Dean Graziosi | Dean Graziosi Real Estate | Dean Graziosi Investment

Ever since the housing crisis began, you have probably been hearing about credit scores. Credit is needed for just about everything. It is much easier to get a new car loan, an installment loan for a home repair, or a mortgage for your dream home if you have a good credit history. The problem is that the whole idea of credit is confusing to many people and it is not always easy to find out exactly what your credit score is or what it means. One of the biggest mysteries of credit is how exactly it affects a mortgage for a home.

There is no debating the fact that the higher your credit score the better deals you can get. Where mortgages are concerned, you are able to get mortgages that have lower interest rates, higher borrowing limits, and lower monthly payments. The lower interest rates that you pay with a better score is what lowers the monthly payments that you make. Interest is money that is added on to the money that you borrow and increases the amount that you have to pay back over the life of the loan. The lower the rate the less you have to pay to borrow the money.

Credit tells your lenders how much they can trust you. High scores mean lenders will be willing to lend you money while low scores mean they will not want to. Your score, called the FICO score, is determined using a number of factors and a specific formula. The credit bureaus such as TransUnion take these factors into account when assigning a credit score. The factors are your previous performance and how often you paid creditors on time, the amount of money you owe, how long you have been using credit, and what kinds of credit you have. Credit inquiries also count but to a much smaller degree. Your past payment history is the most important factor. Using the FICO score, a lender will use the score and reason codes to decide where you fall on their lending guidelines.

Scores range from 350 to 950. Very few people actually have scores in the 900s. Those who get the best loans have scores that are at least 800. Many lenders require borrowers to have scores in the 700s. However, there are lenders who will consider lending money to you for a mortgage even if you are considered to have poor credit, which is usually considered to be anything below 500, though you will end up paying more in interest. Time is the best method of getting a higher credit score. Be sure to pay your bills on time, pay off any debts you owe, and your score should climb. 

Knowing what the real estate market has done in the past is an important piece of knowledge that buyers and sellers should be aware of. Being aware of how the market has behaved in certain neighborhoods and locations where you are looking at properties can be an indicator of what to expect once the home has been purchased. Past market trends can and do have an effect on the current value of a property and how the value of the property can change in the future. Market trends have been in a constant state of change lately and knowing what the past trends were will better prepare you for the future.

Looking at how the area you’re interested in has changed in past three or four months will show what to expect in the future. Banks and lenders typically use this same information when determining comparable prices of homes recently sold in the area. This is an important tool to use while you are looking at properties. Once you find a property that you are interested in, you should also look at what the past property trends have been. This will prepare you for what to expect when the market becomes more stable. These numbers will show if the neighborhood you’re looking at has a high turnover rate, meaning that people purchase homes but do not tend to stay.

You will also want to look at the rate of foreclosures in the neighborhood, this can affect the purchase price of your home and can also affect the selling price should you decide to sell later. Experts suggest that when you look at past trends you go as far back as three years. This will tell you how many homes were sold and what the average sale price was. It also allows you to notice any trends either up or down in property values. Doing some research into past trends may seem like a lot of extra work, but it can help you make a better informed decision when purchasing a home.

Every neighborhood will have property sales throughout the years, some are for the typical reasons of families relocating to a larger home, downsizing or a change in their living situations. But researching the trends will show you if there is an abnormally large amount of activity in the area. Market trends are changing all the time, and doing some research now can help you in the long run. Finding a neighborhood you like is critical to being happy in the home you buy; but doing the proper research before purchasing that home will ensure that you are getting the most for your money and you will not be likely to lose more down the line.

Relocating to a new city can be either scary or exciting, depending on how you look at it. The best way to keep a positive attitude is to have a plan. Here are a few ideas to think about before you make the move.

Leaving the Old City

The truth is that you may not be able to sell your old home before you leave the area. That does not mean you cannot try. Get the best real estate agent you can find and set him to work. When you get a buyer, make arrangements to set the move-out date as close to your relocation date as possible. Otherwise, you will either have to stay in temporary housing while you wait for your new home, or you may have to make two mortgage payments simultaneously.

If you do not sell the home before it is time to leave, and there are no immediate prospects for doing so, you might want to consider renting it. This is an especially attractive proposition if you will have trouble making two house payments. Before you go, take the time to interview leasing agents to manage your property while you are away.

Buying in the New City

If at all possible, make a trip to the new city early in the process. You can take a week, or even just a long weekend. Choose a buyer’s agent first and foremost. Make sure it is someone who is willing to work with a long distance buyer. Ask questions to see what the agent can do for you while you are still in your old city.

Get to know your buyer’s agent while you are visiting the new city. Spend time, preferably in relaxed settings like going out for lunch or relaxing at a park. This will give you time to express your wants and needs for home buying. The real estate agent will not have time to lounge around with you all day, but if he will give you a bit of quality time to get to know you, the process will go much smoother.

After you have given the buyer’s agent your requirements and wants for a home, he may want to take you to see a few. However, the purchase does not have to be made in this short trip. If a house or houses are decided on, the agent can work out the negotiations while you are at home in your old city. He will confer with you about the details so that you get the deal you want.

If a home has not been chosen, set your buyer’s agent the task of looking for a home for you. Remind him of all the ideas you have discussed. Have him look at houses for you and take as many pictures as possible. If you see the pictures from a particular house and you like what you see, you can proceed from there. You might want to go look at the house in person. The agent can also set up the inspections and appraisal for you.

When you have completed the sale of your old home and the purchase of your new one, you can settle down comfortably in your new city. The most important thing to remember is to avoid becoming overwhelmed. Take one step at a time and enjoy the relocation process.

The easiest way in the world to choose a real estate agent is to work with the first one you meet or hear about. On the other hand, the easiest way is probably not the best way when it comes to a job as important as selling your home. It is a good idea to talk to several agents, and even to interview them. Here are a few interview questions you can ask.

1. How many times have you worked as a seller’s agent?

Of course, every realtor has to start somewhere, but do you really want that first sale to be yours? When you compare agents, do not forget to consider the amount of experience they have.

2. How many houses have you sold in all?

Just being in the business is no guarantee of skill at selling houses. You want to make sure that they have not only worked as a seller’s agent, but they have indeed been successful in selling homes.

3. How many homes have you sold in the last year?

Recent success also counts because it means that the real estate agent knows how to work in the current state of the economy. It means that he has not let his skills get rusty. It means also that he should be up to date on all the laws and regulations concerning home sales.

4. How long has the average home you have sold in the last year been on the market from listing to closing date?

In a buyer’s market, the number of days is likely to be high. However, getting that number is important at any time because you can use it to compare different realtors. With this bit of information, you can sort out the real estate agents who work diligently, quickly and effectively from those who do not put in the same effort.

5. What is the average of your sales ratios, comparing list price to selling price.

A realtor who tends to get a high percentage of sales near the list price is one who will probably be good at making deals for you. This type of realtor knows his business and uses his superior abilities to get you the best price.

6. Do you employ a personal assistant to help you, and if so, what does the assistant do?

This is a pertinent question for you to find out because you need to know whether the realtor will have plenty of time to work on the most important aspects of selling your home. At the same time, you will want to make sure that the assistant is not doing work he is not qualified to do.

7. If I am not satisfied, what will happen?

Some real estate agents will refuse to answer this question directly. They will just say something like, “Oh, you will be satisfied, no doubt about it!” Look for a realtor that explains the options you will have in case you are not happy with him, including breaking the contract. This type of realtor is honest and realistic, two good qualities to look for in a real estate agent.

Real estate agents are plentiful, but the ones who can sell your house, sell it as quickly as possible, and sell it for a price you can live with, are not as easy to find. Do not just go with the first realtor you meet, but interview several before you decide who will help you sell your home.

Properties that have been vacant for a long time can be a great bargain for anyone looking to invest in real estate. However, there are a few things you should watch for in properties that have stood vacant for some time. The longer a property is vacant, the more chances that these problems will arise. This is due to the fact that since no one is living there, and most of these properties are rarely checked on. Certain problems may arise and become worse due to lack of attention. To protect yourself, watch for these three things in properties that have been vacant for a year or more.

1.      Have the roof checked for any need of repair. When you walk through the house, look carefully at the ceilings for signs of leaks. It is very common for a house that is standing vacant to develop problems with the roof that go unnoticed. When roofing problems are left to their own devices, they become much worse very quickly. It is important to have this inspected before you buy the home.

If you believe that the roof needs to be repaired, do not be afraid to ask that such repairs be taken into consideration as part of the negotiations on the property. Make certain that the repair cost is deducted from the sale price, or that the repairs will be made before the sale is completed.

2.      Have the foundation checked out by an experienced appraiser. The foundation of a house can be the reason that it has stood vacant for so long. You want to make sure that the house is on a firm foundation, otherwise it could have serious problems later on down the road. Even if the foundation is not causing problems right now, it could cause issues in the future if it is going bad. This is one of the biggest reasons older homes don’t sell, and it should be taken into careful consideration before you buy.

If the house has a bad foundation, this is likely the reason it has stood vacant. You should not buy such a house. It can cost thousands of dollars to repair a foundation. It is typically not worth the investment.

3.      Electrical systems should also be checked thoroughly. It is common for houses that have been vacant for some time to have an invasion of rodents or other pests. These intruders generally go unchecked for some time, because the house is left empty with no one entering it for months at a time. They can chew on wiring, and cause other problems with the house. Just make sure that you check for any signs of any rodents or animals being in the property, and have the wiring checked thoroughly to ensure that no damage has been done.

A lot of prospective home owners are concerned about listing their home in today’s unstable realty market.  Since the market has gone from a seller’s market to a buyer’s market with more and more homes being listed every day, sellers are worrying that they will not get what they feel their home is really worth.  In past years sellers would have no worries when it came to listing their homes, often times available homes that were in great shape would set off bidding wars once they hit the market.  Unfortunately in the world we live in today, sellers are faced with the decision to list or wait until the market picks up again.  But if you do choose to list your home there are a few ways that you can make sure that it gets all of the attention from agents and buyers that it deserves.

The first thing you will want to do is make the exterior appealing to prospective buyers.  If any of the shrubbery is overgrown now is the time to trim it down and make it look appealing.  If your house paint needs some updating that should also be taken care of before you have it listed.  The first thing that your real estate agent will want to do is take pictures, since we are a visual society many of our first impressions are determined with a quick glance at pictures that your agent has listed online.  When preparing the pictures of your home, it is important that they feature up close shots of the entire exterior of the home including the backyard and garage.  The more pictures that you have available for buyers have to look at the more interested they will be in viewing your home in person.

Along with exterior pictures your agent will also want interior pictures as well.  When preparing your home for these photographs, it is important that you remove any clutter from the rooms that will photographed.  You will also want to open any blinds or drapes to let natural light in.  If you have rooms that are a bit darker you will want to turn on any lights that will make the room look more appealing and less like a dungeon.  It is important to focus your pictures on special details that you may have such as, new cabinets, granite counter tops, wood floors or a fireplace. 

Buyers do most of their research online before actually contacting an agent to schedule a viewing.  Ask your agent to include a virtual tour of your property in your selling arrangement.  A well designed virtual tour will grab the buyer’s interest and make them feel as if they are being led from room to room.  The better your photos and virtual tour are the more interested prospective buyers will be to view your home in person.

In addition to the photos and virtual tour that your agent will make available online, you should also ask your agent to use print advertising along with online advertising.  Many people still read newspapers and your home should be listed in the major newspapers in your area.  There is no such thing as too much advertising when you’re trying to sell your home.  Sellers should utilize all of the resources at their disposal when trying to sell their home, the more people you reach the better your chances of getting what you’re asking for.

Many real estate experts agree that in today’s market overpricing your home can be a very big mistake.  It is better to list your home at fair market value, than overprice it in order to leave room to negotiate or just to test the market.  When the market was in better condition these tactics may have worked, but in todays flooded market, buyers have more options available and do not need to waste time viewing listings that they know are overpriced.  By listing your home over fair market value you may cause your home to sit for months without even getting an offer, the longer buyers see your house sitting on listing sites, the more they may begin to wonder if something is wrong with the property.

Other problems that may occur from overpricing your home include no prospective buyers wishing to view your home.  Offering an overpriced home to buyers who have become familiar with the appropriate values of homes in your area will know that your home is priced too high and will steer clear.  By overpricing your home, you may also inadvertently be helping others to sell.  Buyer who see your asking price and the price of others in the neighborhood that are similar to yours, will more than likely make an offer on the lower priced home rather than yours.  So, in effect, you are actually helping your neighbors sell their home instead of getting your own home to sell.

If you are lucky enough to get the attention of a buyer and they actually agree to pay what you’re asking the deal may fall apart when there is an appraisal done on the property.  More than likely, your home is not going to appraise for the higher price you have it listed under.  Lenders will not approve a loan for more than what the home is actually worth.  The longer your home sits on the market, the harder prospective buyers will try to negotiate.  This will give buyers the control of the negotiating process and may cost you by having you make more concessions in order to close the deal.  What seemed like a good idea in the beginning may ultimately end up costing you any extra profit that you may have seen if your home sold quicker.

By pricing your home too high you are also cutting out prospective buyers who could actually afford the true market value of your home.  Listing your home too high may take it out of the price range of many buyers who are looking in a specific price range.  This will not only limit the amount of buyers who look at your home, but buyers who are familiar with listings in the range of your asking price are familiar with what to expect for the amount they will leave unimpressed with your home and search for one that is better suited to the price range you are asking.

There is a lot to be said for doing real estate business with a partner. Partners can increase your pool of financial and intellectual resources. If you work with one or more other investors to do a real estate deal, it relieves some of the possibility of loss. In fact, with the right associates, you may find that your real estate business is more stable and profitable. Plus, it is often easier to push the deal through when you are not working alone. There are several things to keep in mind when looking for a partner in real estate.

1. Partners can come from many places.

Many people find their partners for real estate deals in their own families. Sometimes a parent, a sibling, or an aunt or uncle will help you in a real estate deal. This is a fine way to do business if your family has something to offer you in terms of money or experience. However, you may need to look outside your family. Friends and colleagues can also be good partners if they have the right qualifications and temperament.

2. Find a partner with experience.

Ideally, the partner you choose will know the score on real estate transactions. She will understand the local market. It is much easier if the lingo and the concepts of real estate are second nature to her. A partner who has made at least a few deals in the past will bring invaluable experience to the bargaining table. The person does not have to be a professional investor, although that is not a bad choice, but she it is good if she has some experience under her belt.

3. Look for a partner with financial resources.

There are other benefits a person can bring to a partnership besides the financial ones, but money certainly helps. If your partner has money to invest, it makes it easier to come up with down payments for financing. Renovating a house to be flipped can be done without loans, making the process quicker and smoother. A partner who can contribute financially makes the job of buying and preparing real estate for a sale easier to accomplish.

4. You need a partner you can trust.

Watch out for people who want to make a fast buck at your expense. Even in families, there is the possibility that another person who invests with you will burn you. Therefore, it is essential to make sure that you can trust the person you are dealing with before you become partners. Find out about his past dealings, and talk to people who have been on the other side of the transaction and see how he treated them. Most of all, talk to people who have partnered with him in the past if possible. Get a feel for his ethics so you will know where you stand.

Finding a partner for real estate transactions takes thought and research. It is best not to jump into business with the first person who wants to invest with you. Instead, take your time and find someone who can contribute substantially to the partnership.

In our current economic situation, many people are finding it difficult to come up with the large down payments that many lenders are requiring.  This trend is leading many prospective home buyers to look into the option of renting to own.  This option is becoming more popular among first time home buyers, who are having a difficult time receiving preapproval from lending agencies or can’t come up with a down payment.

In order for a rent to own option to be successful, a buyer must first find a seller who is open to this type of arrangement.  Many sellers are warming to this option; it offers them a profitable alternative to letting their house sit empty for months waiting for a buyer or renter to come along.  Once you have found a seller who will work with you, the next step is negotiating the terms of the deal.

When negotiating your deal you will want to find out if the seller will require any type of down payment and if all of the monthly payment will go towards the purchase price of the home.  Some sellers may require a smaller down payment just to insure that you are serious about the deal.  Others may not require any, if you agree to pay the first and last month’s payment.  You will also want to know if all of your monthly payment will be applied to the agreed on sale price of the home.  Some owners may choose to only apply a percentage of each month’s rent while others will apply the full amount.  In the long run, you will want to negotiate that all of your monthly payment be applied to the balance. 

Working with an agent who has experience in these types of sales is important.  They will help you spot a good deal and steer you away from sellers who are negotiating a one-sided deal.  Once you have found a seller who you feel comfortable dealing with, you will want to seek the advice of an attorney who is experienced in these types of contracts.  This will insure that the contract offered is a fair one that benefits you as much as it does the seller.

Having the counsel of professionals when negotiating a rent to own deal is extremely important, what you may feel is a good deal may not appear so to them.  They will look out for your interests and insure that you are not throwing money away on a bad deal.  First time home buyers may walk away with a better deal when this route is taken than if they would have gone the traditional route and sought funding from a lender.  For other prospective buyers this choice offers them the chance to become homeowners without having to meet all of the guidelines set forth by lenders.  Whether this is the right choice for you is something that you will have to think about and decide on your own.

Times are tough all over. People who are selling their homes want to save money just like everyone else. It is common for thrifty people to consider selling their homes without a Realtor. That way they can save themselves the commission and make more money on their home sale. It all sounds so simple. Yet the fact is that there are many problems in trying to take the For Sale By Owner route.

Poor Advertising Opportunities

Realtors have the advantage of being able to list your home on the most advantageous advertising system for real estate of all – the Multiple Listing Service (MLS). FSBO sellers cannot use the MLS, and so they cut themselves off from a very large majority of the people who are looking for a home. They are forced to take out advertisements online or in newspapers or simply put up a sign in the yard. These methods are usually much less effective.

Buyer’s Perception

When you are a FSBO seller, the buyer makes certain assumptions about you and about the sale. He automatically assumes that, since you are saving the cost of the Realtor’s commission, you can afford to drop the price below your asking price. He probably will not trust your evaluation of the home’s worth in any case because he knows you are not a trained professional. He may think that you are trying to hide defects in the home even if you are being totally honest. The buyer’s perception of you can damage your ability to sell your home.

Emotionalism

Buyers who are looking for their first home may be very emotional about the process. When you are selling your own home, you compound that emotionalism with your own strong feelings. If you are showing these buyers your home without a Realtor present to add a note of professionalism to the situation, the results can be very unpleasant. The worst thing is that if you upset the buyer you are not likely to sell your home.

Legal Requirements

There are many legal requirements in selling a home, no matter which state you live in. Realtors take large amounts of time and effort to learn how to cross all the t’s and dot all the i’s in meeting all the legal obligations necessary to sell a home. They will make sure all the inspections required are done on time and all the paperwork is filled out in full. If you are selling the home yourself, these tasks can be very intimidating, and in fact many people never get them completed correctly.

Some people may be suited to selling their homes for themselves. If you have experience in real estate, a cool head and a clear eye, you might be able to pull it off. For most people, the opposite is true. While they try to save money by eliminating their Realtor’s commission, they create more problems for themselves than they can handle. In the end, many FSBO sellers end up using a Realtor after all. It is not a sign of failure, but an acknowledgement that Realtors are best suited to selling houses.