Buyers

• Definition
  A 1031 Exchange (Tax-Deferred Exchange) is One Of The Most Powerful Tax Deferral Strategies Remaining Available For Taxpayers. This allows the taxpayer to pay due taxes at a later date. In usual transactions, the landowner pays a percentage of his gain from the sale for taxes. But Section 1031 of the Internal Revenue Code allows the landowner to trade the property with another “like-kind” property. This however does not mean tax-free. It simply gives the taxpayer time to reinvest their profit.
• Advantage
  The obvious benefit of a 1031 Exchange is that the taxpayer can postpone paying taxes. But an exchange of property of like kind has to happen. And this only pertains to investment property; not a personal home.
• Disadvantage
  The exchange needs to be done within a limited time frame and reduced cost. And the funds need to remain invested. The taxpayer also needs to pay the exchange fee.
• Exchange Techniques
  There are several ways of drafting a tax-deferred exchange. But it has to abide by the 1991 “safe harbor” regulations. It established procedures which include the use of an Intermediary, direct deeding, the use of qualified escrow accounts for temporary holding of “exchange funds” and other procedures which now have the official blessing of the IRS. Because of this, you will need the help of an Intermediary.
• Investor Services
  Our extensive knowledge and experience proves our credibility in terms of improvement costs and acquisition guidelines. This helped us develop a strong relationship with owners and investors who help us understand all sides of any deal.

To us, negotiation is important and we have the patience to go through the the process of getting a good deal.

Our success rate is strong giving no wonder we enjoy a big share in the percentage of success rating in growing nationwide business.

Because of the crash of the housing bubble and the economic slump, many Americans find themselves with a home that costs way less than what they paid for. It’s worse for families who are troubled financially on top of this. Foreclosure seems to be the most logical option. Let’s discuss details and other options.

During the housing bubble, many people were compelled to join the bandwagon and purchased a house. But now they find that their houses are worth far less than what they paid for. There are many reasons why this happened. During the bubble, constructions companies built massive housing projects and a lot of them stayed vacant. Neighborhoods stayed empty. Some neighborhoods that were populated evetually became empty as homeowners turne/d to sub-prime mortgages, causing the entire neighborhood to fall in value. Houses in neighborhoods like this are hard to sell even at low rates. They are even hard to put up for rent.

On top of the crash of the housing bubble, a lot of Americans find themselves out of work or they have reduced work hours. Both cause families to lose part of their income. This makes bills harder to pay.

At that time, buying a house with low interest rates was so appealing. Despite their financial capacity, many American families turned to lenders to purchase a home. But now keeping a job has become tough and paying for mortgage has become such a challenge. The value of the house has depreciated so much that even if you sell the house, it won’t be enough to pay for the mortgage.

The first thing that people think about when faced with a situation like this is foreclosure. However, you must first think hard about it because they come with consequences. Having a record of foreclosure will give you a negative credit rating. and it will stay that way for years. When you need to apply for a loan, you might not be approved because of it. Even renting a house might be difficult if the landowner requires a credit report. Credit options is expected to be lower and there can be tax implications. If payment for mortgage has been continuously late, the homeowner may already feel the consequences mentioned above.

One of the advantage of being foreclosed is  that you can continue living in the house without having to pay for rent. Depending on your state, it could be a year or longer. You can also talk to the bank to ask for new terms. Especially if the property is in a difficult market. Be careful and be sure to know what you’re getting yourself into. There are some lenders who foreclosed homes illegally. 

If you’re not quite sure about foreclosure, you can also consider a short sale. A short sale is an agreement with the bank that they can sell the house at an amount much less than what was borrowed. Through this, the homeowner can get off the hook with minimal costs or be given terms that are easier financially. However, going into a short sale can also put you in a bad light in terms of your credit score.

Usually, families who are facing this difficult situation are advised to find a more affordable housing set-up; like living with relatives or having the house rented. But keep in mind that having your place rented can present problems of its own. You might find yourself with troublesome tenants that might lead you to more costs on repairs. 

If you are convinced that having your house rented out is the best option for you, research on what you need to know before putting up that sign. You need to first establish if your house can be rented out. Some homeowner associations do not allow rental. There could also be restrictions you should be aware of. Like in many college towns for example, laws have been passed to prohibit no more than two non-related adults to live in one single-family house.

The best thing to do is to seek legal advice from a lawyer. Each homeowner’s situation is unique. And different conditions apply so there is no one-fit solution to the problem. Just be open to various options and seek professional help so you can make informed decisions.

Looking for a new home is exciting and overwhelming. There are so many things and details to pay attention to. Focus on these five most important areas: electrical, foundation, plumbing, the attic, and landscaping. According to Don Walker, inspector and owner of Ace Home Inspections, these are the five areas in homes that he frequently reports problems with.

• Electrical

  Most people assume that if they buy a newer house, they won’t have electrical problems anytime soon. “I inspected a brand new house — four years old but the electrical was all done incorrectly,” says Walker. Through a complete home inspection, potential problems are detected early on.

• Foundation

  Walker said he inspected a four-year-old home that was already showing signs of major damage that is expected to cost you a lot of money in repairs. “It was a model home. What [the homeowners] did was plant trees for shade to make it look really nice, but they planted the wrong trees and they’re going to crack the foundation and it’s going to cut the property value down by $50,000,” says Walker.

  Walker says in the case of that home, the trees were causing micro-fractures in the tile in various locations of the home. “As you walk through the house, 21 feet in and 30 feet deep, there’s just too much root invasion and it’s going to ruin their tile,” explains Walker.

  He says some tell-tale signs with this home were the minor cracks in the foundation that were causing a lifting and separation of the foundation. Also, the windows were not opening and closing properly, “which means the foundation is moving.”

  But not all cracks is an indication of a foundation problem. Walker said, “Most people don’t understand that there are natural cracks in a house. That’s why when we do an inspection report we have to look at it and say ‘Okay, this is a typical crack and this one is an untypical crack.”

• Plumbing

  According to Walker, is another area that poses a big concern yet often goes undetected. “Mold forms underneath sinks when people have a leak and they fix the pipe but they don’t take care of the mold,” says Walker. He said caulking the sink can help prevent mold. “That’s my number one thing I always find — bad sinks.”

  He says, “When you look at the sink, look behind it and most of the time you will discover a little crack. What happens is, when you wash dishes or you wash your hands in the bathroom or the kitchen, the water gets in that crack and seeps down. Once the water gets behind the cabinet it’s in a perfect position to create mold.” When it’s dark and damp, it becomes a perfect breeding ground for molds.

• Attic

  Walker says, “You can tell everything about the house by the attic.” When you fix other parts of the house, you can already mask the problem. Take for example a wall damaged by leaks. You can have it fixed and repaint it to make it look new. But Walker says the attic is sort of the eyes to the soul of the home. “In the attic you can tell where all the damage has been.”

  “If you’re in a 20-year-old house and you see that the insulation is brand new, you know that there was a water leak because it had to be replaced,” says Walker. He adds, “You can tell if the roof is good because you can look right at the wood.”

• Landscaping

  “There should not be moisture or plants next to your house,” says Walker. He says there should be a 12 inch barrier between the landscape and the house. If not, the foundation might crack. If the landscape is too close to the home, when the plants are watered, the foundation and soil expand. And when the they’re not, the foundation dries up and shrinks which causes it to crack.

  Acquiring the money to pay for a house is not the only preparation you need to buy a house. Learn what you can about the house and how to take care of them. It will save you a alot of money in the near  future.

Usually, spring and summer is the busiest time in residential real estate. Most families want to take advantage of the good weather and the children’s summer break. However in most regions, spring is also when houses are most expensive. During this time, there are a lot of buyers and competition is tough.

Here are some measures you can take that can give you an advantage over other buyers:

• If you plan to work with a real estate agent, start early. Interview three to four agents and talk to their references as well. Once you have chosen, let the agent know exactly what you’re looking for. Be specific and detailed. 
• Get your loan pre-approved. By doing this early, you have one less task to think about. You’ll also know how much you can borrow. This will save you from looking at houses you can’t afford. And when you make an offer with a pre-approved loan, the sellers know that you’re serious.
• Determine how much you can afford for downpayment. According to NAR, first-time buyers usually make a down payment of 6 percent on a home purchase, and 24 percent of down payment funds were gifts from relatives or friends. If you don’t have this option, you can turn to loan programs that accept 5-3 percent downpayment. Closing costs typically range from 2-7 percent of the property cost. 
• Always be ready for your agent’s call. If the competition is tight, as soon as your realtor finds a good deal that is up to your criteria, they’ll notify you. Be ready to visit the house and once you determine that it’s going to be a good buy, make an offer. 
• When you look at houses, consider the potential. There are some things you cannot change like the neighborhood, proximity to job centers and schools, the basic floorplan of the house, and size of the back yard. But don’t turn your back on a house because you don’t like the color of the paint, the design of the carpet or wallpaper. These are things you can change according to your taste. Try to imagine the house with the furniture and carpet which you think goes best with the house.  Do you ike it now?
• If you’re in a seller’s market consut your real estate agent on how much you should offer. If there’s competition, consider offering more than the listing price. Avoid asking for a long closing date or extras like carpet allowances. 
• Start thinking about home insurance now. Start by checking that your credit report is accurate. The accuracy of your credit repor is very important. It will determine if a company will cover you and for how much. According to the Insurance Information Institute, you should get a copy of your loss history report like a CLUE report from ChoicePoint or an A-PLUS report from Insurance Services Office. They record home insurance claims. If you weren’t able to file a claim in the past five years, you won’t have a loss history report. This gives you a better report and a lower premium. If you previously rented, you should have renter’s insurance. Your insurance history will be helpful when you apply for insurance for your new home. 

Readines when it comes to buying a home takes more than just money. There are other factors involved – factors not involoving money but can be as important. People make decisions not just based on financial issues but on other things as well like your personality, abilities and values.

Probably one of the most important consideration you’ll have is the environment. What kind of place or neighborhood do I want to live in?

• City Versus Suburbs

  Your personality influences your choice of where to live. Do you want to live in a quite neighborhood? Or do you prefer livnig in a busy city? Are you looking for a place near malls, the night life or are you looking for a place away from all these? Do you want to live within walking distance from your office or your children’s school? or you prefer to take the subway or ride the train? The environment you choose, spells the quality of life you will have. If your preferences go with properties that are too mch for your budget, consider these options: postpone buying a house until you can afford your dream house in your ideal neighborhood or pursue having your own home now and just compromise on your preferences?

• Amenities Versus Customization

  If you buy a home with amenities like a tennis court, basketball court, gym, olympic-sized swimming pool, you’ll be paying a lot for it. Your mortgage rate will be very expensive compared to renting a house with these amenities. There are many apartments in cities that have these amenities available but you don’t have to pay as much. Another option you could consider is to find an affordable house and just customize it according to your preference.

• Flexibility Versus Stability

  Renting allows you to leave anytime without much ado. Of course there is a contract but the problem can be fixed by paying up to what is agreed. But as a homeowner, if you want to move, you’ll need to face the hassle of selling your house and finding a good buyer. And while you are waiting for a buyer, you need to continue paying your mortgage and keep the house well-maintained. This process will take months or even years. Unless money is not an issue and you could afford to move without having to sell your old house. However as a tenenant, there is always the possibility that your landlord will raise your rental fee or ask you to move anytime even when you don’t plan to move anytime soon. As a homeowner, you can live in your house for as long as you want.

• Personalized Aesthetics Versus Less Work

  Owning a house gives you the freedom to customize the look of the house according to your liking. But this privilege also comes with the responsibility of takiing care of maintenance and repairs. If you think you are not the type to spend time and effort into fixing a leaky faucet or cutting grass, you might not be ready to own a home yet. Unless you can afford to simply pay someone to take care of this for you.

  A tenant on the other hand, does not have control over the aestheitcs of the place but you also have liberty from dealing with maintenance or damages from poor construction. What you can do though is change the furniture and interior decorations to suit your liking. If there is a leaky faucet, just call your landlord.

• Emotional Satisfaction Versus Less Worry

  Having your very own home is considered the “American dream”. This means growing roots and being involved in the community. If you’re the kind of person who only wants a place to stay and is out most of the time, renting may be a better choice for you.

Deliberating about your readiness to own a home is something that only you can answer. What you can afford to buy can be done by online calculators but when it comes to intangible things like your personality, values and priorities can only be determined by you. Take time to think about considerations listed above before you make any decision regarding home ownership.

When you enter into the buying process, you will be commited despite all the uncertainties involved. By adding contingencies clauses in the contract, the buyer feels a sense of protection from the unknowns. Contingencies clauses state things that need to be met before closing the sale. 

• The protection buyers get from mortgage contingenciesThis is one of the most common contingency. It provides additional security for the buyer. This contingency states that the buyer will acquire a certain kind of mortgage at or below a certain interest rate for a particular amount of the purchase price (usually 80 percent) on or before a specific date before closing. If the buyer is unable to get a loan according to the terms stated on the contingency, he can withdraw from the contract and the earnest money will be given back to him.
• Protection for sellersThe security that comes with contingencies protects not only the buyer but the seller as well. If the buyer is unable to secure a loan but fails to inform the seller by the date agreed, the buyer is still obliged to buy the house with or without a loan. Depending on the contingency, the seller can also find a mortgage for the buyer. To provide more protection for the seller, they could do the following: set an earlier date for the deadline so the buyer can’t back out at the last minute; negotiate that a significant part of the earnest money will be forfeited if the buyer can’t get a loan by the deadline.
• Appraisal contingencyAppraisal contingencies work with mortgage contingencies. It can work in two ways: (1) If a buyer cannot get an appraisal that can cover the asking price, the buyer can back out of the sale; (2) If the buyer cannot acquire enough appraisal, the buyer can negotiate for a lower price. If the seller does not agree with it, the buyer can walk out of the sale.
• Inspection contingencyThis contingency allows the buyer time to inspect the house. Typically the time frame is 3-14 days. If the inspection reveal major problems with the house, the buyer can opt to back out.There are many other contingencies available like insurance contingencies or mold inspection contingencies. Common contingencies vary among states.Never disregard fine prints. Read them carefully and make sure you understand what you’re about to sign. The contract is legally binding. You can’t just change your mind once you sign it.

Most first-time home buyers are eager to have their very own home but it has to be at a price they can afford. Smaller homes, fixer-uppers and cheaper commutes to work are the best options to look into.

The problem is, most firt-time home buyers expect more than what they can actually afford in a home. Coldwell Banker conducted an online survey with 150 of its brokers. The result of the survey yielded a strange trend among first-time home buyers.

Almost of the survey respondents said affordability was their top concern first time buyers. Yet, 81 percent are looking for move-in conditions. Only 7 percent are considering fixer-upper homes. The real estate company suggests looking into fixer-upper homes if you want affordability.

“In the past, first-time home buyers were willing to purchase older, more basic houses in an effort to save money and bhttp://www.doctilo.com/article_writing/index.php?e=33reak into homeownership,” said Jim Gillespie, president and chief executive officer, Coldwell Banker Real Estate, LLC. He adds, “It is important for first-time homebuyers to remember that by considering a fixer-upper for their first home purchase, they can build equity over time and later move up and into their second-stage home that better reflects their expectations.”

Buyers who choose to go with fixer-ups homes should have the house inspected by a professional home inspector. Buyers need to find out how much it will cost you on repairs. You might end up spending more than what you saved. Homes that need basic fixing or improvement can give already give you a lot of savings but you can even save more on houses that need major work. Again, buyers need professional help so you can determine if your savings on the house is more than the cost of repairs.

Another surprising discovery was that most first-time buyers wanted affordability yet they looked for bigger houses within the metro. The survey shows that 71 percent of first-time buyers wanted bigger houses than they were 10 years ago. A smaller home is less expensive because of smaller footprint and square footage. 41 percent were considering proximity. They were looking for a house near their workplace so they could save on gas. However, houses around economic centers are expensive. These properties bank on the value of convenience. Those who live in areas like this can save on travel time and gas money.

A good alternative to this is finding an affordable place far from economic centers but near a transit oriented development (TOD) or low-cost public transit. There is also the option for carpooling or car-sharing communities.

The survey also showed that most of these first-time buyers looked at five to ten homes before they decided on a house. But if you want to get the most for your money, invest more time in looking at houses. More houses, more opportunities for savings. Look at at least 10 houses. You can usually find big discounts from these: houses that had been on the market for at least 90 days; houses being sold by long-time homeowners; houses for sale from flipping investors who got unlucky; and houses from we-want-to-sell-real-estate banks.

Finding your perfect home starts with searching for your kind of neighborhood.

What is so important with a good neighborhood? The environment you live in affects your lifestyle and quality of life for you and your family. You may want to live near a park so you and your kids can often walk there and they could play with other kids. Others want to live in a quiet suburb so after a hard day’s work they could retire to a relaxing home. For some a perfect neighborhood should be close to busy commercial districts where shopping and dining is convenient.

The search for a perfect neighborhood starts with driving around, especially in areas you’re not familiar with. Take note of neighborhoods that interest to you. Walk around to get a better feel. See if the houses are well-maintained.

If you have children, you might be looking for a safe, kid-friendly neighborhood. You’ll also want to think about these things:

• Are there good schools in the area?
• How is the crime rate?
• Are there grocery stores nearby?
• Is theproperty value likely to increase?

If you work with a realtor they should be able to tell youthings you want to know about the neighborhood you’re interested in.

• School

  Even if you don’t have children, there’s a good reason for living near a good school. Properties near a reputable school is more likely to appreciate in value. Years from now if you sell your house, you will be able to sell it at a high price in no time. Properties like this are attractive to buyers. If you want to know more information about the schools in the area you’re eyeing, you can conveniently do this online. You can just search for the zip code or geographical area and you’ll be able to find ratings for the school system as well as standardized test scores. You can also ask your realtor about the school/s. Or try talking to neighbors with children who go to the school. If you have kids the best thing to do to validate your research is to visit the school yourself or with the kids. And get the feel of the school.

• Crime Record

  This is a very important aspect you should look at. The good news is, you can easily find information online. There are websites where you can see statistics on crime and other relevant information. Homestore allows you to search for crime data and school information in the area you are searching for. Just enter the zip code or city you choose. The site can also give a comparison of crime rates between another area.

  You can also do these as you research:

  • Observe if the windows and doors of the houses in the neighborhood have bars.
  • Look out for graffiti and vandalism on walls and walkways.
  • Talk to neighbors.
  • Ask the police or sheriff’s office.
  • If you’re looking in town or in busy areas, nooise and traffic is expected.

Go beyond facts and figures. Don’t focus too much on the value of your investment. There other important factors to consider aside from this. Like the convenience it offers to work and school; its proximity to restaurants and shopping centers; or even just the relaxing feel it can give you and your family. But usually property value is a reflection of the area’s overall health. When you do your research find out as well how much property taxes have gone up over the past few years.

When you think about buying a home, one of the first questions that come to mind is whether you buy an old house or a new one. A new house may be attractive because everything is new. Nothing has been used yet. The walls are clean, the closets have never been used before, they come with energy-efficient appliances and you won’t have to spend on repairs because of wear and tear. On the other hand, you may fall in love with traditional look and feel of an old house.

When you’re at a crossroad, these points can help you decide:

Old homes

• Neighborhood.
  Some people prefer a home in an established neighborhood. Another plus factor are the full-grown trees and mature landscaping you can’t get from brand new houses.
• Maintenance and repair.
  Existing homes need to be inspected by a proffesional home inspector. There might be existing damage or potential problems that will costly to repair or maintain. Old appliances may need to be replaced. All this needs to be considered in the purchase price.
• Home improvement.
  If you’re into home improvement projects, an older house present opportunities to put your DIY (do-ityourself) skills to action.
• Freebies.
  Existing houses come with features, furnitures and appliances that are already there. You can consider them freebies.
• Land.
• Location.
  Older homes are situated in or near business centers. But newer houses are usually in far suburbs.
• Opportunity to remodel.
  There are some homebuyers who are excited at the opportunity to customize an old home according to their liking.
• Price.
  In general, existing homes cost less than brand new ones.  Buyers can even get more for their money because of existing features that count as freebies – drapes, carpet, landscape.
• Track record.
  With an existing home, you’ll already have an idea of the property’s value based on how much it has appreciated or depreciated over the years.
• Tax savings.
  Existing houses have lower property tax rates (depending on your state). Plus you could save on local bonds associated with new development, such as schools, parks, or road or transportation improvements.
• Traditional layout.
  People who love classic, formal dining and living areas will love older homes.

Their major responsibility is to protect your interest as a buyer and as their client. Their main roles are the following:

• Educates you about your market.
• Negotiates on your behalf
• Analyzes your wants and needs.
• Guides you to homes that fit your criteria.
• Coordinates the work of other needed professionals.
• Checks and double-checks paperwork and deadlines.
• Solves any problem that may arise.