January 17th, 2008 categories: Finances, Home Ownership, Mortgages, Real Estate
If you think you’re ready to tap some of the equity in your home, do your homework first. The time you spend now could save you heartache (and plenty of dough) in the future. Bankrate.com’s experts advise us of four steps to take before signing on the dotted line:
1. Consult your financial advisers.
Financial advisers know which questions to ask to understand your complete financial picture, including events on the horizon. Starting here can save both time and money while making the borrowing process less threatening. Any major financial decision should be weighed with consideration to its tax impact. Speaking with a tax professional can guide you to your smartest borrowing decision.
2. Comparison shop.
Shopping is an incredibly important but often overlooked step. At the very least, start with your primary lender. One easy way to find the best deal is to use the Bankrate home equity loan rate tables to find rates specific to your area. One bankruptcy researcher draws a parallel between consumer willingness to “run around to Kmart or Target to save 50 cents,” while the stakes of taking out a home equity loan are much higher. With these numbers, rates even 0.1 percent to 0.6 percent higher than the prime rate add up to thousands of dollars worth of additional interest payments. Be sure to shop.
This audio clip explains what lenders look for.
3. Understand the terms.
Home equity loan terms may be unfamiliar to you. What you don’t know could cost you your home. Most home equity lines of credit, known as HELOCs, are variable rate loans. Generally, a HELOC starts with a low teaser rate, then increases after a set introductory period. Find out the floor and ceiling rates. The initial rate is almost always at floor, or the lowest allowable rate, and the only way to go is up. Make sure you do the math and determine whether you will be able to afford the rate increases.
Use the glossary of the most commonly used home equity terms to help you understand all the details of the deals offered.
4. Know your rights.
The Federal Reserve says you should receive information in writing about each mortgage or home equity loan program you are interested in before you pay any fees. Be sure to read all the loan details and ask the lender or broker to clarify index rates; margins; caps; other ARM features, such as negative amortization; or anything else you don’t understand. After applying for a loan, you will receive detailed loan information from the lender, including the APR, a payment schedule and whether the loan has a prepayment penalty. A provision of the Truth in Lending Act gives you the right to cancel certain real estate loans within three business days without penalty. It is called the right of rescission. In home equity loans, you can rescind only when using your principal residence — not a vacation or second home — as collateral. Story
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January 14th, 2008 categories: Finances, For Fun, Home Buying, Home Ownership, Home Selling, Investments, Real Estate
According to the folks over at Springwise, consumers who want the luxury of having a second home at the beach or in the mountains, but don’t have the money to plunk down on the choicest properties, now have an appealing alternative: half ownership. Like other shared ownership ventures, Halfshare.com gives customers the chance to get a piece of the good life, but at a much lower cost. Unlike traditional timeshares, which pioneered the concept of fractional ownership, Halfshare.com buyers aren’t purchasing time in a hotel or resort, but an actual home—and all the benefits that go with owning it. Along with sharing costs, buyers share profits if the value goes up. And depending on the terms both owners agree to, the property may generate rental income, too.
Getting started is as easy as logging onto Halfshare.com, where members can browse listings of available properties throughout North America. Halfshare.com can match them with other prospective buyers based on tastes, backgrounds, interests, hobbies and lifestyles through the Buyer Match Plan. Potential co-owners can arrange to meet one another online, by phone or in person to determine if they’d make a good match. Once buyers select a property, Halfshare.com’s Tenants-in-Common Agreement takes care of all the details, formalizing legal concerns and each owner’s rights. “It spells out what is expected in terms of financial arrangements, seasonal time sharing, rental revenues, re-sale, property maintenance and repair, among other pertinent details.”
Although the real estate market is currently in a bit of a slump, demand for sandy beaches, mountain air, cultural attractions and picturesque scenery isn’t likely to wane any time soon. Which means that making vacation homes affordable, fraction by fraction, could be a worthwhile start-up in almost any region frequented by tourists looking to make themselves at home.
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January 11th, 2008 categories: Real Estate
When the market is slow it is especially crucial to be efficient with your time. Make sure that the majority of your efforts are spent on activities that bring immediate reward. According to RISMedia, one of the most effective ways to master time is to eliminate time-wasters from your life. You can do this by starting a “To-Don’t List.” Every successful agent has a “To-Do List” but the super-successful write down those things they will stop doing that waste their time such as:
- Don’t work with unmotivated buyers. Stop working with buyers who won’t sign a Buyer-Broker Agreement with you. If they won’t commit themselves to an agent who will work hard on their behalf and show them all of the properties on the market how motivated are they?
- Don’t work with unmotivated sellers. Owners who aren’t willing to price their properties to sell and make their homes show well aren’t motivated. If they want to “test the market” with a price that’s even slightly above market send them to your competitors.
- Don’t work with clients you dislike. Perhaps you just don’t have much rapport with them but folks you don’t personally like will waste your time just the same. If buyers don’t intrinsically trust you’ll find they will be reluctant to make offers when you suggest at a price that is reasonable. Sellers who lack trust will be unwilling to price their properties to sell or spend the money to make it look its best.
- Don’t run ineffective ads. If an ad doesn’t pay for itself stop it immediately. This means that you must track every ad to see how much business it brings in and if it isn’t measurable (such as vanity advertising) or doesn’t at least cover its cost dump it. Ineffective ads not only waste time but money as well.
- Don’t hang around with negative people. In this market there are plenty of people filled with doom and gloom so avoid them. Don’t forget that real estate is cyclical. For example, in 1980’s interest rates were twenty-two percent and higher and yet plenty of agents made a very good living during this market and other challenging times. Spend your time with positive, upbeat people not those who brighten an entire room just by leaving.
What’s wasting your time? Make your own “To-Don’t List” and stick to it. Have a prosperous and productive new year. Story
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January 9th, 2008 categories: Home Buying, Home Ownership, Home Selling, Real Estate
According to RISMedia, a recently released report compiled from analytics and user statistics for the real estate industry reinforces the fact that the real estate consumer is moving increasingly toward real estate Web sites as their source for listings and industry information. The report was released by VisiStat, a provider of real-time Web site visitor statistics.
Supporting indicators include:
– Overall traffic growth for 2007 (over 2006) was 36.8%
– Return visitors made up 47% of all Web site visits
– The average visitor clicked through 14 site pages during each visit
– Monday and Tuesday were the most trafficked days of the week, with the
highest activity in the 9 p.m. hour
– March received the most visitor traffic of any month of the year
“We provide data for thousands of brokerages and agents across the country, and because of this, I have been working closely with brokers and agents for some time. It’s no surprise that the figures in this report coincide exactly with what I have been hearing from them, and that is, home buyers are using the Internet to educate themselves and find properties, often long before they engage an agent,” said Tina Bean, director of Sales and Marketing for VisiStat.
For more information, visit The VisiStat Real Estate Trends report.
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