Tag: San Fransico buy my house

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Real Estate Market Outlook for 2012

The real estate market is supposed to stay pretty much the same in 2012 as it did last year. There is expected to be a similar round of foreclosures, and a higher than usual amount of houses on the market because of this. Discretionary sellers who are in a position to wait will probably still wait instead of listing the properties this year. The industry expects the interest rates to continue to be low in an effort to spur housing sales. But with the strict guidelines it is harder than ever for people to qualify for a loan. I will probably have to say that I am more pessimistic than the general reports. I don’t think the economy is going to rise before the end of the year. Also it would not surprise me to see an uptick in foreclosures with the 5 & 7 Adjustable Rate Mortgages coming up. People who have been in a position to maintain the payments on their loans may not be in a position to either refinance or to change the loan when it begins to adjust. This may be okay since the interest rates are low right now but there are many loans that have built in increases upon maturity, which may increase the monthly payments. If that is the case there may be another round of foreclosures to wade through before the housing prices begin to settle and rise. So needless to say there may still be another bump in the road as we work our way through summer and into the fall. We will just have to see.

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The Importance of Selling Quickly in the Current Market

We know that despite the political climate and the way the media is discussing the economy and the economic outlook that we still have a way to go to get out of the mess we are in. Our region has been hit particularly hard with a high foreclosure rate and slow housing sales.   As a home owner who may need or want to sell, speed of the transaction will probably be at the top of your mind. Why? Well as you know the longer it takes to sell your property the more money it can cost you. Not just with the direct costs of mortgage, insurance, utilities, interest. But also with the indirect costs, houses that are on the market longer than 60-90 days take a price tumble. Most real estate agents that you talk with will say that if you do not have an offer in the first 30 days you need to revisit the price. So you lower the asking price $5,000, then it doesn’t sell in the next couple of weeks and they recommend another $10,000 - $15,000 to spur interest.   It is a vicious cycle. The original price was not right for the condition of the property and the market. So you need to adjust to get rid of the house. So you have to work hard to come up with the right price in the beginning and then market aggressively to sell quickly.   Let’s take an example of a house for $350,000. It doesn’t sell for 150 days. The agent asks for a $5,000 reduction at day 30, another on day 50, another $10,000 on day 75, another $5,000 on day 120. So at day 150 you get an offer for $320,000. You decide to take it. Then the house is inspected and the buyer wants you to fix about $3,000 worth of “miscellaneous” needs. So you go to closing at day 180 for a grand total of $317,000.   You factor in the cost of the closing, usually 3% and then the real estate agents commission 6%, inspections & miscellaneous fees (1%), and then finally the tax on the sale. So your $317,000 suddenly becomes $272,000 or so. Not to mention the 6 months of payments, interest, utilities and the like and you can see the result of waiting to sell the property the conventional way.   So time is a huge factor when selling. You can be much better off in the long run working with a professional Real Estate Service company that can buy your house at a reasonable price and get you out from under quickly.   So investigate your options and weigh them it could be that your “off the top of your head” thinking that you should only work with an agent could be leading you down a path of no return. Give us a call to see what options you may have. You may decide that you want to continue working with an agent is best for you but you will never know unless you have all the information.

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How The Heck Do You Finance The Deal

If I had a nickel for every time someone asked me that question I would have an extra million dollars just lying around and would be able to give it to someone to buy my house. Financing is really the key to opening up your investing business right now. Over the last eighteen months or so the financing picture has changed drastically. In February of 2007 you could get a 100% LTV non-owner occupied loan with a mediocre credit score, no proof of income or assets and just a signature. Now if you can get funding at all, you have to have a great credit score, fully documented assets and income and a large down payment. Not only that but you need to have seasoned money for the down payment and reserves. The pendulum has swung back the other way almost to the extreme.   If you or your buyers are going to use conventional funding sources, you need to make sure to have your act together. Ensure that everything is documented perfectly. This is the main reason why it is much tougher to sell your rehabbed properties. Buyers are not prepared. The good news is that if you buy the house right, you are sitting pretty to sell your properties creatively and to make a great profit. This brings me back to financing, it is more important than ever to use private lending in your business. Learning the ins and outs of Private Lending can be the difference between thriving in this economy or shutting your doors and missing the best opportunity for wealth creation in our lifetimes. Unfortunately most people don’t understand how to find Private Lenders, or how to be one for that matter. Investors are afraid to talk to people about what they do and ask them if they are happy with their investments. It is amazing what happens when you talk to people. You can find money coming out of the wood work. The other night I was flying home from St. Louis and chatting with a college professor about our lives and jobs. At the end of the 3 hour flight I had a potential new private lender and had sold one of my new courses about how to be a private lending. Most people are in a position where they just lost some significant money in the stock market. Their mutual funds are stagnant or have gone down as well. People are afraid, very afraid. They don’t see any options available to them except a T-Bill that earns less than 3% annually. I show them how they can earn a safe and secure return by lending me money that will be secured by real estate. I talk with them to find out their goals and determine if what I do will fit their criteria or not. I never try to force anyone into an investment. It will never work for either of us if I do. I am careful to stay well within the SEC and State department of securities guidelines. I am careful to only approach people when I have a relationship with them rather than hitting someone up when I first meet them. I get to know them and their goals. I am not a financial planner. I do not present myself as one on TV or through what I say to people. By building a relationship you understand their needs better. You also stay well within the law, which is always a big thing for me. I really don’t look good in stripes. Your assignment this week is to talk to people about your investing business and discover if they are happy with their investments. Find out what they earning from their investments. Don’t push them to reveal everything to you immediately; you can follow up with them later. Next week I will talk about what to say to get them to open up to you.