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Posted on January 8th, 2008 by Melisa
Many people today are losing their properties to lenders by foreclosure. Foreclosure is the legal definition for the process regarding the transfer of a borrower’s properties to a lender because the borrower wasn’t able to meet the terms of the loan repayment. The property is repossessed by a lender and it is auctioned or sold as a foreclosed property.
This article tries to give some general information regarding real estate foreclosures and other kinds of foreclosures in general. If one is buying foreclosed real property, he might want to spend a few minutes reading this article.
How Properties Are Foreclosed
A foreclosure action is usually initiated when a borrower isn’t able to pay up three mortgage payments. A notice of default will be issued by the lender against the real property. If the borrower is unable to pay up the debt, the lender will have the right to foreclose the property and sell it in a trustee sale.
Problems Regarding Buying Foreclosed Real Property
When we talk about something that is as risky as buying a foreclosed property, we might as well lay down the problems that might arise in this venture. Although one can have a great deal out of purchasing real property that is foreclosed, one must have a keen eye on the details.
A simple rule in buying foreclosed real estate property is- “beware.” There are not much available schemes for buying foreclosed properties in general, therefore, one must be very liquid and this entails a lot of disposable money. An impulsive buyer should be careful in engaging in auctions and sales of foreclosed properties. The title of the real property should be checked meticulously so as to avoid purchasing a deficient title. One of the more serious concerns that should be considered is that the condition of the property is not known well and usually, an inspection of the real property will not be possible before one purchases it.
Types Of Foreclosures
There are two main types of foreclosures out there, the judicial foreclosure and the non-judicial foreclosure of properties. A judicial foreclosure is a process by which a trustee, a mortgagee or a lien holder requests a sale of the property which is supervised by the court to be able to pay the outstanding balance of a debt. The non-judicial foreclosure action is a process wherein an owner of a real property sells under the power of sale in a trust deed which is in default.
How To Find Foreclosed Properties
If one is really interested in getting his hands on foreclosed real property, he should be keen and act fast because of the stiff competition in the market. In almost all states, notices regarding foreclosed properties can be found in the legal notices pages of the local newspapers. One can also spot a foreclosed property by taking a drive because they have notices in them (just like advertisements) saying that they are up for sale.
There are a lot of foreclosed real properties out there, however, people should be careful and smart in proceeding with purchasing these properties. With the proper research and wise actions, one can actually get a great deal out of buying foreclosed real properties.
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Filed under: Foreclosures
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Posted on January 8th, 2008 by Melisa
There are essentially 5 steps to being successful in real estate marketing. Before we go into the 5 steps of real estate marketing, I want to encourage you to become a student of marketing. The moment that you are able to find your own deals - on demand - the more money you will make! It’s a direct correlation.
When I started out in real estate, I didn’t understand how to “really” market for deals. I was depending upon real estate agents, local real estate investing groups, etc. I did a lot of deals, but I realized I wasn’t making the kind of money I knew I could in estate.
Follow these five steps to successful real estate marketing and you’ll be on your way to filling your own funnel full of five-figure deals.
1. Define Your Target Market:
You must be focused! If you run in too many directions, focusing on too many real estate markets, you’ll always be skipping around, never getting ahead. You need to learn overcome objections; you need to know how to handle the different situations that arise. Once you master one market, then you can duplicate your system across market after market. For instance, you may choose to start working with foreclosures or out of state owners. Once you get the real estate marketing system in place for one, add the other. Then, you can simply duplicate it over and over again!
The single most important thing to remember is that you MUST target motivated sellers… PERIOD.
2. Execute your plan:
It has been said that successful real estate investors have three things: specialized knowledge, ability to take action, and consistency. It’s not enough to have the knowledge. You have to act on that knowledge.
Let’s say your real estate marketing strategy involves bandit signs. You need to have a system for distributing signs on a consistent basis, a consistent method for filtering leads, and a bullet-proof follow up system. If you’re going to execute a direct mail campaign, make sure you have a system for sending out the whole series. For instance, our foreclosure direct mail system consists of 6 sequential postcards. It doesn’t do you any good to come off the starting block at 100mph if you don’t have the ability to sustain that pace or the have tools to fulfill the plan. If you only have the resources to send the first postcard, don’t bother wasting your money. Find another real estate marketing strategy.
3. Pre-screen your leads:
Scribbling notes on the back of an envelope while you’re driving is not a system! We actually send our leads to a separate voicemail line or a call center depending on the marketing campaign. Our students and staff have been trained to do this because it takes emotion out of the system. If I’m having a bad day or sitting in traffic, I can’t focus on that call from the motivated seller, so all of the calls are fed through the system. We request that the seller leave certain information on the line or with the operator. We then take that information and do our basic due diligence before we even have our first conversation with the seller to find out if, in fact, he/she is a motivated seller.
4. Make your offer:
By following a specific real estate marketing system, you’ll be prepared to make an initial offer during the first phone call. By asking the right questions and having a pre-screening sheet in front of you, you’ll quickly learn if they are a motivated seller or simply just wasting time! If your real estate marketing system has this component in place, you’ll know what the property is worth, have a ballpark idea of what the repair costs are, and will know if the seller is motivated. Consequently, you will know at what price you should make your first offer.
5. Contract/Exit Strategy:
Once the seller has accepted our verbal offer, or is close thereto, it’s time to put the purchase offer in writing. We include 3 contingencies - or escape clauses - into the contract.
- Inspection
- In the event of buyer’s default, the deposit is the sole remedy
- Subject to property appraisal
Based on this due diligence, we are then able to decide which exit strategy is most appropriate. All of this follows a basic flow chart process. There’s no thinking! It’s like when you call in for technical support on your computer. They ask you a question, and based on your answer… they go to the next step.
Keep in mind that your real estate marketing efforts should be in concert with the types of deals you’re looking to do. For instance, if you want to flip properties, your marketing system might target motivated sellers facing foreclosure. On another note, if you’re looking to build a rental portfolio, then you might consider building a real estate marketing plan to target landlords filing evictions.
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Filed under: Real Estate Marketing
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Posted on January 8th, 2008 by Rony
Although this is a pretty straightforward question, how many individuals do you know that ever take the time to ask, and receive an answer? Not very many. More often than not, the question of a home mortgage isn’t pondered until there is a desire to purchase a home. For the purpose of this article, we’re simply going to examine the home mortgage, and the variations that exist in the mortgage market today.
A home mortgage is a loan furnished by lending institution to a buyer for the purpose of procuring residential property, are a home of which to live. It’s that simple, the definition is that simple; the actual process is anything but simple. How do you approach mortgage lenders and what information what you need to furnish?
Mortgage lenders today, thanks to all the federal regulation, default rates, and identity theft in existence require more information than ever before. The mortgage application is sometimes a 10 to 15 page application that will ask questions pertaining to your life years prior. Why does the mortgage company want history? The lender simply needs previous addresses, previous jobs, and previous education to gain greater insight and opportunity to know the borrower. It is not entirely impossible to steal someone’s identity, gain access to their current information, even from three to five years prior. What is impossible is to enter the mind of the individual and gain access to relevant work history or education history.
Generally, when you complete a mortgage application there’s also a mortgage application fee charged at the time you submit the application; why do the mortgage lending institutions charge an application fee? Mortgage companies charge a fee because it cost money to process application, and only serious applicant’s warrant the time and expense.
What other information will be necessary to furnish when completing the mortgage application? Generally a personal financial statement, the proposed mortgage amount, and any legal judgments against you such as bankruptcies, tax liens, or federal student loans will be requested at the time of application submission.
Now, what have the mortgage products are available to the mortgage borrower? The most often used mortgage product is the fixed rate mortgage; the next in line would be the adjustable rate mortgage, and the newest member of mortgage products would be the interest only loan. The interest only loan is gaining in popularity at an ever increasing and phenomenal rate of growth. The fixed rate mortgage provides the borrower with a fixed interest rate for a specified number of years, generally 10, 15, or 20 years as a set monthly payment. The adjustable rate mortgage is exactly as it sounds; the interest rate for this type of mortgage is adjusted at set intervals generally no less than six months no more than 12 and the amount of the monthly payment will vary according to the adjusted interest rate. The interest only loan is quite frankly, the least consumer friendly of the three and today the most popular of the three. When you take at an interest only loan, you may payment of only interest for a specified number of months or years on a loan that has been amortized for a greater number of years, usually 20, and at the end of the interest only term, your payments will reflect interest and principal payment. It’s at this juncture that many homeowners cannot afford the interest and principal payment. That’s why this mortgage product is the least consumer friendly; it does however make the most profitable lending institution.
I believe you should now have a much clearer picture as to what a mortgage is, why you complete a mortgage application, and the basic mortgage products available. If you are considering the purchase of a home, please take a moment to visit a local lending institution, a local realtor, and the web site of the Housing and Urban Development Department. You, as a potential homeowner can never obtain too much information.
What are other resources that can be accessed to learn about the mortgage process and your available options? Get online, check out the advertised lending companies there; look at the information they ask for, the products they offer, and then do some comparison shopping. Often, you will learn as much about what you don’t want, as what you do want.
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Filed under: Mortgage
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Posted on January 8th, 2008 by Mike
Investing in real estate is quite expensive. Most people cannot afford to buy real estate with cash. With a real estate loan, the dream of your own property can be realized.
Many agencies such as banks, credit unions and lending companies offer real estate loans to those who can avail it. There are certain qualifications in order to qualify for a real estate loan.
Real estate loan is a loan on real estate usually secured by a legal document by which the owner transfers to the lender an interest in the real estate to secure the repayment of a debt or mortgage. There are two classifications of real estate loans: commercial and residential real estate loans.
In order to qualify for any of those two classifications of real estate loans the following are some of the requirements needed:
Commercial real estate loan:
• Commercial real estate loan application form and real estate addendum.
• Current business financial statements and most recent year tax return.
• Guarantor’s current personal financial statement and most recent year personal tax return.
The applicant should sign the application form and the application materials should be submitted to the agency or institution where the applicant wants to apply for a commercial real estate loan.
Residential real estate loan:
• Residential real estate loan application form.
• Financial statement and most recent year income tax return.
• Guarantor’s current personal financial statement and most recent year personal tax return.
In the same way as commercial real estate loans, the application materials for residential real estate loans should be submitted to the agency or institution where the applicant wants to apply for a residential real estate loan.
The materials needed for a real estate loan varies according to the requirements of different agencies and institutions.
Whn applying for a real estate loan, there are certain steps that the applicant should follow.
The following are the simple steps that an applicant should follow in order to hasten the processing of the real estate loan.
• Select terms. Mortgage terms affect both interest rate and payment. With large amount of flexibility, lenders allow the applicant to tailor the loan to fit the budget needs.
• Research the lender. In order for the applicant to save money, the easiest way to purchase real property in low rates is by finding the lowest costing loan. Research and find lenders who offer low cost loans.
• Apply for real estate loan. After finding the right lender, the applicant can now apply for real estate loan accompanied with the requirements.
There are common mistakes when applying for a real estate loan. The following are some of it. To make the right impression and secure the loan, it is important to be aware of these common mistakes.
• Not thoroughly researching the options. Thorough research on options should be made.
• Not having the ducks in a row. Make sure that all the documentation the lender would expect is at hand and an applicant should be prepared to show why the property makes fiscal sense.
• Failing to negotiate the best deal. Negotiation should be done to have the best deal.
• Not selecting the best lawyer. Hiring the best lawyer is important. Hire lawyer that is very experienced in negotiating the types of real estates loans.
• Going straight to a family lender. It is good to have a rapport with a lender, particularly when loan is needed. However, there are new real estate products offered constantly, ant it is worth the time to check out some of the other possibilities before going straight to favorite lender.
Knowing everything about real estate loans is very important when investing in real estate. Make sure you follow all the steps mentioned above.
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Filed under: Real Estate Loans
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Posted on January 8th, 2008 by Mike
Investing in real estate market carries risk. The reason for this risk statement is that, it carries fluctuation. Investing in the real estate market without having adequate knowledge involves high risk. With initial investment, a realtor can get succeeded in real estate investing by finding more profit and wealth augmenting business. The influence of market trend has been carried forward towards the real estate investment. A knowledge investor can obtain profit from the real estate market in despite of the fluctuations. Fluctuation can be classified in many terms. The fluctuations can be called as hot versus flat, rising versus falling and buyer versus seller. A Knowledged real estate investor will have to use a right strategy to make profit in the fluctuation. Comparable to the stock market, real estate investment does not find rapid fall in the investment. This is the main factor of real estate investing. To make the real estate venture more profitable some basic strategies should be used.
Study the local market:
Study of local market is the important factor, because local market study is the indicator of the national or international market. The local, national and international trends always have a good influence on each other. The experienced and professionalized real estate investor will always guide you for more information regarding the real estate investment market. This information will highly help you while making a decision on any profitable venture. The main function of the realtor is to be up to date with the real estate investment. Proper organization on the real estate market will give a clear view on investment.
Economies financial structure:
Economy or finance plays the major role in determining the value of the property. Because when economy comes down then the value of the property also comes down. While economy is high then the value of the property will be top listed. When number of properties has been offered in the real estate market for good price, then it is a good indicator for the changes in the market trend. If property listed in the market becomes low, then prices increases due to the demand of property. This price increase is more profitable for the sellers because they enjoy more income from the property. But the buyer finds difficult because they have to pay more consideration for the property. Price fluctuation occurs depending upon the season. So, this listing finds a good fluctuation depending upon the changing trend in the economy.
Fluctuation:
Real estate investor should be up to date with the real estate market. The real estate investor must know that within a few time the market may change with an extraordinary deals or transactions. When the real estate market finds destruction in the price of the property then the value of the property may come down. Due to this fluctuation the sellers or buyer may enjoy with the market. In some case the prices of the property may falls down in the market, in such a situation the buyer finds the venture more profitable. Sometimes the prices may increase due to demand of real property, in such a situation the seller finds more profitable with the market. So, there are alternative for both the seller and buyer to enjoy in the market. Therefore every real estate investor finds his real estate investment more profitable.
Property decision:
The main factor of the real estate investor is to be careful while making a decision in purchase or sale of property. The investor should analyze the property before he/she decided to purchase the property. The realtor should be up to date with the market trend and he should know the changes in the prices of the property. Property decision should be taken after proper analyzation and absorption of the market. In case of appreciation or depreciation of the value of the property the prices should be paid properly.
Uncertainty:
Real estate markets have changes at any time, since changes are uncertain. The changes may occur due to rising interest rate, tax rate, demand and supply, depreciation or appreciation in the value of the property and standard of living of people with unemployment will surely determine the value of the property. These are the main factors that determines the value of the property or changes in the market trend. After these changes the real estate investment market may have development or diminishment. Therefore a knowledged investor should find solution for the problem faced by the real estate market against any losses.
A good real estate investor should plan the strategy for purchase or sale in the real estate market. He should not make guesses in the real estate business. He should have to take decision and then only he should generate. Real estate markets are not ideal in nature. They get changes at any time in the property market. The investor should have ability to adopt the situation and change accordingly to make his venture more profitable.
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Filed under: Real Estate Investing
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