Sunday, March 27, 2016

Reverse Mortgages - What You Need To Know

A lot of people like the idea of a reverse home mortgage because it lets the owner stay in the home. There are no payments on the loan until you permanently leave the home.

It sounds like a great way to get the best of both worlds: staying in your home and having money too.



But is a reverse mortgage a good idea?

If you think it is, read on…

High Fees


The upfront fees for a Reverse Mortgage are somewhat high. These include closing costs, insurance costs and origination fees.  While these fees are financed by the Reverse Mortgage Company, they are typically higher than the costs charged for refinancing.

Low Limits


Even if you have a lot of home equity, a Reverse Mortgage will only let you to use some of it. 

The actual loan amount you may be entitled to is determined by a calculation that uses the appraised value of your home, the amount of money you owe on the home, your age and current interest rates.

Interest Accumulates


Some people believe that because there are no monthly payments that there are no costs to a Reverse Mortgage. They fail to realize that the loan amount – the amount you will eventually have to pay back – grows larger every month. In addition the amount of interest you will eventually owe increases - because it accumulates.


It’s Complicated


A traditional mortgage is an upfront loan of a fixed amount that is repaid over time. A Reverse Mortgage is the opposite – you accumulate the loan amount over time and pay it all back when you no longer live in the home.

Other Fees and Costs


If you do have a Reverse Mortgage, you are still responsible for paying for upkeep, taxes and insurance on your home.


If you are struggling financially, the best solution may be to take a clean break from your house. Managing a lump sum of money to cover your living expenses may be easier than constantly wondering what new expense may come up.



If selling this spring isn't something you wish to consider right now, we can help.

If you have come to the realization that it is time to move right now to have a better life, but your house isn’t ready for the traditional market, we can help. 

If you are juggling too many responsibilities to sell your house yourself this winter, then there are people who specialize in the sale of properties "as is" - usually within a week to resolve the situation quickly. We have a team of professionals able to assist you immediately.

Contact us for details.



So thanks for reading my post. I'm so glad you're here! 

And I really look forward to getting into more great stuff in future posts -- so that you can 

Turn Your House To $OLD!



Feel free to ask me any questions through the contact info below. I would be very happy to help.


Lynda  623-335-2662







_____________
Article Sources:

Lynda Bathory

Friday, March 11, 2016

Beware of FSBO!

Everyone has seen those handwritten or hand filled signs by people trying to sell their own houses.

What’s that all about? Are those owners really that cheap? What is wrong with the house that they can't sell with a real estate agent? 

You may wonder!


These days the advancement in do-it-yourself internet marketing may give you the impression that it is easy to sell a house on your own. Specialty websites like Zillow (see our important update below!) and Trulia let property owners place ads for houses for sale without real estate agents. 

Online classifieds like Craigslist are another great source for placing an ad.

But is that all it takes to sell a house?



The True Costs Of For Sale By Owner


Even though this advertising is available, the seller must still be responsible for all other aspects of the sale. 

  • With or without an agent, the seller must make sure that the house is in good order to show to the public. 
  • They must be able to determine a fair price for the house by understanding how to compare their house to others on the market. 
  • They must book appointments for visits with the buyers. 
  • They must arrange and manage their own open houses. 
  • The seller must ensure that all contracts and necessary documents are available for view. They must negotiate the sale - and all compromises, such as work that is to be done, or price reductions. 
  • In addition, they must ensure that everything is taken care of and provided for the closing.


It seems like an awful lot of work, and it is! It may make a person wonder if paying the agent’s commission is worth it to save the time and trouble.  For some people, paying the 4%-6% commission on the sale is not an option.


The Housing Crisis


Some property owners went through a very difficult time during the recent housing crash. Many were under water – owing more than the house was worth. A lot of people in that situation could not keep up with payments due to financial hardship. Some went through the foreclosure process and lost their homes.



Others hung on and have now reached the point where they owe about as much as the house is worth. This is often called sideways instead of under water. For these people, they do not have the luxury of using a real estate agent because they will not generate enough money from the sale to cover the commission. Instead they put the house on the market themselves.

What these people don’t realise is the true cost of the “For Sale By Owner” process.

A Question of Trust


It can take very long to sell a house this way. Home buyers are accustomed to using the Multiple Listing Service for home buying. Some may not trust an owner. If there is nothing wrong with the house, why isn't it on the MLS? What is the owner trying to hide? 

Most agents will not even show a potential buyer a house that is up for sale by the owner, but if they do, there will still be a commission to pay!


Carrying Costs


To sell publicly, the seller must still do a certain amount of repairs and renovations to be competitive on the open market. If this can be financed, the property owner doesn’t have a lot of upfront cost. The owner can pay over time. The trouble is the inconvenience of living in the house while the work is taking place. In addition, there are other costs associated with keeping the house. 

While the house is up for sale, the seller must still pay the mortgage, insurance, taxes and utilities. If the house is on the market for an extended period of time, the costs could become substantial. Heating or air conditioning bills may become a substantial cost while waiting for the sale. On top of all this, the seller must still perform maintenance and take care of any repairs that come up while the house is up for sale.


Options


For some people, they may choose to keep their house up for sale and wait for as long as it takes - even if that is for years. Other people may need to sell quickly for a variety of reasons. A job transfer death in the family or sudden illness can put pressure on an owner to sell quickly. In these cases neither for sale by owner or sale using a real estate agent would facilitate the situation. The sale of the house in a traditional way would still take time. 

ZILLOW UPDATE: 


Many people have heard about a recent lawsuit involving Zillow for its alleged inaccuracy of its Zestimate application. This is because many home sellers have been put in a position to lose significant amounts of money using the tool.

While Zillow may be the most well-known for the Zillow Zestimate, several other online home valuation tools are also not yet at the point where their results fall within an acceptable margin of error. Zillow just happens to be the test case.

So how is a property owner supposed to know how much to sell their house for?

Most online home valuation tools (including the "Zestimate") are as accurate as the majority of real estate agents. And by that, we would like to point out that most listing agents in America sell fewer than 2 homes per year and are neither trained nor motivated to truly monitor home values across a local real estate market. There are, of course, top agents out there who are truly knowledgeable and professional and if you ever meet one, keep their card!


If you are truly determined to sell your house on your own, keep the following in mind to NOT lose money using Z-estimates:


1. DO use an online valuation tool to check the estimated value of your house. Just remember that it is an estimate. Most people don’t realize that the tool can’t make important distinctions such as land size, frontage (like being on a lake or a golf course), and even whether or not a home has a swimming pool or garage. It is an estimate.

2. DO NOT use a home valuation tool as the basis of your decision to sell your home. It cannot accurately evaluate the market conditions in your neighborhood.

3. DO NOT use a real estate agent's valuation of your home as the basis of your decision to decide your price. It is a well-known practice for an agent to flatter the prospective home seller by convincing them that their house can be sold for much more than the owner thinks it is worth. Until the agent has you under contract and comes back at you with a much lower revised price – or the house sits on the market for months and grows stale!

4. DO use a Zestimate to get an idea of the general direction of the market. You should be able to tell if prices are going up or down in your area. Don’t rely on it for more than that.

5. DO NOT use the comparable sales information from nearby recent home sales as "fact." A lot of people believe this information to concrete values for a sale, but unless you are part of the transaction you really don’t know the conditions of the sale. Your neighbor’s house sold for $50,000 more than what you find you should be asking, and you think you can increase your price? Well, Zillow won’t tell you the house was sold with all the furniture and the boat included! Or you may see that it sold for $100,00 less, but Zillow won’t tell you the owner sold it to their own child. Neither of these sales is likely comparable to your situation!



It is important to recognize that these tools and resources have a long way to go before they will be able to accurately value all homes within a market. Do not be seduce by outrageously high estimates or accept extremely low ones.


For some people the best option is to sell a house fast.


It is possible to sell a house quickly and without having to repair it first. This can be a big advantage to the property owner. It alleviates a lot of the pressure and financial strain from the property owner. It is possible to come to a mutually satisfactory arrangement the same day as the meeting! The seller has no costs for closing and none of the headache. In cases where the seller has no equity, they may still be able to sell and make some money! 



It is a wonderful way to have a fast, efficient win-win transaction!




If you are putting your home on the market, spring can be a very stressful time. There is so much competition at this time of year. This may extend the time it takes to sell your property.
If selling during the competitive spring season isn't something you wish to consider right now, we can help.
If you have come to the realization that it is time to move right now to have a better life, but your house isn’t ready for the traditional market, we can help. 

If you are juggling too many responsibilities to sell your house yourself this spring, then there are people who specialize in the sale of properties "as is" - usually within a week to resolve the situation quickly. We have a team of professionals able to assist you immediately.

Contact us for details.





So thanks for reading my post. I'm so glad you're here! 

And I really look forward to getting into more great stuff in future posts -- so that you can 

Turn Your House To $OLD!



Feel free to ask me any questions through the contact info below. I would be very happy to help.


Lynda  623-335-2662







_____________
Article Sources:

Lynda Bathory