Nov
30
Buy Low and Sell High… Right??
Posted by dlang2 under Bonita Springs, For Buyers, General Information, investing, Listings
<!–[if gte mso 10]> /* Style Definitions */ table.MsoNormalTable {mso-style-name:”Table Normal”; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:”"; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:”Times New Roman”;} –>We’ve all heard it before “smart investors buy low and sell high”. However, many people, including myself, many times do quite the opposite. As the stock market tumbles down, fear takes hold and many people “sell” trying to stop the loss. On the other hand many people “Buy” when the market jumps up for fear that they will miss out on the gain. So even though we know what to do, it is often not that simple.
There are primarily two different ways one can seek to make money in a real estate investment. The first is the return from monthly or annual income less expenses. The other is simple appreciation of the asset over time. Is there a better time than now to realize both of these? The low cost of investment makes it easier to make a good monthly return and the possibility of significant appreciation down the road is very real.
Here we are in one of the “buy low” opportunities in a lifetime, the current real estate market, and I found myself recently wondering where I could find additional capitol to take advantage of this opportunity. Many of you are thinking “if I only had the money to invest right now!”. Well, maybe you do…..
Many of us have a little “box” given to us by the IRS in the form of tax code that may be the answer. In this “box” we are allowed to put many different types of investments that will either grow tax deferred or tax free depending on the “box”. Most of us invest in mutual funds, stock, bonds, etc. in the box….. But real estate is an investment, right?
Curious about my own opportunity, I did a little research and found what I had already heard before but not quite understood. I could invest in real estate directly within my IRA, and just like my other investments, they would grow tax deferred as well (as long as I followed the rules). It turns out that I did have the capitol to take advantage of the tremendous opportunity that I believe is being provided by our current housing market. Maybe you do too?
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Oct
8
How to use Comparable Sales to Price Your Home.
Posted by dlang2 under Ask a REALTOR, For Sellers, General Information
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How to Use Comparable Sales to Price Your Home
Before you put your home up for sale, use the right comparable sales to find the perfect price. Read
Visit houselogic.com for more articles like this.
Copyright 2010 NATIONAL ASSOCIATION OF REALTORS ®
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Sep
10
What is so short…. about a short sale?
Posted by dlang2 under Ask a REALTOR, For Buyers, For Sellers, General Information
It’s funny that something called a “short sale” could typically take anything but a short amount of time to complete. Maybe they should be called “long sales”! Of course, the “short” in short sale refers to the current market value and potential selling price of a home, to be “short” of the amount owed on the property; and that the current lender has agreed to receive a lesser amount that what is owed on the home.
The Short Sale Process
Because ownership of a property can not be transferred to a third party unless all liens including mortgage liens on the property are released, the owner’s lender is involved in the process and must agree to release the note from the property so that it can be sold.
The seller starts the process by agreeing to disclose to the lender his or her financial information including but not limited to: tax returns, W2s, pay stubs, bank statements, etc. In addition, the seller must write a “hardship letter” stating their financial situation and why they can not continue to pay the mortgage payments and need to sell the property “short”.
Even though the lender is collecting this documentation, the approval process typically does not actually start until there is an offer on the property. The offer and a settlement statement, showing exactly what the lender will “net”, is submitted to the lender for review. Only then is a negotiator assigned to the file and depending on the lender this step can take a few weeks just to have a negotiator assigned to the file. The lender orders an opinion of value from a third party to give the lender an idea of what the current market value of the property is, and to ensure that the current offer is a reasonable offer. It is important to note that “low-ball” offers may not be approved by the lender.
It is important to note that since this post was originally written the short sale propcess, even though it is still time consuming, is actually getting a bit faster as approval times have decreased over the past year or so. The banks, I believe have realized that to proceed through the foreclosure process, with the added attorney fees and court costs, will “net” them less in the long run. This is evident by the fact that one of the worst banks to deal a year ago has now become one of the better ones to deal with – Bank of America.
Why Would a Lender Approve a Short Sale?
If the seller/borrower can not continue to make their house payments, there is a good chance the home will end up in foreclosure. The bank will gain possession of the property and will need to secure, maintain, market and sell the property. Ultimately they will only be able to sell the home for the current market value minus the extra court and attorney costs of the foreclosure itself.
Seller’s Participation
The seller’s financial situation will inevitably factor into the lender’s decision to approve the short sale. In addition, other parties such as a second mortgage or a PMI (private mortgage insurance) company will also be included in the decision making process. Many times, depending on the financial situation of the seller, any one of the lenders or PMI company could and ask for some the seller to contribute to the transaction as a condition of approval. This could be some amount of cash at closing, or the signing of a note agreeing to a much lower amount than what is currently owed. In every situation, the seller needs to evaluate what is in their best interest. Many times the idea of the lender forgiving tens if not hundreds of thousands of dollars, in return for the acceptance of a much smaller note or bringing some amount of cash to the closing, is still very agreeable.
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