Tips to Follow When Buying New Construction Real Estate

New home communities offer beautiful homes, open-floor plans, new appliances, and much more. Plus, new homes often offer easy purchasing through an on-site sales agent. The problem is that they can also tally up to significant losses. To buy your new construction home the smart way, follow these tips:

1. Use a Realtor Who Has New Home Sales Experience

New homebuilders will sometimes put pressure on you to use an on-site agent plus a pre-approved lender, insurer and title company. It’s a mistake not to get your own realtor. A realtor can protect your interests and can ensure that all costs and interest rates are within industry standards. Realtors with new home experience know the homebuilder community and this can ensure that homebuilders are very cooperative – after all, they don’t want to tarnish their reputation.

2. Don’t Sign ANYTHING Until You’ve Negotiated Every Detail

Always assume that nothing is agreed upon until it is in writing. Once it’s in writing, don’t assume that it can be changed or negotiated. Don’t fall for the “write up the contract so that no one else can get your house” ploy. Instead, make sure that the contract you sign has everything you negotiated in writing before you sign.

3. GET A HOME INSPECTION!!!

Many people assume that home inspections are for older homes that may have asbestos, structural problems, and other liabilities. This is not true! While many new constructions come with full warranties, those warranties usually only last 12 months and many problems surface only after that first year. An independent, professional inspector can help you avoid very costly repairs a few years down the line.

4. Don’t Use Their Lender

Many builders who build entire communities are now publicly traded corporations. These companies make a lot of money by financing – not just building and selling – homes. As a result, many builders will offer you enormous incentives or pressure you to use their lenders. The problem is that the builder’s lender will usually have higher interest rates and higher closing costs than a traditional lender. In most cases, you can have the stipulations removed so that you can choose your own lender and enjoy some incentives. After all, the builder will not make any money if you refuse to buy a home. If a builder insists that you use their lender, walk away and find another builder. It makes no sense to pay many thousands of dollars
extra.

5. Research the Builder

Most builders are responsible and take care to protect their built neighborhoods. Still, make sure that you research your builder. Specifically, make sure that your builder has a reputation for good quality homes. Make sure that the company limits investor purchases – these can result in rental properties that depreciate neighborhood value. Also, determine whether the builder will build equal or greater value homes in the surrounding area. If they do not, the new homes will instantly devalue.

6. Choose An Appraiser

Lenders require you have an appraisal anyway, so you may as well research a good appraiser yourself. Ask for a copy of the appraiser’s findings as well – it can contain information that will give you better insight into what you are buying.

7. Research City Plans

New neighborhoods are often built on the outskirts of town, where land is available at a lower cost. Be sure to ask your realtor or do your own research into what the city has in mind for the area. Research roads, zoning, public transportation, parks, and schools – all will determine the future value of your new home.

New homes are very appealing to buyers. If they’re appealing to you, be sure to hire professionals and do your research so that your new home remains a positive experience for years to come!

What to Examine Before Buying Real Estate Foreclosure Properties

Are you interested in buying real estate foreclosure properties with the hopes of turning them into investment properties and making money with them? If you are, you need to be familiar with real estate foreclosure properties. Not only do you need to know what they are, but you also need to know the best ways to go about finding and buying them.

When it comes to finding real estate foreclosure properties, there a number of different approaches that you can take. For instance, you can use the internet. There are a number of online real estate foreclosure listing services that you can use to browse through or search for foreclosures. You can also find real estate foreclosure properties by keeping an eye on your local newspapers or by examining the public records at local county clerk offices.

Now that you exactly how you can go about finding real estate foreclosure properties, your focus should then switch to buying the properties. Before buying any real estate foreclosure properties, you are advised to examine the properties in question, as much as possible. There are some instances where you may be required to make a purchase decision without actually seeing the property in question, but, with an address, you should at least be able to get a look at the property in question. Look for any signs that may indicate that repairs or updates may need to be made. Any additional money that you will have to invest in a real estate foreclosure property is important, as it should impact how much you are willing to pay for the property.

In addition to the real estate foreclosure property in question, you are also advised to examine its surroundings. For instance, is the real estate foreclosure property located in a good neighborhood? Are there many fun, but safe activities and attractions nearby? If there is, you have a better chance of turning a profit. Real estate investment properties are those that are later sold for a profit or rented out. You need to not only make sure that the real estate foreclosure you are interested in is marketable, but you also need to make sure that the area in which the foreclosure property is as well.

Of course, you will also want to look for real estate foreclosure properties that are being sold at great prices. Many real estate foreclosure properties are sold at prices which are less than the fair market value. This is what makes real estate foreclosure proprieties highly sought after, particularly with real estate investors. As stated above, when examining the cost of a real estate foreclosure or the bidding price if it is being auctioned off, you need to take any possible updates or repairs into consideration. This is important because you will want to invest in good real estate foreclosure properties, but you also want to try and limit your investments, if you can do so. The less you invest, the easier it is for you to make a profit.

The above mentioned points are just a few of the many that you will want to keep in mind, when looking to find and buy real estate foreclosure properties. For additional information, you may want to think about taking a real estate investing course, particularly one that places a large focus on real estate foreclosure properties

The Recipe for Real Estate Success... Finding Motivated Sellers

In real estate there is a saying that you don't make your money when you sell, you make your money when you buy. The name of the game is finding amazing deals and then keeping them for the long term or turning around and flipping for a handsome profit. Of course, if great deals were that easy to find, everybody would be doing it. The forces of supply and demand would inflate the price of properties to the point that there would be no deals left! Naysayers claim that this is true of today's housing market, but in reality, there are endless deals to be found almost anywhere at almost anytime. Finding these deals takes experience and talent, but this article serves as a head start for novice investors, or a refresher course for old pros.

Distressed Owners Make for Distressed Properties (And Vice Versa)

What is a great deal? Quite simply, it's when you buy a property for well below its actual value and/or with favorable terms. The only way this can happen is for the seller to be ignorant of the market, completely uninterested in profit motives, or extremely motivated to sell. Your chances of making a career out of finding homes owned by people who don't know any better or who don't care are slim, so it's best to concentrate on identifying motivated or "distressed" sellers. After all, only someone who absolutely needs to sell is going to price his or her home well below market value and/or accept unusual financing arrangements. These are the ingredients of a great deal!

So what makes a person a motivated seller? Divorce, death of a relative, job transfer, and serious financial distress are the items that top the list. While you might feel guilty for "taking advantage" of people in such a situation, you shouldn't. After all, they need to sell - you are helping them! You and the seller are finding a mutually agreeable price point and terms. You are getting a great deal and they are unloading a headache. It's a win-win situation.

How to Find Distressed Sellers

The first place to look is the newspaper. Don't bother searching through the fancy ads with pictures placed by real estate agents; go right to the classifieds instead. Look for listings with "for sale by owner" in the text, or that appear as though they are being sold without an agent. Technically, real estate agents must state that they are agents in all advertising materials, but the less scrupulous ones frequently disobey this rule. Also look for key phrases such as "must sell, fix-up, needs work, vacant," and of course, "motivated sellers" (although agents often advertise "motivated seller" when in fact their client isn't all that motivated!). Be prepared to make a lot of calls and not to spend much time with each seller - finding deals is a numbers game, and you have to make a lot of calls to find that one special deal.

But you shouldn't limit yourself to FSBOs (homes that are "for sale by owner"). Instead, draft a letter on professional letterhead and fax it to all of the real estate offices in your area. Explain that you are a real estate investor looking for distressed properties and that you can close quickly if the price is right. This way, you can have an entire army of real estate agents working for you, free of charge. If one of them finds a property for you, the seller of the home will pay the agent's commission. You owe them nothing, it comes off the seller's side.

Another idea is to call the owners of rental properties and offer to buy. Many income property owners are reluctant landlords and will certainly entertain the offer. If they say no, leave them your name and phone number and tell them to call you if they're ever interested in selling.

Finally, you can place your own classified ad. A simple headline like "We Buy Houses for Cash" works best. Don't worry that other investors use the same ads, it's a numbers game. Sometimes people will sell to you because they like the way you sound or they trust you over your competitor. How many advertisement do you see in the paper for mortgage companies, car dealers and retail stores selling the same product? There's enough business to go around, and so long as you get the phone ringing, you'll learn to get good at converting them into deals.

By knowing what you're looking for - distressed owners - and following these strategies, you will already be way ahead of most beginning real estate investors. It takes work, and lots of it, but the rewards are worth it. 
 

Things to Check Out Before Buying A House

If you’re thinking about buying a house, you’ll have a number of things that you’ll want to specifically look into before you do. This article will give you a number of suggestions about exactly what factors to look into before you make the big plunge into being a homeowner.

First, always ask around among the neighbors before you buy. You’ll be surprised about what might turn up. If there’s been bad blood, a neighbor might be willing to reveal every problem they know about with the house. They’ll also be able to clue you in to things that may not be a problem with the house in particular but may be with the neighborhood in general. This can include a number of things. Remember to ask about: whether the house or the neighborhood is in a flood zone, whether there are any problem neighbors nearby, whether they know of any previous damage, and whether there is a crime problem. You can probably think of about a dozen other things to ask - talk with several neighbors, and if you find the local gossip, you’ll be in on everything you need to know. Always make sure that you document what representations the owner makes to you about the house - it could come in handy later, especially if there are major undisclosed problems with it. Do a little searching on the internet - you can always do a search for the name of the homeowner and see if anything interesting comes up. If there’s something shady or they’re untrustworthy, you want to know about it. By the same token, you can often easily see if they are legitimate that way. Make sure that you’ve had a title search done - your real estate agent will probably take care of it, but it’s a must-have. Hire a handyman to inspect the place if you aren’t good with that sort of thing - or just get someone you trust to look around. It doesn’t take much to make sure that your house will be a good investment.
 

10 Things You Must Do Before Buying a Home

Buying a home is often the largest personal finance transaction a person makes in his or her life. So it's critical that you make the right preparations and do the proper research. Regardless of unique situations and special circumstances, there are ten things you must do before buying a home.

1. Study the home buying process.

This will allow you to make better decisions and act confidently. Home buying lingo is a big part of this, so be sure to read through a few home-buying glossaries before you get into the thick of things.

2. Obtain your credit report.

Get a copy of your credit report and review it for errors. You can get copies from all three credit bureaus at once by visiting www.AnnualCreditReport.com. Mortgage lenders will review your credit with a fine-toothed comb, so you should do the same ... before they review it.

3. Fix credit errors quickly.

If you find an error on your credit report, go to the company's website where the report came from (TransUnion, Equifax or Experian) to contest it. It can take time to clean up an erroneous credit report, so get started as soon as you spot the error.

4. Check your debt-to-income ratio.

Mortgage lenders like to see a borrower's debt at (or below) 20% of net monthly income. If your debt exceeds 20% of your net monthly income, try to pay it down for applying for a mortgage loan. You'll have an easier qualification process and will likely qualify for a better rate.

5. Determine your budget.

Use an online mortgage calculator to get an idea of how much you can afford to pay each month, and what that equates to in terms of a home price. This will give you a budget to work from, which will help you weed out the homes that are beyond your comfort zone.

6. Start saving your cash.

This is one of the best things you can do before starting the home buying process, for a couple of reasons. First of all, mortgage lenders like to see that you have some cash reserves on hand. Secondly, you'll need cash reserves for any unexpected fees or costs that might arise (which is common).

7. Get pre-approved for a loan.

During pre-approval, a mortgage lender will review your credit, finances, debt, etc. and conditionally qualify you for a certain amount of mortgage. Sellers will take you more seriously if you have a pre-approval letter, and the process also helps identify any problems with your credit or other qualifying factors.

8. Avoid new lines of credit.

Try to keep your financial situation as "stable" and favorable as possible. It's a good idea to pay down some debt (see item #4 above) and to save up some cash. But the worst thing you can do is take out a new loan / line of credit. At best, this could make the qualification process take longer. At worst, it could tip the debt scales into the "greater than 20%" zone, which will make it harder to get a loan.

9. Validate the asking price.

It's called an "asking price" for a good reason. No asking price is set in stone, and everything in real estate negotiable. So don't accept an asking price as being reasonable until you validate it through careful research. Compare the home / price to recent sales in the area. Your real estate agent can provide a comparative market analysis (CMA) to help you with this step.

10. Get a home inspection.

It is never -- I repeat, never -- wise to skip the home inspection. A house is a sizable investment, and the last thing you want is to find a bunch of things wrong with it after you've taken ownership. Home inspections are very affordable, and you cannot put a price on the peace of mind you'll have as a result of your inspection.
 

Preparing Your Home for Sale

Preparing to sell your home can be stressful and time consuming. Knowing what kind of things to focus on can greatly reduce your stress and keep you focused on the projects you need to undertake in preparing your home for sale. Having a home that is clean and in good condition will typically sell for a higher price and more quickly than homes that are not well maintained.

The difference between a home in good condition and one that is not many times is as simple as a new paint job or replacing damaged fixtures throughout the home. Put yourself in the potential buyers’ shoes and take a good hard look at your home. What would you want to have fixed if you were to buy this house?

When preparing to sell your home don’t neglect the yard. Your yard is the first thing home buyers will see. Keep you lawn mowed and hedges trimmed. If it is spring time plant some flowers in the front to add some color. Pick up any clutter than is in your yard, front and back. I’ve seen homes where all is going well and I like what I am seeing until I get to the backyard and it looks like a junk yard. Typically, the seller of the home will clean it up but sometimes they don’t and the buyer is left with the mess. Plus upon seeing the mess the buyer may forget about the good things and remember your home by, “the one with all the crap in the yard.”

Consider painting your home, especially the inside. Newly painted walls add to the overall appearance of your home and may help it sell. Repair doors, windows, walls, and anything else that needs to repaired. If there are things that you can’t afford to repair at the time or if you are not interested in repairing it know that it will reflect in the price people are willing to pay for your home.
 

Inexpensive Tips to Sell Houses

In the past years, selling houses focus only on recreating the exterior so as to invite buyers. However, a shift has now occurred wherein the emphasis is given towards the inner appeal as well. After all, there is no point in selling (or buying) a beautiful house judging by the external offers it has if you are going to sacrifice the design of the interior.

Look at your own house with a critical eye, as if you are somebody looking at another person's house. Don’t dismiss any flaws that you think are acceptable enough on your own perspectives. Think as if your prospect buyers are the worse critics you will have and your future dignity would lie on them. Strange isn’t it? But we tell you, this technique is effective enough to warrant easy market for you. This is because you have already limited the possibilities of rejection and scrutiny.

As you may have already noticed, there are various television programs that let people see what they can do in their own houses that could make them appealing for buyers. In most cases, the houses are reconstructed in inexpensive ways yet cause dramatic changes. Well, it would help if you'll follow the suggestions such home improvement shows provide.

But you must always keep in mind that you have to maximize the effects of such changes through incurring lesser expenses. Thus, you must seek the best prospects that would bring out the best in your house while not taxing your wallet.

For one reason or another, the floor seems to matter much and buyers took notice on the type of flooring you have used in your house. Also, focus on the condition of your flooring. If this needs reconstruction then see to it that it is reconstructed in the least possible expenses you can have.

Don’t hasten the changes though. You will have to plan the design and the outcome of the changes in your flooring. Go for economical yet appealing floor tiles and other types of flooring. There are lots of options for you. In fact, there is almost an endless list of materials you can use to furnish your floor with. Among the most common are laminated tiles, ceramic tiles, cork tiles, wood and others. Of course, the type of material you will choose will be largely dependent on the entire setting of your interior.

Some houses seem to have its distinct odor that act as repellant against promising buyers. You may not know this but you must understand that any possible turn offs should be removed.

This is typically hard to judge. Since you have already lived in your house and has already become accustomed to its smell, it would be hard for you to detect any unwanted odor. In this case, you must ask the assistance of another person who hasn’t been in your house for long. Whatever his or her opinion is, you have to analyze and consider them in great detail.

Also, take a look on your walls. Maybe there are marks that should not be there. Or perhaps cracks are already appearing on some of its portions. Wall blemishes could affect both the price and the interest of the buyer of your house. Be sure that you have completely fixed your walls that expansion cracks and nail pops barely have their traces.

These are just some measures you could use to help get the higher prices for your houses while incurring minimum expenses on the repairs.

Sell Your Home At Top Dollar With An Inexpensive Face Lift

Have you ever why some homes sell faster than others? It could be the very same model in the same neighborhood, and one home moves quickly whereas some just remain on the market with disinterested buyers. Here are some tips to stage your home to not only sell it, but to get top dollar.

First, examine your home from the curbside as though you had never seen it before. It may be difficult to really put on your objective glasses, but if you can, you will be surprised of how accustomed we become to that broken gate, the damaged garage door, or the garden hose that isn?t rolled up. These may sound like minor issues, but to the home buyer, they?re touring your home with a magnifying glass and a white glove. Begin your evaluation by writing down everything you notice that could improve your property in the slightest way. Here are some inexpensive, easy tips to enhance your home and get top dollar!

Be sure to replace or trim trees and plants and try livening up your garden with some colorful, fragrant flowers near the entrance. In some cases, you can even use beautiful silk floral pieces in large pots as long as they look real!

Varnish or paint the entrance door with subtle colors such as black, burnt brown, gray, forest green, or white. If you?re home is older, replace the old door with a glass entrance door. If you have a screen door, consider purchasing one of the newer models and make sure the latch works for easy entry. First impressions and anticipation of walking into your ?dream house? begins here.

The first thing people notice is if the home is bright and cheery. The last thing homebuyers want to do is walk into a dark hole and depend on a realtor to turn on (and off) the lights and open (and close) all the blinds or shades. The cheery greeting your home gives to people will give them an immediate impression as to how they FEEL about your home. If you have pets, be sure to pack away all their toys and dog foot or kitty litters. Keep your home smelling fresh and clean that doesn't repel the prospective homebuyer.
Flooring is one of the most important features homebuyers will judge. Clean the carpet and don?t request that buyers take off their shoes. Do everything in your power to welcome visitors and keep them there. Any excuse you give them NOT to view your home will lower your numbers. Remember the more people who view your home, the better chance you have in selling it.

Replace bathroom fixtures with the newer ones ?Hollywood lights are out. Make sure the bathtub is scrubbed clean as well as shower stalls. Buy a new shower curtain, if necessary and caulk around tiles in the shower and tub. Be aware that bright colors or children's colors may be a turn-off to new buyers. Paint your walls with neutral colors such as beige or off white.

Take out the clutter, garbage, stinky shoes, and put your dirty clothes in the hamper. It's very important to have those beds fixed in the morning too! Clean the sliding glass door to the patio as well as the patio furniture. Cut and trim the grass often for a fresh, clean smell.

People want to imagine their families living in their future home and you have the ability to set the stage. The home should be complete with bar stools at the breakfast nook, soft lighting, and nice furniture. Remember, the backyard has become an extension of the home. Show off your BBQ, patio furniture or children's play area in a way that they feel their own family would enjoy.

If you have a pool, have the pool guy come over so your pool is sparkling clean. Buy some Tahiti candle torches for a tropical look. If you have a bar, place plastic glasses and trays as though you were ready to have a party. If you don?t have a covered patio, you may want to make a small investment by buying a canvas cabana that warms the heart and sets a romantic mood. Put some candles on your patio table and accentuate with lots of plants surrounding the patio.

Blinds, plantation shutters, and Roman shades are in. The least expensive, but most popular choice, is to replace your verticals or outdated mini-blinds with wooden blinds. They?re easy to install yourself and will make a big difference in the overall look of the home. You may find some very nice Roman shades that are reasonable and can be used in lieu of curtains as a trim. Curtain panels from the high ceilings will serve as a window treatment and add elegance or magnitude to your room also.

Make sure your kitchen and bathrooms are always clean and remember that homebuyers will look in your pantry and closets. You can always fake it by cleaning the sinks every morning before leaving for work and wiping down the mirrors if there are any noticeable spots. Never leave dirty dishes or pots and pans in the sink. Just hide them in the dishwasher.

Dare to be open enough to get opinions from your friends, neighbors, and realtor. Ask if they have any suggestions as to how to arrange your furniture and be willing to give it a try to see how it looks. Their perspective may make a big difference in your entire floor plan. People are looking for space so you want to do whatever it takes to make your home look open and spacious.

If you feel that your bottom line can handle more expensive upgrades to compete against other newer homes, you may want to replace old carpeting with 18" tile and new carpeting in the bedrooms with a thick pad. I wouldn’t suggest changing your countertops to granite or changing the kitchen cabinets as that would be very expensive and may not be compensated unless you are doing a total renovation.

Selling a Home - The Preparation Stage

There are certain processes that are vital in any endeavor. And selling a house, being something that truly posses its own difficulties, also require some activities that would prepare it for the subsequent processes. Here are some of the initial stages that mark the preparation of your house for sale.

Getting started

You want your house to be impressive and friendly enough with future buyers? Then clear the clutter.
This might be among the most difficult thing you would do with your house. During your years of ownership, you might have attached emotions into your house that it would be hard to detach yourself from it. But this is more than that.

Years of emotional attachment could mean years of clutter collection. We collect all sorts of materials that could be difficult to separate ourselves from. This clutter would be evident on the top shelves, drawers, countertops, closets, attics, garages and basements.

Well, if you want to sell your house immediately, then you must let the buyer see more open spaces.
Look then at your house from an anonymous point of view. Try disconnecting your emotions for awhile and see it from another person's eyes. If you can't do this then find someone who will gladly do it for you.
You might not realize the extent of help this activity could bring but you would soon find that the precious materials in your eyes are not as much precious from the view of another.

This can't be done unless you start thinking your house as a commodity. If you would have noticed, when you buy a house the real estate agents would refer to it as your "home" but if you are selling one, he would make it a point to call it as "property". This helps the process of realization occur faster since words connote even the emotions that are embodied in each article.

Your realization must come from the point that it is no longer your home but theirs. By doing this, you will re-channel possibilities that could inadvertently make the selling a longer process.

Separate the person from the personality

When selling a house, be prepared to separate even the most valuable things from it. It would do you no good if you would leave picture frames with your own photos on it. Instead, leave anonymous items that would make the buyer feel that this is a potential home for him and not a trace of your own personality could be found.

If the buyer of your property sees anything that would remind him that this is not his home yet, such as a family picture hanging on the wall, you could shatter their hopes that this is the potential home for them. These would leave your marks in the house which in turn, could repel the prospect of recreating the personality of the home from their own point of view.

Remove all things that would remind the buyers of the memories of the previous owners. Put them all in storage somewhere apart from the attic, garage and basement.

The two suggestions we have given here are not only effective for making your house a bit friendlier for sale. This also eases the hard process of letting go of something you have owned yourself for long. Undeniably, this would take much effort on your side since it is not that easy to make you forget of something you have accustomed yourself to love.

Short Sale Negotiation

Negotiation through the loss mitigation department will be the key factor in getting your new home at a deep discount.If opportunities emerge in which lenders can sell distressed properties without registering big losses, they will do it.For example, consider that a homeowner with a $200,000 mortgage is late on his or her loan payments and is facing foreclosure. With the consent of the homeowner, you offer his or her lender $150,000 as full payment for the loan, which is accepted. That means you instantly save $50,000 on a real estate investment.This is a short sale.

Getting started

Negotiating a short sale with a lender can be a complicated. But with careful research and patience, it is possible for you to earn big profits with short sale deals. Naturally, closing the first one will be the most challenging.The first step in this process is to identify potential investment opportunities on Foreclosure.com, which offers more than 1.8 million listings across the nation. Foreclosure properties are ideal because you can make more money with them versus homes that are already bank-owned.To be most successful, we recommend reaching out to homeowners who are more than three payments behind on their mortgages. At this point, each of these homeowners has received a Notice of Default (NOD) and is very close to losing their home. Time is running out and the chances of them curing the loans and making up the back payments are slim.The homeowners understand this and may be grateful for your assistance. The lenders understand this, too, and are motivated to recoup their losses as soon as possible.

Calling lenders

It’s important to gather as much information as possible about the properties and the homeowners prior to getting on the telephone with lenders. Because when you do get a lender representative on the line, he or she will have questions.Using the contact information contained within the listings you have targeted from Foreclosure.com, it’s time to call a lender and inquire about the possibility of a short sale agreement. Traditionally, the “Loss Mitigation Department” will handle these types of requests.If you can’t get in touch with anyone, move onto the next listing. The negotiating can begin only when you get in touch with the right person. Once you have reached a representative for the lender, inform him or her that you represent the homeowner. This is all you need to say — avoid revealing that you are an investor. The representative will usually want basic information about the property, the homeowner and the proposed deal. He or she will also want to know the value of the property and the financial situation of the homeowner (borrower).Aside from making the initial introduction, the goal of this conversation should be to request a short sales or workout packet. This packet will provide you with everything you need — instructions, forms and procedures — to close a successful short sales deal.

Broker’s Price Opinion (BPO)

Lenders generally hire local real estate brokers or appraisers to evaluate properties in the foreclosure process prior to selling them at public auction. These are referred to as a Broker’s Price Opinion (BPO). Essentially, a Realtor® — based on the condition of the home and current market conditions — provides the lender with an estimate for the value of the property. The BPO is the key piece of information that a lender will rely on to make a decision regarding a short sale.The lower the estimate, the better it is for you. Lenders want to get rid of distressed properties as soon as possible, but they aren’t going to sell them for ridiculously low prices Many short sales, in fact, fall through if the BPOs come in too high. When properties are in good condition, it is hard to convince lenders that they are worth much less than the appraised values.

Hardship letter

Most lenders will request a hardship letter that details the reasons a homeowner has not made his or her mortgage payments. This is a bit strange because the borrower who is in default must prove that he or she is broke and unable to afford the payments.This is a fairly extensive request, which may require the homeowner to submit pay stubs, tax records and other personal financial records, along with the letter. It is essential that you submit everything that is requested. Otherwise, your offer will not be accepted.Creating an effective and compelling hardship letter requires creativity. Without lying, the letter should paint a very bleak picture of the situation. If neither you nor the homeowner possesses decent writing skills, it may be in your collective best interests to seek the assistance of a professional — it’s worth it.

HUD-1 settlement statement

A lender will generally require a written contract between you and the homeowner. A preliminary HUD-1 settlement statement will reassure the lender that the homeowner isn’t receiving any cash from the deal.The HUD-1 form requires you to itemize all charges imposed upon you and the homeowner for the real estate transaction. Essentially, it is a complete list of the incoming and outgoing funds.The contract should be written so that you pay all costs associated with the deal. And, that the “net cash” to the homeowner is the precise amount of the short pay to the lender. If you have difficulty completing the form, a title or escrow company may help you prepare it in advance of the closing.

Supporting materials

A lender will often agree to a bigger discount if a property requires significant repairs. The more work that needs to be put into the property, the less it is worth and the harder it is to sell on the open market.Hire a professional(s) to appraise the home and provide you with a bid for repair estimate (the higher the better). This is not a requirement because as mentioned above, the lender will get its own BPO. However, providing independent appraisals and comparable sales information that support your offer are critical.There are other things you can also do if the home is not in ready-to-move-in condition.Always remember, it is in your best interests to submit with your paperwork as much negative information about the property as possible. For example, newspaper clippings that discuss “bad news” nearby or in the neighborhood can help reduce the price of the property in negotiations.

Waiting for an answer

It usually takes about three to six weeks to receive an answer from the lender once you have submitted the HUD-1 settlement statement and all of the other supporting materials. It’s always good to call the lender to ensure that he or she has received the information, as well as make it clear that you are always available to answer questions and provide additional information, especially if something is missing.If the auction date for the property is approaching, ask the lender to extend it until he or she has had time to consider your offer. If your offer is legitimate, the lender will almost always grant your request. 

Being a first time home buyer is intimidating and a big life experience. First time home buyers often don't know where to begin. We can help. From mortgages, to home searches in your best places to live and schools information we can give you the tools you need to move forward. One of the first steps to being a first time home buyer is to get your financial house in order and make sure your credit is great. Once pre-approved for a mortgage, the home search process (the fun part) begins.

There are lots of styles of homes and neighborhoods research you'll want to explore as a first time home buyer before settling for a place and looking for homes. Search homes online and get help from a buyer's agent to help you secure a great first time home at a fair price. The mortgage types for first time home buyers may be more difficult to get these days and the process intimidating. Once your offer is accepted be sure to check out moving resources to get quotes on movers and other tools for first time home buyers moving into a new area.

As a first time home buyer be sure to keep some things in mind before you settle down. Is the neighborhood great? Is the area appreciating? Does your home have the room you need for family growth? How is the job market in the area and how close are your favorite hot spots? Once you find the right place, unpack and enjoy! Your first time home buyer experience is now complete.

If you are buying or will buy a home in 2009 as a first time home buyer (see below for definition), you will be eligible for an $8,000 tax credit that you will not have to pay back. This is part of Obama's Recovery and Reinvestment Act and will replace the previous $7,500 credit that was previously in effect. So below are some of the qualifications necessary:

1. First Time Home Buyer Purchasing in 2009

A first time home buyer is defined as a someone or a couple who has not owned a home in the past three years. The purchase or recording date needs to be between or on January 1, 2009 to December 31, 2009. If you're not sure about the dates, contact your real estate professional, if you have one, or you can always contact me.

2. Primary Residence for 36 Months

The home you buy must qualify as a primary residence for 36 months following the purchase date or else the credit must be repayed.

3. Income Under $75,000 for individuals and $150,000 for couples

Your taxable income must be under $75,000 if you file as an individual or $150,000 if you file as a couple. You are still eligible for the tax credit if your income is higher than that but it phases out quickly to $20,000 over the limit.

These are just the basic rules for the law. If you need the form, you can download it here. Also, I'm not a CPA or tax expert so don't rely on just this information. I have a really great tax planner if you need tax advice as well.

About Government Grants: While the federal government gives away over $80 billion in free government money every year, individuals may be more likely to find grant funds through local and state government agencies. In addition, there is millions of dollars provided by private organizations and foundations that most people don’t know exist. One distinct difference between a grant and a loan is that a cash grant never has to be paid back. These are tax-free funds that are given away to qualified individuals for a variety of reasons, including:

• First Time Home Buyers and Home Improvement

• Who Can Get a Grant: Any citizen at least 18 years old is eligible to apply for government and private foundation grants. While each program has its own qualification requirements, there is no limit on the number of offers that can be applied for. Requesting a grant does not typically require a credit check, a cosigner or any kind of collateral. In many instances there is no income verification either.

A home inspection is critical when you are making potentially the largest purchase of your life. Sometimes a buyer will try to forgo spending the nominal fee to have an inspection done. For the average home, a home inspection will cost in the $300 - $500 range. That price will vary depending on the size of the home. 

 
Just as important as getting the inspection, it is important to get a qualified inspector. Don't hire your Uncle Jimmy, who does home repair work on the side. Don't get your investor buddy, who has purchased a lot of investment properties, but never paid for any inspections.

 
Do your research. It is best to contact at least 3 inspectors, before choosing one that you are comfortable with. Your Realtor can help you with this task. Each one will more than likely try to persuade you to use them. Do not feel pressured. 

Refer to the 10 questions below, to ask pertinent questions that will help you decide which inspector is best for you.

 
10 Questions to Ask Your Home Inspector

 
1. What does your inspection cover?

Verify that the inspection and inspection report meet the guidelines required by your state. If there are specific areas of concern that you want to make sure get inspected, you should point them out upfront.
 

2. How long have you been a practicing Home Inspector? How many inspections have you completed?

This is a great time to ask for referrals, if so desired. Just because an Inspector is new, does not mean that he can not do a good job. You just want to be comfortable with his qualifications.
 

3. How much of your experience is with residential property?

Residential property is different than Commercial property. You want an inspector who has some experience with type of property you are purchasing.

4. If repairs or improvements are needed, do you offer that service?

Some inspectors are qualified, and allowed by the state to provide this service. If they are not, they may be able to provide referrals. Once again, make sure any referrals are qualified to do the work.

 
5. How long will the inspection take?

The average inspection, on an average single-family home, will take 2 - 3 hours. Anything less may be inadequate. This time will increase with the size of the property.

 
6. What will the inspection cost?

A typical range for the average single-family home is $300 - $500. This will vary by state, home size, age of home, etc. Do not automatically choose the cheapest inspection. Quality is important, and the other nine answers to the questions will help you decide.

 
7. What type of inspection report will I receive? How long will it take to receive it?
 
Inspection reports can vary greatly between inspectors. Some inspectors are highly technical and use special software to complete their inspection reports. Some are more "old-school" and provide reports on established forms. Time is of the essence. Therefore, it is critical that you and your Realtor receive a copy of the report as soon as possible. Most inspectors will provide reports within 24 hours. You should also ask about their delivery method. Will the report be emailed, or sent via snail mail?

 
8. Will I be able to attend the inspection?

If the inspector says no, move on the next inspector. You never want to feel like an inspector is hiding something. This is a good opportunity, as a buyer, to learn some of the ins and outs of your potential new home.
 
 
9. Are you a member in any professional home inspector associations?
 
This will just add to the inspector's credibility as a qualified inspector.

 
10. How do you keep your expertise up to date? 

It is important to keep learning via continuing education classes, seminars, etc. This is an indicator of the professionalism of the inspector.

 
These are the basic questions to ask, but they may make all the difference in the world. Know what you are buying. Don't become one of those homeowners, who failed to get an inspection, then found out after closing that their home had some irreparable damage, like foundation issues, or mold, or expensive termite damage.