If you've ever seen The Suze Orman Show, you know that she offers advice to people to help get on the path of financial independence. She recently had a Realtor on her program, who made a bad real estate investment and now is fighting off bankruptcy and losing her home. It's a sad case what this agent got herself involved in, and I'm passing it along so we can learn what not to do when it comes to real estate.
http://www.forsalebyowner.com
Thursday, August 28, 2008
Tuesday, August 26, 2008
Housing News
The latest S&P/Case-Shiller national home price index came out this morning. To sum it up, the index found that the average home price in the nation's top 20 markets fell 15.4% in the past 12 months.
While such a drastic decrease is certain to give pause to any current or prospective homeowner, it's important to understand that home sales resulting from foreclosures and short sales are included in the index. Such sales are sold at heavily discounted prices, which naturally drag down the median price of homes sold.
That's why areas like Miami (-28.3%), Las Vegas (-28.6%) and Phoenix (-27.9%) are seeing the sharpest decreases... they're areas where short sales and foreclosures are most prevalent.
To give you an idea of how much such sales could drag down the overall home sales figure, RealtyTrac estimates that there will be at least 1.9 million homes that will be foreclosed this year. Not all will be sold, mind you, but a significant chunk will be -- along with homes foreclosed in 2007 & 2008 -- at a fraction of what they were purchased for. A friend of mine bought a condo in Pompano Beach, FL, in 2004 for $320,000 that he is now trying to short sell for $180,000. His mortgage company has given its approval because they'd rather get $180,000 than a lesser amount.
So while your heart might skip a beat after reading the headlines, keep in mind that there are factors that are drastically skewing the numbers. If you're a prospective home buyer and your family is interested in a neighborhood not hit by foreclosures and short sales, don't be afraid to take that important step towards home ownership.
http://www.forsalebyowner.com
While such a drastic decrease is certain to give pause to any current or prospective homeowner, it's important to understand that home sales resulting from foreclosures and short sales are included in the index. Such sales are sold at heavily discounted prices, which naturally drag down the median price of homes sold.
That's why areas like Miami (-28.3%), Las Vegas (-28.6%) and Phoenix (-27.9%) are seeing the sharpest decreases... they're areas where short sales and foreclosures are most prevalent.
To give you an idea of how much such sales could drag down the overall home sales figure, RealtyTrac estimates that there will be at least 1.9 million homes that will be foreclosed this year. Not all will be sold, mind you, but a significant chunk will be -- along with homes foreclosed in 2007 & 2008 -- at a fraction of what they were purchased for. A friend of mine bought a condo in Pompano Beach, FL, in 2004 for $320,000 that he is now trying to short sell for $180,000. His mortgage company has given its approval because they'd rather get $180,000 than a lesser amount.
So while your heart might skip a beat after reading the headlines, keep in mind that there are factors that are drastically skewing the numbers. If you're a prospective home buyer and your family is interested in a neighborhood not hit by foreclosures and short sales, don't be afraid to take that important step towards home ownership.
http://www.forsalebyowner.com
Friday, August 22, 2008
FSBO-Friendly News From Consumer Reports
For quite some time, we've touted studies from Northwestern University and Stanford Universities that each found that "for sale by owner" home sellers are as effective as agents in maximizing the sales price of a home. The studies also concluded that, once commissions are taking into account, a FSBO home seller comes out financially ahead than sellers who use a real estate agent.
Now comes a new study from Consumer Reports. The publication (September 2008 issue) found home sellers who used a real estate agent received less money for their homes than sellers who sold their home without an agent. Specifically, the study concluded that homeowners who sold with the help of an agent received $5,000 less, on average, than the home’s original asking price.
So, in other words, if a person lists a $300,000 house with a Realtor, they'll sell it for $295,000 and pay more than $17,000 (6%) in commissions - -leaving them with $278,000. But a "for sale by owner" seller will list a home for $300,000 and sell it for that amount, and will receive it in full since they're not paying commission. That's a $20,000 differential between a FSBO seller and an agent-represented seller.
If you're thinking about selling a house, why wouldn't anyone want to use a site like ForSaleByOwner.com and enjoy such savings?
Wednesday, August 20, 2008
The Most Important Number of Your Life
Home prices are down, there's tons of houses to choose from, and people are have life-changing events (marriage, job transfers, etc) that puts them in the marketplace to buy a home.
But many home buyers are quickly realizing that shopping for a home doesn't just mean finding that pretty colonial that you've always dreamed about... it means finding a mortgage lender that will lend them a hefty sum of money. Perhaps the single most important piece of information a lender wants to know about a prospective home buyer is his/her credit score, which the lender will use to gauge how risky it would be to lend that person money.
Sadly, not too many Americans can cite what their credit score is and what they need to do to fix it. ForSaleByOwner.com has just partnered with Credit.com to help people learn how to strengthen their credit score. This great service can be found by clicking here. Finding out your credit score is an essential first step for any prospective home buyer.
But many home buyers are quickly realizing that shopping for a home doesn't just mean finding that pretty colonial that you've always dreamed about... it means finding a mortgage lender that will lend them a hefty sum of money. Perhaps the single most important piece of information a lender wants to know about a prospective home buyer is his/her credit score, which the lender will use to gauge how risky it would be to lend that person money.
Sadly, not too many Americans can cite what their credit score is and what they need to do to fix it. ForSaleByOwner.com has just partnered with Credit.com to help people learn how to strengthen their credit score. This great service can be found by clicking here. Finding out your credit score is an essential first step for any prospective home buyer.
Tuesday, August 12, 2008
First Time Home Buyers & the Housing Rescue Bill
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There's been much in the news lately about the housing rescue bill that was passed by Congress and signed into law by President Bush. The massive bill includes benefits for virtually anyone that currently owns a home, or is looking to become a first-time home buyer. As a recent first-time home buyer myself, I naturally wanted to know "what's in it for me?"
The bill includes a tax credit for people who bought their first home between April 8, 2008 and July 1, 2009 of up to 10% of the home's purchase price or $7,500, whichever is less. In other words, the only home buyers who will be able to get the full 10% tax credit will be those who purchased a home priced at $75,000 or lower.
Considering that the median home price is $215,100 (as of June 2008), the overwhelming majority of people won't qualify for the full 10% discount. More people will be able to claim the $7,500 tax credit. For a person who bought a home for $300,000 and is in a 28% tax bracket, the tax credit will total $7,500 and will lower his/her tax bill by roughly $2,100.
Sounds great, right? But before you take that $2,100 and go shopping for a new 50" LCD HDTV at Best Buy, people need to know that, under the provisions of this tax credit, you have to pay back your tax savings in equal installments over the next 15 years. So it' not really a tax credit, but rather an interest free loan that has to be paid back to Uncle Sam.
It's anyone's guess why the bill includes this provision, but my guess is that the government knows that once people have $2,100 burning a hole in their pocket, they're going to spend it in the economy.
There's much more to the housing bill, and there's endless articles and commentaries from tax experts and financial writers. Here's a great article by Holden Lewis of Bankrate.com that I found to be very informative.
There's been much in the news lately about the housing rescue bill that was passed by Congress and signed into law by President Bush. The massive bill includes benefits for virtually anyone that currently owns a home, or is looking to become a first-time home buyer. As a recent first-time home buyer myself, I naturally wanted to know "what's in it for me?"The bill includes a tax credit for people who bought their first home between April 8, 2008 and July 1, 2009 of up to 10% of the home's purchase price or $7,500, whichever is less. In other words, the only home buyers who will be able to get the full 10% tax credit will be those who purchased a home priced at $75,000 or lower.
Considering that the median home price is $215,100 (as of June 2008), the overwhelming majority of people won't qualify for the full 10% discount. More people will be able to claim the $7,500 tax credit. For a person who bought a home for $300,000 and is in a 28% tax bracket, the tax credit will total $7,500 and will lower his/her tax bill by roughly $2,100.
Sounds great, right? But before you take that $2,100 and go shopping for a new 50" LCD HDTV at Best Buy, people need to know that, under the provisions of this tax credit, you have to pay back your tax savings in equal installments over the next 15 years. So it' not really a tax credit, but rather an interest free loan that has to be paid back to Uncle Sam.
It's anyone's guess why the bill includes this provision, but my guess is that the government knows that once people have $2,100 burning a hole in their pocket, they're going to spend it in the economy.
There's much more to the housing bill, and there's endless articles and commentaries from tax experts and financial writers. Here's a great article by Holden Lewis of Bankrate.com that I found to be very informative.
Friday, August 1, 2008
The Virtual Vacation Home
It's Friday and while most of us are sitting at work, the Wall Street Journal has an interesting article today on how people are enjoying their vacation home through virtual means.
Utilizing an inexpensive webcam set up on a computer in their second home, these folks are able to monitor their beloved vacation home. Not only does it help inspire daydreaming about spending time at the beach or lake, WSJ reporter June Fletcher also notes that many people are using webcams as an inexpensive home monitoring system.
While I'm not lucky enough to have a second home, I think I'll go out and purchase a webcam for my house. I've always wondered what exactly my dog does all day at home.
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