Real Estate Articles
Good Advice For Planning Home Improvement Projects-added 1-18-2012
Residence improvement is something any residence owner will need to cope with while owning a household. Even though you have had an unfavorable expertise with household improvement projects previously, these suggestions should make the process seem far a lot more manageable and encouraging.
Organize your methods according to undertaking type. A plumbing toolbox could very well be filled with PVC glue, pipe wrenches and pipe fittings. Make one more toolbox with electrical equipment and have wires, switches, along with other items related to the electrical projects. By doing this, your equipment might be much easier that you find.
Most building supplies are pricey and prone to theft. It is essential to lock up all building supplies at night. In the event the household becoming worked on is really a obtain surroundings, which means that all the doors and windows are in place and capable to be locked, then it really is acceptable to shop the supplies inside. If the home is not obtain sufficient, think about a storage container or unit that can be locked.
Installing a fresh mailbox is surely an simple method to spiff up your house. A fresh mailbox could guide your house appear upgraded, and it can additional curb appeal. Call up your town office initially to be sure that your brand-new mailbox will meet their codes. Installing a new mailbox is actually a reasonably fast home improvement.
When outsourcing your house improvement undertaking to a contractor, the reputation from the specialist is far more helpful compared to the discount rates provided. A crappy contractor who charges below-market premiums will cut corners and make use of poor components. The substandard task will just mean costly repairs later. In addition, a poor construction task might be dangerous and render your home inhabitable. Pick someone you possibly can trust.
When painting or demolishing, employ a drop cloth or tarp to cover things like household furniture and floors. Guarding surface areas from scratches, dents and splatters will save you time and income during the long operate. You should also cover walls if debris is likely to be flying close to whenever you whack out a cabinet. All fixtures must also be covered if you are painting.
Now that you simply know of some ideas that you can use, you might be now ready to begin your very own house improvement undertaking. Flex your creativity muscles in improving your house during the way that you want prevent disasters from happening while you will be realizing your dreams by applying the ideas which you have learned at this site.
Helpful Home Improvement Tips Everyone Can Use! added 12-12-11
Knowledge is power, and with a little information, there are many home improvement projects you can accomplish. Realize your home improvement dreams with the advice in this article. Read on for some great information.
Give your porch an "up" as well. Your porch makes the first impression on any guest who is visiting your home. Throw away any junk lying around and beautify it with plants, furniture, and new lighting. As an added benefit, you can enjoy an increased home value.
Taking the proper safety precautions should always be your first concern when starting a new renovation project. You need these precautions so that you or your home are not injured. Before you go to work, you should review all of your tools' instructions and safety warnings. Find someone to demonstrate how to use a tool safely for you if you haven't done it before.
Take whatever steps you need to in order to get your contractor's attention and ensure they are listening when you are telling them pertinent information. It is much easier to voice your concerns or see your vision put into play when you have a contractor whom you consider trustworthy. The contractor that won't take the time to listen to your needs and desires is not likely to perform fully as expected. Look for a contractor who knows how to listen.
Building dormers into your roof can help make your attic space more useful. This adds charm to your house, along with potentially doubling your square footage. This makes your property worth much more and increases the amount of usable space in your house without breaking the bank.
Look at the low areas around your property, including those near the foundation of the house. You should fill up these areas with soil so you do not get puddles in your yard. Water which gets into your home can cause wood rot, electrical problems, and even foundation concerns.
Lampshades are not typically very interesting. By using stencils, creativity, and paint, you will be able to transform your boring lampshade into a masterpiece. Spicing up your lamp shades will make a surprising difference in the personality of a room.
The information presented in the article above will help you finish all those great home projects. Completing even a small task will improve your home and give you a terrific sense of accomplishment. When your project is complete, make sure you take time to enjoy the fruits of your labor.
From where to get information about a mortgage loan added 11-14-11
Taking out a home mortgage loan is very common in the country. However, before taking out a home mortgage loan, it is very much important to get to know about your mortgage payment amount. In order to find your monthly mortgage amount, you can take the help of a mortgage calculator. This helps you a lot to take the decision regarding whether or not to choose a particular home mortgage loan.
Mortgage loans are offered by various financial institutions such as commercial banks, credit unions and mortgage lenders. If you approach a mortgage lender for a mortgage loan, it will offer you the information regarding how much you can borrow, depending upon your credit score. Once you are sure about your affordability, you can look out for the home mortgage loan which does not affect your budget. Before obtaining a home mortgage loan, it is important to obtain the necessary pre approval. If you have the necessary pre approval, you can have more leverage in negotiations with the seller. Moreover, this helps you stand out among several other buyers bidding on the home. Anyways, it is important to find out the mortgage lender from whom you want to get the home mortgage loan. You can find your mortgage lender from a variety of sources such as by using the Internet, through a mortgage broker or on your own.
Through Internet
The introduction of Internet has brought about radical changes in the mortgage industry. Now the days are gone when you had to visit the offices of credit unions and the commercial banks in order to obtain information about mortgage rates. Now, you can obtain mortgage related information while staying at your home only. Since it is now very easy to communicate with various mortgage lenders, rates charged by different lenders are very competitive. Many of the top lenders operate online and offer an exclusive range of mortgage deals for you. You can take the help of online mortgage companies such as Mortgage Search 123 and Lending Tree.
Via a mortgage broker
You can also take the help of a mortgage lender to obtain necessary information about different mortgage rates and to get the best mortgage deal. If you are troubled with serious credit crisis, taking the help of a mortgage broker can indeed be very useful. Not all the brokers who operate in the market place charge fees from the borrowers. However, they charge fees from the lenders. There are however some brokers who charge fees from the you and the charges range from 0.5% to 2% of the principal amount.
On your own
Another option that you can explore is to directly work with a lender. Here you have to visit the offices of different mortgage lenders so as to obtain the best mortgage rate.
However, before taking out a home mortgage loan, you need to know the monthly mortgage amount associated with it. In order to know the mortgage payment amount, you can take the help of a mortgage calculator.
Water Sports in the Florida Keys added 10-25-11
The Florida Keys are a collection of islands of the southeastern peninsula. Geographically, they are known as a “coral archipelago” or “island group”. This chain of tropical islands are found off the southern coast of Florida and divide the Gulf of Mexico from the Atlantic Ocean.
Home to island living and a plethora of water activities, the Florida Keys makes an ideal place to purchase a vacation home or relocate. Another big plus is Florida Keys real estate holds its value, because of its limited space.
Aside from the night life and beachfront, there a number of water sports to keep both homeowners and guests busy all year round. That’s right, “winter” in the Keys rarely dips below 70 degrees.
Fishing:
You name it, the Florida Keys have it. Spear fishing. Sport fishing. Charter fishing. Casual fishing from beaches, docs and bridges. Florida Keys real estate boasts great fishing from January through December.
Diving:
Whether you are into skin diving or shallow water diving, snorkeling or even scuba, the Florida Keys has it. There is no limit to the diving. Taking a boat out into the Gulf of Mexico or into the Atlantic is an adventure in the making. Both reef and wreck diving are at-hand.
Kayaking:
Like to shape up without having to run a treadmill in the gym? A piece of Florida Keys real estate will give you access to the great hobby of kayaking. You can kayak for pleasure, getting away from it all or do a little fishing. Get some friends together and you have a great group activity, maybe even a picnic.
Parasailing:
Feeling adventurous? Try parasailing. Get a bird’s eye view of the Keys while having a blast. This sea/air going sport is perfect for those that want to try something out of the ordinary. Be sure to bring a friend and a camera to catch the moments.
Paddleboarding:
If you want to experience the water in a completely different way, try paddleboarding. With a long surfboard and a paddle, you can glide around the Keys. Its perfect for getting a tan and working your upper body while doing it.
Personal Water Craft:
Not only can you boat around the Florida Keys, you can jump on a PWC. Jump waves and have a world of fun speeding near the coastline.
Regardless of the water sport, you can enjoy the fun year round in the Florida Keys
The Most Common Real Estate Sales
Tips And Advice added 9-28-11
The housing and real estate market of today is
filled with varied complicatiosn and anxiety for anyone facing it. The
recent pricing and valuation issues as well as the increased layers of
competition in local markets continues to make the selling process
much more difficult than ever before. People considering selling
should know the most common real estate sales tips and advice.
Selling any type of property or house in the marketplace today presents
very unique challenges. There are now plenty of buyers that have found
the current conditions to be ideal while still not adding up to provide
the numbers of people that match the properties made for sale. Many sellers
now find it takes much longer to sell a property than ever before.
The past few years have seen numerous ways by which the selling
process can be made simpler. Many of the most common suggestions are
aimed at helping the seller. People that understand what these tips are,
often ensure their sale is kept as efficient and effective as possible.
One of the most popular suggestions is to have a sound
marketing strategy. The property or house should be listed on as many
websites and local listings as possible to ensure it is highly visible.
This helps ensure targeted consumers are reached. This is where a great
Real Estate agent comes in.
Partnering up with local agents and brokers is extremely inportant.
LTop producing brokers and agents are typically well connected and are
able to sucessfully market any piece of property or house made available.
This helps ensure as many potential buyers as possible are reached.
A final step of the real estate sales tips and advice is to price your
home correctly. Working with pricing helps ensure more buyers are attracted
to the actual property.
For Expert help with Key Largo Real Estate contact Sally Stribling.
Florida Keys Real Estate – Factors to consider
before making a foreclosure deal added 8-30-11
When purchasing a foreclosure property in Florida Keys, an investor needs
to take care of certain points. Sometimes buyers get attracted to cheap
prices and sign the deals thatwill lead to trouble in the coming future.
Little patience and detailed research can help an individual in avoiding
many future problems. Let’s discuss this topic in detail-:
• Understanding all rules and regulations - It is very important for
the investors to understand all the regulations and laws as far as Florida
Keys real estate is concerned. Check out whether there are any fines,
liens or taxes on the property. If property is bought without getting
these taxes and fines discharged, a buyer will have to pay for them.
• Examining the property carefully – A Property needs to be examined carefully. For carrying out this task, help of experienced builders and professional real estate agents is necessary. This is an important step when one invests in Florida Keys real estate. Because after buying a property, buyer will be liable for every issue arisen on the property. He or she cannot complain to anybody. So, it is always better to know in advance - what the problems in a property are and whether there are any legal issues concerning that property? Some problems and defects are possible to fix. Talk to the sellers and get them fixed as early as possible. If the problems cannot be fixed, avoid purchasing that property.
• Don’t take it at face value – Another point worth considering is that
never estimate any property at its face value when inspecting for it.
Fresh paints may hide some damp areas. There is a possibility of having
many problem areas as far as foreclosure properties are concerned. These
problems may relate to infected drywalls, leaky taps, mold and others.
The place may be full of rats, bats, insects and other species. Do not
forget to check out for all these problems. It is better to employ a
trustworthy agent who is well familiar with Florida Keys real estate,
its rules, regulations and laws. He or she will assist you in
complying with all property issues.
Foreclosure deals have become very common in Florida Keys. This is due
to the fact that one can get a nice domicile or commercial property within
the budget. Additionally, when above factors are kept in mind, it will
help in going through the process smoothly.
The main advantages of Owning A Home added 7-21-11
Being the owner of your own personal real estate is a main part of the
American aspiration and there are a couple of main reasons why you would
like to posses your own personal property or home. Through the income
tax advantages towards the rise in worth, many reasons exist for exactly
why having a property is a lot better than renting.
Even during the current market, owning a home is advisable. There are
lots of reasons why homeownership such as income tax write offs, increasing
amount of property or home worth, proudly owning an investment vehicle
as well as a spot to call your very own.
Income tax Write offs
Many householders are able to discount their property on their own tax
statements. Through the interest paid plus property or home taxation
paid out, property owners will be able to itemize these write offs.
Check with a good income tax person or company to learn more about
the actual income tax advantages of buying a property. These types
of income tax advantages can certainly genuinely help make owning a
home less than leasing. With regard to tenants, there aren't any income
tax advantages.
Increasing amount of Worth
Of course house values currently have decreased within the last several
years, however having a property in the long run may frequently see
a rise for the property's value. Having a property should be thought
about a longer term investment decision. As time passes, the value
of your property is going to increase. There's an old saying, "Posses
your own possessions as well as lease ones own debts." Since a
home is recognized as a resource (raises in value), buying a home will
help you improve your prosperity. A number of millionaires use real
estate property in order to improve success, because real estate as
time passes does increase in worth.
Possessing Property
It is very important increase your resources as time passes. Through
personal savings balances to retirement planaccounts, you need to position
your cash throughout places that you'll see a return. There isn't any
better way to accomplish this as compared to investing in a property.
Real estate property is an excellent method to make investments for
the long term, additionally you receive an additional advantage of
experiencing someplace for you to call your very own! In addition,
with rates of interest currently very low a lot of home mortgages,
now could be a great time to buy a brand new property and also spend
less. Through leasing a home, this really is regarded as a negative,
because your worth throughout leasing never ever raises. When you're
finished with leasing the property, you don't have anything to show.
How You Can Make a relocation move without taking any risk added 6-20-11
Relocating from one residence to another is not necessarily enjoyable. Don't allow a personal injury, add energy towards the flames. In case you are not really cautious you might end up having an aching back or neck. Probably the most typical accidents come about whenever we lift up something, which is just too hefty. In case you are possibly not cautious you might overload ones back or else you may drop some thing and also harm a few of your own personal things. We have now used some time to demonstrate tips on how to employ a more secure switch in the event you are moving by yourself.
Make Sure And Load up The Correct Way
The most apparent and most typical way in which it is possible to damage your own back is actually moving containers which are too large. There are actually certain methods you should use which will lessen the chance of damage to your self when you're relocating.
Large things ought to be put into a smaller container. Should you position a number of weighty belongings in a container, you could possibly simply have crammed it excessively. And also the particular person raising it might damage their selves. Likewise lots of people realize that you are certainly not designed to raise weighty goods using your backside. Utilizing your thighs and leg will help make a huge difference. However, if you've crammed the box with a lot of excess weight, it's not going to make a difference.
Should you allow it to be overweight, the underside may possibly bust out causing all of your own personal goods to drop all the way through. Large packing containers ought to be restricted to less heavy things.
Make sure that you understand how to pack up and lift items, there is certainly an additional method available to safeguard your self from cuts and lacerations. Should your packaging of, knives, or any other sharp items, you need to wrap up every item separately. They could pierce the package as well as cut and injure you. So make certain all of your current sharp items will be properly secured.
Ask For Help
You most likely cannot relocate all of your current goods on your own. You almost certainly have got large sofas as well as cabinetry. It is time to inquire about a buddy to assist you together with your move. When two or three people move large materials this splits the load all around. And you will probably reduce the likelihood of damage.
Also acquire a dolly. Obviously you can purchase one, however possibly the upkeep team possesses 1 you may use. It's ideal for moving large packing containers along with things all the way down lengthy hallways and stairs.
Just be sure you utilize these preventative measures while having your relocation.
Florida Keys Rentals added 5-14-11
It is sometimes essential to merely get away from all of the daily anxiety in your own life. This is where the Florida Keys fit in. An incredible area to escape the doubts and pressure of the mainland.
The Fl Keys or Our Country's Caribbean are a group of island destinations starting about 30 miles down below Miami. The main appeal of the Florida Keys is the water activities, though the Keys provide considerably more than just this. It's possible to also enjoy the Florida Keys through numerous Florida Keys holiday rentals, from Key West to Key Largo, with some excellent choices in houses, villas, cabins, cottages, condos to book, and much more.
Renting a vacation home in the Keys is a wonderful way to chill out for what ever timeframe you can get away.
Almost all the Islands from Key Largo, Islamorada, Hawks Cay, Key Colony Beach, Marathon, Big Pine and all the bottom Keys down to and including Key West are well-liked locations you can relax and experience a Keys Lifestyle.
3 Items To Look Out For When Receiving A Home Loan Online added 4-28-11
The world wide web can be quite a important useful resource for studying the ins and outs of getting a home equity loan. It can also be a terrific place to locate a reliable real estate agent, as long as you are careful not to get caught in an online home equity loan scam.
Look out for subprime lending.
Subprime loaning occurs when a loan provider offers to provide you with
a loan for an extremely high rate of interest and adds on high costs.
Usually these loans are provided to high risk people that are generally
so eager for a loan that they donít spend some time to check around for
an organization which will help them despite an undesirable credit history.
Beware of equity stripping.
Equity stripping occurs when a loan is based exclusively on the valuation
on the home, and doesnít factor in your power to repay the obligation.
The typical result of these loans, is a debtor canít pay it back and
the loan provider ultimately ends up getting the home and all of the
equity from it.
Beware of aggressive loan providers.
Predatory lenders thrive on creating loan scenarios wherein the buyer is destined to default, therefore losing his home. A lot of the signs that you might be dealing with a fraudulent lender include a broker that will require you to put fictitious information on the loan application, apply for a larger loan than you would like, or sign bare loan documents, saying they are completed later. Make sure that you stay clear of lenders promising one set of conditions when you initially apply after which change the conditions when the time comes to sign or refuse to present you with duplicates of your forms when you have signed. Fraudulent lenders frequently misrepresent the type of credit you happen to be being supplied and fail to provide the neccessary loan disclosures.
There are a lot of good reasons to apply for a home equity loan online. The procedure is quickly, easy, and straightforward, as long as you be sure to stay away from the dangers of dealing with dishonest brokerages.
Should I Consider Purchasing a Home After Foreclosure? added 3-28-11
Foreclosures on the market are normally available, regardless of the condition of the economy. Buying a foreclosure might or might not end up being a wise plan of action. Following are things to consider before you take the leap into purchasing a foreclosure.
Is it best to buy a foreclosure or delay the process until the bank
or mortgage company has completed their process? Typically you will get
a better deal, if you make your purchase during foreclosure. However,
you could be truly getting the property "as is" with few, if
any, guarantees. Making a proposal after a home becomes an REO (real
estate owned) of the lender may cost someone a little more, however,
the key owner/lender has more then likely spent some funds in repairing
some problems and/or giving the home and property a little TLC to make
it more saleable.
Is the property truly a great buy?
Many people mistakenly assume that all foreclosures equate to a bargain
purchase. Consider that belief a bit. First, most foreclosures take place
on real estate where little equity exists. For example, people owning
a home worth $250,000, but having only a $100,000 first mortgage will
typically never allow the property to be susceptible to foreclosure.
They might be throwing away $155,000 in equity.
Contrast that example with another $250,000 home with a first mortgage
balance of $245,000. If you could not afford that home, you might be
much more likely to let it go to foreclosure since you are losing little
money. You, being the buyer, might need to pay near the FMV (fair market
value) of $250,000, even if it were a foreclosed property or home.
Are there any expensive repairs that should be completed before you resell
or stay in the property or home?
The nature of home loans may make it faster and easier to purchase a
house in great condition for a higher price than to request "rehab" or
repair dollars to get integrated to the loan. Often, you may be required
to fund major repairs out of your own pocket.
You should find MLS (multiple listing service) listings of similar homes for sale in the same neighborhood as your preferred foreclosure home to compare prices. Is the price of the foreclosure substantially lower than current prices for matching homes? When the price is similar, you may be wiser to buy a house from a professional real estate professional. Should the purchase price for the REO be substantially less than typical FMV for that area, you might have an actual bargain.
How to Set Up a Vacation Home as a Rental added
1-19-2011
One of the best real estate deals nowadays is to own rental property. Is that really possible? Yes, however, it must be a certain type of property. The property should be a vacation property able to support short term
rentals throughout the year. In order to be effective at turning a second home into a vacation home, there are a series of considerations and steps that you will need to be aware of and undertake. These will be described in more detail below.
Legal Considerations
Most of what is stated below will deal with Florida and local laws. However,
most vacation homes in other states will have similar rules that are
applicable. The author’s previous experience has been with short term
rentals, for the most part.
Florida basically permits an individual or corporation to rent a dwelling, whether a condominium or home. In some cases, the local county where the property is located, will insist on an inspection of the property, however for the most part, this isn’t the case. In the case of condominiums, often the condo association will handle some of those issues.
The major interest the state and county has is whether or not the owner of the property is collecting and paying sales tax on the rentals and remitting it on a regular basis. One other consideration: before trying to rent your property out, make sure that the local ordinances support short term rentals. One further consideration is that it might be advisable to set the property up as a corporation for both tax and legal protections. Consult an accountant or attorney for advice in this regard.
Sales Tax
Sales tax on short term rentals are applicable to hotel rooms, rental
homes and condominiums for stays of less than 180 days. With declining
local tax revenues throughout the country, states like Florida, are
now more vigilant in their efforts to collect sales occupancy taxes.
In Florida, sales taxes on short term stays are especially important
because the “occupancy” sales tax is typically double the regular sales
tax rate.
For instance, if a county has a sales tax rate of 6% or so, one expects that the occupancy sales tax would be approximately 12%. Obviously on a week long stay with rentals of $900 or so, the sales tax collected for the state would be approximately $90. This will add up over the course of a year and is an extremely attractive source of revenue for the state. Therefore, a prospective owner must collect and pay the taxes or face strong legal action by the state.
Licensing – Any type of business activity must be licensed in the county where the business activity occurs. This is an occupational license. The fee for one may be anywhere from $75 and up. Sometimes in the case of a condominium, the condo association’s license is all that is required. Second, you may have to apply for a state license for your rental property. This will of course, entail another fee. This is renewable every year. In certain case, the state may insist upon an inspection of the property before granting a license.
Rental contracts – In line with the above, it’s important to have a
well written, short term rental contract that protects you as the property
owner. It is worth one’s time, expense and avoidance of future problems
to have an attorney craft such a document
Safety Considerations - Most of the safety precaution are common sense, but it’s important that the property conform to the letter of the law. Additionally, there are some safety considerations that will be applicable. A short term rental home must have a fire extinguisher and a working dead bolt lock for all entry doors. Typically, the home must also have a fire alarm and an emergency light that automatically illuminates, if power is lost. The home must be easily accessible or easy to exit in cases of an emergency. If the home is a condominium on an upper floor and there is a balcony attached to the property, there must also be a restraining fence to prevent someone from accidentally falling.
Billing/Payment – Renting out a vacation property is a bit different
from most other types of rental arrangements and business activities.
• It is such a short term transaction that it is important for the owner
to obtain all payments well in advance of the rental period. If someone
decides to rent your property and fails to pay in a timely manner and
then cancels right before they were due to arrive, you’ll not usually
be able to replace the rental.
• If they pay by check and the check doesn’t clear and the renter has
already left, you might have a difficult time forcing him to make good
on the rental and is certainly not worth the hassle. Therefore, insist
on payment either by check (long in advance of the rental) or Paypal.
Even funds transfer is open to abuse. Although in some cases, if the
renter is arriving from another country, you may not have a choice.
Insurance – It is always vital to carry good insurance to protect against damage, weather disasters and liability in the case of accident.
Rental Season Profitability - In most case, if a vacation rental can accommodate virtually all seasons, such as the Keys, Tampa Bay area or South Florida, the total yearly rentals generated will be significantly greater on average, than properties that may only be rentable within a single season, such as a ski area or more northern lake properties. Typically, properties that have a year round rental attraction can usually show a profit within the first few years of ownership. This may be a major consideration when you are planning to purchase such a property.
Rentals Policy – When you are setting up a rental property, you will need to decide if you are interested in longer term seasonal versus shorter term vacation rentals. Most that wish to rent their property should avoid the spring break situation, for obvious reasons. Longer term rentals, one to three months, tend to be less profitable because rents will always be lower than a short term weekly rental. Also, short term renters usually spend minimal time at a property, while longer term renters will normally consider your second home to be their second home when they rent. The advantage is that because weekly renters are spending more time outside there will almost always be less wear and tear on the inside of your property.
Furniture, Equipment & Flooring – In order to make a vacation property attractive, the furniture should be of a reasonably high quality to accommodate years of rental abuse. In the case of sofas, the material should be treated with a stain resistance compound. Further, the appliances should be relatively new and modern and not prone to break down or malfunction. In most cases, avoid whenever possible, carpeting. It is a magnet for dirt and stains. Instead, install a good ceramic or porcelain tile which is worth the expense to avoid future headaches. Wood floors are attractive, but expensive and will require more maintenance.
Maintenance and Repairs – Typically, the short term renter pays for the exit cleaning. Therefore, it will be of paramount importance to locate cleaning people to come in and change the linens and perform the basic cleaning after guests have departed. In line with the above, a potential vacation home owner will need to have a working relationship with local maintenance people that can unblock a sink, repair damage or fix any appliances, when necessary.
Great deals on Foreclosed Homes, But Buyer Beware! added
1/4/2011
Getting the deal of a lifetime on a foreclosed home or condominium could
be the answer to your prayers. However, sometimes the process is fraught
with difficulties…if you try to go it alone. There are problems aplenty
when buying a foreclosure and an experienced real estate agent will be
very inexpensive insurance policy against making a huge and costly real
estate blunder. What we'll be dealing with here is the process of buying
bank owned or foreclosed properties, the 'how-tos' with an emphasis on
what to avoid and ultimately who should be part of your team.
Foreclosure Sales vs. REOs
Before getting into the process, we'll need to cover some basics. The
bank will typically and initially offer the home as a "foreclosure
sale" in an auction. The sale assumes that the mortgage is still
in place. In a foreclosure sale the price is set at a minimum to include
the following: the loan balance, any accrued interest, plus any other
associated costs. The successful bidder must have a cashier's check in
his possession at the time of the auction. In today's market, this type
of sale almost never occurs. If there was enough equity in the property
to cover the mortgage and the market was more stable, the owner could
have potentially sold his property himself and avoid the obvious negatives
associated with this transaction. Nowadays, this scenario is probably
unlikely
If the bank resells the property in a REO (Real Estate Owned) sale, as
the alternative, the mortgage then ceases to exist and the bank owns
the property 100%. This article will consider only the process from an
REO perspective which would also include Veteran Administration mortgages,
as well. VA mortgage repossessions are handled by real estate agents
in much the same way that REOs through a commercial bank are handled.
Basic Buyer Preparations in Purchasing a REO
In all cases, REO repossession is not free of potential issues. In fact,
there are often more problems. Obviously, a bank or the VA that is saddled
with an inventory of repossessed homes actively tries to get the asset
off of their books. However, they certainly strive to not lose additional
monies on the transaction. After all, they probably have already lost
a significant amount in the repossession process. In many cases there
are issues that will need to be addressed upfront with respect to the
ultimate contract that will be signed, assuming that your purchase bid
is accepted.
Whether you are buying a home in this manner to personally occupy it
or it is purchased as an investment, it will require you to perform additional
'due diligence' in order to avoid some of the potential 'got-chas' that
are not usually associated with straight real estate purchases. Therefore,
the two most important people to help guide you through the procedure
will be an experienced real estate realtor and a seasoned real estate
attorney. Additionally, you'll need to fully understand the process and
the potential problems that can befall you.
Physical Problems with Repossession
Many homes that are repossessed have reached this situation because of
family problems, loss of employment, death, etc. In the end, if a short
sale or standard foreclosure sale is not possible, as is the case in
the current market, the home sold under a REO repossession often is vacant
for a period of time and the following problems are often encountered:
1. Vandalism and Break-ins. When a home is left vacant for any period
of time, often appliances or anything of value may be stolen or vandalized.
2. Deliberate Vandalism by Previous Owner. When a homeowner is forced
out, there is a tendency for those to take out and sell any of the appliances
and in many cases, vandalize and destroy the home in retaliation against
the mortgage holder for the repossession. However, to prevent the situation
from occurring, some mortgage companies are now making a cash payout
to the homeowner to prevent that situation from occurring.
3. Wild Life. If a home is left vacant and the lawn and foliage are unattended,
various animals may seize this as an opportunity to move in. This might
include raccoon, opossum, snakes, rats, mice, etc. After all, nature
abhors a vacuum.
4. Maintenance not Performed. Many homeowners under the threat of foreclosure,
neglect maintenance because funds are scarce and basic survival may not
include painting or other cosmetic improvements. Often important preventive
maintenance is not performed, as well.
5. Mold Damage. A home that is sitting vacant for any period of time,
particularly in places like Florida or other locales in warm, humid climates
are prone to develop mold. If left without proper air conditioning or
dehumidification, the walls may develop this fungus and mold, particularly
if the home has had water or plumbing leaks. Some mold damage may even
occur on the inside of dry wall. Once mold takes hold on a wall, often
the only recourse is to replace the entire dry wall.
6. Lead paint. Normally this is not much of a problem in newer homes,
but in older homes, it is likely that lead based paints have been used
in the interior. If this is the case, it's a safety hazard for a homeowner,
his family or even workmen brought in to perform repairs. There are two
approaches, cover it completely with paneling or use any one of a number
of products designed to bond with the lead paint. In any event, removal
or surface repair of lead paint on the interior of a REO home will certainly
add cost to the potentials purchase
Professional Home Inspection
Most homebuyers may not be aware of the potential problems attendant
in the purchase of a REO home. Therefore, it is almost mandatory that
a homebuyer use the services of a reputable, licensed home inspector.
Further, use an inspector that has previous experience inspecting REO
homes. Money invested at the front end of this transaction, will save
both headaches and dollars after the home has been purchased.
Certainly, when and if any of these problems are discovered, they can
be used to negotiate allowances in the price of the property. There are
however, potential buyers of such properties that look for homes in need
of repair. For the most part, they are savvy and well experienced in
this type of transaction. For the average homeowner, it's always best
to avoid homes that appear to be problematic, upfront.
REO Contractual Issues
After dealing with and allowing for problems with respect to the condition
of a property, the next hurtle is working with the bank that now owns
the property. When you buy a REO, you start with a standard contract.
The bank then attaches a normally non-negotiable "bank addendum" to
the standard contract. There is a major 'got-cha' in this: a bank owned
contract addendum means, "Everything in the main contract is nullified",
if the addendum addresses it. For instance, if the main contract allows
you make a final walk through inspection, but the addendum says "As-is," the
addendum wins. While addendums typically specify no negotiation, in home
purchases as in life, there is always room for negotiation.
The following are a couple of issues that you may need to be aware of:
1. Some standard addendums may be written nationwide and actually ignore
local laws. Local statutes supersede these contracts, therefore in some
cases, there are points in addendums that are not enforceable. A local
attorney can guide you in this.
2. Beware of hidden fees. Sometimes, significant fees, amounting to thousands
of dollars may be shifted from the seller to the buyer, as directed in
the provisions of a contract addendum.
3. Most addendums typically allow the bank to cancel the contract up
to the sale date and sometimes with no penalty to the bank. For instance,
if the bank receives a higher offer, they may have the right to break
the contract.
4. Be wary of termite provisions. Normally it's the seller's responsibility
to pay if there is termite damage. The addendum typically shifts the
risk back to the buyer.
5. If the bank is trying to unload a REO property, normally they will
not provide financing. However, it never hurts to ask.
6. Always have a title search performed. You would expect that in a bank
REO sale this would have been covered, however you can never really be
sure. Therefore, make sure that the title is 100% clear through a proper
title search. You can perform a preliminary check of title on RealtyTrac.com
and then hire a title company to run a full, insured title search before
closing on a deal.
A VA REO has some Real Advantages
While most of the homes that are now for sale as REOs are available from
banks, VA repossessed homes and to an extent, FHA repossessed homes offer
certain benefits to a homeowner over and above conventional banks. They
are sold the same way through a local realtor and you as a potential
buyer can place a bid on a property. If your bid is highest, you have
the right to purchase the home. A VA home REO sale has the following
advantages:
• The VA may provide financing (VA Vendee Financing) available to both
veterans and non-veterans, alike.
• Under most circumstances, the property can be purchased with no down
payment, whether the buyer is a veteran or not.
• The VA pays all closing costs, which may amount to as much as 6% of
the purchase price.
• Private Mortgage Insurance (PMI) is not required.
• Instant equity may be developed, as VA property discounts may be as
high as 50%.
• There are no mortgage prepayment penalties
Whenever you ultimately submit an offer, if you have found any defects,
justify your offer with both photos and inspection reports. No matter
what type of REO property and from whom you buy it, you will need to:
1. Work with a good realtor, experienced in this type of transaction.
2. Make sure that you secure the services of a real estate attorney,
prior to any payments being made or documents being signed.
3. Use a qualified home inspector.
Certainly, by taking precautions and by assuming the worst about the
condition of a property, you can avoid overpaying for a home and underestimating
the amount and number of repairs and amount of renovation that will have
to be undertaken on your purchase.
Evaluating Real Estate Investments
Like a Pro: Present Value
When you consider that there are many real estate opportunities where
you think you could make a killing, how can you really be sure that one
investment is better than another? Many would-be investors jump into
real estate without a good way of determining whether a particular piece
of property, a single family home, resort condo or a multi family dwelling
is really and truly a good investment. The end result is often disappointing.
Maybe you should have bought investment B instead of investment A. And
so it goes…What is the best way of evaluating real estate? The following
approach is the way large companies utilize a very important, yet relatively
simple evaluation tool for comparing competing investments.
A Couple Fundamentals, First
Obviously, if you are a real estate investor, you probably have decided
on a minimum rate of return or minimum amount of money that you would
expect yearly on a real estate investment. Of course, there are some
investments that you can immediately jump into without doing very much
evaluation. Suppose you can snap up a home that is selling for 60% less
than its current value and you’re very sure that without upfront repair/refurbishment
expenditures, you can immediately sell it, realizing an attractive profit.
The answer is obvious upfront. Most times, these opportunities are hard
to find and often the listing real estate agent is in the best position
to takes advantage of these situations. Also, we’ll need to assume that
there are no legal barriers, potential zoning regulations or other problems
that would immediately preclude one investment over the other. Moreover,
you as an investor will need to assume that all of your information is
imperfect and the future is almost always unclear about investment choices
you make. Thus, the following approach to evaluating competing real estate
investments is based purely on financial returns. Let the numbers do
the talking!
Present Value Overview
The basic approach to present value boils down to an obvious fact: a
dollar today is worth more than a dollar that will be received at some
time in the future. For instance, what would you rather have: a $100
return now or $100 return in 2 years? Obviously now, but when you start
making that future $100 grow, there will be some point at which you will
decide in favor of the latter. Assuming the worst is always a safer strategy.
In present value, it is more reasonable for you to assume that any rents,
receivables, rates of return, rate of appreciation and occupancy rates
will typically be less than you want and expect. As you assemble the
facts for your analysis or business plan, be very conservative and this
is especially the case if you’re seeking funding from a bank, venture
capital source or investment group.
Present Value Internal Rate of Return MethodologyAs mentioned above,
money has a time value. Albert Einstein was quoted as saying, “The most
powerful force in the universe is compound interest”. The so called internal
rate of return analysis is all about that. The Microsoft product, Excel
allows a relative financial neophyte to analyze side-by-side alternative
investment cash flows in terms of its compound interest time valueA Basic
ExampleLet us say that you have two properties that you’re might considering.
The first is a home that you can purchase for $100,000 with $25,000 down.
The second is a condominium that has a price of $75,000, but can be purchased
directly from the builder with only $7,500 as the down payment. Let’s
assume that both will appreciate at 5% per year and by the end of three
years, you would be able to sell either for a 15% profit over your initial
cost. Let is assume that you can rent these properties resulting in the
following:
1. You receive a net $100 per month profit after your mortgage payment
on the single-family home.2. You can realize $50 per month net profit
on the condo.
The image on left shows what the Excel format would look like.
In the basic financial terms, without even considering individual any
federal or state income tax rates that apply, the best investment would
obviously be the condo’s rate of return which is more than double the
rate of the investment on the home.Now extending the investment horizon
to 6 years, with the same sales price and the same rents, the condo
is still the best investment, but the rates of return falls drastically.
The home has a rate of return of 12.2% and the condo has a return of
22.3%.
How to Use the Excel function
Using Excel to set the example up is simple:The Excel formula is IRR(Cash
Flow1, Cash Flow2. Cash Flow3,Guess at Rate). On the Excel spread sheet
it will be expressed as follows: =IRR(-C2:C5,19) where C2 is the initial
investment (down payment with a bracket surrounding it, designating
that it’s a negative flow) and C3, C4, C5, etc. which are the yearly
(or monthly cash flows). The last number, 19 is a ‘guessimate’ of the
what the rate might be. I could used 5, 10, etc. Excel uses this as
a function, but it really doesn’t matter whether you’re accurate or
not. You can obtain additional information about IRR directly from
Microsoft.Obviously you can make this as complex as needed. For instance,
you might want to use a factor for federal income taxes, a factor for
expected repairs and even increases in rent and real estate taxes.
You may also assume occupancy rates. It really doesn’t matter as long
as the formula is set up in the correct Excel format. You can make
it as precise as you need. But keep in mind that too much precision
into the future is largely wasted effort. This approach to analysis
only requires you to be reasonable in all your assumptions.
There are numerous ways of performing real estate investment analysis.
While you can’t ever know the future, you can assume typical terms, conditions
and the types of rates that most banks or investor groups will demand
of the real estate investor.
Want an Investment Property? How About a Florida Vacation Home?
With the mortgage melt down and the accompanying plummeting home values, the last thing on most people’s minds is buying real estate as an investment strategy. Right? Well, no, not right! At least, when it comes to buying the right kind of home or investment home. Right…translates into buying a Florida vacation home.
The Ideal Florida Vacation Home Investment Certain areas in the Sunshine State are ideal for investment now in the current real estate market. Those areas are located mostly on the shorelines of Florida: the south east coast, the Florida Keys and the west coast from Tampa Bay and points south. There are three good reasons why investing in a vacation home now makes good economic sense: 1. All Florida home prices are depressed. 2. Short-term rental prices for the most part, have not declined. 3. A Florida vacation home can generate rentals all year round.
One must keep in mind that not all Florida vacation properties are good economic bets. First, the Disney area is not particularly a good investment. It’s a bit over built. Second, areas north of Tampa Bay on the west coast and north of Daytona Beach on the east coast have winters that are a little too cool to attract vacationers the year round. Therefore, the best places for investment in vacation rental homes will usually be further to the south. Also, the vacation real estate investor should only purchase in communities permitting short-term (weekly) rentals. Many of the advantages enumerated below will not materialize, if short-term rentals are prohibited.
The Mortgage Meltdown and Recession Has Created Gold for the Savvy Investor While home purchase prices have declined in Florida, the allure of the weather, beaches and waters continue to attract vacationers. During the summer almost everywhere in coastal Florida is a good vacation choice. During the winter, the ‘snow bird’ crowd flies in for several weeks or months of temperate weather in the more southerly areas of the Sunshine State. During the rest of the year, short-term rentals are fewer, but still exist.
In line with the above, a weak economy means that many, who might normally opt for a vacation in Europe, have decided to spend their vacations in Florida. Also nowadays, people employed in corporate America are less apt to take long vacations fearing that they might not have a job after returning from a two-week junket. Further, because of excellent airline service throughout Florida, now almost anyone can easily squeeze in a few days of sun from almost anywhere in the continental U.S.
This translates to opportunity for those looking to purchase vacation properties in Florida for investment. There are some excellent advantages to owning vacation real estate, as well:
• A Florida vacation property doubles as an investment as well as a vacation escape • With a fall in prices and rentals remaining at or near their previous levels, a property on a weekly rental basis can quickly show a net positive cash flow • With basic depreciation and other out of pocket expenditures as deductible expenses, it is likely that an investor can show a “taxable” loss, thereby reducing federal income tax liabilities. • Regardless of the future, a typical vacation home with its rentals can carry itself handily on into the future. This of course, assumes that the investor purchased the property at a reasonable level.
Assuming that a property can generate short tern rentals and also assuming that mortgage payments are not excessive, a property as stated previously will be a net positive investment. As home prices start to regain their footing, vacation properties in Florida, obviously will also enjoy the same price increases. If an investor decides to sell his vacation property at a later date, history has proven that the net rate of return on his investment, including rentals should be equal to or greater than other investment alternatives that could have been undertaken and available at the same time. When taken in total, vacation properties in Florida in the right areas at the right price is an investment worthy of serious consideration.
FIVE TOP MISTAKES IN BUYING KEYS WATERFRONT PROPERTY
1. Not Understanding the importance of controlling Depth.
When buying waterfront property, both the actual value of the property
and it’s usefulness as to boating are governed by controlling depth.
What is controlling depth?
It is the depth at which your boat can safely get to open water at average
low tide. Another way to look at it is boating draft.
For example, most sailboats have at minimum a 4 foot draft—meaning they need at least 4ft of water to safely navigate without running aground.
So-If you own a sailboat or are ever considering the purchase of one, the waterfront property you buy has to have at least 4 feet of controlling depth.
How does this affect value?
People that own 50 ft boats and larger sailboats, that require 4 to 5
foot draft, will find that neighborhoods have controlling depths of
4-5 feet or more are typically more expensive as to real estate prices.
To Consider.
Even if you don’t own a boat, you may want to buy one in the future or
will possibly have friends coming to visit that do have a larger boat.
So first and foremost take Controlling depth into consideration.
2. Not knowing what types of Boats are allowed.
Generally there is no problem with pleasure craft, however jet skis and
commercial fishing boats can be a problem based on neighborhood (subdivision)
restrictions (if any)
For example: Many boating communities frown upon Jet Skis due to the
noise. If you plan on using jet skis or having friends that use them,
look into any restrictions.
The same thing goes for commercial boats.
3. Not paying attention to Flood Zones.
What type of Flood zone is the home you are buying?
For example flood insurance for a home in a VE will be triple that of
a home in an AE zone. So one of the first things to find out is the Flood
zone and then check with a local insurance company as to costs.
4. Using outside of the area lenders.
If you are buying waterfront property in Florida and are considering
a lender in Colorado, you can have a problem. Why?
Because lenders outside of the state can place prohibitive restrictions
on a property.
For example, some lenders will feel that any waterfront home bought
in Florida needs to be constructed of Concrete block as opposed to wood
frame, due to potential hurricane damage.
Be sure to talk to Local (at least State) lenders, as they will be familiar
with the area.
5. Not determining area (county or subdivision) rental Laws.
If you are considering using your waterfront home as a rental, look into
the area or subdivision zoning laws as to rental periods allowed.
For example-can you only rent monthly-every 6 months or are weekly rentals
allowed. Whatever the law, it will make a big difference in both ease
of renting and your potential income.
These are just some of the most important issues to seriously look into. As your Agent, I will help guide you through all of this.
A World Away – Vacationing in the Florida Keys
The Florida Keys offer many of the same laid back characteristics as the Caribbean, without ever leaving the United States. Amazing sunsets and a free spirited attitude all contribute to the laid back atmosphere of the Keys.
There are many activities to do, like sport fishing, scuba diving and snorkeling, boating, sailing, kayaking and eco-tours. Each island destination has its own special features. These islands are also rich in culture and history with many galleries, restaurants, festivals, music and theater to visit and check out. Of course, just relaxing is always an option throughout the Keys as well.
The Keys span about 120 miles and are connected by bridges and causeways, running south west from Miami. This area has the only living-coral barrier reef in the United Stares and is approximately 5 miles off shore and runs the entire length of the Keys.
The first island in the Florida Keys is Key Largo. Being close to the Everglades National park, there is much wildlife to be seen here. It is a popular destination for kayakers and bird watchers. There are many amazing scuba diving or snorkeling sites in Key Largo as well, with many sunken wrecks in the area. The John Pennekamp Coral Reef State Park is located here and offers scuba and snorkeling tours, glass bottom boat tours and swimming in the Florida Keys National Marine Sanctuary. In 2002, the navy ship, the USS Spiegel Grove was sunk to provide a reef here and a sunken wreck for divers to explore.
The next island in the chain is Islamorada. It is comprised of six islands including Plantation Key, Windley Key, Upper Matecumbe Key, Lower Matecumbe Key and the offshore islands of Indian Key and Lignumvitae Key. This area is well known for its world class sport fishing. There are many fishing tournaments held here each season.
Marathon Key is in the middle of the Florida keys. It is famous for the Seven Mile Bridge, which links it to the Lower Florida Keys. You will find great shopping and many fine restaurants offering fresh seafood. At Crane Point Museum, there is one of the last untouched tropical hardwood hammocks in the Florida Keys.
Big Pine Key is known for its boating tours and for bird watching and fishing. The diving and snorkeling is great here too. It is a quiet region of small resorts, home-style restaurants, vacation homes and untouched natural areas.
The last of the Florida Keys is Key West. There are many festivals, shopping and restaurants. Boat tours provide a great way to view Key West from the water. The snorkeling and diving are renowned here to see a diverse array of marine life. Wrecks and reefs, both artificial and natural coral, are home to hundreds of species of tropical and game fish. Many visitors rent a bicycle or go on walking tours to explore the history and architecture of Old Town Key West.
So if you are into eco-tourism, scuba diving or snorkeling, shopping and dining, or just want to relax in a tropical paradise, the Florida Keys may be the destination for you.