Home Buying

What’s Going On In Real Estate News By Lisa Udy

by Lisa Udy on February 15, 2011

Real Estate Industry NewsThere’s a lot that’s been going on in the real estate world. With these changes, I went around the web and tried to gather some resources to share with my readers.

If you’re interested in what’s going on in the Logan real estate market, please visit that link. Otherwise, here’s some national real estate news you should be aware of:

The first post is on my friend Aloha Tony’s Hawaii real estate blog regarding home affordibility. In this post, I explained why you need to be aware of increasing interest rates and why homes are the most affordable they will be in a long time. There’s also a report you can read by CNBC on the changes coming up in the lending market. The White House announced last week that Fannie Mae and Freddie Mac will undergo changes to decrease the governments involvement in the real estate industry.

Next up is a couple of articles on Real Estate Industry Watch regarding announcements by Zillow, Corelogic, and why cash buyers are a good sign for the real estate market.  The first article is a news report on home prices declining in the fourth quarter of last year. It shows the numbers and is a good read if you’re interested in how declining real estate prices will affect you.  The second post is about investors buying up homes with cash. With rental markets gaining strength, investors are turning from flipping homes to buying and renting. It’s a great read for you investors out there.

Next on the agenda is an article related to buying short sales and what you need to know before buying a short sale property. This post is on Tina Fountain’s Atlanta real estate blog and discusses a few key points. One of which is the price of a short sale listing may not be the whole story. See, short sales are a complicated process and in order to understand them, it’s important to hire an experienced short sale Realtor. Otherwise, you could lose out on your dream home or end up paying for a home in need of extensive repairs.

For those of you looking to sell your home this spring, my friend Greg Eckler, a Denver real estate agent, posted a blog on what you need to know to get your home ready. In this post I explained the affects of curb appeal on a buyers first impressions and why it’s so important to create an inviting atmosphere for potential buyers. It’s also a good idea to get rid of pets during showings and enhance your homes best selling features such as kitchens and bathrooms. If you’re selling a home or planning on it, it’s a great read and you should check it out.

For many home buyers, the decision to buy a new home or buy an older home is a tough decision. In this next article on a real estate news blog at WannaNetwork.com, I outlined a very detailed post on the pro’s and con’s of each. Some tips include why price per square foot is so much more on a new home and why older homes may cost more due to long term maintenance issues. If you’re a home buyer looking to get into the market, this is a great article on buying new vs. old and is a great, although lengthy, read.

This is all for new, please feel free to comment on your favorite posts or send me an article you thought was great. If you have any real estate related questions, leave me a comment and I’ll respond as soon as possible.

{ 0 comments }

Tips For Buying Your First Home: A First Time Home Buyers Guide

by Lisa Udy on September 30, 2010

Realtor Holding A BinderI have written many articles on real estate, going into extreme details about complicated real estate deals. I have tried to inform my readers about the most surprising twists and turns of the real estate process.

Today, this article is about the basics. If you have never bought a home, it’s best to start at the very beginning, and this article should give you some great information to get started.

Hire A Buyer’s Agent

Realtor with help wanted sign.I would highly recommend using a real estate agent for your first deal. I would also recommend specifically hiring a buyer’s agent. A buyer’s agent is required by law to work as a fiduciary to you, the buyer. They work for you. They have your best interest in mind.

No Upfront Costs – You don’t have to put any money upfront when you hire a buyer’s agent. When you purchase a home listed with a real estate agent, the commission is already added into the purchase price. The seller is responsible for the commission to both a buyers agent and their sellers agent.

Get A Referral – Talk to family members and friends about the experiences they’ve had with Realtors they’ve used in the past. Interview agents they recommend and hire the one you feel the most comfortable with.

Listing Alerts – Ask your agent to sign you up for listing alerts. A listing alert is automatically sent to your email through the agents website or sent directly through the multiple listing service (MLS). Listing alerts can be set to the specifications of your choice. If you need 3 beds and 3 baths, you can set your alert to show you only homes with those attributes.

Agent Advantages – Real estate agents have many advantages. We often know of new listings before they hit the market.  You can waste the agents gas and not your own when touring homes. Agents can preview homes for you. Agents know if listings are overpriced. Agents have market data. Plus many more.

Don’t forget to check out our post on real estate agent interview questions.

Woman Holding Piggy BankTalk To A Lender

Unless you have cash to purchase a home, you will need to obtain a mortgage. Many people get excited about buying a home, only to find out after they find the perfect house, they can’t get approved for what they thought they could. It is recommended to get a pre-approval before you go house hunting for this reason.

Get Pre-Qualified – Also, if you write an offer on a home, and you haven’t at least been pre-qualified, you could lose out to a competing offer. Home sellers today are very adamant about home buyers providing proof they can obtain financing before they will commit to a contract.

Prove Your Serious - Once under contract, a seller will have to remove their listing from the MLS. They won’t be willing to do that unless you are serious about purchasing their home. Talking to a lender, providing proof of your ability to purchase, and submitting an offer with that proof, tells a seller you are ready to go.

Ask For A Referral – Just as all real estate agents aren’t the same, all lenders are not the same either. Talk to your agent about lenders they recommend. I would also suggest you look for a lender with in house underwriting, as it makes the deal go more quickly, and there is less chance of something getting lost in the shuffle.

Check out our post on Utah home loan programs.

Find A House

Have A House!When looking at homes, I would recommend scheduling no more than 7 appointments at a time. After viewing 7 homes, your head starts to spin, and it makes it difficult to distinguish properties.

Research Online – If you have access to the internet, you can find many websites to preview homes on. If you are in the Cache County area, you can view all Logan real estate listings by visiting that link.

Attend Open Houses – Open houses are a great way to get started looking at homes, especially if you haven’t found an agent yet. You can pop from one house to the next talking to a different agent at each one. If you find an agent you click with, ask them if they would like to work with you.

Check out our post on how to pick the perfect house.

Write An Offer

First Time Home Buyer Writing An OfferIf you find a home you feel is right, don’t be afraid to write an offer. Be sure to run the numbers, and don’t offer to much to start out with. Talk to your agent about comparable properties, and determine if the home is priced right.

Comparable Sales - When writing an offer, the great thing a Realtor can do for you is give you information on the market. Your agent should complete a comparable market analysis of the property to give you a starting point with your offer.

Check out our post on writing an offer.

Buying a home is a serious financial decision and can be extremely frightening. As a first time home buyer, remember that the roller coaster of emotions is normal. I always recommend to my first time buyers, before submitting an offer, take a day to think it over. Talk to friends and family, run the numbers, and don’t do it if you aren’t 100% in. If you feel it’s the right time to buy a home, have some fun, and enjoy your new place. Good luck!

You read through this whole post? Great! Want more information Super! Check out our:

Complete Guide To The Home Buying Process

{ 3 comments }

Can You Still Make Money Flipping Real Estate?

by Lisa Udy on September 10, 2010

Can You Still Make Money Flipping Real Estate?This is a tough question to answer. Investors have made money flipping real estate during any market, but with today’s swollen inventory levels, it’s becoming a whole lot harder.

The answer to the question, can you still make money flipping real estate is yes, but there’s a catch. The home has to be perfect in every aspect for you to make a profit.

How Investors Are Making Money Flipping Homes In 2010

Locate motivated sellers.

The right seller is someone who is motivated to get rid of the home as fast as they can. The best way to find these sellers is work with someone in the real estate business. Either a Realtor or another investor with seller contacts in the market you’re working.

Find the best neighborhoods in your area.

Today’s market is flooded with inventory, so you need to work the best neighborhoods that show the best sales numbers. The perfect home would be a fixer upper in a neighborhood with very little inventory and a short time frame for re-sale.

Make multiple offers.

Once you find the neighborhoods you want to work in, it’s time to make multiple low ball offers until you get a bite.  If you find 30 homes in a good neighborhood, you should make 30 offers. Yes, that’s right, make offers on all of them. If you want to find a great deal, you need to find a motivated seller, and submitting multiple low offers gives you a better chance to find the sellers willing to consider your low offer.

Offer on all vacant properties.

A vacant property means someone who use to live there is still paying for it. This is a pretty good motivation to sell. Also, many vacant properties are foreclosures or banked owned homes. A bank is an extremely motivated seller, and a bank is more inclined to entertain a low offer than a normal home seller.

Handle rejection.

When you make 30 low offers, there is a good chance you’re going to get rejected on most of them. Many sellers will be offended by your low offer, but that shouldn’t be your concern. Brutal? A little. But you aren’t here to make friends, you’re here to make money. This is a numbers game and you shouldn’t worry about the no’s, instead, focus on the yes’s.

Keep your funnel full.

If you want to be successful flipping real estate and your serious about making money, you have to keep your funnel full. You should always be looking for properties, new streams of cash flow, and motivated sellers. The investors who make a living on flipping homes make offers and buy houses. If you don’t have anything in your funnel, your not doing it right!

Warning: Don’t Say I Didn’t Warn You

Many people will tell you it’s insane to flip houses right now. I agree to an extent. It’s insane for someone to expect to flip a house without any experience and tied up emotions.

Flipping is all about perfecting a system that allows you to keep your emotions out of the transaction. You must be diligent in your research, you must maintain a tight bottom line, and you have to be rigorous in marketing the home for re-sale.

As John Rockefeller said, “The time to buy is when there is blood in the streets.” It’s a brutal saying, but it’s true. When everyone else is scared, the investors who are willing to take the right risks will benefit from those who feared the consequences instead of embracing the possibilities.

{ 9 comments }

Lower Down Payments To Boost Housing Recovery?

by Lisa Udy on September 1, 2010

Business woman leaning on currency symbolsI recently read an article on CNBC where the author talked about Bill Gross’s recommendation to lower the down payment requirements for people to purchase homes.

He states that in order for housing to play a role in the recovery, it’s paramount to ease the up-front cash requirements.

This article brings many questions to mind, and I wanted to discuss what would happen if  Bill Gross had his way.

Yes Reduced Down Payments Would Increase Housing Demand, BUT

Money GraphIf we lowered the down payment costs to purchase a home, indeed housing demand would increase. The less it costs to purchase a home, the easier it makes for people to purchase. Pretty simple logic.

BUT, and this is a big but, wouldn’t we be stuck in the same situation as we were during the bubble?

Putting people in homes without any money down has shown how that can backfire. If prices start to decline, people become underwater, they panic, and will walk away from their obligations. People that didn’t have money invested into a home were much more likely to walk away than people with 20% or more in equity.

These walk aways set off more foreclosures and increased inventory; which reduced demand causing home prices to decline further. If these buyers were required to put 20% down, two things would be completely different today.

First – The housing boom wouldn’t have been so enormous as they wouldn’t have been able to purchase a home in the first place.

Second – People with equity tied up into a home would be more reluctant to just walk away.

If your house was worth 10-15% less yet still had 5% equity, wouldn’t you do everything you could to salvage that money? You bet you would. You wouldn’t gut the home and walkaway leaving it to foreclosure.

Purchase A Home You Can Afford

Buying A HouseLittle to no down payment gives someone the opportunity to purchase a home they can’t afford. Someone making 40k a year should not be able to afford a $350k home. It’s just not reasonable.

Instead, if they had to save up a 20% down payment, they wouldn’t even think about purchasing that home. They would think about purchasing a home they could afford.

If banks were to remove the down payment requirement for a home many people would overextend  themselves purchasing a home they wouldn’t be able to afford. This is the number one reason the bubble got so big so fast and fell so hard so fast.

Many people have blamed the bubble and the burst on the sub-prime loan fiasco and loans with complex terms with low initial interest rates. But an article in The Wall Street Journal indicated that there’s more to the story.

According to the article, 51% of all foreclosed homes in the last half of 2008 had prime loans with no equity. Which brings me to my next point:

What Is The Real Reason For The Market Decline?

Foreclosures In The United States

(Graphic From Wall Street Journal Article)

This graphic shows that the majority (415,319 compared to 393,086) of the foreclosures in the second half of 2008 were directly related to how much equity a homeowner had.

The data clearly shows that the reason the housing bubble got so big and crashed so hard, was because of the ease in which people were able to buy homes with “no skin in the game.”

If we take away the amount of borrowers who bought a home with little money down or without equity, we would decrease the foreclosure rate by 47%.

Keep Lending Standards Tight Even Though It Hurts

Wallet held in clampIf we want to see a true recovery we must learn from the past. People like Bill Gross don’t have a clue.

The suggestion to allow people to put less money down when purchasing a home would throw us into another steep bubble followed by another steep decline in the near future.

It’s absolutely absurd to think lower down payments would be beneficial long term to the housing recovery. Instead, we need to keep down payments as the #1 requirement for purchasing a home. If this would have been the case pre-collapse, we may not even be in this mess.

It hurts right now, trust me I know, but incomes and credit scores will change over time. Just because a borrower has the income one year doesn’t mean they will the next. Equity provides a real incentive for a homeowner to do whatever possible to keep from going into foreclosure.

Instead of gutting the home then walking away letting the home go into foreclosure. A homeowner with equity would try to sell and retain as much as they can. This would reduce the amount of foreclosures, which would reduce the decline.

I am not saying the whole reason we are in this mess is because of no down payment loans. What I am saying is: This all happened because people, banks included, all thought they could get away with it with very little consequence if things went bad. Foreclosure is not a sufficient deterrent if they were starting from nothing in the first place.

{ 0 comments }

Buying Logan Utah Foreclosures At Public Auction

August 24, 2010

Yesterday I discussed buying a foreclosure during the pre-foreclosure process, and today I wanted to move along in the series to the public auction phase. Once a homeowner is foreclosed on, the banks will hold an open auction for the home. The public auctions in Logan, UT are held at the Logan justice court located [...]

0 comments Read the full article →

Contacting A Distressed Homeowner To Buy A Pre-Foreclosure

August 23, 2010

Earlier, I wrote a post on the Logan Utah foreclosure process, and in that post I discussed negotiating with a home owner on purchasing their home while it’s in pre-foreclosure. In this post, I wanted to discuss this tactic in more detail. Contacting The Homeowner When Purchasing A Pre-Foreclosure A home is in pre-foreclosure when [...]

1 comment Read the full article →

Logan Utah Foreclosures Process And Overview

August 23, 2010

This post is going to be one of many posts on the foreclosure process in Logan UT that I will be writing over the next couple days. First of all let’s discuss what a foreclosure is. A foreclosure is a process that allows the lien holder, or lender of a mortgage, to recoup the costs [...]

2 comments Read the full article →

The Complete Guide To Buying A Home In Logan Utah

August 20, 2010

Most real estate markets around the country are considered to be a buyers market. The Logan real estate market is no different. We are in a very strong buyers market, and it only makes sense to me to give you buyers as much information as possible to ensure that a great home for a great [...]

1 comment Read the full article →

5 Reasons To Buy And Not To Buy A Home In 2010

August 19, 2010

You read that right. A Realtor telling you not to buy a home. It’s quite a concept isn’t it? Well, there are some very valid reasons not to purchase a home in the next few months, and I wanted to point them out.  They are in red. Buying a home can also be a great [...]

3 comments Read the full article →

Pros And Cons Of Buying Logan Utah Foreclosures

August 18, 2010

Logan home buyers are just like most buyers all across the nation. You want the best deal on a home that fits perfectly into your criteria of needs. Getting that great deal means being cautious and shopping around. Many times, the best deal out there ends up being a Logan Utah foreclosure property since banks [...]

1 comment Read the full article →

← Previous Entries

Google Analytics Alternative