Florida Real Estate Blog

Generating Leads for Realtors continues to be a hot topic. The Internet has now become a highly targeted marketing tool for Realtors as many are no longer cold-calling and/or door knocking. Most Buyers and Sellers choose to “Shop Around” before choosing a Realtor to work with making ‘first impressions’ more important than ever. Many Realtors are now exploring the use of Buyer and Seller friendly websites that are more about the client and less about the Realtor.

Below are tips how Realtors can increase their leads. Not only will these tips increase the amount of leads, but they will also show Realtors how to convert leads into sales!

Get yourself top placements with Google, Yahoo and MSN search engines!

Most Buyers and Sellers start their searches here and you need to have high ranking websites! This can be accomplished by having separate websites for Buyers and Sellers. As search criteria is different for Buyers than for Sellers, you need to have high ranking websites for both types of clients.

Offer something free with your website

Instead of making your website about you, make it about your clients. An example of a free service you could offer is a CMA. You could offer this via an ‘online form’. People looking to sell don’t always like to give out their contact numbers, but usually don’t hesitate to give out their email address.

Don’t forget about your client!

Daily emails of new listings is fine, but be sure to also send your client a personal email every ‘now and then’. Remember, if you forget about them, they will have long forgotten about you.

Website must be user friendly.

If a Seller is searching for a CMA in your area, they don’t want to take time navigating thru a website and end up typing a long email about their home. If they do this, they will likely copy that email and send it to 10 other Realtors in your area. A Seller wants a basic template where they just fill in the fields.

Offer Free tools to your Buyers and Sellers

A free eBook on home staging is a great gift that any Seller would appreciate. Get the edge over your competition by offering your clients something they don’t have!

Realtors are often found offering their clients the exact same tools as any other Realtor in their office making the competition fierce. You need to differentiate yourself from the rest and explore your options. The internet has proven itself to be the way of the future for marketing Real Estate Services and with Buyers and Sellers shopping online; you MUST make sure you have a presence on ‘the net’. Having the best negotiating skills is great but if you are the only one that knows this, you will find yourself struggling to make a living in this industry.

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Any news report will alert you to the fact the home foreclosures are on the rise. If you have untapped funds just sitting in your Self-Directed IRA LLC account, now is a great time to invest in foreclosures. Following are three reasons why.

3 Reasons Now is a Great Time to Invest in the Foreclosure Market

Buy Low/Sell High: If you’re looking for the proverbial good deal, now is the best time to find one. Good deals, or buying a property with enough equity to sell it for a profit, are plentiful right now. So, one of the most difficult parts of making money in foreclosures is taken care of.

As adjustable rate mortgages adjust up, the economy worsens and more people lose jobs, homeowners become more willing to negotiate. This means the elusive good deal is easier to come by.

Banks Don’t Want to Be Property Mangers: Banks are not in the business of managing property. They want homeowners to do that. So, as they become inundated with more and more foreclosures, they’re doing everything they can to sell them as fast as possible. Why don’t’ banks want to be landlords?

Because they usually wind up losing money - in two different ways. First, there’s nobody paying the mortgage when house is sitting empty. This cost banks. Secondly, when a house is in foreclosure, the bank is responsible for keeping it up until it sells. This means hiring contractors to mow the lawn, fix broken windows, clean up and haul away traffic from previous owners, etc. So, they’re quite eager to sell, sell, sell.

Long-Term Gain: Using your Self-Directed IRA LLC / Checkbook IRA account funds to purchase foreclosures now will pay off in the long run. Especially if you buy and hold properties. Real estate is a cyclical market. Meaning, what goes down will eventually go up again. When the market starts to sizzle again, you’ll be perfectly situated to take advantage of the smart investments you make now.

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I have taught real estate princ. and prac. for over twenty years. Thousands and thousands of students have interacted with me on dozens and dozens of different areas of study. Nowhere in this vast body of contact have I ever seen a more often ignored concept than that of “Agency”.

Who does the real estate agent that you’re talking to represent?

If you’re a buyer does the agent work for you? Do they try to obtain the lowest price for you? Hard to imagine since over 95% of all real estate compensation is based on commission, and that is based on sales price!

If you’re a seller, is the agent you hired telling buyers to, “make an offer, they really have to sell” or worse revealing what other offers have been on the table and the result!

When you are entering into a real estate relationship spend a little extra time talking about Agency, and who represents you and who does not.

I usually tell clients that a real estate professional has three important things to remember (there are more than three, but these are the most important):

What can I say? What I can’t say? What I must say?

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1) How much will you receive? Companies all offer different amounts, from as low as 70% to as high as 100%. Companies which offer 100% usually give you 70% upon completion of the sale and 30% at the end of the tenancy, however the average offer tends to be 85%

2) When selling any house, the best tip is to try and make the process as simple and easy as possible as selling your house can often be far from a relaxing process. To make sure the process is as peaceful as possible it’s important know who the sell and rent back company you are dealing with. Are they reputable? Ethical? In good financial standing and will still be around at the end of your tenancy period? All these questions are very important and make sure you do plenty of research on a sell and rent back company before you enter into any agreement with them. The best advice will come from an independent personal recommendation from someone who has gone through process, but as sell and rent back is still an emerging sector of the property this may be tricky. Searching internet forums and message boards may also reveal some more information on the range of companies entering the sector.

3) What happens when you become a tenant? Are you guaranteed long-term rental? You are best looking for companies which offer a long-term contract. This will give you peace of mind that you cannot be evicted after a short period. When you become a tenant you will generally have to pay for council tax, gas, electric bills as any normal tenant would who rents a property.

4) Who will pay the valuation costs and legal fees? Usually the company you sign with will pay the valuation costs and legal fees for you. Most will do this to make the offer seem more attractive but only buy the property for a lower percentage. Although there are exceptions as some companies will pay for the costs and fees whilst offering a high or full percentage. Aim for these!

5) Will your details be kept private/confidential? All of the sell and rent back companies should keep your details private and confidential although ensuring the company is reputable beforehand should eliminate any risk of breach of confidentiality. Unless expressed otherwise, the only people who will know about what happened will be you, the company you dealt with and the solicitor handling the case, not even a “sold” sign should appear outside your house.

6) Will the rent I pay stay at pre-agreed levels? Some sell and rent back companies will offer a fixed rate for the first few years, after then the monthly rental payments may increase. Others will not guarantee a fixed rate and leave you open to increased payments later on in your tenancy try to avoid these. Often the best deal will be the sell and rent back firm who will offer you 10 years (or whatever the length of tenancy agreed) at a single fixed rate which is signed into the contract.

7) Will the valuation be independently calculated? It is always advisable to go with a sell and rent back company that offers an independent valuation, especially by a member of the Royal Institute of Chartered Surveyors (RICS).

How long is the process likely to take? How quickly could you receive your money? Companies can offer a 24 hour service if that is what’s required and as long as the legal paperwork is fine, although most will take 3-4 week to get everything sorted. Your money is usually released after the transaction has been completed.

9) Who will own and maintain the property? After the transaction has taken place, your landlord will generally be the company who bought the property from you and they will be responsible for taking care of any maintenance or emergency callouts that occur. That is why it is essential to ensure the landlord is reputable or is using an experienced and reliable property management company to quickly address any issues you may have. As for the contents, the “moveable furniture” is typically still owned by you, unless you negotiate a deal with the company to sell them the furniture as well.

10) What if you want to buy your house back? Some companies will offer a deal where you can choose to buy your house back off them at the end of the tennancy period. This is very useful for those who are having a difficult time financially but expect things to improve in two years or more when they can afford mortgage payments again.

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While there are multiple reasons for the current mortgage crisis, part of the responsibility lies with borrowers who bought homes and acquired mortgage financing they couldn’t really afford. The result has been many people hurting themselves, and in a classic ripple effect, harming the entire global economy.

The good news is that current homebuyers have the ability to strengthen our long-term economy and protect themselves by following sound financial principles. Foremost among these is living within one’s means. This pertains to items small and big, from the food a person purchases to the home a couple buys.

Heeding the advice listed below can assist you in living withing your means, having greater peace of mind, avoiding foreclosure, and creating greater stability in the economy.

1. Wait until you have a larger down payment. Although loans are available with down payments as low as 3%, the traditional guideline of a 20% down payment is still smart. A higher down payment lowers the amount of debt you’ll carry. It can also mean a lower monthly payment, and correspondingly, less financial strain and stress. It’s true that saving for a down payment to buy a home takes time, but it can bring great rewards.

2. Retain sufficient savings. It’s also important have the equivalent of a few months of mortgage payments readily available in a savings account in case of job loss or other emergency. In fact, most loans have a reserves requirement. Having three to six months worth of payments in a bank account can bring peace of mind and help you avoid foreclosure or dings on your credit should something happen to your source of income or if unexpected expenses arise.

3. Take into account the extra costs of buying a home. A mortgage isn’t the only cost when you purchase a house. Besides possible HOA fees, property tax, property insurance and possibly flood insurance, you’ll also have the costs of maintaining, improving, and furnishing your home. How much will the new bedroom and kitchen sets costs? How about the lawn mower for your new yard? Can you afford the additional costs of home ownership along with your mortgage?

4. Consider all your debts. It’s important to add all your current debts (credit card debt, auto loans, payment plans) to the amount of your proposed mortgage loan. Will paying off debt take up more than half your income? After you buy your home, home much money will be availabe for savings, investments and just everyday living?

You may have to exercise some delayed gratification and discipline in order to follow the advice above, but doing so can mean greater enjoyment of the house you buy and play a role in preventing a future mortgage crisis.

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The world is stressful and we tend to feel its stress more than we’d like to. As a result, we will do whatever is necessary to make ourselves feel better even if it costs thousands of dollars to do so. One of the ways in which homeowners improve their wellness is by installing a sauna in their home. This is a huge investment that is beneficial in a number of ways. It improves health, it relaxes, and it is very enjoyable. However, it is important to take some things into consideration.

The type of sauna being installed and the location of the sauna are important, as is how much work the installation is going to require. The more elaborate the sauna, the more expensive it is going to be, and the more work it is going to require. This also brings about an important question for the homeowner because of this huge investment and that question is: “Is it going to increase the value of my home?”

This question is important because such a large investment should also have financial incentives in addition to the health benefits. Sure, these financial benefits can be in the way of eliminating club memberships and fuel costs to drive to a sauna, but when making such a huge installation in the home, it is important that the addition add to the value of that home.

The good news is that this investment does indeed add to the value of the home. Of course, the more elaborate the sauna, the more value it adds. But that is no reason to break the bank just for the sake of adding home value. The sauna that is installed should be adequate enough to support the needs of those who will be using it. If a large sauna is what is needed, then that should be what is installed. If a small sauna is what is needed, then that should be all the homeowner needs.

Installing a sauna that is too large results in wasted money in the way of its purchase price, the price to install it, and the expenses associated with running it. It also results in wasted space. Spending money on space that will never be used kind of offsets any money that will be received if the house ever has to be sold, a new mortgage is opened, or to simply increase the equity. As the market turns for the worst, having a home sauna definitely helps with the value of that house as prices are seeing a weekly decline.

Saunas also become the focus of many home improvement products for this very reason. They are a great addition and they have family, friends, and neighbors aching to be invited over to enjoy a relaxing evening in the sauna with good conversation and a temporary escape from the rest of the world. Before long, everyone either wants to spend time in the sauna or they will eventually install one of their own once they experience the benefits and realize that they can get a heads up on the mortgage market by increasing the value of their home with a sauna.

So it is easy to see how investing in a sauna can benefit the homeowner in a lot of ways. Not only does it promote a healthier lifestyle through reducing stress, it also has its financial benefits, which might explain why saunas are becoming huge in fix and flip projects and other home improvement endeavors. No matter the reason for installing a sauna, it is a great idea for any homeowner.

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The Forex market offers an exciting form of trading that can be quite profitable for those who are willing to learn the ins and outs of this interesting format. Forex trading is trading based on the Foreign Exchange rate, or the comparison of one currency to another. Many people are looking to get into the Forex market quickly and easily and without wasting money or time. This is the fool proof way to a quick and profitable introduction into Forex online.

We find that there are three basic ideas that can help solve the problem of how to learn forex online. When you are new to trading you want to find out the best ways to make sure you get into forex with the best start. So there are three fundamental things that you will want to be sure to do.

The first is to paper trade online, simulate trades or trade for free to develop skills and a strategy. The second is to find a mentor that is willing and able to train you. The third and final step is to find training materials that will allow you to hone and fine tune your skills until you feel comfortable trading for real on the foreign exchange rate market.

First thing that you want to do is find a good free online account that will allow you to simulate trades in the real forex market as you develope your online trading skills. This may include following your training material and software programs in a simulation, not wagering any cash. This allows for honing your skills ahead of time.

The next thing that you should do when you have fine tuned your skills a bit is to find a mentor who is willing and able to do some teaching. This mentor should be successful his or her own self when it comes to Forex trading. If they do not have experience trading successfully in Forex, find another mentor.

Learning forex trading online will require that you learn new thinking processes much the same way for learning any new skill. You need to truly enjoy this because you will be spending so much time in learning and practicing and playing in and around the foreign exchange market.

Like anything important, learning forex trading online must be taken seriously if you want to be successful at it. Planning ahead helps to take much of the difficulty out of the task. Of course if money is no concern for you than ignore my advice, don’t worry be happy. But if you like need or want money, then have a good plan and the right information, you’ ll do well.

The fast and easy way to learning forex trading online is about three simple steps, first of course you need to establish a trading account that you can use to simulate trading for free. Next you need to find live human beings (not just books and software) to help your training. Last and of course not least you will need to gather the right learning tools to speed your education.

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Almeria is set on the coast of Spain offering a beautiful countryside full of sunlight and delightful views. The days are warm and appealing with the nights full of activities for all. Almeria is a holiday location recently discovered by more and more Europeans. Those who have visited Almeria often decide to relocate the other area as their permanent residence.

The last ten years has shown popularity for Almeria, which has caused the property values to increase exponentially. One of the main reasons for Almeria becoming so popular is the tourists who have discovered the secrets hidden in Almeria as well as the potential investors. Word has followed tourists home to be spread throughout and investors have found the hidden potential. Travellers from the UK and other European countries have decided Almeria is the top place to visit, a must that shouldn’t be missed.

Almeria has plenty to enjoy from the authentic Spanish homes, food, and culture to the coastline resorts. It is a quaint town that has been influenced by the modern. It is such an interesting mix of culture and heritage that one can spend days trying to understand the underlying juxtaposition. The Almeria residents have kept their culture alive even with the culture influences of the outside world.

Relocating on a permanent basis to Almeria is a financial decision that could set up and your family up for life. The property values though they have increased in the last ten years, are nowhere near other more developed destinations. The prices are fair for investors as well as younger families. The properties available are wide in range offering land, homes, and condos. There is just something for everyone on the shores of Almeria.

Property such as farmhouses, villas, apartments, and beachfront condos are all available. There are also a number of land parcels offered. A buyer interested in their dream home can custom build rather than buy something prebuilt. The home can be built for a fraction of the cost in other destinations.

Property ranges in 50,000 pounds to 200,000 pounds on average. The price will depend on the property type you are interested in and your budget. The location you have chosen may increase or decrease the value as well. Almeria has a few transfer fees and other costs associated with the purchase. It is a good idea to have a local lawyer or real estate person help you with the process.

The professionals are familiar with Almeria as well as the purchase transactions required. The added benefit of speaking the language can help you speak with the sellers and other individuals involved in order to make the process less of a problem. The skills of the professionals allow for them to seek out information for you that is in your interests rather than others.

Almeria Spain will offer the perfect new home for anyone wishing to settle there. It will not matter if you are a young family or about to retire, there will be a place for you in Almeria with its lovely warm days and nights, the perfect place to live.

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Choosing furniture is one of the most difficult and significant decisions consumers have to make once in a while. True, it might not be that life-shifting an option, but still it is imperative to mindfully opt for a great item that would be timeless, good looking, and functional. More so if you want to choose items that would still be good looking even if you conclude you will remodel your house in the future.

Initially, you have to consider the dimensions of the room where the fixtures will be. You also need to consider what changes you might want to do in the future. It is important to select items that will not be too small or too big for the room, whether at present or perhaps later. Buying furniture that is simple to shift around is a good thing to do particularly if you propose to renovate the room later on. However, you have to base your options on your budget since you are buying something that’s rather a long lasting component of your house.

Next you need to pick a product that is constructed of strong materials and that is framed sturdily. It’s better to purchase fixtures that aren’t difficult to care for. Items that require so much energy in upkeep might not last to look good enough by the time you redesign your house. If the fixture is made of wood, it needs to be solid and well finished. If it is made of metal, it needs to be treated to prevent rust and shaped well. Plastic might not be the choice as they are easy to get blemished sooner or later.

You may consider getting fixtures whose form can easily be restored. Sofas that are easy to refashion can last a decades and many renovations. There are different tables whose tops can be switched easily. The flexibleness of such fixtures can also help you make your space fabulous, since it can be altered at any time, making it appear that you continuously have different fixtures.

You can also go with the current trend, by selecting items that is made to look old. This kind of fixture can even look better with age. Such items can also look good with new pieces or even newly renovated spaces, making your house or room trendy and fun.

Choosing fixtures that is long-lasting might be hard, but the energy exerted is generally worth it.

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Are you considering refinancing your mortgage loan? Did you know that choosing the wrong kind of lender will cost you thousands of dollars? It makes a difference refinancing with a mortgage broker, bank, or Internet lender; the difference is thousands of dollars in unnecessary interest payments. Here are several tips to help you choose the right mortgage lender when refinancing your home.

Mortgage Questions You Need Answered

Most homeowners focus on choosing the best lender or the lowest mortgage rate when refinancing. After all, isn’t shopping for a mortgage just like shopping for a washing machine? You compare rates and closing costs and choose the best offer right? That would be true if you were shopping for kitchen appliance; however, when choosing a lender you’re basing your decision on estimates that are guaranteed to change before you close on the loan.

If most homeowners ask the wrong questions when refinancing, what questions should you be asking? The question you need answered is not which lender should you choose, but which person should you pick to arrange your home loan. Finding the right person that allows you to refinance with wholesale mortgage rates while paying a one percent fee will save you thousands of dollars and many headaches.

Who Should You Choose To Originate Your Mortgage?

Should you refinance with your bank or an Internet lender? The answer might surprise you but you should never choose a bank or Internet lender for your home loan. The reason banks are out is that they are exempt from legislation that protects borrowers from predatory lending practices. Should you choose a lender that doesn’t have to play by the rules when conducting business? Of course not. The problem with Internet lenders is that you’ll need to talk to a person with the authority to negotiate the deal you’re looking for. Large Internet lenders employ salespeople with little experience or authority to broker the mortgage deal you want.

You’re Looking For The Right Mortgage Broker

To get the best mortgage loan you’ll need to use a broker…and not just any mortgage broker. The person you’re looking for owns their own business; a self-employed broker that does not rely on salespeople to close mortgage loans. The reason you want a business owner with no sales staff is that this broker will have the authority to broker the deal you’re looking for without sharing the commission with a sales staff. This is critical because you’ll be refinancing your mortgage with a one percent origination fee and a wholesale mortgage rate. Sounds too good to be true? It’s really much easier than you think for anyone willing to invest the time to do a little homework before refinancing their home.

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The definition of a short sale is simple; it’s the sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Here’s a typical example of short sale situation:

Assume that “Joe”, a home owner, has debt on a house that’s greater than the amount for which the property can be sold. In fact, Joe has an unpaid loan balance of $140,000; however, the property will only sell for $120,000.

Obviously, this is terrible situation for Joe, but it’s also bad for the lenders. They’re losing money! So, to keep their losses down, the lenders are willing to accept less than the total amount due.

So, in this situation, the lender accepts that $125,000 as full payment from an investor or other buyer. This amount is clearly “short” of the full $145,000 payment. And that’s where the term “short sale” comes from.

At this point, you may be wondering, “Why in the world would a lender consider a short sale?” Well, there are many reasons often related to “hardship cases”; e.g., the homeowner has permanent injuries; financial insolvency; convictions; job layoffs; military call ups, etc. In such cases, lenders are willing to consider a short sale as part of their “loss mitigation” policy.

However, lenders don’t go into business to lose money, so they consider short sales a last resort! Foreclosures can be a better option for them. So, as an investor, should you consider short sales as a money-making opportunity?

The answer is “Yes,” if you’re an investor with a lot of experience. If you’re a novice, stay away from short sales until you’ve gained enough knowledge to work successfully with lenders. If possible, find a mentor to guide you through short sale deals.

You can get some good deals in this market, but short sales are definitely not the ticket to “instant wealth” as some gurus claim. Also, these gurus usually don’t mention that short sale transactions can be very difficult to complete (compared to conventional deals). Below, I describe some of the complications you have to deal with.

Short Sales and Their Complications Several elements are involved in short sale transactions, and that multiplies the complications you have to master in order to achieve success in this market.

The first factor is the particular loan mitigation policy of the lender and third-party investors. These policies (and the attitudes of the lenders) aren’t always easy to deal with. As an investor, you have to both master the details of the policies and master the “politics” of dealing with lenders in the loss mitigation department.

Factor 2: the property’s as-is value compared with the as-repaired expenses. You have to do full due diligence to make sure a short sale purchase will make a profit after the expense of “rehabbing” it.

Factor 3: approval for short sale. Approval needs to come from the investor who’s actually the owner of the loan. This can lead to more complications as you may need to work with several people involved in the sale of the property.

Fourth, depending on economic conditions, investors can flood into the market, increasing competition.

So, how do you know if a short sale is worth pursuing? Here are the general steps to follow in order to make that determination

Short Sales-General Steps to Follow The steps described below occur in most short sale transactions. They may vary, depending on your area.

Step 1 Identify potential short sale properties (e.g., contact a listing agent, check the public records, etc.).

Step 2 Check the lender’s loss mitigation policy. For example, if they deal with short sales on a fairly regular basis, they’re a good choice. If, on the other hand, they seldom or never accept short sale offers, don’t waste your time.

Step 3 Determine the number of liens recorded against the property and the total amount of money in those liens.

Step 4 Determine the borrower’s present financial condition.

Step 5 Analyze the type of loan that’s in default and its current status.

Step 6 Determine both the property’s as-is market value and its as-repaired value.

Step 7 Analyze current real estate market conditions.

Short Steps–Specific Steps To Follow Once you determine a short sale is worth pursuing, then you’ll need to take additional steps.

* Contact the homeowner and analyze their financial condition. * Complete due diligence on the property’s condition. * If due diligence determines that both the financial and property condition are suitable, request that the homeowner give you written authorization to contact the lender’s loan loss mitigation department. * Contact the decision-maker in the loan loss-mitigation department of the lender and give them a copy of the authorization signed by the homeowner. * Discuss the short sale and ask them to send the appropriate short-sale documents to the homeowner. * Instruct the homeowner to gather all documentation in order to prove financial hardship. * Obtain repair cost estimates from a minimum of three licensed home improvement contractors. * Determine the value of three similar neighborhood properties sold in the last six months (a comparable value study). * Return the short sale proposal to the lender’s decision-maker. It should include a signed purchase agreement for a percentage less than the amount owed to the lender; e.g., 20%, 30% less, etc. * At this point, the lender’s decision-maker reviews your proposal and orders a BPO (”broker’s price opinion”) to determine the property’s as-is and as-repaired values. The BPO is normally a realtor giving his or her opinion on the property. You’ll want to meet with this realtor and influence his or her opinion as much as possible. It’s perhaps the most critical aspect of getting a short sale offer accepted and closing the deal! * The decision-maker accepts your proposal or rejects it. * If the decision-maker believes a short sale is appropriate, they make a counteroffer. * You accept or reject the counteroffer. * In the event you accept the counteroffer, you close on the transaction within 30 days.

Additional Points Always remember that all short sales are cash transactions; therefore, you’ll need to have cash on hand and verifiable proof that you have that money. If you don’t, lenders will not do business with you.

Keep in mind that short sales can’t be made to relatives, family members, or close friends of the homeowner. If a lender finds out after the sale that, say, the homeowner’s sister bought the property, then that lender can sue to have the sale overturned.

Key Concept: Short sale transactions are not for amateurs; be fully knowledgeable, experienced, and professional before approaching the loss-mitigation departments of lenders in this market.

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The prospect of buying a new home is both exciting and frightening at the same time. It is exciting in the sense that one is finally “free” of apartment payments, living at home, or any other distasteful situation. It can also be frightening, however, due to the simple fact that new potential home owners don’t always have all the facts necessary to make the transition into being a stable home owner.

Purchasing a home the correct way can be possible for potentially new home owners by making use of an agent. Agents are very popular among new home owners who might not know all the financial aspects of the process- such as mortgages or loans. Other home owners make use of agents in order to learn more about negotiating, bargaining, and knowing a great deal when one arises.

The process of selecting any possible houses that one might be able to afford is the next step in buying a home for the first time. After a firm price range is set, it is then necessary for a consumer to find listings via friends or family, newspapers, any type of classifieds, or even going straight to a realtor’s office for more information. Using the Internet is a new way of getting listings, which can also prove helpful in the search.

After the first selection process is completed, and a healthy list of locations is obtained, one should do their best to visit each and every location possible. This will give new home buyers an idea on how much some features cost. A basement or a porch, for instance, often ups the price of a house considerably. Learning from prices and features is some of the best information a potential home buyer can learn.

Even after the locations are all visited, consumers should always make a second selection round that narrows the selection even further. Visiting houses a second time, but not necessarily touring them, can have a profound effect on a potential home owner’s ability to buy a home. After all, buying a home is a long term decision- and spending a fair amount of time on the process is likewise necessary.

Lastly, it is vastly important for every consumer to plan ahead when buying a home. If a loan should be taken out, the consumer should consult the bank immediately and find out rates and terms of the necessary loan. There isn’t anything worse than buying a house on credit, only to find that one goes into debt as a result of poor financial research. Again, a real estate agent can help guide a consumer in this process.

Final Thoughts

When it comes down to it, many first time home buyers will probably require the services of an agent. Of course those who are confident in their abilities might not have to choose this option, the majority of first time home buyers will benefit greatly from the decision. It’s often worth the agent fees in the sense that any financial trouble or other problems won’t arise.

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REO is short for “Real Estate Owned.” These are properties that have been foreclosed upon by a bank or other lender.

REO departments are staffed by “asset managers.” Their task is to inspect the properties, get needed repairs done, and manage the properties until they’re sold.

You may be able to find great opportunities in this area if you’re willing to learn the ropes and deal with the often tough-minded REO departments of banks and other lenders. This article provides you the guidelines for doing just that.

Understand the Attitude of Lenders Toward REO Properties Naturally, lenders don’t like to have REO properties on their books. Instead of an asset, they have a liability. Equally naturally, they want to get rid of these properties, but they’re not willing to do it at a loss, if at all possible.

Not only do you, as an investor, have to deal with this attitude, but you also have to deal with the fact that banks often don’t like to publicize the fact that they have REOs on their books. They have three reasons for this.

First, they don’t want federal regulators on their backs, questioning their business practices or solvency.

The second reason is that they don’t want their depositors knowing about REOs. Depositors want security above all and if, rightly or wrongly, they see REOs as evidence of questionable practices, they may pull their money out. Banks want to protect their image.

Reason Three is that when lenders have a large inventory of REOs, they don’t want the market at large to know about it. If the information leaks out, prices could drop dramatically.

So, how do you find out about REOs? That’s our next topic.

Present Yourself As a Professional to the REO Department A lender’s REO asset managers don’t want to deal with amateur investors, so you need to approach them as a knowledgeable professional.

The first step is to call the lender and ask for the REO department. Once in contact, explain that you’re an independent, professional investor and are interested in buying REO properties and would like an appointment with a decision-maker.

Then, use that appointment to present your case and convince the decision-maker that you have the assets and experience of a committed professional. If you do your sales job right, then you can ask for a list of REO properties.

Note: Sometimes, REO departments handle the properties themselves; sometimes, they use a broker. So, you should be prepared to deal with both.

Guideline 3: Inspect the REO Properties It’s a fact that many of these foreclosed properties aren’t in great condition. The former owners aren’t happy campers so they may not take care of the property or even damage it to vent their anger. So, you’ll definitely need to do due diligence and inspect any properties under consideration.

In some cases, lenders will do cosmetic repairs to a property since they know a more attractive home will bring a higher price. To counter this possibility, I recommend that you try to show up as soon as the property is acquired and offer to take it “as-is” to get a lower price.

The Mechanics of Buying REO Properties There’s no secret to buying these properties; you buy them just as you would any property. First, you make an offer. The lender either accepts it, rejects it, or makes a counter-offer. In the case of a counter-offer, you negotiate.

In terms of payment, most lenders prefer cash because they want to be rid of these properties cleanly and quickly. If this is the case, you’ll need to go to a different lender to get your financing. Just don’t expect a great deal; that lender may want 10% or more down plus closing costs. However, some REO departments realize that they’ll get less from a cash offer so they may offer you financing. The advantage of this is that you may be able to pay a lower down payment, get easier terms, and also obtain some money for improvements. The disadvantage is that you’ll pay more in interest and fees than you would on a strictly-cash basis.

Typical Problems to Expect As I said earlier, many of these properties are in bad condition and may not be worth the money, so inspect them carefully before you commit to a purchase.

Also, as I said before, these properties are sold “as-is.” This means there is no warranty of any kind. So, if you buy a property that later requires very expensive repairs, you’re stuck with that expense. The lesson-perform due diligence very carefully!

In the case of federally-chartered lenders, you may not get a disclosure statement (most states require these now). That means there’s the possibility you could get stuck with a property that has severe and expensive problems (e.g., lead paint, etc.).

Finally, if as a result of a home inspection, you find repairs that need to be done, don’t expect the lender to pay for them. Their attitude: “It’s your problem to solve.”

Key Concept: When approaching an REO department, be a fully-prepared professional.

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When dealing with commercial real estate investments, the financial stakes are much higher than with residential investments. With commercial deals, the rewards are greater, but the risk is as well. So, it pays to understand fully the terms and wording of commercial loan documents. In this article, I’ll provide you with the necessary knowledge of the basic loan forms and language. But, first, you should understand the types of lenders you’ll be dealing with in this market.

Most commercial lenders are represented by mortgage bankers. These bankers work on behalf of a fixed number of lenders and often have long-standing relationships with them.

Mortgage brokers are “shoppers” or middle men. That is, they shop your loan application around to lenders and operate on a deal-by-deal basis.

My preference is to go with mortgage bankers if at all possible. I have this preference for two reasons. One is that mortgage bankers are more likely to be well-connected within the financial community so they’ll be able to steer you to the right person for your project. The second is that they’re usually cheaper than brokers. When using the services of a mortgage broker, you have to pay two fees: one for the broker and one to the lender.

Now, let’s look at the standard commercial loan documents and their wording.

The Promissory Note A promissory note is a written promise to repay the loan. It’s spelled out in specific terms. Terms vary with the particular note, but they generally include the following items: * Date * Borrower and lender names * Address of lender * The principal sum * Interest rate * Term * Place of payment * Terms of repayment * Terms of late payment charges * Promise to pay * Acceleration and pre-payment stipulations * Deed of trust or mortgage attached * Attorney’s fees and other boilerplate items * Signatures and date

Priority of the Loan Priority simply specifies who gets paid first. The lender has “first position.” This is a protection for the lender and means that the lender’s rights are subject only to the payment of real estate taxes. This means the lender has the ability to pay the taxes to protect his or her position.

There are also “junior” positions-second, third, and so forth. If a lender is in second position, then they have to bring the loan up to current status or pay it off to eliminate any default on that loan. Te date of recordation determines priority.

Securing of the Loan Notes must be secured, and this is done by recording of the mortgage or deed of trust. They’re liens against the property and are security instruments. Recording of a mortgage or deed of trust has two purposes. First, it establishes the priority I mentioned earlier. Second, it makes public the fact that the lien exists. This permits prospective lenders to establish the priority of the lien in regard to any proposed financing.

Whether a mortgage or deed of trust is involved depends on the region of the country in which you live. Eastern states tend to use the traditional mortgage format while Western states tend toward use of the deed of trust. Both are essentially the same; the primary differences lie in who draws up these documents. In mortgage states, an attorney is usually required to prepare the document. In deed of trust states, it can be drawn up by a title company.

Both of these non-negotiable security instruments are universal to all real estate property borrowing and are often standardized. They include such information as: * The account number * Borrower’s name and mailing address * Beneficiary’s name and mailing address * Trustee’s name and address * The date * Property description (location, town, county, state, address, etc.) * Note amount * Purpose of the document (”recitals”) * Terms and conditions * Mutual agreements (rights of assignment, damages, trespass, personal guarantees, etc.) * Additional security (if required) * Default provisions and remedies * Recording authority * Successors in interest * Rights of assignment * Signatures and date

Special Provisions Special provisions may be added to the general terms of the mortgage or deed of trust. Here are two examples:

Cross collateralization Assume a borrower has more than one property and offers them as collateral for the loan. In this case, the mortgage or deed of trust is recorded against all these properties. Thus, when any of these collateralized properties are sold, the proceeds go to the lender before any payment is made to the borrower.

Personal guarantee A personal guarantee occurs when the borrower doesn’t have sufficient collateral to secure the note in full. Thus, the borrower is required to guarantee to pay the difference of the short fall. My recommendation is to avoid personal guarantees at all costs since the lender can require you to pay the note in full! Avoid any situation where you may end up without money and are still stuck with the property!

As I indicated earlier, this article is intended only as a basic introduction to commercial loan documents. Before engaging in any deals in this market, I recommend you study the documents in detail so you have full understanding of the terms and conditions you’ll have to abide with once you put your name on the dotted line.

Key Concept: Understand completely the terms and wording of commercial loan documents before ever signing them.

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If you’re an experienced investor, sooner or later you’ll want to seek extra protection for your hard-won investments. This article will cover key strategies for getting that protection. Of course, not every strategy I describe will apply to every situation. In other words, you may not have a use for all of them, but I’m willing to be they’ll come in handy at some time during your investment career.

The Indispensable Memorandum of Option One of the main negatives of lease options involves financial difficulties of sellers. Such difficulties often take the shape of liens, delinquent property taxes and other similar hassles. As an investor, you can waste a lot of time and money cleaning up these issues before a property can be sold.

The Memorandum of Option is a basic protection for the investor. The memorandum is a document is a record against the title of the property and should always be recorded. It informs the public that you have an interest in the property.

The memorandum has an important purpose–to prevent an unethical seller from selling the property out from under the investor’s nose to someone else. It also provides protection from bad faith sellers trying to squirm out of their obligations. My advice–always record a memorandum of option!

Advanced Strategy 1-the Deed in Escrow You may think that the term escrow refers only to the deposit of funds by one party for delivery to another party upon completion of a specific event or condition.

But, the definition also refers to the deposit of deeds and other written financial/legal instruments. Here’s my suggestion–place the deed in escrow at the same time the memorandum of option is filed. When this happens, the seller signs the deed along with the other contracts. The deed isn’t recorded on the title at this point however; it’s held in escrow by an attorney or title company, and they’re provided with instructions for its release.

Now, this action doesn’t protect against the filing of liens against the property. But, its effect is to reinforce to sellers that they’ve actually sold the property. This, in turn, creates reluctance on their part to try to back out on a lease option agreement.

It also has another benefit: It permits the investor to close on the property without the seller being present! With the deed in escrow, the investor should specify how and when the deed is to be released and recorded. The instructions can be simple, such as this example: “When Sam Smith pays $200,000 in certified funds to John Jones, the deed will be released to him. By (date), these funds must be paid.”

Advanced Strategy 2: The Performance Mortgage With this technique, the seller pledges the property as collateral for the lease option agreement, and, thus, ensures good faith performance by that seller. Once the mortgage is assigned to the buyer, it prevents the seller from selling the mortgage to other people. (It replaces the memorandum of option filing.)

The performance mortgage permits the seller’s insurance company to put the buyer’s name on the owner’s policy as another insured. It shows as well that the buyer is a lien holder and requires that he or she be notified if any type of foreclosure action is taken.

Of course, some sellers don’t like the idea of a performance mortgage and won’t agree to this deal! If a performance mortgage is agreed to, have your attorney review the terminology of the mortgage to make sure the appropriate, specific clauses are included.

Advanced Strategy 3: The Land Trust A land trust is defined as an organization established to hold land and to administer use of that land. This technique is very useful with subject-to’s. The purpose of a land trust is to minimize possible exposure to litigation.

It accomplishes this by hiding true ownership. The actual owner or beneficiary is not recorded in the public records, just the name of the trust. This means potential litigants find it difficult to identify someone to sue.

Land trust contracts tend to be complicated and long so investors will definitely need an expert lawyer to draw them up.

Advanced Strategy 4: Get Yourself a Seller-Partner There may come a time when you want to consider subject-to high-end properties (in terms of quickly appreciating value). Since there’s more risk involved, it’s a smart idea to spread that risk. You can do this by taking on the seller as a partner. With this arrangement, you and the seller share the profits.

Here’s an example: Assume a property is worth $800,000 and the monthly rental is $3,500. Under normal circumstances, you’d more than likely back away from this deal. However, let’s assume you discover that this home might be sold for $200,000+ in profits. This deal makes good financial sense for you and the seller. So, you agree on a 50-50 partnership (or another percentage arrangement), and you’re both happy.

My recommendation: If you take this course, require that the seller cover all the risks.

Advanced Strategy 5: Refinancing This is a tax-deferment strategy. Here’s an example: Assume you have a house worth $300,000 and $230,000 is owed on it. Through a new mortgage, you can take out some or all of the $70,000 in equity, and it’s not a taxable event. That means you can use that money to reinvest in other properties while still holding on to the original property.

It’s a good idea to check with lenders and brokers in your area to find out what refinancing programs are available.

Tax Concerns Remember that with any of the methods I’ve just described they have to meet IRS regulations. So, make sure that you and/or your tax person are on top of them; the regulations do change from time to time and can affect the legality and profitability of deals. One area to really stay on top of is capital gains.

Capital gains are the profit on the sale of a property. At the present time, you can sell your primary residence (the one actually lived in, not investment properties) every two years.

If a person is single, he or she can keep the profits up to $250,000; if a person is married, he or she can keep up to $500,000. In both instances, the profits are tax free. If the seller of a property lives in his or her home for two out of five years, then that property qualifies for a tax-free gain. The seller can rent the home out for three years - and not a single day more.

My Advice Study advanced strategies and keep them in mind as you grow your investment portfolio. More than likely, you won’t need them for the majority of investments (especially early in a career), but, as is often said, knowledge is power. With that knowledge, you’ll be able to apply it quickly and easily when the right situation arises.

Key Idea: Always get the Lender’s written permission first. Study advanced strategies diligently, so you can make use of them at the appropriate time for maximum protection of your investments.

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