|
|
|
Home Owners In Trouble Real Estate Bubble Rising Interest Variable Rate Loans Concern Fed
urricane Katrina, floods, property than the current market
earthquakes, high fuel price will bring. In addition,
prices, shrinking rising mortgage payments coupled
pocketbooks, and now, worries with slower real estate sales,
over variable interest rate loans are forcing more owners into
are discussions heard throughout foreclosure, and in some cases
the nation. bankruptcy, which is currently on
the rise and heading toward one
With mounting concerns by the Fed of the highest levels in U.S.
over rising inflation, there is a history.
serious push to increase the
current rates of interest. This In an effort to curb this
may help to curb inflation, but combination of economic
will have a devastating effect pressures, and for saving equity
for millions of homeowners tied wealth positions, many homeowners
to variable interest rate loans. are now resorting to selling
As rates increase, so do most their property as a, For Sale By
underlying mortgage payments, Owner. In doing so, they are
placing a greater stress on those saving large portions of equity
who want, or need to sell profit that would otherwise be
property. paid out as a real estate
commission.
For these concerned homeowners,
many are beginning to find What many owners have discovered
themselves in an Ôupside downÕ is that a 6% rate on a $200,000
sales position. In other words, home is in fact, $12,000. If
decreasing home values in some their equity wealth position is
areas of the country are already $24,000 on their property, then
leaving owners in the dire they have effectively paid 50% of
position of owing more on their their profit to a real estate
broker, not 6%! This financial establish a price/value range and
inequity is created because the trend a homeowner might
6% commission is being charged on effectively use for marketing
the gross price rather than on their property.
the net proceeds from the sale.
Step #2: Connect With An Attorney
Add to this, the standard 2 and Escrow Office. One of the
1/2%-3% normal closing costs for first connections to establish is
each transaction, also calculated with a qualified real estate
on the gross price, and again, a attorney. This attorney will be
home ownerÕs wealth diminishes used for helping guide the
even further! To avoid this loss, homeowner through the legal
a growing number of owners are portion of the transaction and
opting to Ôdo it themselves.Õ for finalizing any Offer To
Therefore, in an attempt to Purchase (also known as Earnest
bolster this independent Money Agreement). The best place
homeowner movement, the following to start looking for a qualified
five steps are being provided as real estate attorney is at the
a solid foundation in the For same Title Company used for
Sale By Owner process: researching the property value.
Larger Title Companies usually
Step #1: Determine A Fair Market have a full service escrow
Price For The Property. This can department for closing
be done by visiting a local Title transactions. In addition, they
Insurance Company and having them can also provide a good alliance
run price comparisons for with some of the better, local
ÔSOLDÕ property (over the past real estate attorneys. By
two years) within a 2-block selecting the right Title Company
radius. Using ÔsoldÕ prices in in the initial research phase, it
an immediate area will help can prove to be a one-stop-shop
for helping solve many accomplished.
home-selling challenges.
Step #4: Advertising and
Step #3: Find A Mortgage Lender. Marketing. Now that the attorney
Now that the attorney and escrow has been chosen (and contact has
office are lined up, a good been made), a location for escrow
mortgage lender will be needed and closing the transaction has
for helping to qualify purchasers been determined, and all mortgage
and ultimately, for financing the lenders lined out, it is time to
transaction. My recommendation is place the yard sign and begin
that at least two conventional advertising.
bank lenders, and one or two
mortgage brokers are contacted There are many sign companies
for this purpose. The reason for found on the Internet for
having choices is that each purchasing a For Sale By Owner
lender will offer different yard sign, and one that may be of
financing packages. It is this interest is Victory Signs at:
loan diversification, which will http://www.victorystore.com.
open a wider range of financing However, for immediate service, a
opportunities when working with homeowner might also check out
buyer prospects. the offerings and pricing from
their local sign shops.
For completing these first 3
steps, the homeowner should As for advertising, the most
figure on creating one ÔAction effective ad placement will be a
DayÕ where all research and clearly written classified ad
connections are finalized. At the stating the most unique feature
end of this day, a complete sense of the home. This targeting of
of control and organization for the ad copy will help to draw out
the selling process should be the one most likely prospect that
will purchase the property. When agents and brokers would resort
writing the ad, it should be kept to advertising only through
economically viable remembering display and classified
that serious house hunters will advertising media channels. But,
read all ads within in a column, they donÕt! So, it quickly
whether they are promoted in bold becomes apparent this is an
type, or not! Knowing this effective means for marketing any
information can help to keep your property. And one, you do not
ad costs lower. want to overlook.
The other most important real As a final note on this subject,
estate advertising to consider, make sure the flyer box on the
is through creating a simple yard sign is always kept full of
flyer that will be placed in a flyers for the people who are
clear plastic holder attached to driving the area. To help in
the outside yard sign. This flyer creating the most professional
can also become an effective looking sales flyers at a
advertising tool when used as a reasonable cost online, a good
handout at all open houses. source to check out is:
http://www.myfsbo.com.
From my own research, almost 60%
of homebuyers actually locate Step #5: Writing Your Offer. When
their homes by driving the initially meeting with a chosen
neighborhoods where they intend attorney, the homeowner should
to live. Realtors have known this also ask him/her how they would
for years, and that is why yard prefer the initial offer to be
signs are so heavily used in drawn up for a prospective
promoting property for sale. If purchaser? At this time, the
signs were not effective as a attorney will also be able to
marketing and branding vehicle, provide a list of what questions
need answering and any other and with full disclosure.
legal paperwork required for
state compliance. The attorney IN SUMMARY: If you find yourself
can also provide good initial at the mercy of rising interest
direction for making sure rates and variable rate payment
negotiations hit the most key adjustments, these five, For Sale
elements when consummating the By Owner steps, can help you to
sale. This initial pre-sale move beyond traditional marketing
legwork helps to alleviate many methods, potentially avoid
future concerns. Once again, foreclosure, and help save more
proving there is no magic formula of your equity wealth position.
used for selling real estate or Taking these steps can also help
for writing an Offer To Purchase. to alleviate stress-causing
What it really boils down to is unknowns from misinformation and
the intent of the seller and lack of preparedness.
buyer for consummating a fair and
legal transaction between them,
About the Author:
Greg O. Bacon, President of MXMRQ" Corporation, is a former sales and operations manager for Coldwell Banker" Real Estate, and is the author of the ePackage: ÒWarrior Economics Ð Taking Back Your Home Selling Profits! A Complete For-Sale-By-Owner Program.Ó To learn more visit the Master Real Estate Resource Center at: http://www.MXMRQ.com
Source: www.isnare.com
|
|
