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SO MUCH TO DO – SO LITTLE TIME

SO MUCH TO DO – SO LITTLE TIME

“If you don’t have time to do it right, when will you have time to do it over?” – John Wooden

Time is the only thing that everyone has the same of – whether you are rich or poor, famous or ordinary, we all have the same amount of time to accomplish what we want to do on any given day.

This past weekend I think I may have bit off more than I wanted.  I decided to build a website to showcase all the short sales I have for sale and it pretty much took up all of my weekend.  So, I never got to post what I wanted to talk about yesterday.

Briefly, yesterday was the Epiphany – the day when the wise men – Magi – went to see the Christ child. These three men traveled a great distance just to see the newborn king and bring him gifts.  King Herod was jealous and afraid this newborn king would be greater than him, so he asked the wise men to come to his palace after they saw the Christ child, to tell him where he was so he could also pay homage to this newborn king.

An angel appeared to the Magi in a dream and told them of King Herod’s plan, and so instead of  returning the way they came – via where King Herod resided  – the Magi took a different way home.  In essence they had a “Plan B”.

Do you have a “Plan B”?  In today’s world and economy, it is very important to have a “Plan B” to keep you afloat.  If you don’t have one, I suggest you begin giving it a lot of thought. I know I am!

By the way, please stop by my new “ShortSaleAlachua.com” web site and take a look at the “Pre-Approved” short sales I have on the market. This is the website I built this weekend that took up all of my time.  Just click on the link below to view the site.  Thanks

https://sites.google.com/site/shortsalealachuacom/home

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SELLERS; IF YOU WANT IT, ASK FOR IT!

SELLERS; IF YOU WANT IT, ASK FOR IT!

“Ask, and it shall be given unto you.”  –  Jesus Christ

There’s nothing more frustrating to a ready, willing, and seemingly able buyer than to lose an offer to another buyer — especially since the seller was not specific (down to the letter) about what he expected to receive.

Sure, there’s the list price; but in today’s fast-paced market, a buyer/ prospect may offer thousands more than the list price and STILL not be the lucky buyer who gets the property!

That’s why sellers should be as specific as possible with buyers in what they want to receive and achieve in a successful offer.

Let’s tackle the major elements the seller should be prepared to address with serious buyers. I suggest that sellers (or their real estate agent) prepare a “Suggested Contract Requirement” sheet to give to buyers, outlining what they expect in the following:

Loan pre-approval
By now, it should go without saying that buyers without loan pre-approval shouldn’t be competing in the current market; but sadly, some are. That’s why it’s important for the seller to specify that buyers be pre-approved for loans ample enough to fund the purchase price, AND detail the type of loan and respective costs (if any) the seller would cover.

For example, a buyer might claim to be pre-approved for a mortgage of “x” amount. What she fails to disclose, however, is that it’s Veteran’s Administration (VA) financing and she expects the seller to cover her two discount points. On a $140,000 sales price (with zero down) that’s a hefty $2,800 for the seller.
Or what about the buyer who claims to have “cash” coming to him to fund the purchase (often coming from proceeds of an estate or settlement of a law suit.) The buyer’s funds are delayed. In order to close the sale, he must borrow the money, causing the seller a three-week delay in accessing his proceeds. Verifying the buyer’s funding (which is tougher to do in a “cash” sale) is vital for sidestepping potential delays for the seller.

Earnest Money
In the old, slower school of home buying a decade or more ago, buyers would offer a meager amount of earnest money or even a post-dated check with the idea that they could always up the ante if need be. In today’s market, more (rather than less) earnest money is advised in most situations. Not only does it subtly signify to the seller how financially motivated a buyer is, but can serve as a buyer’s first (and often only) shot at a strong first impression to the seller.
By letting prospective buyers know (in writing on the “Suggested Contract Requirement” sheet) the minimum amount of earnest money the seller is seeking, it places a strong buyer on equal footing with competitors. It also gives a heads-up that if you want a stronger foothold with the seller in this area, exceeding the suggested minimum amount is certainly in order! If a buyer structures an offer to include minimal contingencies like obtaining financing in a certain amount and the property appraising for at least the sales price, etc., earnest money would be at little risk of loss.

And what about contingencies? Should a seller require that buyers make all offers free of positively all contingencies if they’re serious about the property? Hardly. But keeping contingencies to a minimum (as we’ll see in Part II of this article) definitely gives buyers an added advantage over their competition and results in a smoother sale for you as a seller.

IF YOU ARE A “FOR SALE BY OWNER” THEN YOU NEED TO KNOW THIS!

IF YOU ARE A “FOR SALE BY OWNER” THEN YOU NEED TO KNOW THIS!
“He is happiest, be he king or peasant who finds peace in his home.” –  Goethe

Many homeowners believe to maximize their home sale they should sell it themselves. At first glance, they feel selling a home is simple. Why would they pay a broker free for something they could do themselves? In fact, close to 25% of all the homes sold last year were sold For Sale by Owner (FSBO).

However, close to half of the FSBOs said they would hire a professional next time they sold. Thirty percent said they were unhappy with the results they achieved by choosing FSBO. Why?

Many FSBOs told us the time, paperwork and everyday responsibilities involved were not worth the amount of money they saved in commissions. For others, the financial savings were even more disappointing. By the time they figured the fees paid to consultants, inspectors, appraisers, title lawyers, escrow and loan officers, marketing, advertising, they would have been better off to have paid the broker’s fee that would have included many of these charges.

Selling a home requires an intimate understanding of the real estate market. If the property is priced too high, it will sit and develop a reputation for being a problem property. If the property is priced too low, you will cost yourself serious money. Some FSBOs discovered that they lost money as a result of poor marketing decisions. In the final outcome, this far outweighed the commission they would have paid.

Before you decide to sell FSBO, consider these questions and weigh the consequences of assuming the responsibility versus employing a professional. A little time spent investigating now could pay off tenfold in the end.

Questions To Consider

  • Do I have the time, energy, know how, and ability to devote a full forced effort to sell my home?
  • One of the keys to selling your home effectively and profitably is complete accessibility. Many homes sit on the market much longer than necessary because the owner isn’t available to show the property. Realize that a certain amount of time each day is necessary to sell your home.
  • Am I prepared to deal with an onslaught of buyers who perceive FSBOs as targets for “low balling”?
  • Another challenge of selling a home is screening unqualified prospects and dealing with “low ballers.” It often goes unnoticed that much time, effort and expertise is required to spot these people quickly. Settling for a “low ball” bid is usually worse than paying broker commissions.
  • Am I offering financing options to the buyer? Am I prepared to answer questions about financing?
  • One of the keys to selling, whether it’s a home, a car.. anything, is to have all the necessary information the prospective buyer needs and to offer them options. Think about the last time your purchased something of value, did you make a decision before you had “all your ducks in a row?” By offering financing options, you give the home-buyer the ability to work on their terms. You’ll open up the possibility of selling your home quicker and more profitably. A professional real estate agent will have a complete team for you to profit from… lenders… title reps… inspection companies… they’ll be completely at your disposal.
  • Do I fully understand the legal ramifications and all the necessary steps required in selling a home?
  • Many home sales have been lost due to incomplete paperwork, lack of inspections or not meeting your state’s disclosure laws. Are you completely informed of all the steps necessary to sell real estate? If not, you may want to consider consulting with a professional.
  • Am I capable of handling the legal contracts, agreements and any disputes with buyers before or after the offer is presented?
  • Ask yourself: “Am I well-versed in legalese? Am I prepared to handle disputes with buyers?” To avoid any disputes, it is wise to put all negotiations and agreements in writing. Many home sales have been lost due to misrepresentations of what was negotiated.
  • Have I contacted the necessary professionals… title, inspector (home and pest), attorney, and escrow company?
  • Are you familiar with top inspectors and escrow companies? Don’t randomly select inspectors, attorneys, and title reps. Like any profession, there are inadequate individuals who will slow, delay and possibly even cost you the transaction. Be careful!

My hope with this report has been to educate you and help you avoid the pitfalls many FSBOs go through. I hope you found the ideas valuable and if there is every any way I can be of service to you or anyone you care about, please contact my office. Your initial consultation is always completely free and you’re under no obligation of any kind. I’d love to hear from you!

Sincerely,
Jocelyne Grandjean-Brown
RE/MAX Professionals
352-870-9929

MOVING ON UP!

MOVING ON UP!

“Hold yourself responsible for a higher standard than anybody expects of you. Never excuse yourself.” –  Henry Ward Beecher

The kids are warring over bedroom space — even the dog wants more room! So one Saturday you innocently load everyone into the car, in search of a larger home. Emotionally, it makes sense.

But financially, are you prepared to part with some of your hard-earned equity (not to mention a bit more of your paycheck) in order to purchase a larger home? It’s going to cost you money to move up.

Simply explained, equity is the difference between what you owe on your home (all its mortgages, liens, etc.) and what you could obtain on the open market LESS YOUR COSTS OF SALE. (And the last part of that sentence is often overlooked by over-zealous move-up buyers!) But looking before you leap can make the difference between a financially prudent new purchase and a haunting economic disaster! Let’s evaluate the costs.

1) Some increased costs of purchase are obvious: You’ll be paying a larger mortgage payment monthly to own a larger home (depending on your down payment) your taxes will increase, and yes, even your home owner’s insurance will be more. And if your down payment isn’t at least twenty percent of the purchase price, you may even have private mortgage insurance to pay. It all adds up; but

2) Some increased costs of purchase aren’t so obvious: What about upkeep and maintenance? Utilities? Even the extended period of time it takes to clean the home on the weekend, taking time away from your family and other “fun” things—are you prepared for that?

3) One category most of us overlook when taking the “move up” plunge is to evaluate the chunk of equity it will cost us to sell our existing home, pay our buying costs, and move into another. Since 80% of all sellers hire a broker to sell their existing home (often saving money overall in doing so), you’ll no doubt benefit by that cost. You’ll add to it the additional sales costs of title insurance, transfer taxes, deed preparation, tax pro-ration—-basically all the costs paid by the seller when you purchased the home.

So should you move up? The answer depends on what you’re trying to achieve. If you’re purchasing a home that will appreciate faster than your current one, gives you more space, is in a better neighborhood, and/or will make you psychologically happier, it may make sense to move. It’s true that happiness becomes the over-riding factor to the move-up buyer. Yes, you may want different features than you have in your current home; but you also know that housing is housing— but being happy where you live is paramount!

The bottom line is that homebuyers purchase with their “gut” and justify the purchase with their wallet. Long after you’ve crunched the sales cost numbers and consulted with an expert to evaluate a new neighborhood, you’re still likely to follow your gut instincts and purchase the home that tugs hardest on your heart-strings. After all, it’s what living the American Dream is all about.

REVIEW YOUR CREDIT REPORT BEFORE YOUR LENDER DOES

REVIEW  YOUR CREDIT REPORT BEFORE YOUR LENDER DOES

“Always bear in mind that your own resolution to succeed is more important than any other. ”  –  Abraham Lincoln

Consumer credit information is obtained and stored in the United States by three major credit bureaus, Experian, formerly known as TRW, Trans Union Corporation and Equifax.

Credit reports contain significant information on more than 190 million Americans, about the entire adult population of the United States. These reports include your name, date of birth and social security number.

Offered in the reports for lenders to see are your lists of credit card accounts, including credit limits, your outstanding balances, payment history (late payments) for each account, your current loans, and any bankruptcies, civil judgments or liens against you. The credit report should also state the name of any company who has requested a copy of your report.

The biggest complaint that most people have about these credit reporting services is that they are often inaccurate, and getting the problem corrected is time-consuming and often difficult. An astonishing two out of five people are reported to have one or more errors on their consumer credit reports, so the odds of your having an error are high. When credit reporting companies make a mistake, they don’t incur any penalty, but you well might.

Although these credit reporting services include instructions and contact information so that you can correct mistakes on your reports, the damage could already be done. An inaccurate report that cannot be quickly cleared up can cause you to miss getting a loan on time to get your dream house. You may have to wait as long as 30 days to hear that a complaint has been corrected. And you will have to supply the corroboration that the account is in fact paid in full, or paid on time, etc. A canceled, dated check will do nicely.

Not anticipating that there might be a problem, people often wait to check their credit reports until they apply for a loan. Then they find out from the lender that there is a problem. If you are able to show proof that the report is in error, the lender will usually proceed with the loan, but s/he will insist that the credit reporting service post the correction before the loan goes through. If the lender is not satisfied that this has been done before closing, s/he may opt to close the loan at a higher rate or put off closing until the information has been posted.
As you can see, either way, it will be a nightmare for you if there is a problem. That’s why you should review your credit report before you go to a lender.
You will have to see the reports from each of the credit reporting services. One report isn’t enough. Again, you will be surprised at how often they are out of date, or inaccurate. And they don’t accept information from each other. If you call Experian and say that Trans Union’s report is correct but Experian’s isn’t, they will still make you prove the error.

So you have a choice – contact each of the credit reporting companies separately or use a new service which offers access to all three from one convenient site. QSpace, makers of iCreditReport.com, is the first service to deliver credit reports in real time over the Internet. iCreditReport.com gives Internet users the ability to access their credit files at any time, determine if their report contains information or inquiries that they do not recognize, and challenge inaccuracies more rapidly. iCreditReport.com allows users to instantly receive their personal credit reports over the Internet for $8 a report.

iCreditReport.com offers users a quick and secure method which includes the highest encryption protocols for securing transmissions, for users to monitor their personal credit records online. The proprietary system authenticates your I.D., then will release credit information to you in a secured environment.
In order to ensure privacy on the user’s side, the service does not use unsecured connections such as email, nor doe it store credit reports on its servers once the transmission is complete.

Watch Out for Credit Scoring

Lenders also get more than the credit report when they access credit rep orting company records – they get a score or a credit rating on the borrower. The score indicates a statistical probability that the borrower will default on the loan.
According to real estate columnist, Robert Lee, innocent maneuvers to consolidate your debts can inadvertently cause your score to go up. Lee advises caution when canceling many cards with small balances and then shifting the debt to a single or fewer cards.

“The maneuver will effectively raise the ratio of your unpaid balances to the maximum credit lines available on fewer cards. To the software (used by the online lenders,) it appears as if your financial situation has tightened,” says Lee.
So not only do you have to worry about your balances but the score they produce.

Lee explains that quick fixes won’t help you get the loan, but that there are some strategies you can follow to raise your score. One of them is paying a visit to Fair, Isaac and Co. Inc., a company which developed credit scoring for mortgage applications. The site includes consumer information on credit scoring. Used by both the site offers information on how credit scores are developed and used and how they can be improved.

Once you obtain a credit report, even if it is all in order and your credit is good, you will not be able to use the report to get a loan. Your lender will still want to run his/her own credit check, but at least the report will be a step in the right direction toward getting you pre-qualified and prepared to buy.

A word of caution. The reason lender fees are so high for credit report checks is that they typically will run your credit report a second time, right before closing. So when you hear that your loan has been approved, don’t do anything foolish like go out and run up a lot of bills. Every action will show up on the credit report.

Many closings have been delayed or canceled because the lender has found out something new that changes the dynamics of the loan. Don’t allow your closing to be one of them.

PART 2 – INFORMATION TO MOVE FORWARD WITH-

PART 2 – INFORMATION TO MOVE FORWARD WITH-

“What you do speaks so loudly, that I cannot hear what you say”
– Ralph Waldo Emerson

While the Internet has proven to be an invaluable tool for any first-time home buyer, the wealth of information posted on the Net can cause a new buyer stress. The Web has countless sites that target new buyers, and all of them claim to offer the most accurate data. And what about e-mail? It’s both a blessing and a curse. E-mail is a fantastic medium, of course, for Realtors and their clients, although it can never replace the value of face-to-face communication. Where e-mail becomes problematic for new buyers is when it creates an information glut. Consumers who have been surfing the Net for information about home-buying may unwittingly find themselves placed into large databases for e-mail. These victims of “spamming” arrive home each night to as many as 50, 60 or more ads in their Inbox. And while some of them advertise legitimate businesses, just as many of them don’t.

The bottom line is that new home-buyers are deluged in a sea of information. Some of this information is presented in alarming terms, making it seem as if new buyers are up against considerable odds, and behind every corner during the real estate transaction is a disaster waiting to strike, not the least of which is mortgage-induced financial doom. Perhaps its little wonder, then, that many professionals in their late 20s and early 30s are a bit hesitant about buying, even if their finances would allow it. What is unquestionably a complex process seems that much more daunting thanks to this information glut. Which questions is a new buyer supposed to ask? What elements are critical in a residential real estate transaction? How does a buyer protect his or her own best interests?

One of the best lines of defense you’ll have during the real estate transaction is a trusted Realtor. Sounds simplistic, and yet, its so vital to ensuring that your interests are protected. Like any other field, loyalty to one’s friends is often expected in real estate, and falling victim to that burden can cost you. Consider this chapter pulled from my own home-buying storybook: When choosing a Realtor, I had the option of selecting 1) an acquaintance with 15 years of experience and an outstanding reputation, and whose services a colleague had used and praised wholeheartedly; or 2) a close friend who just eight weeks before made the decision to pursue a career change and become a Realtor. I chose Number 1, and it cost me Number 2. But when you’re a first-time buyer preparing to make the most significant financial commitment of your life, you’d better make sure you’ve got a Number 1 on your side to guide you through the process.

A question you need to ask yourself is what you absolutely must have in a home, what you’d like to have and what you can do without (but, of course, it would be nice if the home had those amenities). You’re probably going to find that as you get into your home search, that list of “must haves” is going to shrink. Nevertheless, you’ll help yourself and your Realtor save considerable time in the home-search process, so that the both of you can spend more time looking at homes that present real potential. It’s a good idea to have a discussion with your Realtor about your lists, too. Although you may not have written “extra bedroom” on your “must-have” list, your Realtor will probably advise you to choose a home, if it’s financially feasible for you, that has at least two bedrooms — mainly for resale purposes. So your Realtor can help provide you with some perspective on that list, which you may want to reorganize after your discussion.

Know What You Need And What You’ll Concede. What is essential to one home buyer may be of no value to another. Creating “need-to-have” and “nice-to-have” lists can be helpful. Your first “need-to-have” list may be very different from your final version; still, it serves as a starting point for you to discuss and decide upon those features that are the absolute essentials. For instance, public transportation to shopping areas might be a “need-to-have” if you do not own a car, while it is another person’s “nice-to-have.” If someone in your family is disabled, a one-level home with wheel chair access may be a necessary feature. However, you may decide that adding a customized ramp after the home purchase is more cost-effective. Identifying what you want and what you need helps your real estate agent pinpoint your ideal home.

If you don’t understand the mortgage process, by all means, ask for help both from your Realtor and your loan officer. If you’re a first-time buyer, “mortgage-ese” is going to sound like Greek to you, and while it’s sometimes difficult to admit your lost, the sooner you ask for help with translation to English, the better. Once your loan has been approved, closing soon follows, and you’re going to want to keep those lines of communication open among yourself, your Realtor and your loan officer during that process. It’s complex, it’s expensive, and you have a right to know what you’re signing — even if the title company representative is flying through your closing (you’re probably one of many clients that day). Don’t be afraid to ask questions before, during and after the closing. Rest assured that your questions are ones your Realtor and loan officer have heard before and are quite used to answering.

The average first-timer will have more questions than the ones raised during this article and its preceding piece, but this gives you a good starting point for moving forward with your transaction. The best insurance you have is to align yourself with a Realtor in whom you trust your future. If they have an excellent reputation and seasoned experience in your market, he or she will have the connections you need to complete the your transaction, and will stand by you during and after the home buying process. When it comes to home buying, it is, indeed, a jungle out there. You don’t need to be paralyzed with fear, but you do need to find yourself the proper Realtor and demand the answers you’re seeking. It will make the difference between a positive first-time purchase and one filled with regret.

THE RENT OR BUY DILEMMA – PART 1

THE RENT OR BUY DILEMMA – PART 1
“The greatest griefs are those we cause ourselves.”
Sophocles, Oedipus Rex

Most people decide to buy a home for very emotional reasons. Their home-owning friends are constantly talking about fix-up projects and gardening chores. Family members keep asking when the apartment dweller will be hosting a holiday dinner. Children want bedrooms of their own and a backyard for playtime. And so it goes.
Despite these emotional tugs, buying a home isn’t always a wise financial decision, according to the National Multi Housing Council (NMHC), an apartment industry organization in Washington, D.C. Ownership housing advocates naturally have an alternate view and promoting rental housing is part of the NMHC agenda; however, the group’s perspective is still an interesting one for those considering the financial ramifications of the rent or buy decision.
Such individual criteria as income, credit history, savings and lifestyle preferences determine whether a person will want to buy a home and, if so, whether he or she can qualify for mortgage financing. But the broader economic outlook for interest rates, other investments and the local housing market should be factors in the decision as well.
Interest rates obviously have a big impact on the affordability of ownership housing. Low rates such as today’s make mortgage financing costs dramatically less burdensome for homeowners and make ownership an attractive proposition in many cases. But low rates might mean the home will be less likely to appreciate in value, says Jack Goodman, chief economist and vice president of research for the NMHC. “Let’s say fixed-rate mortgage interest rates went down from 7 percent to 3 percent. A prospective home buyer might say that makes it cheaper to service a mortgage and makes the cost of homeownership less. But what caused interest rates to go down? If it is an inflation expectation, you shouldn’t be looking for as much appreciation as you might have when interest rates were higher. If it is because the economy is soft, maybe you should be thinking about whether your employment is at risk. It’s not so much that there is a right or wrong answer. It is just that there is a list of considerations,” Goodman says.
Up-front financing costs (e.g., points, appraisal fee) are a significant component of transaction costs, which should be a prime consideration in the rent or buy decision. Goodman says it is very expensive to buy, then sell owner-occupied housing and transaction costs tip the scales toward renting as a preferred option for short-duration buyers.
Another item on the list of considerations is the stock market or, more broadly, other investment opportunities. Although a house should be a home, it’s also a financial investment that ties up capital. “No one can out-guess the [stock and housing] markets over a long term, so you want to be diversified. Too [many] people put all their eggs into the homeownership basket, whereas they shouldn’t count on house price appreciation as being a source of increased wealth for them over time. In some years, house prices do better. Lately, the stock market has had a good run. The moral is that your [investments] should be diversified,” Goodman argues.
Mortgage financing increases both the risk and the possible return on buying a home, Goodman adds. “It is exactly like buying equities on margin. Using borrowed money in any investment increases the volatility,” he explains.
Finally, is the absolute cost of ownership housing an important economic factor in the rent or buy decision? While high housing costs are a barrier to ownership for some people, the price of homes may be less of a factor than the relative costs of owning or renting comparable housing in an area, Goodman suggests. He says the comparison between the costs of renting and the costs of owning must be made in each market area as another component of the rent or buy decision.

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