Real estate infos

Archive for December, 2009

What Has Happened To Real Estate Prices?

Back in the late 1990s and in the early part of the 2000s banks had tougher guidelines to purchase a property when using conventional financing. Banks would lend you money based on your debt to income ratio and your credit score. Back then a maximum of 30 percent sometimes up to 40 percent of your income could be used toward a mortgage payment. Meaning if your monthly income is 2000 you could qualify for a mortgage payment around 600 including principal interest taxes and insurance PITI. Most investment properties required a 20 percent down payment and proof that you could afford the investment mortgage payment in addition to your residential mortgage payment.

In some cases the banks would stretch the loan amount allowing 40 percent of your income to be applied toward the mortgage payment.

However; what if you have a car repair medical bills need a home repair need to buy clothes or anything else? Where does the money come from? What about trying to save for retirement or trying to care for ailing parents?

Sometimes life just takes over you have a problem you use some of the money that should be used for the mortgage payment and next thing you know youre one payment late then two then three then the bank files foreclosure papers and then everything spirals out of control.

Many investors bought rental properties with no landlord experience. When their rentals sat empty they used mortgage money to keep up the rental payments or worse yet they spent the rental income for their own bills and fell behind on investment properties which often ended up in foreclosure without the tenants knowing a thing. Next thing you know the tenant is being served eviction papers from the sheriff and must move in three days. It would stun you to see how many investors are going under right now you are not alone.

If you are an investor losing your investment properties its okay. My advice for the future is not to buy any rentals unless you can afford to make the mortgage payments in addition to your bills for five months on all your rentals. For example say you own five rental properties and the mortgage payment is 500 on each. This means your monthly commitment is 2500 a month. Unless you can afford to pay 2500 for five months in addition to all your regular bills do not become a landlord. I realize that this seems extreme because it is unlikely that all five of your rental would be vacant at the same time; however it does happen. The great news is that in this program I am going to cover some great ways to turn your rentals into cash flow machines again.

If you look at the average life span we live to be 75 or so. If you are in financial hardship and it takes you three years to recover in the big picture its not that much time. When you recover and start over youll have many more good years than bad.

About the writer:  Dwan BentTwyford is the CoFounder and Faculty Head of Real Estate Investing Short Sale Real Estate Foreclosures a company that specializes in training new and seasoned investors in a wide range of realestate investing techniques through live workshops and seminars. Dwan is President of Financial Freedom Through Foreclosures. Her company specializes in educating new as well as seasoned investors through a series of home study courses.

What Are Real Estate Short Sales?

In many parts of the country home prices doubled during the period from 2000 to 2005. During this same time creative financing programs e.g. zero down payment adjustable rate loans interest only loans option ARMs loans negative amortization loans etc. gained popularity and helped some people buy homes who would not normally qualify based on their income debt level and credit history.

Most real estate markets are now cooling and some are even experiencing declining prices. In times of dropping real estate prices the amount owed on a loan by some homeowners may actually exceed the value of a property. If homeowners cannot make their monthly mortgage payment there is a potential for default on the loan and foreclosure of the property by the lender.

The term “short sales” is used to describe a situation in which a homeowner is at risk of defaulting on their loan and the lender agrees to sell the property below the original appraisal price in order to avoid foreclosure. Most lenders do not readily agree to short sales although exceptional circumstances such as a homeowner losing his/her job or the death of a wageearning spouse may make some of them more open to doing so.

If a property is sold as a short sale the lender recoups at least a portion of the original loan amount the homeowner avoids the stress and stigma of foreclosure and the new homebuyer gets a property below its original appraisal price. If a short sale doesn’t work then the property usually goes into foreclosure.

Short sales may be an emerging trend as the rate of foreclosure is rising dramatically across the nation. According to Business 2.0 Magazine the top 10 foreclosures markets are:

1. Greeley CO
2. Detroit MI
3. Miami FL
4. Indianapolis IN
5. Fort Lauderdale FL
6. Denver CO
7.Dayton OH
8.Dallas TX
9.Fort Worth TX
10.Atlanta GA

The credit of homeowners may be impacted after a short sale but it all depends on how the lender reports the outcome. Some lenders report a partial loan repayment as full payment of the debt due which does not adversely impact the credit of the borrowers. Other lenders report the sale as “settled” which adversely and significantly impacts the borrower’s credit. The other problem is that the portion of the loan amount forgiven by the lender may actually count as taxable income by the IRS.

In summary a successful short sale has some potential positive benefits e.g. homeowners avoid foreclosure lenders recoup at least a portion of the loan amount new homebuyers gets a property at below the original appraisal price etc but there are also many negative consequences. Some of these potential negative consequences include: the negative impact on borrower’s credit negative impact on the value of other similar homes in the neighborhood and that the amount forgiven by the lender may be taxable event. Homeowners having difficulty making their monthly mortgage payment may benefit from talking to a real estate agent who is experienced in short sales.

About the writer:nbsp;nbsp;About the Author

Larry Jone is an associated editor to the website http://www.indiaground.com . Indian ground is dedicated to explain all your related queries for real estate India and Indian properties with the latest news updates. Your feedback and comments will be highly appreciated at “larryjonegmail.com”.

Water In The Home: How To Find Fix And Clean Water Damage

Arg! There are few disasters that can occur in the home that are more heinous and hard to deal with than water damage. It can sneak up on you or hit you suddenly. No matter how it strikes it’s a tough one to clean up after and the damage can be subtle and long lasting.

It’s not always obvious when water damage has occurred because often the source of the damage is a broken or leaky pipe behind the drywall or under the concrete slab of your house. Leaking pipes take a long time to show up especially if the leak is slow and by the time water spots or sagging ceiling tiles start to show the damage can be extensive.

Another source of water damage a clog in the drainage system can manifest itself suddenly in most cases. The resulting backed up toilet sink or bathtub drain is easy to spot and easy to rectify usually.

A third kind is a failure of a major appliance the dishwasher washing machine or refrigerator and the resulting damage can also be hidden for some time.

Last on the list is damage that occurs when the roof or basement walls leak and the sump pump fails. This last type can be quite devastating and is usually readily apparent to the naked eye.

Finding the damage can be easy if the cause is a sudden catastrophic failure of an appliance or plumbing or a violent rain storm that damages roof tiles or shingles. Sometimes it can be subtle and slow to reveal itself in the case of plumbing behind the walls. A hot water pipe may expand causing a leak between joints for example. The leak disappears when the pipes cool down making detection work slow and frustrating. A hot spot in the concrete slab or bathroom tile may indicate another hot water pipe leak. This is even more fun to sort out if you have radiant floor heating.

Water spots in the ceiling are a definite indication that something is amiss as well as wet carpeting and you don’t have a dog. Small leaks are the worse as the damage is slow to develop and hard to spot.

It’s important to understand the extent of the water damage so that clean up and repair can be thorough and effective. While some damage is immediately apparent such as damage to porous materials like wood carpeting drywall and such latent damage like mold may take months or even years to develop although depending on conditions mold can develop in as little as 24 hours. Thorough drying of the damaged area as well as replacing such porous materials as carpeting drywall and ceiling tiles will minimize and possibly prevent a mold or mildew problem. Antiseptic solutions may need to be applied particularly if the source of the damage was a backed up sewer or septic system.

Bottom line: address water damage immediately for your houses sake and for your health.

About the writer:nbsp;nbsp;Joe Cline is a professional real estate broker investor and REALTOR with RE/MAX Capital City Austin Texas. Joe believes in providing worldclass service to his clients through educating and coaching them through their real estate transactions.

Joe’s commitment to education and service is reinforced by his achievement and participation in the Austin Board of Realtors Council of Residential Specialists Accredited Buyer’s Representative’s Council Texas Association of Realtors and National Association of Realtors.

Joe holds his Broker’s license the Accredited Buyer’s Representative designation the Certified Residential Specialist designation the Certified Home Marketing Specialist designation Cendant Mobility Marketing Specialist designation and the Cendant Mobility Referral Specialist designation.

Find out more about Austin real estate and new homes in Steiner Ranch .