The Facts Behind the Equity

An clever residenceowner may be excited to watch the worth of their house unhurriedly rise, and then call their REALTOR to aid sell it, as they reap the profits. But is it genuinely that gash and dry? Does a house that has profited $100,000 in worth genuinely mean the residenceowner can pocket that or employ it to go on to their next residence?

Typically it isn’t that easy with the extra costs involved in residence-selling transactions like agent’s fees, convey taxes and so on.

Elan Chertock blogs about the truth behind the numbers.

“I execute foster residence ownership for the many noteworthy leangs that recede with it including the long cycle financial profits.

But, I powerfully foster everyone to gaze at the genuine numbers of how much it costs to acquire pro! perty and how much it costs to sell property, and then subtract those quantitys from any potential profits in equity.”

Helping your clients comprehend everything that is involved in the residence purchaseing and selling process is an integral harbourion of being a Realtor. Many residenceowners may simply see the worth of their house rise and estimate they can delightin a rapid profit. They certainly may be able to execute so, and you could be the one to create it happen for them. But it is mandatory to educate them so that they are aware of any and all extra costs that they will be responsible for.

Deciding Whether a Short Sale is the Right Thing to Do

To

Pete Goodman blogs about the factors to consider when it approachs to deciding whether or not a

“Price prevents many genuine estate transactions from coming together, but pride slays many a deal too. In seeking a win/win outcome there are often moments of stubborn denial, wounded egos and walk-aways.

Yet the seller wants to sell and the purchaseer wants to purchase. Standing your ground may mean you won the battle but lost the house. Which win execute you want?”

For many residenceowners, a

Scams Target Foreclosure Victims

Unfortunately, whenever there is an epidemic, or a need for assistance, someone, somewhere, will probably employ it to their advantage, as an opportunity to profit some fraudulent funds. In the genuine estate

Michelle Hall shares some current and common scams that are making their way through to some potential foreclosure victims.

“For those who are desperate to hold their residences, a powerful message of hope is tempting in attempting times. Companies that tout ads of assures to desist foreclosure on your residence, when you are fair about to lose it, create you want to pick up the phone and call them for aid.

Many that spout exaggerated messages, however, genuinely fair want your money, and have no intention in actually aiding you out of foreclosure. Some even finish up t! aking your money AND your residence.”

If your client approachs to you in the unfortunate situation of potential foreclosure, and questions you about possible options and/or if they have been victim of a scam, it is mandatory to be aware of the current scams recedeing on, so that you may clarify the situation to them and aid point them in the accurate direction.

What Happens When the Fed Stops Buying Mortgage Backed Securities

If the Fed desists to purchase Mortgage Backed Securities in March, most will amazement what kind of effect that will have on mortgage rates. Some people have predictions, but has anyone actually crunched the numbers?

Scott Voak has holdn a long difficult gaze at the facts and figures and gives us his prediction of what could happen in March.

“I was gazeing at numbers over the last year as they related to sales worths to attempt and figure out what effect that Feds purchases of Mortgage Backed Securities has been. A major problem of acquireting accurate numbers is that housing prices are reported as an average or median price.

In

Scott Voak predicts that if and when the Fed desists purchaseing mortgages, rates will rise rather rapidly. We will fair have to wait and see how ta! ll they will acquire and how rapid this will happen.

Could I Lease a House For Sale? Ask a REALTOR

I recently saw an ad of a house for sale. I am interested in calling the REALTOR to see if the seller would be interested in a rent-to-own agreement, but I am hesitant to contact the Realtor because I fear that they would just tell me that the seller will not agree to it. My question is: what is in it for the realtor? Would they still make a profit off of the house or not?

-Jeff

Most sellers are not willing to do a lease-to-own in the current market. It does not hurt to ask, for sure. The Realtor may earn a part of the first month’s rent and then a commission at closing of the property. It is best to find a property you like to lease, then have the first right of refusal to purchase the property. That means that at the end of the lease, if the owner wants to sale, you would have the first right to make a purchase of the home.

Amy Downs is a REALTOR with Keller Williams Realty in Dallas, TX.

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Predicting the Future? Maybe You Shouldnt

As 2009 came to a close, everyone was quick to give their two cents as to what the new year would

Bob Phillips blogs about the current state…and the possible future state…of the real estate industry.

“2010 is just a few days old and already the experts are making predictions for the year.

Given how varied their outlooks, its clear that the professionals have no better view of the future than the amateurs. An expert can make an educated guess, but its a guess nonetheless.”

It’s important to stay on top of the latest news and trends of our industry. And those who can study statistics and gauge what the future will

Should We Take A Loan or Update Our Home? Ask a REALTOR

Our home was appraised for $435,000. We have no mortgage, but we do have an equity loan out for $50,000. Later this year, we may sell and purchase a home for around $400,000. We have a combined income of approximately $90,000/yr. Our credit is only good at best. My dilemma is, do we get another equity loan for $35,000 which we will use to pay off all the high interest loans/credit cards, re-do one bathroom and finish window replacements (replaced half the house two years ago). Or, should we add that amount to a requested mortgage? If you suggest the latter, it will be a strain to get the other windows replaced and re-do the one full bath, therefore we would be expected to take a bit off the asking price. Any suggestions?

-Robert

Without the benefit of knowing the condition of your home or which real estate market you are in, I will drop back and punt to the four “P’s” of marketing.

Product, Price, Placement and Promotion are the basic principles involved in marketing your home. The product is what you are offering for sale, and is essentially the location, style, bedrooms, bathrooms and aesthetics of your home. The product is the only part that is completely under your control. While the list price is yours to choose, the market response will let you know if you chose well. Ultimately, the market dictates the value of your home.

This

Now, for a more specific answer. Extending the equity line and paying off higher interest loans will help your credit situation, but only if you don’t charge them back up again. I know the current economy has put a strain on everybody’s financial situation, but I believe that is starting to turn around.

As far as the improvements to the home, I posted in my blog a few weeks ago that people buy bathrooms and kitchens. I am assuming since the home needs new windows that it is an older home and the bath is probably quite dated. Update the bathroom, but you do not have to go “over the top.” You probably won’t get a dollar for dollar return, but it could make the difference in the sale. If you are definitely going to sell, do the bath first.

If you are still up in the air about selling, replacing the windows will probably make the bigger difference to you in the monthly utility bill. Finally, I cannot stress enough the importance of hiring a Realtor that knows your local market. They know what is selling, and can see first hand your home’s condition and marketability.

David Welch specializes in residential re-sales and new home construction at RE/MAX 2000 Realty in and around Orlando, FL.

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An Innovative Way to Divide Rent

(photo courtesy of A Natural Sound)
It's the first of the month and it's time to pay rent. How do you do it? Do you pay rent with a credit card? Do you have to collect rent from your roommates, hope that their checks clear and then pay the total to the landlord in your own name?
If you are in charge of collecting the rent from roommates, the most common way to divide rent is based on the size of the room each resident. However, there are some other ways to quantify the value each resident brings to the house and apply that to the money owed each month.
See the below email correspondence for one apartment's solution to figuring out who owes how much for a given month:
Subject: jokes aren't cheap
From: M**
To: A****, D***, E***
can i have $418 at your earliest convenience please?
From: D***
To: M**
Holy crap it's december!
From: E***
To: M**
maybe we should base our rent off the number of jokes not told. i mean each of us probably averages 2.5 jokes per night, that's 10 total jokes per night. �on an average month, that's 300 jokes per month, or $1.39 per joke ($418 / 300 jokes). � so drew, who isn't that funny and doesn't have many good jokes, would owe slightly more than us for all of the missed joke opportunities. �you on the other hand, would not owe very much for rent, because you are not missing out on many joke opportunities, thus reducing the dollar per joke you would owe.

Judges Throw Out Multifamily Cases that Abuse Legal System

A recent U.S. District Court decided in favor of Post Properties, who had been sued by the Equal Rights Center (ERC) for violations of the Fair Housing and Americans with Disabilities Acts. The judge granted the defendant's Motion for Summary Judgment and ruled that the plaintiff did not have legal standing in a court of law.

In both cases, advocacy groups filed suit after visiting rental properties to determine whether they were up to code and were then dismissed. We'll start with the facts of each case and then move onto our opinion of the opinion.

Although neither the stories from the Atlantic Business Journal nor the NAA disclosed the specifics of the case, we believe that the case was very similar to a case we wrote about in 2008, Garcia v. Brockway. In that case, the same ‘failure to comply' allegations were brought against a developer whose apartment complex did not include federally mandated disability access features, such as curbside cut-outs.

The Garcia v. Brockway case was dismissed after the judge ruled that the plaintiff's interpretation of the statute of limitations, (that interpretation [that the statute of limitations for liability was 2 years from the date of the first occupant and not 2 years from the date of the discovery of the problem] extended liability to virtually all individuals and corporations involved in the construction and ownership of the building) was antithetical to the purpose of their lawsuit.

In the Equal Rights Center v. Post Properties case, the judge ruled that the ERC had no standing in court because the plaintiff's injury “occurred as a result of its decision to investigate Post [Properties]."

A Summary Judgment occurs when the judge, not the jury, makes a determination on either a specific point or the entire case. Basically, the (usually) defense is asking the judge to act as the entire jury because there is some kind of ‘point of procedure' that needs to be addressed. Juries are employed only to hear the facts of a case, not to address obscure points of law. In this case, the judge ruled on whether or not, according to the law, the plaintiff had legal standing.

Above we have two different court cases, both with the same allegations and both dismissed by a judge and never making it in front of the jury. Both judges essentially ruled that both plaintiff's were abusing the legal system.

In the first case, the plaintiff, the Disabled Rights Action Committee, by arguing that all individuals and entities involved with the construction where all liable for damages discovered within 2 years of the discovery, if upheld, would drastically increase the amount of people that advocacy groups could sue.

In the second case, the plaintiff, the Equal Rights Center, by arguing that they had sustained injury by taking it upon themselves to inspect buildings for compliance with the FHA, would incentivize those organizations to be like people who make a living by stepping in front of cars.

This is not to say that those advocacy groups do not serve well their members and causes, merely that those groups that use their resources in such away are not legally appropriate.

U.S. apartment vacancies rise

A Reuters report today said that US apartment vacancies are at the highest level in 20 years. This may be good news for renters as they have a better selection to choose from and many property management firms are offering incentives such as paying the first month’s rent. Landlords and property managers however need to be concerned that it may take much longer to rent their properties.

Here are a few tips to help you avoid vacancies:

1. Ask existing tenants a few months early if they plan to stay for the next year.
2. Get your tenants to sign a lease as soon as possible.
3. Collect a security deposit.
4. Advertise your vacancy several months before it is available.
5. Use every resource possible to advertise your vacancy.
6. Offer incentives to get tenants to sign a lease quickly.
7. Make your rental stand out from the millions of others with special features.

Manage your rental effectively and you can avoid vacancies and loss of valuable rental income.

Renting in a small town

If you own a rental property in a small town, you may find it hard to get tenants. Your area just may not have many people looking to rent. Does that mean you should lower your rent or sell your property? Not necessarily.

A single family home in a quiet suburb or a unique apartment can be appealing to a lot of people. You just need to make sure the right people know your property is available.

1. The first key is to give your rental lots of exposure. It is difficult for major apartment and home rental sites to cover every town.

Look for smaller local sites to post an ad. There are many free or low cost classified ad web sites available. Also, get your ad on paid web sites where it won’t be buried behind dozens of other properties.

2. Second, give yourself enough time to find renters. Start looking 4-5 months before you need to fill a vacancy.

3. Lastly, contact a local property manager or rental agent for help. They typically charge the first month’s rent, but that is better than losing money if your property is not rented for a long time.

Once you have good tenants, do everything you can to make them happy and keep them there for a few years.

Rentalads.com displays Apartments.com ads

I noticed the other day that Rentalads.com is displaying listings from Apartments.com. It will be interesting to see if that helps them or hurts them. The added content from the listings should improve their results in the search engines and possibly with property managers, but the ads take renters away from their site.