eMortgage Forum Blog

You have the “for sale by owner” sign on your lawn for all to see you are selling your home.  The “for sale by owner” sign cannot sell your home without help.  Those who have never seen the interior will want more information about the home.  The flyers will be hanging with your “for sale by owner” sign in the waterproof envelope, you may attach them to mailbox in your neighborhood or you may even go to the nearest neighborhood grocery store to place them under the windshield wipers.

 

The flyers will not only make people aware the home is for sale, but it is also a fact sheet.  It will contain information regarding the features of the home, such as the number of rooms, home warranty, security alarms, pool, or spa etc.  You will also tell them how the home is constructed.  Is it a wood frame home or a ranch-style brick home?  You will also include the size of home the number of square feet, single level or 2-story.  Does the home have a basement and/or an attic?  The asking price should be included along with pertinent telephone numbers where you can be reached, the address of the house, and the web address to see your Internet photo tour.

 

If you live on an out of the way street, you might want to consider directional signs to help drivers get to your house.  You can get these directional signs at Home Depot or Lowe’s for around a dollar a piece or less.  Some people will pick a neighborhood they would like to live in and start driving to spot any homes for sale in that area.

 

Most people who can afford to buy your house will own a home computer and have an Internet service.  It only makes sense to utilize the Internet in assisting in finding a buyer for your home.  There are places on the Internet where you can find help in creating a web page with photos of your home for prospective buyers to see.  Some of the web sites have a free publication with listings of homes for sale.

 

You will need 10 good photos of your home inside and out.  These photos should show off the best features of your home.  A host for the web page and you will want to create a link to maps on how to get the location of your home.   With the help of some of the “For Sale By Owner” web sites.  Building your own web site to sell your home will be a snap.

 

When advertising in the local newspaper, include your web address and of course include it on your flyer.  Neighbors, or people who live and work in the area are usually the same people who purchase homes in the same area.  This is the reason an open house works so well.  Make sure to check into how to host your own open house for your home.

If you’re one that watches home renovation television shows and reads home and garden magazines, you may have recently had the idea to renovate your home.  You might think that there’s no harm in renovating your home.  As long as it makes the home look better then it adds to the value of your home.  If ever you have to resale the home for whatever reason, these renovations will allow you to sell your home for a much higher price than had you not completed the renovations.  While this might be true of some home improvement projects, it isn’t true for all of them.

 

Home Additions

At some point in time, many people consider adding on an extra bedroom to their home.  This is especially true of families that are expanding.  As there are more people taking up room in the home, the need for extra space increases.  Before you start purchasing the lumber and nails your house, you should first pull out the floor plans for the home.  Talk with a contractor about how to best fit the new additions to your existing floor plan.  A poor design can be detrimental to your ability to resale your home.

 

Swimming Pools

You may think it’s a good idea to add a swimming pool to your backyard, but the next people to purchase your house may not.  Buyers are wary of houses with swimming pools because of the increased insurance costs and amount of work that’s involved with maintaining the pool.  Families with small children also shy away from swimming pools because of the risks involved with the pool.  Before you add a swimming pool to your yard think long and hard about what it will do to the resale ability of your home.  While the pool might add value to your home in the Southwest part of the country, it can mean a lost sale in other areas.

 

Trendy Renovations

You should stay away from renovations that are based on trends.  It’s very hard to tell when trends are going to go out of style.  You might think a trend is going to stay around for awhile, but Murphy’s Law says the trend goes out of style just when you decide you put your house up for sale.  Rather than changing finishes based on a trend, you should purchase furniture or other fixtures that follow the trend.  In doing this, you preserve your home and stay away from trends that could discourage future buyers.

 

Before you make any renovation to your home, you should consider what that renovation will to do the resale factor of your home.  Even though you might like the renovation, future buyers might not.  Of course, you might think that you will never have to sale your home, but you never know what life is going to bring.  If you want to make the resale process easy for yourself in the future, stay away from renovations that will discourage buyers from purchasing your home.  Instead, do those renovations that are sure to add value to your home.

Late night television and radio advertisers want you to think that real estate investment is a gold mine waiting to be discovered.  In some ways, these advertisers are correct there is a lot of wealth in real estate investments.  What these advertisers fail to mention, however, are the risks that go along with investing in real estate.  It is helpful to hear both sides of the story before you make a decision about going into real estate investment.

 

Real estate investment requires a serious time commitment.  There are so many different aspects to the business of real estate that it becomes difficult, and sometimes impossible, to give only a small part of your attention to your investment endeavors.   Before making an investment, it is important to understand all the factors that play into your decision.  This includes capital appreciation, tax benefits, cash flow, equity paydown, and those are just a few.  Each element of real estate investment requires a serious amount of time.  Shortcuts can be detrimental.

 

There aren’t many people who realize that real estate investment is a business and carries along with it all of the risks that any other business would have.  Similar to the time management aspect of real estate investment, the business aspect is something that also needs to be taken into consideration.  If you do not understand some of the basics of how businesses work, you could find yourself facing a difficult situation with no resources to assist you.

 

Negative cash flow is a possibility.  Not everyone is so lucky as to get a cash cow with every property purchased.  It is normal for investors to experience a period of negative cash flow at some point during the real estate investment process.  Whenever you a property begins to cost you more than it is profiting you it is time to assess the situation.  Careful analysis is needed to make sure you aren’t divesting a property that could end up benefiting you later on.

 

There is a lot to know when it comes to real estate investments.  Much of this knowledge will come as you gain more experience with making transactions.  The first time you encounter an unfamiliar situation, you might be confused as to what you should do.  Often, individuals in real estate investing do not have a manager or superior that they can go to for advice in a difficult situation.  This leaves the possibility that you could make a wrong decision.  Mistakes are unavoidable.  The important thing is that you don’t make mistakes that could end up costing tens or hundreds of thousands of dollars.

 

As a real estate investor, you need to read and inspect every document and piece of property thoroughly.  You can’t afford to let even the minutest mistake slip through the cracks.  Never sign anything you don’t understand and never purchase a property that needs significant repairs.  These are the mistakes that can end up costing you a lot in the long run.

 

Is real estate investment a lucrative business? Yes, it is.  Are there risks associated with real estate investing? Yes, there are.  Ignorance may be bliss in many situations, but not when it comes to something as complex as real estate.  Knowing the risks involved with real estate investing you to set yourself up for success.

Economists speculate that the real estate bubble is busting all over the United States.  While it is true that there are some places where there is no more profit to be made, Raleigh-Durham, North Carolina is not one of those places.  Investors have been playing in many other US coastal cities, but they have been sleeping on the Raleigh-Durham area. 

 

Currently there is a period of growth occurring in the Raleigh-Durham real estate market.  In recent years, there has been a steady population growth in the area.  An increased number of people are moving to the area.  Whenever there is an increase on the population in an area, there is a subsequent increase in the real estate demand in that area.  Where there is demand, there is a need for supply.

 

The Raleigh-Durham real estate market currently has more buyers than sellers.  There is a need for real estate, but there is not a supply for this need.  This creates a huge opportunity for real estate investors.  There are a few investors that are working with Raleigh-Durham real estate.  These investors have been experiencing much success in recent years.  Single properties have netted multiple offers usually at or even above the asking price.  Because of the lack of supply, investors are making significant amounts of profits from their investments in Raleigh-Durham real estate.

 

The average property in the Raleigh-Durham real estate market spends about sixty-two days on the market.  Compared with some other markets, this period is relatively high.  The good news is that the amount of time a property stays on the market is declining.  Since there is a high demand for property, the right priced real estate is sold within only a few weeks of being placed on the market. 

 

Since the amount of time is dropping and the demand for Raleigh-Durham real estate is fairly high, there is an excellent opportunity for real estate investors to receive great profit in a short period of time.  Investors have a comfortable amount of time to capitalize on the Raleigh-Durham real estate market since there is currently a period of growth.  However, the best strategy is to make profits early before the area becomes saturated with investors.

 

There are several different strategies that investors can use to invest in Raleigh-Durham real estate.  Right now the Raleigh-Durham real estate markets have all the elements that are necessary for profits to be made from investments.  Flipping is perhaps the best strategy to use because it allows investors to make a profits within a short amount of time with little outlay of cash. 

 

In many cases, investors can improve their profits by increasing the market value of property.  To do this, investors can make enhancements to the property.  Doing some simple enhancements can increase the value of the property by at least a few thousand dollars.  The increase in market value allows the investor to subsequently increase the selling price of the property.

 

There are several different investment strategies that investors can use for making a profit in Raleigh-Durham real estate.

With mortgage rates on the rise, foreclosure rates are not far behind.  It is highly unfortunate that the rising mortgage rates make mortgage payments difficult for many people.  However, this creates an opportunity both for the mortgager and real estate investors.  By taking advantage of a pre-foreclosure sale, the mortgager can save his or her credit by allowing an investor to take over the mortgage.  Even if there is some situation in which the mortgager does not wish to own the house any longer, the investor still benefits by paying price lower than the appraisal rate.

 

A pre-foreclosure sale is made during the period of time after the mortgager has defaulted on the payments but before the foreclosure process has begun.  Although the lender can technically proceed with foreclosure during this default period, most lenders try to give the mortgager a chance to get up to date with their payments.  During this period of time is when investors can work out some kind of deal with the homeowner to make a pre-foreclosure sale.

 

There are two major strategies that investors can use in a pre-foreclosure sale situation.  In one situation, the investor pays the balance of the mortgage.  The investor then offers the homeowner the opportunity to pay him instead of the original lender.  This gives the homeowner the chance to lower their monthly payments and remain in their home.

 

The other strategy that investors use is to purchase the property via pre-foreclosure sale to resale the property for a profit.  In this situation, the homeowner relinquishes ownership of the home and turns it over to the investor.  At this point, the investor completely owns the property and retains such rights as a homeowner.

 

When investors use the latter strategy, there is a great opportunity for profit.  In some cases, the property can be purchased well below the appraisal value giving the investor reasonable limits for making a profit.  Given the property does not need a great deal of repairs, the investor can make a substantial return on the investment made.

 

Pre-foreclosure sale creates a win for all parties involved.  The homeowner receives relief from the mortgage payments, the lender receives the balance of the mortgage, and the investor has a strong profit opportunity.

 

With all the benefits involved with pre-foreclosure sale, you might wonder why more people don’t use this route for investing in real estate.  The process can be a little awkward.  The foreclosure process will be a sticky situation for the homeowner.  In some cases, the homeowner might be in denial about the situation and might also be unwilling to make any negotiations.

 

Since foreclosure knowledge is public record, there may be multiple investors working to purchase a single property.  Each of these investors will be putting various amounts of pressure on the homeowner to sell the property.  The competition makes it difficult for each investor that seeks to purchase the property.

 

Investors that seek to make a pre-foreclosure sale should conduct his own research and contact the homeowner independently.  Being courteous in your approach with the homeowner will set yourself up for success with the pre-foreclosure sale.

If you are selling your home on your own, also known as “For Sale By Owner or FSBO”, you are the agent for your home.  Here are tips for you to make the sale of your home a success.  Your home must be ready for the critical eyes of the potential homebuyer.  You will want to take a look at your home in a new light.  You may ignore the chipped paint and the crooked screens, but to a potential homebuyer it is a warning to “stay away from this house.”

 

As the seller in the FSBO home, you will have the opportunity to meet every potential buyer.  You will be able to notice first hand the reaction of the potential buyers when they see the outside your home for the first time.  Since the yard and the entry way is the first things the potential buyer will see, you will want the lawn and entry way of your home to look its best.

 

In order for your FSBO home to create a great first impression, let’s start with the lawn and the yard.  You will need to mow or have your lawn mowed once a week for it to look its best during a showing.  You will also want the leaves raked and the sidewalk swept.  Make sure to remove all the fallen branches and limbs from the trees and shrubs from the yard.

 

Your “For Sale By Owner” home will look great with just a little landscaping.  If you don’t have flowers, plant some or place some potted flowers around to give your landscape some color.  You need to repair any problems with the fence and touch it up with a fresh coat of paint or stain, if needed.  You will want to do the same with the mailbox by replacing it or painting it.

 

Put away all lawn equipment and tools, as well as toys or any other clutter in your yard.  Store them neatly.  If you have a shed, it needs to have everything neatly put away.  If you have a large dog, make arrangements for it to stay with a neighbor while the house is being shown.

 

The front entrance to your “For Sale By Owner” home is just as important as the rest of the home.  In fact it is one of the keys to the first impression of your home.  Take a good look at your front door, if it needs painting, cleaning or staining, make sure it gets done before the house showing.  Remove any old screens if they don’t fit or they are slightly damaged in some way.  You can add a nice welcome mat and a potted plant if you have room on your entrance steps.  Make sure the porch light or any other outdoor lights along with the doorbell are in working order.

 

Make sure the number of your house is visible from the street especially at dusk and early evening.  Replace any missing numbers.

 

You may ignore the shutter needing a coat of paint, the bent gutters or the loose shingles on the roof because they don’t leak, but these are signs to a homebuyer to avoid your home as a serious purchase prospect.  Make sure to include washing all the windows.  If your home has siding, make sure it is clean and in good repair.  Do all the necessary repairs to make your “For Sale By Owner” home look more inviting.

The outside of the “For Sale By Owner” home is the “first impression” the buyer will have of this home, but the inside of the home is the lasting impression of the home.  Before you put the “For Sale By Owner” sign on your front lawn, you will need to go through your home to get rid of the clutter.  Clutter and dark colors tend to turn off most buyers.  This means you will need to go through the clutter and weed out some of the things you can’t or don’t use.  You may want to have a garage sale or make a donation to your nearest Salvation Army or Goodwill location.  If you still have too much clutter, you will want to look into renting a storage space.  If you can’t see the baseboards in a room, you might still have too much clutter.

 

Light colored walls with bright lights make your rooms look larger.  If you have any darkly painted walls, you may want to consider painting with a white or off-white paint.  Increase the number of watts of the light bulbs in your home.

 

If you have carpet, you might want to replace any carpet pungent or overly stained.  If replacing the carpet is not necessary, give a good shampooing.  Make sure to polish and clean all windows and mirrors.

 

Give your stove and oven a thorough cleaning.  Clean the oven and the drip pans under each burner.  Make sure to remove all grease and dirt build-up.  Polish the shine on the outside of the stove and oven.  Clean your refrigerator and any other appliances including the dishwasher.

 

Clean all the window treatments, including the blinds, and clean all the fingerprints around the doorknobs and light switches.  Make sure to clean the wall around your wastebaskets, especially the one in the kitchen.

 

Clean all your kitchen countertops and clear them off as much as possible.  Reduce the number of items in your cabinets not only in the kitchen, but in all the cabinets in your house.

 

Arrange your clothes in your closets to where they hang neatly and not over crowded and remove some of the items off the shelves and on the floor leaving them looking spacious and clear.  Make sure to clean and organize your garage, basement and attic space.

 

If the FSBO home has any leaks, rattles, or squeaks, this gives the impression the home needs a lot of work done on it, so do everything you can to eliminate them.  If your stairs, steps or banister is loose, tighten them.  Repair any water leaks and eliminate any signs of water damage, such as painting over the water stains or replace any damaged wallpaper.  You may want to clean and replace all the caulking in your home.  Make sure to repair any doors or windows so they will open correctly.  Tighten any loose nuts, screws or bolts, especially on the light switches, doorknobs, and cabinet hinges.  Any loose molding needs to be tacked down.

 

Don’t forget to check for odors.  If need be, get a neighbor or friend to help you.  They will be able to smell odors you have become accustom to.  You want you FSBO home to look and smell as fresh, clean and as new as possible. 

In recent years, the Pensacola-Gulf Breeze area in Florida has been experiencing significant economic and job growth.  These factors are two that have the most impact on the real estate market in an area.  Since the Pensacola-Gulf Breeze real estate market is characterized by strong economic growth and job growth as well, the market is one that has a strong housing market. 

 

While the job market in the area increases, the demand for housing increases subsequently.  This area is one that has not been affected by inflation in home prices.  Perhaps this is in part due to the fact that many people are not aware of all that the Pensacola-Gulf Breeze real estate market has to offer. 

 

While average home prices in other parts of the country continue to rise well above the national average, the average price of Pensacola-Gulf Breeze real estate is around $135,000.  This price is affordable for most incomes in the area.  The area consists of many first time buyers that are largely buying condominiums and townshomes.

 

It is very likely that the Pensacola-Gulf Breeze real estate market will continue to grow in the near future.  This creates a great opportunity for real estate investors that have an interest in that area.  It is in investors’ best interest to take advantage of the opportunity in Pensacola-Gulf Breeze real estate sooner rather than later.

 

There are many other factors that make the Pensacola-Gulf Breeze real estate market prime for investors right now.  Average turnaround for Pensacola-Gulf Breeze real estate is anywhere from zero and thirty days.  Investors are selling their properties in less than a month’s time.  Sellers are receiving multiple offers for a single property.  Many of these offers are at or within a few percentages of their asking price.  Investors that have the capital to spend on Pensacola-Gulf Breeze real estate can make a substantial amount of profit in only a few months.

 

The greatest chance of making a profit is when growth in the market first begins.  Since growing markets present the best opportunity for making a profit, the best thing for an investor to do is take advantage of Pensacola-Gulf Breeze real estate as early as possible.  Those investors that take advantage of the real estate opportunity when growth first begins receive a higher amount of profit than those who wait longer to capitalize on the market.

 

There are some investors that already have property in the Pensacola-Gulf Breeze real estate market.  The best strategy for these investors is to hold the property for a few months while the market continues to mature.  Selling property after the market grows will give investors a higher return than selling early.

 

Since the Pensacola-Gulf Breeze real estate market is still growing, it gives investors with varying strategies a chance to make a profit.  Since the market is still relatively inexpensive and is still growing it presents a great opportunity for investors to make money.  These factors are two of the most important for investors to make a profit in the real estate market.

As a “for sale by owner” seller you probably expected to find a good buyer paying with cash.  There are a number of financial institutions available just for that purpose.  Sometimes it works out that way and sometimes it doesn’t.  However, certain homeowners could be missing out on a beneficial opportunity.  If you are a “for sale by owner” seller who has a large amount of equity built up in the home, you would be able to take advantage of this beneficial opportunity by owner financing the sale of your home.

 

There are two major benefits to owner financing the “for sale by owner” home you are selling and of course there is a certain amount of risk involved, but the benefits might out weigh the risks in your situation.  A buyer might be willing to pay a higher price for your home at a higher interest rate if you are willing to help him or her by owner financing the home.  This people may for some reason not be credit worth to get a conventional loan.  Herein lies the risk; there is the possibility they may default on the loan.

 

Seller with a large equity can get a higher interest rate by offering a mortgage to the buyer than the interest the owner would receive if the money were placed in a bank account.  This method of investing their money appeals to some of the older seller because they may be thinking of their retirement days not far ahead.  Unfortunately, there are those who are vulnerable when the buyer defaults on his payments.

 

When offer owner financing to a buyer, the seller will be giving the buyer either a first mortgage or a second mortgage.  The second mortgage being a greater risk it comes with a higher interest rate than the first mortgage.  The challenges facing the seller would be to qualify the buyer to ensure their income is large enough to make the payments.  Obtaining the document to create the mortgage for the buyer, you will want everything documented; as proof of the transaction details should you ever need them.  Protecting you from the loss of all or part of the equity invested to create this financing, in the event buyer defaults on the loan.

 

Qualifying the buyer might be easier than you might think.  The buyer can easily get his credit scores from the credit reporting agencies and show them to you.  Drawing up the documents needed to create this mortgage can be accomplished with the assistance of some online services.  It is recommended you have an attorney look over the document to ensure you are protected and everything is legal and above board.

 

It is common knowledge some buyers will default on their payments.  Foreclosure would be the next plausible step, but it can be difficult and a costly procedure.  This is one of the reason owners shy away from financing their own homes.

 

Knowing the risks involved with owner financing it is still a lucrative way to invest the equity of your home.

The buyer has made an offer for your home and has written up an offer to purchase agreement.  If you have not looked at a real estate contract, it might be a good idea for you to study one.  By studying a blank real estate contract it will give you some insight and will make the buyer’s offer easier to understand.  You will be able to recognize terms being used by the buyer, which are not standard.

 

If the buyer has made any additions in the “special clause” box, which is located above the signature, you will want to read and understand the non-standard demands. The buyer may ask you to cover a portion of the closing cost, which you are not normally responsible for.  Or the buyer may demand you move by a specific date.

 

There are some demands you might want to watch out for.  The purchase is dependent on the sale of the buyer’s home. The buyer wants an excessive amount of time to obtain financing to purchase your home.  The buyer has a very low dollar amount as earnest money.  Normally the dollar amount in earnest money is $500 to $2000.  A penalty is enforced if the seller cannot move by the buyer’s specified date.  The buyer requires the seller to pay the buyer’s mortgage costs.  These items could incur problems such as a delay in the sale of your home and additional costs to you.

 

Make sure the buyer has been pre-approved or pre-qualified for a mortgage loan large enough to purchase your home.  If the buyer is making the offer prior to either one of these, do not sign the offer.

 

After you have looked over very carefully the buyer’s offer, there are several options available to you.  One is to accept the offer as is.  This can be accomplished by simply signing the offer agreement making it a sales contract.  Some states require you sign a separate agreement, which is called a “binder”.

 

Another option would be to make a counter offer.  Make notes on the sales agreement and cross out unacceptable conditions on the offer.  You could just fill out your own sales agreement enabling you to stipulate the conditions you want in place.

 

The last option is to reject the offer all together.

 

You will want to keep in mind if the offered price is lower than you had in mind, look closely at the offer.  Are there conditions, which will compensate the lower price?

 

Some seller will not sign an offer agreement until they have received a minimum of $500 earnest money, however if you have judged the buyer to be a serious buyer, you can do without the earnest money.  The earnest money check should be made out to you, but held by a third party such as your real estate attorney or the buyer’s real estate agent).  This check is non-refundable should the buyer default on the contract.

 

Even though you have signed an offer, you can accept a backup offer.  The buyer with the backup offer must be aware of the current pending contract on the house with the first buyer.