer of ownership and house keys, so you can be in the home you always imagined.
Buying on Your Terms
Buying a home is all about you. What you need. What you want in the house you'll call home sweet home. So naturally the buying process should be all about you, too.
That's why working with an agent is such a good idea - it puts the focus on what's important to you. Century 21 JRS Realty agents work hard to make your home buying experience just as good as you imagined it; and since they have the most innovative tools in the industry, they're well-equipped to do so.
Here's the Century 21 JRS Realty 10-step plan to buying on your terms:
1. Conduct a Comparative Market Analysis
A Century 21 JRS Realty agent can deliver a Comparative Market Analysis (CMA), which is a breakdown of homes in a particular location that are currently on the market, expired from the market, pending a sale, or already sold. The CMA helps you accurately determine a home's value by comparing homes in the same area that have already sold.
2. Start the Financing Process
Unless you're planning to buy with cash, you'll need to secure a mortgage loan. Your Century 21 JRS Realty agent can help you select a lender and coordinate the timing and paperwork of your loan. Working with our lending affiliate, Century 21 Mortgage may be a good option for you since we can help consolidate the many aspects of the home-buying process.
3. Narrow Your Search
The right agent will work to find your new home, first by opening up your options, then by helping you narrow the field. S/he will come up with a suggested list of homes that match your needs, and can even show you homes online, before arranging for home tours, and providing maps and directions to the homes you wish to visit.
4. Document Assistance
Your Century 21 JRS Realty agent can help you write and present your purchase offer on the home of your choosing. Rely on your agent's expertise in managing the paperwork that's a necessary part of the home-buying process.
5. Evaluate and Negotiate Offers and Counteroffers
While it may be true that anything is negotiable, it may not always be in your best interest. An agent skilled in negotiation is your best ally in a competitive market, helping you get the best purchase price on your new home.
6. Get Objective Advice
Your Century 21 JRS Realty agent is a professional dedicated to guiding you in your new home purchase. While emotion might color your judgment, you can rely on your agent to provide an impartial viewpoint and advise you of options and alternatives throughout the process.
7. Set Up a Home Inspection
Some states require sellers to disclose material facts about their home's condition to potential buyers. A home inspection can help you protect your interests by determining if there are any problems or repairs that need to be taken care of before you complete your new home purchase. Your Century 21 JRS Realty agent can arrange for an inspection appointment, accompany you (or fill in for you) at the inspection, and determine additional needs.
8. Negotiate Disputes and Issues
Even the smoothest, simplest real estate transaction involves two parties with needs and objectives that often differ. Your agent should negotiate, mediate and provide conflict resolution to help you and the seller come to a mutually beneficial outcome.
9. Prepare for Contingencies
Contractual contingencies are terms that must be met before an agreement can be binding. Written contingencies must be removed (in writing and by a specified date) before a contract can be in full effect. Whether it's financing, inspection, or any other item in your agreement, your Century 21 JRS Realty agent can help you understand how to fulfill or remove any contractual conditions.
10. Get to Closing
Taking possession of your new home is always top of mind. But unanticipated difficulties at closing can be downright annoying. Your Century 21 JRS Realty agent will help you resolve issues and finalize the transfer of ownership and house keys, so you can be in the home you always imagined.
Buyer Frequently Asked Questions
You Want Answers? We Have Them.
Q: I'm thinking about buying a home. Where do I start?
A: The first step for potential homebuyers is a credit check. It's best to keep an eye on your credit reports so you can spot any mistakes and dispute them. You should also avoid running up high credit card bills in the months prior to buying a home.
These two steps will help you in the next phase of your game plan, pre-approval on a mortgage. A full-service real estate broker can help you with this portion of the plan. Pre-approval includes analyzing your income, assets, and present debt to estimate how much house you can afford. This means the lender has committed to loaning you money subject to the house you choose to buy. Being pre-approved for a loan will make you attractive to sellers because the contract won't be tied up with financial issues.
After you know how much you can spend, you're in the homestretch. This is the time for you to become familiar with neighborhoods and the features of a home. Educate yourself by visiting local real estate web sites and viewing the listings. This is also the time for you to decide what you want and need in a home.
A solid game plan needs a good coach. A Century 21 JRS Realty Realtor can help you through all steps of the plan, prepare you for any unforeseen problems and eventually help you to buy the home of your dreams.
Q: What should I consider when I start to look for a home?
A: First, put together a list of features and benefits you want in a home. Think of such things as pricing, location, size, and amenities. If you can't get a home at the price you want with all the features you're looking for, figure out what features are most important to you and rank them in priority so you know what you're willing to give-and-take. For instance, you could choose to have a large kitchen and smaller bedrooms?
You should also consider your future needs. Maybe now is the time to buy a larger home rather than buying a small home and expanding it in the future. Your agent can help you compare the price of homes with the features you are looking for or suggest alternate uses of space.
Q: Should I buy first, or sell first?
A: The answer to this question lies squarely with you. Do you need the equity that's built up in your present home to complete the purchase of a new home? If so, you either need to sell first or consider a bridge loan or house sale contingency. If not, you may choose to buy first and sell later. Before making a final decision, Century 21 JRS Realty strongly suggests that you engage a real estate agent with whom you can enter a trusting relationship. Then discuss this question with him or her, touching on every aspect of what it may mean for your particular situation.
Q: How do I choose between renting or buying?
A: Owning a home offers tax benefits, as well as the freedom to make decisions about where you live. Homeowners, unlike renters, can secure a fixed-rate loan and lock in their monthly payments, so they can make investment plans knowing their expenses won't change substantially. Renters are at the whim of their landlord, who can raise the rent each year without a renter's input. Homeowners, on the other hand, are in control of their property and decide whether they allow pets, decorating, or permanent improvements.
Q: Do your real estate agents cooperate with other companies' agents?
A. Our agents work according to specific laws, regulations, and customs in their respective areas. In every market that Century 21 JRS Realty serves, brokers and agents from different companies work cooperatively, showing and selling each other's listed properties.
Q: Why do I need an agent to help me find a home with all of the technology and advertising available?
A: The Internet and newspaper are good places to start researching the current housing market. You can also find information to help answer many of your financing questions. But once you've looked at what's available, it's a good time to get a professional involved.
If you go it on your own, you might spend hours scanning newspaper ads and home magazines, driving through neighborhoods seeking "for sale" signs, or phoning about individual listings and still miss some of the best available homes. A Century 21 JRS Realty agent will save you time, money, and provide access to a wealth of information resources to help find that special home.
Q: If I'm thinking about buying a newly-constructed house, why do I need an agent?
A: Building a home often requires hours of research and decision-making. You must first decide what area you want to build in and which builder you want to use. After these initial decisions, you still have many choices of floor plans, building materials, and fixtures.
Personalization and freedom of choice are some of the benefits of building a home, but they can also be very stressful. An agent will guide you through the entire home building process and help you along the way should you need it. You'll still get to make the choices on your own, but your agent will be there to help, keeping your best interests in mind. Plus, buyer representation comes at no cost to you.
Q: Is Century 21 JRS Realty a member of the Multiple Listing Service (MLS)?
A. Yes - in every market we serve, Century 21 JRS Realty is a member of the local MLS, as well as being members of the national, state, and local Associations/Boards of Realtors®
Q: What typically goes into an agreement for buyer representation?
A: Like any contract, a buyer representation agreement needs beginning and ending dates. It also has an acknowledgement of your willingness to be represented by the company and its agent, as well as the amount, if any, that you'll pay for real estate-related services. Buyer agreements may also indicate whether you'll work with only one company/agent or several.
Q: What is an Agency Disclosure?
A: An Agency Disclosure is a state-required document, disclosing to you as a principal-in this case, the buyer-in a real estate transaction whom the agent or agents in the transaction represent. A state's Agency Disclosure simply notifies you of that state's agency laws; it does not obligate you to work with any particular agent or broker.
Q: How are buyer's agents compensated?
A: The buyer and real estate agent come to terms on which services the buyer needs and the way the agent will be compensated for providing these services. In most cases, a fee or commission is based on the seller's proceeds of sale and shared between the seller's (listing) and buyer's (selling) agents. In some cases, the buyer makes a direct payment to his or her agent.
Buyers sometimes pay their agent/broker directly for finding and purchasing a home. If a broker charges buyers a direct fee, it should be outlined in an exclusive agency agreement that the buyer signs when engaging the broker.
Payment arrangements vary, depending on market conditions, customary practices, and consumer expectation. Some eager home buyers offer an incentive to give their real estate agent additional motivation (generally a cash bonus when title transfers) to find them the "right" property.
As you interview prospective agents and weigh their respective services, consider which compensation options and terms will get you in the home you want and meet your individual needs.
Q: What do all of those abbreviations in property ads mean?
A: If you find yourself stumbling to understand a property description, you're not alone. We've composed a list of some of the most frequently used abbreviations to help you understand a BA from a BR and more.
BA FDR BR
Bath Formal Dining Room Bedroom
LR MBR=Master Bedroom Dr=Dining Room
Living Room
FP, frplc, fplc FR=Family Room
Fireplace
WBFP LL=Lower Level
Wood Burning Fireplace
Entr grmet kit=Gourmet Kitchen
Entrance
Dck Pvt=Private pwdr rm=Powder Room
Deck
Gar Brk=Brick
Garage
Upr=Upper Floor HDW, HWF, Hdwd=Hardwood Floors
Q: As a buyer, do I have the right to obtain past information about the property I'm interested in purchasing?
A: Yes. Sellers are required to disclose all known property defects. With your agent's help, you can find out what has happened to the property in the past. You should make careful observations, examine the property, and request or otherwise obtain any other important records. Put these requests in writing. If you decide to put an offer on a home, it's important to have a professional inspection completed before closing.
Q: I'm thinking about buying a home. Where do I start?
A: The first step for potential homebuyers is a credit check. It's best to keep an eye on your credit reports so you can spot any mistakes and dispute them. You should also avoid running up high credit card bills in the months prior to buying a home.
These two steps will help you in the next phase of your game plan, pre-approval on a mortgage. A full-service real estate broker can help you with this portion of the plan. Pre-approval includes analyzing your income, assets, and present debt to estimate how much house you can afford. This means the lender has committed to loaning you money subject to the house you choose to buy. Being pre-approved for a loan will make you attractive to sellers because the contract won't be tied up with financial issues.
After you know how much you can spend, you're in the homestretch. This is the time for you to become familiar with neighborhoods and the features of a home. Educate yourself by visiting local real estate web sites and viewing the listings. This is also the time for you to decide what you want and need in a home.
A solid game plan needs a good coach. A Century 21 JRS Realty Realtor can help you through all steps of the plan, prepare you for any unforeseen problems and eventually help you to buy the home of your dreams.
Q: What should I consider when I start to look for a home?
A: First, put together a list of features and benefits you want in a home. Think of such things as pricing, location, size, and amenities. If you can't get a home at the price you want with all the features you're looking for, figure out what features are most important to you and rank them in priority so you know what you're willing to give-and-take. For instance, you could choose to have a large kitchen and smaller bedrooms?
You should also consider your future needs. Maybe now is the time to buy a larger home rather than buying a small home and expanding it in the future. Your agent can help you compare the price of homes with the features you are looking for or suggest alternate uses of space.
Q: Should I buy first, or sell first?
A: The answer to this question lies squarely with you. Do you need the equity that's built up in your present home to complete the purchase of a new home? If so, you either need to sell first or consider a bridge loan or house sale contingency. If not, you may choose to buy first and sell later. Before making a final decision, Century 21 JRS Realty strongly suggests that you engage a real estate agent with whom you can enter a trusting relationship. Then discuss this question with him or her, touching on every aspect of what it may mean for your particular situation.
Q: How do I choose between renting or buying?
A: Owning a home offers tax benefits, as well as the freedom to make decisions about where you live. Homeowners, unlike renters, can secure a fixed-rate loan and lock in their monthly payments, so they can make investment plans knowing their expenses won't change substantially. Renters are at the whim of their landlord, who can raise the rent each year without a renter's input. Homeowners, on the other hand, are in control of their property and decide whether they allow pets, decorating, or permanent improvements.
Q: Do your real estate agents cooperate with other companies' agents?
A. Our agents work according to specific laws, regulations, and customs in their respective areas. In every market that Century 21 JRS Realty serves, brokers and agents from different companies work cooperatively, showing and selling each other's listed properties.
Q: Why do I need an agent to help me find a home with all of the technology and advertising available?
A: The Internet and newspaper are good places to start researching the current housing market. You can also find information to help answer many of your financing questions. But once you've looked at what's available, it's a good time to get a professional involved.
If you go it on your own, you might spend hours scanning newspaper ads and home magazines, driving through neighborhoods seeking "for sale" signs, or phoning about individual listings and still miss some of the best available homes. A Century 21 JRS Realty agent will save you time, money, and provide access to a wealth of information resources to help find that special home.
Q: If I'm thinking about buying a newly-constructed house, why do I need an agent?
A: Building a home often requires hours of research and decision-making. You must first decide what area you want to build in and which builder you want to use. After these initial decisions, you still have many choices of floor plans, building materials, and fixtures.
Personalization and freedom of choice are some of the benefits of building a home, but they can also be very stressful. An agent will guide you through the entire home building process and help you along the way should you need it. You'll still get to make the choices on your own, but your agent will be there to help, keeping your best interests in mind. Plus, buyer representation comes at no cost to you.
Q: Is Century 21 JRS Realty a member of the Multiple Listing Service (MLS)?
A. Yes - in every market we serve, Century 21 JRS Realty is a member of the local MLS, as well as being members of the national, state, and local Associations/Boards of Realtors®
Q: What typically goes into an agreement for buyer representation?
A: Like any contract, a buyer representation agreement needs beginning and ending dates. It also has an acknowledgement of your willingness to be represented by the company and its agent, as well as the amount, if any, that you'll pay for real estate-related services. Buyer agreements may also indicate whether you'll work with only one company/agent or several.
Q: What is an Agency Disclosure?
A: An Agency Disclosure is a state-required document, disclosing to you as a principal-in this case, the buyer-in a real estate transaction whom the agent or agents in the transaction represent. A state's Agency Disclosure simply notifies you of that state's agency laws; it does not obligate you to work with any particular agent or broker.
Q: How are buyer's agents compensated?
A: The buyer and real estate agent come to terms on which services the buyer needs and the way the agent will be compensated for providing these services. In most cases, a fee or commission is based on the seller's proceeds of sale and shared between the seller's (listing) and buyer's (selling) agents. In some cases, the buyer makes a direct payment to his or her agent.
Buyers sometimes pay their agent/broker directly for finding and purchasing a home. If a broker charges buyers a direct fee, it should be outlined in an exclusive agency agreement that the buyer signs when engaging the broker.
Payment arrangements vary, depending on market conditions, customary practices, and consumer expectation. Some eager home buyers offer an incentive to give their real estate agent additional motivation (generally a cash bonus when title transfers) to find them the "right" property.
As you interview prospective agents and weigh their respective services, consider which compensation options and terms will get you in the home you want and meet your individual needs.
Q: What do all of those abbreviations in property ads mean?
A: If you find yourself stumbling to understand a property description, you're not alone. We've composed a list of some of the most frequently used abbreviations to help you understand a BA from a BR and more.
BA FDR BR
Bath Formal Dining Room Bedroom
LR MBR=Master Bedroom Dr=Dining Room
Living Room
FP, frplc, fplc FR=Family Room
Fireplace
WBFP LL=Lower Level
Wood Burning Fireplace
Entr grmet kit=Gourmet Kitchen
Entrance
Dck Pvt=Private pwdr rm=Powder Room
Deck
Gar Brk=Brick
Garage
Upr=Upper Floor HDW, HWF, Hdwd=Hardwood Floors
Q: As a buyer, do I have the right to obtain past information about the property I'm interested in purchasing?
A: Yes. Sellers are required to disclose all known property defects. With your agent's help, you can find out what has happened to the property in the past. You should make careful observations, examine the property, and request or otherwise obtain any other important records. Put these requests in writing. If you decide to put an offer on a home, it's important to have a professional inspection completed before closing.
What to Look for in an Agent
What to Look for in a Buyer's Agent
Once you've made the decision to buy a home, your next step is one of your most important: finding a real estate professional to guide you through the process. A good agent will help you avoid common pitfalls, make wise home investment decisions, and bring order to the entire buying process.
Realtors are licensed professionals who adhere to the National Association of Realtors (NAR) Code of Ethics. Those belonging to the NAR receive continuing education and are up on the latest trends, making them well-prepared to offer you the most advanced real estate advice. Your agent will provide you a variety of tools and assistance to streamline your buying experience.
At Century 21 JRS Realty, we believe that both the buyer and the seller should have professional representation. If an agent represents you, you're privy to more information and receive the benefit of someone promoting your best interests at all times – usually with no out-of-pocket costs to you.
One of the things to look for in a buyer's agent is their reputation and standing in the community. Realtors know (and are known) favorably in their territories. Because they know the neighborhoods inside and out, they can help you decide which home is right for you. For example, you might see two houses in the same neighborhood as being identical, but your agent will be well-versed in their differences – no matter how subtle. In addition, even comparable homes may differ in terms of contract, financing, inspection requirements and closing costs. Let your agent help with all the details.
You should also expect your agent to provide you with quick and easy ways to make the home search process more convenient. Look for a buyer's agent who has access to tools that can help you weed through potential homes at your convenience, online. Being able to view property photos, information and details in advance of in-person showings can help save you a great deal of time in the home search process. Technology-savvy agents should provide this type of service as part of their overall offering to you as a client.
A Century 21 JRS Realty buyer's agent actively approaches the home-buying process with enthusiasm, experience and patience. Look for an agent who will:
Work on your behalf to find your new home.
Research comparable properties to determine a fair price and terms.
Prepare your purchase agreement and accompanying legal paperwork, including disclosure documents.
Negotiate for the price, terms and conditions that are agreeable to you.
Follow up with your mortgage lender, title company, seller's agent and others until the house is legally yours.
Finding the right sales associate involves asking tough questions of yourself and your agent. For example, if you're always on the go and prefer updated listing information via e-mail, ask your prospective real estate agent if s/he is technology-savvy. If you'd prefer a "one-stop shop" where you can get assistance with mortgage, title and relocation needs, consult with an agent at a full-service brokerage company, like Century 21 JRS Realty.
Finally, remember to employ an agent with whom you have a rapport. Knowing you're in capable, trusting hands will let you enjoy the excitement of the home-buying process, not agonize over it.
Find your Century 21 JRS Realty buyer's agent now!
Once you've made the decision to buy a home, your next step is one of your most important: finding a real estate professional to guide you through the process. A good agent will help you avoid common pitfalls, make wise home investment decisions, and bring order to the entire buying process.
Realtors are licensed professionals who adhere to the National Association of Realtors (NAR) Code of Ethics. Those belonging to the NAR receive continuing education and are up on the latest trends, making them well-prepared to offer you the most advanced real estate advice. Your agent will provide you a variety of tools and assistance to streamline your buying experience.
At Century 21 JRS Realty, we believe that both the buyer and the seller should have professional representation. If an agent represents you, you're privy to more information and receive the benefit of someone promoting your best interests at all times – usually with no out-of-pocket costs to you.
One of the things to look for in a buyer's agent is their reputation and standing in the community. Realtors know (and are known) favorably in their territories. Because they know the neighborhoods inside and out, they can help you decide which home is right for you. For example, you might see two houses in the same neighborhood as being identical, but your agent will be well-versed in their differences – no matter how subtle. In addition, even comparable homes may differ in terms of contract, financing, inspection requirements and closing costs. Let your agent help with all the details.
You should also expect your agent to provide you with quick and easy ways to make the home search process more convenient. Look for a buyer's agent who has access to tools that can help you weed through potential homes at your convenience, online. Being able to view property photos, information and details in advance of in-person showings can help save you a great deal of time in the home search process. Technology-savvy agents should provide this type of service as part of their overall offering to you as a client.
A Century 21 JRS Realty buyer's agent actively approaches the home-buying process with enthusiasm, experience and patience. Look for an agent who will:
Work on your behalf to find your new home.
Research comparable properties to determine a fair price and terms.
Prepare your purchase agreement and accompanying legal paperwork, including disclosure documents.
Negotiate for the price, terms and conditions that are agreeable to you.
Follow up with your mortgage lender, title company, seller's agent and others until the house is legally yours.
Finding the right sales associate involves asking tough questions of yourself and your agent. For example, if you're always on the go and prefer updated listing information via e-mail, ask your prospective real estate agent if s/he is technology-savvy. If you'd prefer a "one-stop shop" where you can get assistance with mortgage, title and relocation needs, consult with an agent at a full-service brokerage company, like Century 21 JRS Realty.
Finally, remember to employ an agent with whom you have a rapport. Knowing you're in capable, trusting hands will let you enjoy the excitement of the home-buying process, not agonize over it.
Find your Century 21 JRS Realty buyer's agent now!
Thursday, August 6, 2009
Back on Top
Congrats to Joe Piizzi for earning agent of the month honors again. Joe is back on top for the month of July with 2 listings and 2 sales for the month. Joe is leading the way for CENTURY 21 JRS Realty this year having his best year in Real Estate. Joe is out to prove that the market does not determine the success of a Real Estate Agent. The agents work ethic is what counts. Again we are very proud of Joe and wish him the best in the future.
Friday, July 31, 2009
8 REO Tips for Buying Foreclosures
8 REO Tips for Buying Foreclosures
How to Write Offers to Buy REO Foreclosures
Lots of savvy home buyers want to hit the jackpot and buy that REO foreclosed home, many of which are often under-priced. When banks price REOs under the comparable sales, multiple offers are often the response. This means you could be up against stiff competition for that bank-owned home.
It's not unusual for some REO homes in Sacramento to receive 15 or 20 offers. Sometimes the bank will throw out all but two offers and then ask the selected buyers to resubmit what is called "Highest and Final" offer. Sometimes the bank simply accepts the best offer at inception.
If you're wondering how you can make your offer shine above all the rest and be the winning offer, here are a few tips to help you select the right price and terms:
1) Get the Property History
Ask your buyer's agent to find out the bank's purchase price on the Trustee's Deed or Sheriff's Deed. Generally, it is noted on the document itself, which you can get from the tax rolls or a title company. Compare that price to the price the bank is asking.
Look at the amount of loans that were once secured to the property. Somewhere between the original mortgage balance(s) and the foreclosure sale price is the amount the bank will accept, if the home is under-priced.
2) Determine Comparable Sales
In many cases, the list price has little bearing on the value of the home. The market value carries the most weight. If you are up against competing offers, other buyers will offer more than list price.
Look at the last three months of comparable sales, a mini CMA, for that neighborhood to determine how much this REO is worth. Try to use only those homes that most closely match the REO regarding square footage, number of bedrooms, baths, amenities and condition.
Look at the pending sales. Ask your agent to call the listing agents of those pending sales to try to find out the accepted offer price. Some will share that information and some will not.
Look at the active listings. Those are most likely the listings other buyers will use to formulate a price because they are the only homes those buyers actually tour.
3) Analyze Listing Agent's REO Solds
Most REO agents work for one or two banks. Some listing agents are exclusive listing agents for REOs, and they do not list any other type of property. Since REO agents deal in volume, they typically apply the same pricing principles to all their REO listings.
Ask your buyer's agent to look up the listing agent in MLS.
Run a search using that listing agent's name to find the last three to six months of that agent's listings.
Pull the history of those listings to determine the list-price to sales-price ratio. If most of those listings are selling for, say, 5% over list price, then you may need to offer 6% over list price, and vice versa.
4) Ask About Number of Offers
If there are no offers on the REO home, you can probably offer less than list price and get your offer accepted. However, if there are more than two offers, you will most likely need to offer above the asking price.
If there are 20 offers, bear in mind that some of those offers might be all cash. Banks like all cash offers. If you are obtaining financing, then you may need to increase the price on your offer to be considered.
5) Submit Preapproval Letter
It goes without saying that you do not want a prequal letter. You want a preapproval letter. Get preapproved from your choice of lender in advance.
Moreover, get preapproved by the lender who owns the property. Do not expect to use this lender for your loan, but submit the prepproval letter from this lender, along with the letter from your own lender. Banks don't trust other lender preapprovals but trust their own departments.
6) Don't Ask for Repairs / Inspections
Sometimes banks will pay for repairs, but typically will not agree to do so at the offer stage. If there are problems found during a home inspection, renegotiate after your offer has been accepted.
7) Shorten the Inspection Period
If other buyers ask for 17 days, for example, to conduct inspections, and you ask for 10, you will be deemed the more serious buyer.
8) Offer to Split Fees
Some banks will not pay transfer fees, for example. If the buyer offers to split those fees, the bank will feel more amenable to accepting the offer. Same thing for escrow fees.
Many banks negotiate discount fees for title insurance. If the bank will pay for the owner's policy, the ALTA policy might cost a bit more. But it's still a good idea to let the bank choose title if you want your offer accepted.
Consider the Appraisal Consequences
If you offer over list price, bear in mind that the appraisal will need to substantiate that price. If you find yourself dealing with a low appraisal, you have options, so don't despair. Remember, the bank will most likely run into this problem with the next buyer who obtains financing.
How to Write Offers to Buy REO Foreclosures
Lots of savvy home buyers want to hit the jackpot and buy that REO foreclosed home, many of which are often under-priced. When banks price REOs under the comparable sales, multiple offers are often the response. This means you could be up against stiff competition for that bank-owned home.
It's not unusual for some REO homes in Sacramento to receive 15 or 20 offers. Sometimes the bank will throw out all but two offers and then ask the selected buyers to resubmit what is called "Highest and Final" offer. Sometimes the bank simply accepts the best offer at inception.
If you're wondering how you can make your offer shine above all the rest and be the winning offer, here are a few tips to help you select the right price and terms:
1) Get the Property History
Ask your buyer's agent to find out the bank's purchase price on the Trustee's Deed or Sheriff's Deed. Generally, it is noted on the document itself, which you can get from the tax rolls or a title company. Compare that price to the price the bank is asking.
Look at the amount of loans that were once secured to the property. Somewhere between the original mortgage balance(s) and the foreclosure sale price is the amount the bank will accept, if the home is under-priced.
2) Determine Comparable Sales
In many cases, the list price has little bearing on the value of the home. The market value carries the most weight. If you are up against competing offers, other buyers will offer more than list price.
Look at the last three months of comparable sales, a mini CMA, for that neighborhood to determine how much this REO is worth. Try to use only those homes that most closely match the REO regarding square footage, number of bedrooms, baths, amenities and condition.
Look at the pending sales. Ask your agent to call the listing agents of those pending sales to try to find out the accepted offer price. Some will share that information and some will not.
Look at the active listings. Those are most likely the listings other buyers will use to formulate a price because they are the only homes those buyers actually tour.
3) Analyze Listing Agent's REO Solds
Most REO agents work for one or two banks. Some listing agents are exclusive listing agents for REOs, and they do not list any other type of property. Since REO agents deal in volume, they typically apply the same pricing principles to all their REO listings.
Ask your buyer's agent to look up the listing agent in MLS.
Run a search using that listing agent's name to find the last three to six months of that agent's listings.
Pull the history of those listings to determine the list-price to sales-price ratio. If most of those listings are selling for, say, 5% over list price, then you may need to offer 6% over list price, and vice versa.
4) Ask About Number of Offers
If there are no offers on the REO home, you can probably offer less than list price and get your offer accepted. However, if there are more than two offers, you will most likely need to offer above the asking price.
If there are 20 offers, bear in mind that some of those offers might be all cash. Banks like all cash offers. If you are obtaining financing, then you may need to increase the price on your offer to be considered.
5) Submit Preapproval Letter
It goes without saying that you do not want a prequal letter. You want a preapproval letter. Get preapproved from your choice of lender in advance.
Moreover, get preapproved by the lender who owns the property. Do not expect to use this lender for your loan, but submit the prepproval letter from this lender, along with the letter from your own lender. Banks don't trust other lender preapprovals but trust their own departments.
6) Don't Ask for Repairs / Inspections
Sometimes banks will pay for repairs, but typically will not agree to do so at the offer stage. If there are problems found during a home inspection, renegotiate after your offer has been accepted.
7) Shorten the Inspection Period
If other buyers ask for 17 days, for example, to conduct inspections, and you ask for 10, you will be deemed the more serious buyer.
8) Offer to Split Fees
Some banks will not pay transfer fees, for example. If the buyer offers to split those fees, the bank will feel more amenable to accepting the offer. Same thing for escrow fees.
Many banks negotiate discount fees for title insurance. If the bank will pay for the owner's policy, the ALTA policy might cost a bit more. But it's still a good idea to let the bank choose title if you want your offer accepted.
Consider the Appraisal Consequences
If you offer over list price, bear in mind that the appraisal will need to substantiate that price. If you find yourself dealing with a low appraisal, you have options, so don't despair. Remember, the bank will most likely run into this problem with the next buyer who obtains financing.
Is It Better To Buy a Short Sale or Wait for the Foreclosure to Happen?
Is It Better To Buy a Short Sale or Wait for the Foreclosure to Happen?
Foreclosure Prices (REOs) Can Be Better Than Short Sale Listings
Waiting for an answer on a short sale can be frustrating. A short sale happens when a seller's lender agrees to accept less than its unpaid mortgage balance to facilitate a sale between the seller and buyer, and banks take a long time to decide.
Some short sale buyers wait six months or more for a response. More than half the time, the answer is "No, and don't let the door hit you on the way out."
Short Sale List Prices are Not Real
Buyers gravitate toward short sales for two reasons. The list price is attractive and they believe the seller is desperate. However, neither of those beliefs is necessarily true.
Since not every short sale home is in foreclosure, not every seller is desperate. Moreover, sellers often set the listed price unrealistically, hoping that buyers will flock to that listing like moths to a flame.
Preapproved Short Sales
The way a listing agent finds out how low the bank will go is if an offer has already been accepted and the buyer walks away. Only then is the agent free to market the listing as an accepted short sale because banks rarely disclose a bottom-line price up front.
With a preapproved short sale, the new buyers' wait is dramatically shortened. Typically, about the time the first buyers walk away, the sellers' documents have already been submitted to the lender, and the lender may have been close to issuing the short sale approval letter. The missing documents at this point are the new buyers' offer and loan qualifications.
Short Sale Negotiations
The sellers can agree to any type of purchase offer put before them for signature, but it's not binding unless the sellers' bank approves the offer. It doesn't matter what stipulations are in the offer if the bank won't accept them. Your true negotiation does not lie with the seller; it lies with the bank's negotiator.
Banks rely on desktop appraisals and third-party BPOs (broker price opinions) to determine value. Although banks don't want to follow through on a foreclosure, they also want fair market value. It is up to the listing agent to provide comparable sales and to substantiate the price submitted by the buyer.
Is the Price Lower After a Foreclosure?
Whether a buyer should wait for the property to go through foreclosure and be deeded to the bank depends on whether the home has multiple offers. If more than one buyer has submitted an offer, the highest and most qualified offer will most likely win.
If the buyer is the sole offerer and the bank is responding negatively, or worse, not at all, it might be in the buyer's best interest to wait out the foreclosure. There is also no guarantee that a bank won't reject multiple offers, too, particularly if none is high enough.
Sometimes banks aren't reasonable and end up shooting themselves in the foot. I've had several listings where banks refused to accept short sale offers only to get title to the home through foreclosure, which then ultimately sold for tens of thousands less.
Don't get discouraged if the bank rejects your short sale offer. Be smart. Laugh all the way to your bank.
If no one else submits a higher offer -- and if you didn't, why would anybody else? -- eventually the bank will put the home up for sale as an REO. Watch for it to reappear on the market as a bank-owned home. If the price is reasonable at that point, buy it from the bank. At least buyers of bank-owned homes are relatively assured their transactions will close within 30 days or so, and most likely at a much lower price.
Foreclosure Prices (REOs) Can Be Better Than Short Sale Listings
Waiting for an answer on a short sale can be frustrating. A short sale happens when a seller's lender agrees to accept less than its unpaid mortgage balance to facilitate a sale between the seller and buyer, and banks take a long time to decide.
Some short sale buyers wait six months or more for a response. More than half the time, the answer is "No, and don't let the door hit you on the way out."
Short Sale List Prices are Not Real
Buyers gravitate toward short sales for two reasons. The list price is attractive and they believe the seller is desperate. However, neither of those beliefs is necessarily true.
Since not every short sale home is in foreclosure, not every seller is desperate. Moreover, sellers often set the listed price unrealistically, hoping that buyers will flock to that listing like moths to a flame.
Preapproved Short Sales
The way a listing agent finds out how low the bank will go is if an offer has already been accepted and the buyer walks away. Only then is the agent free to market the listing as an accepted short sale because banks rarely disclose a bottom-line price up front.
With a preapproved short sale, the new buyers' wait is dramatically shortened. Typically, about the time the first buyers walk away, the sellers' documents have already been submitted to the lender, and the lender may have been close to issuing the short sale approval letter. The missing documents at this point are the new buyers' offer and loan qualifications.
Short Sale Negotiations
The sellers can agree to any type of purchase offer put before them for signature, but it's not binding unless the sellers' bank approves the offer. It doesn't matter what stipulations are in the offer if the bank won't accept them. Your true negotiation does not lie with the seller; it lies with the bank's negotiator.
Banks rely on desktop appraisals and third-party BPOs (broker price opinions) to determine value. Although banks don't want to follow through on a foreclosure, they also want fair market value. It is up to the listing agent to provide comparable sales and to substantiate the price submitted by the buyer.
Is the Price Lower After a Foreclosure?
Whether a buyer should wait for the property to go through foreclosure and be deeded to the bank depends on whether the home has multiple offers. If more than one buyer has submitted an offer, the highest and most qualified offer will most likely win.
If the buyer is the sole offerer and the bank is responding negatively, or worse, not at all, it might be in the buyer's best interest to wait out the foreclosure. There is also no guarantee that a bank won't reject multiple offers, too, particularly if none is high enough.
Sometimes banks aren't reasonable and end up shooting themselves in the foot. I've had several listings where banks refused to accept short sale offers only to get title to the home through foreclosure, which then ultimately sold for tens of thousands less.
Don't get discouraged if the bank rejects your short sale offer. Be smart. Laugh all the way to your bank.
If no one else submits a higher offer -- and if you didn't, why would anybody else? -- eventually the bank will put the home up for sale as an REO. Watch for it to reappear on the market as a bank-owned home. If the price is reasonable at that point, buy it from the bank. At least buyers of bank-owned homes are relatively assured their transactions will close within 30 days or so, and most likely at a much lower price.
Buying Distressed Homes
Buying Distressed Homes: Foreclosures, Short Sales, REOs
Which is More Profitable: Foreclosures, Short Sales or REOs?
Foreclosures, short sales and REOs remind me of, "Lions and tigers and bears, oh, my!" The latter are dangerous animals but different from each other -- just as foreclosures and short sales and real-estate-owned (REOs) are distressed sales but different from each other.
However, they are also similar because without knowledge about handling foreclosures, short sales and REOs, you could find yourself in dangerous territory. For example, while most short sales are foreclosures, not all foreclosures are short sales. To further complicate matters, REOs are not short sales either, but some intended short sales can end up as an REO.
What is a Foreclosure Property?
A foreclosure property is a home in foreclosure -- when a notice of default has been filed in the public records. It means the owner has stopped making mortgage payments and the lender has given notice that unless the payments are brought up to date, it will sell the property to the highest bidder.
Lenders can foreclose for other reasons, but the most common reason lenders file a notice of default is when a borrower is at least two payments in arrears.
If the home owner does not bring the loan current, the lender will take the property away from the owner. The final step the lender takes after a certain period has passed is to try to auction the property at a public sale.
Not all homes that fall into foreclosure go to public sale because owners have the right to make up back payments up to a point, the time which varies from state to state.
Real estate investors and home buyers see profit in buying foreclosures because they can often buy the property for the amount owed, picking up the home owner's equity for free.
How California law Affects Foreclosure / Short Sale Investors
States have varying laws governing foreclosures and some follow California law. To completely understand your rights as a foreclosure buyer, contact a local real estate lawyer. However, realize that for a long time in California, a real estate agent could not represent a foreclosure investor if all of the following four statements were true:
The home qualifies as the seller's personal residence.
The property is a single family home or 2 to 4 units.
A Notice of Default has been filed in the public records against the property.
The investor buyer will not occupy the property.
However, if any of those four statements were false, an agent in California would be allowed to represent buyers, especially if the buyer was going to occupy the home. But to represent an investor, CA law requires that a real estate agent post a bond. No such bond is available in the state of California. Therefore, as a pre-foreclosure investor in California, many buyers were forced to act on their own.
A California court ruled in 2007 that the bond requirement was unenforceable. The California Association of Realtors then made available a special package of forms that agents can use to represent investors. Realize, as an investor, you are required to comply with the Home Equity Sales Act. Among other requirements, sellers who are in foreclosure have the right to rescind (cancel) a transaction within five days. Investors must give the seller notice of that right, including a copy of the form that will let sellers cancel.
Failure to comply with the Home Equity Sales Act carries severe penalties, including a provision that gives the seller the right to cancel the sale up to two years after the sale to the investor has closed and get the property back. You read that correctly. Two years.
As an investor, before you decide to buy a home in foreclosure by making up the back payments to the lender, giving the seller a few dollars and recording a deed, call a real estate lawyer.
What is a Short Sale Property?
A short sale occurs when a home owner is in foreclosure but before the property goes to public auction. Under a short sale, a lender must agree to accept less than the amount that is owed on the property.
Unlike a foreclosure, investors typically buy the home for even less because investors are not paying off the existing loan nor making up the back payments. Investors are striking a deal with the existing lender to take less than what the lender has coming to avoid dealing with a foreclosure.
It's a myth that lenders are not going to make a deal with an investor unless the seller has fallen behind on the seller's obligation to make timely mortgage payments. Sellers don't need to be in default for a short sale to occur. For a buyer who wants to occupy the home, buying a short sale makes financial sense.
What are REOs - Real Estate Owned?
Buying an REO is similar to buying a short sale except the property is already owned by the lender.
The property was acquired by the lender through a foreclosure action.
Often lenders will sell repossessed homes for less than the past loan balance.
Bank-owned properties are called REOs, meaning real estate owned by the lender.
Banks end up owning the property when nobody at the public auction bid enough to cover the amount owed against the property. REO homes are often considered the best way to buy a distressed property because the seller is already out of the picture. It's just the investor, the investor's agent, the bank and the bank's agent who are negotiating the transaction. Some REOs can be purchased directly from the lender.
For more information, seek the advice of a real estate lawyer.
Which is More Profitable: Foreclosures, Short Sales or REOs?
Foreclosures, short sales and REOs remind me of, "Lions and tigers and bears, oh, my!" The latter are dangerous animals but different from each other -- just as foreclosures and short sales and real-estate-owned (REOs) are distressed sales but different from each other.
However, they are also similar because without knowledge about handling foreclosures, short sales and REOs, you could find yourself in dangerous territory. For example, while most short sales are foreclosures, not all foreclosures are short sales. To further complicate matters, REOs are not short sales either, but some intended short sales can end up as an REO.
What is a Foreclosure Property?
A foreclosure property is a home in foreclosure -- when a notice of default has been filed in the public records. It means the owner has stopped making mortgage payments and the lender has given notice that unless the payments are brought up to date, it will sell the property to the highest bidder.
Lenders can foreclose for other reasons, but the most common reason lenders file a notice of default is when a borrower is at least two payments in arrears.
If the home owner does not bring the loan current, the lender will take the property away from the owner. The final step the lender takes after a certain period has passed is to try to auction the property at a public sale.
Not all homes that fall into foreclosure go to public sale because owners have the right to make up back payments up to a point, the time which varies from state to state.
Real estate investors and home buyers see profit in buying foreclosures because they can often buy the property for the amount owed, picking up the home owner's equity for free.
How California law Affects Foreclosure / Short Sale Investors
States have varying laws governing foreclosures and some follow California law. To completely understand your rights as a foreclosure buyer, contact a local real estate lawyer. However, realize that for a long time in California, a real estate agent could not represent a foreclosure investor if all of the following four statements were true:
The home qualifies as the seller's personal residence.
The property is a single family home or 2 to 4 units.
A Notice of Default has been filed in the public records against the property.
The investor buyer will not occupy the property.
However, if any of those four statements were false, an agent in California would be allowed to represent buyers, especially if the buyer was going to occupy the home. But to represent an investor, CA law requires that a real estate agent post a bond. No such bond is available in the state of California. Therefore, as a pre-foreclosure investor in California, many buyers were forced to act on their own.
A California court ruled in 2007 that the bond requirement was unenforceable. The California Association of Realtors then made available a special package of forms that agents can use to represent investors. Realize, as an investor, you are required to comply with the Home Equity Sales Act. Among other requirements, sellers who are in foreclosure have the right to rescind (cancel) a transaction within five days. Investors must give the seller notice of that right, including a copy of the form that will let sellers cancel.
Failure to comply with the Home Equity Sales Act carries severe penalties, including a provision that gives the seller the right to cancel the sale up to two years after the sale to the investor has closed and get the property back. You read that correctly. Two years.
As an investor, before you decide to buy a home in foreclosure by making up the back payments to the lender, giving the seller a few dollars and recording a deed, call a real estate lawyer.
What is a Short Sale Property?
A short sale occurs when a home owner is in foreclosure but before the property goes to public auction. Under a short sale, a lender must agree to accept less than the amount that is owed on the property.
Unlike a foreclosure, investors typically buy the home for even less because investors are not paying off the existing loan nor making up the back payments. Investors are striking a deal with the existing lender to take less than what the lender has coming to avoid dealing with a foreclosure.
It's a myth that lenders are not going to make a deal with an investor unless the seller has fallen behind on the seller's obligation to make timely mortgage payments. Sellers don't need to be in default for a short sale to occur. For a buyer who wants to occupy the home, buying a short sale makes financial sense.
What are REOs - Real Estate Owned?
Buying an REO is similar to buying a short sale except the property is already owned by the lender.
The property was acquired by the lender through a foreclosure action.
Often lenders will sell repossessed homes for less than the past loan balance.
Bank-owned properties are called REOs, meaning real estate owned by the lender.
Banks end up owning the property when nobody at the public auction bid enough to cover the amount owed against the property. REO homes are often considered the best way to buy a distressed property because the seller is already out of the picture. It's just the investor, the investor's agent, the bank and the bank's agent who are negotiating the transaction. Some REOs can be purchased directly from the lender.
For more information, seek the advice of a real estate lawyer.
Monday, July 20, 2009
6 Steps to a Higher Credit Score
Contrary to what you might see in some advertisements, there is no magic way to raise your credit score. That doesn't mean you can't improve your score with good old-fashioned attention and effort. All you need to do is see to it that errors are removed, deal with any disputes with your creditors that are resulting in a reduction in your score and -- for most people -- improve your payment history and lower your debt.
Easier said than done, right? Here I give you the six steps to a higher credit score. Your score won't jump overnight, but you should see steady improvement over time if you follow my advice.
1st: Read Your Credit Report
The first step to a higher credit score is to order your credit report, which is the roadmap used to calculate that score. It's like a snapshot in time of your financial and personal life on a particular day. It should factually reflect your outstanding credit, your payment history, the status of your credit accounts, and any information that can be found in public records.
You can request one by visiting www.annualcreditreport.com or calling one of the three main credit reporting agencies: Equifax, Experian, and TransUnion. You are entitled to one free report a year.
2nd: Deal with Credit Report Agency Errors
When you get your report, first, check your personal information (name, addresses, job history), to make sure your file hasn't been merged with someone else. Then check the accounts listed. You may find one listed more than once or one that is not yours included in the report.
If you discover any mistakes, send a written letter to the credit bureau listing what is wrong with the information on the credit report and how you think it should be corrected. The agency has 30 days to respond to your letter and indicate how it will handle your challenges to the report. If the error was simple, that may be all you need to do to take care of it.
3rd: Disputing Creditors' Claims
Your report may include errors that aren't so easy to fix. For example, some consumers walk away when they are in billing disputes with creditors when they are confident they are in the right. But creditors may report a lack of payment to an agency. Such negatives can result in a "no" decision on an application for future credit, even if the negative mark is not a true reflection of your credit history.
To correct those kinds of inaccuracies, you may need to contact the creditor directly. From the time you first hear back from the credit reporting agency when you report an error, you have 60 days to try to get the creditor to correct the information. During that period if you are not satisfied with the response of the creditor, you can then contact the credit reporting agency again and ask for an additional investigation.
4th: When It's Smart to Just Pay the Bill
If you've been battling it out with a creditor and don't want to pay the bill, you could end up severely damaging your credit score. While credit scoring companies must investigate any credit information you challenge, they tend to agree with the vendor in ongoing disputes and will only take the negative mark off your credit report temporarily while investigating a complaint.
If the amount in question is small enough that you can pay it off without financial distress, you may be better off paying the bill and taking the vendor to small claims court for a refund. Why hurt your credit score over a $30 or $50 dispute?
If the amount in question is much larger and you want to continue fighting, be sure you tell a potential creditor to expect the negative report and explain why you won't pay the bill. In some instances it may help, but don't be surprised if you can't get the best interest rates.
5th: Only Use Some of Your Available Credit
The ideal way to use credit is to use only 10% to 20% of your available credit and pay all your bills on time. That seems to get people the best credit scores. You may think you have to pay down all your credit cards to zero to get a good credit score. That's not true. To show you know how to use credit wisely, it doesn't hurt to occasionally pay a card over time. In fact, if you don't buy on credit and pay everything with cash, you'll likely have a lower credit score because you have no credit history for the credit scoring agencies to use.
Another mistake people make when they want to improve their credit score is to cancel credit cards. That can actually hurt your score since it reduces your available credit. Then your debt utilization ratio (the amount of debt you have as a percentage of your available credit) is higher -- which may lower your credit score.
6th: Pay Monthly Bills Ahead
There really aren't many ways to give your credit score a quick boost if you already have low debt and a stellar payment history. But I can suggest one technique you can try if you want to give your score a lift ahead of applying for a major loan, such as a mortgage.
If you pay your cards in full each month, those payments are made after the report has been sent to the credit reporting agency (right after the end of the billing cycle), so your outstanding debt looks higher than it is. If you're trying to improve your credit score, all you have to do pay your total bill at the end of the month -- before actually being billed. Check your balance due online or call your credit card company. If you do this for a few months, you should see a nice improvement in your credit score.
Easier said than done, right? Here I give you the six steps to a higher credit score. Your score won't jump overnight, but you should see steady improvement over time if you follow my advice.
1st: Read Your Credit Report
The first step to a higher credit score is to order your credit report, which is the roadmap used to calculate that score. It's like a snapshot in time of your financial and personal life on a particular day. It should factually reflect your outstanding credit, your payment history, the status of your credit accounts, and any information that can be found in public records.
You can request one by visiting www.annualcreditreport.com or calling one of the three main credit reporting agencies: Equifax, Experian, and TransUnion. You are entitled to one free report a year.
2nd: Deal with Credit Report Agency Errors
When you get your report, first, check your personal information (name, addresses, job history), to make sure your file hasn't been merged with someone else. Then check the accounts listed. You may find one listed more than once or one that is not yours included in the report.
If you discover any mistakes, send a written letter to the credit bureau listing what is wrong with the information on the credit report and how you think it should be corrected. The agency has 30 days to respond to your letter and indicate how it will handle your challenges to the report. If the error was simple, that may be all you need to do to take care of it.
3rd: Disputing Creditors' Claims
Your report may include errors that aren't so easy to fix. For example, some consumers walk away when they are in billing disputes with creditors when they are confident they are in the right. But creditors may report a lack of payment to an agency. Such negatives can result in a "no" decision on an application for future credit, even if the negative mark is not a true reflection of your credit history.
To correct those kinds of inaccuracies, you may need to contact the creditor directly. From the time you first hear back from the credit reporting agency when you report an error, you have 60 days to try to get the creditor to correct the information. During that period if you are not satisfied with the response of the creditor, you can then contact the credit reporting agency again and ask for an additional investigation.
4th: When It's Smart to Just Pay the Bill
If you've been battling it out with a creditor and don't want to pay the bill, you could end up severely damaging your credit score. While credit scoring companies must investigate any credit information you challenge, they tend to agree with the vendor in ongoing disputes and will only take the negative mark off your credit report temporarily while investigating a complaint.
If the amount in question is small enough that you can pay it off without financial distress, you may be better off paying the bill and taking the vendor to small claims court for a refund. Why hurt your credit score over a $30 or $50 dispute?
If the amount in question is much larger and you want to continue fighting, be sure you tell a potential creditor to expect the negative report and explain why you won't pay the bill. In some instances it may help, but don't be surprised if you can't get the best interest rates.
5th: Only Use Some of Your Available Credit
The ideal way to use credit is to use only 10% to 20% of your available credit and pay all your bills on time. That seems to get people the best credit scores. You may think you have to pay down all your credit cards to zero to get a good credit score. That's not true. To show you know how to use credit wisely, it doesn't hurt to occasionally pay a card over time. In fact, if you don't buy on credit and pay everything with cash, you'll likely have a lower credit score because you have no credit history for the credit scoring agencies to use.
Another mistake people make when they want to improve their credit score is to cancel credit cards. That can actually hurt your score since it reduces your available credit. Then your debt utilization ratio (the amount of debt you have as a percentage of your available credit) is higher -- which may lower your credit score.
6th: Pay Monthly Bills Ahead
There really aren't many ways to give your credit score a quick boost if you already have low debt and a stellar payment history. But I can suggest one technique you can try if you want to give your score a lift ahead of applying for a major loan, such as a mortgage.
If you pay your cards in full each month, those payments are made after the report has been sent to the credit reporting agency (right after the end of the billing cycle), so your outstanding debt looks higher than it is. If you're trying to improve your credit score, all you have to do pay your total bill at the end of the month -- before actually being billed. Check your balance due online or call your credit card company. If you do this for a few months, you should see a nice improvement in your credit score.
8 Ways to Raise Your Credit Score
In an age of slashed credit limits, tighter credit-card restrictions, and anxious lenders, having strong credit is more important than ever. The average credit score is 692, according to credit-scoring agency Experian, but in today's market, those even slightly below average could be in trouble. "With the economy so down, 620 is the minimum for getting a loan, but people really need credit score around 700, preferably 720, to get something with decent rates," says Linda Call, vice president of Berkeley Mortgage in Richmond, Virginia. "It's very scary right now for anyone with a low credit score." Here are eight ways to give your credit score an extra boost.
1. Keep the Balances Balanced
In a tough economic climate, keeping your credit balance under the limit -- but close to the limit -- could hurt your score, says Scott Scredon of the Consumer Credit Counseling Service of Greater Atlanta. "If you carry a balance on your credit card, you need to make sure the difference between your credit limit and your balance is 50 percent or less," he says. "So if your limit is $1,000, you need to keep your balance at $500 or less. Not using all of your credit is a signal to card companies that you're managing your credit properly."
And keeping an even lower balance -- 30 percent or less -- will boost your score even more, Scredon says. Should your balance go over the 50 percent mark on one card, Scredon recommends focusing any available financial resources on cutting the balance down, even if it means sacrificing a few daily luxuries until the credit's in check.
2. Eliminate the Mistakes
One of the fastest ways to lift your score is to make sure it's actually yours. An estimated 8.3 million Americans are victims of identity theft each year, according to a 2005 study by the Federal Trade Commission. Of those victims, 1.8 million have had new credit cards, loans, or financial accounts opened in their name without their knowledge.
An easy way to prevent paying off debts you didn't incur is to keep tabs on your credit score.
3. Diversify Your Credit
"People don't realize that 10 percent of your credit score is determined by what types of credit you use," says Gail Cunningham, marketing director of the National Foundation for Credit Counseling. "That's determined not only by how you manage revolving debt like Visa, MasterCard, and store credit cards, but also how you handle fixed payments, like your car payments or your mortgage payments, over time."
Instead of putting longterm purchases on cards, Cunningham recommends taking out short-term one- to two-year loans, to build a diversified credit portfolio. In addition to receiving lower interest rates and more flexible payment terms, consumers who use loans over cards also build positive credit and gain better credit terms in the future.
4. In With the Old, Out With the New
Another 15 percent of your credit score is determined by how long you've been managing credit. If you can manage your cards wisely, paying on time and keeping balances lower than your limits, you can improve your credit score by getting plastic early. It's up to you to figure out when the time is right.
"It's to your advantage to get a credit card as early as possible and start building credit early," says Call, "but you have to do that when you're ready. People who start building credit in their early 20s will have a significant advantage when it comes time to apply for a home mortgage." Though college students are statistically poor at managing plastic -- the average college student graduates with nearly $2,200 in credit card debt, according to Nellie Mae -- learning the basics of credit at a young age can benefit in the long run.
5. Add Some Positives
Consumers in dire credit straits may be able to boost their scores simply by showing credit scoring services what they're doing right. "If the consumer has positive histories in things like rent and utilities, adding those histories can greatly help the credit score," says Mark Guimond, executive director of the American Association of Debt Management Organizations.
"There are companies designed to get positive information on your credit score and that can have a significant impact," he says. Organizations like PRBC in Annapolis, Maryland, can help consumers add day care, insurance, rent, and cable credit histories to their score, and set up online bill pay services to make sure those debts keep getting paid on time.
6. Flex Your Negotiation Muscle
If you see trouble on the horizon, nip it in the bud. "Making a late payment could affect your interest rate -- not just on the card you're paying late on, but on all your credit cards," says Scredon. "If you know you're going to have trouble making payments, get in touch with your lender and have a discussion about it. We are hearing more and more from our counselors that lenders are willing to look at whether you can put together a different payment plan." Since even one late payment could lower your credit score, preventing disaster before it happens can protect your credit for years to come.
7. Prioritize the Debt
Those who are already in the plastic trap can begin digging out by creating a debt attack plan. Start by making a list of all of your credit debts. Then pick out which is harming you the most.
"If you have a card where you owe more than 30 percent of your credit limit, pay that one down first, to keep your credit score intact," recommends Cunningham. "After that, I tell people to pay off their largest debts first, unless it's just too daunting. If so, tackle your smallest bill first while making minimum payments on everything else, and once you've paid it and have that sense of accomplishment, move on to the next one."
By focusing your financial resources on eliminating one problem debt at a time, Cunningham says consumers can keep long term out-of-control debt from hurting their credit score.
8. Research the Bargains
Credit inquiries prevent consumers from comparing loan rates and terms. While inquiries on your credit report can lower your score -- as much as five points, according to Lendingtree.com -- consumers have a 30-day window before choosing their loan, when all mortgage and auto-loan inquiries only count once.
An easy way to avoid racking up inquiries on your account, says Guimond, is to comparison-shop before filling out an application. "Don't just apply to ten different lenders -- talk to lenders, talk to customer-service people, get as much information as possible," he says. "It pays to do the research."
1. Keep the Balances Balanced
In a tough economic climate, keeping your credit balance under the limit -- but close to the limit -- could hurt your score, says Scott Scredon of the Consumer Credit Counseling Service of Greater Atlanta. "If you carry a balance on your credit card, you need to make sure the difference between your credit limit and your balance is 50 percent or less," he says. "So if your limit is $1,000, you need to keep your balance at $500 or less. Not using all of your credit is a signal to card companies that you're managing your credit properly."
And keeping an even lower balance -- 30 percent or less -- will boost your score even more, Scredon says. Should your balance go over the 50 percent mark on one card, Scredon recommends focusing any available financial resources on cutting the balance down, even if it means sacrificing a few daily luxuries until the credit's in check.
2. Eliminate the Mistakes
One of the fastest ways to lift your score is to make sure it's actually yours. An estimated 8.3 million Americans are victims of identity theft each year, according to a 2005 study by the Federal Trade Commission. Of those victims, 1.8 million have had new credit cards, loans, or financial accounts opened in their name without their knowledge.
An easy way to prevent paying off debts you didn't incur is to keep tabs on your credit score.
3. Diversify Your Credit
"People don't realize that 10 percent of your credit score is determined by what types of credit you use," says Gail Cunningham, marketing director of the National Foundation for Credit Counseling. "That's determined not only by how you manage revolving debt like Visa, MasterCard, and store credit cards, but also how you handle fixed payments, like your car payments or your mortgage payments, over time."
Instead of putting longterm purchases on cards, Cunningham recommends taking out short-term one- to two-year loans, to build a diversified credit portfolio. In addition to receiving lower interest rates and more flexible payment terms, consumers who use loans over cards also build positive credit and gain better credit terms in the future.
4. In With the Old, Out With the New
Another 15 percent of your credit score is determined by how long you've been managing credit. If you can manage your cards wisely, paying on time and keeping balances lower than your limits, you can improve your credit score by getting plastic early. It's up to you to figure out when the time is right.
"It's to your advantage to get a credit card as early as possible and start building credit early," says Call, "but you have to do that when you're ready. People who start building credit in their early 20s will have a significant advantage when it comes time to apply for a home mortgage." Though college students are statistically poor at managing plastic -- the average college student graduates with nearly $2,200 in credit card debt, according to Nellie Mae -- learning the basics of credit at a young age can benefit in the long run.
5. Add Some Positives
Consumers in dire credit straits may be able to boost their scores simply by showing credit scoring services what they're doing right. "If the consumer has positive histories in things like rent and utilities, adding those histories can greatly help the credit score," says Mark Guimond, executive director of the American Association of Debt Management Organizations.
"There are companies designed to get positive information on your credit score and that can have a significant impact," he says. Organizations like PRBC in Annapolis, Maryland, can help consumers add day care, insurance, rent, and cable credit histories to their score, and set up online bill pay services to make sure those debts keep getting paid on time.
6. Flex Your Negotiation Muscle
If you see trouble on the horizon, nip it in the bud. "Making a late payment could affect your interest rate -- not just on the card you're paying late on, but on all your credit cards," says Scredon. "If you know you're going to have trouble making payments, get in touch with your lender and have a discussion about it. We are hearing more and more from our counselors that lenders are willing to look at whether you can put together a different payment plan." Since even one late payment could lower your credit score, preventing disaster before it happens can protect your credit for years to come.
7. Prioritize the Debt
Those who are already in the plastic trap can begin digging out by creating a debt attack plan. Start by making a list of all of your credit debts. Then pick out which is harming you the most.
"If you have a card where you owe more than 30 percent of your credit limit, pay that one down first, to keep your credit score intact," recommends Cunningham. "After that, I tell people to pay off their largest debts first, unless it's just too daunting. If so, tackle your smallest bill first while making minimum payments on everything else, and once you've paid it and have that sense of accomplishment, move on to the next one."
By focusing your financial resources on eliminating one problem debt at a time, Cunningham says consumers can keep long term out-of-control debt from hurting their credit score.
8. Research the Bargains
Credit inquiries prevent consumers from comparing loan rates and terms. While inquiries on your credit report can lower your score -- as much as five points, according to Lendingtree.com -- consumers have a 30-day window before choosing their loan, when all mortgage and auto-loan inquiries only count once.
An easy way to avoid racking up inquiries on your account, says Guimond, is to comparison-shop before filling out an application. "Don't just apply to ten different lenders -- talk to lenders, talk to customer-service people, get as much information as possible," he says. "It pays to do the research."
Wednesday, July 15, 2009
Short Sales and Foreclosures
Not all homes that go into default go all the way through foreclosure. Many sell before the notice of default is finalized. Home buyers and investors are attracted to short sales and foreclosures because they want to buy a home for less than market value. Sometimes sellers in default and buyers who want a short sale or foreclosure can see eye-to-eye and enter into a profitable transaction for both parties.
But it's not for the faint of heart. Distressed home sales are often complicated and sellers have rights when in foreclosure. Both sellers and buyers should seek legal advice before entering into such a contract.
Sellers in Foreclosure
It's all too common for sellers in foreclosure to want to ignore the problem and hope it will go away. Some stick their heads in the sand. But help is available. Sellers in foreclosure have options.
How to Stop Foreclosure can help sellers keep a home through reinstatement, forbearance, mortgage modifications or repayment plans.
Short Sales for Sellers clarifies how to transfer title to a buyer before the redemption period ends by persuading the lender to accept less than the unpaid mortgage balance. Not all lenders will accept a short sale, however. This covers what lenders want from sellers. Negotiation is key.
Foreclosure and Short Sale Taxes discusses how the I.R.S. will treat a foreclosure or short sale for tax purposes. It's called debt forgiveness, and until tax rules change, sellers could owe the government taxes even though sellers lost money on the sale.
Buying Foreclosures & Short Sale Homes
Not all foreclosures and short sales are profitable. To pull a home out of foreclosure, buyers need to make up back payments to the lender, pay all imposed fees and either pay off the loan or make arrangements to sell the property. Few lenders will let a buyer assume an existing obligation.
Buying Distressed Homes involves three ways to purchase: from the seller in foreclosure, negotiating a short sale or buying from the lender after a public auction. Read this carefully as investors in California cannot be represented by a real estate agent.
Buying Short Sales details why the process is complicated and can take much longer to close than an ordinary transaction. Not all short sales are profitable, and this article explains why.
Buying Foreclosures before the home goes to a public auction involves negotiating directly with the seller. Buyers also have the option of bidding on a foreclosure at the public auction, but read the procedures first.
Drawbacks to Foreclosures talks about the repercussions and inherent problems that are often present when buying a foreclosure. Buyers who bid at public auctions will benefit from getting as much information as possible beforehand.
Defaults Hit Home Values. Nearby homes will feel the effect, which could pull the market value of a newly purchased short sale or foreclosure even lower. This article goes into detail about how appraisers determine the value in neighborhoods with distressed home sales.
Fixing Up Foreclosures & Short Sale Homes
One way to make money in real estate is to "buy low and sell high." Couple that principle with fixing up the home or improving it, and the amount of profit can be even greater. Besides, many distressed homes fall into disarray and require repairs.
Repairs Before Resale can boost bottom-line profit. But not all repairs or improvements return 100% of an investment. Read why.
Top Do It Yourself Mistakes. This article covers 10 common errors home owners make when trying to flip a house. Don't think about buying a foreclosure until you read this.
Fix-Up and Sell is a five-part series with links at the end of each article to the next. It's a first-hand description involving simple to complex remodeling projects that were completed on five flipper homes.
But it's not for the faint of heart. Distressed home sales are often complicated and sellers have rights when in foreclosure. Both sellers and buyers should seek legal advice before entering into such a contract.
Sellers in Foreclosure
It's all too common for sellers in foreclosure to want to ignore the problem and hope it will go away. Some stick their heads in the sand. But help is available. Sellers in foreclosure have options.
How to Stop Foreclosure can help sellers keep a home through reinstatement, forbearance, mortgage modifications or repayment plans.
Short Sales for Sellers clarifies how to transfer title to a buyer before the redemption period ends by persuading the lender to accept less than the unpaid mortgage balance. Not all lenders will accept a short sale, however. This covers what lenders want from sellers. Negotiation is key.
Foreclosure and Short Sale Taxes discusses how the I.R.S. will treat a foreclosure or short sale for tax purposes. It's called debt forgiveness, and until tax rules change, sellers could owe the government taxes even though sellers lost money on the sale.
Buying Foreclosures & Short Sale Homes
Not all foreclosures and short sales are profitable. To pull a home out of foreclosure, buyers need to make up back payments to the lender, pay all imposed fees and either pay off the loan or make arrangements to sell the property. Few lenders will let a buyer assume an existing obligation.
Buying Distressed Homes involves three ways to purchase: from the seller in foreclosure, negotiating a short sale or buying from the lender after a public auction. Read this carefully as investors in California cannot be represented by a real estate agent.
Buying Short Sales details why the process is complicated and can take much longer to close than an ordinary transaction. Not all short sales are profitable, and this article explains why.
Buying Foreclosures before the home goes to a public auction involves negotiating directly with the seller. Buyers also have the option of bidding on a foreclosure at the public auction, but read the procedures first.
Drawbacks to Foreclosures talks about the repercussions and inherent problems that are often present when buying a foreclosure. Buyers who bid at public auctions will benefit from getting as much information as possible beforehand.
Defaults Hit Home Values. Nearby homes will feel the effect, which could pull the market value of a newly purchased short sale or foreclosure even lower. This article goes into detail about how appraisers determine the value in neighborhoods with distressed home sales.
Fixing Up Foreclosures & Short Sale Homes
One way to make money in real estate is to "buy low and sell high." Couple that principle with fixing up the home or improving it, and the amount of profit can be even greater. Besides, many distressed homes fall into disarray and require repairs.
Repairs Before Resale can boost bottom-line profit. But not all repairs or improvements return 100% of an investment. Read why.
Top Do It Yourself Mistakes. This article covers 10 common errors home owners make when trying to flip a house. Don't think about buying a foreclosure until you read this.
Fix-Up and Sell is a five-part series with links at the end of each article to the next. It's a first-hand description involving simple to complex remodeling projects that were completed on five flipper homes.
Tuesday, July 14, 2009
Why do I need a Realtor?
What are the advantages of using a REALTOR today?
Having a good real estate transaction or experience really depends on your agent
Finding the right agent is the basis for a great real estate transaction. And success comes from the consumer's perspective, no one else's. Make sure that you feel comfortable and can communicate easily with your agent, and that they have the knowledge you need to help make a good decision. Carefully choosing a Realtor will definitely give you an advantage in the home buying or selling process!
QUICK TIP #1: Look for the agent who has the LOCAL ADVANTAGE
When you are choosing a Realtor to help you buy or sell real estate, look for one who is an expert in the community where you are selling or interested in buying. Here are a few ways to determine how "local" your agent is:
- A community resident (preferred)
- Has community memberships in clubs, boards, chambers, associations, PTA, etc.
- Ask to see their "PR" or press related announcements about their local activities
- Ask how long they have been in the area and where their office is located
- Do you see their "FOR SALE" sign in the area?
QUICK TIP #2: Look for the agent who has the TECHNICAL ADVANTAGE
One of the key assets you want in a Realtor is one who has knowledge of their industry and of the local market. You want them to understand the technical side of the real estate transaction so they can help you navigate through the process, eliminating errors and getting you to the closing table successfully and on time.
- Look for experience. How many years in the business?
- What is their background?
- Check to see what real estate "designations" they have. There are many education hours required for an agent to receive one single designation such as CRS (Certified Residential Specialist) or REALTOR® (Graduate of the Realtor Institute). This indicates specialized training in a certain area.
- When you identify the agent's areas of expertise, make sure this compliments your particular needs.
QUICK TIP #3: Look for the agent who has the MARKETING ADVANTAGE
One of the greatest advantages in working with a real estate professional is the marketing opportunities they bring to the table. For the buyer, they are more knowledgeable on homes from marketing through their vast referral network. And for the seller, a Realtor's "marketing toolbox" and referral network has the potential to expose your property to thousands more interested buyer prospects.
- Check out their website, is it up to date with community and property information?
- Are they Internet savvy? Connected?
- Do they participate in social networking, and do they have pages on Facebook and other sites they are using to market their listings and provide pertinent real estate information to the online community?
- Ask for an example of their marketing plan for your property or a listing of their referral networks where they can match your real estate needs up to sellers.
- When and how will they deploy their marketing plan? How will it benefit your objectives?
These tips get you thinking about what qualifications you want in a real estate professional. The bottom line is that you want to find an agent who possesses most, if not all, of these qualities while having a comfortable working relationship with you. You are choosing someone you will be spending many hours with and hopefully will build a solid, long-term relationship over time. Selecting the right real estate agent will make a world of difference in the outcome of your real estate transaction.
To find a real estate professional who can help you get started on your next real estate transaction, visit http://www.C21JRS.com today! Call 800-831-0681, or email c21jrs72@aol.com
Having a good real estate transaction or experience really depends on your agent
Finding the right agent is the basis for a great real estate transaction. And success comes from the consumer's perspective, no one else's. Make sure that you feel comfortable and can communicate easily with your agent, and that they have the knowledge you need to help make a good decision. Carefully choosing a Realtor will definitely give you an advantage in the home buying or selling process!
QUICK TIP #1: Look for the agent who has the LOCAL ADVANTAGE
When you are choosing a Realtor to help you buy or sell real estate, look for one who is an expert in the community where you are selling or interested in buying. Here are a few ways to determine how "local" your agent is:
- A community resident (preferred)
- Has community memberships in clubs, boards, chambers, associations, PTA, etc.
- Ask to see their "PR" or press related announcements about their local activities
- Ask how long they have been in the area and where their office is located
- Do you see their "FOR SALE" sign in the area?
QUICK TIP #2: Look for the agent who has the TECHNICAL ADVANTAGE
One of the key assets you want in a Realtor is one who has knowledge of their industry and of the local market. You want them to understand the technical side of the real estate transaction so they can help you navigate through the process, eliminating errors and getting you to the closing table successfully and on time.
- Look for experience. How many years in the business?
- What is their background?
- Check to see what real estate "designations" they have. There are many education hours required for an agent to receive one single designation such as CRS (Certified Residential Specialist) or REALTOR® (Graduate of the Realtor Institute). This indicates specialized training in a certain area.
- When you identify the agent's areas of expertise, make sure this compliments your particular needs.
QUICK TIP #3: Look for the agent who has the MARKETING ADVANTAGE
One of the greatest advantages in working with a real estate professional is the marketing opportunities they bring to the table. For the buyer, they are more knowledgeable on homes from marketing through their vast referral network. And for the seller, a Realtor's "marketing toolbox" and referral network has the potential to expose your property to thousands more interested buyer prospects.
- Check out their website, is it up to date with community and property information?
- Are they Internet savvy? Connected?
- Do they participate in social networking, and do they have pages on Facebook and other sites they are using to market their listings and provide pertinent real estate information to the online community?
- Ask for an example of their marketing plan for your property or a listing of their referral networks where they can match your real estate needs up to sellers.
- When and how will they deploy their marketing plan? How will it benefit your objectives?
These tips get you thinking about what qualifications you want in a real estate professional. The bottom line is that you want to find an agent who possesses most, if not all, of these qualities while having a comfortable working relationship with you. You are choosing someone you will be spending many hours with and hopefully will build a solid, long-term relationship over time. Selecting the right real estate agent will make a world of difference in the outcome of your real estate transaction.
To find a real estate professional who can help you get started on your next real estate transaction, visit http://www.C21JRS.com today! Call 800-831-0681, or email c21jrs72@aol.com
Congrats to Warren, NJ #6 in US
6. Warren, NJ
WINNERTop 100 rank: 6
Population: 16,100
Unemployment: 6.9%
Compare Warren to Top 10 Best Places
Children, commuters, cul-de-sacs--sure, Warren has those. But it isn't the typical big-city suburb. Here, fields aren't used just to kick soccer balls but also to raise cows and crops, thanks to 72 working farms. You'll see few sidewalks and streetlights; residents say they'd spoil the semi-rural atmosphere.
Many residents work in New York City, but there are plenty of jobs closer to home. Insurer Chubb has its headquarters in town. Embattled Citigroup has a large office in Warren, and a spokesperson says no layoffs are planned there.
Residents rave about the local schools and the family-friendly township recreation offerings, including a fishing derby for kids each May, a carnival in June, and a classic-car show in September. And when the charms of Warren wear thin, either the beach (the Jersey shore), the slopes (the Poconos), or high culture (Manhattan) is just an hour away. Become a Facebook fan of Warren
WINNERTop 100 rank: 6
Population: 16,100
Unemployment: 6.9%
Compare Warren to Top 10 Best Places
Children, commuters, cul-de-sacs--sure, Warren has those. But it isn't the typical big-city suburb. Here, fields aren't used just to kick soccer balls but also to raise cows and crops, thanks to 72 working farms. You'll see few sidewalks and streetlights; residents say they'd spoil the semi-rural atmosphere.
Many residents work in New York City, but there are plenty of jobs closer to home. Insurer Chubb has its headquarters in town. Embattled Citigroup has a large office in Warren, and a spokesperson says no layoffs are planned there.
Residents rave about the local schools and the family-friendly township recreation offerings, including a fishing derby for kids each May, a carnival in June, and a classic-car show in September. And when the charms of Warren wear thin, either the beach (the Jersey shore), the slopes (the Poconos), or high culture (Manhattan) is just an hour away. Become a Facebook fan of Warren
Monday, July 13, 2009
7 Way to find the best Realtor for me
Finding a good real estate agent / broker is essential to enjoying a painless real estate transaction. The saying is "20% of the agents do 80% of the business," and it is true. The question is how can you find a good real estate agent? The best agent for you doesn't necessarily work at the largest brokerage, close the most transactions or make the most money. The best agent for you is an experienced professional who will listen to you, conduct herself in an ethical manner and knows your market.
1. REALTORS® and Real Estate Agents
All Realtors® are licensed to sell real estate as an agent or a broker but not all real estate agents are Realtors®. Only Realtors® can display the Realtor® logo. Realtors® belong to the National Association of Realtors and pledge to follow the Code of Ethics, a comprehensive list containing 17 articles and underlying standards of practice, which establish levels of conduct that are higher than ordinary business practices or those required by law. Less than half of all licensees are Realtors®.
2. Referrals
Most real estate agents stay in business because satisfied clients refer them to friends, family, neighbors and coworkers. Ask the people around you who they have used and ask them to describe their experiences with this real estate agent. Successful agents make customer satisfaction their number one priority and put their customers' needs before their own. Try to find an agent who goes above and beyond her responsibilities. She'll be the agent whose praises your friends sing loudest.
3. Search Online for Agent Listings
There are plenty of Web sites that will refer agents to you but that is no assurance of quality. The agents they refer are those who have paid the Web site owners a fee to be listed in their directory. A better bet is to Google the top real estate companies in your area, go to those Web sites and look up profiles of individual agents at offices near you. Agents who are experienced will tell you but newer agents might have more time to spend with you. Look for customer testimonials.
4. Attend Open Houses
By going to open houses, you can meet real estate agents in a non-threatening working environment and interact with them. Collect business cards and make notes on them. If you're thinking about selling your home, pay attention to how the agent is showing the home. Is she polite and informative; appear knowledgeable? Does she hand out professional-looking promotional material about the home? Is she trying to sell features of the home? Or is she sitting in a corner reading a book, ignoring you?
5. Track Neighborhood Signs
Pay attention to the listing signs in your neighborhood. Make note of the day they go up and when the sold sign appears. The agent who sells listings the fastest might be better for you than the agent with the largest number of "for sale" signs. Results speak volumes.
6. Using Print Advertising
Real estate agents run real estate ads for two purposes. The first is to sell specific real estate. The second is to promote the real estate agent. Look in your local Sunday newspaper for ads in your targeted neighborhood. Then look up the Web sites of the agents who are advertising. These agents could be specialists in your neighborhood. Call and ask them about their experience.
7. Recommendations from Professionals
Ask other real estate agents for referrals. Agents are happy to refer buyers and sellers to associates, especially if the service you need is not a specialty of the agent who is referring you. Some agents specialize in residential resales while others work exclusively with new home builders. Other agents sell only commercial or investment property. Mortgage brokers are also a resource for agent referrals as many brokers have first-hand knowledge of exceptional agents. Pros tend to refer pros.
1. REALTORS® and Real Estate Agents
All Realtors® are licensed to sell real estate as an agent or a broker but not all real estate agents are Realtors®. Only Realtors® can display the Realtor® logo. Realtors® belong to the National Association of Realtors and pledge to follow the Code of Ethics, a comprehensive list containing 17 articles and underlying standards of practice, which establish levels of conduct that are higher than ordinary business practices or those required by law. Less than half of all licensees are Realtors®.
2. Referrals
Most real estate agents stay in business because satisfied clients refer them to friends, family, neighbors and coworkers. Ask the people around you who they have used and ask them to describe their experiences with this real estate agent. Successful agents make customer satisfaction their number one priority and put their customers' needs before their own. Try to find an agent who goes above and beyond her responsibilities. She'll be the agent whose praises your friends sing loudest.
3. Search Online for Agent Listings
There are plenty of Web sites that will refer agents to you but that is no assurance of quality. The agents they refer are those who have paid the Web site owners a fee to be listed in their directory. A better bet is to Google the top real estate companies in your area, go to those Web sites and look up profiles of individual agents at offices near you. Agents who are experienced will tell you but newer agents might have more time to spend with you. Look for customer testimonials.
4. Attend Open Houses
By going to open houses, you can meet real estate agents in a non-threatening working environment and interact with them. Collect business cards and make notes on them. If you're thinking about selling your home, pay attention to how the agent is showing the home. Is she polite and informative; appear knowledgeable? Does she hand out professional-looking promotional material about the home? Is she trying to sell features of the home? Or is she sitting in a corner reading a book, ignoring you?
5. Track Neighborhood Signs
Pay attention to the listing signs in your neighborhood. Make note of the day they go up and when the sold sign appears. The agent who sells listings the fastest might be better for you than the agent with the largest number of "for sale" signs. Results speak volumes.
6. Using Print Advertising
Real estate agents run real estate ads for two purposes. The first is to sell specific real estate. The second is to promote the real estate agent. Look in your local Sunday newspaper for ads in your targeted neighborhood. Then look up the Web sites of the agents who are advertising. These agents could be specialists in your neighborhood. Call and ask them about their experience.
7. Recommendations from Professionals
Ask other real estate agents for referrals. Agents are happy to refer buyers and sellers to associates, especially if the service you need is not a specialty of the agent who is referring you. Some agents specialize in residential resales while others work exclusively with new home builders. Other agents sell only commercial or investment property. Mortgage brokers are also a resource for agent referrals as many brokers have first-hand knowledge of exceptional agents. Pros tend to refer pros.
Sunday, July 12, 2009
5 Mistakes for First-Time Buyers to Avoid
Re-blogged by 0 agents
5 Mistakes for First Time Buyers to Avoid (edit/delete)
5 first-time buyer mistakes to avoid
Experienced homeowners share their secrets so you won't make a rookie mistake
If you're a first-time home buyer in this market, how could you go wrong? Nationally, sales prices of existing single-family homes are down nearly 24 percent since their July 2006 peak. Interest rates, recently 4.9 percent for a 30-year fixed-rate mortgage, are hovering near historic lows.
And if that isn't incentive enough, Uncle Sam is offering first-time buyers an $8,000 tax credit to further sweeten the deal.
But as any homeowner will tell you, the decision to buy a home is only half the battle. The real challenge is in the details of what, where and how much. Here are five first-time home buyer mistakes you don't want to make.
First Time Buyer Guide 2009
This is an exciting year for first time buyers, with a once in a lifetime opportunity to get the home of your dream.
1. Don't think that "long term" is a couple of years.
Buying a home, especially now, requires long-term planning, not just with finances, but with your career and your personal life. "The old rule was to plan on owning the house for three to four years," says Ben Hoefer, an agent with John L. Scott in Seattle. "I'm recommending that people think in terms of five to seven years."
If you don't know where you'll be a year from now, let alone seven years from now, you might want to rethink your plans to buy. A house isn't a bargain if you can't recoup your investment. The more time you can spend in the home -- comfortably -- the better the deal.
For many first-time home buyers, that means finding a house that suits their needs and their budget now but also offers room to grow -- or the option to rent. Location is another sticking point. "A lot of people will go for the better house farther out and realize, after it's too late, it's not the location they want," says Hoefer. Would the commute be manageable if you change jobs? What about school quality? These factors influence not only your sanity but also home values.
2. Don't settle for something with more wrongs than rights.
Before you get lured into an open house, spend some time figuring out how much home you can afford and browse online listings to familiarize yourself with the market. "Most first-time buyers are going to be hard pressed to get everything they want, even now," says David Krieger, general manager of Coldwell Banker Preferred in Philadelphia. But if you prioritize your needs and wants and give yourself time to look around, you have a better shot.
That tactic worked well for Litsy Witkowski, who bought her first home last summer. "I didn't necessarily want to find a place very quickly," says Witkowski, 27, who spent more than six months looking around New Haven, Conn. During that time she saw dozens of houses and condominiums and "quickly learned what neighborhoods and styles I liked and didn't like," she says. Her home, a three-bedroom colonial with two and a half bathrooms, a finished attic and basement, and a four-season porch, was listed for $299,000; Witkowski managed to negotiate the price down to $285,000. "Taking my time was definitely the right call," says Witkowski, who shares her home with three housemates. "I think there is something to be said for walking into a place and knowing that you either love it or you don't."
3. Don't make finding an agent an afterthought.
With so much information at your fingertips, it might seem old fashioned to enlist the help of a real estate agent. But, a good buyer's agent brings a lot more to the table than listings; he can walk you through everything from the loan preapproval to the home inspection and, most importantly, is obligated to put your interests first.
In hindsight, this is one thing first-time home buyer Kelcey Nichols, 34, would have done differently when she started house hunting in Santa Fe, N.M., a couple of years ago. Although she's very happy with her three-bedroom adobe-style home, she wasn't always on the same page as her agent. "We had different negotiation styles," she says. If she were buying again she would interview several agents before starting the search. "I think working with someone who really knows what you want could save you a lot of time and money," she says.
Yet, most buyers don't spend enough time looking for an agent who will represent their interests in the transaction, says Krieger. Instead, they find the home and call the listing agent, not realizing that that agent represents the seller. It's better to find your own advocate from day one. What's it going to cost you? Technically, nothing. Sellers' and buyers' agents split commissions paid by the seller. Although you could go it alone and ask the seller's agent to cut her commission and pass that savings on to you, as a first-time buyer it's likely you would do better working with a pro and looking for savings elsewhere.
4. Don't assume that every home is in foreclosure.
No doubt there are deals to be had. But just because national headlines show double-digit drops in home prices and a record level of foreclosures doesn't mean that's the case for every home in every market. Nationally, fewer than 1 percent of all housing units on the market are in foreclosure, according to first-quarter data from RealtyTrac. While you don't want to rule out foreclosed property, you don't want to limit your search to the bargain bin.
Krieger notes that the average Philadelphia seller is receiving about 97 percent of asking price. This figure will vary from month to month and even from neighborhood to neighborhood, so do your homework before putting in an offer. Now that home prices have fallen so much, many of the best deals are starting to fetch multiple offers.
5. Don't forget about all the other costs of owning a home.
After searching Salt Lake City for six months, Julia Lyon, 35, knew she'd found a winner when she walked through the front door of a circa-1901 Victorian in the Liberty Park neighborhood. The house needed a little work. But at $260,500 the price seemed fair, especially by 2006 standards.
Still, the home has gobbled up more time and money than she'd ever anticipated. "As my brother recently told me, I didn't buy a house -- I bought a project," says Lyon, who's spent about $15,000 on everything from gutting the first-floor bathroom to fencing in the backyard. "I don't want to keep ignoring problems that should have been dealt with 10 years ago," says Lyon, who got married in 2008. "But I worry that we're putting more money into some of the fixes than we may get back."
Most first-time home buyers find themselves in a similar situation: They focus so much on the sticker price that they fail to account for the other costs that come with owning a home. Some of these costs aren't optional -- closing costs, maintenance and utilities. Others -- new furniture and gardening tools, to name a few -- can add thousands of dollars to the price tag if you're not careful.
At the same time Lyon is conscious of "over improving" her home, she has no regrets about buying it. "I love my house as much today as I did the first time I saw it," she says. Unfortunately, many buyers from the boom can't say the same. "Some of the saddest homeowner stories I've heard are from people who bought too quickly -- without really understanding what was out there."
5 Mistakes for First Time Buyers to Avoid (edit/delete)
5 first-time buyer mistakes to avoid
Experienced homeowners share their secrets so you won't make a rookie mistake
If you're a first-time home buyer in this market, how could you go wrong? Nationally, sales prices of existing single-family homes are down nearly 24 percent since their July 2006 peak. Interest rates, recently 4.9 percent for a 30-year fixed-rate mortgage, are hovering near historic lows.
And if that isn't incentive enough, Uncle Sam is offering first-time buyers an $8,000 tax credit to further sweeten the deal.
But as any homeowner will tell you, the decision to buy a home is only half the battle. The real challenge is in the details of what, where and how much. Here are five first-time home buyer mistakes you don't want to make.
First Time Buyer Guide 2009
This is an exciting year for first time buyers, with a once in a lifetime opportunity to get the home of your dream.
1. Don't think that "long term" is a couple of years.
Buying a home, especially now, requires long-term planning, not just with finances, but with your career and your personal life. "The old rule was to plan on owning the house for three to four years," says Ben Hoefer, an agent with John L. Scott in Seattle. "I'm recommending that people think in terms of five to seven years."
If you don't know where you'll be a year from now, let alone seven years from now, you might want to rethink your plans to buy. A house isn't a bargain if you can't recoup your investment. The more time you can spend in the home -- comfortably -- the better the deal.
For many first-time home buyers, that means finding a house that suits their needs and their budget now but also offers room to grow -- or the option to rent. Location is another sticking point. "A lot of people will go for the better house farther out and realize, after it's too late, it's not the location they want," says Hoefer. Would the commute be manageable if you change jobs? What about school quality? These factors influence not only your sanity but also home values.
2. Don't settle for something with more wrongs than rights.
Before you get lured into an open house, spend some time figuring out how much home you can afford and browse online listings to familiarize yourself with the market. "Most first-time buyers are going to be hard pressed to get everything they want, even now," says David Krieger, general manager of Coldwell Banker Preferred in Philadelphia. But if you prioritize your needs and wants and give yourself time to look around, you have a better shot.
That tactic worked well for Litsy Witkowski, who bought her first home last summer. "I didn't necessarily want to find a place very quickly," says Witkowski, 27, who spent more than six months looking around New Haven, Conn. During that time she saw dozens of houses and condominiums and "quickly learned what neighborhoods and styles I liked and didn't like," she says. Her home, a three-bedroom colonial with two and a half bathrooms, a finished attic and basement, and a four-season porch, was listed for $299,000; Witkowski managed to negotiate the price down to $285,000. "Taking my time was definitely the right call," says Witkowski, who shares her home with three housemates. "I think there is something to be said for walking into a place and knowing that you either love it or you don't."
3. Don't make finding an agent an afterthought.
With so much information at your fingertips, it might seem old fashioned to enlist the help of a real estate agent. But, a good buyer's agent brings a lot more to the table than listings; he can walk you through everything from the loan preapproval to the home inspection and, most importantly, is obligated to put your interests first.
In hindsight, this is one thing first-time home buyer Kelcey Nichols, 34, would have done differently when she started house hunting in Santa Fe, N.M., a couple of years ago. Although she's very happy with her three-bedroom adobe-style home, she wasn't always on the same page as her agent. "We had different negotiation styles," she says. If she were buying again she would interview several agents before starting the search. "I think working with someone who really knows what you want could save you a lot of time and money," she says.
Yet, most buyers don't spend enough time looking for an agent who will represent their interests in the transaction, says Krieger. Instead, they find the home and call the listing agent, not realizing that that agent represents the seller. It's better to find your own advocate from day one. What's it going to cost you? Technically, nothing. Sellers' and buyers' agents split commissions paid by the seller. Although you could go it alone and ask the seller's agent to cut her commission and pass that savings on to you, as a first-time buyer it's likely you would do better working with a pro and looking for savings elsewhere.
4. Don't assume that every home is in foreclosure.
No doubt there are deals to be had. But just because national headlines show double-digit drops in home prices and a record level of foreclosures doesn't mean that's the case for every home in every market. Nationally, fewer than 1 percent of all housing units on the market are in foreclosure, according to first-quarter data from RealtyTrac. While you don't want to rule out foreclosed property, you don't want to limit your search to the bargain bin.
Krieger notes that the average Philadelphia seller is receiving about 97 percent of asking price. This figure will vary from month to month and even from neighborhood to neighborhood, so do your homework before putting in an offer. Now that home prices have fallen so much, many of the best deals are starting to fetch multiple offers.
5. Don't forget about all the other costs of owning a home.
After searching Salt Lake City for six months, Julia Lyon, 35, knew she'd found a winner when she walked through the front door of a circa-1901 Victorian in the Liberty Park neighborhood. The house needed a little work. But at $260,500 the price seemed fair, especially by 2006 standards.
Still, the home has gobbled up more time and money than she'd ever anticipated. "As my brother recently told me, I didn't buy a house -- I bought a project," says Lyon, who's spent about $15,000 on everything from gutting the first-floor bathroom to fencing in the backyard. "I don't want to keep ignoring problems that should have been dealt with 10 years ago," says Lyon, who got married in 2008. "But I worry that we're putting more money into some of the fixes than we may get back."
Most first-time home buyers find themselves in a similar situation: They focus so much on the sticker price that they fail to account for the other costs that come with owning a home. Some of these costs aren't optional -- closing costs, maintenance and utilities. Others -- new furniture and gardening tools, to name a few -- can add thousands of dollars to the price tag if you're not careful.
At the same time Lyon is conscious of "over improving" her home, she has no regrets about buying it. "I love my house as much today as I did the first time I saw it," she says. Unfortunately, many buyers from the boom can't say the same. "Some of the saddest homeowner stories I've heard are from people who bought too quickly -- without really understanding what was out there."
Monday, July 6, 2009
Avoid Mortgage Fraud
Avoid Mortgage Fraud (edit/delete)
Mortgage fraud has many guises
by Lisa Fleisher/The Star-Ledger Sunday July 05, 2009, 10:15 AM
As the economy changes, so do the ways people try to make a quick -- and sometimes criminal -- buck.
In response, state and federal agencies are ramping up efforts to track down and prosecute people who committed fraud that hurt major financial institutions and everyday homeowners.
There's no single crime known as "mortgage fraud." Instead, people are charged with crimes such as mail fraud or identity theft. The height of the fraud activity might have taken place two or three years ago, but the prosecution is just ramping up.
The FBI created a national mortgage team in December and more than doubled the agents devoted to this type of crime.
Here's a primer to the types of mortgage fraud that are out there, how to get help and what it all means to you.
GLOSSARY
mortgage: Loan used to buy a home.
mortgage-backed security: Financial instrument that allows investors to buy shares in a fund that combines many mortgages into one pool.
straw buyer: Person named on mortgage documents but who is not really the intended homebuyer; often used when the actual buyer does not have good enough credit or high enough income.
equity: Money built up in the house by paying into the mortgage. For example, a person who made $100,000 in mortgage payments on a $300,000 loan has $100,000 in equity in the house.
shell company: Company set up for a single purpose. In our context, fraud.
WHY I SHOULD CARE
Mortgage fraud deflates property values across the board, destabilizes banks and
can ultimately put greater stress on our social safety nets by leaving victims destitute. Fraud often results in foreclosure, which pushes down neighboring home prices, can chip away at the town's tax base and strains municipal resources.
TYPES OF MORTGAGE FRAUD
INCOME AND EMPLOYMENT FRAUD
Method: Perhaps the most prevalent, either homeowners lie about their income or loan brokers coerce or flat-out falsify documents to get a loan approved.
Result: Homeowners end up with loans they can't afford.
REVERSE MORTGAGE FRAUD
Method: Elderly people who might have lost retirement funds sometimes turn to a reverse mortgage, which allows them to take a new mortgage out on a house they've already paid off. While this is sometimes a helpful tool, industry watchers and government officials warn about people charging sky-high fees.
Result: Elderly people are either cheated by high fees or, in worst-case scenarios, lose their house because they signed documents they did not understand.
PHANTOM HELP
Method: A type of foreclosure rescue scam in which a fraudster collects an upfront fee from homeowners trying to save their homes from foreclosure -- and then disappears.
Result: Criminals do nothing and pocket the fee.
MORTGAGE-RELATED IDENTITY THEFT
Method: Perpetrators use stolen identities to buy properties outright or take out mortgages.
Result: Victims find out they are on the hook for mortgages and loans.
SHORT SALE FRAUD
Method: A buyer colludes with real estate agents or others to give faulty appraisals to banks and convinces them a property is worth less than it is.
Result: Banks are defrauded and surrounding property values can drop.
BAIT AND BUMP
Method: Lenders or brokers dangle attractive loans in front of desperate homeowners. But when it comes time to close, buyers are told it's too late to switch.
Result: New homeowners are left with mortgages they can't pay or end up signing away their homes.
EQUITY STRIPPING OR SKIMMING
Method: There are several definitions for this, one of which is synonymous with lease buy-back (see below). Another iteration is when a fraudster convinces people to invest in or buy properties, using their credit to get loans for inflated property values, but walks away.
Result: Investor or group of investors is left with properties, which often have been neglected and have gone into foreclosure.
LEASE BUY-BACK
Method: Homeowners facing foreclosure sign over the deed to a company or individual who promises to sell it back after a year, during which the homeowners can get their finances in order. In the meantime, they are told they will be allowed to rent the house.
Result: The scammer evicts the original homeowner-turned-renter and keeps or sells the property.
HOW DO I AVOID BECOMING A VICTIM?
• Be skeptical of people who make unsolicited contact.
• Don't hesitate to ask as many questions as you need until you understand what you are signing.
• Don't sign blank forms.
• Check to make sure your name is correct on documents and matches your identification.
&bull Check mortgage agent, real estate agent and lawyer's certifications through state agencies.
• Review the value of the home by comparing it with others nearby, and go over the sales history of the home to see whether the value has been inflated through multiple sales.
• Remember, if it's too good to be true, it probably is.
Q&A
Q: Are frauds like these new?
A: No, many of these methods have been around for decades.
Q: Why are we just hearing about them now?
A: A few reasons are often cited: The falling economy strips away the financial cover some of these perpetrators may have had, leaving more people with mounting losses; companies are reporting fraud more frequently; state and federal agencies are stepping up enforcement.
Q: Are the victims always innocent?
A: No, sometimes -- but not always or often -- victims can be partial participants. They get a cash payment and do not ask questions or agree to falsify information. The key, however, is that the licensed professional who ought to know better is helping them along.
Q: Does a prosecution prevent a company from doing business?
A: Not necessarily. Unless there is an injunction, the companies might be able to solicit customers and operate websites until proven guilty or until their licenses are stripped away.
Q: What is being done?
A: A half-dozen federal agencies are investigating these frauds -- including the FBI, the Secret Service, the Department of Housing and Urban Development and the IRS. So are states' attorneys general. The number of FBI special agents assigned to mortgage fraud increased to 250 in February, from 120 in 2007, and Congress is considering adding $35 million to the FBI's budget for this type of fraud detection.
New Jersey Attorney General Anne Milgram said her office is using civil cases to go after suspected criminals, because civil cases can be brought more quickly, but might follow up with criminal charges. Also, she said she told the Division of Consumer Affairs to look into TV and radio commercials making debt relief or foreclosure relief claims.
Q: Why aren't banks doing more?
A: Some say the banks do not want to investigate their own loans for fear it will taint them or open them up to lawsuits because their loans have been packaged into mortgage-backed securities made with certain promises against fraud.
Q: Why aren't more of these cases being prosecuted?
A: Criminals can be difficult to pin down, since many businesses have gone bankrupt or perpetrators have skipped the state.
WHERE SHOULD I GO FOR HELP?
Contact the New Jersey Division of Consumer Affairs at (800) 242-5846 for in-state callers and (973) 504-6200 from out of state; or visit njconsumeraffairs.gov.
If you are facing foreclosure, visit a U.S. Department of Housing and Urban Development-approved counselor. For a list, visit the real estate blog at nj.com, call (888) 989-5277 or go to NJForeclosureMediation.org.
Sources: N.J. Attorney General's Office; FBI; Mortgage Asset Research Institute; Interthinx
Mortgage fraud has many guises
by Lisa Fleisher/The Star-Ledger Sunday July 05, 2009, 10:15 AM
As the economy changes, so do the ways people try to make a quick -- and sometimes criminal -- buck.
In response, state and federal agencies are ramping up efforts to track down and prosecute people who committed fraud that hurt major financial institutions and everyday homeowners.
There's no single crime known as "mortgage fraud." Instead, people are charged with crimes such as mail fraud or identity theft. The height of the fraud activity might have taken place two or three years ago, but the prosecution is just ramping up.
The FBI created a national mortgage team in December and more than doubled the agents devoted to this type of crime.
Here's a primer to the types of mortgage fraud that are out there, how to get help and what it all means to you.
GLOSSARY
mortgage: Loan used to buy a home.
mortgage-backed security: Financial instrument that allows investors to buy shares in a fund that combines many mortgages into one pool.
straw buyer: Person named on mortgage documents but who is not really the intended homebuyer; often used when the actual buyer does not have good enough credit or high enough income.
equity: Money built up in the house by paying into the mortgage. For example, a person who made $100,000 in mortgage payments on a $300,000 loan has $100,000 in equity in the house.
shell company: Company set up for a single purpose. In our context, fraud.
WHY I SHOULD CARE
Mortgage fraud deflates property values across the board, destabilizes banks and
can ultimately put greater stress on our social safety nets by leaving victims destitute. Fraud often results in foreclosure, which pushes down neighboring home prices, can chip away at the town's tax base and strains municipal resources.
TYPES OF MORTGAGE FRAUD
INCOME AND EMPLOYMENT FRAUD
Method: Perhaps the most prevalent, either homeowners lie about their income or loan brokers coerce or flat-out falsify documents to get a loan approved.
Result: Homeowners end up with loans they can't afford.
REVERSE MORTGAGE FRAUD
Method: Elderly people who might have lost retirement funds sometimes turn to a reverse mortgage, which allows them to take a new mortgage out on a house they've already paid off. While this is sometimes a helpful tool, industry watchers and government officials warn about people charging sky-high fees.
Result: Elderly people are either cheated by high fees or, in worst-case scenarios, lose their house because they signed documents they did not understand.
PHANTOM HELP
Method: A type of foreclosure rescue scam in which a fraudster collects an upfront fee from homeowners trying to save their homes from foreclosure -- and then disappears.
Result: Criminals do nothing and pocket the fee.
MORTGAGE-RELATED IDENTITY THEFT
Method: Perpetrators use stolen identities to buy properties outright or take out mortgages.
Result: Victims find out they are on the hook for mortgages and loans.
SHORT SALE FRAUD
Method: A buyer colludes with real estate agents or others to give faulty appraisals to banks and convinces them a property is worth less than it is.
Result: Banks are defrauded and surrounding property values can drop.
BAIT AND BUMP
Method: Lenders or brokers dangle attractive loans in front of desperate homeowners. But when it comes time to close, buyers are told it's too late to switch.
Result: New homeowners are left with mortgages they can't pay or end up signing away their homes.
EQUITY STRIPPING OR SKIMMING
Method: There are several definitions for this, one of which is synonymous with lease buy-back (see below). Another iteration is when a fraudster convinces people to invest in or buy properties, using their credit to get loans for inflated property values, but walks away.
Result: Investor or group of investors is left with properties, which often have been neglected and have gone into foreclosure.
LEASE BUY-BACK
Method: Homeowners facing foreclosure sign over the deed to a company or individual who promises to sell it back after a year, during which the homeowners can get their finances in order. In the meantime, they are told they will be allowed to rent the house.
Result: The scammer evicts the original homeowner-turned-renter and keeps or sells the property.
HOW DO I AVOID BECOMING A VICTIM?
• Be skeptical of people who make unsolicited contact.
• Don't hesitate to ask as many questions as you need until you understand what you are signing.
• Don't sign blank forms.
• Check to make sure your name is correct on documents and matches your identification.
&bull Check mortgage agent, real estate agent and lawyer's certifications through state agencies.
• Review the value of the home by comparing it with others nearby, and go over the sales history of the home to see whether the value has been inflated through multiple sales.
• Remember, if it's too good to be true, it probably is.
Q&A
Q: Are frauds like these new?
A: No, many of these methods have been around for decades.
Q: Why are we just hearing about them now?
A: A few reasons are often cited: The falling economy strips away the financial cover some of these perpetrators may have had, leaving more people with mounting losses; companies are reporting fraud more frequently; state and federal agencies are stepping up enforcement.
Q: Are the victims always innocent?
A: No, sometimes -- but not always or often -- victims can be partial participants. They get a cash payment and do not ask questions or agree to falsify information. The key, however, is that the licensed professional who ought to know better is helping them along.
Q: Does a prosecution prevent a company from doing business?
A: Not necessarily. Unless there is an injunction, the companies might be able to solicit customers and operate websites until proven guilty or until their licenses are stripped away.
Q: What is being done?
A: A half-dozen federal agencies are investigating these frauds -- including the FBI, the Secret Service, the Department of Housing and Urban Development and the IRS. So are states' attorneys general. The number of FBI special agents assigned to mortgage fraud increased to 250 in February, from 120 in 2007, and Congress is considering adding $35 million to the FBI's budget for this type of fraud detection.
New Jersey Attorney General Anne Milgram said her office is using civil cases to go after suspected criminals, because civil cases can be brought more quickly, but might follow up with criminal charges. Also, she said she told the Division of Consumer Affairs to look into TV and radio commercials making debt relief or foreclosure relief claims.
Q: Why aren't banks doing more?
A: Some say the banks do not want to investigate their own loans for fear it will taint them or open them up to lawsuits because their loans have been packaged into mortgage-backed securities made with certain promises against fraud.
Q: Why aren't more of these cases being prosecuted?
A: Criminals can be difficult to pin down, since many businesses have gone bankrupt or perpetrators have skipped the state.
WHERE SHOULD I GO FOR HELP?
Contact the New Jersey Division of Consumer Affairs at (800) 242-5846 for in-state callers and (973) 504-6200 from out of state; or visit njconsumeraffairs.gov.
If you are facing foreclosure, visit a U.S. Department of Housing and Urban Development-approved counselor. For a list, visit the real estate blog at nj.com, call (888) 989-5277 or go to NJForeclosureMediation.org.
Sources: N.J. Attorney General's Office; FBI; Mortgage Asset Research Institute; Interthinx
Thursday, June 18, 2009
Home Buyer Tax Credit
The new-and-improved version of the First-Time Homebuyer Credit offers rookie home buyers (or those who simply haven't owned a home in the past three years) a chance to get a federal income tax credit of up to $8,000. Thanks to this year’s Stimulus Act, you don't have to repay the credit like you did with last year’s version.
Even better, the IRS says unmarried individuals can team up on a home purchase and then share the credit. If you're thinking of going this route, here's what you need to know to get the best tax-saving results:
How Much You'll Get
The updated First-Time Homebuyer Credit can be applied to purchases of homes that occur between Jan. 1, 2009, and Nov. 30, 2009. The maximum credit equals the lesser of 10% of the purchase price of a principal residence or $8,000. Or, in the case of married individuals who file separately, $4,000. (These amounts are up from the $7,500 and $3,750 limits for purchases that occurred between April 9 and Dec. 31 of last year.)
There are some catches, however. The credit is phased out (reduced or completely eliminated) if your modified adjusted gross income (MAGI) is too high. (For this purpose, MAGI means the adjusted gross income figure reported on the last line on page 1 of your Form 1040 increased by certain income from outside the U.S. that is exempt from taxation.)
For married joint filers, the credit is phased out when the MAGI is between $150,000 and $170,000. For unmarried individuals and married individuals who file separately, the credit is phased out between MAGI of $75,000 and $95,000.
You can use the credit to offset your entire federal income tax bill, including any alternative minimum tax (AMT). Since the credit is refundable, you can collect any amount left over after your tax bill has been reduced to zero in cold, hard cash.
Eligibility
The credit is only available to buyers who have not owned a principal residence in the U.S. during the three-year period that ends on the purchase date for the home. That home must serve as the new principal residence.
If you’re married, both you and your spouse must pass the three-year test (whether or not you file jointly). If you’re unmarried, and you team up with another person to buy a home that serves as the new principal residence for you both and you both pass the three-year test, then you can share the credit. If only one of you passes the three-year test, only that person can claim the credit.
Unmarried Buyers Can Share the Credit
Say two (or more) unmarried individuals buy a home together that serves as their new principal residence. Assuming each person passes the three-year test and they jointly own the property as tenants in common or as joint tenants, they can pretty much share the credit any way they choose, according to IRS Notice 2009-12. However, the total credit is still limited to the lesser of 10% of the purchase price or $8,000. And the credit allocated to each person is still subject to the phase-out rule, based on MAGI. Although the IRS doesn’t actually say so, it appears you can’t claim a credit that exceeds your share of the purchase price (including your share of any mortgage debt). Here’s an example to illustrate the possibilities.
Example: Say you and your significant other jointly buy a home for $150,000 in June of this year and you both pass the three-year test. You pay 60% of the cost, and your partner pays 40%. The available credit for this purchase is $8,000 (lesser of 10% of the purchase price or the $8,000 credit ceiling). You and the other person could agree to share the credit 60/40 to reflect your shares of the purchase price. But if the other person's MAGI is too high to claim the credit and yours is not, then it makes good tax-saving sense to have the entire $8,000 allocated to you. On the flip side, if your MAGI is too high, the entire $8,000 could be allocated to the other person. Or you could split the credit 50/50, or 75/25, or 25/75, or whatever allocation suits the two of you best. Anything you decide is OK with IRS.
Word of Caution: Credit Must Be Repaid in Some Circumstances
Under last year’s version of the First-Time Home Buyer Credit, those who bought homes between April 9, 2008, and Dec. 31, 2008, were generally required to repay the credit over 15 years. The Stimulus Act eliminated the repayment rule -- in most cases. However, the repayment rule can still hit you if you sell the home you buy in 2009 within three years of the purchase date or stop using the home as your principal residence during that time. If either of those events occurs, you generally must repay your entire credit when you file your Form 1040 for the year during which the triggering event occurs (no 15-year repayment deal for you).
Even better, the IRS says unmarried individuals can team up on a home purchase and then share the credit. If you're thinking of going this route, here's what you need to know to get the best tax-saving results:
How Much You'll Get
The updated First-Time Homebuyer Credit can be applied to purchases of homes that occur between Jan. 1, 2009, and Nov. 30, 2009. The maximum credit equals the lesser of 10% of the purchase price of a principal residence or $8,000. Or, in the case of married individuals who file separately, $4,000. (These amounts are up from the $7,500 and $3,750 limits for purchases that occurred between April 9 and Dec. 31 of last year.)
There are some catches, however. The credit is phased out (reduced or completely eliminated) if your modified adjusted gross income (MAGI) is too high. (For this purpose, MAGI means the adjusted gross income figure reported on the last line on page 1 of your Form 1040 increased by certain income from outside the U.S. that is exempt from taxation.)
For married joint filers, the credit is phased out when the MAGI is between $150,000 and $170,000. For unmarried individuals and married individuals who file separately, the credit is phased out between MAGI of $75,000 and $95,000.
You can use the credit to offset your entire federal income tax bill, including any alternative minimum tax (AMT). Since the credit is refundable, you can collect any amount left over after your tax bill has been reduced to zero in cold, hard cash.
Eligibility
The credit is only available to buyers who have not owned a principal residence in the U.S. during the three-year period that ends on the purchase date for the home. That home must serve as the new principal residence.
If you’re married, both you and your spouse must pass the three-year test (whether or not you file jointly). If you’re unmarried, and you team up with another person to buy a home that serves as the new principal residence for you both and you both pass the three-year test, then you can share the credit. If only one of you passes the three-year test, only that person can claim the credit.
Unmarried Buyers Can Share the Credit
Say two (or more) unmarried individuals buy a home together that serves as their new principal residence. Assuming each person passes the three-year test and they jointly own the property as tenants in common or as joint tenants, they can pretty much share the credit any way they choose, according to IRS Notice 2009-12. However, the total credit is still limited to the lesser of 10% of the purchase price or $8,000. And the credit allocated to each person is still subject to the phase-out rule, based on MAGI. Although the IRS doesn’t actually say so, it appears you can’t claim a credit that exceeds your share of the purchase price (including your share of any mortgage debt). Here’s an example to illustrate the possibilities.
Example: Say you and your significant other jointly buy a home for $150,000 in June of this year and you both pass the three-year test. You pay 60% of the cost, and your partner pays 40%. The available credit for this purchase is $8,000 (lesser of 10% of the purchase price or the $8,000 credit ceiling). You and the other person could agree to share the credit 60/40 to reflect your shares of the purchase price. But if the other person's MAGI is too high to claim the credit and yours is not, then it makes good tax-saving sense to have the entire $8,000 allocated to you. On the flip side, if your MAGI is too high, the entire $8,000 could be allocated to the other person. Or you could split the credit 50/50, or 75/25, or 25/75, or whatever allocation suits the two of you best. Anything you decide is OK with IRS.
Word of Caution: Credit Must Be Repaid in Some Circumstances
Under last year’s version of the First-Time Home Buyer Credit, those who bought homes between April 9, 2008, and Dec. 31, 2008, were generally required to repay the credit over 15 years. The Stimulus Act eliminated the repayment rule -- in most cases. However, the repayment rule can still hit you if you sell the home you buy in 2009 within three years of the purchase date or stop using the home as your principal residence during that time. If either of those events occurs, you generally must repay your entire credit when you file your Form 1040 for the year during which the triggering event occurs (no 15-year repayment deal for you).
Wednesday, June 17, 2009
Deciphering Mortgage Types
Deciphering Mortgage Loan Types
Home loans got your head spinning? You're not alone. We all need a clear explanation of mortgage types before we take the plunge into the home buying market. Get help understanding types of mortgages here before you go shopping for your own home loan. We've compiled a solid list of resources to consider when understanding mortgage types.
There are four basic types of mortgage loans: fixed rate loans, adjustable rate loans, convertible mortgage loans and balloon mortgage loans. Learn more here. Walletpop: Types of Mortgage Loans
You may have heard of FHA or VA Loans. The Federal Housing Administration (FHA) is part of the U.S. Dept. of Housing and Urban Development (HUD). An FHA loan usually requires a lower down payment and must not exceed the statutory limit. Similarly, VA loans, backed by the Department of Veteran Affairs can offer lower down payments and terms if you qualify for one.
Conventional loans may fall under the category of conforming or non-conforming. Conforming loans are backed by Fannie Mae and Freddie Mac, who set terms as to how much the loan may be for, what kind of credit requirements are involved and amount of down payment. Jumbo loans, above the maximum amount established by Fannie and Freddie can have higher interest rates.
Need more help with explanation of mortgage types? We have a simple explanation and list of some of the more popular loans. See which loan is right for you.
What is Negative Amortization?
Negative amortization happens when a loan payment schedule has increasing amounts each year because the scheduled monthly payments do not fully cover the amount of interest due. The unpaid interest builds up and is then added to the principal of the loan, resulting in you owing more on the loan balance each year instead of chipping away at the principal balance.
Graduated payment loans allow you to buy a home with a larger loan and a smaller payment up front. However, the payments go up at pre-determined times throughout the loan, and keep accelerating into larger payments toward the end of the loan life to catch up for the earlier lower payments. During this time, especially the early years, they are building up negative amortization, thus you are owing more each year on your loan balance than you started with.
Option ARM loans have become popular during the boom, as they allow you to buy a home with a large loan, yet pick which payment you want to send in monthly. In good times, you may choose the lowest payment, which would accrue negative amortization. In good times, you may want to bump it up to an interest only or even a fully amortized payment. These loans may be beneficial to someone starting out in a career that needs a lower loan payment option, but as you progress in life you can pay the higher amount, thus combating or making up for the early negative amortization.
Fixed Rate or Adjustable?
With a fixed rate loan your payment generally stays the same through the life of the loan. You can get a lower interest rate for shorter term loans, for example if you chose a 15 yr. vs. a 30 yr. You'll get a lower payment with a longer term however you'll pay a lot more interest, and therefore more on the total loan throughout the loan life.
Payments on adjustable rate mortgages (ARMs) change through the life of the loan. Adjustments are made to the interest rate of the loan based upon the defined index the loan uses, such as a Treasury Bill (T-Bill) or Cost of Savings Index (COSI) or many more. Arm Indexes Explained
If you really want some heavy reading on ARM loans, check out the Federal Reserve Board's Consumer Handbook on Adjustable Rate Loans.
Fixed or Adjustable? See which loan is right for you from Bankrate.
Glossary of adjustable rate mortgage terms:
Federal Reserve ARM Glossary
Thursday, June 11, 2009
2 in a Row
2 In a Row?
That's right, 2 months in a row Eddie Kefalas has earned the CENTURY 21 JRS Realty Agent of the Month Award. With the stacked roster of top agents CENTURY 21 JRS Realty employs this is a tremendous accomplishment. CENTURY 21 JRS Realty has some of the hardest working, well trained agents in the Union & Middlesex County area. For Eddie to be the Agent of the Month for April and May of 2009 is a great accomplishment. CENTURY 21 JRS Realty is very happy for Eddie and would like to wish him even more success moving forward. This market will not stop CENTURY 21 JRS Realty from reaching their goals, and it will not stop Eddie either.
Thursday, May 21, 2009
Congrats to our Hot Rods & Harley Day Winnners
Saturday May 16th, 2009 turned out to be a beautiful day after all. CENTURY 21 JRS Realty spent the day out side at the annual street fair in down town Rahway New Jersey, Hot Rods & Harley Day. This year CENTURY 21 JRS Realty gave away 5 bicycles, temporary tattoos, bouncy balls, and many other free items to the public. CENTURY 21 JRS Realty was the only Real Estate company to attend this years street fair, and they made the most of it. Pictured above are some of our winners and hard working agents attempting to help the crowds of people.
Wednesday, May 13, 2009
Selling in Spring
Spring is the optimum time to sell a home. Regardless of whether it's a buyer's market or a seller's market, inventory almost always rises in the spring. Why? Because the largest number of buyers are actively searching for a new home during the months of April, May and June.
Tip: If your home has been languishing on the market since the holidays, take it off the market. Give it a chance to "cool down" for a few weeks before putting it back on the market. Nobody is going to look at your home in the spring if the DOM show it's been on the market for several months. Buyers gravitate toward fresh, new listings!
Here are 15 things you can do to improve the odds that your home will stand out among the sea of new listings flooding the spring-time real estate market:
1) Wash windows inside and out / polish all mirrors
Sparkle is free, and sparkle sells homes. A potential buyer may not realize why your home seems so inviting but will feel drawn to it if the windows are spotless and your mirrors reflect sunlight. Cleaning is the first step to preparing your home for sale.
2) Rake the yard / trim back bushes
Clean out dead leaves and debris in your lawn. Don't let overgrown vegetation block the windows or path to the entrance. Cutting bushes and tree limbs will let the sun inside and showcase the exterior of your home.
3) Mow diagonally and edge lawn along driveway / sidewalks
Artfully manicured lawns are edged and tell buyers you pay attention to small details. Diagonally mowed lawns make your yard appear larger.
4) Transplant tulips and daffodils or buy flowers in containers
Yellow flowers stimulate buying urges. After a long winter, everybody is anxious to see the first signs of spring. Yellow tulips and daffodils induce feelings of happiness and contentment. Arrange containers in groups of three or five near the entrance.
5) Clean drapes, curtains & blinds and open every window
Send your window coverings to the dry cleaners or wash, dry and press. Toss blinds into a soapy bathtub for a quick wash. Get rid of all accumulated dust and spider webs. Crisp linens and a spring-time breeze through the windows invites the season inside.
6) Set out fresh-smelling flowers such as just-clipped lilacs branches or peonies
Why not flatter your neighbors and ask if you can borrow flowers from their yards? Natural scents are more appealing than artificial and trigger fewer allergies among those susceptible. Peony vases are designed to hold peonies upright, but wash the flowers first to avoid carrying ants inside. Clever home staging brings color and fragrance indoors.
7) Polish floors to a high gloss
Your hardwood floors should be refinished, if necessary. Make your ceramic and linoleum floors twinkle and shine. Bleach dull grout. Thoroughly clean all area rugs.
8) Utilize towels, throws, pillows in light colors – yellows, pinks, pale blues, lavenders
Even if it means replacing items, towels, linens, throws and sofa pillows are inexpensive accents you can buy. In soft spring colors, they will light up a room. Layer towels on bathroom towel racks and place rolled wash cloths on the counters in a fashionable pyramid.
9) Offer an outside mat for cleaning shoes & put umbrella stand at entrance
No matter where you live, spring weather is often unpredictable. In some states, it can be 72 degrees one day and snowing the next. If it's raining, give buyers a place to stash umbrellas and wipe their feet before entering your home. Some sellers lay down plastic runners across floors for protection, but that tends to ruin the effect of a glittering polish job.
10) Buy brightly colored helium balloons
Stationery and party-supply stores sell helium balloons for about a dollar each. So, there's no reason not to pick up a couple dozen balloons to tie to your open house signs. Balloons build excitement and will get your home noticed by home shoppers.
11) Set out four-color flyers & financing options
Don't skimp on your marketing materials. You want home buyers to select your flyer among the dozens they pick up. Color sells better than black and white. Show home buyers how easily they can afford to buy your home by giving them two or three financing options. The first thing on buyer's minds when considering a home purchase is the monthly mortgage payment. Don't make them guess.
12) Use a color photo for display advertising
Spend a little more on newspaper and online advertising by including a color photograph in your ad. Remember: a picture is worth a 1,000 words. Look through your photo galleries for a seasonal photograph that flaunts your home to its best advantage.
13) Mail four-color postcards with UV coating
Call a local title company to obtain a free direct-mail list of your surrounding neighbors. Print four-color oversized postcards and include a UV coating to give the marketing oomph. Use first-class postage.
14) Fill sink with ice to chill bottled water for guests
Put a couple dozen bottles of water in a sink of ice for buyers. You can also tape labels to the bottles, printed from your computer, with your phone number, a photograph and address of your home.
15) Set out treats, individually wrapped in cellophane & tied w/ribbon
Touring homes makes buyers hungry. Give them a snack. It will give buyers an opportunity to linger in your kitchen and marvel at its elegant appointments, which might otherwise be overlooked.
Tip: If your home has been languishing on the market since the holidays, take it off the market. Give it a chance to "cool down" for a few weeks before putting it back on the market. Nobody is going to look at your home in the spring if the DOM show it's been on the market for several months. Buyers gravitate toward fresh, new listings!
Here are 15 things you can do to improve the odds that your home will stand out among the sea of new listings flooding the spring-time real estate market:
1) Wash windows inside and out / polish all mirrors
Sparkle is free, and sparkle sells homes. A potential buyer may not realize why your home seems so inviting but will feel drawn to it if the windows are spotless and your mirrors reflect sunlight. Cleaning is the first step to preparing your home for sale.
2) Rake the yard / trim back bushes
Clean out dead leaves and debris in your lawn. Don't let overgrown vegetation block the windows or path to the entrance. Cutting bushes and tree limbs will let the sun inside and showcase the exterior of your home.
3) Mow diagonally and edge lawn along driveway / sidewalks
Artfully manicured lawns are edged and tell buyers you pay attention to small details. Diagonally mowed lawns make your yard appear larger.
4) Transplant tulips and daffodils or buy flowers in containers
Yellow flowers stimulate buying urges. After a long winter, everybody is anxious to see the first signs of spring. Yellow tulips and daffodils induce feelings of happiness and contentment. Arrange containers in groups of three or five near the entrance.
5) Clean drapes, curtains & blinds and open every window
Send your window coverings to the dry cleaners or wash, dry and press. Toss blinds into a soapy bathtub for a quick wash. Get rid of all accumulated dust and spider webs. Crisp linens and a spring-time breeze through the windows invites the season inside.
6) Set out fresh-smelling flowers such as just-clipped lilacs branches or peonies
Why not flatter your neighbors and ask if you can borrow flowers from their yards? Natural scents are more appealing than artificial and trigger fewer allergies among those susceptible. Peony vases are designed to hold peonies upright, but wash the flowers first to avoid carrying ants inside. Clever home staging brings color and fragrance indoors.
7) Polish floors to a high gloss
Your hardwood floors should be refinished, if necessary. Make your ceramic and linoleum floors twinkle and shine. Bleach dull grout. Thoroughly clean all area rugs.
8) Utilize towels, throws, pillows in light colors – yellows, pinks, pale blues, lavenders
Even if it means replacing items, towels, linens, throws and sofa pillows are inexpensive accents you can buy. In soft spring colors, they will light up a room. Layer towels on bathroom towel racks and place rolled wash cloths on the counters in a fashionable pyramid.
9) Offer an outside mat for cleaning shoes & put umbrella stand at entrance
No matter where you live, spring weather is often unpredictable. In some states, it can be 72 degrees one day and snowing the next. If it's raining, give buyers a place to stash umbrellas and wipe their feet before entering your home. Some sellers lay down plastic runners across floors for protection, but that tends to ruin the effect of a glittering polish job.
10) Buy brightly colored helium balloons
Stationery and party-supply stores sell helium balloons for about a dollar each. So, there's no reason not to pick up a couple dozen balloons to tie to your open house signs. Balloons build excitement and will get your home noticed by home shoppers.
11) Set out four-color flyers & financing options
Don't skimp on your marketing materials. You want home buyers to select your flyer among the dozens they pick up. Color sells better than black and white. Show home buyers how easily they can afford to buy your home by giving them two or three financing options. The first thing on buyer's minds when considering a home purchase is the monthly mortgage payment. Don't make them guess.
12) Use a color photo for display advertising
Spend a little more on newspaper and online advertising by including a color photograph in your ad. Remember: a picture is worth a 1,000 words. Look through your photo galleries for a seasonal photograph that flaunts your home to its best advantage.
13) Mail four-color postcards with UV coating
Call a local title company to obtain a free direct-mail list of your surrounding neighbors. Print four-color oversized postcards and include a UV coating to give the marketing oomph. Use first-class postage.
14) Fill sink with ice to chill bottled water for guests
Put a couple dozen bottles of water in a sink of ice for buyers. You can also tape labels to the bottles, printed from your computer, with your phone number, a photograph and address of your home.
15) Set out treats, individually wrapped in cellophane & tied w/ribbon
Touring homes makes buyers hungry. Give them a snack. It will give buyers an opportunity to linger in your kitchen and marvel at its elegant appointments, which might otherwise be overlooked.
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