Washington politicians are busy discussing on how they would attack the problems of mortgage and how to aid the troubled homeowners. A bill made by Representative Barney Frank was passed by the House. This bill would allow the Federal Housing Administration in insuring new mortgages for those who are risking a foreclosure. A committee in the Senate would probably create a similar proposal, but the final legislation may not be exactly the same. Still, the house provides a sense of how their program could be effective once enforced. There would be certain factors which would be considered in order to qualify for the program.
Once you have chosen your dream home, the most important thing is to ensure a smooth closing. Most home buyers and sellers count on their Real Estate Professional to guide them through this process. As an escrow professional, I know home buyers and sellers are often nervous about the process. If a Realtor wants to truly market themselves as an expert in their field, they should learn the settlement procedures inside and out.
A knowledgeable real estate agent must be familiar with the mortgage lending process, even if they are primarily working with sellers. The sellers will become reliant upon the buyers mortgage lender to ensure timely closing and disbursement of funds. If the Real Estate Agent is going to represent buyers, this is vital to ensure a smooth closing. Most of the larger lenders will offer seminars to help inform Real Estate Agents on typical lending practices.
Another important part of the settlement process is the title insurance or lien search. The Realtor must be prepared to explain to their client the ins and outs if a defect on title were to arise. The Agent must also be familiar with the typical charges associated with searching and insuring a clear title. These cost vary from state to state, and the responsibility of the buyer or seller to pay for these charges also vary by region.
Lastly, it is an absolute necessity for the Realtor to be knowledgeable of the HUD-1 settlement statement. This document explains to the client in detail all the charges associated with the transaction. The HUD-1 will provide the buyer and seller with their bottom line. An informed Real Estate Agent will be able to catch any mistakes or incorrect charges to their client. Knowing what is being charged and why is vital to provide excellent representation of the buyer or seller in the transaction.
The settlement process can be overwhelming to a buyer or seller, especially if this is their first or second transaction. The client has obtained a Real Estate Agent to guide them through the purchase or sale of the property. Representing the client is so much more than showing them properties or putting up a sign and finding a buyer for their property. If a Realtor can properly inform their client of each step towards the settlement and disbursement of the transaction, they are truly representing them.
Quite ironically, while there are plenty of homeless people out there, in the United States, there are millions of unoccupied homes. This situation was brought about when wrong assumptions by speculators created a false demand thereby causing builders to construct more houses than what the market actually needed.
Based on the circumstances it appears there is no need to build anymore homes until such time that the existing “surplus” has been absorbed. The good thing now is that there is a significant decline in construction in America which should clearly continue till the time when vacant houses are filled up.
As the media reminds us on an almost daily basis, many sectors of the real estate market are in the midst of one of worst adjustments since the Great Depression. This is evidenced by the most recent California Association of Realtors (CAR) publication on existing home sales which reported a price decline in the median selling price of 35.3% from a year earlier. During the worst 12 month period during the Great Depression U.S. housing prices fell by a less dramatic 10.5%. For investors with high tolerance for risk, it may now be time to embrace the timeless proverb “buy low – sell high” and start sifting through the wreckage for bargains. And while bargains exist, they are not available universally across all locations or property types. Investors must know where to look, have proper guidance and understand the proper methods for valuation. The sectors with the most opportunity are single family residential properties (SFRs) in class B or B-minus locations of suburbs outside major metropolitan areas. Properties in many metropolitan markets have adjusted very little, while towns in extended metropolitan areas (MSAs) have deteriorated acutely.
Using the San Francisco MSA as an example, CAR statistics released for June 2008 indicate a year over year decline of 4.3% for San Francisco proper. Comparatively, the median selling price in Vallejo, California, a suburb about 30 miles outside of San Francisco, has decreased a much more dramatic 37.3% year over year. Vallejo is still accessible to San Francisco via public transportation including frequent commuter bus routes, Ferry access, casual car-pool access and BART access from the Richmond, California station. Furthermore the statistics do not fully reflect the willingness of banks and distressed sellers to negotiate on a case by case basis in these markets. As an example, one of our investors is currently purchasing a SFR in Vallejo for $104,500. In this instance the property is being acquired for a 65% discount relative to the implied valuation on June of 2007 (based on comparable sales from First American Title Company). Although this 65% discount is tantalizing it should not be a deciding factor in the decision to purchase the property.
Using a discount to market value approach is a fools approach to valuation at this point in the current environment, because it assumes that historical prices were rational. A discount to market value won’t pay the mortgage and it does not ensure that the home will be affordable to prospective buyers when an investor is ready to sell. Investors should alternatively use an income approach or an affordability approach to valuation.
For example, consider the Vallejo property discussed previously. From an income approach (assuming a 30% down-payment), the cash on cash return is about 11.6% per year and the cap rate is 9.54%. From an income standpoint this is an attractive cash yield. It handily exceeds the national average money market rate of 2.99% annual percentage rate and the 2.90% average dividend yield for S&P 500 non-zero dividend stocks. This additional return offers substantial compensation for the additional risk and management responsibilities required for this investment.
From an affordability standpoint the medium household income in the zip code is $50,030 per year. Most lender underwriting guidelines consider that 28-33% of household income is an allowable limit for housing related expenses (rent or mortgage plus taxes and insurance). Using this guideline as a benchmark, the average household in this zip code can afford $15,000 per year ($1,250 per month) toward housing related expenses. The mortgage payment for the Vallejo property will be approximately $550 plus monthly expenses of $200 (taxes, insurance, and repairs/maintenance) which is comfortably below the affordability implied limit of $1,250 per month. Assuming a 90% loan to purchase price and a 7.0% fixed rate mortgage, this property could be purchase by the median household for up to $182,000. This represents a 70% premium to the purchase price of $104,500. As a cautionary note, valuation based on affordability won’t guide market values until the mortgage market returns historical underwriting guidelines. Further details of this transaction are posted on our website http://www.unitedinvestors.com >> education center >> sample property.
Due to price crash all around the country, prices of houses have been more affordable and have shown dramatic improvements among U.S. cities. The latest Housing Opportunity Index, 53.8% of existing and new homes were sold all across the nation. This significant increase took only the first three months of the year to be made possible. These homes have been easily affordable to households with a median income of $61,500 according to the report by Wells Fargo and NAHB or the National Association of Home Builders. Compared to the first three months of the previous year, this year has improved by 44%.
Selling your house can be a challenging task nowadays. With the competitive real estate market, it is really tricky to sell property quickly, but not if you add curb appeal to your house for sale. Use these affordable home improvements tips and I’m pretty sure that you can attract more buyers!
• Declutter. Remove all unnecessary things in the house. Clean out the closets and make each room looks more spacious. “It’s the most affordable change that sellers can make when selling their abode,” says Marybeth Dennett, real estate professional with Triangle Star Realty in Durham, North Carolina.
Polish Furniture and Floors. Make your room free from dust and dirt. Make sure to convey a room with a pristine feel, and your buyer can surely not resist to your home’s charm.
• Update your lighting with modern fixtures to brighten and add warmth in your home.
• Throw away broken mirrors and replace it with a new one.
• Make a great impression! Welcome your potential buyer with a newly fresh front door.
• Remember everyone has personal style and preferences. So, keep your walls in neutral colors and remove wallpaper if needed.
If you have done all these efforts yet you were not able to sell your house within the period of time you want, it is recommended to contact cash house buyers. These legitimate companies buy houses and other properties in any condition and at any location.
There is a lot to be done when one decides to sell a house. It is more than a matter of putting that ‘for sale’ yard on your lawn or porch for passersby to see. If you want to sell at the best possible price, you have to really look into ways of making your house the best possible buy.
There are some value adding tips a person can do to make his or her home more marketable. Some are expensive, require a budget and professional help and a lot of time. Some are not so expensive, can be done on your own, and can be done in advance or as close to a month before you decide to put your house up for sale.
One such tip in the latter group is painting. Painting your house will make it look brand new and can be a budget-friendly value adding tip. Done on the inside and outside, a good paint job’s effects can be seen until at least two years later. Take a look at this to help make your home more marketable.
Investing is always a tricky thing. Unless you are sure that what you are investing will not only place you at a financial loss but will also earn for you, then it is really always a matter of choosing the best possible risk. Property investment can be a good thing. Most often than not, owning land works well for you. However, history will show that this can also drain you if you choose unwisely or if you do not plan your budgets accordingly.
When investing in property, there are some simple indicators that you can use as your guide to making a good investment. Look at the demand for prices by looking and comparing prices. Those that are higher are likely in places of higher demand. Look at taxes too. Some areas have higher taxes than others making them less palatable for investment. Also, look at school ratings. If schools in the area are rising in ranks, the area will probably become a popular place especially for families.
If you live in a condo, you might think it is impossible to have any kind of greenery around. After all, having a garden does require the space to set this up and in a condominium space is not abundant. However, there are still lots of ways to have your own pocket of greenery. All you need is some creativity, some flexibility, and the right set of expectations.
Of course, you must accept that you cannot have a full garden. So you have to choose what kind of greenery you are willing to take on. Since you live in an enclosed space, with possibly little opportunity of sun exposure, choose plants that are for indoors and are low maintenance. Then take a look at your space- do you have a balcony? If you do, you can create a plant nook there. If not, choose strategic parts of your unit to place your potted plants.
With creativity and flexibility, you can get the greenery you want in your condo.
There are some holidays in a year that are really useful for you when your goal is to sell your house. Fortunately, February is a month with a famous and popular holiday that is actually very useful. Valentine ’s Day is a day now celebrated and observed the world over. And this event can be used when marketing a home.
As any home seller would know, one way to make a home sell faster and for a better price is to market it well. This means doing the research into what sells well and appeals to buyers in your area, playing up the strengths of your property, camouflaging the weaknesses, and making the house a possible home for people who are seriously looking to buy. One way to do this is to personalize your house. Valentines provide the perfect opportunity to create ambiance through some flowers, sweet smelling candles, maybe a casual and simple present on the table. Small things like this transform a house into a home and can help to sell it.