Short Sales in Real Estate - Pros and Cons
There are many advantages as well as disadvantages to purchasing a short sale take a look at the advantages and disadvantages in today's market.Holiday Gift from Washington!
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Buying a home in today’s market
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Homework Essential
To Successfully Buying Your First Home
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Affordability in Real Estate Market and trade-ups on rise
Creates Many Opportunities for Buyers First-time purchases
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Short Sales Can Save The Day
If your having trouble paying your mortgage help may be closer than you think
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Keller Williams Realty Brokerages Dominate Annual Industry Surveys (More...)
About Keller Williams Realty Inc.:
Founded in 1983, Keller Williams Realty Inc. is the third-largest real estate franchise operation in the United States, with 679 offices and 73,000 associates in the United States and Canada. The company, which began franchising in 1990, has an agent-centric culture that emphasizes access to leading-edge education and promotes an economic model that rewards associates as stakeholders and partners. The company also provides specialized agents in luxury homes and commercial real estate properties. For more information, or to search for homes for sale visit Keller Williams Realty online at (www.kw.com).
Newlyweds Start a Family in Mays Landing
First time home buyers and newlyweds, Anthony and Danielle, began their search for a home when they realized their apartment would not accommodate their desire to start a family. The couple began searching online, and visited a few areas with the initial idea, like so many in today's market, that the homes in the town they wanted would be out of their price range.
"I guess we didn't believe it was a buyer's market at first," said Anthony. "But once we started our search, it seemed that there were a variety of homes that were definitely available to us."
The couple landed a beautiful home in September 2008 in Mays Landing, home to Atlantic County's breathtaking scenery and historic attractions, at an affordable price and perfect for raising a family. "We knew we didn't want to live in an apartment forever," said Anthony. "We want to have kids in two or three years and we wanted to buy a house that we didn't have to upgrade when we decided to have kids."
With so many conflicting reports about real estate prices and tight mortgage lending circulating in the news, the couple relied on the help of a REALTOR® for guidance and expertise through the process of buying a home. Ultimately, Anthony and Danielle came to believe the process is not as complicated as people think. "It turned out to be a lot easier than some people make it out to be," said Anthony. "Of course it's stressful because you are about to go into debt, but it was very easy for us, especially the closing of the house."
Anthony continued, echoing the thoughts perhaps of many young couples in New Jersey thinking about buying a home of their own. "We are looking to the future."
Short Sales in Real Estate - Pros and Cons
In today’s market there is much interest in “Short Sales.” It’s almost impossible to look for a house without coming across one or more properties currently classified as a short sale. The educated buyer recognizes the value of a short sale, but doesn’t limit the search to short sales alone. Because of the surplus of home on the market, many homes are now offered at reduced prices. Real estate professionals suggest exploring all options, bargains can be found in traditional sales and should not be overlooked.
There are many advantages as well as disadvantages to purchasing a short sale.
Short sales can be a great way to purchase real estate at a discounted price. However for the buyer this could mean waiting a month or more to hear back from the lending institution as to whether or not the offer has been accepted, rejected or countered.
The entire short sale process is dependent upon the bank’s willingness to take a loss now, approve the sale, and eliminate the costly process of foreclosing, clearing, and reselling a home.
One of the advantages is obvious - the buyer gets a great deal on a property they may not otherwise be able to afford. In turn, the seller is able to sell a home in lieu of the bank taking it back through foreclosure proceedings, thus partially salvaging their credit rating.
One of the disadvantages is the time factor. Banks generally want to close within 30 days, however in the market today this is almost impossible to accomplish. For both the seller and the buyer this waiting period is not only stressful but often harmful to not only personal finance, but also the legistics of future living arrangements.
As a buyer you will be competing against investors and other home buyers. A short sale originally priced in the area of $190,000 could turn into $220,000 after bidding is finished.
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Many real estate professionals suggest that potential buyers put an offer in on a short sale, but to continue searching for a home. It takes at the very least a month to have an offer accepted or rejected by the bank. Often, homes that are offered at significantly reduced prices - and potentially your dream home can also come and go in the same time. Put the offer in and move on.
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Holiday Gift from Washington!
Tax Credit Extension not just for first-time buyers
Many home-owners and first-time buyers received an early holiday gift from Congress. The much talked about, much appreciated tax credit was due to expire November 30. After many months of deliberating and at least 20 different bills intended to extend the credit, congress finally voted to extend the current home buyer tax credit through April 30 and to extend a $6,500 credit for move-up or size-down buyers who have owned their current home for five years.
Around 70% of all current homeowners will be eligible for the expanded home buyer tax credit, which should provide some boost to home prices over the next few months, according to an estimate by economists at Goldman Sachs.
Many local real estate agents are hopeful that this extension will be enough to keep the momentum going in the housing market. While the incentive for first-time buyers is huge the $6,500 available to existing homeowners will, in most cases, cover closing costs.
In addition to the tax credit itself, than overall home prices themselves are a driving force in jump-starting the rise in sales. The depreciation of many local homes is up to 20 percent or more, that alone makes buying a home now particularly attractive.
Although the extension won’t fix all of the MainStreet’s problems, if last year’s sales are an indication of things to come we should be in pretty good shape. Sales were up 30 percent over 2008 and contracts pendings in October were up over 70 percent over the previous year.
The hope is that this sort of momentum will help reduce some of the distressed properties that bring down overall prices of homes. Until the existing inventory is cut down, real estate prices are bound to hover below average.
You can find out more at www.FederalHousingTaxCredit.com.
Buying a home in today’s market
The homebuying process can seem complicated, but if you take things step-by-step, you will soon be holding the keys to your own home!
Nine steps to buying a home
- Figure out how much you can afford
- Know your rights
- Shop for a loan
- Learn about homebuying programs
- Shop for a home
- Make an offer
- Get a home inspection
- Shop for homeowners insurance
- Sign papers
Step 1: Figure out how much you can afford
What you can afford depends on your income, credit rating, current monthly expenses, downpayment and the interest rate. The calculators below can help, but it is best to visit a lender to find out for sure.
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How much home can you afford? |
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Buying vs. Renting |
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Home Economics |
Need help with your downpayment and/or closing costs?
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Homebuying programs in your state |
A housing counselor can help you figure out how to manage and pay off your debt, and start saving for that downpayment!
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Find a housing counselor near you |
Step 2: Know your rights
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Fair Housing: Equal Opportunity for All - brochure |
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Real Estate Settlement Procedures Act (RESPA) |
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Borrower's rights |
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Predatory lending |
Step 3: Shop for a loan
Save money by doing your homework. Talk to several lenders, compare costs and interest rates, negotiate to get a better deal. Consider getting pre-approved for a loan.
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Looking for the best mortgage: shop, compare, negotiate - brochure |
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Let FHA help you |
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Why Ask for an FHA Loan? |
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Learn about interest only loans |
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Avoid Predatory Lenders |
Step 4: Learn about homebuying programs
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Homebuying programs in your state |
FHA loan programs offer lower downpayments and are a good option for first-time homebuyers.
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Let FHA help you | ||||||||
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HUD's special homebuying programs
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Step 5: Shop for a home
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Choose a real estate agent |
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Wish list - what features do you want? |
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Home-shopping checklist – take this list with you when comparing homes |
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Homes for sale (including HUD homes) |
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" Fixer-uppers " - home purchase and repair programs |
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Manufactured (mobile) homes |
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Build a home |
If you choose a home in a neighborhood with a Home Owners Association (HOA), be sure to request a copy of the HOA packet, so you can review before closing.
Step 6: Make an offer
Discuss the process with your real estate agent. If the seller counters your offer, you may need to negotiate until you both agree to the terms of the sale.
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Making an offer |
Step 7: Get a home inspection
Make your offer contingent on a home inspection. An inspection will tell you about the condition of the home, and can help you avoid buying a home that needs major repairs.
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For Your Protection Get a Home Inspection |
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10 Questions to ask a home inspector |
Step 8: Shop for homeowners insurance
Lenders require that you have homeowners insurance. Be sure to shop around.
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Homeowners insurance |
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12 ways to lower your homeowners insurance costs |
Step 9: Sign papers
You're finally ready to go to "settlement" or "closing." Be sure to read everything before you sign!
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Settlement Costs and Helpful Information |
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Homework Essential To Successfully Buying Your First Home
Declining home prices, increasing numbers of foreclosed properties and unique government stimulus programs are luring potential homeowners into the market. But, purchasing a new home is more challenging then it was just a year or two ago. Relaxed lending standards over the past decade led to one of the greatest housing market booms in the nation's history, and have now contributed to one of the greatest housing market crashes. Lenders who were previously able to easily lend to most homebuyers have now severely tightened their lending standards, making it more difficult for potential buyers to obtain financing.
If you are still ready to make the jump from renter to homebuyer, here are some tips from FindLaw.com, the world's leading online source for legal information on how to prepare to purchase your first home.
Carefully inspect your
Lenders check your credit report to see if you have the means, the capacity and the track record to pay the mortgage on the home you would like to purchase. The better your credit score, the more likely you will obtain a favorable interest rate and terms on a mortgage.
To learn what your credit score currently is and if there are any mistakes on your credit report, contact the three major consumer credit reporter companies - Equifax,
Become familiar with mortgage terms and conditions
A mortgage is a legal agreement between the lender and the buyer of a home in which the property is collateral for the loan. A lien on the property being purchased secures the promise to repay the loan. Never sign any legal documents, including a mortgage, if you do not clearly understand the terms and conditions of the agreement. If you feel pressured to sign a document, walk away and seek the assistance of an attorney or trusted real estate professional.
Shop around for your loan
Contact at least three financial institutions to obtain information on mortgage rates, terms and conditions for a first-time homebuyer. When you believe you have enough money for a down payment, obtaining a pre-approval letter from the lending financial institution can speed the purchasing process along. Sellers may be anxious to sell a property in today's market, but they're just as anxious to avoid a buyer who is unable get a mortgage to pay for their property.
First time home-buying programs
As you consider buying your first home, look into local, state and federal programs that may offer financial assistance for first-time homeowners. Check with your mortgage lender to learn more about, and to see if you qualify for the 2009 first-time homebuyer's tax credit. The American Recovery and Reinvestment Act of 2009 expanded the first-time homebuyer credit by increasing the credit amount to $8,000 for purchases made in 2009 before Dec. 1, 2009. In most circumstances, the 2009 credit does not have to be paid back, but be sure you fully understand your obligations before you count on not paying back the credit.
You also may be able to obtain a bridge loan and apply the funds to your closing costs. Additional information is available at www.hud.gov and www.irs.gov. If you're a military veteran, the Veteran's Administration also offers special loan programs for which you may qualify.
Hire a real estate professional
Buying a home will probably be the largest financial transaction you will make in your lifetime, and it's a process that can leave you feeling overwhelmed. Most buyers often rely on their realtor, loan officer or closing agent to guide them through the purchase process. If you feel that you do not clearly understand the purchasing process, or you would feel more confident if you had additional expertise to make a sound decision, consider hiring an attorney who specializes in real estate law to review and negotiate your offer to the seller, to review your mortgage and closing documents, and to be present and represent you at the closing. Hiring an experienced real estate attorney would be especially useful in dealing with the complexities of purchasing a foreclosed home.
Do your homework
When shopping for a home, take the time to research neighborhoods where you would like to own a property. There are many online tools to help you research the schools, property taxes and values and crime statistics. Visit as many open houses as possible in the neighborhood, and as well as nearby shops and other facilities that add value to owning a property. As you narrow down your home choices, work closely with your attorney or real estate professional to obtain a professional inspection of the structures and to understand any disclosures made about the homes.
Consult with friends and family
Experience is often the best teacher. When you start looking for your first home, consult with a parent or friends who have purchased homes to get their perspective of what to look for in a home, and what to expect in terms of ownership and maintenance.
Co-buying a home
If you're interested in co-buying a home with a friend or a future spouse/partner, work with a real estate lawyer to clearly define the arrangement and the sharing of the title. Working things out up front will reduce potential problems if circumstances change.
For more information and tips on buying or selling a home, visit realestate.findlaw.com.
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Buying Season in Full Swing
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Affordability in Real Estate Market
Creates Many Opportunities for Buyers
First-time purchases and trade-ups on rise
In the first quarter of 2009, 56 percent of households in New Jersey could afford to buy an entry level home, compared to 44 percent of households a year ago, according to the NATIONAL ASSOCIATION OF REALTORS® (NAR).
Major contributors to the higher rate of affordability are lower median home prices, which have declined from $308,600 in the first quarter of 2008 in New Jersey to $299,800, in the first quarter of this year, and record-low interest rates. According to NAR, in the first quarter of 2009, the average interest rate in New Jersey was 5.14 percent, compared to 6.02 percent in first quarter of 2008, a decrease of almost one full percentage point.
"Rising affordability means a lot of people who maybe couldn't afford to purchase a home in recent years, can now take advantage of the opportunities presented by today's market conditions," said New Jersey Association of REALTORS® (NJAR®) 2009 President Diane Dilzell. "Financially stable buyers in many situations are finding themselves in a great position to enter the market and find a home that fits their budget."
First-time buyers have a tremendous chance to take advantage of affordable homes, especially with incentives available like the $8,000 federal tax credit for anyone who hasn't owned a home in three years. Also, for people who have dreamed of a bigger home or a move to a certain neighborhood they might have previously thought was out of their range, opportunities exist to trade-up.
"The high affordability in New Jersey will also be advantageous for sellers," said Dilzell. "As affordability remains high, demand will increase, and inventory will drop. It's a condition that will help drive the real estate market to a healthy equilibrium."
Paired with other buyer incentives, like the first-time home buyer tax credit of up to $8,000, the high affordability in New Jersey creates a unique opportunity for buyers considering entering the real estate market.
Talk to a Keller Williams REALTOR® about conditions in your local market. For more information on housing affordability, or to find out more about taking advantage of today's real estate market in New Jersey, visit www.REALstoryNJ.com.
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As a result of the ups and downs in todays real estate market many people found themselves owing more than their house is worth. As interest rates rise and those wonderful ARM mortgages adjust homeowners everywhere find they can no longer afford their ballooning mortgage payments.
Just refinance. That's the advice homeowners were given in past. Not that easy when the market dips and your home is no longer worth what your mortgage demands.
What now? Don't dispair, many homeowners are turning to short sales to escape foreclosure. That's right - you might be able to sell it for less than you owe -- without having to pay the lender the difference.
If you can no longer make your mortgage payments and your home is now worth less than you owe on it, foreclosure may not be your only option.
A short sale, is the sale of a house for less than what the owner owes on the mortgage. If the lender agrees to a short sale, the rest of the homeowner's debt may be forgiven.
Why would a lender accept less than what is owed? Because in the long run a small loss is better than the lengthy and costly foreclosure process.
Short Sale = Everybody wins!
Here's how:
- The seller avoids forclosure and avoids facing bankruptcy.
- The buyer gets the home at a bargain price.
- The lender avoids the cost and delay of foreclosure and is not stuck with an "upside-down" property.
Think a short sale may be the lifeline you've been looking for? Give your Keller Williams agent a call today to discuss your options. Help might be closer than you think.
Keller Williams Realty Brokerages Dominate Annual Industry Surveys
RISMedia’s Power Broker Report and REAL Trends’ REAL Trends 500 rank the largest residential real estate brokerages in the U.S. based on transaction sides and sales volume. This year, Keller Williams Realty had more brokerages on both lists than any other real estate brand.
In the REAL Trends 500 report, Keller Williams Realty dominated, with its offices comprising more than a quarter of the entire list. Of all the major brands represented in the report, Keller Williams was the only company to boast growth in both number of agents added to its ranks and in total transactions closed.
Within RISMedia’s Power Broker Report, Keller Williams Realty again had the largest majority on the list – accounting for 35 percent of all the brokerages listed. The report also ranked Keller Williams Realty #1 in number of agents and total closed transactions.
“These results prove what we already knew – Keller Williams Realty is experiencing the next phase of our growth during this shift,” said Mark Willis, CEO of Keller Williams Realty, Inc. “Our agents and offices are capitalizing on the opportunities presented in today’s market and powering forward.”
“Two years ago, when the market began to shift, we mobilized to make sure our people would have the training, support and technology to tackle the market and they have truly blown us away with their accomplishments,” he added.
Within the past 18 months, Gary Keller, co-founder and chairman of the company, released his latest book, SHIFT: How Top Real Estate Agents Tackle Tough Times which became the No. 1 selling real estate book for agents in 2008. The launch also included a nationwide seminar tour which is slated to visit more than 50 cities throughout North America by the end of the summer. Other initiatives included the delivery of affordable health care options for KW associates through the new Keller Williams Health Providers Program and the launch of the company’s commercial arm, KW Commercial.
“When we do what we do best – coach and train our associates to higher levels of personal productivity and profitability – growth takes care of itself,” said Mary Tennant, president and COO of Keller Williams Realty, Inc. “Keller Williams Realty, the franchise company, didn’t rank on these lists – our people did.”
“We’re confident we’re in businesses with some of the most talented and focused individuals in the industry and we are so proud of all they’ve achieved,” added Willis.