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Archive for November, 2013

Vacation Homes- Sure Fire Advice To Consider Before You Buy

Considering a vacation home?  Many people found the ability to afford a vacation home in the early part of this century, because they’ve amassed a huge amount of equity in their primary residences and LIGHTINGthe stock market wasn’t providing anywhere near the returns they could make when buying investment properties or vacation homes.

Most vacation homes were purchased in close proximity to beaches, camping, or other highly desirable travel destinations such as Florida, Arizona, Texas and California.

European vacation homes became trendy again with an emphasis on Spain, Greece, England, and Italy.  While the Asian markets maintain a higher than average price point, there have been some well to do business people who travel to these locals regularly who have made investments made in areas such as Japan, Thailand, and South Korea.  Australia’s Gold Coast has also seen an influx of secondary homebuyers due to its beautiful year round beach weather.DINING

There are many reasons people have chosen to move into secondary homes, not necessarily considered a vacation property simply for the fact of its use.  Some people may opt for the warmer climates during winter season, while returning home in the summer months.  Others may work in areas where they’re not able to commute to work every day and thus need some type of additional housing and consider renting an option they would rather do without.

While buying a vacation property is typically the same as buying your primary residence, you might want to consider visiting and spending an extended period of time in the area were you’re looking to purchase so you can get a feel for the local market and also to see what it’s like to live there.

FLYINGNo matter where you choose to purchase a vacation home, some of the best spots are found near water.  At the beach, on the river, or sitting on the dock of the Bay, water properties are typically thought of as special places of leisure time use.

Most vacation homes are purchased with the idea in mind to rent the property while it’s not a use by its owners.  This is a great way to afford a vacation home but you should also consider the consequences. Another consideration is who is going to manage the property when you’re not there?  If you’re going to higher a management company you should obviously expect to pay some type of fee for this service, which could also cut LIVING AREAinto the rental income needed for the property to support itself.

All in all, a vacation home can be a great getaway for you and your family to enjoy many outdoor activities such as swimming, tennis, golf, sailing, fishing, and many other exciting outdoor activities.  Do your research, find a property that best suit your needs, obtain the right financing and then kick your feet up and read that book you’ve been putting off and enjoy your holiday!

Property Foreclosure: An Ideal Investment

When a person buys a home, he/she usually has to take a loan. The lenders, generally banks, keep the title to home collateral in this case. The ownership of the home is transferred to the lender when the LENDERperson is unable to pay the dues and installments in time. This transfer of ownership to lender is called Foreclosure. Buying foreclosure has been compared to playing poker. As an investment, it has its own risks.

The lenders first determine if there are any junior liens as well. When they find any pending loans etc, they pay everything off so that they themselves have a clear title to the property. Once this is done, the lender adds up all costs to the loan amount to be recovered, and then again resells the property so that they can recover the expenses and loan amount. This is an ideal time for investors to buy such property. Buying a property that has been foreclosed has many gains.

Benefits of acquiring foreclosed property from lenders:BANK OWNED

The first and most prominent benefit is the fact that all properties bought from lenders will have clear titles and ownership rights, thereby saving you the trouble of doing any research.

Next is the fact that foreclosure is not for profit booking. When the lenders sell foreclosed property they want their money back, so they are ready to sell the property cheaper than what it could have fetched in open market under normal conditions.

How to buy foreclosed property:

The first step is to collect information. The best idea is to make a database specifically so that you will have separate data on all the properties and markets in clear sets. In addition, that way you will be REOaware of any specific laws that you may need to abide by while making an investment. The next step is to directly contact the foreclosure owners and start negotiating with them. If you have the address of property but not the name, online directories may help you find the relevant names.

As a beginner, buying foreclosure property on your own can be risky. Try to get help from an agent if you are trying to buy such property. They have all the required knowledge.

Risks involved:

One risk is when buying foreclosed property at auction, sometimes they give just a week to deposit all the cash, and if you fail to do so, you may lose all your deposit. As you keep on investing and makingSOLD money, you will gain experience about bad construction, poor soils, problems with septic systems etc. Background reading and relevant information is extremely important before you get into foreclosure investing. Foreclosure laws in your state, priority of liens, bidding at auctions, title insurance, and bankruptcy are some key areas where you should gain full knowledge. That way you will be able to make better and safer investments.

Property investment is not an easy game, and must be played only with caution and care. Some compassion for the person whose property is up for foreclosure is also essential.

Selling Tips – Determining Your Market

The decision to sell a home is more complex than many people first realize. One of the primary issues to consider is your market and how it will impact the sale of the property.

FOR SALESelling Tips – Determining Your Market

People sell their homes for a variety of reasons. In some cases, the sale is involuntary due to issues that arise in everyday life such as a job-related transfer, divorce and financial problems. For a vast majority of people, however, the decision to sell is made under less trying circumstances. If you fall into this category, determining the nature of the real estate market in your area is a critical step to take.

When determining a market for real estate in a particular area, the central issue is what kind of market is present? There are two types – the seller’s market and the buyer’s market. Each market has particular characteristics and will impact how much time and money will be involved in your selling effort.EQUAL

A seller’s market is one where there are more buyers than properties being listed. It is no secret that the United States has been in one of the hottest seller’s markets ever seen for the last seven years, but it is really starting to cool off. This doesn’t mean, however, that the national trend reflects the situation in your particular area. If your area is still red-hot, you are in the cat birds seat. You can list your home with a high price for your area and still reasonably expect to get offers.

A buyer’s market is one where there are more listings than buyers. In such a situation, homes tend to sit on the market for substantial amounts of time. Many parts of the country, such as Texas and Colorado in general, have historically been buyers markets. For some reason, these two states never really benefits from the massive seller’s market push the last few years.

REALTORAnyway, if you are in a buyer’s market, you need to determine two things. First, do you have sufficient equity in your home to make selling it at a competitive price a worthwhile decision? Second, would it perhaps be better to wait a few years until the market falls in your favor? Unless there is a compelling reason to sell, many homeowners will wait out buyer’s markets. If there is a compelling reason, you need to price your home near the bottom of the market for comparable homes in your area to get a quick sale. If it is any comfort, you should be able to turn around and find a good deal in your area as a buyer.

At times, the real estate process can be a confusing one for buyers and sellers. If you take the steps to determine your market before making a specific decision, you will be better off.

Are You Working To Get A Home Mortgage? Explaining The 80/20 Loan

Nearly half of all first-time homebuyers financed the entire cost of their home, rather than paying a hefty down payment. And many of these zero-down buyers did so thanks to the so-called 80/20 mortgage plan. This is a relatively new type of loan that was especially designed to help buyers who REFINANCEwant to avoid paying down payments. As housing prices have skyrocketed, more and more buyers with good credit and strong income find that they cannot afford a home because of the difficulty in saving up enough to make the large down payment. On a home worth $200,000, a 20 percent down payment is a whopping $40,000. To respond to this challenge, mortgage companies began offering the 80/20 option.

Sometimes the 80/20 is referred to as a “piggyback” loan, because in reality it is two loans working in tandem as one. The first part works in a conventional way, and is for 80% of the purchase price. The 2nd part – the smaller one – is a 20 % loan. So when you apply for your mortgage, the lender actually qualifies you for 100 percent of the purchase price of your home, and then divides the loan into two sections.

For example, if you want to buy a house worth $100,000, the down payment of 20 percent will cost $20,000. With an 80/20 mortgage, the lender gives you $80,000 at one interest rate, and then gives HOMEyou the 20 percent down payment of $20,000 at a somewhat higher rate, for a grand total loan amount of $100,000.

The reason for splitting up the mortgage into two distinct parts is to help you qualify for the loan without a down payment. Normally you have to put 20 percent down to get a conventional 80 percent loan, so with this rather clever mortgage plan, the lender is letting you borrow your down payment. Then the same lender can turn around and let you borrow the rest of the loan.

EQUALYes, it does sound a little bit contrived, and it is indeed a rather complicated way to arrive at a basic mortgage. But what really counts for those trying to avoid a big down payment is that it works, and helps to overcome the down payment hurdle.

You can expect to pay higher rates on the down payment or 20 percent portion of the loan. But the rates are still reasonable, and this loan arrangement allows you to buy without first saving massive amounts of money to use for your down payment. Later, if you decide to pay off the 20 percent loan to lower your monthly payments, that is an option available to you. Many homeowners refinance once they have had a few years to increase their equity, and convert their 80/20 into a more traditional type of mortgage.

Before Closing On Your New Purchase, Conduct A Finl Walk – Through

The notion of a “final walk-through” seems to confuse both buyers and sellers of homes. Here is an explanation of a walk-through.

HOME BUYING MISTAKESWalk-Throughs

What is a  walk-through? What is its purpose? Is it important or just a formality? Can it be used to re-negotiate the terms of the contract at the last-minute? Let’s look.

Typically the buyer just before settlement conducts a final walk-through. The idea is to be sure the seller is delivering the home to the buyer in the condition they agreed to under the terms of their contract. Therefore it includes checking on anything the contract says about the condition of the property.

One requirement often seen in contracts about the condition of the home at time of settlement and possession by the new owner is that it will be “in substantially the same condition” as on the date ofFORECLOSURE the contract. Another frequent requirement is that it will be “broom clean.” Still another is that all the working parts of the home (such as heating and cooling systems, plumbing, appliances that convey, electrical systems, etc.) be “in normal working order.”

Sometimes contracts and addenda to them require things like new carpeting to be installed, gutters to be cleaned out, and HVAC systems to be “professionally serviced and filters changed.”

Read Your Contract

COMMERCIAL LEASINGIt’s a good idea for both buyer and seller to review their contract paying attention to what is said about the condition in which the home will be delivered. Those are the things that should get attention at the walk-through.

While walk-throughs are a formality of closing or settlement, they are not something you should take lightly. This is your chance to get any problems straightened out.

Understanding A Rental Agreement Contract

A rental agreement is a legally binding contract between the landlord and the tenant that outlines the terms and conditions of the rental.

FOR RENTThis contract document is made up of many components. They are:

1. The rental agreement should be very specific on the subject of abandonment. It must clearly define the landlord’s options if the tenant leaves the property without notice?

2. It should outline the alterations that a tenant can make to the property. The rental agreement should clearly state the kind and extend of the alteration that is allowed or not.

3. The rental agreement should touch on the subleasing. As subleasing is very popular today, the rental agreement should state your stand very clearly on this subject to avoid future misunderstanding.

 4. The rental agreement should also state very clearly what will happen in the case of defaulting on a RENTALpayment. The late fees should also be outlined in the rental agreement.  The tenant should know up front how much they will be penalized.

5. As a landlord you should have access to your property for inspection. The rental agreement should detail when and how you will be able to enter the property in order to inspect it, etc. State laws vary on this subject and your rental agreement should conform to the law of the state.

6.  The rental agreement should state who is responsible for the maintenance of the property. If it is a joint responsibility, it should clearly state who is responsible for what. 

HOME7. Payment methods should be outlined on the rental agreement so that the tenant knows how they can pay the landlord.

8. Like maintenance, utilities are a huge part of any rental agreement.  It should be clear on who will pay what bill, as well as which utilities are included in the monthly rent.

All of the above are important components to any rental agreement. In addition since state laws differ, a rental agreement can have additional clauses depending on where you are located.

The first place, and usually the best place, that you may want to search for a rental agreement is on the Internet.  There are several websites that will supply you with the rental agreement form that you are looking for.  One of the more reputable services is located at www.rentalagreements.netAPARTMENT

You have to pay a small price to purchase the rental agreement that is appropriate for your state but it is much better than drafting your own rental agreement and taking the chance of missing out on something that is crucial.

The other way to get hold of a rental agreement is to get in touch with a real estate agency. If you are lucky, they may even be able to supply you with a sample rental agreement that you can customize and use as your own.   A rental agreement is something that you must have if you are going to be renting out any property.  State laws differ and your rental agreement needs to meet the laws and requirements of your state in addition to also outlining every aspect of the lease in detail.

HUD Properties Are Available All Over The United States

HUD properties are available all over the United States, and make great investments for anybody that is interested. These homes often times get a bad rap for being in bad condition, but in all actuality HUDthey are not any worse than other foreclosed homes that are available. Just like anything else, there are some HUD properties that are in good condition, and some that are in need of a few repairs. It is simply a matter of how well the past owner cared for the home.

HUD properties are homes that had loans which were insured by the Department of Housing and Urban Development. But when the owner fails to live up to the financial obligations that are expected, the bank then takes over the home and it becomes a HUD property. At this point, the Department of Housing and Urban Development is in charge of repaying the lender any money that they lost on the deal. So as you can see, the Department of Housing and Urban Development sticks their neck on the line when they insure the loans on these homes; if the owner does not pay, they are stuck with owing money to the lender.

Investors are particularly fond of HUD properties because they are a great way to make them a quickFOR SALE profit. The way this works is quite simple. Since HUD properties can be bought at a great discount, investors will purchase as many as they can afford. They will then fix these homes up just enough so that they can sell them back to the public. But the catch is that they sell them for the market value. This means that their profit equals the difference between the market value cost and how much they actually bought the home for. In many cases this can be tens of thousands of dollars. EQUALBy doing this on several houses a month, HUD property investors can make a lot of money.

If you are not an investor and are just in need of a new home, you may also want to consider HUD properties. Even though you may have to put some work into repairing the home, you will save a lot of money on the initial cost. With the money that you save you will easily be able to make the necessary repairs.

HUD properties can be found all over the United States, and offer great buys to interested parties.

Locating Potential Commercial Real Estate Deals

Locating potential commercial real estate deals can be the most important aspect of commercial real estate investing. In fact, without solid deals, you do not have any property in which to invest. It is COMMERCIALreally necessary to find the best deals you can so that your invested capital is maximized in its return.

When you locate only great deals, you can do fewer deals per year and make an exorbitant amount of money. Great deals are characterized by a return that equals three to four times the amount of your investment. However, if you find only average deals, the return per deal can be considerably less, causing you to either not make as much money, or do more deals per year. It takes the same amount of work and identical processes for each deal, so you might as well do less work and see a greater return.

You must use trusted and solid resources to locate your deals. Although there are many options to find properties, as they are available in every city and state, you must use resources with updated and accurate information. Below you will find the best resources to assist you in finding deals. You can BUILDINGuse each resource to locate the properties that fit within your property investment criteria. Some resources may work better than others, depending on your area of specialization.

One of the best and most common places to find commercial property is through commercial brokers. This would make sense, as they are the ones who actually have the properties listed. You can go to them with a criteria sheet or specific information on the type of property you would like to purchase.

You can find brokers on a local or more widely spread basis, even going as far as calling brokers in other states. Most will be more than happy to call other brokers and find listings that best fit your criteria. They will bring you properties as they become available.

Another great advantage of a commercial broker is their ability to find pocket listings, or listings that are about to go on the market, but have not yet officially been listed. You can get a jump ahead of the GLASScompetition and find excellent deals. Get in contact with a few brokers every day, and watch targeted properties roll in!

Another place to locate properties is on the internet. There are many sites that have hundreds of commercial properties for sale ranging from raw land to large retail and apartment complexes. These sites have information on both the property and the broker, so you can easily get in contact with the broker and learn more about the property. You can filter the information as you see fit, usually according to your specific criteria.

One of the best sites is Loopnet.com. This site houses hundreds of brokers all over the United States who post their many listings. You can filter through deals very quickly and reach a larger audience than you would in just your own community. Your ability to build contacts also increases with so many brokers and agents at your fingertips. I urge you to check out these commercial real estate sites and see what deals you can find.

Auction houses are great places to locate properties of all conditions and types. Many times you can get excellent deals on properties that you may otherwise have to spend a lot more for if they were STORElisted with a broker. You can get on mailing and e-mail lists of different auction houses so they notify you of properties that will be going to auction. This allows you time to investigate the property as an investment, before the actual bidding day.

Auction houses also sometimes provide the option to purchase a property at a certain price before it goes to auction. You never know what opportunities will come along, so it is a good idea to stay in contact with several auction houses to be privy of the properties moving through their hands.

Although there are many ways to locate deals, these are among the best offered to the commercial real estate industry. The properties are abundant, and contacts can constantly be made, allowing for an ease of influx of other possible deals. A secret in this business is that the more contacts you have LEASEworking for you, the more opportunities will be brought to your attention.

If you are working locally, and using only local resources such as newspapers, listings, and magazines, I urge you to use these other options. You can find local deals this way as well. It might even give you incentive to move out to your comfort zone and into areas where you will find even more opportunities.

Use these resources commercial brokers, internet commercial real estate sites, and auction houses to find targeted, up to date, and numerous properties that could possibly bring your next big commercial deal!

3 Ways To Get The Lowest Rate On Your Home Equity Loan

Home equity loans are relatively easy to get, even if you have bad credit. Because you are putting your home up as collateral, lenders tend to be more willing to give you money. From a lender’s point of view, it is a low risk situation. HOMEChances are, if your home is on the line you will make repaying your loan a budget priority and if you default on the loan, they will get their money back in the form of your house. With all of the lenders out there wanting to give home equity loans you can afford to be picky and work to get the lowest rate on your home equity loan.

Shop around!

When you decide to take out a home equity loan, you don’t have to get if from the loan department of your bank. You actually stand a better chance of getting a lower interest rate at a bank that you don’t normally do business with. This bank will be looking to get you as a new customer and might be willing to beat your bank’s offer.REPAIRS

Manage Your Credit Score.

Banks don’t just look into your credit history, when deciding whether or not to give you a loan, they also look at your potential for debt. If you have 5 credit cards, each with a zero balance, but with a total credit limit of $100,000 a bank views that as a risk. You have the potential to go into a large amount of debt and that means that you might miss a payment to them. Weed down the amount of credit cards that you use and cancel the cards that you don’t use.

Think outside the box.

You don’t have to go to a bank to get a home equity loan. You might be able to find a lower interest rate at a credit union or mortgage EQUITYbroker. Take advantage of online mortgage lenders and research which companies offer the lowest interest rates. Some lending brokers even make comparisons for you and then get back to you with the name of the company that will save you the most money.

Home equity loans are a great way to get extra cash to pay off debts, pay college tuition, or do a few remodeling projects around the house. Just make sure that you do your homework before you talk to a lender, so that you will get the lowest interest rate around.

REO Or Foreclosure Property, Why Buy An REO?

An REO is real estate owned by the bank, and many investors consider an REO property to be money just waiting to happen. An REO is different from a foreclosure property in that the bank has already tried to sell it at a foreclosure auction and has had no luck getting bids. Because the property was not bid on, the bank then became the owner of REOthe property. Naturally, the bank does not want to keep the REO any longer than possible, and this makes it a great opportunity for an investor. Not every REO is a good deal, but when you look at an REO you’ll commonly find that there is a lot of money to be made.

So, is this a foreclosure?

Technically speaking, the home was foreclosed on because the owner of the home failed to make their scheduled payments. The bank set up and went through a public auction, but there was not any bids placed on the home, so the bank ended up owing the property. Yes, the home was foreclosed on, but it is well past the foreclosure process and the bank will be anxious to get rid of the property.

Advantages of REO vs. Foreclosed Property

When you are thinking of buying an REO you have to distinct advantages that a buyer does not have with a foreclosedFORECLOSURE property. The first is that you are able to buy on your schedule, as you do not have an auction date to work with and around. You can make an offer of the home any time; you don’t have to wait for bidding to begin. Another big advantage of an REO compared to a foreclosed property is that you can inspect it before you buy, when you cannot do this with the majority of foreclosed homes that you think about purchasing. Being able to inspect the property before you buy will let you know how big of a project you will be dealing with.

Best types of REO to purchase

You might not think the type of loan the home was purchased with the first time around matters but it does. You should attempt to purchase REO’s that had a conventional loan the first time around, as you will likely get much better deals with these than you will if you look at FHA and VA loans. The federal government backs FHA and VA loans, and the government can actually buy them back if they are so inclined. Homes that had conventional loans the first time are often purchased for just a fraction of their value, meaning that they can make an investor a lot more money.

Which REO’s you should not purchase

BANK OWNEDJust because the bank owns a property does not make it a good deal. In fact, when you see that a home or property is an REO you have to wonder exactly what IS wrong with it. The house was not bid on because no one saw the worth in it. Did the home just not have enough equity? Were their IRS liens against it? Was the property just too badly damaged? You need to ask these questions. If the bank cannot answer the questions then you need to be even more skeptical. Take advantage of your right to inspect the REO so that you can see with your own eyes what may or may not be wrong, hire professionals if necessary as well.

One must also be sure that if they are purchasing an REO to fix it up and sell it, that the property is located in a desirable part of town. If the home is not located in a desirable part of town, you should really think about how wise of an investment the property may be. Perhaps location is why the property was not bid on at auction. There are three big things to consider when dealing with any type of real estate and those are location, location, location. Never let a seemingly good deal let you lose sight of how important location is for any piece of real estate that you intend to sell.

Why the bank will sell an REO cheap

Basically, a bank is not set up to deal with real estate. Sure, they give loans to people, but really, they are not equipped to buy and sell real estate. Because banks are not accustomed to dealing with real estate, it often takes them awhile to get the ball rolling so that they can repair the property, and get an agent to sell the property. What SOLDthis means is that while the bank attempts to get their business together they are losing money hand over fist and the federal government often penalizes them for each and every REO that they acquire.

Because the bank is loosing so much money on each REO, they are willing to sell it fast and cheap. In fact, banks commonly sell an REO property for around 30% of its value just to be done with it. Sure, they end up losing money on the deal, but they end up losing less if they sell cheap now than they would if they kept the property for another six months while they try to pull everything together so that they can sell the property. 

LENDERThe great thing about working with the bank with an REO is that you aren’t buying site unseen. Because you can walk through the house and make all the inspections that you want, you can deal with them in a way that will give you the best deal, and the bank will typically be happy with any serious offer because it will get the house off of their hand and they will stop losing money.

Generally REOs are a great investment as long as you know what you are getting into. The bank simply wants to get rid of these homes, and if you find the right property and are ready to make the serious investment, it can be a great way to get off and running in the real estate business.