Real Estate Investment Myths

by admin on February 26, 2012

Real Estate Investment MythsThere are several myths about investing in real estate; if investing in real estate is something that you are thinking about doing, it would be wise for you to educate yourself on the facts surrounding the topic.

Following are just some of the most common myths that are running around out there. I have identified the myth, and then followed it with an explanation as to why this is JUST a myth. Hopefully reading these will help you ease your mind about the whole process and convince you that you too can invest in real estate…SUCCESSFULLY!

1. You must be Rich to Invest in Real Estate.

While it always helps to have money in savings—ready and waiting for great investment opportunities, you can start small. For example, buy a small lot and sell it right away to someone for a minimal profit. There are ways to make real estate investments even if you do not have the capital at the moment; you could search out a like-minded investment partner, an investor who will fund you and let you do the work, or you could even save a little money each paycheck until you have enough for a down payment on your first investment.

2. Putting Nothing Down is Impossible Anymore.

Real estate investments that allow you to put no money down are harder to find, yes. But there are available. You can find seller-financed properties that allow you develop a relationship with the seller; if they trust you and you have a good relationship, they may finance your loan for nothing down; keep in mind that they typically will charge a higher interest rate from you. Still, in this scenario, both parties can win.

3.  Putting Zero Down is The Best Way to Go.

The truth is:  the less money you have to put down at the front end of a deal, the more money you will spend down the road. Even finding a seller who is willing to work with you on a zero-down transaction will expect something in return for their cooperation. So, not making a down payment might seem like a great deal, but it all adds up over time.

3. You Should Have Real Estate Investment Experience.

This statement is somewhat true, but you have to invest to get the experience. Again, start small. Become familiar with the numbers of potential deals, how they will affect you—both monthly and long-term, what you can afford, and more. And know that you may lose money. It is always a possibility.

4.  Some Investors Just Know What Makes Money.

Some investors do know best, this is true. Investors who have been in the “business” for a while have learned some “tricks” of the trade over time. But you will learn in a similar manner over time. Most of them all started in the same place—with SMALL investments.

5.  It’s All About Who You Know.

This is not entirely correct. It helps, of course, but it is not a MUST. You will get to know other investors, realtors, brokers, and lenders, as you grow as an investor.

6.  The Fixer-uppers Are The Best for Investments.

Most people think that doing repairs and remodeling themselves will save so much money, and in turn, get them a larger profit. This can be true if you truly know what you are doing. BUT, more often than not, it ends up costing more money and more of your time—thereby reducing the profit of your investment.

10.  Come In With the Lowest Bid.

Again, it is best to know where you are financially:  what you can afford, what the value on the property is and should be and what a fair, but smart offer is. Bid based on these factors—not just on coming in at the lowest bid.

Myths are Typically Misunderstandings

Most real estate myths are just misunderstandings and they exist because of a lack of knowledge.  If you do your research, and really put your mind to it, you can be a real estate investor and you can be successful!

Guest blog provided by Linda Wise a Realtor in Merritt Island, FL. Please visit her Palm Bay real estate website where you can search homes including homes for sale in Viera FL.

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The Benefits of Owning a Home

by admin on February 26, 2012

The Benefits of Owning a HomeAs the economy and real estate market continue to waiver, many are left wondering whether owning a home is still a good idea. The investment world is tricky right now, and the real estate world can be too.

However, as a realtor, I have seen almost everything come and go. And owning a home remains ones of the few purchases that you can make that eventually will bring you a return. Below is a list of valuable reasons why owning your own home is still a good idea today regardless of the current market.

The Benefits of Owning a Home

Appreciation

One of the greatest reasons why many choose to invest in a home rather than rent a piece of property is because purchasing a home is just that–an investment. Although the economy the last couple of years has not been exceedingly great for the real estate market, financial professionals suggest that the value of a home will continue to rise in the next few years. Likewise, homes over the past decade have demonstrated this trend.

When you choose to purchase a home, you are making an investment. However, the value of the home will increase the more years you own it as well. Thus, you are ultimately getting more money when you choose to sell your home than when you purchased it.

Costs Less than Renting

Another bonus of owning a home rather than renting a space is the lower cost overall. Although your rent payment per month may be less than what you pay for your home per month, the money you save in tax deductions due to your property taxes and the like actually save you money over the long term. Thus, although you may pay less per month when you rent, you are not saving money on the yearly basis.

It is also important to remember that the money you spend in renting is not an investment. This means that you are not gaining anything with the money you put down each month on an apartment.

 Consistency

Consistency is another big factor when deciding to own a home. Unlike homeowners, renters usually do not know what they will be paying in a few years’ time. In fact, many renters can expect to pay more each year.

Homeowners on the other hand do not need to worry about the inconsistency that renters have to deal with. Rather, they are on a fixed mortgage payment plan. Thus, they know what to expect each month.

 Freedom

A final significant benefit to owning your home is the freedom available to you. What does this mean? Many renters are often burdened by the rules placed by the landlord. For example, many renters are not able to paint the walls, hang pictures, replace appliances, etc.

Homeowners are able to do all of these things and more because they own the space they live in. Homeowners also do not need to worry about their noise level or the things they choose to do within their space. They are free to do as they wish without any penalties or regulations.

 Owning Your Own Home

Owning your own home is definitely a big investment and a decision that should not be taken lightly. However, there are many benefits to be gained from making the decision to do so. One of the best choices you can make is to ask those around you how much owning a home has changed their lives. Ask those who are closest to you what they appreciate about having their own space they have purchased.

Also, look into the real estate market and discuss your decision with professionals. As a real estate agent, I can help guide you to finding properties that are selling and increasing in value. Owning a home can be the best decision you have ever made if it is done with the investment of time, money, energy, and education.

This article was provided by Mitch Ribak a Palm Bay FL real estate agent. You can learn more about Mitch and the benefits of owning a home on his Melbourne real estate website where you can search all Melbourne Beach FL real estate listings for sale.

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Why Do I Need a Home Inspection?

by admin on February 18, 2012

Why Do I Need a Home InspectionMost people consider purchasing a home to be an important decision. It is a good idea to make sure that you are truly getting what you are paying for.

In my years as a real estate agent, I have seen families avoid huge expense and heartache when their home inspector alerted them to structural problems within the house they were planning on buying.

Why Do I Need a Home Inspection?

So often, we know what we are looking for as far as room size or floor styles go, but we do not give as much thought to the quality of the foundation or the roof until something goes terribly wrong. A good home inspector can help you to spot these problems before you lay down your hard-earned money on a house that turns out to be a money pit. Here are some of the advantages to hiring a home inspector:

  • Knowledge

A home inspector has knowledge of what makes a house a quality house, new or old. The inspector is a professional and has probably “seen it all.”  A home inspector will also look for things you are not likely to be thinking about, but that could cause huge expense and heartache when something goes wrong down the road.

  • Peace of mind

Paying for a home inspection up front gives you the peace of mind knowing that you are getting exactly what you are paying for, and there are not going to be any nasty surprises in the future. By having the home inspected, all parties involved cannot claim that they “didn’t know;” all cards will be on the table.

  • Savings

The home inspection reveals problems that require repair or replacement before you close on the house. This knowledge gives you room to negotiate with the seller in order to cover these costs.

  • Fewer Surprises

The home inspection guarantees that you will have fewer nasty surprises after moving into your new house. Nobody is perfect, and so you still may encounter some oddities. But, for the most part, your home inspector will help you avoid any truly troublesome surprises after moving in.

  • Education

A good home inspection gives you important details about your new home, such as the location of the fuse box or shut-off valves. These are details you rarely think about when you are house hunting, but they are important once you are living in your new house. So now that you understand the importance of having your home inspected, how do you find the right inspector?  Here are some things to look for when hiring a home inspector:

  • Experience

Experienced home inspectors are going to do a more thorough job and are less likely to miss anything important during their inspection. Obviously, someone who has seen hundreds of houses is going to be able to spot potential problems more easily than someone with less experience.

  • Training

In some states, anyone can call themselves a home inspector without any licensing or training. Make sure the company you are hiring from only employs people who have been trained to inspect houses.

  • Association membership

Companies who are affiliated with professional organizations keep up with all the new developments in their field. Some well-known home inspection associations are the American Society of Home Inspectors (ASHI), and the National Association of Home Inspectors (NAHI).

  • Liability insurance

Your inspector should carry professional liability insurance (errors and omissions insurance). This insures that the inspector will be able to pay a claim if you need to collect on a legal judgment.

Even Brand New Homes Should Undergo Inspection

Another common question is whether a home inspection is necessary if you are buying a newly constructed house. I recommend it, mainly because I’ve seen builders take shortcuts that most people would never notice, but that a home inspector will pick out right away. If you are building your house, I recommend scheduling an inspection before the drywall is installed. This gives you the chance to identify potential problems while they are still easy and inexpensive to fix, and will give you greater peace of mind later.

If your interested in learning more about the home buying process, you can visit Kimberley Kelly’s, an Indio CA Realtor, website where you can read her blog that she updates almost daily or view home for sale. You can search all Rancho Mirage homes for sale, Indian Wells homes for sale, and Indio homes for sale.

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Silicon Valley Commercial Real Estate Still Hot in 2012

by admin on February 17, 2012

Silicon Valley Commercial Real Estate Still Hot in 2012Silicon Valley tech companies are seeking commercial space in order to continue expanding. This was reported in a conference that was put together by the real estate firm,  Cornish & Carey Commercial Newmark Knight Frank.

During the conference, brokers spoke of positive outlooks for commercial real estate located in the Bay area. Brokers are very optimistic about the economic outcome in the region.

High Demand Started in 2011

In the 2011, Silicon Valley found commercial rental property to be in high demand. This is expected to continue as commercial tenants continue to expand in 2012. According to the Cornish brokers, these tenants are looking to rent a 9.6 millions square feet of combined office and technology research space. These numbers, which are updated quarterly, are current as of December, 2011. As the 2011 year ended, commercial tenant space demand was at the highest it’s been since 2006

This is not just great news for the real estate market, it helps us stay positive about the financial recovery in Silicon Valley. A hire demand for commercial property means more jobs within the region. As of today, around 9,400 technical jobs openings are available in the Bay area alone. The Cornish brokers believe the Bay will continue to be a leader in job growth throughout 2012.

New Commercial Leases for 2012

Even though the commercial tenant demand is so high, this is no guarantee that they will all become new leases. This is mainly because most commercial tenants would rather stay where they are and renew current leases. Many find this much easier than uprooting the entire company in order to obtain new leases somewhere else. But, Cornish does estimate that about two-thirds of the demand will translate into new commercial space rentals.

This estimates to about 6.4 million square feet that could be leased by Silicon Valley businesses in the near future. As this demand rises, this could mean 10 million square feet of commercial rentals in the Bay area across the market.

Because of this high demand for commercial leasing property, choice office space availability in the area has been cut by 50 percent. There was over 20 percent in vacancies when 2010 ended. As 2011 ended, these numbers went down to just under 12 percent.

Demand Brings Money to Other Areas

Eventually, as companies in the area continue to have a hard time finding commercial real estate to lease, they will have to venture out further. The prime areas of Silicon Valley and San Francisco will continue to remain full, causing companies to rent in other Bay area neighborhoods instead. Some of the areas that may feel the positive effects of this are Cupertino, San Mateo County, Milpitas, South San Francisco, Fremont and downtown San Jose, among others.

According to Thomas Fehr, Cornish & Carey senior VP, there isn’t enough commercial space available to meet current leasing demands. As the demand continues, the overflow is expected to hit the East Bay area in 2012, just as it has in the past.

If you’re looking to buy a home in California, you can visit Vickie Nagy’s Pleasanton real estate website. There you will have access to thousands of listings including Blackahwk real estate and Livermore real estate. For a full featured home search please visit http://vickiesellshomes.com/.

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How to Get Your Home Ready for Sale

by admin on February 13, 2012

How to Get Your Home Ready for SaleIt is probably obvious to you that you need to do a little straightening up of your home in order to get it ready to sell. Think about how you feel when you know company is coming.  Worse yet, consider how you feel when you don’t know company is coming, and they come into your home unannounced.

Maybe that doesn’t alarm you if you are the type of homeowner who always keeps things in order and keeps things clean.

How to Get Your Home Ready for Sale

But for many homeowners who are now getting ready to sell their current home and move into a new one, one quick glance around the home reveals that some work must be done. Where should you start? While a Realtor is going to give you great advice on repairs and replacements that must be done, there are still some things that you can do on your own.

Start by de-cluttering your home. If you have a family, you can assign each family member a portion of the home. Such work is easily conquered when divided amongst several. So, each room in your home must first be de-cluttered, and then deeply cleaned. Think of how freeing this experience could be for you. Can you picture taking a trash bag and two boxes into each room with you—the trash bag is for trash, one box is for things to give away, and the other box is for things to take with you to the new home.

Once you go through this process in every room, your home will actually seem bigger and brighter. If you need to go a step further than a trash bag and two boxes, find some storage space to keep all the items that you really want to take with you to your new home. In order to make your home open and spacious, you may even want to put several pieces of your furniture in that storage space so as to give your home a more sleek appearance. This gives potential buyers space in their own minds for their own belongings to fit into your home.

Hire A Professional Cleaner

Unless you clean for a living, and even if you do, hire someone else to come in and clean your home maybe once a month or every other week (depending on the traffic in your home). If you are busy with other day-to-day happenings, the money that you pay someone else to polish and shine your home can really be well worth it; a clean and orderly home goes a long way in gaining the attention and interest of potential buyers.

Pay special attention to your kitchen. It should not have appliances sitting on the counters; in fact, if it is possible at all, it is best to have completely clear countertops. And, look into your closets and attics also. Your potential buyers will look in there. While it may seem strange or a little too personal, they want to see if their stuff will fit into your closets, your cabinets, and your storage spaces, too. So, do not be fooled. If they are truly interested, they will open doors and cupboards, and you want yours to be organized and spacious—or even empty if you can arrange them to be.

Add A Coat Of Paint If Needed

While there is typically no benefit in remodeling portions of your home, you can repaint walls and create a “new” look to your home by doing so. Choose neutral shades of paint so that your potential buyer can then add his/her own personality to the home when the time comes.

If your flooring is embarrassing (which can happen from daily wear of kids and pets), ask your Realtor if you should replace it before putting your home on the market.  Sometimes the answer is “yes,” and sometimes the answer is “no.” Let the Realtor help you decide if the worn out flooring will actually slow down the sale of your home or not.

While there is definitely some work to do prior to selling a home, the effort that you put into straightening up your home will only help you reach your goal of selling the home more quickly. Clearly, the goal merits the work.

This post was written by guest blogger Aaron Seekford. You can learn more about Aaron by visiting his Arlington VA homes for sale website where you can see all Arlington Neighborhoods and Subdivisions. You can also check out all the Arlington VA real estate listings on his city page.

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What Are Specialty Home Inspections?

by admin on February 7, 2012

What Are Specialty Home Inspections?Whether you are preparing to buy or sell Fort Collins real estate, a home inspection is invaluable.

A report from a standard home inspector includes an objective review of the home’s condition–its heating and air conditioning systems, interior plumbing and electrical systems, and a review of the structural components from roof to the foundation and everything in between, including walls, ceilings, floors, window, doors, visible insulation, basement, attic, and anything else considered “structural.”

  • For the home seller, a home inspection identifies any problems and gives you the opportunity to make any particular repairs that will make the home a more attractive offer on the market.
  • For the homebuyer, a home inspection helps you learn as much as possible about your possible new home. It might identify the need for major repairs, upcoming maintenance or, if it’s a new home, any builder oversights. No matter what, it gives you a good overview of the home’s physical condition and allows you to move forward with any decisions.

*In addition to the standard home inspection, you may wish to consider a specialty inspection depending upon the home’s age, location, and unique property features. Below is a list of specialty inspections that you may choose to have done.

What Are Specialty Home Inspections?

Termite inspection. Termites–those tiny, destructive wood-destroying organisms can cause untold damage to your home unless they are caught in time. A termite inspection, which may be a condition for sale, focuses on infestations, wood rot, and other conditions.

Swimming pool/Jacuzzi inspection. For this inspection, use a pool specialist who specializes in real estate-related inspections. The final report should include a detailed report about your pool’s condition and an action plan that addresses any problems such as racks, faulty equipment, or other safety issues.

Chimney inspection. If your home has a fireplace, a chimney inspection should be conducted regularly, whether as part of the home inspection or a separate specialty inspection. Depending on use and age, a chimney may have hidden cracks, construction defects or other problems due to earthquakes or settling.

Septic inspection. If you are considering buying or selling a home with a private septic system, a professional septic system inspection is a very good idea. Leakage, odors, and stone discoloration are all signs of concerns. It’s also important to consider the age of the septic system, how often it has been pumped, and how much water the current occupants use versus future occupants. A family of two probably uses less water than a family of five, and the amount of water flow helps determine how often the septic system should be pumped. 

Lead inspection. If the home was built before 1978, I recommend a lead inspection. Until 1978, there was no regulation on the amount of lead used in paint for residential use. A lead inspection would include a review of interior and exterior painted surfaces ranging from walls, ceilings and chair rails to porches, siding, and gutters.

Asbestos inspection. Before the 1970s, it was not unusual for many building products to contain asbestos particularly to improve fire resistance and heating insulation. There is an increased health risk if asbestos fibers are released into the environment so it’s important to know if the home has asbestos and what condition it is in. As always, a professional should do any inspection and necessary repair work, and I can connect you to reputable inspectors.

Radon inspection.  Radon comes from the natural breakdown of uranium in water, rocks, and soil, usually moving up through the ground into the air above. It can enter your home through cracks or holes in the foundation or even via well water. Any home can have a radon problem and the problem can vary from house to house; a neighbor’s home may have more or less radon than yours. A radon inspection will indicate the level of radon in the home and if it poses a health hazard.

Inspect Your Most Valuable Asset 

Protect yourself and your largest investment. Specialty inspections, whether for a real estate transaction or your own ongoing home maintenance program can save your life, not to mention your wallet, by identifying any problems or concerns.

About the author: This post was provided by Allison Klein. Allison has been helping buyers and sellers in the Windsor Colorado real estate market for many years. Please visit her website to get the latest news on Windsor as well as the Loveland Colorado real estate market on her blog.

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Energy Efficient Mortgage Program (EEM)

by admin on February 4, 2012

Energy Efficient Mortgage Program (EEM)FHA (Federal Housing Administration) has an Energy Efficient Mortgage program (EEM) that was put into place to help homeowners cut costs on their electric bills.

With this program, they are allowed to finance the costs of adding energy efficient features to their homes. This is specifically for homes that were financed under FHA.

Energy Efficient Mortgage Program (EEM)

This is good news for many homeowners, as well as potential homebuyers looking to buy a home in the near future. Energy costs continue to rise in the US. They have risen so much that they are actually unaffordable for many families. With the cost of energy rising so frequently, many homeowners are having a hard time making monthly mortgage payments, as well as other utility payments. The EEM program aims to help homeowners and homebuyers afford the cost of homeownership by making energy costs affordable.

How to Apply for a EEM

To apply for an FHA insured EEM, you must qualify, under the FHA guidelines. Contact a FHA approved lender for more information on how to qualify. They will be able to help you with the application and other necessary steps and paperwork.

Who is Eligible?

Any homebuyer who meets the income demands required for a FHA insured loan and has the ability to make the monthly house note can apply. The home energy rating system (HERS) is responsible for determining how much the energy efficient improvements will cost. They will also give you and estimated about of how much the improvements will save you in energy costs. You will probably have to pay for an energy report, but this can be added to the mortgage financing. Here are a some other factors about eligibility:

  1. Cooperatives, condominiums and townhouses are not eligible. Only single family detached homes can qualify.
  2. Victims of circumstances declared to be disasters by the president with FHA mortgages are eligible.
  3. Your mortgage must meet the requirements of both FHA and the EEM program.

Eligible Improvements

Energy efficiency improvements can be made under the EEM program for newly constructed and older homes. The only way these improvements can be added to the homeowners mortgage loan is if the cost of the improvements are less than the value of the estimated savings.

Eligibility Requirements

Homebuyers are required to meet the usual FHA requirements:

  • Must meet eligibility requirements for the max FHA insured loan.
  • A down payment of 3.5 percent of the sales price or appraisal value of the home is required.
  • Insurance premiums for the mortgage can be added to the total financed loan.
  • Other types of loans may be eligible.

The improvements have to be cost efficient for eligibility. They must be made after the close of escrow. The mortgage bank places the funds in an escrow account for the homebuyer. It’s released to them after there is an inspection to verify that the improvements have been made and there will actually be a saving in energy cost. The max mortgage amount, as in all FHA insured loans, is based on where the home is located. This amount adjusts annually according to current FHA guidelines. These amounts are based on the county where the home is located.

Article provided by Paula Henry, a Carmel Indiana Realtor. If you’re interested in learning more about buying or selling a home in Carmel, visit her Indianapolis Real Estate Blog or search homes for sale, Carmel Indiana on her website.

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