First Investment Deal Tips

Posted on by Mollie Abel

Because I have been investing for a long time, many new investors assume I’ve always known how to buy and sell investment real estate. Absolutely not true. No one is less experienced than I was starting out, but I had an absolute goal and I was willing to work hard to achieve it.

Let me tell you about my very first deal:

Jim and I knew we had to let people know that we wanted to buy houses if we were ever going to find deals to purchase. So, we began a little bit of very inexpensive marketing to get the phone to ring – walked neighborhoods putting out flyers, had magnetic signs on our car doors, put an ad in the local Nickel Paper (a three line ad was only $265 for a year). I had questionnaires printed out and stacked by the phone so, if a seller did call, I’d remember which questions to ask.

Like most new investors, I was terrified. Because I didn’t know what I was doing, I really didn’t want sellers to say “yes” to my offers, so I always made very low offers. Investor ignorance is not always a bad thing.

Almost the very first call was a woman calling from out of state. Back at that time, our phone had caller ID and it said the call was coming from “US Gov’t. Baltimore, MD”. I was convinced I was being arrested for doing something illegal, but quickly rationalized with myself that I couldn’t have done anything seriously wrong by that point, so I answered the phone.

The woman’s voice said, “do you buy houses?” What? The government already knew I was buying houses?!

As it turned out, her son lived near us and had taken down our phone number from the magnets on my car doors while I was parked at our local grocery store. The condo she was selling was actually in our neighborhood, and she was calling all the way from Baltimore, MD! This was so weird.

Anyway, it was vacant and had been on the market with a real estate agent for a year. I asked for the property details and promised to call her back. After doing my due diligence, I called and offered 65 cents on the dollar. She said, “Honey, I’ve owned this condo for six years and I still owe more on it than that!” I told her that I totally understood, that I was not going to be her best offer but that I was one solution, and she was welcome to call back anytime if she had more questions during her selling process.

I was so relieved that she didn’t take my offer. That night, she called back…

She asked, “if we did the deal, how it would take place?” I explained it to her, told her we would close with our attorney, and that she would have to write a check for the difference between what I was offering and what she still owed. She thanked me and hung up.

The next day, she called back and accepted my offer.

I had never even seen the inside of the property and was scared to death. Later that day I met her son at the property to check it out. It was immaculate – all new carpets and paint, all appliances including washer and dryer, a 2 story living area with a 2 story stone fireplace, an upstairs office area that overlooked the living area below. It was amazing. Because it was my very first deal and the seller actually paid to have me take it off her hands, I took this as a sign that I was heading down the right investment path!

Morals of this story?

  • Don’t think you need to know everything before you start investing. You really learn what you need to know while you’re investing.
  • Don’t think for the seller. Many assume that, if the seller owes too much, they won’t accept your low offer. Not true! Many sellers pay to sell. If their need to sell is great enough, they write a check at closing.
  • Don’t let fear stop you. No one knows what they’re doing at first, in any job, but surround yourself with people who do know the business so you always have somewhere to turn for answers.
  • Always be a resource for the seller. Most sellers need help. Offer it to them. You are forming relationships that will lead to great referrals. Be willing to help, even if you aren’t the one they sell to.

Do you have a story you’d like to share here? We’d love to hear it!

Perfect Time To Maintenance Your Home

Posted on by Mollie Abel

Home ownership, is, both, a right, and an obligation! A smart homeowner considers how, to effectively, maintain, his house, in the best, most effective way, to minimize costs, hassles, and keep the home, well – maintained! Rather than waiting for obstacles and challenges, to become problems, the wise ones, realize and recognize, it’s a good idea, to do, regular maintenance, on a seasonal basis. After over a decade as a Real Estate Licensed Salesperson, in the State of New York, I have attempted to simplify this process, and refer to, this approach, as the 4 Seasons, of Home Maintenance.

1. Spring: Nearly everyone has heard of Spring Cleaning, and wise owners, approach this season, as an opportunity, to address, issues, which were brought on, by winter’s weather. For example, in colder climates, houses undergo certain stresses, during winter. Front hallways, often suffer, because of the dirt, brought into the house, by bringing in the elements, such as snow, salt, etc. In addition, they clear leaves, address plantings, repair cracks on paved paths, driveways, and exterior foundation, as well as examining, whether the weight of snow and ice, have created challenges, with the gutters. Also, now that weather has warmed, it is wise, to seed lawns, and take care of all the little things, you needed warmer weather, to do!

2. Summer: Towards the end of Spring, and during the Summer, and early Fall, take care of landscaping. Do as much exterior/ outside work, when the opportunity arises, and, do so, proactively, before minor issues, become major expenses.

3. Fall: As trees begin to lose their leaves, clear them from lawns, paths, drains, gutters, etc, so as to be prepared, for more extreme weather conditions! Towards the end of the season, drain, and turn – off, exterior water sources, in – ground sprinklers, etc. Have a pre – winter, heating system, preventive maintenance, to ensure fewer heating problems, when you most need to heat, your house.

4. Winter: Thoroughly perform snow removal, and clear away, paths, pipes, etc, to ensure fewer issues and challenges. Avoid using harmful chemicals, when melting ice, etc, and there are many safe products, on the market, today. Using certain chemicals, often cracks cement, etc. Remove hanging icicles, in order to reduce the stresses and strains on your roof, and gutters. Make certain, early in the season, to minimize wasting energy, by using a setback thermostat, and doing minor efficiencies, such as door sweeps, caulking windows, insulating behind sockets, etc.

It’s wise to have a home maintenance plan. Addressing these simple steps, generally saves a lot of hassle, and money!

 

Tips To Securing Your Capital Estate Investment

Posted on by Mollie Abel

I previously shared the steps for creating a professional plan for a real estate project; the importance of obtaining third-party validation; advice in how to find the right financing sources; and suggestions on presenting the project professionally, then closing the deal. This approach will enable you to obtain financing term sheets, letters of intent and/or financing commitment letters from lenders if your project is financially feasible and falls within the lending parameters of the financing institutions that you approach. Nevertheless, financing always requires a cash contribution, as 100{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} financing is not realistic in today’s market.

Lender requirements for cash equity contributions, deposits or down payments, typically fall between 15{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} and 40{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} of the total project cost (85{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} to 60{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} Loan-To-Value ratio). A portion or all of the equity value in the property can sometimes help reduce the cash deposit requirement, but it is very unlikely for a conventional lender to completely eliminate the cash contribution requirement because lenders want to ensure that the principal(s) are vested in the project, or have “skin in the game”. The cash deposit is necessary to close the loan and obtain financing.

So, where does the cash deposit come from? There are several potential sources:

  1. Your pocket
  2. Your partner’s pocket (if you have one)
  3. Equity from another property you may own (if any)
  4. Private investors

There are many advantages to infusing the cash equity requirement yourself, including the fact that you retain all profit and full control of the project at all times. This can often be the most advantageous funding structure because it maximizes your profit and control. However, there are also advantages to securing equity participation from investors, including:

· Less cash out of pocket enables you to be more liquid, retain more cash reserves and/or diversify your investments to earn profits from other projects or endeavors simultaneously

· Reduces your risk and exposure in the project

· Enhances your financing capabilities

There are 3 basic steps for securing equity capital for your real estate project:

  1. Prepare an investment proposition
  2. Source like-minded investors and private investment organizations
  3. Investment negotiations and agreement

1) Investment Proposition

There are many ways to formulate an investment proposition. I’ve seen an investment proposal written on the back of a napkin… and the deal was funded! (This was a developer seeking an investment from his grandmother). I’ve seen verbal agreements get funded by family members. I’ve also seen very intricate, elaborate and lengthy investment proposals not get funded. How you document your investment proposal is extremely important. The first two examples were appropriately prepared for their intended audiences; the third was not. If your project is financially feasible and can demonstrate reasonable gain for investors, securing investment capital becomes a function of proper documentation, sourcing, presentation and negotiation.

Regardless of whether an investment proposal is intended for a family member or a sophisticated investment organization, proper documentation always enhances your ability to secure funding. Your proposal should be professional, clear and concise. Following are some basic suggestions for documenting your investment proposal:

1. Provide a brief executive summary describing the project and the investment proposition. Within the executive summary, outline the investment amount required, return on investment, time-frame of the investment, and discuss the security, collateral and/or equity value that can help protect the investor.

2. Provide a financial summary of the uses of funds, sources of funds, operating projections and cash flow of the project.

3. Discuss the funding structure and capitalization plan.

4. Attach term sheets, letters of intent, financing proposals, and/or commitment letters from prospective lenders.

5. Attach the project plan.

Source Like-Minded Investors and Investment Organizations

Where do you find investors that would be interested in participating in your project? If your project is financially feasible and you’ve prepared a professional plan and a concise investment proposition, then you’re only steps away from finding your equity investor(s). It takes time and determination, but it can be a worthwhile effort that can last beyond a single project. Here are some suggestions for obtaining sources:

  • Contact local and regional mortgage brokers, real estate brokers, title companies, real estate attorneys, and other real estate professionals. Offer a finder’s fee.
  • Place ads online and in local and regional newspapers.
  • Prepare a project web page where prospective investors can find the project and review/download pertinent documents, including your investment proposition.
  • Hire a consultant or financing broker that specializes in securing equity participation.
  • Review your own contacts and business cards – You’d be surprised at how fruitful this effort may be.
  • Attend networking events and or conferences for private investors in your area and/or region, then collect business cards and make follow up calls and meetings.

Dedicate time to making calls, setting up appointments and engaging in meetings to present your project to prospective investors. Become an expert at presenting your project. Prepare a multimedia presentation to help them focus on the points you want to stress. Don’t stop until you get it done. If your project is feasible and profitable, it can get funded with proper determination and effort.

Investment Negotiations and Agreement

How much should you offer an investor? Depending on the nature of a project, perceived risk, profitability, location, your experience, competition, demand, supply and numerous other factors, I’ve seen investors require from 5{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} to 95{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} of the project and/or profit. Most investors want to see that you have “skin in the game”, generally 10{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} to 50{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} of the amount you ask them to invest in the project. Demonstrating that you have invested in the project or that you will invest into the project is adds value to the deal. You should document this clearly and provide evidence of the time and money you have invested in your project.

Other items that are open to negotiation include the percentage of control in the project, roles of the parties, reporting procedures for the investors, etc. You should provide benefit and value to the investors, but at the same time you don’t want to lose all control or receive minimal gain for your efforts. Finding the right balance is extremely importance. This is accomplished through open dialogue and effective communication between the parties.

There is no global formula for this, so it’s impossible for me to provide accurate advice on what to propose investors for your specific project. I would strongly recommend getting advice from a savvy attorney who can assist in preparing the investment agreement and structuring the investment terms. Meet with your attorney first so that you have an original structure for the deal; then use your attorney when negotiating any modifications with prospective investors.

If you have a history or recently completed real estate projects, document this clearly and share with potential investors during your presentations and meetings. If you don’t have a track record of successfully completed real estate projects, raising your first equity investment can be more challenging, but if you follow the above suggestions and you are determined, the sky is the limit!

How To Purchase A House Like A Pro, Even If It’s Your First Time Buying One

Posted on by Cheryl Barnes

Purchase A House

People have varying reasons why we choose to buy a house. While we have different “because” to answer “why,” we all aim to own a home we like and one that is worth every penny.

But when you’re buying a house for the first time, it can be hard to make decisions. With all of the things you need to consider -from finding the right Mortgage Lender Grand Prairie to finally saying yes to that one house you want to own, it can be quite overwhelming. However, it doesn’t have to be.

Here are four tips you can get on how to make a home purchase like a pro, even if it’s your first time buying one.

Create a checklist of the things you want – and don’t want.

When you start hunting for a house, you should already have an idea of what you want and don’t want. Having a list and giving it to your real estate broker will make it easier for them to narrow down homes that meet your criteria. For example, you should already have an idea on how many bedrooms you want your house to have, how many toilet and bathrooms, a yard or a large kitchen, if you want something that is near excellent schools, malls, and a park. Know the things you don’t like such as an open backyard or too much traffic noise.

Think about the resale value.

When you were still renting, all you need to consider is whether or not the location of your rental is convenient for you and your family’s lifestyle, if it’s safe, if you and your family can live comfortably on that apartment, how to pay your utility and rent and if the place is generally safe. However, being a homeowner means having more responsibilities which include regular repair and maintenance, monthly mortgage, taxes, etc. You’ll want to buy something that is worth every penny while thinking about the resale value. It won’t matter if you plan on staying for many years, or already plan on selling it after a few years. You won’t want to pay far more than others think your house is worth.

Pay attention to red flags.

Buying a house is a huge deal considering you’ll be paying with hard earned cash to make the purchase, plus you’ll be living in it for a considerable amount of time.  It is why you should never ignore red flags. Watch out for inadequate ventilation, a crazy drop on price, crime rates, litigation issues, psychological stigmas, and one that is on sale for far too long.

Good Read: Top 10 Red Flags for Homebuyers

Never skip a home inspection and ask for concessions.

One of the biggest home-buying mistakes you can ever make is skipping a home inspection. While it is not a requirement, doing a home inspection gives you an idea on what the overall condition of the house is, what repairs and maintenance are needed and its costs, and the total value of the home you’re trying to buy. Even if the home seller already accepted your offer, you can still be as for concessions and negotiate.

Good Read: What Is A Home Inspection And How Do I Hire An Inspector?

When buying your first-home, never be afraid to ask questions, don’t hesitate to negotiate and always listen to your gut feeling. A home purchase is a significant buy and a lifetime commitment. It only makes sense to talk about money, haggle and secure a good deal.

Steps To Get Started in Property Investment

Posted on by Mollie Abel

1. Know Your Budget

Before taking a plunge into property investing, it is essential that you have an in-depth understanding of your cash flow. Plus, ask your bank for the pre-approval of your investment loan so that you know how much you can borrow prior you hunt your properties.

2. Don’t Skip Ongoing Costs

Ensure that you have sufficient budget for the insurance, rates, and general repairs. When you have bought your perfect investment property, know what you can do to stop costly maintenance problems like as replacement of old taps.

3. Purchase In the Growth Area

Pick an investment property in the areas where there is strong demand for the rental accommodation. So, purchasing an asset to transport, schools or universities will make it more alluring to the renters.

4. Be Practical About your Investment Goals

If you are hunting for the long-term property for fast capital growth, then it is easy to renovate properties and convert them for a quick profit. In slow economic times, it may take many years to get the same growth.

5. Create Sweat Equity

Paying tradesman to renovate your investment property is a costly affair. But if you are prepared to get into this, you can boost your profit margin and save money by doing the work on your own.

6. Hunt For the Liveable But avoid the Grand One

Note that the rental property only has to be neat, clean, and functional. Don’t get into buying a luxury asset as it has stylish decor and interior.

7. Don’t Get Emotional When Buying

When hunting for the house, you have to buy with your head not with your heart as some people might get caught up in the emotions easily. While home on the steep block might offer you mesmerizing views but it could be a nightmare for you to renovate due to the excavation or retaining costs. Also, make sure that you know the advantages and its risks.

8. Think Before Negative Turn-out

Your asset may get negatively geared if your repayments on the investment loan won’t entirely covered by the rent. While this can offer tax benefits, it can also result in the financial distress if you don’t have sufficient cash flow to cover the loan repayments. So, you need to consider your budget carefully before purchasing.

9. Inspect Your Building

Before signing any buyer contract, take your time to understand the building report well to avoid any high-cost repairs. Also, the termites are one of the leading issues that you need to look out.

The great Australian investor and professional real estate entrepreneur. He offers the best property investment podcast in the USA. He offers cost-effective tips and tricks to many newbie Australian and foreign investors to help them stand out from other and that too in short period. He will also help you out to refine your search to buy the best Investment Property for sale.

 

Tips To Get Different Investment In Property

Posted on by Mollie Abel

The real estate market thrives with many opportunities that give chance to people to earn. The portfolio is diverse such that there are also many investments to try.

Rental properties are among the most common of the real estate property investments. This is as simple as buying out the property and letting someone (tenant) rent it for some period as determined by a contract. While the landlord (property owner) is responsible for maintenance and tax dues, the tenant has the obligation to pay for the monthly rent.

The downside to this investment is if the landlord will have to deal with irresponsible tenants. These people do not care at all and can end up damaging the property.

If you’re not keen with this property investment, you can try the real estate investment group. It will let you buy apartment blocks, condo units or even townhouses with a single company acting as the property manager. You keep ownership, usually documented in block and white. The investment company collects payments for you whole keeping some portion of what the tenants pay for the monthly rent. In some cases, there is a portion allotted to cover for units which are left vacant for short periods.

Another property investment is called flipping. In this method, you buy a property and flips it to the next owner. It’s like buy and sell. Usually, flipping a property takes three to four months. You just have to be keen on eyeing properties that can be sold without having to alter them at all.

However, there are new flippers who also shell out small amount of money to make the properties they buy more attractive. Few renovations and improvements are done before they look for the next buyer. This buyer may be someone who just looks for his new house or someone who is also a property flipper.

There are also property investors who take risks on financing people who have mortgage dues. Some do these in exchange for collaterals like cars. Some take the property titles and return them to the owner when the debt has been repayed.

Real estate is truly diverse. Many forms of investments are now available for those who do not only seek shelter but also seek shield from financial crisis.

If you are looking for real estate investments within your place, seeking the help of a real estate professional is a big leap towards this realization

Guide To Choose Real Estate Company

Posted on by Mollie Abel

Selecting a commercial real estate company can be a challenging process. You want to hire someone who is knowledgeable, skilled, experienced and can match your goals and ideals. This is easier said than done. One company may offer you some of these features while others have the remaining characteristics you desire. There is no lack of the number of commercial real estate companies out there, which claim to possess peerless knowledge and skill. So, how do you go about selecting a commercial real estate company?

The secret lies in finding a real estate company that suits your needs and criteria. Yes, there are some overlaying concerns that also need to be considered like appropriate documentation. However, when you are looking for one of the best real estate companies for your needs, you need to do more than just scratch the surface. Here are some tips outlined below that can be useful in helping you during this process.

Let’s take a look at them:

Look at their experience

Commercial real estate is a blanket term and this business can be multi-faceted and highly nuanced. Therefore, you cannot just hire any real estate company for your needs. You have to start looking for one that suits your criteria. For instance, if you are interested in buying or selling properties in strip malls or shopping districts, you shouldn’t hire a company that deals in offices and residential homes. You want someone with a background in the kind of real estate you are focused on or else the company will be of little use because they will be out of their depth.

Assess their reputation

One of the best ways of spotting the best companies is by taking a look at their reputation. How can you do that? There are certifications, customer reviews as well as awards that are readily available due to the magic of the internet and the culture of open communication. If you find a commercial real estate company that seems appealing, you can do some research and discover if they do stack up. This step can be immensely helpful in allowing you to dodge a bullet.

Go over client’s opinions

The greatest problem with reviews is that they are mostly from satisfied customers. Unhappy customers either don’t post or their reviews are removed. Therefore, it is recommended that you ask the commercial company to provide you with a list of their past clients. This allows you to do some homework of your own and identify any weaknesses or problems that a previous client encountered.

Meet the representative

Last, but very important; don’t hire a company over the internet. Always meet their representative in person and see if they understand your needs. Open communication is vital in this business and if you are not comfortable with them, there is no point in starting a relationship.

Use these pointers to pick out one of the companies for your realty requirements.

 

All About Mortgage House

Posted on by Mollie Abel

Although, owning a home – of – one’s own, is often, considered, an essential component, of the so – called, American dream, unless/ until, someone, prepares, effectively, and has the financial necessities of affording to do so, this dream, is quite challenging to achieve! The vast majority of Americans, especially, first – time, home buyers, must utilize a mortgage, as a key part of being able to afford, to buy, one of the stumbling blocks is often, preparing, in advance, to do, everything needed and necessary, to qualify, for the best possible financing options. With that in mind, this article will attempt to briefly review, examine, consider, and discuss, 6 major considerations/ actions, for qualifying for a mortgage.

1. Overall Credit Rating, and Score: The higher one’s credit rating, and score, the better, the chance of securing the best possible form of financing. Wise home shoppers, begin the process, at least six months, before they start their hunt/ search, and secure a copy of this report, from the major bureaus. Do so yourself, or if, needed, use a professional’s help and guidance. Correct errors, fix them, and begin reducing your debt. In this period, avoid taking out, and/ or using any additional debt!

2. Total verifiable income: How much income (verified), can you show, and prove? Know how much mortgage, you qualify for, by discussing it, well, in advance, with a Mortgage Professional!

3. Debt, other than mortgage debt: Lending institutions, use a formula, which factors in your overall debt, and your mortgage loan, will be impacted, by this percentage. It is a wise idea, to begin paying – down, the balances on your credit cards, and other personal loans, etc.

4. Combined/ total debt: In addition to the formula for overall debt, there is another percentage, lenders use, to guide them, to the maximum amount of mortgage, they will offer. This is based on a percentage of your monthly income, related to the mortgage installment. An educated consumer, is best prepared!

5. Know how much you qualify for: After correcting issues, paying – down debts, etc, have a confidential discussion, with a mortgage professional. Begin your search, by knowing how much, you will qualify for, so you don’t waste a lot of time and energy, looking at houses, you can’t afford!

6. Appraisal value: The next step, is to realize, the house, you are seeking, and want to purchase, must Comp – out! This means, it must appraise, at what you are paying for it, because the bank will only loan, an amount based on their appraised value!

The home – buying process, can, either be stressful, or, far, less so, often depending upon, one’s level of preparation, etc. Be a smart buyer!

 

Things Should Be Prepared Before Own A House

Posted on by Mollie Abel

Since, for most of us, our house, represents, our single – biggest, financial asset, wouldn’t it make sense, to do, all we possibly might, to ensure, we do so wisely, and in a prepared, informed manner? Wise home buyers, proceed, in a cautious, well – prepared way, and balance their emotions, and logical components, in order, to best determine, what makes sense for them. While each individual, has, specific needs, requirements, and objectives, each should commit to wisely, proceeding, through the process. This should begin with effectively preparing, prior to even, beginning the house – hunting, search. With that in mind, this article will attempt to briefly consider, review, and discuss, 6 keys, to preparing to buy a house.

1. Reduce debt – Pay down, or off: Begin your planning, at least, 6 months, prior to beginning your search! Do everything possible, to pay – down, your overall debts, and attempt to eliminate, as much as possible. Since most use a mortgage, to pay for a house, it’s important, to enhance your credit, and overall debt, is a major consideration, for most lending institution!

2. Do not add, new debt: How many times, have you shopped, in a store, and been offered, a discount, if you open a store charge? This small, immediate savings, often, ends up, having longer – term, less – desirable ramifications, when it comes to applying for mortgages.

3. Put together funding: At least 6 months, in advance, begin putting together the necessary funding, you will need, for a down – payment, closing costs, and reserves. Smart home buyers realize, it is wise, to put together, the equivalent of at least, 6 – 9 months, reserves, in order to make the overall process, the least stressful, reduce hassle, and enhance your enjoyment, of owning a home, of your own.

4. Know, recognize, address, fix, and improve your credit: Begin by getting a copy of your Credit Report, from all 3 major Credit Reporting Agencies. Review each one, thoroughly, carefully, and completely, and address any areas, which might bring forth questions, and/ or obstacle, in terms of qualifying for your loan. If you feel, you can’t do so, yourself, it is wise, to hire a professional, recommended, experienced individual, to help you do so.

5. Know your comfort zone: It will take a considerable amount of your capital, to put down, as a down – payment, etc. Will you be comfortable, reducing your available cash, etc? How about the monthly payments, as well as necessary reserves, for repairs, renovations, and maintenance? Objectively, introspectively, examine and consider, your personal comfort zone! Don’t become house – poor, by putting too much, into this investment! Do what’s best for you!

6. Avoid the money – trap, or eliminating your comfort zone: Have your prospective home, professionally inspected, and recognize, what your present and future needs, might be, and whether, the particular house, will be a good – fit!

An educated, prepared, home buyer, becomes the happiest homeowner. Will you proceed wisely and patiently?

 

Factors That Impact Home Buying

Posted on by Mollie Abel

Most people consider, owning a home, of their own, to be a meaningful component, of the so – called, American Dream, but, in order to ensure, dreams do not become nightmares, it’s important to proceed, with insight, well – prepared, and doing all they can, to make the best decision, for their needs and requirements. Since, for most of us, our house’s value, represents our single – biggest, financial asset, doesn’t it make sense, to prepare properly, and proceed, in the best possible manner. This article will, therefore, attempt to briefly consider, review, examine, and discuss, 4 factors, which might, often, impact home buying.

1. Supply: When the supply, of house’s available, on the real estate market, exceeds the demand, we have a Buyers Market, which generally, lowers selling prices, and helps buyers, purchase more house, for less money! The economic theory of Supply and Demand, is extraordinarily, relevant, when it comes to real estate, and often, fluctuates, considerably, from time – to – time. Sometimes, this occurs, gradually, over a period of time, while at other times, it changes, dramatically, rather quickly. This is why, one must carefully evaluate and consider, pricing, not, merely, in terms of what has been, or what is, but also, what might be!

2. Demand: When the demand for houses, exceeds the supply, it creates a Sellers Market, For the past couple of years, we have been experiencing that type of market. Many factors effect this, including competition, job market, overall economy, public perceptions and comfort zone, and the specific, local market. We must all beware, and prepare, for factors which might impact real estate and the housing market, including the capping of so – called, SALT deductions, as well as rising mortgage interest rates.

3. Perceptions: Buyer and seller perceptions, are, often, quite different, The best thing for a homeowner, to do, is, go, to, some Open Houses, in the neighborhood, in order to get a better idea of the competition. Many owners over- value their house, while most buyers, seek the best possible price. In addition, perceptions of the overall economy, trends, etc, have a significant influence!

4. Financial considerations: Many financial considerations, are relevant to this discussion. This may include: the overall economy; the specific, local, one; mortgage rates and trends; real estate taxes; the employment/ job markets, etc.

Pay attention to these 4 factors, which impact the home – buying, process. The more prepared, the better, for the home – buyer!

 

Economics Factor You Should Consider Before Buying Home

Posted on by Mollie Abel

While most potential home buyers, recognize, they need, to save for a down – payment, be prepared for repairs, etc, and afford the monthly costs of home ownership, many, either, ignore, fail to understand, or don’t consider, some of the other, relevant, economic considerations, for whether one, would benefit, by owning a home, of their own. Especially, when it comes to first – time, homeowners, the more they understand, and consider, the wiser, their decision – making process, might be. With that in mind, this article will attempt to briefly, review, consider, and discuss, 5 relevant, significant, economic considerations, for buying a house.

1. Tax deductions: Although, for many, especially, those in, so – called, high SALT states/ regions, the tax deductions, associated with home ownership, are less than they have traditionally been, there is still an, up – to $10,000 tax deduction, on one’s federal tax return, for the state and local taxes, we pay, Therefore, when we consider, whether, there are advantages, to buying, instead of renting, this must be factored in. If the net – numbers, of renting, versus, owning, are compared, and if they are close, home ownership often becomes more economically, advantageous, because of the appreciation, and equity, involved, in owning.

2. Mortgage/ mortgage interest: Mortgage interest, up to that paid, on a $1 million mortgage, is still, tax – deductible, so, when one considers, if it makes sense, for him to purchase, this must also be considered. In addition, a wise consumer considers, whether his monthly costs, are within their personal comfort zone, and strengthens, their enjoyment, etc.

3. Local real estate market: While there is, often, much discussion, about the overall, real estate market, every local area, is different, and certain ones, appreciate more, and/ or, depreciate, less, than other areas/ regions/ neighborhoods! One should, carefully, consider, whether, the location of the particular property, is one, which meets your needs, and priorities, desires, before buying, because, unlike renting, purchasing a home, requires far more commitment, than renting, does.

4. Competitive Market Analysis (CMA): Never purchase a house, unless you check, whether it’s worth, at least, what you pay for it! To do so, the best approach, is to have a professional, real estate agent, prepare a fully – considered, relevant, Competitive Market Analysis, or CMA.

5. Will the assessment match – up, with the price paid?: You won’t get the mortgage, needed, and required, until/ unless, the particular property, assesses, for the amount, you are paying! Mortgage lenders will only provide mortgages, based on the assessed value, not, on what you are paying, so if this property, is not valued, as high as you are willing to pay, you will need, to put down, a larger down – payment, to make up, the difference. Will you have the additional amount of reserves and resources, needed?

Wise buyers review many relevant factors, and these 5 economic considerations, must be considered carefully. Will you be a smart home buyer?

 

Signs That Determine Real Estate Market

Posted on by Mollie Abel

Many, often wonder, why, it is often, so challenging, to understand, predict, etc, many of the variables, involved, when it comes to the real estate market. Why are prices, so high, or low, or a buyers market, or sellers market? Why do some houses, sell, very quickly, while others, remain, unsold, for a seemingly, long period? What makes pricing fluctuate, etc? With that, and more, in mind, this article will attempt to briefly consider, review, and discuss, 6 factors, which often, determine, how the real estate markets, might perform, etc.

1. Supply and demand: Like so many economic issues and considerations, supply, and demand, often, is a major factor, in the performance of the housing market. When there are more buyers than sellers, we call this, a sellers market. When the scenario is reversed, it’s a buyers market. When there is balance between those seeking to buy, and sell, conditions are neutral. Many factors and considerations, go into, what market conditions, might be, including the overall economy, mortgage rates, tax laws, employment/ jobs, etc.

2. Economic strength/ employment: When potential homeowners feel comfortable and secure, in terms of their employment, presently, and for the foreseeable future, they proceed, with a mindset, which focuses on the possibilities!

3. Consumer confidence: The more, consumers exhibit confidence, in the overall strength and stability of various factors in the economy, and the more convinced, ownership has advantages over renting, etc, the stronger the possibilities for housing and real estate pricing. Relevant factors include: mortgage rate trends; tax considerations; the attractiveness of certain neighborhoods, areas, and homes, etc; and the overall national and international economies, and the balance between positive and negative factors/ trends.

4. Mortgage interest rates: When mortgage interest rates are low, the corresponding monthly carrying charges/ expenses, are reduced, This means one can buy, more house, and be able to afford the costs. When rates are higher, monthly costs rise, and, this is generally, a negative factor, in terms of rising prices!

5. Tax considerations: The tax reform legislation, passed at the end of 2017, places caps, on the amount of real estate taxes, which are deductible. Therefore, homes in states, with higher state and local taxes, are somewhat, at – risk, in terms of maintaining their value, because this, significantly increases the costs of home ownership!

6. Real estate, often, is local: There is a slogan, All real estate is local, which means, every local housing market, is different and variable! Avoid believing, what happens elsewhere, is directly related to your specific region.

An educated homeowner is beware, and prepared! The more one knows, and understands, the better all are served!