Real Estate Investor Girl

Getting Your Short Sale Offer Accepted

2010-02-01T17:38:00Z

I am pleased to present this from Mark Walters, a third generation real estate investor and author. Be sure to check out his site, Cash Flow Institute.

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Certified Short Sale Agents, Experts??

2010-01-29T20:11:00Z

Here is a video from Patrick Precourt. He is a true, in the field short sale expert, and freely shares tips with others. He puts this video out every Friday to help short sale professionals.

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Explanation of FHA Reverse on Seasoning

2010-01-21T01:16:35Z

It seems the FHA has now realized what ethical investors in real estate have been saying all along. Previously the FHA had a required a 90 day seasoning time before they would fund a purchase for a borrower. That meant an experienced short sale negotiator that got a wholesale price on a short sale was not allowed to sell it to an end buyer until 91 days had passed. You could not even have a contract dated before the 91st day.

Or, if you purchased a property to clean up, and fix up, and it was completed in a couple weeks, you still had to hold the property for the seasoning period, therefore incurring additional costs.

This put many investors out of the market, especially when they wanted to cater to the first time home buyer. This also made “flipping” a dirty word. That is because many people did not understand that there is an ethical way to flip a house.

Now, the FHA has reversed the seasoning requirement, and is allowing flipping. This starts on Feb. 1, 2010 and is in effect for a year. They realized that the seasoning rule was hindering the housing recovery.

Here are the FHA requirements explained. These come from Bob Massey, he is an expert on working with agents on short sales. You can find more information about Bob, who resides in the Atlanta, Ga. area, at this site:

www.REWealthCoach.com

1. No multiple transactions on the chain of title within a 12 month period. This means one Investor cannot assign a contract to another Investor or to a different entity before the end Buyer transaction occurs.

2. There may not be more than 20% profit built into the deal without jumping through additional hoops. If more than 20% is warranted, then there must be a second appraisal, documentation pointing to extensive repair and renovation needed, including an inspection report. Inspection reports must include the main structural elements of the house and the main mechanical and electrical elements. Inspections must cover both exterior and interior condition, insulation, ventilation systems, fireplaces and other fuel burning appliances.

Even with a low end property, however, 20% yields a fairly decent profit, especially when you are just starting out in investing. On a $50,000 house the maximum profit without further justification can be $10,000, while on a $200,000 house the built in maximum can be $40,000. You can see how dramatically profit will vary just by increasing the value of the property that you go after in the Short Sale marketplace. Still, the new ruling makes it profitable and simpler to go after low end deals and to put first time Homebuyers in place with these transactions than before when FHA buyers were out of the question. The Homeowners will no longer be forced to wait for lengthy seasoning periods, and therefore fewer deals will fall through.

3. As in the past, all FHA transactions must be “arms length.” Do not try to transact a Short Sale flip with a relative or close associate.

4. The Seller must hold title to the property. Make sure that the A to B transaction closes completely with separate funding, and that the sale is officially recorded. For this reason, it still may not be possible to do a same-day closing with end Buyers with FHA loans; there may need to be a few days to get the deed recorded before the second transaction can take place.
Note by Real Estate Investor Girl: The title must also be officially recorded before the FHA underwrites the loan. And the Purchase and Sale must be dated on or after the recording.

5. Make sure that you are investing within an LLC or corporation that has been fully recognized and is legally set up. Do not try to invest using a DBA. FHA does recognize trusts, if legally set up, but we highly recommend that you use an LLC or corporation as your legal base for your business.

6. The deal must have been marketed. The FHA will recognize deals that were marketed publically through the MLS, an auction, FSBO service, or through a developer.

If you want to read the FHA’s announcement for yourself, here is the link: www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf.

Please give me "your take", or questions you may have below in the Comments.

FHA Lifts 90 Day Seasoning Requirements

2010-01-17T12:11:00Z

Here is a video from Bob Massey with his announcement on the FHA lift on seasoning requirements. He also gives a little advise as to the type of property you should go for.

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CELEBRATE! FHA Lifts 90 day Seasoning!

2010-01-16T19:29:47Z

DC Fireworks
Originally uploaded by Grundlepuck

The FHA lifts the 90 day seasoning requirement for financing through FHA. So, what's all the excitement about? If you don't know, you haven't been investing in short sales, or REO's and then selling them to an end buyer.

Before February 1, 2010, the FHA did not allow an end buyer with an FHA loan to purchase a property that had not been owned by the person on title for less than 90 days. With FHA providing most of the funding for first time home buyers, this gave FHA buyers a disadvantage, and kept the housing market from recovering as fast as it should.

Often houses had to sit for 90 days, allowing more of a chance for vandalism. This 90 day period also made it very difficult to make any profit on a property, even when it had been repaired and updated.

So this is what all the excitement is about! Wells Fargo made a similar statement for homes they sell by short sale, or REO, a couple weeks ago. Now that FHA has "seen the light", other lenders will revise their standards whether it is an FHA loan or not.

This lift is for a one year period, and their are some restrictions. But with my first look at the FHA statement, there isn't anything that an ethical "flipper" would not abide by anyway.

The entire original ban on "flipping" was nothing to do with the ethical investor. It involved some schemes with some appraisers, and some unethical people calling themselves real estate investors.

I say prosecute the criminals, but don't punish free market.

I'm giving a big hand of APPLAUSE to David H Stevens - Assistant Federal Housing Commissioner, who signed the waiver on January 15, 2010. To view the actual statement from FHA please go to: http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf

Let me hear your Comments!

Motivated Sellers: 6 Secrets

2010-01-14T17:00:00Z

Here are the inside secrets from a pro real estate investor, Bill Cook, in finding motivated sellers. You can view his site by going to: http://www.bartowrealestate.com

The "secret" to finding motivated sellers is this: There ain't no secret – it just takes a lot of hard work!

Think of it this way: What is the secret to finding gold? There's no secret to that either. You get a pan, go to a riverbed and start panning for gold. When you first start panning, it's kind of fun.
But six or seven hours later, when you're hot, wet, your back hurts, and you'd rather be anywhere else than bent over in a streambed, trying to find gold is no fun at all!

I know, I know – what about all those guys on TV who tell you how easy real estate investing is? What about all the millions they claim you can make in a snap? Think about it for a second. Exactly what business are those "gurus" in? Is it real estate investing – or are they selling real estate investing courses?

Back in the California gold rush days, who made the big, easy money – The miners out panning for gold or the scallywags who sold worthless claims to those poor suckers?

Don't get me wrong. There are GREAT real estate investing teachers out there – Pete Fortunato, Dyches Boddiford, John Schaub and John Adams, to name but a few. At the same time, for every great teacher, there must be about 100 scallywags who wouldn't know a real estate investing deal if it bit them on the bottom!

Here's how to find motivated sellers:

First, make sure everyone around knows that you buy houses.

Second, print some cheap business cards that say what you do and continually pass them out around town.

Third, get a cheap set of magnetic signs that say what you do and put them on both sides of your car.

Fourth – and this is the technique that scares most folks to death – stop at every house you see with a "For Sale" sign in the yard, pull in, knock on the door and ask Pete Fortunato's famous question: "Why are you selling a nice place like this?"

You probably think most homeowners will get angry, hurl insults at you and finish off by slamming the door in your face! This couldn't be further from the truth. Most sellers LOVE having someone – anyone – show an interest in buying their house.

Fact is, I've been knocking on sellers' doors for more than 15 years. In all that time, I can't remember anyone slamming a door in my face!

Fifth, call the folks who have a "For Rent" or "For Sale" ad in your local paper.

Sixth, link up with a top-notch realtor who understands how to work with real estate investors. Realtors, because of their FMLS system, are able to help you find motivated sellers.

Hope these six hints help to make you a better, more successful real estate investor.

"Bill and Kim Cook live in Adairsville, Georgia and have been successfully investing in real estate since 1995. Since 2003, they've written a weekly real estate investing newspaper column."

Short Sale Tips

2010-01-08T19:58:04Z

Today I am bringing you a video by Patrick Precourt. He is an active short sale investor from Connecticut. He is a pro and is willing to share great tips to make you successful.

Creative Real Estate Investing: Buying Property "Subject To"

2010-01-06T00:25:00Z

This video is from Patrick Riddle. He is a seasoned real estate investor from South Carolina. He previously wrote a guest post on Real Estate Investor Girl. The video is an excerpt from a 2 1/2 hr. teaching session. There are many opportunities to buy using the "Subject To" technique.

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How to Learn About Real Estate Investing

2010-01-04T19:46:41Z

Bill and Kim Cook are fellow real estate investors, and friends of mine through the North Metro Real Estate Investors Association. Their website is found at Bartow Real Estate. If you are interested in learning how to invest in real estate, a real estate investor association is the place to get your education. Also, at NMREIA, if you do not live in the area, you can take part in the online membership program. Please see the website for more information. Below is an article written by Bill Cook. -Real Estate Investor Girl-

How to Learn About Real Estate Investing

In our area, many of the homes have dropped in value down to their 1997 levels. Because of this huge plunge, the interest of many would-be real estate investors is beginning to be sparked. A lot of folks are seeing this depressed market as an incredible buying opportunity.

Last night, at a friend's Christmas party, I was surrounded by 10 people who had questions about buying investment real estate. Specifically, they wanted to know how to buy foreclosure and bank-owned properties.

First, is this a good time to buy real estate? It's ALWAYS a good time to buy real estate if you: 1) buy a good home in a good neighborhood; 2) get a great price with great terms; and 3) have a clear exit strategy.

For example, some time back, Kim and I bought a property in The Planters. The Planters is a wonderful subdivision in Cartersville, Georgia. Average property values range from $180,000 up to $250,000. Our purchase price was $14,298 (This is NOT a typo!) for a house that only needed a shave and a haircut (i.e. paint and carpet).

In any market, this is a great deal. And here's the thing: With all the real estate chaos out there, these diamond deals are there to be had – IF YOU ARE MEETING WITH SELLERS ON A REGULAR BASIS!

What are the best ways to learn about real estate investing? NEWSFLASH: It's NOT from one of those TV infomercials. The goal of those shows is to get you to part with your hard-earned money!

The best source of real-world real estate investing knowledge will come from the been-there-and-done-that investors working in your area. How do you find these folks? Their phone numbers are in the "We Buy Houses" ads in your local paper.

An even better place to meet these investors is at your local REIA (Real Estate Investor's Association). These associations are everywhere. Kim and I are members of North Metro REIA (NorthMetroREIA.com) and Georgia REIA (GaREIA.org).

The key is to spend time with the veteran investors in your area. They can tell you which creative deal-structuring techniques work and don't work, who the best teachers are, what to be mindful of, pitfalls to avoid, etc.

Think of it this way: If you wanted to know how to repair a car, where's the best place to learn? From a book, an infomercial or some old guy with skinned knuckles and an oil stained shirt who's been working on cars his entire life?

If there's not a REIA in your area, start one. It can be something really simple – get together with several other investors from your area on a regular basis. It doesn't matter what you know or don't know. What matters is that you spend time with other like-minded people!

Bill and Kim Cook live in Adairsville, Georgia and have been successfully investing in real estate since 1995. They write a weekly real estate investing newspaper column.

Interested in Real Estate Investing? Why not SUBSCRIBE to Real Estate Investor Girl?

Comment or question about this article? Please leave below.

Foreclosures - A Choose Your Own Ending Story

2010-01-02T22:35:00Z

Foreclosures - A Choose Your Own Ending Story
By Kathleen Couch

You keep struggling every month to pay the mortgage payment, and the other bills you have. Or you know in the near future it will not be possible to keep up. In the past the obvious solution was to refinance, and cash out some money to pay off bills, or sell the house, and take the profit.

Suddenly what has been taught to the homeowner to do in case of emergency, is no longer shining as the crisis solver. What makes it worse is in the time of easy buying, people were often put into homes they could not really afford, but were given low teaser rates, with the understanding the rates would go up drastically in the set amount of 3 to 5 years. The concept was, not to worry because you can always refinance, or sell the home before the rates went up.

The values of homes have dropped and homeowners cannot get refinanced to get out of their situation. Many try to sell the home for just enough for what they owe, but to no avail. The house is now overpriced for the market. Even if they would get a contract, there is a good chance it will not appraise for what the selling price is.

Which ending of the story will you choose?

ENDING ONE

The first choice is to start early in talking with the bank. By early, this mean to be aware of when the interest rate is going up on your mortgage, and make some plans for that. If only one person is working in the family, it might mean just a part time job would be needed to cover the increase mortgage costs. Another strategy is to see if you qualify, and the bank will cooperate with modifying your loan. There are a lot of different plans out there, and the best way is to talk with your bank to see if you qualify. If you are successful in bringing in extra income, and modifying your loan, this may be the end of your foreclosure story.

ENDING TWO

If you have talked with the bank, but cannot get a loan modification, or just feel staying in the house is too much to handle, you can sell to an investor. Sometimes you can sell by the investor taking over payments. This does not work well if your mortgage balance is high, and your interest payments are also high. Another option is to have an investor, or short sale negotiator to negotiate a short sale with the bank. A short sale means getting the bank to accept less than the amount owed to them. This is done by having a contract for sale presented to the bank at a discounted price, that can be documented to make sense. The short sale negotiator also needs authorization from the seller, and to collect certain financial documents from you. You need to have patience in this process, but a successful outcome will sell the home to settle the debt obligation. The homeowner will not receive any money from the sale, but also will not have a foreclosure on their record. The ethical short sale negotiator does not take any money from you. They will get their payment from commission, or from buying the home themselves, and re-selling. This may be the end of your foreclosure story if you so choose.

ENDING THREE

Maybe you have talked to the bank, but often you are just ignoring their calls. Your sticking your head in the sand, and hoping they will go away. At some point you decide you are just going to pack up and leave the house. The property is advertised as a notice of foreclosure, and it is auctioned. In some states there is a court hearing, and in others it is a non-judicial action, meaning it happens without court. When it is auctioned, the home is either purchased by someone who bids at the auction, or if it is not purchased by a third party, it goes back to the bank, and becomes the problem of the bank to sell. If you have not moved out, you will be evicted after the auction. With this scenario you will have a foreclosure on your credit record. This may be the end of your foreclosure story if you so choose.

If you would like to choose ENDING TWO for the end of your story, you can get the help you need by contacting one of the companies at the end of this article

Kathleen has formed a new company, KC Real Estate Solutions for the purpose of assisting homeowners, and selling the home at a discount. I may be contacted by going to www.KCRealEstateSolutions.com

Article Source: http://EzineArticles.com/?expert=Kathleen_Couch
http://EzineArticles.com/?Foreclosures---A-Choose-Your-Own-Ending-Story&id=2205230

Guide For Investing in Foreclosures

2010-01-02T00:00:00Z

Guide For Investing in Foreclosures
By Pauline Go

Many investors will tell you that investing in foreclosures is a good way to make money in real estate. While this can be true, it is not certain that you will make money. Nonetheless, if done correctly, you can make a tidy profit in the end.

Due to the slump in the housing market and the recession, many foreclosures are taking place. While it is horrible experience to go through, foreclosures are great opportunities for real estate investors.

Given the sheer number of foreclosures, lenders are trying to entice buyers with great deals and offers. The lenders have put heavy discounts on foreclosed properties because they want to recover their losses and move on. Therefore, based on how you want to use the property, you should be looking for the discounts. For example, if you want to renovate and sell the property for a profit, you should be looking for a 20 percent to 30 percent discount; if you want to rent the property out with an option to buy, then you should be eying a 10 percent to 20 percent discount; if you want to just rent out the property; you should be happy with a 5 percent to 10 percent discount.

There are three ways to buy a foreclosure. One is to negotiate with the homeowner before the lender actually forecloses the property. Second would be to buy it through the county foreclosure auction; and lastly you can buy a real estate owned property, also known as REO. A real estate owned property is one where the lender has bought it back in an auction. This is the easiest way of buying a foreclosure, but you may not get a huge discount for an REO property.

When you buy a property through a foreclosure auction, you do not get the opportunity to inspect the property properly. This can often cause a lot of problems as owners are known to damage and vandalize the property as a way of getting back at the lender. In addition, you will have to wait for the redemption period to get over before the title is transferred to your name.

On the other hand, when it comes to an REO property, you will be able to inspect the house thoroughly. In addition, usually these properties are the best in the foreclosure market. You can even use a normal mortgage to finance the purchase of the property.

If you are interested in investing in foreclosures, check out the local newspaper and contact your real estate agent to check out the Multiple Listing Services. You can also get information on foreclosures through the local government office or HUD office.

About Author:
Pauline is an online leading expert in finance industry. She also offers top quality tips like:
Real Estate And Tax, Personal Property Rights

Article Source: http://EzineArticles.com/?expert=Pauline_Go
http://EzineArticles.com/?Guide-For-Investing-in-Foreclosures&id=3439930

Making the Best Credit Choices When In Foreclosure

2010-01-01T02:10:00Z

"What options do you have when it is obvious that you will lose the house to foreclosure? The choice you choose can significantly affect your future. Many times the homeowner does not adequately research what options they have or understand the consequences of the option on their future life as ruled by their credit."

Making the Best Credit Choices When in Foreclosure
By Kathleen Couch

What options do you have when it is obvious that you will lose the house to foreclosure? The choice you choose can significantly affect your future. Many times the homeowner does not adequately research what options they have or understand the consequences of the option on their future life as ruled by their credit.

* Deed in lieu: Sometimes this is called by other names, such as "cash for keys". It is simply making an arrangement with the bank to give them the deed to the house instead of them taking it to the foreclosure auction. This is less costly to the bank than the foreclosure action. Sometimes the bank will give you cash for the deed. But only $500 to $1,000 is given. This has to be done early, usually before the "notice of default". In this market, the bank may not be as agreeable to accept a deed in lieu because they will still have the house as an REO. (Or, real estate owned) The credit consequence is the same as a foreclosure.

* Foreclosure: The foreclosure is when the property has been auctioned by the county where the deed is filed. In some states this is an auction on the courthouse steps, in others it is called the sheriff sale. That is when the property has been foreclosed upon. Everything such as notices, court hearings (in judicial states), and sending the file to the attorney are all during pre foreclosure, and are not the final foreclosure. The foreclosure can still be avoided. The credit consequences are long lasting.

* Bankruptcy: There are two types of bankruptcy. One type is a Chapter 13. With a Chapter 13 all of your debt is reorganized. A trustee of the court makes your payments to unsecured debtors who responded to the court. Sometimes the real estate is included in the payment plan, and sometimes it remains outside. Most of the time your outgoing payments in total are higher than they previously were. If you default on your payments with the trustee, you can be dismissed from the program. And if you default on payments on your mortgage you are in the same place your were. A chapter 13 stays on your credit for 7 years even if all obligations are paid in full before that.

The second type of bankruptcy is Chapter 7. With a Chapter 7 most unsecured debt is not paid back. Secured debt is usually not paid until the bankruptcy is over, but then the payments start again, with a higher payment because of accrued interest. This type of bankruptcy stays on your credit for 10 years.

Bankruptcy is not the panacea many people think it is, and laws are stricter on who qualifies for a bankruptcy. Be sure to research thoroughly before deciding on a bankruptcy do not just depend on the word of someone who is taking your money.

* Short Sale: A short sale can take place when the amount that is owed to the bank is higher than the current fair market value. Most lenders require the homeowner to be behind on the mortgage payments. Many lenders will suggest to the homeowner that they pursue a short sale to sell their home. Most times the homeowner will seek out a real estate agent. This seems to be the logical choice, but often real estate agents do not want to do the short sale negotiating, or do not know how. It is important that you get someone who knows how to deal with the banks. The negotiator gets the bank to accept a price lower than the amount owed. It can sometimes be complicated, and take a period of time anywhere between 1 month to a year. The time has a lot to do with the efficiency of the bank. A short sale should not cost you anything. The bank pays the commissions. A short sale only affects your credit for as long as the late payments are being added up. After the short sale, and your indebtedness is reduced, and other payments are on time, your credit improves.

The following chart shows the FHA ruling on how long before a person needs to wait before they can buy another property.

Foreclosure or Deed in Lieu Bankruptcy Short Sale

5 years before bank financing 5 years, but stays on credit for 7 to 10 years 2 years before bank financing

Here is a synopsis from a firm that measures the generic consumer's credit score for risk. This gives a very good argument for a short sale.

"Sarah Davies, vice president of Vantage Score, says restructuring plans on a mortgage, whether in the form of a forbearance, modification or short sale, have a relatively insignificant effect on the consumer's credit score. The credit score can increase because the total amount of debt owed is reduced, and the borrower becomes inherently more reliable. However a foreclosure for someone with good credit can decrease the score by 140 points. Bankruptcy for someone in good credit standing results in a reduction of 365 points, and a mark on the credit file for seven to 10 years."

Kathleen Couch is an expert short sale negotiator, and has started the company, KC Real Estate Solutions to serve the short sale needs of homeowners, and real estate agents. Kathleen and her team of professionals will do the negotiating with the bank, freeing the real estate agent to list and sell. With the experience of KC Real Estate Solutions you will find you can get higher commissions, and a quicker process. What is even better is there is no charge to the homeowner or agent. For more information, go to: http://www.KCRealEstateSolutions.com or http://www.KCRealEstateSolutions.info.

Article Source: http://EzineArticles.com/?expert=Kathleen_Couch
http://EzineArticles.com/?Making-the-Best-Credit-Choices-When-in-Foreclosure&id=3483550

How to Separate a Good Short Sale Opportunity From the Rest

2009-12-28T03:30:45Z

The following is a ezine article that gives good common sense advise on which short sales to deal with.

How to Separate a Good Short Sale Opportunity From the Rest
By Bob Massey

Not every troubled mortgage makes for a good Short Sale opportunity. There are things Investors must look for with regards to the homeowner, the house and the Lender to determine if a Short Sale is appropriate. Here are a few key factors.

The Home Owner:

Is the homeowner cooperative? It is much easier to get a homeowner who is eager to sell and willing to do anything to get out of a bad situation to actually fill out the Short Sale paperwork.

Watch out for homeowners who are full of pent up rage or are depressed. They might damage the property on their way out the door.

They must have a legitimate hardship. Most people don't stop paying the mortgage unless there is a genuine emergency. Job loss, divorce, health issues, market changes, and diminished retirement income are common hardships that Lenders accept. The homeowner must have exhausted every other option before deciding on a Short Sale in order for the Lender to seriously consider their case.

The House:

There is a balancing act between a property that has repairable problems that will help discount the price and serious issues that make the house a risk for any buyer. The property must have both sufficient curb appeal and low enough repair costs to convince an end-buyer to sign on the dotted line.

Look for properties in need of mostly cosmetic TLC and you'll have a property that can be discounted with the bank, but will look like an attractive bargain for an end-buyer with relatively little work. Typical cosmetic repairs that should cost $1000 or less include carpet and floor cleaning, cleaning counters and cupboards, and painting the inside walls, the front of the house and the front door.

With luxury homes and in particularly competitive markets, a home stager may be a good investment. Stagers bring in rental furniture and accessories to give the home a lived-in look with designer appeal. Staged homes tend to sell faster and at a higher price.

In markets where the prices have not dropped as much, ugly houses make great Short Sale opportunities because the Lenders will not want to spend all the time and money it takes getting a truly ugly house to sell. In more competitive markets, however, it might be harder to sell an ugly house if there is a huge inventory of pretty houses that are already at affordable prices.

The Lender:

Although more and more Lenders are favoring Short Sales to lengthy and expensive foreclosure proceedings, this is not universally the case. With subprime mortgages that have been sliced and diced into packages owned by many investors it may be tough for the loan servicing agent to find all parties necessary to get approval for a Short Sale. Large second mortgages usually make for excellent Short Sale prospects.

Conditions change rapidly in the banking industry, so a Lender who has been stubborn about doing Short Sales one month may be more agreeable the next. Lenders may be more willing to approve a Short Sale if the market for REOs is saturated and prospects are better with a Short Sale. It's all about the expected return for the mortgage company. Your job is to arm yourself or your negotiator with every bit of information you have to convince the bank that a Short Sale is their best option.

There are tons of ways to make money in real estate, but all of them are useless unless you have a steady flow of motivated sellers and qualified buyers coming into your business. When you have a solid pipeline of prospects, you pick and choose the best of the best and finally take control of your financial future. Find out the most effective ways to get your real estate investing business roaring and turn it into an absolute cash engine. Sign up right now to get a FREE copy of Bob Massey's new book Cash Infusion Now: 11 Marketing Secrets to Massive Deal Flow in 2010. Go to http://www.REWealthCoach.com

Article Source: http://EzineArticles.com/?expert=Bob_Massey
http://EzineArticles.com/?How-to-Separate-a-Good-Short-Sale-Opportunity-From-the-Rest&id=3449576

How to Sell Your House Before the Tax Credit Deadline...Part II

2009-11-12T16:20:00Z

The tax credit has been extended until March 2010. There has also been added a credit for some other buyers. The information here can be adapted to many different situations.

Owner financing is a method of selling your home that will get a very favorable response in this market. Because the banks have made their lending criteria stiffer, and do not have lending funds available, loans are harder to get. Owner financing should be looked at as a viable solution for selling now, and in the future.

Qualifying the Buyer
You should use qualifying for your buyer, just as you would for a renter. Many times a person who had a short sale, or foreclosure one their previous residence can still be a good risk. This depends on their present job situation, and whether the previous mortgage adjusted to an extremely high interest rate. There are other factors to consider, but these are a few that can change the affordability to the prospective buyer.
Use a tenant qualifying agency, or get a current credit report from the buyer. A tenant qualifying agency will also give you the option to search criminal records.

Selling if You Are Behind on Payments

If you are behind on payments, this should be fully disclosed to the buyer. If the payments are not so far behind that catching them up is feasible, that should be done. That amount would be considered the down payment, and the payments caught up with the bank. Then the property could be sold "subject to". This is simply taking over the payments on the loans in place, and putting the deed in the new owner's name. If necessary, a trusted third party could be involved to insure that the payments are made, or quick notice if they are not.

Short Selling the Second
At times, in order for the purchase price to be in line with today's values, it may be necessary to short sale the second only. Then take over the payments on the first.

Homeowner Remaining Responsible for the Second
When a second mortgage is taken out on a property after the original purchase it is called a home equity loan, or a retail credit purchase. The loan is secured by the home, but is not necessarily spent on the home. Second mortgagors will often release the second for an agreed sum, but do not release the homeowner to pay all or some of the amount back over time. They will use a promissory note, or a judgment against the borrower to get payment. In a situation of selling the home,and avoiding damage to your credit you should consider selling the home by "subject to", but remain responsible for the amount of the second mortgage.

CLOSING
The closing should be done with a real estate closing attorney who understands different ways of selling. Shop around for one. Attorneys may be up to date on ways of selling, or they may not be. Some will only do things like they are used to.

Okay, now you have some hope to be able to move on with your life, without having the house you want to sell "hanging over your head." Oh, and be sure to be ready to answer those phone calls once you put the ad out that you are offering owner financing.

I am giving any affiliate profits during November and December to the mission project, My Heart For Honduras. Please see the website for further information.

Please leave your comments or questions below.

The Housing Credit Extension and Improvement

2009-11-06T18:56:00Z

The following is a break down of the housing credit extension and the new provision for some who are buying a principal residence after already owning one. This has been reported by Chris McLaughlin in his newsletter. Mr. McLaughlin is an real estate attorney in Florida, and has developed the "Short Sales Riches" course along with Nathan Jurewicz. I have taken the course and would highly recommend it. I am also an affiliate for "Shot Sales Riches".

It's here! The U.S. House of Representatives has just voted (403-12) to extend and expand the homebuyer tax credit, and it’s on its way to the President for his signature...he's expected to sign it today. Not only does it extend the tax credit, but it expands it. The items carried over until April 30, 2010 are: Amount of Credit ($8000 or $4000 married, filing separate) and Definition for Eligibility (May not have had an interest in a principal residence for 3 years prior to purchase). The items added to the credit, from December 1 to April 30 are, for current homeowners: Amount of Credit ($6500 or $3250 married, filing separate); Effective Date (Date of Enactment); Definition for Eligibility (Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years); Termination of Credit (Purchases after April 30, 2010); Binding Contract Rule (So long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close); Income Limits ($125,000 – single $225,000 – married Additional $20,000 phase out); Limitation on Cost of Purchased Home ($800,000 Effective Date of Enactment); Purchase by a Dependent (Ineligible Effective Date of Enactment); Antifraud Rule (Purchaser must attach documentation of purchase to tax return).

Update: H.R. 3548, the Worker, Homeownership and Business Assistance Act of 2009, has been signed today by President Obama.

Giving to My Heart For Honduras

2009-11-02T00:56:00Z

Okay...okay...it's not Christmas yet! But, it's not too early for Christmas shopping. This year, just as last year, I am donating all proceeds from purchases through the affiliates on this site to a mission project in Honduras. This means all you have to do is click on one of the ads to the right, and do your Christmas shopping for any product on their site. When you purchase a product the affiliate commission paid for that will be donated to the Honduras mission.

To help you better understand the need with the Honduras River people, please watch this video. The video is of another group who has worked in the same area.

How to Sell Your House Before the Tax Credit Deadline...Part I

2009-10-22T23:49:00Z

The inspiration of this post was selling your house before the 2009 tax credit of $8,000, expires on November 30th. However using some of these same techniques could be used at any time.

The deadline for the buyers to get a house under contract, and get the financing through, and closed, is now. Many buyers would not be able to get their financing ready in time to close by the 30th of Nov. Although many think this will be renewed, we do not know until the government makes the decision. Here are some ways to sell the house.

Sell by Owner Financing

Pricing should be just above market value. Owner financing gives an extra value to the home.
If that price is above what you owe, a wrap mortgage is created. The original loan stays in place, and the additional is added to it. The payment is figured on all of it by choosing an interest rate that pays the set mortgage amount, and payment on the additional amount. The interest rate can be higher than the going interest rate. You can find a mortgage calculator by using a search engine.
Money for the down payment can be in one sum from the buyers funds. Or, a promissory note can be drawn up with using the tax credit as the source of repayment. Or use a combination of both.
Use an "agreement for deed" contract, which is called "land contract" in some areas.
The actual deed is usually not transferred until the loan is paid off. Other exceptions can be put in the contract, such as a 3 year call on the loan, and that structural changes cannot be made without written approval.

Part 2 will discuss various situations the homeowner may be facing, and how they can sell by owner financing.

I will love to hear your comments or questions! Please leave them below.

Let other people know!

Great Bargain...Great Price!

2009-10-13T03:10:00Z

CALL ANNEMARIE JONES 404-895-7272 Progressive Group

The Downfall: A Real Estate Parody

2009-10-03T16:18:00Z

If you enjoyed this parody comparing the downfall of Hitler to the downfall of the real estate market, why not SUBSCRIBE to Real Estate Investor Girl?
Comments are welcome!
Let others know about this video. Let these social sites know about it.

http://www.twitter.com/kathcouch

Housewars

2009-09-29T20:44:00Z

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