Dean Graziosi | Dean Graziosi Real Estate | Dean Graziosi Investment

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.

Here is a list of the five best places you can buy hot real estate now. With the market currently a buyer’s market and sellers unable to move houses as much, this real estate list can help you choose a great place to live.

The first hot area to buy real estate is Austin, Texas. Why is this a hot real estate area?

Austin is a beautiful place to live. If you have lost your job you will be happy to know that Austin, Texas, had a 14.1% of job growth in the year 2010. You may want to apply ahead of time to find a job before moving. If you are into a tech career there are more then 2000 tech companies in the capital of Texas. The national USA average of unemployment is 9.8% whereas Austin, TX is 7.1%. When looking to buy a home the average median price is $122,921. If you currently own a home, sell it and you may already be ahead with the low cost of homes here. All of these benefits make Austin a great place to live!

Another one of the hot areas to buy real estate is Broomfield County, Colorado which is located between breathtaking Denver and Boulder. In this area you will find jobs galore including high tech jobs. In the last ten years jobs increased by 50%. Average median home price is $239, 000. Get skiing and hiking in Colorado now!

Looking for someplace warm to buy hot real estate? Check out Deerfield Beach, Florida. The median home price is only $89,400. Enjoy a home with a view of the beach. Imagine waking up every morning, grabbing a cup of coffee and relaxing by the beach.

If you are looking to retire and find a new piece of real estate check out Durham, North Carolina. The median home price is $174,900. Enjoy as many of the one hundred plus activities the Duke University has to offer seniors. You can also enjoy your golden years playing golf, seeing Broadway hit shows as well as concerts and stay young hiking.

On the opposite spectrum if you are looking for a hot piece of real estate to buy and raise your children check out Woodbury, Minnesota. In this area of Minnesota the schools are phenomenal. Plenty of jobs await at 3M and the state government. Enjoy the wonderful lakes for swimming, fishing and boating. Other fun activities include winter activities such as snowmobiling, snowshoeing, making snowmen with your kids, sledding, ice skating, etc. You and your family can hike, enjoy the grassy parks and biking. There is never a dull moment. Median home price in this hot real estate area is $245,000.

The fifth best place to buy a home is Madison, Wisconsin. You can choose to live in Madison or buy a hot piece of real estate rental. There is so much to do in Wisconsin’s capital including many sports, cultural events, affordable housing, one of the top rated colleges, shopping, variety of restaurants, four season activities and so much more. The average median home price is $199,900.

With a little research and help from a real estate agent you can find the best place to live for your current situation. Start living the dream now.

Millions of people all over the world are looking to buy a new home. Lower interest rates have come along over the past few years making it more affordable than ever to become a homeowner. For most people owning a home makes more sense than renting. The rest of this article will give you tips on what to look for when you get ready to buy your home. You will learn what you need to have in order to purchase your first property.

Get Your Financial House In Order

If you want to purchase your first property you need to start saving your money. You will need to make sure you have enough saved up to pay for the down payment and the closing costs. To be on the safe side you should always try to have at least 20 percent of the asking price to put down as a down payment. Otherwise, you will need to buy private mortgage insurance, which will usually cost you more in the future because your monthly payment will be higher.

Check Your Credit Report

Before you start house hunting, be sure you check your credit report. You may have an error on your credit report and not even be aware of it. If you do have an error on your credit report, it can cost you in terms of the interest rate you will pay. You will usually pay more in interest if you have a less than favorable credit report. If you check your credit report early enough in the game, you may give yourself enough time to fix whatever credit problems you may find on your credit report. Always make sure you plan ahead. Allow enough time to fix your credit.

Purchasing a property is a big commitment. Be sure to get the best possible deal. This usually means you should know your credit and where you stand. Fix whatever problems you find so you can get a better deal. Allow yourself enough time to make an educated decision. You do not want to fall into the trap of purchasing something you don’t like because you did not do your preparation.

For many years mobile homes carried many stigmas and prejudices around them. However, there are plenty of advantages to investing in mobile homes. Even though the advantages are not always obvious, they exist and are real One of the advantages of investing in mobile homes is fast equity building. The myth about mobile homes depreciating is only half true. When you buy mobile homes in parks they generally go down in value over time. On the other hand, if you buy mobile homes on land, they’ll usually go up in value.  Buy Mobile Homes To Build Equity Fast Here is an example of how a mobile home builds equity fast. A house with a $100,000, 6%, 30-year mortgage loan gives you a payment of $599.60. $500 of the first payment will go to interest, $99.60 to principal. You built equity of $99.60. For right now we are ignoring appreciation.  A mobile home on land, with a $30,000, 8%, 10-year mortgage gives you a payment of $363.99. The higher interest rate is normal with mobiles. The shorter term is normal too, so you’ll own the home free-and-clear in 10 years instead of 30. The first month, $200 will go to interest, meaning $163.99 goes to principal. You built more equity in this scenario. A mobile home on land might appreciate more slowly than a “regular” house, but faster loan pay-down probably may cover this factor. Now, if you also chose to bank the difference in payments ($235.61 per month), you’d definitely be better off financially with the mobile home versus the more expensive home. However, this will not be true during times of fast appreciation. You can pay less per month and build more equity. Your real estate agent won’t tell you this, and don’t expect him to agree even after you explain it.  Other Advantages You can do what you like with the home when you own the land.  Mobile homes are cheap to maintain. The most expensive repair you’ll have in a mobile would be to replace the furnace should it die on you. Windows, plumbing, and doors are all cheaper on a mobile home. Property taxes, because they’re based on value, cost less. Insurance is less because you’re insuring less value. Just be sure you can get insurance before you buy. You may not be able to get insurance for some old mobiles in some areas. It is not a good idea to buy a mobile home if prices for houses are about the same as prices for a mobile home. You have to decide if you can make money investing in mobile homes. Every investment opportunity is not right for every investor. Take some time to decide if this is an area that can be profitable for you.

Foreclosures can make a real estate investor quite wealthy. It is certainly possible for someone to make quite a nice living buying foreclosure properties, fixing them up and either renting them or selling them at a much higher price than they paid for it. However, when you invest in foreclosures, you typically need to already have the money needed in hand before you can lock up the property. This is usually not a problem for seasoned foreclosure investors because they already have a proven track record with the bank they plan to get the loan from. Seasoned investors also usually have partners they can get help from if they need help getting money to invest in a property. There is one other way you can get money to invest in foreclosure properties. The government does have some grants available for those willing to do the work to get the grant. The rest of this article will discuss ways to use grants to invest in foreclosure properties.

Government Grants For Real Estate Investing

I know this sounds difficult to believe, but there are government programs out there designed to help investors invest in foreclosed homes. I know you may be wondering why the government would be interested in people buying foreclosed properties. Here’s why.  The reason these programs are out there is because the government feels that a foreclosed home that has been flipped often provides affordable, quality rental housing for low-income families.

There is a specific program called the Rental Rehab program which is a forgiveness loan, which means the program finances up to 50% of the total foreclosure rehab costs. While this does not secure the full amount for the foreclosure, it is just another way to keep your budget in check when looking for available financing. The only catch to dealing with the government is that you have a lot more paperwork to fill out and they may not move as fast as you would like for them to. This is when you have to exhibit some patience.

Financing a foreclosed property is not that difficult. There are lots of ways you can find money to invest in property. You can get a bank to give you a loan if you already have a buyer in place. You can partner up with an investor who has deeper pockets than you do and split the proceeds. You can also apply for a government grant like this article suggests. The key is being diligent in your search and seeking out the best deal. While having a buyer pre-approved is a great thing, it also helps to have a banking mortgage finance guru on your side as well. If all else fails, government grants are a great way to keep investing if you don’t mind the paperwork on the front end. Whichever vehicle you choose, be sure to do your homework before you sign those papers.

REITs, or Real Estate Investment Trusts, regularly invest in commercial properties such as rental apartments, office buildings and shopping centers. These groups have seen greater profits compared to the rest of the real estate market recently. When you understand why, you can use that knowledge to your benefit as an individual investor.

The main current popularity of apartment buildings is because the housing market has been so poor. With so many people losing their homes, there is a flood of people who need somewhere to live. Although some people simply downsize, it is easier for most people to simply move into an apartment complex and leave the responsibility of a mortgage behind. This may seem quite appealing if the prior homeowners have had a bad experience in losing their home.

Besides the recent rate of home foreclosures, there is another reason people are living in apartment buildings more. Lending practices have tightened up and many people who would have been able to get a house in the past now have a difficult time getting financing go buy their dream home. They might need a bigger down payment, a higher income or a better credit score before they start the process. Therefore, they stay in apartments while they try to accomplish those goals.

Unemployment also contributes to the reason so many people are unable to buy a house. Until this problem is solved, apartments are likely to do well in the housing market. Then too, many young people are burdened with enormous student debt since most educational institutions have raised tuition. There are fewer young house buyers than previously, and this is one of the reasons.

The individual real estate investor can turn this knowledge to his advantage in several ways. For example, the investor who understands the homeowner’s reluctance to take on the responsibility of home ownership again can respond accordingly. She can encourage this prospective buyer with facts about the advantages of home ownership. She can help the prospective homeowner who has had large, expensive home in the past see that a more reasonable house purchase might work better for them. She can work with the circumstances that present themselves.

As far as lending practices go, the investor can take advantage of the situation by coming up with his own financing to buy homes that others cannot finance. Then, when he wants to sell them, he can come in with contacts for alternative financing for people who wish to follow that route in getting a home.

The huge number of people who have trouble buying a home increase the probability the investor will get an inexpensive home before it is sold. What is more, the real estate investor can purchase apartment buildings herself if she is interested in that type of investment. For the same reasons the REITs are prospering, the individual investor can make a profit as well. Anytime is a good time to make money in real estate if you know where to focus your energy.

A home inspector plays a critical role in the home buying process.  As an objective professional, an inspector is required to produce a report of findings alerting you to unexpected problems that, if extensive enough, could allow you to back out of the purchase.

What to Expect From Your Home Inspector

Since a home inspection is an independent review of the property that is not influenced by any other parties in the transaction, a home inspector can alert you to the overall condition of the property.  Often, a clause is written into the purchase contract stating the sale is contingent on acceptable results of a home inspection.  In circumstances where the inspection reveals unacceptable damage or problems with the property, the potential buyer can void the purchase or renegotiate the offer.

While cost varies, home inspection generally runs between $200-$300, a relatively low cost for the potential buyer’s peace of mind.  And certainly a worthwhile investment if the home is found to be irreparably damaged or in need of extensive, unanticipated repairs.

Typically, a home inspector will assess

·         exterior features such as outside walls, soffits, decks, the roof, chimneys and drainage conditions;

·         interior items, such as condition of windows, doors, plumbing fixtures and electrical outlets and switches;

·         heating/cooling systems;

·         attic and crawl space (adequate insulation and ventilation)

It is important to know that inspectors look for current, significant safety hazards, but tdo not disassemble pieces of the home to determine whether an item is close to failure.  Therefore, while they may not be able to tell you exactly how many years a roof may have left, they will tell you if it needs immediate replacement.

Inspectors usually recommend that the buyer accompany them as they look at the house so they can explain the severity of any problems they find, give maintenance tips and answer questions.

What Home Inspectors Do NOT Look For

Home inspectors look for general problems within the home and on the property. They do not, however, do specialized work like termite, swimming pool, or septic system assessment. Additionally, many will not inspect the quality or condition of major appliances.  You usually have to hire pest inspectors and specialized service professionals to address these concerns separately.

Note: If an Inspector does miss a substantial problem, your options might be spelled out in the contract. Some have a clause in the contract limiting their liability to the cost of the inspection, while others have arbitration clauses limiting your ability to sue them. Still, some inspectors carry errors and omissions insurance. Discuss all your options with prospective inspectors prior to hiring someone.

Hiring Your Home Inspector

Your real estate agent is the best resource in finding a reputable home inspector.  You can also as friends and relatives for referrals.  Finally, you can visit the American Society of Home Inspectors website (http://www.ashi.org/find/default.aspx) for a list of certified home inspectors in your area.

I.              What is an REO Property?

Foreclosure results when a homeowner is unable to pay the mortgage or has defaulted on his/her loan. When this occurs, the bank will auction the foreclosed home for a minimum bid that includes the loan balance, accrued interest, attorney’s fees, and any costs associated with the foreclosure process.  The successful bidder at a foreclosure auction must agree to produce a cashier’s check for the full amount of his/her bid on the spot, and must accept the property “as is.” 

Should a foreclosure auction fails to result in a sale, property ownership is automatically transferred back to the mortgage company.  It then becomes a Real Estate Owned property, or an REO.

At this point, the bank will evict any current tenants, and handle urgent repairs.  They will also work with the IRS to remove any tax liens and pay off any homeowner’s association dues.  However, most banks are unlikely to absorb the cost of REO inspections or major repairs.  And while they generally allow you to incur such costs, they won’t lower the price to account for necessary repairs found upon inspection.

II.            Making an Offer

A.   Before you make an offer, consider:

·          Inspection contingency period.  Should inspections reveal damages that the bank failed to disclose and refuses to correct, this will allow you to terminate the sale.

·         Sometimes the bank will renegotiate the “as is” conditions you initially agreed to, rather than putting the property back on the market. It is worth requesting that the bank make repairs or give you credit after you’ve completed your inspections.

·         While most banks don’t provide REO financing, ask anyway.  In cases of extensive property damage, they may make exceptions.

B.   Then, you/your agent should ask the listing agent:

·         Are there any inspection reports?

·         What work has the bank agreed to?

·         Is there a special “as is” form?

·         How long does it take the bank to accept an offer?

·         How does your agent deliver the offer?

To expedite the process, provide the listing agent with a pre-qualification.  If you can provide an actual pre-approval letter and buyer biography, your offer will be that much easier to accept.

III.           Deal or No Deal?

While an REO may seem like a bargain, you must do your research. What is the current value of other homes in the same neighborhood?  Is there investment potential in the home?  Will location increase the value or over time?  How much upfront investment is required? (Don’t forget to consider the added costs of living elsewhere while you make this property livable!)

Since banks must show investors, auditors, and shareholders that they attempted to get the highest possible price on the property, REO’s generally sell at pretty close to full market value.  However, if you plan, save, and know exactly what you are looking for in a property, it is possible to find the REO home of your dreams at a price you can afford!

As a real estate investor, you are confronted by closing costs in every deal you make. The figures can be alarming if you are not ready for them. Too many times, a lender will tack on closing costs that a new investor does not understand. Some of them may be excessive. Do not be worried; there are ways to save on closing costs.

1. Try to use the same lenders as often as possible.

The more often you use the same lender, the more of a reputation you build with that institution. As you get to know them and they get to know you, a layer of mistrust is peeled away. The lender will work with you in every way possible if you become a valuable repeat customer. That does not mean you should never try a new lender. Adding new lenders to your stable will help you in all your ventures. Just be sure to develop a relationship with the ones you do use.

2. Get an upfront estimate of closing costs.

Get an estimate of what the closing costs will be as soon as the deal is being discussed. That will give you a heads up for trouble later on. Remember that this preliminary estimate is not binding in any way. However, it can help you in researching the details and planning for negotiations. In the last days before closing, you should be given a good faith estimate of the final closing costs.

3. Negotiate costs when you can.

Once you get that good faith estimate, you have a fairly good idea of what will be demanded of you at the time of closing. However, nothing is set in stone at this point. The lender can up their costs. Preferably, you could go in and negotiate even lower costs. Discuss the merits of your ideas from a position of power. After all, the lender wants to make the deal as much as you do in most cases. Remember that you are doing them a service by bringing them your business.

4. Accept the fact that some fees are not subject to alteration.

Face it; some closing costs are set by government agencies and they cannot be circumvented. You may be able to negotiate who pays these fees, but they must be paid by someone. These include title fees, notary fees, survey costs and others.

5. Timing is everything. Once you have the closing costs under control, close the deal immediately.

Do the negotiations for the closing costs when it is near the time for closing. After the costs have been nailed down, assuming that the rest of the deal is in place, proceed directly to closing. Needless delays will give the lender time to rethink their position and possibly charge you the higher costs they originally requested, if not more. When you invest in real estate on a regular basis, it is important to get the hang of managing closing costs. Otherwise, you will spend a great deal of money on each deal for unnecessary expenses.