Category Archives: Purchase Dilligence

When do I need a real estate appraiser?

Property expert

Real estate or the business of property doesn’t seem to die down least bit even in times of recession. Yes, there is a slowdown but hope just as well.  Real estate properties need to be assessed owing to many circumstances.

Before all, first reason for property assessment is property tax. Such an evaluation is conducted by the municipality or the city office. The idea is to levy tax on the property and hence an assessment of property value is required. No one wishes for a real estate appraisal during such times because as a general rule a property is evaluated equivalent to the fair market share principle and not in accordance with the evaluation of foreclosure or short sale properties.

A homeowner requires an appraiser during the time of resale. At such times, he is quite happy with the fair market evaluation theory as he gets a chance to get his property assessed at premium.

Real Estate Investment Fundamentals

Property investment

First and foremost it is important not to be lured by agents or big investors. These days there is a lot of talk about coming into the system without any operating cash or credit. This is true, but then the right method of funneling into such properties is important.

Foreclosure is a great way of earning but then it implies that a buyer settles for a price less than the original, it is thus important to have legitimate backing from a regulated body like FHA who can take the brunt of such dealings for an investor in the event of a payback default.

Another fundamental is shying away from dead properties.

The importance of insuring your home and property

Insuring your home is essential as it is difficult to predict what will happen in the future. There are chances that the burglars may break into your house. Also the chances of getting affected by natural calamities like flood, wild storms and fires cannot be neglected. There are reports of damages caused by such natural activities. There can be explosions due to gas leakage or short circuit in wirings. So, it is always better to stay on the safer side by taking an appropriate insurance to your home.

While selecting a home insurance one has to make sure that the insurance premium stays within the person’s budget as well as should provide the necessary coverage. Most of the insurance policy not only cover the home alone but also covers the nearby structures like car shed or anything like that which are owned by the person. The policy will only include the cost of rebuilding the home only. The land cost will not be included in the policy. So make sure that you get the cheapest insurance policy with good support and coverage. In order to find a cheap insurance policy, an individual can search for one in the internet. Thus a person can go through the details of policies offered by different companies and can select an appropriate one.

Money.co.uk is one such site where a person can do the comparative study on different home insurance policies provided by different companies and their prices in U.K. The advantage of using Money.co.uk is that the comparison study can be done with an ease as they arranged all the home insurance policies and their features in the form of tables. The customer can directly make a quote from this site itself. One can make his/her decision within minutes, so it helps in saving your valuable time also.

4 reasons for owning your house

If you are first time buyer, you must be wondering if investing in property is a good decision. Well having reservations about this is normal and there is nothing to worry about. I will list down 8 reasons why a purchase of a property is worth a decision to be taken.

The pride of ownership

For home buyers there is nothing more elating than to have the feeling of being the owner of that dream property. It means that you are the owner of that space and you can do whatever you wish to do within the premises (of course it should be within the legal framework). The ownership of the property gives the person and his / her family a sense of security and stability

Appreciation

Like every other investment tool, real estate also moves in cycles. But the fact of the matter remains that the prices have always appreciated over a period of time. For many of the investors the investment in the house / property is a hedge against inflation. Once the prices have appreciated you also have the option of exercising the equity release option. That will give you access of the locked cash potential of your home / property.

Mortgage interest deductions

Investing in your dream property is an excellent way of tax shelter. The tax laws in Unites States, UK and most of the Europe favor property investments. The interest component and to some extent even the principal can be claimed as a deduction under the tax laws thereby reducing your net tax liability.

Capital Gain exclusion

Tax / revenue laws in many of the countries give tax exclusion on long term capital profits / gains. So if you have remained invested in your property for a certain number of years, the proceeds from the sale of the property are exempted from your tax calculations if those proceeds are reinvested into the purchase of another property.

Why you should have a real estate agency with a long term partnership in place ?

A real estate broker house is a set up that is designed to assist the customers in property acquisitions. Some of them have expertise on specific aspect of real estate while others specialize in some other aspects. Few of them might be offering leasing services while some others might offer investment and a select few would be offering both commercial leasing as well as investments. Here’s a snapshot of some of the specialized services that come with good real estate agents:

Investment and user acquisition : Buyer’s perspective

· Determination of client needs

· Compilation of properties that meet the client criterion

· Identification of the best property deals accordingly

· Financial analysis of prospective and short listed property locations

· Market analysis and future prospects

Investment Sales: Owner’s perspective

· Aggressive, credible, strategic planning

· Preparation of custom designed marketing agenda

· Qualification of prospects

By roping in a good real estate agent or broker house, you would most likely not be required to search for a new partner every time you are in need of a property – commercial, residential or leased property. Your real estate agent or broker understands your requirements and investment or business objectives. This alignment and understanding helps you in catching the best property deals in the market.

Property checklist – before you grab that piece of land

Investments in real estate are done in order to secure profits. Some carve out an entire career out of this, and some other indulge in real estate as a supplement to their income. Many investors put their money in real estate with the objective of retaining the ownership of the property and leasing or renting it out for commercial usage.

Whatever be the objective every property investor must perform few sets of activities as a checkpoint before taking the last leap.

Know your property

Visit the property you are planning to purchase during various times in a day or spread it over few days. This must be done because few things look different in different times of the day. A perfunctory glance at the property is not enough. You might miss few important things.

Hire an expert

Bring an expert to walk you through the deal. Take the expert to walk through the property. There’s a good chance that they know some of things that you might not even given a thought to. Also, they help you in vertical integration of the entire process. Closing a property deal involves a series of activities from finding a property to ensuring that the title is clear, from valuations to securing mortgage loans at an appropriate rate, from verifying if the property is damaged and repaired superficially to ensuring if the structure has been completely secured, from planning to execution – they know it best. Some of better experts also have the list of good properties in your area. So if you are looking to buy properties in London, hire the property experts in London.

Background of the property

Make it a point to have the local county office records searched to see if the property is clear of any liens, taxes and/or disputes. The information is always on the records for you to see. The expert you have hired will come handy in finding the right kind of information on the related property.

Going into the deal armed with all the knowledge and technical support would mean that you are in a better position to negotiate the deal and that investment in the property would earn you better rewards in times to come.

Weighing the real estate value in a downhill market

In a tattered real estate and housing market like the current one, choosing your neighborhood is more significant than ever.

Around five million Americans would be scouting for a house this year. They could the first time buyers scouting the Chicago or the California markets or a worker in the middle of his career relocation to Denver. The significant part is that they all would be contemplating the one of the most important decision of their life in times when no one is certain how low the prices would go before taking a halt.

If you would be relocating in a job, you do not have luxury to decide the region. But do have the discretion to decide where to live within that region. This decision of yours would decide whether or not your home turns out to be a good real estate and property investment.

There are signs that the current crisis could run deeper than all of the previous ones experienced. The statistics from the National Association of Realtors suggest the housing property prices witness their first year on year decline in 40 years in the year 2007. Prices are expected to fall further as the crisis deepens. The price fall may, well, continue into 2007.

But even in this crisis ridden atmosphere, some cities like Seattle, Austin, Texas and Wichita are witnessing a surge in their property prices. And even in cities which are hard hit, some neighborhoods are holding up their prices better than others.

Always remember that buying a home or a property is a street by street exercise. This particularly holds true in a weak market like the current one. In a strong market, buyers lap up properties on not very desirable locations and even on busy streets. But in a sliding market things turn around and change.

Anything could have been sold in the strong market sentiments of 2004 and 2005 but now its location… location… location more than ever.

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Related info: Homeowner Loan 

 

 

Taking the FSBO route for your property

For most of the real estate investors, buyers and sellers who have decided to go the FSBO way (For Sale By Owner) the primary objective is to save on the payments of commissions to the real estate agents. With the commission hovering in the range of 4% -6%, this also makes a lot of economic sense.

The realtors and the real estate agents often argue that in order to generate interest in your property in a slow and recessionary markets like the current one, you would require their real estate agent’s services.

On the other hand the investors, sellers and buyers have the argument that the Internet has its own ways of generating potential leads for fsbo homes. Add to this that the ease with which the process can be learnt and the speed of communication between the stakeholders.

Some of the benefits are:

Saves Time

Because you are dealing directly with the owner of the home and that that owner of the home is dealing directly with the purchaser the communication turnaround time is fast and secured. The entire process objective is achieved faster than usual.

Saves Money in the form of commissions

Many buyers believe that the services of the realtor are free. But in actual the real estate agent or the realtor has already loaded his commission / charges in the sell price. The selling offer price that you have got is loaded one. Direct purchase would be minus the commission value.

More Convenient

Communicating directly with the owner is easy and less frustrating than dealing with the middleman. The negotiations are more efficient and effective. The process becomes easy and transparent.

Make sure you consult an appraiser to arrive at a proper valuation of your property and hire a lawyer who is expert is real estate to prepare for your property papers.

Watch out the credit error in your mortgage report

Modern loan officers tend to work on volume. So when reviewing the credit scores for a real estate mortgage these officers will tend to look at the basic scores, without paying too much attention to reviewing the reports and discussing problems with applicants.
So when applying for mortgage loan on your dream piece of real estate you could easily end up paying a higher monthly interest rate simply because of some minor error in your credit report. This slightly higher interest rate may add up to thousands of dollars over the life of the mortgage.

Therefore, it is essential that you review your credit report to ascertain if there are any factual errors, as even a small mistake can cost you a lot of money over the years, or even stop you from obtaining a mortgage for your real estate.

Real estate mortgage loan with an interest only component

One of the modern tools in the real estate mortgage is the limited period interest only mortgage loan. Most of the interest only mortgages are not viable for banks for the full term of the real estate mortgage, so usually, the interest only period will last for five to ten years. At the end of the allotted interest only period, payments will go up because of the addition of the principal in the monthly installments.

The problem with this is, because the mortgage holder has paid no substantial principal for all those years, when they begin to play the full mortgage payments on the real estate the monthly amount payable will be considerably higher, because they now have five or ten years less of the mortgage life, to complete repaying the principal loan amount.