Here are a few tip on how to get the most bang for your buck when selling your home. I know some of them sound quite ridiculous but they'll give you the most return on your time and money invested.
1. Landscaping
· Keeping the lawn mowed and shrubs well trimmed.
· Removing dead tree limbs and bushes close to the house, as well as, other yard debris.
· Livening up the landscape by planting fresh shrubs or flowers. (A small investment of even under $100 can really make a difference here.)
2. Cleaning(Inside and Out)
· Treat your carpets/walls a deserved cleaning
· Cleaning gutters and downspouts.
· Washing the driveway and sidewalk; patch holes, too.
· Cleaning and neatly arranging the garage or shed.
· Odors and Dirt are the leading “turn offs” for home buyers.
· Bake some cookies!
3. Front Door Presentation
· Checking siding, trim and doors – especially the front door – for dirt and peeling paint. (Wash or touch up where needed.
· Making sure the entry light and doorbell work.
· The front door should not only look, but also give the house a sense of security. A new lock will give a sense of safety and also add to the “wow” factor.
4. Garage Door Refurbished/Replaced
· Consider installing a new garage door or painting the old one to increase curb appeal if your garage is in the front on the house. This can be the most noticeable item on the house.
5. The “Cute” Factor
· Making the house cute and home-like will give you the greatest return on your money. Painting the exterior will help achieve a more modern, homey feeling. Consider warm, complementary colors.
· Interior colors should be neutral, although personally I like more lively pastels.
· If your house is going to be empty when you list it, add a few things to make it feel cozy. Bath mats, towels, salt & pepper shakers, pots/pans, flowers,
6. The Eight Foot Rule
· This is the sweet spot where buyers stand as they wait for the realtor to open the door. This spot is crucial whether it makes sense or not, try it. You know what “they” say about first impressions.
· Consider a tile entry-way, a new door mat, a vase with tree branches
· Add something that’s warm and inviting.
Friday, February 22, 2008
Thursday, February 21, 2008
STOP FORECLOSURE!
Are you a distressed homeowner facing foreclosure? You’re not alone, as you know many Americans are facing foreclosure in today’s real estate market. Get Informed! Know what your options are.
1. A Loan Modification
· A loan modification is simply that – a modification to your existing loan.
· You’ll need to catch up on 60%-70% of your late payments.
· Call the bank & tell them you have six or seven payments to make up and you want to do a “loan modification”.
· The bank will in turn put the other three or four payments on the end of the loan.
· You will also be required to pay all attorney fee and back taxes at this time.
Example:
Value of the house $200,000
What is owed $185,000
Monthly payments $1,500
Payments behind 10
Back payments Owed $15,000
Attorney fees $2,500
Therefore, you’ll have to pay:
$1500(late payments) X 7 = $10,500 +$2500(attorney fees) =$13,000
*You can only do 1 loan modification per year and 4 per length of the loan.
*Bank will ask for “proof of funds”.
2. Forbearance Agreement
· A workable agreement between you and the bank. If the Loan Modification doesn’t work because you don’t have all the cash, then this may be a better option for you.
· The bank will require 40%-50% of back payments plus all attorney fees up front…the rest of the payments will be added to your monthly payments over the course of a set period of time (6-12mnths).
· If you choose this option make sure you have enough money saved so that you don’t fall back into foreclosure. If you miss a payment you end up right where you left off in the foreclosure process.
Example:
Today is Feb. 6th and you strike a deal with the bank.
Your original Sale date is March 1st.
The bank will push your sale date back to April 1st.
And will continue like this until you have caught up on your payments.
If you miss a payment you will be right back in foreclosure the next month.
3. The Subject-To
· Sell the property Subject-To your existing loan. The Buyer will bring your loan current and pay all the arrearages at the time of the sale.
· This method will help build your credit by making timely payments each month. You should have a third party management company collect payments from the new buyer and then pay them to the lender.
· Your loan may have a due-on-sale clause that may call your loan due at the time of sale. You can ask your lender for permission to waive this clause.
4. Short Sale
· When your lender agrees to take less the amount owed on your current mortgage, this is called a short sale.
· In order for this option to work you must be faced with a financial hardship.
· A lot of paperwork and negotiating is required
· The Negotiator must state a case to the bank as to why you are deserving of a short sale.
· Banks don’t require you to be in foreclosure to do a short sale!
· Short Sales vary in processing time…it can take 3 weeks to 6 months and longer if you file bankruptcy.
· Short sales can buy you time
· Normally the banks give you a deficiency judgment(which is negotiable) is tax as income, as of 1/08 this has be waived
5. Chapter 13 Bankruptcy
· Contact your bankruptcy attorney
6. Deed in Lieu of Foreclosure
· Process where you just “give up” and give your home back to the bank.
· You will definitely be given a deficiency judgment, unless you get it in writing that they will not hold you liable.
· The bank will also hold you responsible for a “1099 tax liability”. This means you’ll have to pay taxes on any “shortage” of mortgage balance.
Example: Mortgage is $200,000
Bank sold for $150,000
You’ll be taxed for the difference of $50,000
7. Collateralizing your Defaulted Note with a Discounted Note
· Meet/Call your lender and negotiate a Substitution of Collateral of the defaulted property.
· Find a discounted note
· Find a lending source
· Replace the defaulted paper with the discounted note…this may actually put money into your pocket
· Easier said than done
I am not an attorney, nor do I pretend to be…Please contact your attorney for legal advice.
1. A Loan Modification
· A loan modification is simply that – a modification to your existing loan.
· You’ll need to catch up on 60%-70% of your late payments.
· Call the bank & tell them you have six or seven payments to make up and you want to do a “loan modification”.
· The bank will in turn put the other three or four payments on the end of the loan.
· You will also be required to pay all attorney fee and back taxes at this time.
Example:
Value of the house $200,000
What is owed $185,000
Monthly payments $1,500
Payments behind 10
Back payments Owed $15,000
Attorney fees $2,500
Therefore, you’ll have to pay:
$1500(late payments) X 7 = $10,500 +$2500(attorney fees) =$13,000
*You can only do 1 loan modification per year and 4 per length of the loan.
*Bank will ask for “proof of funds”.
2. Forbearance Agreement
· A workable agreement between you and the bank. If the Loan Modification doesn’t work because you don’t have all the cash, then this may be a better option for you.
· The bank will require 40%-50% of back payments plus all attorney fees up front…the rest of the payments will be added to your monthly payments over the course of a set period of time (6-12mnths).
· If you choose this option make sure you have enough money saved so that you don’t fall back into foreclosure. If you miss a payment you end up right where you left off in the foreclosure process.
Example:
Today is Feb. 6th and you strike a deal with the bank.
Your original Sale date is March 1st.
The bank will push your sale date back to April 1st.
And will continue like this until you have caught up on your payments.
If you miss a payment you will be right back in foreclosure the next month.
3. The Subject-To
· Sell the property Subject-To your existing loan. The Buyer will bring your loan current and pay all the arrearages at the time of the sale.
· This method will help build your credit by making timely payments each month. You should have a third party management company collect payments from the new buyer and then pay them to the lender.
· Your loan may have a due-on-sale clause that may call your loan due at the time of sale. You can ask your lender for permission to waive this clause.
4. Short Sale
· When your lender agrees to take less the amount owed on your current mortgage, this is called a short sale.
· In order for this option to work you must be faced with a financial hardship.
· A lot of paperwork and negotiating is required
· The Negotiator must state a case to the bank as to why you are deserving of a short sale.
· Banks don’t require you to be in foreclosure to do a short sale!
· Short Sales vary in processing time…it can take 3 weeks to 6 months and longer if you file bankruptcy.
· Short sales can buy you time
· Normally the banks give you a deficiency judgment(which is negotiable) is tax as income, as of 1/08 this has be waived
5. Chapter 13 Bankruptcy
· Contact your bankruptcy attorney
6. Deed in Lieu of Foreclosure
· Process where you just “give up” and give your home back to the bank.
· You will definitely be given a deficiency judgment, unless you get it in writing that they will not hold you liable.
· The bank will also hold you responsible for a “1099 tax liability”. This means you’ll have to pay taxes on any “shortage” of mortgage balance.
Example: Mortgage is $200,000
Bank sold for $150,000
You’ll be taxed for the difference of $50,000
7. Collateralizing your Defaulted Note with a Discounted Note
· Meet/Call your lender and negotiate a Substitution of Collateral of the defaulted property.
· Find a discounted note
· Find a lending source
· Replace the defaulted paper with the discounted note…this may actually put money into your pocket
· Easier said than done
I am not an attorney, nor do I pretend to be…Please contact your attorney for legal advice.
Creative Ways to Buy/Sell Real Estate in Today's Market
Whether you’re buying or selling a house these simple techniques can help you reach your objective and solve the problems you face as a buyer, seller, or real estate professional.
Temporary Seller Financing - It’s a well known fact that owner financed properties sell faster and for more money than your typical conventional transactions. However, most homeowners/sellers want to get paid today. This is a strategy where you get the best of both worlds…sell at a higher price and collect the sale proceeds at the time of closing.
Here’s an example of how it works…
Basically, you (seller) set the sales price (should be the appraised value), get a down payment, and create a 1st Mortgage Note that an investor will purchase for up to 85% - 95% of face value at or right after the closing (depending on LTV, credit of buyer, and rate/term of note).
There are many local and nationwide companies that will buy your newly created note. Of course there are certain specifications that need to be considered when creating a marketable note, therefore, consult an expert and/or real estate attorney.
Benefits
· Higher sales price
· Faster Closing
· Lower Closing Costs
· Easier qualifying than that of Conventional Financing for fixers
· More lax underwriting standards
Installment Sale/Contract for Deed - Another form of seller financing where a homeowner with considerable equity takes back all or part of the market price of the property in the form of a promissory note secured by real estate. What does this mean? In simple terms…you finance the property for the buyer and hold title until terms of the agreement have been satisfied.
Again, caution must be taken in the wording of the created note to protect your interest.
Benefits of the Installment Sale
· Defer Capital Gains
· Secure Investment (interest earned on total loan amount)
· Highest possible sales price
· Faster Closing
· Lower Closing Costs
Explanation of Benefits
· Used as Retirement Vehicle this creates a low taxed income stream, which allows Medicare to kick in sooner than it would with a person with a large sum of cash in their bank account. It allows the beneficiary of the note to leave something to their heirs (all tax benefit) upon exiting.
· Interest only payments-Defers taxes indefinitely. Better/safer investment than most anything.
There are many variations to this type of financing to reach any desired outcome.
Lease Option/Rent-to-Own - The buyer enters into a lease agreement with the seller with an option to buy at a later date. Length of time can be 3 months to 5 years. The Lease payment will be determined by buyer and seller. Buyer pays the seller option money for the right to later purchase the property. The lease option money is considered a down payment and is usually non-refundable. The purchase price can be pre-determined or a percentage of the market value at the time of closing. A portion of the monthly rental payment typically applies toward the purchase price. While the buyer isn’t obligated to buy the property if he/she chooses not to exercise their option all contributed monies will be forfeited to the seller.
Benefits
· Tax Benefits of investments property ownership
§ Depreciation write-offs
§ Capital loss write-offs
· Helps the buyer save down payment and build credit
Lease Purchase - Same as the lease option except the lease is obligated to purchase the property at a pre-determined time.
1031 Exchange - A 1031 tax deferred exchange allows you to roll-over all of the proceeds received from the sale of an investment property into the purchase of one or more other like-kind investment properties. At closing, proceeds are transferred to a third party--called a facilitator or qualified intermediary--who holds them until they are used acquire the new property.
Benefits
· Consolidation of Properties
· Increase Depreciation (raw land to depreciable property)
· Management Relief
· Leverage (more investment $$ to Invest due to no Capital Gain)
Short Sale - This is a sale that involves the bank discounting the amount owed due to a hardship. Although it sounds straight forward and simple it’s not. The bank may give distressed homeowner a Short Sale kit and offer to lower the price a little however it requires a real estate professional to make a case for the homeowner in order to get the discount usually needed to prevent foreclosure. Homeowners be wary of any individual asking for an upfront fee for consultation on a short sale.
Disclaimer- I am not an attorney or Accountant, nor do I pretend to be. Please consult your Attorney/CPA for tax and legal advice.
Temporary Seller Financing - It’s a well known fact that owner financed properties sell faster and for more money than your typical conventional transactions. However, most homeowners/sellers want to get paid today. This is a strategy where you get the best of both worlds…sell at a higher price and collect the sale proceeds at the time of closing.
Here’s an example of how it works…
Basically, you (seller) set the sales price (should be the appraised value), get a down payment, and create a 1st Mortgage Note that an investor will purchase for up to 85% - 95% of face value at or right after the closing (depending on LTV, credit of buyer, and rate/term of note).
There are many local and nationwide companies that will buy your newly created note. Of course there are certain specifications that need to be considered when creating a marketable note, therefore, consult an expert and/or real estate attorney.
Benefits
· Higher sales price
· Faster Closing
· Lower Closing Costs
· Easier qualifying than that of Conventional Financing for fixers
· More lax underwriting standards
Installment Sale/Contract for Deed - Another form of seller financing where a homeowner with considerable equity takes back all or part of the market price of the property in the form of a promissory note secured by real estate. What does this mean? In simple terms…you finance the property for the buyer and hold title until terms of the agreement have been satisfied.
Again, caution must be taken in the wording of the created note to protect your interest.
Benefits of the Installment Sale
· Defer Capital Gains
· Secure Investment (interest earned on total loan amount)
· Highest possible sales price
· Faster Closing
· Lower Closing Costs
Explanation of Benefits
· Used as Retirement Vehicle this creates a low taxed income stream, which allows Medicare to kick in sooner than it would with a person with a large sum of cash in their bank account. It allows the beneficiary of the note to leave something to their heirs (all tax benefit) upon exiting.
· Interest only payments-Defers taxes indefinitely. Better/safer investment than most anything.
There are many variations to this type of financing to reach any desired outcome.
Lease Option/Rent-to-Own - The buyer enters into a lease agreement with the seller with an option to buy at a later date. Length of time can be 3 months to 5 years. The Lease payment will be determined by buyer and seller. Buyer pays the seller option money for the right to later purchase the property. The lease option money is considered a down payment and is usually non-refundable. The purchase price can be pre-determined or a percentage of the market value at the time of closing. A portion of the monthly rental payment typically applies toward the purchase price. While the buyer isn’t obligated to buy the property if he/she chooses not to exercise their option all contributed monies will be forfeited to the seller.
Benefits
· Tax Benefits of investments property ownership
§ Depreciation write-offs
§ Capital loss write-offs
· Helps the buyer save down payment and build credit
Lease Purchase - Same as the lease option except the lease is obligated to purchase the property at a pre-determined time.
1031 Exchange - A 1031 tax deferred exchange allows you to roll-over all of the proceeds received from the sale of an investment property into the purchase of one or more other like-kind investment properties. At closing, proceeds are transferred to a third party--called a facilitator or qualified intermediary--who holds them until they are used acquire the new property.
Benefits
· Consolidation of Properties
· Increase Depreciation (raw land to depreciable property)
· Management Relief
· Leverage (more investment $$ to Invest due to no Capital Gain)
Short Sale - This is a sale that involves the bank discounting the amount owed due to a hardship. Although it sounds straight forward and simple it’s not. The bank may give distressed homeowner a Short Sale kit and offer to lower the price a little however it requires a real estate professional to make a case for the homeowner in order to get the discount usually needed to prevent foreclosure. Homeowners be wary of any individual asking for an upfront fee for consultation on a short sale.
Disclaimer- I am not an attorney or Accountant, nor do I pretend to be. Please consult your Attorney/CPA for tax and legal advice.
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