Owner financing can help buyers get into a home

With the economy in a near disaster, today it is much harder for a home buyer to get a mortgage than it was a couple of years ago. Some home sellers are being creative and offering owner financing to qualified buyers.

Getting a mortgage in the past 12 to 15 years has been relatively easy for most prospective home buyers. Creative financing has not been a subject that most have thought about when obtaining a home. The concept of owner financing isn’t new,But in today’s tough real estate markets, a seller that is able to finance the sale of their home may have an edge over other sellers in their market.

Owner financing is great for buyers who may be having trouble getting a loan because they are self-employed or work on commission and with the credit rating required to get a traditional mortgage continually being raised, there are more and more buyers that are not able to get a mortgage.

Today, more than ever there are buyers who have recently been foreclosed on because they had an adjustable rate mortgage (ARM) on a property that they were not able to make the payments when the fixed period of the loan ended and it started to adjust.

To protect themselves, sellers should ask for a sizable (non-refundable) down payment from a buyer when they do this type of deal-especially if the buyer has a weak credit score. Accepting too small a down payment can be a huge mistake because the buyer has less of a stake in keeping the home.

As with a traditional mortgage where the interest rate is based partly on the buyers credit score, a seller can receive a steady income stream from the mortgage payments by asking a higher interest rate of perhaps 7% or more. The buyer can always repair their credit and refinance the home and get the deed in their name at a later date.

There is a down side to owner financing also. If the seller needs money to purchase another home and there is always the risk of the buyer defaulting on the payments which would cause the seller/mortgagor to have to make additional payments on the property while having to reclaim the property through foreclosure.

It is wise for the seller to hire a real estate attorney to craft the terms of the deal, with details including what constitutes a late payment and default, or what happens if the buyer neglects to adequately insure the property.

Unlike renting a house where the owner/landlord is responsible for everything, the buyer in an owner financing deal is responsible for upkeep and maintenance. A good home warranty is worth it's cost for both the buyer and seller. There are also insurance issues to be addressed before the closing.

In the end, the key objective is for the seller to sell the house and the buyer to be able to purchase the house. A win/win situation.

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Always Call Before You Dig

Potential Consequences Of Ignoring The "One-Call" System

The guy who did this and anyone else helping him, surely did not survive.

You just never know what you are going to find when you go poking around below the surface.

I thought we could all learn a little about safety from this dramatic event.

Just because you think you are in the "middle of nowhere" does not mean there is not something there.

The pictures below are a result of a guy using a post hole digger without calling for a "locate" ...he hit an underground intra-state cross country natural gas pipe. This is what a high pressure gas main is capable of:

Real Estate Professionals Take Notice

Considering our nation's current economic woes, it's not hard to hear discussions about falling home prices and the glut of un-sold homes...

In fact, you'd almost think that's the ONLY thing happening in the real estate world right now.

But there's another big thing happening in real estate, and you'd do well to pay attention to it.

I'm talking about a rising interest in real estate professionals that specialize in senior concerns.

Demand is growing for RE professionals who understand the unique needs and services needed when our elderly need to downsize, sell their home or re-locate.

In-demand titles such as "Senior Move Manager," Certified Relocation Transition Specialist(CRTS)," 'Certified Senior Advisor (CSA)," and "Seniors Real Estate Specialist," are top priority for more and more companies.

Someone's got to know how to help the elderly figure out how they're going to switch from living in a 2,500 sqft. home (or bigger, depending on how "large" they were living,) down to a 750 sqft. place.

What exactly needs to be done? How? When? What next? All of it.

With a significant portion of our citizens getting older, the need for solutions to issues that arise from this, also swells.

How does this apply to home renovators, REI's and "flippers?"

Well when making your plans and repairs, it can benefit you greatly to understand the new needs/demands, and how this affects how and when you will sell the homes you are repairing/renovating.

Things like widening doorways and other pathways; overall accessibility and "space" issues are now more important than ever.

Plus, since these senior service representatives are also essentially your customer too, it can help you to have this insight.

There's no shrinking market ahead; only a growing one. So it'll be interesting to see where this issues goes....

Posted Aug 26,2008 by Alicia to the Members Forum at www.howtorenovatehouses.com

Emotional Buying

If you are going to be in the business of renovating houses or flipping houses, you must determine that you are not going to become emotional over these properties. For most people, their home is their single biggest purchase in their lives. For real estate investors, it is just another vehicle for creating revenue.

I saw something recently about a young couple buying their first home. They were completely attached even BEFORE the closing. So when the appraisal came back a little low (they had offered above the asking price in order to beat out another buyer), they paid $1,000 above the appraisal plus their own closing costs of about $4,500. This means that they started their newly married lives in a home in which they owed $7,000 more than the appraisal.

The first thing that the wife did was to buy a hot tub for the back patio for a wedding present for her new husband. These were young professionals who could afford this house. It was about $160,000 plus the hot tub. The point is not whether they could afford it - the point is that they now are "upside down" with their biggest investment in their lives.

When the husband brought up the question of children and the school district this house was in (they didn't even know because they were totally new to this city), the wife just blew him off and said, "We have enough to worry about right now with the dogs." She WANTED this house so badly that she could taste it.

That disregard for common sense is a great thing to have in a buyer if you are the seller, but it is a very, very bad position for you to be in as a real estate investor. Homes are a commodity, not an emotional purchase. You need to look at a home's resale value -- not its cute breakfast nook.

Analyze the pros and cons of a property based on facts. Know without a doubt what houses are worth per square foot in the area that you are going to be investing. Don't speculate how much your renovations are going to cost. KNOW this from past experience or a detailed trip to the lumberyard. Also know what the expected carrying costs are going to be. How many days are homes on the market on average in this area? What are your mortgage payments, utilities, etc. going to be? An informed investor is a wise investor.

From www.HowToRenovateHouses.com
Article by Jodi Faulkner