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Tips for Buying in a Tight Market

Increase your chances of getting your dream house in a competitive housing market, and lower your chances of losing out to another buyer.

1. Get pre-qualified for a mortgage. You ll be able to make a firm commitment to buy and your offer will be more desirable to the seller.

2. Stay in close contact with your real estate agent to find out about the newest listings. Be ready to see a house as soon as it goes on the market  if it s a great home, it will go fast.

3. Scout out new listings yourself. Look at Web sites such as REALTOR.com, browse your local newspaper s real estate section, and drive through the neighborhood to spot For Sale signs. If you see a home you like, write down the address and the name of the listing agent. Your real estate agent will schedule a showing.

4. Be ready to make a decision. Spend a lot of time in advance deciding what you must have in a home so you won t be unsure when you have the chance to make an offer.

5. Bid competitively. You may not want to start out offering the absolute highest price you can afford, but don t go too low to get a deal. In a tight market, you ll lose out.

6. Keep contingencies to a minimum. Restrictions such as needing to sell your home before you move or wanting to delay the closing until a certain date can make your offer unappealing. In a tight market, you ll probably be able to sell your house rapidly. Or talk to your lender about getting a bridge loan to cover both mortgages for a short period.

7. Don t get caught in a buying frenzy. Just because there s competition doesn t mean you should just buy it. And even though you want to make your offer attractive, don t neglect inspections that help ensure that your house is sound.

Reprinted from REALTOR magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

Negotiate Your Best House Buy

By: G. M. Filisko

Keep your emotions in check and your eyes on the goal, and you’ll pay less when purchasing a home.

Buying a home can be emotional, but negotiating the price shouldn’t be. The key to saving money when purchasing a home is sticking to a plan during the turbulence of high-stakes negotiations. A real estate agent who represents you can guide you and offer you advice, but you are the one who must make the final decision during each round of offers and counter offers.

Here are six tips for negotiating the best price on a home.
1. Get prequalified for a mortgage
Getting prequalified for a mortgage proves to sellers that you’re serious about buying and capable of affording their home. That will push you to the head of the pack when sellers choose among offers; they’ll go with buyers who are a sure financial bet, not those whose financing could flop.

2. Ask questions
Ask your agent for information to help you understand the sellers’ financial position and motivation. Are they facing foreclosure or a short sale Have they already purchased a home or relocated, which may make them eager to accept a lower price to avoid paying two mortgages Has the home been on the market for a long time, or was it just listed Have there been other offers If so, why did they fall through The more signs that sellers are eager to sell, the lower your offer can reasonably go.

3. Work back from a final price to determine your initial offer
Know in advance the most you’re willing to pay, and with your agent work back from that number to determine your initial offer, which can set the tone for the entire negotiation. A too-low bid may offend sellers emotionally invested in the sales price; a too-high bid may lead you to spend more than necessary to close the sale.
Work with your agent to evaluate the sellers’ motivation and comparable home sales to arrive at an initial offer that engages the sellers yet keeps money in your wallet.

4. Avoid contingencies
Sellers favor offers that leave little to chance. Keep your bid free of complicated contingencies, such as making the purchase conditional on the sale of your current home. Do keep contingencies for mortgage approval, home inspection, and environmental checks typical in your area, like radon.

5. Remain unemotional
Buying a home is a business transaction, and treating it that way helps you save money. Consider any movement by the sellers, however slight, a sign of interest, and keep negotiating.
Each time you make a concession, ask for one in return. If the sellers ask you to boost your price, ask them to contribute to closing costs or pay for a home warranty. If sellers won’t budge, make it clear you’re willing to walk away; they may get nervous and accept your offer.

6. Don’t let competition change your plan
Great homes and those competitively priced can draw multiple offers in any market. Don’t let competition propel you to go beyond your predetermined price or agree to concessions-such as waiving an inspection-that aren’t in your best interest.

More from HouseLogic
Determine how much mortgage you can afford (http://buyandsell.houselogic.com/articles/4-tips-determine-how-much-mortgage-you-can-afford/)

Keep your home purchase on track (http://buyandsell.houselogic.com/articles/keep-your-home-purchase-track/)

Plan for a stress-free home closing (http://buyandsell.houselogic.com/articles/7-steps-stress-free-home-closing/)

Other web resources
More negotiating tips (http://www.freddiemac.com/corporate/buyown/english/purchasing/offer/negotiate.html)

Develop a homebuying strategy (http://www.nolo.com/legal-encyclopedia/article-29746.html)

G.M. Filisko is an attorney and award-winning writer who has to remind herself to remain unemotional during negotiations. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Visit houselogic.com for more articles like this. Reprinted from HouseLogic with permission of the NATIONAL ASSOCIATION OF REALTORS
Copyright 2010. All rights reserved.

7 Tips for Short Sale Success.

By: G. M. Filisko

Have to sell your home for less than it’s worth Our seven tips will help you get the best price.

When you owe more on your home than it’s worth, but you have to sell, you need to squeeze every dollar possible from the sale.

Here are seven tips for navigating the short-sale process.

1. Know who you owe
A short sale has to be approved by any company that has a mortgage or lien against your home. That includes your first, second, or even third mortgage lender, your home equity line lender; your homeowners or condominium association; and any contractors who’ve placed a lien on your home. Make a list and start talking to everyone early in the process. Ask what documents they’ll need from you.

2. Pick your short sale team
You’ll need to work with a team of short sale experts, including a real estate agent, real estate attorney, and your accountant. Look for agents and attorneys who advertise themselves as short sale experts. Interview at least three, and listen carefully for signs that they understand the complexities of the short sale process.
Agents should explain how they’ll arrive at a suggested price for your home. Ask them to show you a sample short-sale package or for an example of a prior short-sale success.

3. Get your documents ready
Gather the paperwork your creditors and mortgage lenders asked to see, like your listing agreement and a hardship letter explaining why you need to do a short sale. You’ll also need proof of what you earn and what you owe as well as copies of your federal income tax returns for the past two years.

4. Expect delays
Despite a federal rule saying banks participating in the federal government’s Making Home Affordable loan modification program (http://www.houselogic.com/articles/making-home-affordable-modification-option/) must respond to short-sale offers within 10 days, it may take weeks or months for your lender to decide whether to allow you to sell your home in a short sale–and even longer if you must negotiate with more than one lender or lienholder.
Your lender and lienholders don’t have to agree to your proposed short sale. They can reject your terms or make a counteroffer, which can create further delays.

5. Anticipate demands
Discuss with your short-sale team how you should respond to common short-sale demands from lenders. For example, are you willing to sign a promissory note agreeing to pay outstanding amounts after the sale is complete

6. Know the tax implications
Any unpaid amount of your mortgage “forgiven” by your lender through a short sale may be considered income to you under federal tax rules. Ask your attorney or accountant whether you qualify to exclude that amount as income on your tax returns under the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act. Also ask if you’ll be required to report amounts “forgiven” by other lienholders, if applicable.

7. Consider how the short sale will affect your credit and what you must pay
Ask whether your lender will report the short sale to credit-reporting agencies. Having a portion of your debt forgiven may negatively affect your credit score, but a short sale typically damages your score less than a foreclosure or bankruptcy.
Ask you lawyer whether you’ll be responsible for paying back the lenders’ loss. If the lender says it will forgive any losses on the sale of your home, get that promise in writing.

Other web resources
More on short sales (http://www.nolo.com/legal-encyclopedia/article-30016.html)

IRS information on the Mortgage Forgiveness Debt Relief Act and Debt Cancellation (http://www.irs.gov/individuals/article/0,,id=179414,00.html)

This article includes general information about tax laws and consequences, but isn’t intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.

G.M. Filisko is an attorney and award-winning writer. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Visit houselogic.com for more articles like this. Reprinted from HouseLogic with permission of the NATIONAL ASSOCIATION OF REALTORS
Copyright 2010. All rights reserved.

Its a Jungle Out There!

Because there is so much money and so many different professionals are involved in the real estate purchasing process, there is always room for professional incompetence or outright fraud. Here are some things to look out for in the team that assists you in your purchase.

Real Estate Agents: This is the key person on your team! Make sure he or she is competent! We cannot stress this point more! Do your homework. All real estate agents must be licensed by the California Department of Real Estate. Visit the Department’s web site (www.dre.ca.gov) to determine the license status of an agent.

Also, talk to others who have used the agent. This is the one person you really need to trust in this process.

There are some unscrupulous lenders out there who only want their commission or points from a loan and couldn’t care less if you are getting the best loan product. There are some lending tactics that are outright fraud.

Beware of the following illegal lending practices and predatory lending tactics:
Flipping the frequent making of new loans to refinance existing loans
Packing selling of additional products without the borrower’s informed consent
Charging of excessive fees
Bait and Switch offering of very attractive terms which are not available and then pressuring the borrower into more expensive terms and hidden fees
Door-to-Door High Pressure Sales typically trying to sell home improvement contracts funded by home equity loans usually with less than desirable terms
Trust Selling salespersons who try to gain your trust based on some common background and then sell you something that might not be in your best interest
No Job! No Problem! encouraging home equity loans to those with no job or bad credit with the knowledge that the borrower will probably lose their home because they can’t make the payments
Pressuring for Immediate Sale insisting that a loan contract be signed immediately before the good deal is gone.

Prior to using the services of a mortgage broker or lender, make sure they are properly licensed by checking the California Department of Corporations web site (www.corp.ca.gov) and/or the California Department of Real Estate’s web site (www.dre.ca.gov).

Home Inspectors: The competency of this person is key in making sure you’re purchasing a structurally sound, safe home. A home inspector who misses details can end up costing you tens of thousands of dollars in the long run. Or worse, missed details could cause you or a family member harm because of bad wiring, cracked glass and other hazards.

Escrow Officer: The escrow officer is the referee in the home buying game. Just as with your favorite sport, an incompetent  or cheating  referee is a huge headache. If bad calls are made on the part of the escrow officer, it can cost you large amounts of money or kill the whole deal.

Tax Advisor: A tax advisor can be a great asset to you financially. Finding out that certain expenses are not tax deductible after-the-fact can put you in a real bind with the IRS. Ask your real estate agent, family members, friends or others you trust if they can recommend the services of a reputable tax advisor in your area.

6 Reasons to Reduce Your Home Price

By: G. M. Filisko

While you’d like to get the best price for your home, consider our six reasons to reduce your home price.

Home not selling That could happen for a number of reasons you can’t control, like a unique home layout or having one of the few homes in the neighborhood without a garage. There is one factor you can control: your home price.

These six signs may be telling you it’s time to lower your price.

1. You’re drawing few lookers
You get the most interest in your home right after you put it on the market because buyers want to catch a great new home before anybody else takes it. If your real estate agent reports there have been fewer buyers calling about and asking to tour your home than there have been for other homes in your area, that may be a sign buyers think it’s overpriced and are waiting for the price to fall before viewing it.

2. You’re drawing lots of lookers but have no offers
If you’ve had 30 sets of potential buyers come through your home and not a single one has made an offer, something is off. What are other agents telling your agent about your home An overly high price may be discouraging buyers from making an offer.

3. Your home’s been on the market longer than similar homes
Ask your real estate agent about the average number of days it takes to sell a home in your market. If the answer is 30 and you’re pushing 45, your price may be affecting buyer interest. When a home sits on the market, buyers can begin to wonder if there’s something wrong with it, which can delay a sale even further. At least consider lowering your asking price.

4. You have a deadline
If you’ve got to sell soon because of a job transfer or you’ve already purchased another home, it may be necessary to generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in your area. Remember: It’s not how much money you need that determines the sale price of your home, it’s how much money a buyer is willing to spend.

5. You can’t make upgrades
Maybe you’re plum out of cash and don’t have the funds to put fresh paint on the walls, clean the carpets, and add curb appeal. But the feedback your agent is reporting from buyers is that your home isn’t as well-appointed as similarly priced homes. When your home has been on the market longer than comparable homes in better condition, it’s time to accept that buyers expect to pay less for a home that doesn’t show as well as others.

6. The competition has changed
If weeks go by with no offers, continue to check out the competition. What have comparable homes sold for and what’s still on the market What new listings have been added since you listed your home for sale If comparable home sales or new listings show your price is too steep, consider a price reduction.

More from HouseLogic
How to ready your home for sale at little cost (http://buyandsell.houselogic.com/articles/5-tips-prepare-your-home-sale/)

How to review offers on your home (http://buyandsell.houselogic.com/articles/6-tips-choosing-best-offer-your-home/)

Other web resources
Setting the right price

More on setting the right price (http://public.findlaw.com/abaflg/flg-4-4a-1.html)

G.M. Filisko is an attorney and award-winning writer who made strategic price reductions that led to the sale of a Wisconsin property. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Visit houselogic.com for more articles like this. Reprinted from HouseLogic with permission of the NATIONAL ASSOCIATION OF REALTORS
Copyright 2010. All rights reserved.

Understanding Capital Gains in Real Estate

When you sell a stock, you owe taxes on your gain  the difference between what you paid for the stock and what you sold it for. The same holds true when selling a home (or a second home), but there are some special considerations.

How to Calculate Gain
In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate, follow these steps:

1. Purchase price: _______________________

The purchase price of the home is the sale price, not the amount of money you actually contributed at closing.

2. Total adjustments: _______________________

To calculate this, add the following:
Cost of the purchase  including transfer fees, attorney fees, and inspections, but not points you paid on your mortgage.
Cost of sale  including inspections, attorney fees, real estate commission, and money you spent to fix up your home just prior to sale.
Cost of improvements  including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.

3. Your home s adjusted cost basis: _______________________

The total of your purchase price and adjustments is the adjusted cost basis of your home.

4. Your capital gain: _______________________

Subtract the adjusted cost basis from the amount your home sells for to get your capital gain.

A Special Real Estate Exemption for Capital Gains
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:
You have lived in the home as your principal residence for two out of the last five years.
You have not sold or exchanged another home during the two years preceding the sale.
You meet what the IRS calls  unforeseen circumstances, such as job loss, divorce, or family medical emergency.

Reprinted from REALTOR magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

Permanent Modifications on Fannie Mae and Freddie Mac Loans Reach 1.1 Million

Fannie Mae and Freddie Mac completed more than 2.1 million foreclosure prevention actions since the start of conservatorship including 1.1 million permanent loan modifications. These actions, designed to help borrowers stay in their homes, are detailed in the Federal Housing Finance Agency’s fourth quarter 2011 Foreclosure Prevention and Refinance Report. The report also shows that after nine months, fewer than 20 percent of Enterprise loans modified in the four quarters ended March 31, 2011, had missed two or more payments, an improvement over prior years.

With this report, FHFA releases new state data sets and launches an interactive Fannie Mae and Freddie Mac State Borrower Assistance Map, showing the number of loans owned or guaranteed by Fannie Mae and Freddie Mac, delinquencies, foreclosure prevention activities, Real Estate-Owned (REO) properties, and refinances in each state. In addition, the report now includes a graphic showing Delinquent Loans by State and Profiles of Key States, with detailed information about states with the biggest five-year decline in house prices and the highest number and rate of seriously delinquent loans.

Also in the report:

  • The Enterprises’ cumulative HARP refinancings increased 10 percent in the fourth quarter of 2011.
  • Half of all borrowers who received loan modifications in the fourth quarter had their monthly payments reduced by over 30 percent, and one-third included principal forbearance.
  • Serious delinquency rates for Fannie Mae and Freddie Mac loans remain below industry levels and continue to decline.
  • Florida had the highest number of serious delinquencies at the end of the fourth quarter.
  • California had the largest number of completed foreclosure prevention actions since the beginning of conservatorship in 2008.

California Probate Fees

California Probate Fees

Currently, California Probate Code 10800 sets the compensation for the Personal Representative and for the Attorney for the Personal Representative of an Estate that is subject to Probate as follows:

  • Four percent on the first one hundred thousand dollars ($100,000).
  • Three percent on the next one hundred thousand dollars ($100,000).
  • Two percent on the next eight hundred thousand dollars ($800,000).
  • One percent on the next nine million dollars ($9,000,000).
  • One-half of one percent on the next fifteen million dollars ($15,000,000).
  • Above twenty-five million dollars ($25,000,000), a reasonable amount to be determined by the Court.

According to this schedule, the Probate fee on an estate of $1,000,000 is equal to $23,000.

Please bear in mind, that this is the fee to be paid to both the attorney and the personal representative.

While many personal representatives forgo their share of the fee, not all will do so. Therefore, it is possible that the full probate fee on an estate of $1,000,000 is equal to $46,000! And that is not including court filing fees!

Art Of Real Estate Flipping Houses And Foreclosure

Real estate business is cyclical with ups and downs. It is hard to predict the happenings in real estate unless you have a fine prior knowledge of how it works.

Real estate means buying and selling of properties with varying amount of profits. To make a real good profit in this business one should know the pros and cons. For obtaining knowledge of real estate business, there is real estate education in USA and abroad giving various models of education. These programs are necessary for finding success in the field as you will know to update the current happenings and the market and logic accordingly. The models here include from MBA (Masters of Business Administration) to MSc (Master of Science) in real estate/development.

If you are already in the field or an agent or want to be in the real estate field, then real estate videos are of big help. Real estate videos provide video home tour for commercial and residential listings of real estate. They have the video spotlights, resort and hotel video providing for real estate agents whether commercial or residential. These videos act as knowledge base allowing viewers to watch full motion video tour of your business or property. Videos also help in knowing what and how of the industry and you can assess your position quiet better in the competition. Therefore to grow as a professional businessman real estate education and real estate videos can put you in right track.

Flipping house and foreclosure are very common terms in real estate once you understand the business which play major role that put you in profit or loss. Flipping house is the art of buying foreclosed homes or the property at cheaper rates and selling when there is good market for making profits. When an individual is in financial distress and has no other option left, will mortgage his property which can be his/her house. After mortgaging again he may not have the capacity to pay back the loan then the poor person will have to sell it to the mortgager. This requires lot of calculation of maintaining the financial situations and the value of the money put in buying by the agent.

Foreclosure is taking possession of a property mortgaged when mortgagor has failed to keep up mortgaged payments. Here the possession of the property will be legal through litigation process. Real estate agents make huge profits in such incidents of failed payments. Real estate business require lot of contacts and hardworking with good lot calculation of every pie. Real estate business is a hot favorite nowadays with ups and downs of one nations economy that has influence internationally in the globalized world.

It is hard to keep up in this business having real estate education, real estate videos, having fine knowledge of flipping house and foreclosure unless you have the real tactics of the game where logic plays. When the there was economic slowdown with many of the US banks going bankrupt real estate business saw its worst days. Wait and watch approach is not advisable all the time though it has its role to play.

Article Source: http://www.articlesnatch.com

About the Author:Lolita Sheriow is a Real Estate Investor and CEO of Harrtstone Management Inc. in Ft. Worth, TX. For a FREE 7 Secrets report on buying and selling Flipping houses using creative options in any market. For more details please visit losblog.net.

Read more: http://www.articlesnatch.com/Article/Art-Of-Real-Estate–Flipping-Houses-And-Foreclosure/1574013#ixzz10UAXf5XJ
Under Creative Commons License: Attribution No Derivatives

What You Must Know About Home Appraisals

By: G. M. Filisko

Understanding how appraisals work will help you achieve a quick and profitable refinance or sale.

When you refinance or sell your home, the lender will insist that you get an appraisal–an opinion of the value of your home based on what similar homes in your area have sold for in recent months.

Here are five tips about the appraised value of your home.

1. An appraisal isn’t an exact science
When appraisers evaluate a home’s value, they’re giving their best opinion based on how the home’s features stack up against those of similar homes recently sold nearby. One appraiser may factor in a recent sale, but another may consider that sale too long ago, or the home too different, or too far away to be a fair comparison. The result can be differences in the values two separate appraisers set for your home.

2. Appraisals have different purposes
If the appraisal is being used by a lender giving a loan on the home, the appraised value will be the lower of market value (what it would sell for on the open market today) and the price you paid for the house if you recently bought it.

An appraisal being used to figure out how much to insure your home for or to determine your property taxes may rely on other factors and arrive at different values. For example, though an appraisal for a home loan evaluates today’s market value, an appraisal for insurance purposes calculates what it would cost to rebuild your home at today’s building material and labor rates, which can result in two different numbers.

Appraisals are also different from CMAs, or competitive market analyses. In a CMA, a real estate agent relies on market expertise to estimate how much your home will sell for in a specific time period. The price your home will sell for in 30 days may be different than the price your home will sell for in 120 days. Because real estate agents don’t follow the rules appraisers do, there can be variations between CMAs and appraisals on the same home.

3. An appraisal is a snapshot
Home prices shift, and appraised values will shift with those market changes. Your home may be appraised at $150,000 today, but in two months when you refinance or list it for sale, the appraised value could be lower or higher depending on how your market has performed.

4. Appraisals don’t factor in your personal issues
You may have a reason you must sell immediately, such as a job loss or transfer, which can affect the amount of money you’ll accept to complete the transaction in your time frame. An appraisal doesn’t consider those personal factors.

5. You can ask for a second opinion
If your home appraisal comes back at a value you believe is too low, you can request that a second appraisal be performed by a different appraiser. You, or potential buyers, if they’ve requested the appraisal, will have to pay for the second appraisal. But it may be worth it to keep the sale from collapsing from a faulty appraisal. On the other hand, the appraisal may be accurate, and it may be a sign that you need to adjust your pricing or the size of the loan you’re refinancing.

More from HouseLogic
How to use an appraisal to eliminate private mortgage insurance (http://www.houselogic.com/articles/cancel-your-private-mortgage-insurance/)

Understanding the assessed value of your home for tax purposes (http://www.houselogic.com/articles/why-real-estate-assessments-matter/)

Understanding the amount at which to insure your home (http://www.houselogic.com/articles/homeowners-insurance-are-you-over-or-underinsured/)

Other web resources
More information on appraisals (http://www.appraisalinstitute.org/profession/appraiser.aspx)

How to improve the appraised value of your home (http://www.appraisers.org/Consumer/ConsumerLibrary/SoftHousingMarketMakesforaHardSell.aspx)

G.M. Filisko is an attorney and award-winning writer who’s had more than 10 appraisals performed on her properties in the past 20 years. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Visit houselogic.com for more articles like this. Reprinted from HouseLogic with permission of the NATIONAL ASSOCIATION OF REALTORS
Copyright 2010. All rights reserved.

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