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September 20, 2007
Secrets to Making a Lowball Offer - 800-819-5466
As the property market cools down, it becomes a good time for property buyers. If you don't have that much money to spend on a house, but you're absolutely convinced that it's the right time for you to move (or if you've found an intriguing investment property) then you need to learn how to make a lowball offer - and get it accepted. Generally, a lowball offer is 10% or more below list price.
First and foremost, learn what types of properties you're looking for in terms of both the house and the seller.
The House
The properties you're interested in have been on the market more than a month. There's not necessarily anything seriously wrong with them, but they're just not generating much attention. Maybe they're unattractive, in a busy street, or in disrepair. The key is to find properties that maybe need a little repair work, but nothing major. Your lowball offer isn't worth much if you have to spend all the money you saved on structural or wiring work.
The Seller
The seller you're looking for needs to move ASAP. Perhaps they're relocating to a job in another city, or they've already bought another house but want to sell the old one before leaving town. Maybe they're selling the home of a recently-deceased relative, and they just want to get the whole thing over with. Maybe they've defaulted on their mortgage payments and the house is foreclosing. These are motivated sellers and they're more willing to accept a low offer on their property.
The Secrets
• Get pre-approved for a mortgage before you start shopping. It'll make you more attractive to sellers.
• Shop at the right time - one of the best times to look is during the week between Christmas and New Year's, simply because very few people are looking then. If you find the right house or the right seller at this time, it's a great opportunity for getting a low-ball offer accepted.
• Make an initial offer that's below what you want to pay, and prepare to be rejected. Let the seller feel that they're negotiating a better deal with you and they're more likely to accept your second or third offer. Note: in a competitive market this strategy isn't advisable, but in a slow market it's worth trying.
• Make offers on several properties. The more opportunities you create, the more likely you are to have a seller accept your offer.
• Hire a buyer's agent. The seller's agent is trying to get the best possible deal for their client and they're not going to help you get a low-ball offer accepted. A dedicated buyer's agent will, and they'll most likely have more in-depth knowledge of the neighborhood and current market prices, too.
• Don't use the list price as an indication of a property's true market value. List prices are often inflated, so do your own research. Get a Current Market Analysis for the area and find out how accurate that list price really is.
• Give the seller a good reason to accept your price. Offer to close quickly, offer to pay in cash, and be flexible on inspection dates. Accommodate the seller in every way possible, and if they're motivated to sell they'll be more amenable to your offer.
For more information regarding the above web blog, please call Dean or Bonnie Isenberg at 305-936-2489 / 800-819-5466 or visit us on-line at A-Realtor.Com
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Posted by South Florida Realtor at 12:14 AM
September 04, 2007
Home Insurance: What Does "Insured" Mean To Me & My Miami Property?
The kids are back in school and now it's time for you to do your home work.
If you have not updated your home inventory and estimated value of your possessions for more than 12 months, you may be in trouble if faced with a "final exam" -- an insurance claim.
Simply paying property insurance premiums on time is not enough. To ensure your possessions, shelter, financial well-being and your home-based business, if you have one, are safe and secure, you should actually read your insurance policy or go over the details with your insurer's representative.
The contract between you and the insurer -- your policy -- must accurately estimate full value and must include relevant details of what you own, which usages are involved and what replacement would cost. If you carry too little insurance or if changes in use would disqualify some or all of a claim, that's your problem because the insurance industry considers it your responsibility to arrange correct coverage for your property and lifestyle.
From a consumer perspective, "The Best" insurance brokers and agents may be those who contact clients annually to ensure coverage reflects property value increases, renovations, new acquisitions and extended usage like a start-up home-based business, a new equipment-intense hobby or the inclusion of foster children.
If you are on your own with this annual up-date, tie the inventory review to a seasonal shift associated with "buying sprees" like back to school or Christmas. Include taxes in your listing. Minimum contents coverage is usually calculated as a percentage of building value. If the value of your possessions exceeds the insurer's calculated percent, then additional coverage may be required to protect the new home theatre, latest diamond ring or "had-to-have" golf clubs.
To up date the building's replacement value, contact your insurance representative. "Insured value" does not include land value, often a considerable portion of market value.
The Insurance Bureau of Canada (IBC), the national trade association of the private property and casualty insurance industry representing more than 90 percent of non-government home, car and business insurance, provides consumers with details on their responsibilities and rights. Armed with accurate information on what to expect, you are well prepared to ask the right questions whether you are searching for a new insurer or renewing a policy. Not convinced there's value in learning more? Did you know ... ?
Decide on Agent vs Broker: "Agents" work for one insurer and can only offer that insurer's policy types and features to consumers. You must fit this insurer's criteria for "insurable" or find your own alternative supplier. "Brokers" each represent a small range of insurance companies, ideally chosen to provide the most useful range of products and options for the client base served by that broker. When shopping around, ask each broker which criteria they use in selecting companies and how their business is distributed between the insurers. If one insurance company drops you, the broker will attempt to switch you to another insurer.
Compare beyond price: IBC Consumer Information Officer Don Stewart provides an example: "Coverage matters. All policies are not the same as companies can enhance their policies or not enhance them. For example, all companies will insure to estimated replacement cost. Most will add 'sleep at night' enhancement—guaranteed replacement cost." Steward goes on to explain that some insurers will pay all the replacement cost even if it exceeds the insured level while others will cap over-payment to a percentage, perhaps 20 percent.
Read the fine print: "People should always read their policy so they know what they are covered for because it's better to know before than after," said Stewart. For instance, policies do cover wind damage—something blowing off or onto your house—but a tree falling on a home can add complications beyond the damage. The policy may include payment to have your tree taken off the building, but not off the property. If the tree belonged to a neighbour, your insurance covers the damage to your home. If the tree was known to be in dangerous condition and the neighbour did nothing about this, your insurance company may go after the neighbour's. Let the insurers fight this out rather than taking on the tree owner yourself since any resulting settlement from your neighbour will be based on depreciated value whereas your insurer will pay you replacement value.
Hidden Secrets May Cost You: Owners of older homes may have knob-and-tube or aluminum wiring within the walls without knowing it. If the house burned down and one of these deficiencies was discovered later, the policy would still stand. However, if your insurer inspects your property at any point and finds a "red flag" like an oil tank or knob-and-tube wiring, you could be given notice to modernize or face having your policy cancelled. Switching insurers could trigger a similar situation. Once you sign up, an insurance inspector may discover a condition the insurer will not cover and you'll have to fix the situation, or find an insurer who will overlook it.
It's For The Unaffordable, Not Home Maintenance: IBC explains that home insurance is there to protect you from having to pay out a huge amount at once, often at the very worst time emotionally. "Auto insurance is claims rated and it is affected by claims," said Stewart, comparing insurers' reactions to a claim. "In home insurance, you would lose the discount for being without a claim. Where you run into a problem with home insurance is two or three claims in two or three years. When you have a claim and it goes on record, the amount does not matter. Frequency does....Home insurance is not a maintenance contract...legally you can claim all kinds of things, but insurers don't like this so they will drop you, and others will not want you."
Insurance is an integral part of the price of real estate ownership. If property insurance lapses, existing mortgages are in default and may become due and payable. New financing may not be possible. The accompanying loss of millions in personal liability coverage places you at risk from law suits. Consider insurance premiums, insurer-driven renovations and continuing property modernization as basic ownership costs.
"Welfare is society's problem, not insurance," said Stewart. "They are there to try and make a profit. If you can't afford to keep a house, you'd better sell it ... . A lot of insurance companies do charity on the side, but not in business. GM does not reduce the price because you cannot afford it."
For more information regarding the above web blog, please call Dean or Bonnie Isenberg at 305-936-2489 / 800-819-5466 or visit us on-line at A-Realtor.Com
Click Here To E-Mail The “I-Team”
Click Here To Request More Information About The Above Web Blog
South Florida Real Estate Information
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Posted by South Florida Realtor at 10:56 PM
FHA to step in, finance at-risk loans
GotMiami.Com ?
Some homeowners with risky “subprime” adjustable-rate mortgages will be able to refinance before they lose their home to foreclosure, with the help of steps President Bush will announce today, senior administration officials said Thursday night.
An estimated 80,000 homeowners with bruised credit and subprime ARMs they can no longer afford will be able to refinance loans, which the Federal Housing Administration (FHA) would insure.
The move marks a historic expansion of the role of the FHA, a Depression-era agency that has traditionally served low- and moderate-income families and first-time buyers, but not delinquent borrowers. Nearly 16 percent of subprime borrowers are behind on their ARMs, and an estimated 2 million subprime ARMs totaling about $600 billion will reset to higher rates through the end of next year.
To qualify for the new benefit, homeowners would have to prove they paid their loan on time before it reset to a higher rate and must have at least 3 percent equity in the home.
The program, which doesn’t need congressional approval, should take effect early next year.
Under current rules, the maximum loan the FHA can guarantee is $202,000 in most states and up to $362,000 in high-cost states such as California and New York.
The officials said Bush will also call on Congress to pass his proposal to overhaul the FHA, in part by raising those loan limits to $262,000 in most states and $417,000 in pricier areas. The officials spoke on condition of anonymity because they weren’t authorized to speak on the record.
Bush also wants the FHA to be able to help other risky borrowers, beyond the 80,000, by broadening its lending criteria. To compensate for the added risk that the borrowers might default, the FHA would charge them higher premiums on the loans. Also, he wants to eliminate the 3 percent downpayment requirement, though borrowers would have to pay at least some of the closing costs to secure the loan.
The senior officials avoided using the word “bailout,” but the plan is sure to incite critics.
“If you’re going to help someone to refinance, you’re going to bail out the person who financed him in the first place,” Peter Wallison of the American Enterprise Institute said Thursday night. “This will only cause the problem to arise again.”
Wallison said the lenders who provided the financing in many of these cases likely knew that the borrowers couldn’t meet the financial obligations of the loan.
“If we’re going to allow (lenders) to be refinanced out, what we’re doing is saving them from their own greed. ... It might be good politics, but it’s very bad policy.”
In another bold step, Bush will propose a temporary change in tax law. It would let homeowners avoid taxes on forgiven debt if a lender agrees to alter the terms of a loan.
For more information regarding the above web blog, please call Dean or Bonnie Isenberg at 305-936-2489 / 800-819-5466 or visit us on-line at A-Realtor.Com
Click Here To E-Mail The “I-Team”
Click Here To Request More Information About The Above Web Blog
South Florida Real Estate Information
Sell Your Pre-Construction Property .COMmission Free
Thank You !
Posted by South Florida Realtor at 02:17 PM