General Article

The Story Behind Repossession Houses (and Why They Are Good Buys)

Foreclosure houses are flooding the market, creating a niche of their in the real estate industry. They are cheap buys and many people have recognized their investment potentials.

Why Foreclosures Houses are Cheap Buys:

Repossession houses are on the market for sale at very low prices. Basically, these houses were foreclosed by banks and mortgage lenders because the homeowners defaulted on their mortgage. To recover the unpaid balance of the loan, banks and mortgage lenders do not have a choice but to foreclose the properties.

On the part of banks, many want to sell the foreclosed properties immediately to recover the unpaid loan balance. Banks also want to cut their losses because they know that the longer a foreclosed property remains unsold on the market, the bigger their losses will be. Also, having a long list of foreclosure homes on their inventory would not look good on their business image.

If you are planning to buy a distressed property directly from a troubled homeowner, you can also expect a bargain. Many foreclosure property owners prefer to avoid the trouble and stress of getting into the foreclosure process. This is the primary reason why they are willing to sell their homes at real bargain prices. Pre-foreclosure sale is also one way to save their credit rating which will be completely ruined if they allowed banks or mortgage lenders to foreclose on their houses.

The Many Opportunities of Foreclosure Houses:

Foreclosure houses represent many possibilities for smart investors. They buy these properties at almost 50 percent below their market value, do some minor repair and re-sell them at a profit. Some rent these properties while waiting for the real estate market to bounce from its current slump.

For other people, foreclosed homes are the only option they have to own properties. The cheap prices allow them to finally be able to afford to buy homes they can call their own. And as long as you do some research before making a buying decision, you can be sure that repossessed houses are the best buys to make.…

Getting the most out of your real estate sale depends a lot on what you are willing to put into it. The best sellers know the market well and make informed decisions. Using what you’ve read here in your real estate selling strategy will ensure you’re well-informed and ready to make a profit!

Adding energy efficient items can entice buyers. Get LED bulbs, solar-powered outdoor lights or an energy monitor to convince buyers that they will save money on their energy bills after moving in.

If you plan on selling your home, get rid of as much clutter as possible, even if you intend to remain living there while it’s on the market. New buyers like to imagine themselves living there. Cleaning it up helps them to do that, and will give you less you’ll have to pack later on.

Little kitchen updates can create big returns with the appeal and value of your home. For instance, update your appliances or change the design. Popular improvements include butcher block kitchen islands and stainless steel pot hangers. Changing the cabinetry is expensive, consider a paint job first for a fresh look.

To sell your house at it’s maximum price, you may want to try to develop a bidding war. Set a price just below what properties are sold for in your neighborhood to attract many buyers. If there are multiple buyers, a bidding war could occur, and this could end up in a better selling price being achieved for you.

When you home looks warm and inviting from the curbside, then buyers want to see more. More people will want to view your home this way.

The windows should be clean all around so that the house itself seems cleaner. Extremely clean windows increase the amount of light that enters the home, making it feel like new. Potential buyers won’t directly notice that you scrubbed down the windows, but they will subconsciously feel the difference.

Don’t paint the interior colors that are your personal favorites. Always use a traditional color palette, such as off-white, taupe or eggshell. One of the best ways to make your home more appealing to potential buyers is to give it a new coat of paint.

Organize and clean your home before showing it. Your home should be as clutter-free as possible when buyers look at it. If possible, all clothing should be removed from closets. Otherwise, the space should be organized perfectly. Also clean out kitchen cabinets. You may want to consider a few gourmet, fancy packaged foods, which will add some sophistication.

Make sure your home is ready to sell before early spring. Buyers want to move in just after the school year ends and be well settled by mid-summer.

Unless you are knowledgeable about the property type and market, you will have difficulty maximizing your profits. The advice you gathered from this article will be an excellent beginning, but be prepared to continue to increase your expertise on real estate selling. You’ll be able to find tips and tricks which will put you above your competition and get your property sold first!…

Do you know everything about real estate? There are so many little things to know that even the most experienced buyers are still reading about new tips that are coming along. This article can help you think about the right things when you are choosing real estate to purchase.

If you find a fixer-upper that needs improvements you are capable of making, ensure the price reflects the condition of the home. This saves you money on your purchase, allowing you to invest extra capital into fixing your home at your own pace. You can not only redesign the home over time, but the modifications you are making build equity you can trade on later. Concentrate on placing emphasis on the home’s possibilities instead of its flaws. Look beyond minor imperfections, to see the home you have always dreamed of.

Try not to be discouraged if the seller of a home you want to purchase does not accept your offer, often times sellers are willing to negotiate different aspects of the sale with you, to make the sale still possible. The seller might be willing to meet you half way, cover closing costs, or finalize some repairs. It never hurts to counter offer and ask.

When you decide to purchase a new house, look at the long term potential. Although your family situation may be that you don’t have children when making the purchase, take the education options in the neighborhood into consideration. This way as your family grows, you will be confident there are good schools nearby.

When you want to add more value to the property you own, do some remodeling and repair work. You’ll have a rapid return on investment, thanks to a little elbow grease. Sometimes it will rise more than you have invested.

It is vital that you know about the common terms found in lending when you purchase your house. Confusion can be kept to a minimum by knowing how mortgage terms impact your monthly payments, as well as the entire cost over the duration of the loan.

With current markets, now is a great time to purchase real estate. Property values are very low now because of the crash in the housing market. This makes it a perfect time to move from that apartment into a home of your own. In time the market will correct itself, and the value of your investment will appreciate.

Ask for closing cost assistance from the seller to save yourself some up front expenses. It is considered common practice to request that the seller “buy down” your interest rate. A seller is less likely to negotiate over the sale price if financial incentives are attached to an offer.

Having read this article, you should now be more prepared to make better real estate purchasing decisions. Passing helpful and useful information on to others in need is always a good practice; you never know when someone might return the favor and it could be in a moment of great need.…

Perhaps you are seeking accessible explanations about the process of purchasing real estate. This article will suit your needs in this instance. The following articles lays out some practical tips and guidelines that you should quickly be able to digest.

Generally, properties that are in need of multiple upgrades or repairs carry a lower price tag. This permits you to save your money on the purchase price, and you have time to work on your home at your own pace. You can build up equity with each and every improvement as well as get the exact home you want. Paying too much attention to the negatives can prevent you from seeing the potential positives. It’s quite possible that behind that ugly, outdated paneling, your dream home is hiding.

When you decide to purchase a new house, look at the long term potential. While you might not have children currently, you should look at the quality of area schools if you think you may still reside there when you do have children.

You probably will not be able to find the exact property you want so learn to be flexible. Finding a home with all of the features on your wish list may not be financially possible, but you probably can afford a few things. If you can’t find a home in the area you want, shop for one in a similar area.

Get a checklist from your realtor. A good Realtor will be able to give you a list that covers the different steps of a transaction, from finding a home to getting approved for your mortgage. The checklist can help ensure that everything is taken care of when it needs to be.

When purchasing a property, always have extra money on hand for unforeseen costs. You can get a good idea of the closing costs if you add the down payment, taxes and what the bank charges. In most cases though, the closing costs include additional items, such as school taxes, improvement bonds and other items specific to the area.

You have to have a thorough understanding of the terms of your mortgage whenever you are purchasing a home. Understanding how the mortgage term will affect your monthly mortgage payment, as well as how it will affect the total cost you will pay over the life of your loan, will help minimize later confusion.

Don’t delay investing in real estate. Property values are very low now because of the crash in the housing market. When buying a house for your personal use, research the real estate market in your area and use a qualified local agent. Eventually, the housing market will rise, and you could even profit from your investment.

In conclusion, we have provided you some of the most crucial aspects regarding buying real estate. We hope that you not only were able to learn something, but that you also will be able to successfully apply it. Follow our advice and you will be one step closer to being an expert in this subject.…

Understanding The Mediation Clause In The California Residential Purchase Agreement Is Crucial

Whether you are buying or selling a residence inevitably you will discover a clause in the Standard California Residential Purchase Agreement under paragraph 26 entitled Dispute Resolution. This clause is extremely important and provides the parties with alternatives to the expense and headache of having to litigate their disputes, should any arise out of the agreement. The first section under this clause is its sub-section A; entitled Mediation. The second section of the clause is entitled Arbitration.

If both parties place their initials under the arbitration section they are giving up their rights to litigate their disputes in a court of law and agreeing instead to use arbitration as their forum to alternatively resolve their disputes. Unless crossed out in the agreement the prevailing party will be entitled to recovery of his attorney fees, awarded by the arbitrator, possibly all, but sometimes less, but there is one major proviso, one all important step one must take before legal fees are available to him.

That step is to either offer or accept mediation to first try to resolve any disputes. The important part in the agreement is first either to refrain from litigation or arbitration and offer to mediate or agree to mediate any dispute or claim to which this paragraph applies:

1. Any party commences an action without first attempting to resolve the matter through mediation.

2. Before commencement of an action, refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in such action. This mediation provision applies whether or not the arbitration provision is initiated.

What this means is simply, whether a party seeks resolution of a claim either through arbitration, or if not through the court, a party who either does so without first offering to mediate, or a party when offered the right to mediate rejects it, that party will lose any rights to recover attorney fees. However, the right to attorney fees is still available to the party who offered to mediate.

I cannot begin to tell you how many people have come to me either as an attorney or mediator who either were never told about the meaning of these clauses, or having been told they just did not understand. Therefore they did not offer to mediate or failed to accept mediation as a way to resolve their disputes. If parties to these contracts, as well as their real estate agents knew and understood the severity of these clauses, they could simply follow the correct procedure and save themselves a great deal of money, by having their attorney fees awarded to them if their claim ended in arbitration.

Southern California Mediation Partners, LLC

Steven J. Eichberg, Attorney-Mediator…

How to Make Money in Real Estate Without Ever Buying Any Property

Tip: Shortcuts to Success

1. Read real estate investments books

2. Join a local real estate investing club

3. Find a mentor to hold you accountable who has already “been there and done that”

4. Hire a training coach

5. Continue adding resources, lenders, money, etc.

6. Build a successful team

7. Take action

Tip: The True Cost of Procrastination

Failing to take action can create many problems.

Loss of Time- During this time period, other assets could have grown in value.

Loss of Additional Capital – You also lose the opportunity to create additional capital; for example, you could have invested in a joint venture.

Loss of Education – Sophisticated investors find properties and sell them to people who play it safe or to unsophisticated investors. Remember Ray Kroc’s advice: “Define your profession, and define your business. They’re not the same thing.”

What did he mean? Well, his profession was always a salesman. He was continuously selling his franchises. However, what was his business – the accumulation of real estate. Too often, we become what we study. You study law and become an attorney. What is your business? Your business builds your assets. Your assets buy your lifestyle and luxuries. Either do that yourself or partner with someone else to build your assets.

Tip: Mentors Steps to Success

1. Define your dreams. Write them down. Visualize.

2. Read about the wealthy, the world-changers, then begin investing. However, don’t spend forever educating yourself. Take action.

3. Associate with people in life where you want to be. This includes financially, marriage, relationship-wise, business-wise, health-wise and spiritual.

4. Master a formula and then learn a new one. Learn fast and apply it.

5. Pay yourself first.

6. Pay your advisors well. What you pay your advisor is small compared to the money you can make based on their knowledge and connections. Your advisor will also save you time. Your advisor is your ears and eyes in the marketplace. Ironically, most people tip 10-15% in a restaurant to a person they don’t know, for a bill that will not affect their life. Then they complain about having to pay their advisor full earned commissions, people who can add to their income and asset column. That is not financially intelligent.

7. Get your money working quickly. Buy a property. Use it yourself or refinance and put the money to work again. Every dollar is a little investment. Always seek the up-side of the deal and invest more dollars.

8. Assets buy luxuries. Focus on assets first.

9. Look for heroes to inspire you. Realize that if they can do it, so can you.

10. Teach what you learn. Whatever you’re in need of, give it out.

Action Steps

1. Take an investor or mentor to lunch.

2. Take classes and seminars.

3. Make lots of offers. In those offers, always include an escape clause subject to the approval of your business partner or lawyer.

4. Visit your area of interest at least once a month. Look for changes in the real estate, the signage, vacant homes and moving trucks. Watch for complete neighborhood change – is it getting better or worse?

5. Watch for sales. When a supermarket has a sale on toilet paper, people run out and load up on toilet paper. The real estate market in Canada and in worldwide is currently having a sale. Are you loading up on cash-flowing properties?

6. Look for buyers first, then find a big pie and sell them a piece of that pie. What they pay you will allow you to keep the remainders.…

Distressed Real Estate Investing 101

As someone with a Masters Degree in Real Estate from Columbia University who also has first-hand knowledge investing in distressed real estate, I’m frequently asked by people how to make their fortune in today’s difficult real estate environment. Due to the economic crisis there are once in a lifetime opportunities to be had. For those that really know what they are doing, a financial killing can be made in foreclosure, REO and Short Sale properties. But where do you start? Read this article and you’ll be on your way.

Foreclosure Properties

The most commonly heard of distressed property type is the foreclosure. A foreclosure is a property in which the bank has initiated a process of taking back ownership of a property from a private party. This usually occurs when a home’s owner has fallen behind on his mortgage and can no longer afford to make payments yet has a balance left on his note.  

The purpose of foreclosure is for the bank to be able to recover the money it has lent to the owner by selling the property. This is done through an auction process which is overseen by a court with the starting price of the property equal to the amount still owed on the property. While sometimes this is much less than the actual value of the property, usually bidding ends up raising the eventual sale price to at or above the ‘market’ value and thus it can be tricky to get a great deal.

REO Properties    

If a property fails to sell during the foreclosure auction process the property reverts to ownership by the bank or lender on the property. The property is then called a REO or ‘Real Estate Owned’ property.  Typically the property fails to sell at auction because the value of the asset (property) does not cover the liabilities (amount owed the bank) and no one was willing to pay enough to cover the debt. This can happen for a variety of reasons such as the property being in poor physical condition, a bad location or if the real estate market has gone down since the purchase of the property.  

After a property becomes an REO, it is typically put back up for sale by a realtor just as if it were for sale by a private party. First, however, the bank goes through the work of clearing existing liens and other obligations to make a ‘clean title’. REO properties can be an opportunity to get a great value because often they can be purchased for less than if someone were to bid on the foreclosure auction.  

Short Sale Properties  

Finally, there is another kind of distressed situation called a Short Sale Property. In a Short Sale situation the value of a property won’t cover the loan that is on the property yet the property has not yet entered foreclosure. The seller is under financial distress and usually in a situation where they need to be ‘bailed out’.  

In a Short Sale, sometimes a highly qualified buyer can convince a lender or bank to agree to take less than the full amount to satisfy the debt on the property in order to avoid the original owner from defaulting and having to go through the entire foreclosure and REO process.

This is sometimes possible because it is quite an expensive and time consuming ordeal to go through foreclosure and all the ensuing complications and management of the property. A bank’s job is not property management and they would prefer not to tie up valuable staff and financial resources if they can get out quickly, take a manageable loss and get back to their business of lending money. …