Facts, Fiction, and the Fantasy of Real Estate

These statistics were pulled off CNN money earlier today… Keep in mind these numbers are forecasted so there is obviously some questionability to whether or not home value will follow this trend. Typically I am reluctant to publish this type of news on my blog because the justification for the drop does not warrant such a percentages quoted, however the reasoning backing these numbers is something I consider credible. If you are considering buying in this area, it would be wise to wait 6 months, you’ll save a substantial amount of money. If you already own a home in one of these areas, you need accept that it is a long term investment that may fall in value before it rises to its full potential. This may mean you need to refinance if you are holding a short term vehicle. The issue with many of these programs is prepayment penalties. I know what you are thinking it is not worth it. Well keep in mind often times prepayment penalties are tax deductible because it is actually prepaid interest, a fact that lenders are reluctant to publicize, so the actual cost (after taxes) if you do have a penalty might be less than you expect.

In addition the 10 year bond market has fallen significantly (an economic indicator for the finance market) and rates have followed suit. 30 year fixed are again under 6.000% (assuming you have the credit and equity to support it) is it is not all bad news. If you are in a program that is going to adjust within the next five years I would definitely speak with a professional and re-evaluate your current program. After your conversation you may decide not to do anything, but having the conversation and exploring your options in your particular regional market is simply managing your investment, a smart move all things considered.

If you have decided to sell your home, you might want to think about reducing the price straight out of the gate, to come in lower than other homes on the market. This tactic could mean a faster sale, and an overall profit, if you do list it high and are forced into price reduction over a 4, 6, 8, or 12 month listing (the average listing is on the market right now for 8.3 months).

Please comment, or email me directly if you would like to discuss your situation confidentially: peter@approved-online.com.

To check the forecast for your particular region click on the link below and scroll to the bottom of the page: http://money.cnn.com/2006/11/20/real_estate/summer_house_prices_cool/ 

So you are thinking about buying a home, and are exploring your options. The old school philosophy is 20% down, but is putting your hard earned money down the best option for you? Do you have money to put down? 5%, 10% 15% or 20% are the most common down payments without question, but is this the best way to spend your money?

That is what this entry is about. Of course this issue is not black an white – every situation is different, therefore I suggest you use this discussion as a guide for your personal situation, and if you have questions you can either comment for a board range of opinions and suggestions, or email me and I will provide you with my professional opinion confidentially: peter@approved-online.com.

 The obvious first step is deciding whether or not you have money for a down payment. For those without any real savings this is an easy conclusion. For other that have savings that they can put toward a down payment but will virutally tap you, this is a serious question that needs to be given some thought. Then there are those of you that have enough savings to allow you to make a down payment without wiping out your entire savings.

100% financing can be accomplished in all of these situations, but the advantages and disadvantages are a little bit different based on the above situations. The most obvoius advantage of 100% financing is you are not using any of your own money to buy your own home. Leveraging someone else’s cash even if it is an institution’s is one of the best kept investor secrets. Donald Trump has gotten to where he due to his ability to find financing for major projects. Using some else’s money allows you to use your money in other ways while benefiting from the appreciating investment you are still apart of despite your not contributing initial capital. If you put zero money down and the property appreciates 20,000 dollars; that’s an incalcuable/exponential return on investment (ROI) where if you had invested 30,000 initially and made 20,000 your ROI would be 67%. Of course 67% is not bad, but if you had financed the full loan and had put your 30,000 in a Mutual Fund that had a 15% ROI. Not only would you have 20,000 from the appreciation of your home, you’d have an additional 4,500 profit from investing that 30,000 in another investment – point in fact you have diversified.

Now for the majoy disadvantage, if you’re home doesn’t appreciate, there are only two other options, it retains its value and you sell it for what you bought it at, or it depreciates, and you owe more than it is worth. Despite this disadvantage, the potential for depreciation (home value holding is not really as large of a concern) is something that any homeowner faces. Had you put a down payment down, you just lost that money (or a part of it) and can no longer look to alternative investments. If you used 100% financing, yes you owe more than it is worth, but if you plan on sticking around for a while, you still have money you would have used as a down payment to make money in an alternative investment, stocks, bonds, money markets… you get the point.

 Which brings us to the next point. How long do you plan on staying in the home and how is the local housing market? These are very important questions. Real estate is a long term investment. Yes we have all heard of house flipping and pyramiding (I’ll write about that at a later date if you haven’t so don’t forget to subscribe to my blog) and the fortunes people have made. But just like day trading they can lose it just as quickly… anyone else hear about the day trader who recently lost 5 billion in a single week? Well flipping real estate is like investing in penny stocks – they can go up quickly and down just as fast. Of course it is for different reasons – many equity is not liquid and it takes time to sell a home, so if you are spread to thin and are unable to sell you start reducing prices and a slippery slope follows. I make this point because real estate is a long term investment. If you are planning on staying in your home for a long period of time, then 100% financing makes more sense than if you plan on moving in 6 months. Of course this conculsion is based on todays flat market. Two years ago I would be singing a different tune. If you happen to be in an area (real estate markets are obviously regional) that is booming than you may take a hard look at 100% financing so you can flip, but I’d make sure that look is a HARD look… 100% financing is risky right now if you are thinking short term because if values fall and you wnat to move and don’t have the capital to pay off the loan that is now for more than your home is worth, things can get ugly. Generally speaking of course, real estate will appreciate which is why 100% financing is much safer for this type of borrower.

Probably the only real disadvantage 100% financing has is its effect on a borrower’s cashflow. You will pay more for this type of loan, moreover you will probably have a second that is at a higher rate than you are willing to consider. My advice is consider it, because it isn’t the rate on the second that is going to run you under. It is the blended rate – the combining of the 1st and 2nd – that matters. To find your blended rate. multiple your first rate by 80% and your second rate by 20% and add those two numbers together (formula for your typical 80/20 loan), that is your blended rate. NOw for the good news these rates are tax deducible so you have a larger write off than you would with a single loan (obviously you should discuss this with your tax preparer), so if you can afford the payments and are not stretched to thin, then you still may want to consider it.

Finally we come to programs…. This is where the qualified buyer (assets)  has the advantage over the under qualified buyer (no assets). If you are in a position to put money down, you will most likely be able to get a longer fixed term on your first then you would if you cannot put any money down. Remember these loans are great as long term vehicles. Getting into a loan that you are going to need to refinance in a couple of years because of an adjusting rate is basically like selling your home, you are going to need to get an appraisal done which means if value has shifted against you, that rate will probably go up, and you will be paying significantly more than you ever thought it would cost you. This is why we are starting to see more and more foreclosures, so if you don’t think it will happen to you, I hope you are right, and consider yourself warned.

These are the nuts and bolts. I could go on, but this will give you enough to get started, and allow you to consider the options in front of you. Ultimatley you should talk with a professional that understands your future goals and is willing to go over the specifics on your situation. This is an important step that should not be overlooked. If you find youself working with someone that is taking the hard line and telling you what you should be doing without listening to your position, than take a step back and find someone that is not going to pressure you, and above all things, make sure you are comfortable and understand the program, if you are not, no matter what the benefits are, you are going to be living in a constant state of fear and will never be happy. Get all the facts, know how the program works and you are comforrtable with it. Only when these things fall into place will you have a finance program in sync with your overall financial goals.

 peter@approved-online.com

If you are in foreclosure or about receive a notice of default (NOD) you should understand that the bank does not want to foreclose and take your home. As far as they are concerned, owning real estate is a liability that they do not wnat on their books. They become responsible for any other liens on title, paying taxes, maintaining the property, etc… which is why they hold auctions and often times sell the property at a loss. Once you understand and accept this it becomes obvious you are in a better position to negotiate then you might originally think.

The most common cause of foreclosure is failure to make payments. This can be for a number of reasons, which may or may not have a baring on your negotiations with the bank. Our point of conversation is the negotiations, not the events that have lead up to the foreclosure.

Here are some of the options you can get your lender to accept. When discussing your situation bring these to their attention and you may be able to strike a deal that will allow you to save your home. Before I continue, please understand that despite these options, most will affect your credit negatively, so refinancing may still be the course of action you decide to take. This will pull your home out of foreclosure the fastest and will settle the account quickly thereby improving your scores immediately.

If however, refinancing is not an option consider these:

Forbearance or Moratoriums – these partial or full payment waivers can provide you the necessary time to recover from whatever crises has caused the foreclosure. Keep in mind though, you will at some point in time need to make up the difference in payment which will cause extra money to be added to your regular payments once they resume.

Another option is a balloon payment for all the money accrued during the moratorium to be paid at the loan’s scheduled expiration date. This option will allow your current payments to continue without causing a burden of increased payment, but you will owe a significant amount of money at the end of the loan which will require you to save funds for this date, or sell your home for a higher price so you can afford to pay off the balloon amount.

Recasting… you can have the company recast the loan to lower the payments and stretch out the time period in which you must pay the full amount. This option however typically requires them to run a new title search to make sure their liem position is still secure. If you have other liens that could jeopardize their priority this option will not be available unless those liens are satisfied in full guaranteeing their first lien position.

If your situation is beyond negotiating, you may want to consider voluntary conveyance. Voluntary conveyance means you sign the property over to the bank without it going into foreclosure. Yes you lose your home, but you will save your credit, and move on with your life.

For more information, or you would like to discuss a particular situation feel free to comment.

peter@approved-online.com

Everyone who has ever bought a house will enjoy this.

A New Orleans lawyer sought an FHA loan for a client who lost his house in
Hurricane Katrina and wanted to rebuild.. He was told the loan would be
granted if he could prove satisfactory title to the parcel of property being
offered as collateral. The title to the property dated back to 1803, which
took the lawyer three months to track down.

After sending the information to the FHA, he received the following reply:

(Actual letter):
“Upon review of your letter adjoining your client’s loan application, we
note that the request is supported by an Abstract of Title. While
we compliment the able manner in which you have prepared and presented
the application, we must point out that you have only cleared title to the
proposed collateral property back to 1803. Before final approval can be
accorded, it will be necessary to clear the title back to its origin.”

Annoyed, the lawyer responded as follows: (Actual Letter):

“Your letter regarding title in Case No. 189156 has been received. I
note that you wish to have title extended further than the 194 years covered
by the present application. I was unaware that any educated person in this
country, particularly those working in the property area, would not know
that Louisiana was purchased by the U.S. from France in 1803, the year of
origin identified in our application.

For the edification of uninformed FHA bureaucrats, the title to the land
prior to U.S. ownership was obtained from France, which had acquired it by
Right of Conquest from Spain. The land came into the possession of Spain by
Right of Discovery made in the year 1492 by a sea captain named Christopher
Columbus, who had been granted the privilege of seeking a new route to India
by the Spanish monarch, Isabella.
The good queen, Isabella, being a pious woman and almost as careful
about titles as the FHA, took the precaution of securing the blessing of the
Pope before she sold her jewels to finance Columbus’ expedition.

Now the Pope, as I sure you may know, is the emissary of Jesus Christ,
the Son of God, and God who created this world. Therefore, I believe it is
safe to assume that God also made that part of the world called Louisiana.

God, therefore, would be the owner of origin and His origins date back
to before the beginning of time, the world as we know it AND the FHA.
I hope you find God’s original claim to be satisfactory. Now, may we
have our damn loan?”

He got the loan.

You are not hiring a Realtor to put a sign on the lawn, an ad in the paper, and hold an open house. You can do this yourself. You are hiring a Realtor to provide you with maximum exposure to the greatest number of qualified buyers for your home.
Supply and Demand

You’ve heard of supply and demand? The more potential buyers at your supply, the higher a price you can demand.

The absolute number one tip I can give you to help you get the most money possible for your home is this: make sure you get full Multiple Listing Service (MLS) coverage.

Don’t look at any offers until you are sure your home is on the MLS computer.

I will say this again…

Don’t look at any offers until you are sure your home is on the MLS computer. An army of Realtors at your disposal can’t be beat.

Dump any Realtor that tries to tell you to put your house on exclusive (only his/her company) or wants you to negotiate offers before it gets on MLS.
Dump any Realtor that wants to list your house on a Friday and have a public open house the following Sunday. There is not enough time to get your home on the system.
I do not care how good a Realtors marketing plan is, it is worthless compared to the value of having your home on the MLS system. Think of it this way. Realtor = home on MLS = most Realtors = most buyers = most money.

Is the first offer the best offer?

There is a saying in real estate. The first offer is usually the best one. This is only true, if everyone knows it’s for sale.

Real estate surveys in my area showed the owner lost an average of $2000. when their house was sold by the same office or Realtor that listed their home. The reason…the offer was written before any one else knew it was for sale.

MLS Comes First

Ask any realtor you are contemplating dealing with, what the order of their marketing plan is. If submitting to the Multiple Listing Service is not the first thing they are going to do, look for another realtor.

If you took away every selling tool I had, and said I could only have one of them back, I would choose the MLS service. This is not a commercial for MLS. It is just the best weapon Realtors and the public have for getting maximum exposure on property..

MLS is a strong selling tool,…use it… It will make a difference on your bottom line.

The Common Denominator of Success
By Albert E.N. Gray“The common denominator of success — the secret of success of every man who has ever been successful — lies in the fact that he formed the habit of doing things that failures don’t like to do.”THE COMMON DENOMINATOR OF SUCCESS is as timely and inspirational, as it was when it was first delivered in 1940. Though it was written for life insurance professionals, it’s message is equally well suited to anyone in the sales profession, or anyone in any field of endeavor who seeks success in their professional, personal or spiritual lives. —This inspiring message by Mr. Gray is one of the most timeless pieces of life insurance literature. It first appeared as a major address at the 1940 NALU (National Association of Life Underwriters) annual convention in Philadelphia and has been available to association members in pamphlet form ever since. Although our author has passed away, his words of wisdom and moving philosophy — so manifest in “The Common Denominator of Success” — are part of the current life insurance scene and have real meaning for today’s professional life underwriter. Mr. Gray was an official of the Prudential Insurance Company of
America and had 30 years of continuous experience both as an agent in the field and as a promoter and instructor in sales development. He was known throughout the country as a writer and speaker on life insurance subjects. —Several years ago I was brought face to face with the very disturbing realization that I was trying to supervise and direct the efforts of a large number of men who were trying to achieve success, without knowing myself what the secret of success really was. And that, naturally, brought me face to face with the further realization that regardless of what other knowledge I might have brought to my job, I was definitely lacking in the most important knowledge of all. Of course, like most of us, I had been brought up on the popular belief that the secret of success is hard work, but I had seen so many men work hard without succeeding and so many men succeed without working hard that I had become convinced that hard work was not the real secret even though in most cases it might be one of the requirements. And so I set out on a voyage of discovery which carried me through biographies and autobiographies and all sorts of dissertations on success and the lives of successful men until I finally reached a point at which I realized that the secret I was trying to discover lay not only in what men did, but also in what made them do it.I realized further that the secret for which I was searching must not only apply to every definition of success, but since it must apply to everyone to whom it was offered, it must also apply to everyone who had ever been successful. In short, I was looking for the common denominator of success. And because that is exactly what I was looking for, that is exactly what I found. But this common denominator of success is so big, so powerful, and so vitally important to your future and mine that I’m not going to make a speech about it. I’m just going to “lay it on the line” in words of one syllable, so simple that everyone can understand them.The common denominator of success — the secret of success of every man who has ever been successful — lies in the fact that he formed the habit of doing things that failures don’t like to do. It’s just as true as it sounds and it’s just as simple as it seems. You can hold it up to the light, you can put it to the acid test, and you can kick it around until it’s worn out, but when you are all through with it, it will still be the common denominator of success, whether you like it or not.It will still explain why men have come into this business of ours with every apparent qualification for success and given us our most disappointing failures, while others have come in and achieved outstanding success in spite of many obvious and discouraging handicaps. And since it will also explain your future, it would seem to be a mighty good idea for you to use it in determining just what sort of a future you are going to have. In other words, let’s take this big, all-embracing secret and boil it down to fit the individual you.If the secret of success lies in forming the habit of doing things that failures don’t like to do, let’s start the boiling-down process by determining what are the things that failures don’t like to do. The things that failures don’t like to do are the very things that you and I and other human beings, including successful men, naturally don’t like to do. In other words, we’ve got to realize right from the start that success is something which is achieved by the minority of men, and is therefore unnatural and not to be achieved by following our natural likes and dislikes nor by being guided by our natural preferences and prejudices.The things that failures don’t like to do, in general, are too obvious for us to discuss them here, and so, since our success is to be achieved in the sale of life insurance, let us move on to a discussion of the things that we as life insurance men don’t like to do. Here, too, the things we don’t like to do are too many to permit specific discussion, but I think they can all be disposed of by saying that they all emanate from one basic dislike peculiar to our type of selling. We don’t like to call on people who don’t want to see us and talk to them about something they don’t want to talk about. Any reluctance to follow a definite prospecting program, to use prepared sales talks, to organize time and to organize effort are all caused by this one basic dislike. Perhaps you have wondered what is behind this peculiar lack of welcome on the part of our prospective buyers. Isn’t it due to the fact that our prospects are human too? And isn’t it true that the average human being is not big enough to buy life insurance of his own accord and is therefore prone to escape our efforts to make him bigger or persuade him to do something he doesn’t want to do by striking at the most important weakness we possess: namely, our desire to be appreciated? Perhaps you have been discouraged by a feeling that you were born subject to certain dislikes peculiar to you, with which the successful men in our business are not afflicted. Perhaps you have wondered why it is that our biggest producers seem to like to do the things that you don’t like to do. They don’t! And I think this is the most encouraging statement I have ever offered to a group of life insurance salesmen. But if they don’t like to do these things, then why do they do them? Because by doing the things they don’t like to do, they can accomplish the things they want to accomplish. Successful men are influenced by the desire for pleasing results. Failures are influenced by the desire for pleasing methods and are inclined to be satisfied with such results as can be obtained by doing things they like to do. Why are successful men able to do things they don’t like to do while failures are not? Because successful men have a purpose strong enough to make them form the habit of doing things they don’t like to do in order to accomplish the purpose they want to accomplish. Sometimes even our best producers get into a slump. When a man goes into a slump, it simply means that he has reached a point at which, for the time being, the things he doesn’t like to do have become more important than his reasons for doing them. And may I pause to suggest to you managers and general agents that when one of your good producers goes into a slump, the less you talk about his production and the more you talk about his purpose, the sooner you will pull him out of his slump? Many men with whom I have discussed this common denominator of success have said at this point, “But I have a family to support and I have to have a living for my family and myself. Isn’t that enough of a purpose?”No, it isn’t. It isn’t a sufficiently strong purpose to make you form the habit of doing the things you don’t like to do for the very simple reasons that it is easier to adjust ourselves to the hardships of a poor living than it is to adjust ourselves to the hardships of making a better one. If you doubt me, just think of all the things you are willing to go without in order to avoid doing the things you don’t like to do. All of which seems to prove that the strength which holds you to your purpose is not your own strength but the strength of the purpose itself. Now let’s see why habit belongs so importantly in this common denominator of success. Men are creatures of habit just as machines are creatures of momentum, for habit is nothing more or less than momentum translated from the concrete into the abstract. Can you picture the problem that would face our mechanical engineers if there were no such thing as momentum? Speed would be impossible because the highest speed at which any vehicle could be moved would be the first speed at which it could be broken away from a standstill. Elevators could not be made to rise, airplanes could not be made to fly, and the entire world of mechanics would find itself in a total state of helplessness. Then who are you and I to think that we can do with our own human nature what the finest engineers in the world could not do with the finest machinery that was ever built? Every single qualification for success is acquired through habit. Men form habits and habits form futures. If you do not deliberately form good habits, then unconsciously you will form bad ones. You are the kind of man you are because you have formed the habit of being that kind of man, and the only way you can change is through habit.

The success habits in life insurance selling are divided into four main groups:

1.        Prospecting habits 2.        Calling habits 3.        Selling habits 4.        Working habitsLet’s discuss these habit groups in their order. Any successful life insurance salesman will tell you that it is easier to sell life insurance to people who don’t want it than it is to find people who do want it, but if you have not deliberately formed the habit of prospecting for needs, regardless of wants, then unconsciously you have formed the habit of limiting your prospecting to people who want life insurance and therein lies the one and only real reason for lack of prospects. As to calling habits, unless you have deliberately formed the habit of calling on people who are able to buy but unwilling to listen, then unconsciously you have formed the habit of calling on people who are willing to listen but unable to buy. As to selling habits, unless you have deliberately formed the habit of calling on prospects determined to make them see their reasons for buying life insurance, then unconsciously you have formed the habit of calling on prospects in a state of mind in which you are willing to let them make you see their reasons for not buying it. As to working habits, if you will take care of the other three groups, the working habits will generally take care of themselves because under working habits are included study and preparation, organization of time and efforts, records, analyses, etc. Certainly you’re not going to take the trouble to learn interest-arousing approaches and sales talks unless you’re going to use them. You’re not going to plan your day’s work when you know in your heart that you’re not going to carry out your plans. And you’re certainly not going to keep an honest record of things you haven’t done or of results you haven’t achieved. So let’s not worry so much about the fourth group of success habits, for if you are taking care of the first three groups, most of the working habits will take care of themselves and you’ll be able to afford a secretary to take care of the rest of them for you. But before you decide to adopt these success habits, let me warn you of the importance of habit to your decision. I have attended many sales meetings and sales congresses during the past ten years and have often wondered why, in spite of the fact that there is so much good in them, so many men seem to get so little lasting good out of them. Perhaps you have attended sales meetings in the past and have left determined to do the things that would make you successful or more successful only to find your decision or determination waning at just the time when it should be put into effect or practice. Here’s the answer. Any resolution or decision you make is simply a promise to yourself, which isn’t worth a tinker’s dam unless you have formed the habit of making it and keeping it. And you won’t form the habit of making it and keeping it unless right at the start you link it with a definite purpose that can be accomplished by keeping it. In other words, any resolution or decision you make today has to be made again tomorrow, and the next day, and the next, and the next, and so on. And it not only has to be made each day, but it has to be kept each day, for if you miss one day in the making or keeping of it, you’ve got to go back and begin all over again. But if you continue the process of making it each morning and keeping it each day, you will finally wake up some morning a different man in a different world, and you will wonder what has happened to you and the world you used to live in. Here’s what has happened. Your resolution or decision has become a habit and you don’t have to make it on this particular morning. And the reason for your seeming like a different man living in a different world lies in the fact that for the first time in your life, you have become master of yourself and master of your likes and dislikes by surrendering to your purpose in life. That is why behind every success there must be a purpose and that is what makes purpose so important to your future. For in the last analysis, your future is not going to depend on economic conditions or outside influences of circumstances over which you have no control. Your future is going to depend on your purpose in life. So let’s talk about purpose. First of all, your purpose must be practical and not visionary. Some time ago, I talked with a man who thought he had a purpose which was more important to him than income. He was interested in the sufferings of his fellow man, and he wanted to be placed in a position to alleviate that suffering. But when he analyzed his real feeling, we discovered, and he admitted it, that what he really wanted was a real nice job dispensing charity with other people’s money and being well paid for it, along with the appreciation and feeling of importance that would naturally go with such a job. But in making your purpose practical, be careful not to make it logical. Make it a purpose of the sentimental or emotional type. Remember needs are logical while wants and desires are sentimental and emotional. Your needs will push you just so far, but when your needs are satisfied, they will stop pushing you. If, however, your purpose is in terms of wants and desires, then your wants and desires will keep pushing you long after your needs are satisfied and until your wants and desires are fulfilled.Recently I was talking with a young man who long ago discovered the common denominator of success without identifying his discovery. He had a definite purpose in life and it was definitely a sentimental or emotional purpose. He wanted his boy to go through college without having to work his way through as he had done. He wanted to avoid for his little girl the hardships which his own sister had had to face in her childhood. And he wanted his wife and the mother of his children to enjoy the luxuries and comforts, and even necessities, which had been denied his own mother. And he was willing to form the habit of doing things he didn’t like to do in order to accomplish this purpose. Not to discourage him, but rather to have him encourage me, I said to him, “Aren’t you going a little too far with this thing? There’s no logical reason why your son shouldn’t be willing and able to work his way through college just as his father did. Of course he’ll miss many of the things that you missed in your college life and he’ll probably have heartaches and disappointments. But if he’s any good, he’ll come through in the end just as you did. And there’s no logical reason why you should slave in order that your daughter may have things which your own sister wasn’t able to have, or in order that your wife can enjoy comforts and luxuries that she wasn’t used to before she married you.” He looked at me with rather a pitying look and said, “But Mr. Gray, there’s no inspiration in logic. There’s no courage in logic. There’s not even happiness in logic. There’s only satisfaction. The only place logic has in my life is in the realization that the more I am willing to do for my wife and children, the more I shall be able to do for myself.” Imagine, after hearing that story, you won’t have to be told how to find your purpose or how to identify it or how to surrender to it. If it’s a big purpose, you will be big in its accomplishment. If it’s an unselfish purpose, you will be unselfish in accomplishing it. And if it’s an honest purpose, you will be honest and honorable in the accomplishment of it. But as long as you live, don’t ever forget that while you may succeed beyond your fondest hopes and your greatest expectations, you will never succeed beyond the purpose to which you are willing to surrender. Furthermore, your surrender will not be complete until you have formed the habit of doing the things that failures don’t like to do.

People across the board are complaining about real estate, and I can’t for the life of me understand why. Yes it is a buyer’s market, which means current home owners are not realizing the appreciation that they enjoyed over the last couple of years, but that doesn’t mean there are not significant opportunities to make money. The incentives offered to people right now are amazing, and rates are still historically very low.

Let’s take a look at what the saavy investor is able to accomplish right now.

More inventory means more options…
Purchasing short sales…
Recognizing incentives offered on new construction…
Having sellers take care of all closing costs…
Ability to negotiate lower sales price…
Purchasing with 100% financing and having an equity position…

Are only some of the different opportunites available. In a market like this, buyers do have the avantage, but like any negotiation, you have to not only believe you have to recognize it, and act. This means finding a buyer’s agent that is willing to do a little more work than usual, and falling in love with the first home you look at is not the recommended formula. Having multiple homes you are interested in, and making that clear to the seller makes the point that you are not committed their property only considering it.
If they are in a position that requires them to sell, they may be more inclined to accept a lower offer if they are under the impression you are going to stick around and play games.
If you are serious about buying right now, you need to go over more than just what type of house you are looking for with your listing agent. In fact, let’s digress, unless you are an experienced investor that has bought on your own before, you need to find yourself a qualified buyer’s agent that has a track record for success. Do not simply call listings. If you do, you will probably find yourself in a dual agency, that is, an agent working for both the buyer and seller. Now ask yourself, how can she have your best interests at heart if she has the seller’s best interest at heart too.
Find yourself a buyers agent! Then discuss what your goals are which include not only the type of home you are looking for, but what you want the investment to accomplish for you. If you plan on flipping this property in a short period of time, then the buyer’s agent needs to know this and you should focus on short sales. If you plan on living in the home for an extended period of time, buying new home that was just built may be the play from you so you can take care of free up grades llike marble counter tops, no HOA fees, or stainless steel appliances. These incentives to buy difference between builders, but it is something you should look into.
The point is this market has much more to offer home buyers than the market did two or three years ago. If you know what you are looking for, and you have a professional working with you, then you are in an excellent position to realize a significant return on your investment.
As for terms and financing, which a lot of people are concerned about, the thirty year fixed just dropped to its lowest point in the last year and a half. Rates are stable, and opportunities are there… just like the stock market buy low, sell high.
peter@approved-online.com