Sunday, September 16, 2012
Really want to own a home of your own, or take advantage of the many great real estate investment opportunities available right now, but don't want to join the ranks of the millions of underwater homeowners out there or have the stress of meeting a mortgage payment every month? The Pros and Cons of Saving to Buy a House With Cash During the hot housing market of the early 2000s, trying to save up enough money to buy a home with cash seemed like an exercise in futility as home prices frequently jumped tens of thousands of dollars. Now things are a little different. Paying cash for a home can be a smart move, especially for those who are extra sensitive to stress and can't handle the knocks on the door or endless harassing phone calls from lenders when the monthly bills can't be met. Who wants to be afraid to check their own mail? Perhaps the one great thing that has come out of the foreclosure crisis is the availability of so many inexpensive homes. There are homes and condos all over the country, even in some of the hottest resort areas on the market for as little as $10,000. Even just saving $1,000 a month for the next year could solve your problem of how to buy a house debt free. Plus, coming in with a cash offer and being able to close quickly normally means more bargaining power and even lower prices. However, not everyone is going to be satisfied with living in a $10,000, one-bedroom condo. Plus, the biggest con of waiting and trying to save up the cash to buy a home outright is that rising prices can quickly mean paying far more for the same home or being priced out of the market altogether. Make sure you weigh carefully the benefits of waiting versus taking out a mortgage now. How to Buy a House Debt Free Next Weekend! If waiting just isn't an option, or you simply lack the patience, there is a way you could land a home for less than this week's paycheck by this weekend - real estate auctions. We aren't talking about the typical auctions in every county, which have been hyped up by real estate "gurus" and are no longer a great source of deals. If you really know what you are doing, have plenty of cash and are willing to risk buying a complete tear-down, okay. Otherwise, you will want to seek out auctions in specific areas of the country where the housing market has been hit the hardest. In some areas, you could own half a block for less than taking the family out to dinner. You'll just have to sit on the investment for 10 years until the area is revitalized, or try to turn around and sell quickly. How to Buy a Home and Get Debt Free Quickly If you already own a home and have equity in it you could decide to sell, downsize and purchase a new home for cash. If this isn't an option, and you are tired of making your landlord rich, there are a number of ways to buy a home now and pay off a mortgage faster. Leveraging your home purchase with a mortgage isn't always a bad thing. With interest rates and home prices so low this is the optimal time to buy, and locking into a great deal now can help you accumulate a lot of equity through appreciation. In fact, some homeowners who could afford to be debt free choose to maintain a mortgage for the tax benefits and deductions. Just recognize the difference between good debt and bad debt, and don't sink yourself with too much of it. There are a number of ways to pay down your loan faster to become debt free far sooner than 30 years from now. Maybe one of these ideas is right for you. 1. Make bi-weekly mortgage payments. 2. Take a shorter loan term with a lower rate. Ask about 20- or 15-year fixed loans. 3. Take out an interest-only loan and do one of the following: a. Pay down principal with commissions or bonuses. b. Put the difference in a higher yielding investment, and use the proceeds to offset the interest. c. Purchase a multifamily property and apply the rents directly toward principal each month.
Saturday, September 8, 2012
You are a buyer that wants "the best deal" here a few things that can be negotiable in a real estate transaction. Remember, a good negotiation provides a win-win for both sides. Price - At the end of the day no seller is going to want to sell their house for less than it is worth. With that said, there are a lot homes sitting on the market for a long time because they are overpriced. If you see one that you like, don't shy away from it because it is out of your price range. Ask your Realtor to do a valuation with comparables supporting a price that is realistically fair, provides that factual information with an offer, and if the seller is serious about selling, the will consider your price. Closing Cost - As a buyer you will have to come up with enough cash for a down payment and to cover you closing cost. Closing cost are fees charged to the buyer from the Mortgage Lenders and Title Company. These cost usually run about 3% of the sale price. When buying you can negotiate for the sellers to cover these cost for you. That does make your offer less attractive because for the sellers it is all about the bottom line. However, being that buyers need to bring cash for a down payment it can be difficult to have the extra 3% cash to pay for closing cost. With that said, consider paying a little more on the home to offset the difference to the sellers if they pay closing cost. That is a win-win! Closing Date - If you can be flexible with your closing date that holds value to a sellers as they may be in need to purchase another home after they sell. The sellers may in turn be more flexible on their price. Personal Property - It is not uncommon for the seller to leave the Washer/Dryer, Window Treatments and Kitchen Appliances that are currently with the home but is not mandatory. When making an offer you will want to make sure to write those in. If there are specific items (e.g. Living Room Furniture, Lawn Ornaments, Garage Freezer, Pool Table) that you want, they might come with a price. Sometimes the sellers are happy to part with things like this and sometimes they want more money$. Since there is a value on items like a Pool Table, don't expect it to be a part of the deal. However, Pool Tables are not exactly easy move so, you might good a bargain. I hope you find this helpful and Happy House Hunting!