Strategies For Today’s Real Estate Market

Every real estate market has its own unique parameters and circumstances. Sometimes everything you do seems to work – we saw that kind of market a few years ago. And sometimes nothing seems to work – we have had that kind of market the last 2-3 years. But even in the worst markets, there are strategies that work, for both buyers and sellers. Today, right now, there are things you can do to increase your odds at successfully selling or buying real estate. Let’s take a look at a few ideas for success in today’s real estate market. You may not be able to use every idea, or any of them, but just knowing what the other party may do will strengthen your position.

 

You should do everything you can to avoid a foreclosure. A foreclosure will stay an your credit reports for years, seriously hampering your ability to obtain any kind of credit. And what ever credit you can get will be at higher rates. Your credit rating can even affect things like rent, employment, utilities, etc. It can also cost you more money on things like insurance premiums.

 

Contact me immediately if you are in danger of going into foreclosure! I have contacts with specialists that may be able to help avoid foreclosure, even if you have already been notified that foreclosure proceedings have been initiated. I will set up an interview with my specialists, and they will determine if they can help you. They do not charge for their services, and they are expert at negotiating a Short Sale with your creditors. There are no hidden fees- they make their money on the difference between what they or their investors pay for your property and what they may be able to sell it for. All the risk is on them, and you avoid a foreclosure!

 

A lease- purchase is something to be considered by both buyers and sellers. There are numerous ways to structure a lease-purchase, but basically the seller agrees to sell to the buyer a property for a specified amount, the sale to be consummated at some specified time in the future. During the extended time before closing the buyer agrees to lease the property at a specified rent. There needs to be a written contract for the lease period and for the purchase & sale. The negotiations become a little more complicated than in a straight purchase & sale. The amount of rent, the length of the lease, and whether any of the buyers rent payments will be considered as additional earnest money toward the eventual purchase are some of the important points of negotiation, in addition to the normal subjects of negotiation of a typical purchase & sale agreement.

 

A seller who is having trouble selling a property in order to buy another may want to consider a lease-purchase for either property, the one he is selling or the one he is buying. One word of caution – if you are the seller and considering a lease-purchase of your current property, first consult with your mortgage lender and insurance agent. Most mortgage contracts will become due in full if the property is leased for a period of time. If you first discuss this with the lender, in this market you probably can get the lender to go along with this strategy, Be sure to get it in writing! Discuss this with your insurance agent, also. You probably need to make some changes. The next step is to make sure your listing agent understands your position, and is willing to aggressively seek that kind of deal for you, along with trying to make an outright sale. If he is not, maybe you need to find someone else to represent you. After all, the agent is supposed to work in your best interest, and if that means a lease-purchase, then he must not ignore that opportunity.

 

Now you may want to look for a lease-purchase in your new location. Make sure to hire a good buyer’s agent, one who understands your situation and is willing to represent you properly. You also want to talk with an aggressive lender who will take an interest in your financing needs. Having done all your homework, and with approval letter in hand, you are ready to find your new home, and maybe offer the seller something he has not considered. Do it in the right way, with the right agent, and you will have an advantage over other buyers, and probably the seller, too!

 

A Reverse Mortgage is definitely not for everyone, but it is another tool that can be used in certain situations. A reverse mortgage can now be used to make a purchase, not just to draw on your equity in your home. The purchase Reverse Mortgage Program is designed to allow seniors to purchase a new home and they never need to make monthly mortgage repayments for as long as they live in the home. A Reverse Mortgage for Purchase allows seniors, age 62 or older, to purchase a new principal residence using loan proceeds from a HECM (Home Equity Conversion Mortgage). If you can come up with the cash required, you can use the reverse to purchase the new home. This can get you through that time gap from when you need to be in another home, but have not sold your current home. This approach can be used when you move to a new location, and can also be used to downsize, allowing you to take advantage of current market prices. When your old home sells, you can pay down on the reverse if you like, but you don’t have to. An advantage of this new program is that the HUD appraises the former home by its actual appraised value and not by the FHA usual method of using the quick sale value. The quick sale value is the value of the property if it had to be disposed off very quickly, and is usually much lower than the actual appraised value, which means you have access to more of your equity. If you want to take a closer look at this option, talk with your real estate agent and get a referral to a lender who thoroughly understands the purchase reverse mortgage. Be sure you get all your questions answered, and understand all aspects of the purchase reverse mortgage, including fees, interest rates, payback rules, etc. If your agent and mortgage lender don’t have many answers, it may be time to find a new agent & lender.

 

A lease-purchase, and a purchase reverse mortgage, are tools you should know how to use. You may not need either one, but more knowledge give you more options, and can strengthen your negotiating position. Talk with your real estate agent and mortgage lender about these strategies. Then you can pull one of these tools out if it fits the need.