Don’t Buy That Home Without the Help of Real Estate Professionals

So you finally decided to take the plunge. You’ve scrimped and saved and waited out the housing bubble, now it’s your turn to grab a piece of the American Dream. But wait, your not thinking of getting into the housing market without the help of professionals…are you? That would be a bad move, because without the help of a good real estate agent and appraiser, you may just find that dream crumbling down around you.

 

With all the tools and advice available today ranging from books and magazines to online advice – it would be possible for you to buy your home almost completely without the aid of real estate professionals. But the housing market is much too complicated for you to take on by yourself, and here’s why. The housing market in each state, city and neighborhood has their own set of laws and rules you must adhere to, and without the help of real estate professionals, you may find yourself lost in a forest of wolves. For example; do you know the best way to negotiate a deal in Los Angeles, or what the comparable house values are in the neighborhood you want to live in…a reputable agent and real estate appraiser do.

 

Let’s start with the real estate agent. Many of them out there are working for the seller, so you must find one that is on your side. This may entail paying them directly, sometimes even an hourly fee, or if you’re lucky they will split the commission that the seller’s agent gets once the sale is completed. This would be something you need to discuss, before you hire your agent. Next you want to hire an experienced real estate appraiser who is willing to do the research it takes to ensure you are getting an appraisal that is for the fair market value. In today’s housing market, the worst thing you could do is end up paying more than what the home is currently worth, so taking the time to set up your own real estate team is well worth your while. But how, you may ask, do you find these reputable team members; well there are several ways to go about it.

 

 

There are now about a dozen Web sites that help connect buyers with buyer’s agents, among them HomeGain.com, House.com, RealEstate.com and Reply.com. But don’t limit your search to the Web. Once you have an idea of the best rates from national lenders, get on the phone to your community banks and any other institutions with which you may have a relationship. Ask if they can beat the national rates. Often, the local lender can offer a better deal simply because he or she knows the local market and wants to keep your business.

 

You wouldn’t get your tonsils taken out without the help of an educated professional, so why would you spend your hard-earned cash on something as important as a home without the guidance of the people who are experts in this area? The housing market is very tricky right now, so the more help you get, whether it be from an agent, a real estate appraiser or a reputable mortgage lender, the better.

 

If you need assistance with real estate appraisals, please visit us at www.iappraiseforyou.com

 

 

     

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How to Buy a Foreclosed House

I’m the last person to suggest you should profit off of somebody else’s misery, but the housing market is in the dumper and one of the best ways to get out of it is for qualified people to start buying. Now, with the influx of homes in foreclosure, this may be a good time to jump in and get your feet wet. But, before you consider purchasing real estate that the bank owns, you should do a little research, and please don’t buy any home without getting it appraised by a reputable real estate appraiser who can make sure you are paying fair market value.

 

 First let me give you some fact; according to RealtyTrac, lenders repossessed 197,800 homes in the first four months of 2008 vs. 90,800 in that period last year. Banks don’t want to be in the real estate business, so sometimes they’ll accept much less than you might think to get rid of them – especially in markets having lots of trouble. But buying such properties has drawbacks. Real estate is almost always a good investment, especially if you’ve had it appraised, but before you run out and spend your hard-earned cash, here’s what you need to know.

 

1. When looking for real estate that has been foreclosed, let you’re your fingers do the walking through the web. For example;

Redfin.com, lets you do a free search for so-called real estate owned (REO) properties – those for which the bank holds the deed – in Baltimore, Boston, Los Angeles, San Diego, San Francisco, Seattle and Washington, D.C. (and soon, Chicago). This will help you narrow down your search, and while your online you can look up the closest real estate appraiser in your area, just make sure they are experienced and thorough. GOD knows we’ve all had enough shady mortgage lenders who strong-armed many appraisers to bring in values higher than what was going on in the housing market (as if the value of homes wasn’t overly inflated as it was during the bubble.) Another place you can look is foreclosures.com.

 

2. Another thing you can do to improve your chances of getting the best deal is to get a broker. I know, they don’t have the best reputation right now, but an honest and ethical broker will help ensure you don’t pay more than you have to, and they will probably get a real estate appraiser involved to help you understand the current value of the home you are thinking of buying. But keep in mind; you’ll want to find the real estate that is REO before going to the broker; doing a little leg work on your own ahead of time will help speed the process along.

 

3. Finally, look for homes and real estate that have been on the market for a while, like over 90 days. The longer a property is on the market, the more desperate the bank is to get rid of it. But be very careful, because bank-owned houses typically need a lot of work: People facing foreclosure often neglect maintenance and may have swiped fixtures and appliances on their way out.

Never buy an REO property without an inspection, and be sure to factor repair and remodeling work into your offering price. Again, this is another good reason to get an appraiser involved as well.

 

Well, there you have it. I know it can be a little uncomfortable to buy a house somebody else was kicked out of, but remember many of these people chose to walk away. That being said, getting this influx of real estate off the market will help the housing market correct itself, so you’re just doing your part to help the economy.

 

If you are considering a purchase, please visit us at www.iappraiseforyou.com for all your appraisal needs.

 


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The Housing Market Can and Will Recover

The current housing market is bleak: home prices and sales are plummeting, foreclosure proceedings are skyrocketing and mortgage rates are on the rise, but there is a brighter tomorrow, where real estate is concerned. Homes that are being appraised for lower values today will eventually begin a steady clime up in the near future.

 

In fact, according to a new study from the Joint Center for Housing Studies of Harvard University, “The State of the Nation’s Housing 2008,” finds the country poised to see an increase in housing demand over the next decade. The housing market will make a come back, it always does. Real estate appraisals will once again garner you a healthy value report, and mortgage lenders will start to feel comfortable giving loans to those with good credit. How may you ask? Read on and you will see.

 

One of the reasons the outlook in the housing market may perk up is the fact that America’s population is continuously growing, and with that growth comes more and more people who need a home. Since real estate appraisals rely heavily on the purchase and sales of real estate, this improves the market value of everybody’s home. Another factor is the increased life expectancy of our society. The longer people live, the more they purchase. Let’s face we are no longer content to stay in jobs for 20 years or more, and with longer life comes the desire for more variety, and that includes our homes.

 

Than we have the hotly contested immigration issue. One of the positive aspects of immigration is the fact that we have more people contributing to consumerism, and that includes the housing market. Many appraisers in the industry point to the fact that a lot of their appraisals are homes that immigrants own, which is why one study states that, “the good news is that we still have a growing population,” said Nicolas Retsinas, director of the Joint Center for Housing Studies and one of the study’s authors. “As long as you have more households, more people are going to need places to live.” This same study finds that from 2010 to 2020, the number of households in the United States will grow by an average of more than 1.4 million per year. That’s great news, especially considering the condition real estate and the housing market are in today.

 

Now, if you add to that the fact that right now the housing market has an influx of homes being sold, you understand why buyers are in a better position today than they were just a year ago. As I’ve stated in previous blogs, the housing market goes in cycles. Granted this last seller’s market cycle was doozy, but what goes up always comes down and that includes the price of real estate. Homes real estate appraisers were valuing at $500,000 and more here in Los Angeles, are now being appraised for around $300,000. While you could be pessimistic and look at that as a horrible thing for the housing market, you could also be optimistic and look at that as a great opportunity for those looking to buy.

 

I’m not saying that the housing market will turn around tomorrow, but it will turn around. At this point, it may just be that the outlook on real estate will just get better by the day. So, if you or somebody you know is thinking about jumping back into the housing market, please visit www.iappraiseforyou.com and complete your appraisal request form today.

 

 

 

 


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Why Did the Housing Market Crash?

So how did we get here? What happened to the dizzying heights of the housing market, and why do things look so dismal now? Well the answer to that is a bit complicated, because it includes a combination of factors that all came together like a perfect storm and shook more than just the real estate and appraisal industry. Since all roads seem to lead back to mortgage lenders, that’s the best place to start. How did these shady lenders affect the value of your home?

 

Our sad story begins in the early 2000s, when the economy was booming. With this boom came lower interest rates, which raised the value of real estate across the country. Real estate appraisers were appraising homes for upwards of $500,000 here in Los Angeles alone. Because the housing market was floating high in its bubble, mortgage lenders felt a bit more comfortable giving loans to people who didn’t have the best credit history, which put an influx of buyers, that otherwise wouldn’t have been able to purchase a home, into the housing market. Are you with me so far? More demand meant less supply, and we all learned in economics 101 that supply and demand is what drives prices up. But that was just the tip of the iceberg.

 

Now we get into the creative financing that took place in the housing market during the bubble. In order to get these higher-risk buyers into a piece real estate, loans that included things like the adjustable-rate mortgage (ARM) were offered. Again, prices were going up and up, and real estate appraisers were appraising homes for one price, only to see them go up even more a month later, so an ARM loan was the only way many of these people could get into the housing market. Here’s how an ARM loan works.

 

ARMs are loans whose interest rates adjust up or down periodically. The initial rate is typically fixed for a period of two or three years. The benefit is that the starter rates are lower for ARMs than for traditional, fixed-rate mortgages. That means lower monthly payments, making homeownership more affordable and allowing borrowers to qualify for a bigger loan. Sounds pretty good, except in cases were people weren’t able to sell their real estate fast enough. Than there was the issue of very risky ARMS that put people in very precarious positions.

 

Some of the creative ARM products that flourished of late included interest-only and payment-option loans. With the former, a borrower only pays the interest on the loan — not the principal balance — during the introductory period. With payment-option ARMs, borrowers get to choose how much they pay each month: enough to cover the interest plus the principal, the interest only… or less than the interest. In that last scenario, the unpaid interest is tacked on to the principal, leaving borrowers owing more than the amount of the original loan. I think most people felt they would be able to sell their real estate before their rate went up, but as we all know what goes up must come down. If people were stuck in their homes longer than they initially thought they would be they sought out refinancing options, which included getting their homes re-appraised by a real estate appraiser. I think you can see where this is going. If somebody bought real estate at the end of the housing bubble thinking they could easily sell, they ended up getting stuck with a home they either couldn’t afford or had to stay in much longer than they anticipated in order to save their shirts. But there’s more, because subprime lending seriously affected the housing market as well.

 

Subprime loans carry higher interest rates in order to compensate for the risk lenders took to give loans to people who really didn’t have the credit to support one. Many of these subprime loans carried risky terms such as interest-only payments, penalties for paying the loan off early and very little paperwork to verify the buyers could actually afford the loans that were needed. In essence, subprime loans were getting people into the housing market that had no business being there. Sounds harsh, I know, but my mother always told me not to buy anything I couldn’t afford. It’s really a basic rule of finance. And if these people thought they’d be able to get out of the homes before the housing bubble burst, recent real estate appraisals shattered those dreams.

 

Now add to the whole mess a bunch of unethical mortgage lenders, and you have a recipe for disaster. Not only that, many of these lenders coerced appraisers to bring in real estate values even higher than they actually were. This is why a reputable real estate appraiser and lending company are so vital to any real estate transaction. So, there you have it. There is actually more that went into the crash of the housing market, but you get the general idea. So what do you do now?

 

The first thing you can do is get your home re-appraised, in order to understand its current value. This can help you decide whether it is best to refinance, sell or settle in and make the best of a bad situation. If you decide to stay in the home you purchased, why not turn it into your dream home until the housing market turns around and it is safe to sell? Or consider renting the house you can’t rid of out. This option can help ease the burden of your mortgage payment. Whatever you decide to do keep this in mind, the housing market goes in cycles. Right now we are starting to see the beginning of a buyer’s market. Normally these cycles last approx five years. That being said, the last cycle, which was a seller’s market, went about eight years, so it’s hard to say for sure how long this situation will last.

 

I hope this clears up at least some of what’s been going on. If you are looking to appraise your home, please visit us at www.iappraiseforyou.com, and we can help appraise it for the fair market value.

 

 

 


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Turn the House You’re Stuck With Into the Home of Your Dreams

Just a few years ago selling your real estate almost as quickly as your purchased it was the best way to make a buck. Now, of course, times are different. The current housing market does not support the idea of buying a fixer-upper, and flipping it as fast as possible. This means there are many people who bought real estate at the tail end of the housing bubble and now find themselves stuck. So what should you do? Create the dream home you were planning on moving into after your sale, with the home you currently find yourself stuck in. But, the first order of business may be to get your home appraised by a reputable real estate appraiser who can tell you what the current value of that piece of property is worth.

 

You may not want to invest in something like an addition to your piece of real estate, if the housing market in your area is worth a lot less than it warrants. In other words, fixing up your home can add value, but what the homes are selling for around you is a bigger variable. True, some homeowners spent hundreds of billions of dollars renovating their homes during the boom times. But many saw those renovations simply as a necessary step to get their homes ready to trade in. So now remodeling your home is more about creating a happy atmosphere for you and your family, since you may have to stay there a while. You may consider refinancing, in order to get the money to do your renovations, but be very careful. If you chose this option make sure you go through a reputable lender and get your home appraised for the fair market value by an appraiser.

 

Ok, so now that you’ve gotten over the shock of being stuck with real estate you thought you could easily get rid of, here are some ideas that may ease the pain. Why not give your house the features you wanted the next one to have, from a luxe breakfast bar to a spa bathroom. Don’t fixate on each improvement’s immediate payback. When you get around to selling after the housing market improves, you’ll probably recoup most (though not all) of the costs – and maybe you’ll find you’ve been liking the place so much that you don’t want to move after all.

 

According to many real estate agents out there, there is one main thing homeowners want most, space, and a bit of pampering (ok that’s two). The good news is that there are ways you can go about getting them with the home you are in right now, without having to consume yourself with what the housing market is doing.

 

1.    If it’s more space you’re looking for, try taking unneeded doors off their hinges. I’m not talking about bedroom or bathroom doors, I’m talking about doors that separate the living room from the dining room…etc, it helps give you the illusion of space, according to designers.

2.    Do some heavy-duty spring cleaning, whether it’s spring or not. This will help clear out a lot of clutter, and you may find yourself with an entirely new room to use. Maybe you can turn that cleaned out basement into a bar area, or an entertainment room. Or maybe you’ll finally get to turn your patio into that trendy neighborhood party spot like you always wanted. Whatever you decide, cleaning up can bring you a lot of benefits.

3.    Take down unnecessary walls. Ok this one is a biggie, but if you have the money, or can pull the money out of the equity of your home by refinancing, it is well worth the price. But remember, you definitely want to get your home re-appraised by an experienced real estate appraiser, if you go this route. An appraiser researches the housing market in your area, in order to asses the current value of your home.

 

Go ahead: Pamper yourself a little. “As long as you keep the improvements in line with the scale of the house, harmonious with its styling, and no more than a baby step fancier than the other houses on your block, you’ll get your money back once the market stabilizes,” say reputable real estate appraisers.

 

Don’t let yourself become another victim of the housing market, this is your piece of real estate so take back your control and turn it into the dream home you always wanted.

 

Please visit us at www.iappraiseforyou.com for all your appraisal needs.

 

 


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How to Survive the Current Housing Market

The housing implosion is nowhere near over. In 75 of the 100 top U.S. cities, prices are expected to fall in the next 12 months according to Fiserv Lending Solutions, as reported in money.cnn.com. Before you bury your head and become too despondent think about it like this; the housing market is dropping, but it was way too high during the bubble. What we are really seeing may be a correction in the real estate market. Sadly, that doesn’t help the thousands of people who were duped into taking creative home loans, but for those of you who have been biding your time and waiting for real estate to come back down to a reasonable level, this could actually be good news. However, if you are a homeowner who is experiencing a drop in the value of your real estate because of a lot of foreclosures in your area, you may want to consult a real estate appraiser, in order to asses the current value of your home.

 

Homeowners who bought real estate hoping to turn it for a quick profit may now have to look at the homes they purchased as a long-term investment. Why not consider renting it out? This option generates you continues income and could cover the cost of your mortgage, or at least help ease the burden. Another option is to refinance. Now this one is tricky, because there are usually costs involved with this, so you want to ensure you are dealing with a reputable lender and get yourself an experienced real estate appraiser who will make sure your home gets appraised for its fair market value. And for all you potential buyers out there, make sure your credit is in order.

 

We are inching our way into a buyer’s market, but mortgage companies are raising the standards as far as giving home loans is concerned. This means no more getting a loan with no money down, or a low FICO score. But if you are looking to buy real estate, and you have good credit, this is an excellent time to start looking. But in order to protect yourself from getting a raw deal, you want a real estate agent on your side who will help you negotiate and a real estate appraiser who will ensure you are paying an amount that is in line with the housing market in your area.

 

Visit us at www.iappraiseforyou.com to set up your appraisal request today.

 


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Mortgage Rates Are on the Rise Again

Rates on 30-year mortgages rose again this week, climbing to the highest level in more than nine months, reflecting more concerns about how the Federal Reserve will respond to higher inflation pressures, according to money.cnn.com. But that isn’t necessarily all bad, especially if you are looking to buy a home. One of the reasons real estate was so high during the housing market bubble was because interest rates were so low. The hike in mortgage rates also means the price real estate is going down. This is where a good real estate appraiser can help, because they can help ensure you get an appraisal that brings a seller fair market value, and ensures a buyer isn’t being charged more than the housing market in their area warrants.

But mortgage rates rising effects more than just the cost of homes and the rates right now are the highest level for 30-year mortgages since they averaged 6.46% for the week of Sept. 9. It marked the fifth consecutive weekly increase and the fifth week that they have been above 6%. So, if you are in the market for real estate a reputable lender, agent and appraiser are a must.

According to money.cnn.com the rates on 15-year fixed-rate mortgages rose to 6.04%, up from 6.02% last week, and the five-year adjustable-rate mortgage rose to 5.99%, up from 5.89% last week. The rate on a one-year adjustable-rate mortgage rose to 5.27%, compared to 5.19% last week. This means as a buyer you’ll have to decide when it makes the best financial sense to purchase real estate. You have the value assessed by a real estate appraiser, have your real estate agent negotiate the best deal and make sure you are dealing with a reputable lender.

The housing market is facing numerous headwinds, from slumping prices, which are keeping potential buyers on the fence, to rising mortgage defaults, which are dumping more homes on an already glutted market. While it’s a good thing for buyers to beware, don’t wait too long because the housing market works in cycles, which means eventually it will go back to being a seller’s market. A good real estate appraiser can tell you whether you are getting a fair market value deal compared to the other homes selling in the area, and an experienced real estate agent can help you negotiate a better deal, which often times means the seller must add incentives.

I know it’s a little scary to see mortgage rates rise nearly each month, but keep in mind they were realistically too during the time the housing market was in its so-called bubble. Even if you decide now is not the best time to buy, it is the right time to begin to keep a closer eye on how things shake up.

 

Visit us at www.iappraiseforyou.com for more information on real estate appraisals.


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