With today's real estate market conditions, you have to really know what you're doing to get your home sold. This article contains some great tips and explanations on how to sell your home in today's, especially tough, Florida real estate market.
Here are some helpful hints on how to sell your home in today's Florida real estate market.
1. Understand what "market value" means.
It's not what your friend sold his house for two years ago or even two months ago. It's not the value your latest tax assessment was based on or what an appraiser said the house was worth a year ago. It is exactly what someone is willing to pay for your house today. Hence, price realistically and broaden incentives, such as closing costs and throw-ins like appliances, flat-screen televisions, etc. There is an old saying: "There's nothing wrong with a home that the right price can't fix."
2. Don't be an as-is seller.
That is, unless you absolutely have to be one. Potential homebuyers aren't looking for fixer-uppers in the current market unless they are rock-bottom, bargain-basement priced. Large volumes of foreclosed homes are already being sold in poor condition at auction.
3. Hire a top performer.
These days, you need an agent who outshines the others and routinely posts better-than-average sales numbers year after year. Agencies may try to steer you toward less-seasoned agents, but if you're paying the commission, then the hire should be your call. The best agents have an innate sense for that right price and right marketing plan. They can suggest the necessary repairs and tweaks while targeting your home to the right buying group. Caveat: In selecting an agent, the percentage of listings sold is generally a better performance barometer than a high volume of sales.
4. Know your market's nuances.
No two markets are exactly alike. Yes, most sellers are now swimming upstream. But there are always counter currents to consider. In many areas, modestly priced homes have bigger buying pools because tighter mortgage qualifications are keeping buyers out of more expensive homes. A little research and a savvy agent can give you an edge and an education.
5. Use the Internet.
According to a reputable website, total time spent online rose 24.3 percent from the fall of 2006 to the fall of 2007. Yes, people are still scoping out newspaper classified ads and real estate listing magazines, but more and more Americans have been wired to at least start their home shopping online.
6. Use other people's money.
You don't have to sell for a big loss to get out from under your rising mortgage payments. If you can, rent out your home for a sum that covers your house payments, insurance, taxes and maintenance costs. Do try to roll in a slight buffer to cover unanticipated expenses. And realize you'll need capital to refresh the place when the market stabilizes and you take off your landlord hat to prep the home for sale again. Or consider offering lease-to-own terms to your renter and you may not have to worry about the future sale.
7. Become a "lender."
Tough times call for unconventional measures. Consider carrying part of the buyer's note with interest, secured by an asset belonging to the buyer. Do so only after a thorough credit check and only if you can afford to wait for the balance of the purchase price. This, by the way, is not a game for the faint of heart.
8. Simplify and neutralize.
In this sales environment, you've probably already been told to focus on curb appeal, add fresh landscaping and de-clutter the house by removing family photos and heirlooms or other items you don't need or use on a daily basis. But let's take it a step further. Paint your rooms a neutral color. Hire a redesign or home-staging firm to help you present your home in optimal condition and give potential buyers a chance to envision their possibilities there. And while you're at it, get a pre-listing inspection, which will reveal any defects your home has and allow you time to make repairs. Then provide a copy of the report to buyers, attaching a list of the fixes you made.
Buyers are in an enviable position, with plenty of homes on the market, and sellers who are willing to bargain.
Thursday, October 30, 2008
Friday, October 3, 2008
SECRET OF MORTAGE
One of the benefits of applying for a home mortgage online is that you can often have a preliminary offer or pre-approval within minutes. You can compare offers from different lenders and choose the loan that best fits your needs and has the best interest rate. Once you've applied for a home mortgage online, you'll be contacted by lender(s) who are interested in working with you. If you submit an application with a mortgage lead service, your information will be accessed by several mortgage companies who will then compete for your business.
Step1
Check your credit score and download your credit report to check for errors. Your credit score will largely determine the interest rate you receive and knowing it ahead of time will give you an idea of what to expect. Work to correct any negative mistakes on your credit report before applying for a loan.
Step2
Fill out an online application at sites such as LendingTree and eLoan. Or, choose a mortgage underwriter you've done business with in the past or had referred to you. Typically, mortgage underwriters will be able to get you a better loan package than brokers.
Step3
Review your information to verify it is correct. Your name, birth date, social security number, address and loan type and amount are typical in the pre-application process.
Step4
Make contact with the mortgage companies matched to your profile. Give them each more information about your situation and find out what their preliminary loan offers look like. Allow them to pull your credit information and verify your income and home value.
Step5
Select the best home mortgage offer and begin working with that company to get an appraisal of the house, lock in your rate and prepare for loan closing.
10 Important Basic Facts About Reverse Mortgage Home Equity Loans
Wondering if a reverse mortgage on your home's equity is a viable financial option for you? Here are ten facts about reverse mortgages in general. Understand the process. Learn the qualifications. Be aware of the conditions. What is a Reverse Mortgage? ~ A reverse mortgage is where a bank or lending company pays money to purchase equity in a home. In a traditional mortgage, a borrower is allowed to take occupancy of a home while slowly purchasing its equity from a lending company. The 'reverse mortgage' is the opposite situation. The mortgage company purchases a percentage of equity in your home, allowing you to remain in your home, and collects the loan with interest at a later time.
Step2
Income Requirements? ~ Generally, none. Unlike a traditional loan, there are usually no income guidelines or minimum requirements for a reverse mortgage. This is because the mortgage is not intended to be paid in installments. A reverse mortgage is actually designed for borrowers who are of or nearing retirement age. Instead of payments, the reverse mortgage is intended to be paid off when none of the co-owners continue to use the home as their primary residence. The sale of the property, not the borrower's income, will be the source of repayment.
Step3
What are the Payment Options? ~ You may choose to receive the total of your reverse mortgage in the form of installments, lump-sum payout, or a personal credit line. You may also divide your payment between these options.
Step4
How is the Mortgage Repaid? ~ Most reverse mortgages require no repayment while you are alive, living in the home, and maintain your level of ownership or co-ownership. Reverse mortgage repayment is obligated when you (or any co-owner) no longer reside in the home. This can be due to illness, death or sale of the home, or any other reason that would strip the borrower of titled ownership.
Step5
Reverse Mortgage if There is a Lean on the Title? ~ Yes. Your reverse mortgage will have to be substantial enough to repay the existing mortgages or leans on the title in full before extending payment or personal credit to you. If a borrower owes $30,000 on a forward mortgage and would like to use the same property to acquire a $30,000 line of credit, the reserve mortgage would have to be at least $60,000.
Step6
Age Requirement
Step7
Hidden Expenses? ~ Common hidden expenses charged to the borrower of a reverse mortgage by the lending company include: closing costs, origination fees, growing interest percentage, various other mortgage fees. Fees associated with your mortgage are priced at the discretion of the lender and will likely increase over time.
Step8
Other Borrower Obligations? ~ In a reverse mortgage, the borrower keeps the title to their home. Subsequently, the borrow retains all financial responsibility associated with home ownership. This includes all tax liability. Also, home-owner insurance is mandatory when acquiring a reverse mortgage and is the borrower's financial responsibility until the mortgage is repaid in full.
Step9
Borrower Consequences? ~ If the borrower fails to fulfill his/her obligation under the terms of the reverse mortgage, the mortgage generally becomes due immediately. Violations that might result in immediate repayment include failure to keep the home adequately insured, failure to pay tax liability, failure to maintain basic utilities, or serious neglect to the home that might lead to its depreciation.
Step10
Tax Deductions ~ Because the borrower often does not repay the reverse mortgage until the house is sold, borrowers are generally not eligible for an annual interest tax deduction. The borrower is eligible only when interest payments have been made in part or in whole within any given tax year. If no payments are made until the home is sold, interest tax deductions can only be claimed for the year the sale took place.
Tips & Warnings
# Always acquire legal advice when seeking a reverse mortgage.
# Always compare terms for reverse loans from several lenders.
# Consider looking into federally structured reverse mortgages from HUD and other agencies for better terms.
How to Avoid Becoming a Mortgage Fraud Victim
In a mortgage fraud, insiders such as appraisers or brokers conspire to get mortgages for more than the actual value of the property then walk off with the difference. Each mortgage fraud scheme contains some type of material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan.
Kevin Reese, Fiducial's mortgage manager, acknowledged the problems caused by mortgage fraud schemes but says his team has not encountered any of these due to its precautionary measures in place.
"We don't operate in any gray areas -- it's all black and white," said Reese from his office in Indianapolis. "We don't charge excessive fees and all our mortgages are highly screened and scrutinized. The appraisers that we use are underwriter approved. If the chief appraisal is ever questionable then the underwriter will deny it."
Dreams can turn into nightmares
For small business owners interested in buying property, Reese reminds them that if they encounter a situation where things seem just too good to be true chances are it's a scam.
"As much as we want to believe that our property is worth three times as much -- the reality is it's not," he said.
When there's a boom in real estate, Reese says people are always trying to make an easy dollar on it with most of these frauds being sub-prime for people that have poor credit or some sort of credit issue.
Mortgage seekers sometimes seem to turn a blind eye when it comes to getting the deal of their dreams which usually turns out to be a nightmare instead. They get themselves in a bind and end up paying through the roof on closing costs.
"They think this is the only option and there are plenty of people willing to take their money," he said. "A lot of these laws have been in place for five to 10 years but the government has only been enforcing them recently."
For example, if a client bought a house in 2002 for $130,000 and then refinanced it in 2004 for $180,000, there's a good chance that something in the way the mortgage has been set up isn't quite right.
Reese's best advice to avoid any involvement in mortgage fraud schemes is to make sure that if you're purchasing a house or refinancing one, look at the Annual Percentage Rate (APR) on your good faith estimate which is inclusive of points that are being charged.
"The biggest way to make sure of your good faith estimate is to take a look at whether the APR is in line with your rate," he said. "It shouldn't get greater than .2 of your rate. So if you have a 5-1/4 percent rate it shouldn't be higher than 5-1/2 percent."
Attacking the problem head on
Experts maintain that it's difficult to determine just how pervasive mortgage fraud is in the lending industry, how many transactions are involved and what the exact dollar loss is.
"Lenders are saying this is a big concern on their radar screen and it's becoming an increasingly expensive problem," said Tim Doyle, a director in the Mortgage Banker's Association (MBA) office in Washington, D.C. "They're seeing a large amount of valuation fraud and valuation is the key to preventing losses on mortgage loans."
John Coliano, a supervisory special agent with the FBI in Washington, D.C., noted that the world's top crime fighting organization is leveraging its resources in trying to attack the mortgage fraud problem "head on."
"We can't stand by and let this go," said Coliano. "But the industry has to be aggressive. There's been a marked shift in the attitude when I got here almost two years ago. It's on the radar screens of most industry executives, it's in the eyes and minds of appraisers, mortgage brokers and escrow workers. There's heightened awareness and people should be on the alert for it."
Joining the fight with the FBI are a number of leading industry organizations such as the MBA, The Appraisal Institute, The National Association for Mortgage Brokers and the National Mortgage Association who are all working to make people more aware of fraud, providing information, education and methods to report fraud.
The latest trends show that insiders are using their industry name as a means to perpetrate mortgage fraud through identity theft, according to Coliano. Lenders are targets of identity theft organizations that are sophisticated at employing computer schemes and misleading mass media advertisements, mostly in newspapers or area mailers where a legitimate company name is used to attract attention before the potential client calls a phone number believing it to be the company listed. The company, incidentally, ends up getting billed for the ad.
One type of mortgage fraud known as flipping was quite prevalent in the mid-to-late 1990s but Coliano says that scheme has morphed into a different type of fraud where identity silent straw buyers and straw sellers are starting to become "more nouveau." In this fraud, schemers hold onto the properties longer, finding other ways to bleed equity out of the property.
The key thing to remember about most financial crimes is that they sometimes walk on the side of legitimacy. That's before you take a closer look.
"By the time you're into the third or fourth layer it's very apparent whatever the financial scheme or financial crime is," Coliano said. "You start to see the wheels coming off the car and see it's a fraud."
Tips on fighting mortgage fraud
On its StopMortgageFraud.com website, the MBA offers advice to help avoid mortgage fraud. These tips include getting referrals to real estate and mortgage professionals with a proven track record from friends, family co-workers and others you trust who also recently had a positive transaction. They should also check the licenses of the industry pros with the state or other local regulatory agencies and ask their trade group for background information.
Outrageously fantastic promises of extraordinary equity returns in short periods should be questioned, the MBA advises. Be wary of home buying deals offered by strangers making unsolicited contact by phone, email or in person. Also, shy away from high-pressure sales techniques and ask for written information, including comparable sales and other documents to verify the value of the property. Never buy a home with limited written information "attesting to the value of the home or to the experience and solid background of the company offering the deal."
The FBI's Coliano says for any business transaction you always need to seek prudent advice from leading industry professionals and talk to people that are knowledgeable within the financial industry such as attorneys, accountants and financial planners.
"Check more than one source and ask questions," he said. "You should come up with some industry norms. There's a myriad of educational and self-help information on the Internet. Be knowledgeable -- don't always believe what you read."
Doyle of the MBA pointed out that if anyone approaches you with a deal, do due diligence on what they're all about.
"Our industry members are constantly doing this," he said. "We have an industry database that tracks complaints against those in the mortgage field."
The small business owner and homeowner should take the time to ask the person presenting the "opportunity" if they are members of a national association like the MBA or National Association of Mortgage Brokers.
It's also a good idea for entrepreneurs and individuals alike to check their credit report each year for free from one of the three credit repositories to see if there's been any unauthorized access to their credit information. This will help guard against identity theft in mortgage transactions.
Step1
Check your credit score and download your credit report to check for errors. Your credit score will largely determine the interest rate you receive and knowing it ahead of time will give you an idea of what to expect. Work to correct any negative mistakes on your credit report before applying for a loan.
Step2
Fill out an online application at sites such as LendingTree and eLoan. Or, choose a mortgage underwriter you've done business with in the past or had referred to you. Typically, mortgage underwriters will be able to get you a better loan package than brokers.
Step3
Review your information to verify it is correct. Your name, birth date, social security number, address and loan type and amount are typical in the pre-application process.
Step4
Make contact with the mortgage companies matched to your profile. Give them each more information about your situation and find out what their preliminary loan offers look like. Allow them to pull your credit information and verify your income and home value.
Step5
Select the best home mortgage offer and begin working with that company to get an appraisal of the house, lock in your rate and prepare for loan closing.
10 Important Basic Facts About Reverse Mortgage Home Equity Loans
Wondering if a reverse mortgage on your home's equity is a viable financial option for you? Here are ten facts about reverse mortgages in general. Understand the process. Learn the qualifications. Be aware of the conditions. What is a Reverse Mortgage? ~ A reverse mortgage is where a bank or lending company pays money to purchase equity in a home. In a traditional mortgage, a borrower is allowed to take occupancy of a home while slowly purchasing its equity from a lending company. The 'reverse mortgage' is the opposite situation. The mortgage company purchases a percentage of equity in your home, allowing you to remain in your home, and collects the loan with interest at a later time.
Step2
Income Requirements? ~ Generally, none. Unlike a traditional loan, there are usually no income guidelines or minimum requirements for a reverse mortgage. This is because the mortgage is not intended to be paid in installments. A reverse mortgage is actually designed for borrowers who are of or nearing retirement age. Instead of payments, the reverse mortgage is intended to be paid off when none of the co-owners continue to use the home as their primary residence. The sale of the property, not the borrower's income, will be the source of repayment.
Step3
What are the Payment Options? ~ You may choose to receive the total of your reverse mortgage in the form of installments, lump-sum payout, or a personal credit line. You may also divide your payment between these options.
Step4
How is the Mortgage Repaid? ~ Most reverse mortgages require no repayment while you are alive, living in the home, and maintain your level of ownership or co-ownership. Reverse mortgage repayment is obligated when you (or any co-owner) no longer reside in the home. This can be due to illness, death or sale of the home, or any other reason that would strip the borrower of titled ownership.
Step5
Reverse Mortgage if There is a Lean on the Title? ~ Yes. Your reverse mortgage will have to be substantial enough to repay the existing mortgages or leans on the title in full before extending payment or personal credit to you. If a borrower owes $30,000 on a forward mortgage and would like to use the same property to acquire a $30,000 line of credit, the reserve mortgage would have to be at least $60,000.
Step6
Age Requirement
Step7
Hidden Expenses? ~ Common hidden expenses charged to the borrower of a reverse mortgage by the lending company include: closing costs, origination fees, growing interest percentage, various other mortgage fees. Fees associated with your mortgage are priced at the discretion of the lender and will likely increase over time.
Step8
Other Borrower Obligations? ~ In a reverse mortgage, the borrower keeps the title to their home. Subsequently, the borrow retains all financial responsibility associated with home ownership. This includes all tax liability. Also, home-owner insurance is mandatory when acquiring a reverse mortgage and is the borrower's financial responsibility until the mortgage is repaid in full.
Step9
Borrower Consequences? ~ If the borrower fails to fulfill his/her obligation under the terms of the reverse mortgage, the mortgage generally becomes due immediately. Violations that might result in immediate repayment include failure to keep the home adequately insured, failure to pay tax liability, failure to maintain basic utilities, or serious neglect to the home that might lead to its depreciation.
Step10
Tax Deductions ~ Because the borrower often does not repay the reverse mortgage until the house is sold, borrowers are generally not eligible for an annual interest tax deduction. The borrower is eligible only when interest payments have been made in part or in whole within any given tax year. If no payments are made until the home is sold, interest tax deductions can only be claimed for the year the sale took place.
Tips & Warnings
# Always acquire legal advice when seeking a reverse mortgage.
# Always compare terms for reverse loans from several lenders.
# Consider looking into federally structured reverse mortgages from HUD and other agencies for better terms.
How to Avoid Becoming a Mortgage Fraud Victim
In a mortgage fraud, insiders such as appraisers or brokers conspire to get mortgages for more than the actual value of the property then walk off with the difference. Each mortgage fraud scheme contains some type of material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan.
Kevin Reese, Fiducial's mortgage manager, acknowledged the problems caused by mortgage fraud schemes but says his team has not encountered any of these due to its precautionary measures in place.
"We don't operate in any gray areas -- it's all black and white," said Reese from his office in Indianapolis. "We don't charge excessive fees and all our mortgages are highly screened and scrutinized. The appraisers that we use are underwriter approved. If the chief appraisal is ever questionable then the underwriter will deny it."
Dreams can turn into nightmares
For small business owners interested in buying property, Reese reminds them that if they encounter a situation where things seem just too good to be true chances are it's a scam.
"As much as we want to believe that our property is worth three times as much -- the reality is it's not," he said.
When there's a boom in real estate, Reese says people are always trying to make an easy dollar on it with most of these frauds being sub-prime for people that have poor credit or some sort of credit issue.
Mortgage seekers sometimes seem to turn a blind eye when it comes to getting the deal of their dreams which usually turns out to be a nightmare instead. They get themselves in a bind and end up paying through the roof on closing costs.
"They think this is the only option and there are plenty of people willing to take their money," he said. "A lot of these laws have been in place for five to 10 years but the government has only been enforcing them recently."
For example, if a client bought a house in 2002 for $130,000 and then refinanced it in 2004 for $180,000, there's a good chance that something in the way the mortgage has been set up isn't quite right.
Reese's best advice to avoid any involvement in mortgage fraud schemes is to make sure that if you're purchasing a house or refinancing one, look at the Annual Percentage Rate (APR) on your good faith estimate which is inclusive of points that are being charged.
"The biggest way to make sure of your good faith estimate is to take a look at whether the APR is in line with your rate," he said. "It shouldn't get greater than .2 of your rate. So if you have a 5-1/4 percent rate it shouldn't be higher than 5-1/2 percent."
Attacking the problem head on
Experts maintain that it's difficult to determine just how pervasive mortgage fraud is in the lending industry, how many transactions are involved and what the exact dollar loss is.
"Lenders are saying this is a big concern on their radar screen and it's becoming an increasingly expensive problem," said Tim Doyle, a director in the Mortgage Banker's Association (MBA) office in Washington, D.C. "They're seeing a large amount of valuation fraud and valuation is the key to preventing losses on mortgage loans."
John Coliano, a supervisory special agent with the FBI in Washington, D.C., noted that the world's top crime fighting organization is leveraging its resources in trying to attack the mortgage fraud problem "head on."
"We can't stand by and let this go," said Coliano. "But the industry has to be aggressive. There's been a marked shift in the attitude when I got here almost two years ago. It's on the radar screens of most industry executives, it's in the eyes and minds of appraisers, mortgage brokers and escrow workers. There's heightened awareness and people should be on the alert for it."
Joining the fight with the FBI are a number of leading industry organizations such as the MBA, The Appraisal Institute, The National Association for Mortgage Brokers and the National Mortgage Association who are all working to make people more aware of fraud, providing information, education and methods to report fraud.
The latest trends show that insiders are using their industry name as a means to perpetrate mortgage fraud through identity theft, according to Coliano. Lenders are targets of identity theft organizations that are sophisticated at employing computer schemes and misleading mass media advertisements, mostly in newspapers or area mailers where a legitimate company name is used to attract attention before the potential client calls a phone number believing it to be the company listed. The company, incidentally, ends up getting billed for the ad.
One type of mortgage fraud known as flipping was quite prevalent in the mid-to-late 1990s but Coliano says that scheme has morphed into a different type of fraud where identity silent straw buyers and straw sellers are starting to become "more nouveau." In this fraud, schemers hold onto the properties longer, finding other ways to bleed equity out of the property.
The key thing to remember about most financial crimes is that they sometimes walk on the side of legitimacy. That's before you take a closer look.
"By the time you're into the third or fourth layer it's very apparent whatever the financial scheme or financial crime is," Coliano said. "You start to see the wheels coming off the car and see it's a fraud."
Tips on fighting mortgage fraud
On its StopMortgageFraud.com website, the MBA offers advice to help avoid mortgage fraud. These tips include getting referrals to real estate and mortgage professionals with a proven track record from friends, family co-workers and others you trust who also recently had a positive transaction. They should also check the licenses of the industry pros with the state or other local regulatory agencies and ask their trade group for background information.
Outrageously fantastic promises of extraordinary equity returns in short periods should be questioned, the MBA advises. Be wary of home buying deals offered by strangers making unsolicited contact by phone, email or in person. Also, shy away from high-pressure sales techniques and ask for written information, including comparable sales and other documents to verify the value of the property. Never buy a home with limited written information "attesting to the value of the home or to the experience and solid background of the company offering the deal."
The FBI's Coliano says for any business transaction you always need to seek prudent advice from leading industry professionals and talk to people that are knowledgeable within the financial industry such as attorneys, accountants and financial planners.
"Check more than one source and ask questions," he said. "You should come up with some industry norms. There's a myriad of educational and self-help information on the Internet. Be knowledgeable -- don't always believe what you read."
Doyle of the MBA pointed out that if anyone approaches you with a deal, do due diligence on what they're all about.
"Our industry members are constantly doing this," he said. "We have an industry database that tracks complaints against those in the mortgage field."
The small business owner and homeowner should take the time to ask the person presenting the "opportunity" if they are members of a national association like the MBA or National Association of Mortgage Brokers.
It's also a good idea for entrepreneurs and individuals alike to check their credit report each year for free from one of the three credit repositories to see if there's been any unauthorized access to their credit information. This will help guard against identity theft in mortgage transactions.
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