Picking the Right Fixer Upper Houses
By: Joseph B. Smith
To ensure you have access to data on good fixer upper houses for sale, work with a real estate broker if you can. These experts can assist you in looking for the most ideal property. The basic elements of fixer uppers are that it sells for a really low price and it requires repair. The unique knowledge of property brokers will ensure you get all the elements of your search accurately.
Immediately after picking out the ideal home from a wide selection of fixer upper houses, have a property inspection carried out. Whether or not the home is being sold as is, you will still need to find out what to anticipate prior to closing the deal. You will probably find that the house might need much more work than you happen to be prepared for. This is also a good time to form relationships with contractors that have worked on fixer upper houses.
Always Determine the Real Value of the Fixer Upper
A certified appraiser can help you determine the true value of the home you wish to purchase. Always leave a comfortable margin in your budget for unknown expenses as there will definitely be a number of them. Stick to the types of repairs that will elevate your equity and the value of the home you will resell. Whether you plan to reside in the property or resell it, you need a realistic time table for the work to be done. Realistic goals are those that everyone can keep to without compromising the quality of the repairs and renovation. Give time for unexpected repairs.
When purchasing fixer upper houses one needs to speed up in closing the deal but take as much time as needed to effect the repairs and renovation. When everything has been completed, go back to your appraiser and get another assessment on the home’s value. You may need to do this periodically as a home is a continuing investment.
About the Author
Joseph B. Smith has been educating buyers on the finer points of fixer upper houses at BankForeclosuresSale.com for over ten years. Contact Joseph B. Smith through BankForeclosuresSale.com if you need help finding information about fixer upper houses.
(ArticlesBase SC #3236679)
Article Source: http://www.articlesbase.com/ – Picking the Right Fixer Upper Houses
Don’t Rely Excessively On Appraisals
An appraisal is a valuation of a property by an independent appraiser. The appraiser does an evaluation of the home, considers the home in comparison to others of comparable type and so on. Once completed, the appraiser then issues a written appraisal value of the home. Many homebuyers make the assumption the appraisal is the true value of the home both now and in the future. This can be a dangerous assumption.
First, appraisals are limited by something known as a moment in time. The appraisal done today, may not be entirely relevant a month or two later. If a property has been on the market for a few months, the appraisal may not reflect a slowing market. This, in turn, means the appraised value is actually higher than the current market will support. Homebuyers run into problems when this occurs because they put too much value on the appraisal. A seller will often list the home below the appraised amount and homebuyers will think they are getting a deal. In reality, they are not and may actually be paying more than a new appraisal would support. The older the appraisal, the less value you should put into it.
Most homebuyers assume an appraiser inspects the home for defects and discounts the value of the home accordingly. This is not really the case. An appraiser is not really doing a critical home inspection. In fact, the appraiser contract and/or report usually contains a long disclaimer whereby the appraiser covers his derriere by noting he assumes the property is in good condition and isn’t liable if it is not. Obviously, that should scare you. This, of course, is why you should insist on a home inspection for any property you make an offer on.
An appraisal is a solid part of the equation when considering a home purchase. It is not, however, the piece de resistance when valuing the property.
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Honesty in Flipping – What to Disclose
By: David Reinholtz
This article is about flipping short sale properties, and the parameters associated with this are much different than other types of property sales and investment and should not be assumed to apply to other, more traditional forms of sales. Short sales, as most people are now aware, occur when a property owner is behind on his or her payments and makes an arrangement with their mortgage lender to sell the property for less than its assessed, or true, value in order to avoid foreclosure, the stigma that goes along with it, and the credit damage that can come from it.
If your client, or someone you know, is in the business of short sale investing, meaning they intend to purchase short sale homes and immediately turn around and resell them for a profit, there are legal questions that go along with the process, many of which have never been addressed, but will undoubtedly come to light in a court of law at some point in the foreseeable future.
While buying a short sale home at a bargain and turning around and selling it at its regular price, or slightly less than its assessed value is completely legal, the term ‘fraud’ is being tossed around lately and it may behoove the serious investor to make every effort to offer full disclosure, or at least a modest modicum of disclosure to all parties involved.
The scenario
Imagine this scenario: You’re a homeowner who has fallen on hard times. You or your spouse may have lost his or her job and despite your best efforts, you can’t keep up with the mortgage payments. You are facing the barrel of foreclosure and work out an agreement with your lender to go ahead with a short sale. You know your home is in great shape, the lawn is meticulously maintained and you added a new kitchen and bathroom.
You have no choice but to let go of this home because you want to buy another one as soon as you recover from your financial setback, so the short sale seems fair. Several interested buyers flock to your house immediately and within a few days, maybe even that same day, you have an offer on it. The bank agrees and you sell the home, getting out from under your financial burden.
Two weeks later, you learn that your home suddenly sold for near full value. Perhaps forty thousand dollars more than you sold it. This is enough to feel as though you were taken advantage of. Maybe it’s enough to consult a lawyer. After all, if your home sold for its assessed value two weeks after the short sale, you could have made that sale directly.
Putting yourself in someone else’s shoes is the best way to determine what level of honesty should be used during the process.
Letting the homeowner know the truth
In most cases, homeowners who partake in short sales don’t have a choice, so whether you are going to turn around and sell their home at a profit or not, they don’t have the luxury of hanging onto any longer. Being upfront may sting for the homeowner, but you are protecting yourself legally.
The same holds true for the lender. Mortgage lenders make loans based on long-term earnings through interest rates. If they are aware of the intention to flip the house, there are some lenders that would not be willing to make the loan. Posting a statement of your intentions within the contract (which, as we all know, can be upwards of 100 pages or more), will cover you legally. Remember, loan officers don’t tend to read the contract thoroughly. You’re covered nonetheless from any legal action that uses the phrase ‘fraud’ in the future.
No legal obligation
While investors intending to flip short sale homes are under no legal obligation to disclose their intentions, most, if asked, wouldn’t want to become the guinea pigs in a legal dispute over a fraud allegation. Full disclosure is always a safe bet.
David
About the Author
David is the Founder and CEO of LoanOfficerSchool.com, an approved education provider for The Conference of State Bank Supervisors and The National Mortgage Licensing Systems’ (NMLS) required pre-licensing education and continuing education.
(ArticlesBase SC #3040471)
Article Source: http://www.articlesbase.com/ – Honesty in Flipping – What to Disclose
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Jul
29Find Out How To Succeed In The Online Real Estate Market
Posted By: Ramon Rivas on July 29, 2010 at 1:59 pmIf you are planning on indulging in real estate investing you should also consider the online real estate market that provides a novel means of buying and selling properties. To begin with, online real estate marketing will involve listing as well as advertising properties over the Internet and it also means getting maximum exposure. And online real estate is a more convenient way of transacting business and is also a lot quicker than traditional ways of real estate investing.
Evaluate Your Property’s Value
However, before you jump into real estate investing and more particularly into the online real estate market, you would need to first evaluate the true value of your property. For this evaluation you can go online or ask a real estate agent to do the evaluation for you. Next, you need to try and use online videos, which are a wonderful way of advertising your property and a whole lot better than the traditional means of advertising.
There are two ways that you can categorize online real estate videos and these are promotional content and pod cast content with each category catering to different types of buyers and sellers.
In any case, by listing your property online you will get a wider audience for your property and so you must be prepared to get queries from many different places. There is no doubt that real estate investing in the online real estate market can be hugely profitable though at the same time it also has its fair share of associated risks, especially if you are not well conversant with online real estate.
You need to be very careful about each aspect of the online real estate deal and this means learning about the proper financing, decide whether you wish to rehab or not and also know how to hire a landlord. Fortunately, there are some websites that deal with these aspects and which allow you to take part in online discussions with others who are interested in real estate investing. In fact, you should also check out articles written on online real estate sites and even sign up for free e-newsletters pertaining to investing so that you are on top of the subject of real estate investing in the online real estate market.
One of the better resources that deal with real estate investing and more particularly online real estate is REI Club Freebies where you will find tons of information as well as numerous resources regarding online real estate. You can read e-books on real estate investing and it is even possible to download these e-books for reading at a later time on your computer monitor. There are also many other resources such as software to analyze properties and information on how to indulge in real estate investing in the online real estate market.
You must also remember that real estate investing and online real estate involves hard work and there are no short cuts that will help you make quick money. Furthermore, because you will be dealing with people who you can’t see (at least in the beginning) you need to be very careful about divulging information without first verifying the credentials of prospective buyers and sellers. Once you get past this hurdle, you should then try and buy properties that are in a rundown condition and then repair and upgrade until it looks attractive to buyers. Also, you should look for properties that are located in places where the rentals are on the high side because in this way you can be sure that your real estate investing endeavors will pay you back good returns.
There are many online foreclosed properties’ lists that you should tap into because you can buy these properties for less money and then sell them at a higher price and thus profit from your real estate investing actions.
The online real estate market abounds with many profitable opportunities, and if you use things such as online videos and perhaps even take a course in online real estate, you will be able to profit from your real estate investing activities.
If you have been thinking about purchasing a real estate property for personal use or as an investment, you’ll need to hire the services of a real estate investor. If you play to finance your home through a bank or other lender, you’ll more than likely need to get the property appraised first. Banks and most lenders want to know the value of the home for your protection, as well as make sure that the home they are financing is worth the total amount that you take on the loan.
In most cases, the appraisal indicates that the home does indeed meet or exceed the asking price. In some cases however, the appraisal will come back saying that the home is worth less than the selling price. If this is the case, the buyer normally has to either drop the deal or try to negotiate with the seller to get a price that meets the appraisal.
For those very reasons, a real estate appraiser is very important. When you are dealing with a home, one appraisal can make a deal or break it. Even though you may not be financing your purchase through a lender or the bank, you should still make an effort to get the home appraised and find out the true value. You should also make a point to find the best appraiser that you can afford. If you hire an appraiser who isn’t that experienced, you’ll pay for it later when you discover that the property isn’t worth what you paid for it.
A real estate appraiser will go through the home performing an evaluation, and then provide you with a written evaluation after he has gathered all necessary information. Appraisers will also taken into consideration the replacement costs as well. Also, they will have to very land descriptions as well. There is a lot of work involved with appraisals, which is why it’s so very important that each step of the process is performed correctly by a qualified real estate appraiser.
If you have a real estate agent, he or she will more than likely be able to make a recommendation. Keep in mind that this doesn’t mean the recommendation is the best; it’s just someone who your agent works with. To ensure that you get the right appraisal on your home you’ll need to find yourself an appraiser who is capable of completing the job.
When you look for your real estate appraiser, you should look for someone who comes highly recommended. You can ask family and friends for their opinions, or search local papers, even the Internet. If you take your time and search for the best real estate appraiser that you can find – you’ll normally get an appraisal that is right on target.
