Posts Tagged ‘interest rates’

The housing market in America is hurting to be sure. There seems to be a misconception that buying a home is something that we do only if certain factors are in place. Those assumed factors are that people buy a home because rates are low, or because a tax incentive is in place. Truth is; we buy homes for very basic reasons and those reasons arises from the same sources as always. The real reason people buy homes is because they NEED to. We get married, we have children, we get divorced, we “empty nest”, we need room for aging parents, we re-locate, we lose our job or we get a better job. The list goes on.

There ain’t no future in the past.

The fact that fewer homes are being bought in this lagging economy has as much to do with a lack of consumer confidence as anything else. We in America are postponing our home-buying decisions because 1) we can’t afford it (or think we can’t); or 2) we worry about the uncertainty of our job situations. The impact of these factors has created a slow-down in housing starts and home sales in general. But back to my point; home buying has much more to do with need that it does market place. For those Americans with a need to make a home buying decision, this terrible economy has actually created a better opportunity to move forward than we’ve seen in nearly 40 years. Interest rates being at near all time lows notwithstanding, buyer’s are in the best position to negotiate a “steal of a deal” than most have seen, or may ever see, in our lifetimes. Real Estate Agents have to compete like never before and the smart ones are reducing commissions or giving a portion back at closing as enticement to choose them over others. It’s that; or go hungry.

If you think education is expensive, try ignorance.

Speaking in terms of Texas, where I conduct my business, buyers who become educated about the actual cost of acquiring a move-up (or down) home are finding unbelievable concessions on the part of sellers and Real Estate sales people. Why? Well let’s just say, the days of fat-cat profits of 6% commissions on a home sale is, at least for now, a thing of the past. 6% on a $200,000 sale is 12 thousand dollars! If the agent works only the “selling side” of the transaction, it’s still $6000 of pure profit. How many of us can pay a few hundred dollars a year, and take a few on-line courses to be licensed to earn that kind of cash for showing a few homes and writing a fill-in-the-blanks contract? The answer is: any of us without a rap-sheet. Agents including me, used to love taking a few years of a home’s equity value and whistle our way to the bank with a big pay-off after closing. Not anymore.

In a negotiation, the dumbest question you don’t ask, is the one you don’t ask.

The game has changed. I just closed a transaction where the buyer got 75% of my commission. My take was the remaining 25% or about 2900 bucks; and I was happy to get it. How did my buyer use his $8800 portion? He paid his closing cost with it, and he was delighted. And I was delighted too because he will tell every friend and co-worker he knows, that there are real deals to be had and hopefully include my name in the conversation. But that’s not the whole story. The seller, faced with a “buyers market “gave my buyer another $25,000 in concessions on the sales price of the home. Am I happy that the seller gave up so much equity to sell his home? No, not really. Am I delighted that I could participate in a buy-sell transaction that met the needs of both, and allowed me to make a reasonable income? You bet. And I’ll do it again. I hope soon.

Blessed are the flexible, for they shall not be bent out of shape.

The moral to the story is this: the economy has created hardship for most of us. But as every savvy business person knows; out of adversity comes opportunity. And opportunity abounds for those who are in a position to capitalize. That’s not wrong; that my friend, is capitalism.

To get information about your upcoming home buying decision and to earn some serious “cash-back” at closing, consider the offer at www.eoptionloan.com “Buyer Cash-Back Offer.” They’re among many out there who are facing the reality of today’s home-buying market place. Regardless of whom you choose to assist you, be sure to let them know that you know there is serious money to be saved in this, your hour of home buying opportunities.

Daniel Garza has been a mortgage banker and financial consultant for the past 29 years, and is a consumer advocate. He enjoys writing articles in his spare time.

Author: Daniel L Garza
Article Source: EzineArticles.com
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There is good news ahead for rental incomes, as we know through the government stimulation package, which included tripling the first home buyer’s grant this resulted in reducing the number of renters. However this is about to reverse.

The commentators tell us In 2010 we will see some excellent rental income growth. This is good news with increasing interest rates. There is one positive in having to pay higher interest rates and that is it means that the regulators believe the economy is gaining in strength and therefore property values will increase.

Why is residential property such a good investment right now?

There are three key components that continue to make residential property the ideal investment vehicle.

1. Interest rates are still at historic lows

2. Supply and demand factors favor investors

3. Residential is the most favored security by the banks

Choosing the best investment property is a process that involves knowing what you want to get out of the investment.Finding real estate that will allow you to reach those goals in the most efficient and effective manner is the objective.

Since Residential investment properties come in several different types and are found in a variety of forms and locations, knowing what you want is key to success.

In considering that the timing is correct based on the three points above we then set our objectives for our investment strategy.

If for example we concluded that we wanted a long term set and hold investment strategy for say ten years then more options open up. For example a new subdivision which had some compelling future prospect or attraction may be considered.

Where as if your objective was to make money and sell within a year or two then this would possibly not be your investment vehicle of choice. Decisions around risk, leverage, personal time involvement and time to realise ones return are the factors one needs to consider in selecting the right property investment strategy.

So the message in this article is to suggest that whilst the timing is right your returns can be significantly improved, simply by selecting the right vehicle for your personal investment objectives.

Property investment consultants are available just like a stockbroker lives and breathes shares; property investment consultants live and breathe property.

The key is to select a consultant who specilises in a location that you want to invest in and also the sector of the market you wish to participate. A good quality property investment consultant will not only ensure their fees are covered in their negotiations on the property but also you will be assured of getting the right property that fits your personal objective. Employing a property investment consultant also removes any potential emotion from the equation which can creep in particularly with residential property investments.

Seeking quailty council makes good sense learning from others saves time and you gain quailty knowledge for your next investment

Enjoy the process.

This Article was written by Phillip Mollard
Director of Mollard Property investment Consultants P/L
http://www.mollard.com.au

Author: Phillip Mollard
Article Source: EzineArticles.com
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Q: Should I wait until home prices go even lower before I purchase?

A: No. Just as no one can accurately predict the peaks and valleys of the stock market, the same holds true for housing. If you wait for what you think is the absolute best deal, you could end up waiting for years. All the market fundamentals show that now is a good time to buy. Prices are down, interest rates near historically low levels, and there are many homes to choose from.

If you buy now, you will not only be in the drivers seat during the buying process, you will also reap the gains of price appreciation. Remember, those who purchased homes in the early 1990s during the last big economic and housing downturn came out as big winners.

Q: Should I wait out the market until can I get the same price on my home neighbors got when they sold two years ago?

A: No. It is always better to trade up in a buyers market. While the value of your house has fallen, the prices of higher end homes have also dropped. Here is an example:

Your neighbor sold for $300,000. Assume values in your area have dropped 10 percent, so you could get only $270,000 for your home today. You have your eye on a move up home that previously sold for $500,000, but now is selling for $450,000. If you sold your home today for $270,000 and purchased the larger house for $450,000, the difference in price would be $180,000.

But if you waited to recoup the 10 percent value on your home and sold it at $300,000, chances are the move up home would also increase in price 10 percent to $500,000. That is a $200,000 price difference. So by selling today, you would actually save $20,000.

Q: Interest rates are going down. Should I wait until they go even lower before I buy a home?

A: Interest rates for 30 year, fixed-rate mortgages are currently below 6 percent and are extremely favorable for buyers. In fact, they are hovering near 30 year lows. But waiting to time the market is a dangerous game. Even those who follow the market for a living cannot figure out when interest rates will bottom out. If they could, they would all be millionaires.

And home prices do not necessarily move in unison with interest rates. So, if you decided to wait to purchase a home and the price dropped $10,000 from where it is today, you could still end up losing money. How? If interest rates were to move up by a half a point during this period, the savings on the reduced home price would be more than offset by the higher monthly payment you would be making over the life of the loan.

Q: I have $10,000. Should I put that money in the stock market or buy a home?

A: Purchasing a home is by far the best long-term investment. For example, say you use that $10,000 to purchase a $250,000 home, and the house appreciates a modest 3 percent during the first year. That means after one year, the house would be worth $257,500 or a gain of $7,500. By contrast, putting the same $10,000 in the stock market and posting a similar 5 percent gain would only net a $500 return on investment.

And remember the tax incentives. In most instances, all mortgage interest and property taxes paid in a given year can be fully deducted from your gross income to reduce your taxable income. These deductions can result in thousands of dollars of tax savings, especially in the early years of the mortgage when interest makes up most of the payment.

Q: I am buying my first home but cannot afford the home that I want. Is it best to keep renting and hope that prices will get even lower

A: If you continue to wait, you may never be able to afford to get into the housing market. Even as home prices are currently moderating or falling, depending on where you live, rents continue to climb. When you buy a home, you are also purchasing price stability, knowing that you will pay the same monthly payment for the life of your 30 year, fixed rate mortgage.

Once you become a home owner, you are able to take advantage of the tax deductions that home ownership offers, and you begin to build equity in your property.

With so many homes on the market to choose from, your best strategy may be to scale back expectations for your dream starter home. After a few years, you can use those equity gains to sell your starter home and move into a bigger house. The sooner you make the jump from renter to home owner, the quicker you begin to create and build up wealth for your family and enjoy pride of ownership.

E. Lee Reid is a hospitality, travel and leisure, Disney timeshare resales, vacation real estate, and construction industry expert. He and his companies have successfully built or managed thousands of homes and vacation resort condos at multiple resorts in North Carolina and Florida. In recent years he converted several hotels to condo hotels in the Disney World area of Central Florida. He is a widely quoted author and speaker. Reid has an MBA and will complete Cornell University’s Master of Essential Hospitality Management program in 2008. Reid is also a certified General Contractor, Realtor, and Certified Commercial Investment Member (CCIM) candidate. Visit at http://www.eleereid.com

Author: E. Lee Reid
Article Source: EzineArticles.com
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Rent then buy or rent-to-own is one of the marketing strategies being applied by real estate brokers these days. It is a very engaging strategy since it allows the renter of the unit to have the option to buy the property afterwards. This transaction is also sometimes referred to as lease-to-own or a lease purchase.

Rent then buy transactions are usually initiated by the renter the moment an option fee, usually amounting from 1% to 5% of the selling price of the house, has been paid. Afterwards, the renter of the unit pays for a certain amount of money representing the rent and an additional rent premium that is also charged to the purchase price. At the end of the term, the renter has the option to buy the property. If not, he loses the option fee and the additional rent premium that had been charged to the selling price of the unit.

The advantage of rent then buy transactions is that it allows for lower cash out in the beginning of the transaction. For some buyers, the purpose of entering into this kind of transaction is to have the exclusive right to buy the house without the presence of banks or other financial institutions upfront. It is usually cheaper to rent than to buy a home directly. The buyer also has greater flexibility to rent a property first before buying it, giving the buyer the choice to buy the property or not in the end. With the rent then buy set up, your monthly overhead remains the same and is not affected by interest rates. Also, the repairs and maintenance of the house will not be your burden. The most significant advantage that this transaction offers is that you could secure a home immediately even with bad credit. The rent then buy transaction allows you to repair your bad credit standing while building up a better one to obtain financing.

The disadvantage of a rent then buy transaction is mainly the financial risk. This arises in the event that the buyer decides not to exercise his right to purchase the property at the end of the lease period. The amount of purchase option as well as the additional rent premium will be forfeited upon the termination of the lease. Another disadvantage of this transaction is the unavailability of inventory to the buyer because most sellers need to liquidate immediately to purchase a new home.

The rent then buy transaction offers advantages and disadvantages at both sides. The best way to treat it is to weigh which is more applicable to you as a buyer. The rent then buy transaction is a fast becoming the trend in real estate markets because of the flexibility and convenience it offers when it comes to cheaper charges and the allowance to buy the property afterwards. More people are looking for alternatives to buy their own homes. The rent then buy transaction allows for buyers to secure a home without a perfect credit history thus making it a more viable choice. This method is usually utilized by those who do not have enough money to pay for the down payment of a house or to secure a house in the traditional manner. Still, proper precaution is very important when entering into these kinds of transaction.

Are you ready to learn all about Rent Then Buy? Visit http://www.easynocashdown.com/ today for more information!

Author: Jared D. Ingram
Article Source: EzineArticles.com
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Investment properties in Las Vegas are at a premium so it’s important that that you get the most value for your money. Where to invest becomes the big question plus what investment properties in Las Vegas are you after.

There are many types of investments that you can make and you will be impressed with the opportunities there are with investment properties in Las Vegas.

What type of financing you seek will depend on your investment properties. Interest rates and terms will vary based on your personal credit rating and the specific investment properties in Las Vegas you are considering purchasing.

There are many financial institutes in the area that will provide you with any financial needs even unconventional mortgages which offer term flexibility, repayment flexibility, and a host of other options that are better suited to unconventional investment properties in Las Vegas and other areas.

There are many different types of investment properties in Las Vegas. Start by deciding what type of investment it is right for you. Do you want to be a residential or commercial landlord? Do you want to invest in an operational property or a sleeper property? Will you be living in the area so that you can personally monitor your investment properties in Las Vegas?

There are several reasons to invest in investment properties in Las Vegas. Of course the main objective is generally to make money. But some investment properties in Las Vegas are purchased initially as a write off or as part of a conglomerate to help create write offs for the corporate body which own other investment properties in Las Vegas and the purpose is to make a profit in the future upon reselling.

And with the rapidly increasing values on investment properties in Las Vegas there are many newcomers to this market looking to hold for a short period of time and make a tidy profit with their only investment being time and patience.

Casino investments including investment properties in Las Vegas are a great way to earn instant profits. Of course if you aren’t familiar with a casino’s day to day operations you are going to be very dependent on the existing staff so make sure things are running smooth there.

Your investment properties in Las Vegas are going to make you a tidy profit no matter which method you choose. After Vegas has a reputation for making money.

Joel Teo writes on various financial topics including Investment Properties in Las Vegas. Learn more about Investment Properties in Las Vegas in our Real Estate Investment Resource Site today.

Copyright 2007 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author’s information with live links only.)

Author: Joel Teo
Article Source: EzineArticles.com
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Due to increase in interest rates and bad debts, homeowners have to sell and rent back their property. In sale and rent back agreement the home owner will sell the house at a discounted price to a specialist company and they will rent it back at market price to the homeowners. Homeowners generally sell their house due to repossession or bankruptcy, separating or divorce or just needing to free up the equity in your property, but still you want to live in that house so you can pay rent every month to the specialist company. Sell and rent back companies will buy your house as soon as you want, sometimes within three days and then rent it back to you. Specialist companies will buy any property like repossessed properties, bankruptcy, flats, Terraces, properties with sitting tenants, rural and farm buildings, industrial property, fire damaged property, domestic properties and commercial, retail or office units.

Selling and rent back is a very good option for home owners during hardships. Due to financial crisis you are not able to pay monthly mortgage payments then you can solve your problem by selling your house quickly as you need cash and just rent it until you release your home. In some cases, your money is tied up while buying a house and suddenly some unforeseen expenses arise then you can just sell the house and then rent it back. You can buy the house later. You’re at a point where you want to actually take a divorce but you are not in position to bear divorce expenses, at that time you can sell your house and take that money to pay off divorce expenses. After the agreement, you can pay the rent and stay at that house and buy back later.

You might have purchased your dream house, but now you don’t have cash to bear those moving expenses, then you can talk to a specialist who will buy your house and you can bear your moving expenses and then you can buy back your house. You might have purchased house when you were young but after retirement you are not able to pay the bills, then you can sell your house and use the money to pay your bills and stay in the same house for rent. Your children may buy the house after your death, thereby keeping a family house.

Andrew Wilson is a SEO copywriter for Sell and Buy back, Sell my house fast and Sell home quickly. He has written many articles in various topics like Sell and rent back, Sell property and Selling home. For more information visit: http://www.rapid-property-solutions.co.uk/

Author: Andrew V. Wilson
Article Source: EzineArticles.com
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