Financing Houses
June 22, 2007
What Real Estate Lenders Look For
Lenders control many programs — some make use of over 200! Generally, lenders look for the following typical standards, with many exceptions:
1. Absolutely no late mortgage payments 2. Credit score above 580 3. If bankruptcy, no charge-offs or collection accounts afterwards 4. If bankruptcy, only 1 late payment afterwards 5. Two active revolving accounts in good standing 6. Good employment history or stated income 7. Three to six months reserves (covering mortgage payment, taxes & insurance) in savings 8. 55% income to debt ratio 9. Appropriate loan-to-value ratio on purchase property
Borrowers obtain a loan by bringing something of value to the table. One of the following assets ought to get you financing:
1. Good credit score 2. Good income 3. Good cash down payment and reserves
Seven Loan Types and Finance Terms
Understanding the variety of loan types and terms enables you to choose an effective lender. Here are seven important loan types and related terms:
1. “A” Loans Borrowers with great credit, a good cash reserve, good employment, and a debt-to-income ratio of less than 33%, qualify for “A” loans. These loans typically cost less upfront for points and costs, charge no prepayment penalty, and offer lower interest rates.
Buying Houses: Types of Bargains to Find
June 21, 2007
To make a good profit in real estate, you must buy right. Check out all property types available to find the best transaction for your specific situation. Consider fixers, distressed sales, repossessions, multiple listings, for sale by owners, and vacant properties just wasting away.
Distressed Properties
Recognize the difference between a fixer and a distressed property. Distressed properties may be fixers or just unwanted houses. Divorce, job loss or transfer, death, financial difficulty, and other problems often force a sale for less than market value. Just because an owner’s problem causes a distressed sale does not mean the house requires fixing.
REPOSSESSIONS
Although the repossession market seemed dried up last summer, houses are beginning to appear on foreclosed lists again. Lender Rob Kramarz with Nationwide Mortgage (www.seetloan.com) says that this may be the beginning of another real estate investor boom.
Look for great bargain properties for sale by HUD, VA, Freddie Mac, Fannie Mae, and Bank-REOs (acronym for real estate owned). Real estate agents try to discourage you from repos and switch you to multiple listed homes. Do not listen to negative remarks about how hard it is to find a good deal property. Find another agent. Even in the hot market at the time of this writing, when the average house sells in less than three weeks, we found two properties for at least forty thousand dollars under market value.
How to Become a Successful Real Estate Investor
June 20, 2007
Many folks dream of becoming real estate investors, but not everyone has what it takes. If you’re dreaming of becoming an investor, here are several important questions to consider, long before you buy your first investment property:
1) Why would a homeowner sell a house at a bargain price?
Many things happen in people’s lives that make their home suddenly become a burden. Loss of income, divorce, or illness are the most common, but sometimes a homeowner dies, leaving a home that none of their heirs wants. In any case, the home has become a problem, which is where you, as an investor, come in. The homeowners, or the heirs, have a problem, and you must find a way to offer a solution.
2) What types of houses should you look for?
Besides being owned by someone who no longer wants or can afford to stay in a property, you want to find a home that’s only tired, and not in need of structural work in order to favorably compete with similar houses on the market. We call that type of house a “doghouse.”
3) How do you find doghouses?
Using Transformation Psychology to Sell Investment Properties
June 19, 2007
Satisfying and lucrative real estate investment depends upon your correct assessment of profit potential, of course, but your ultimate success depends on your ability to transform a doghouse into a dollhouse. The renovation process involves physical work and choosing the best supplies, in order to create maximum positive emotional effect and profits. By incorporating the psychology of residential design, you can make wise choices in transforming your fixer house by using colors, textures, building materials, and decorations that will assure a future speedy and cost-effective sale.
The psychology of residential design addresses the entire home, inside and out, but the techniques of Transformation Psychology are a bit different, because your ultimate goal is different. The use of Design Psychology in your personal home is much more individualized, while renovating a doghouse into a dollhouse integrates more generalized design ideas to create a home that appeals to a specific target buyer.
Using Transformation Psychology to increase your real estate profits means that you must learn how our human senses and emotions are affected by our decorating details and choices of materials. Buyers view a prospective home with their eyes, but their brains interpret what they see and feel according to subtle touches you have purposefully chosen to decorate your house.
Selling by Owner Tips
June 19, 2007
Do strangers scare or intimidate you? If you’re planning to try to sell your home yourself, you’ll have to get used to it. You’ll also be opening yourself up to potentially dangerous situations and legal liabilities. That’s why even many experienced real estate agents will hire another agent to list their own home.
Even so, the lure of saving the usual six percent sales commission is hard to ignore, because it can add up to a significant portion of your equity. But if you’re going to try to sell your home yourself, you’ll need to become an expert in a number of areas. First, you must understand local and national real estate laws and become adept at sales techniques. Visiting open houses in your market area can help you to learn the methods used by successful real estate agents.
Once you feel comfortable with real estate law and the sales process, you can begin working toward earning the sales commission yourself. Don’t think of it as saving money, because you’ll soon discover that selling a home can be hard work, so you might as well pay yourself the commission.
You Have 15 Seconds to Sell Your Home! 11 Steps You Can Take to Sell Your Home for Top Dollar
June 18, 2007
Selling your home? Here are some suggestions to help you sell yours for more than your next door neighbor’s, and faster! Most buyers will know within 15 SECONDS after crossing the threshold if they want your home. But first, you need to attract them inside!
11 steps to take to sell your home for top dollar
1. Start at the street. The buyer’s first glimpse of your home must entice them inside. Design Psychology goes further than mere curb appeal. Here are some easy additions you can make to help your home outshine the competition:
Add a couple of BIG plants, either in hanging baskets or pots, to the porch, which will lead buyers’ eyes to the entrance.
The first color our eyes process is yellow, so place yellow flowers near the front door.
Plant white flowering annuals, since they look clean and show up better at night.
2. Get rid of brown or dead leaves and bare spots in the yard. Add mulch to cover bare dirt near the house. Bright flowers hold the eye and “fill” empty areas, but you don’t need to add plants to every space. Just make sure that everything looks neat.
Selling by Owner = Saving by Owner?
June 17, 2007
According to the National Association of Realtors, For Sale By Owner (FSBO) home sellers comprised nearly 14% of all home sales in the United States in 2003. The Boston Globe reported that nearly 25% of homes sold in that area during that same time period were FSBOs.
Although many FSBO home sellers have saved thousands of dollars in commissions, many others have lost money, and current statistics show that 80% of FSBOs will eventually list their homes after unsuccessfully trying to sell their homes themselves. However, if you’re thinking of trying to sell your home without the aid of a real estate agent, here are a few tips for getting the most from the experience:
Leave Your Emotions Out of Your Sales Process
Selling your home often can be a painful experience, so it’s important to emotionally detach yourself from your house and try to think of it as an investment in your future. Try not to be affected by unkind remarks you may hear from prospective buyers trying to get you to lower your price by attacking various features of your house. And although you should call your house a “home” to prospective buyers, think of it as just a “house.”
Find Bucks in Yucks! 20-Year-Old Woman Turns Doghouses into Dollars!
June 16, 2007
Do you dream of making money in real estate? Do you realize how easy it is to make big bucks? Even a young inexperienced person can transform houses for great profit.
How to Fix, Flip, and Laugh All the Way to the Bank
At the age of twenty, our family friend Dawn made her first fortune flipping houses by herself. Dawn bought her first HUD repo (government-owned repossessed house), fixed it up and sold it herself. She made enough money to buy her second fixer house with all cash. Our young friend sold her second house for $44,000 profit and paid cash for her third fixer house. Within a few months, Dawn sold that house and had enough money to pay cash for another house and reward herself with her custom dream truck. Dawn did all this — Three Doghouses — In Nine Months!
How did Dawn do all this on her own? Dawn bought houses that needed only cosmetic work, not heavy construction. She painted the homes herself inside and out and put in updated lighting and plumbing fixtures. With new carpeting installed, the houses sold immediately to happy new owners.
What is a Predatory Lender?
June 15, 2007
Several months ago, the 3,000-member California Association of Mortgage Brokers (CAMB) created the first real definition to describe the abusive lending practices of predatory lenders. According to the CAMB, predatory lending was described as “placing consumers in loan products with significantly worse terms and/or higher costs than loans offered to similarly qualified consumers in the region for the primary purpose of enriching the originator and with little or no regard for the costs to the consumer.”
Most mortgage brokers provide good service to their clients, yet there are a few who use unethical practices. Those brokers, called “predatory lenders” by the CAMB, not only over-charge consumers, but they also get paid in other hidden ways.
For instance, avoid lenders who charge more than the usual three percent fees for a conventional loan or four percent fees for a government-sponsored loan. Even non-prime lenders can’t justify excessive fees.
Also watch for hidden loan costs, such as the Yield-Spread Premium. This term refers to a rebate that’s given to brokers when they place a borrower at an interest rate higher than the rate for which they qualify. Refuse to pay yield-spread premiums and unwarranted fees, and avoid brokers who include these charges in their loans.
Sell Houses Fast & Top Dollar: Design Psychology
June 14, 2007
How would you like to start a bidding war for your home, ending with a sales price greater than the asking price — all within your home’s first three hours on the market? That’s the kind of results you can expect when you prepare your home for marketing, using Design Psychology methods!
Design Psychology’s innovative interior design strategies go well beyond normal cleaning, painting, and repairs, and have been proven to increase homeowner profit while shortening a home’s market time. And best of all, you don’t have to spend a lot of money to enjoy the benefits Design Psychology can provide!
Here are a few tips for maximizing your sales price, while minimizing the out-of-pocket cost of selling your home:
First, you must emotionally detach yourself from your home and begin to think of it as simply a piece of property that needs to be sold. In the end, your goal is to make your home feel like a well-appointed vacation property and to spur buyers’ imaginations with dreams of enjoying a new life in your luxurious home — soon, and at top dollar!
