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Does Inflation Affects Real Estate Prices?

For those studying the current decrease in real estate market prices these days, inflation is most commonly observed in relation to these very decreases. Inflation consistently affects the price of real estate across the United States. To first understand what inflation is, proves important in grasping why it can have so much affect on the cost of housing.

So, what exactly is inflation? Generally speaking, inflation is the increase in services and goods, that makes your United States dollar worth less. This can affect the purchase of groceries, travel, vehicles, and especially the housing market.

There are many theories on inflation that have been studied over many years. Authors and business persons write books on the topic every day, whiles others read the books and try to create their very own theories on the subject. At this point in time, there are two types of inflation changes that can drastically affect the status of the economy – therefore, real estate. The first, and most significant in relation to housing, is cost-push inflation.

Cost-push inflation is when price of goods and services go up to the consumer, as the costs to own and operate the companies that create these goods and services, begins to increase. In a sense, the companies ‘push’ their increase in operating costs onto the consumers of their goods and services.

In relation to the housing market, companies that may build homes, give or broker loans, sell construction materials, etc. must also then push their costs onto the consumer. This making the real estate market prices rise for those looking to buy. In which case, market researchers would deem this point in time a ‘sellers-market’ in real estate.

So, how does inflation relate to the decrease in housing costs? When inflation hits its peak, or as market researchers define it, when the cost of living becomes too high for the consumer to handle, the cost of housing decreases. We as the United State are currently in this market, which we know as, a ‘buyer’s market’. As the cost of goods have hit an irregular high, the cost of real estate across the globe has become outrageously affordable for all.

Real estate investors wait for moments in time, like now, to invest in rental properties, home upgrades, and other investments they can hold onto until the market turns. For the average family, the cost of buying a new house, or constructing a new house is also at an all-time low.

So, whether you have been waiting for the right time to invest, inflation has temporarily made this cost-effective pricing window available. Inflation will make a change again, soon enough, so why not take advantage of the low prices the real estate market currently has to offer? Invest in your dream home today.

Article Source: Ezine Articles Michael Liebrum

Donna Sanford

Phone: 888 381 8654
Email: donna@yoursolution4re.com

Real Estate Investor | Short Sale Professional
Real Estate Transaction Negotiator | Real Estate Investing Services

Your Solution 4 Real Estate, Inc.
Bauer Hill & Associates, LLC
Area Short Sale Pros, LLC
Tri-County Capital Partners, LLC

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Area Short Sale Pros, LLC negotiates short sales on behalf of homeowners, Realtors and buyers/investors and we act as a neutral third party in the transaction. We have partnered with the best short sale negotiators who have over 50 years of combined industry experience and focus specifically on Short Sales. What makes us unique is our extensive contacts with lenders who know we are working for both buyer and seller as a third party negotiator and this gives us the “edge” over others. We service customers in all 50 states and work with all lenders and mortgage servicers. We are professionals with a proven track record for achieving positive outcomes for our clients. Call us now at 888-381-8654.

Categories: Blog, Business Connections, Commerical Real Estate, Investing in Real Estate, Real Estate Investing, Real Estate Negotiating, Real Estate Sales, Reviews, Short Sale Pro, Short Sales

Tags: Business Connections, Real Estate Investing, Real Estate Investor, Real Estate Networking, Real Estate Transaction Negotiator, Residential Real Estate, short sales

14 APR 0

Common Home Buyer Mistakes To Avoid

Whether you’re on the buying end or the selling end of a real estate deal, there’s a whole lot of money riding on the outcome. Listed here are a few common mistakes and how you might avoid making them yourself. A little research can help you to avoid making these costly mistakes.

Selecting an agent with whom you do not connect, or who is not committed to learning and meeting your needs.
You real estate agent will serve as your voice throughout much of the home search and sales process. Be careful to select an agent who genuinely cares about meeting your needs, and with whom you feel you can communicate well. A misunderstanding or disagreement at any point in the process – even after you’ve made the purchase – can be a source of some serious heartache and regret.

Failing to get pre-qualified.
In today’s market, heading to the bank or mortgage company to be pre-qualified should be one of your first steps when you start thinking about buying a home. The process is relatively painless, and can help you to get a realistic picture of what sort of home you can really afford. Pre-qualification signals to sellers and agents that you’re ready to find your dream home, and that you have no interest in wasting time.

Misunderstanding the total price tag.
When hunting around for homes, ask your real estate agent to discuss closing costs with you – beyond a simple down-payment, there are often many costs, taxes, and fees that can creep up on you, totaling hundreds or even thousands of additional dollars. Earnest money, inspections, title insurance, and legal fees add up quickly, and should be a part of your planning process from the beginning. There’s nothing more upsetting than having an offer accepted and finding that you can’t pull the cash together to seal the deal.

Making your search too narrow.
By and large, every other consumer out there has access to the same publications, search engines, and bulletin boards that you do. Because of this, in many markets, homes that show up through these mediums will be snapped up before you even catch wind of them. A qualified real estate agent has access to listings the very moment they hit the market, and long before most consumers catch wind of them. Armed with your specific requirements, a good agent will make a quick connection, and have you opening the front door for a walk-through before other buyers even know about the property.

Believing in one PERFECT dream home.
Purchasing a home is not about soul-mates, nor is it about love at first site. Home buying is a process that involves a lot of careful consideration and a process of elimination. One week, you may not find something that meets you needs and budget in a neighborhood where you’d like to live. The next week, there may be three such homes on the market. Patience and careful thought are required to ensure success.

Thinking in the short-term.
A home may be perfect for you now, but what if your family grows? Will the house still be perfect next year? How about in five or ten more years? Real estate is a long-term investment in your future, and purchasing a home is not something to be done lightly. Think ahead to ensure you won’t be facing buyer’s remorse down the road.

Failing to do your homework.
Looking at a home in the fall tells you little bout whether the basement floods, just as inspecting a house on a quiet weekday afternoon tells you little about the neighbor who works on his hot-rod all weekend, gunning the engine while you try to nap. How are the schools serving the neighborhood? Is there a safe place to learn to ride a bike? Is the house in a flood plane or evacuation zone? You need answers to these questions before proceeding with an offer to purchase. Don’t be shy – walk right up to neighbors, knock on doors, take a look at local disaster plans. If you make an offer on a property, you want to do so with your eyes wide open.

Skipping the inspection.
Home inspectors make a good portion of their living doing pre-purchase inspections. You may feel that the money that they charge for the work would better serve you as part of the down-payment, but you’d be sorely mistaken. A home inspector brings a trained eye to the job – the kind of eye that can spot black mold at a hundred yards, and identify faulty plumbing in an instant. Skimping on your home inspection may seem like a money-saver, but will end up costing you a bundle in home repairs in the future.

Overlooking insurance considerations
The last thing you want to do when meeting with real estate agents, bankers, inspectors, and lawyers is to sit down with yet another person interested in taking your money. That said, discussing insurance premiums and coverage levels on a home prior to making a purchase will help you to put together a much clearer picture of your financial needs, and may point out a few risk factors that you never considered.

Opting against a home protection plan.
In the event that even your home inspector misses an important repair or issue with the home prior to your purchase, you can be left with huge repair bills for an unanticipated issue. A home protection plan, which you can arrange through your real estate agent or mortgage company, is a short-term insurance plan to hedge against just this sort of unforeseen issue – usually for a period of one year from closing. The premiums are low, and the benefits (should you need them) are priceless.

Article Source: Ezine Articles

Categories: Blog, Investing in Real Estate, Real Estate Investing, Real Estate Negotiating, Real Estate Purchasing, Residential Real Estate, Reviews, Short Sale Pro

Tags: Business Connections, housing market, Real Estate Networking, Real Estate Transaction Negotiator, Residential Real Estate

2 APR 0

What Makes Your House LEED-Certified?

Before we discuss the makings of LEED-certified home, let us first understand what LEED certification is and why it is important. This rating system stands for Leadership in Energy and Environmental Design, formed by the US Green Building Council. This system measures the construction practices followed during the building of a structure or home. This allows the buyers to purchase or build a home that is environmentally friendly.

Its importance:

With the deteriorating state of our environment, having a certifying body that will look into how homes and buildings are built is greatly needed. This will aid homeowners and contractors in monitoring their usage of natural resources. The waste produced and its implication to the environment.

On top of the monitoring, the LEED certification team works hard to promote a better alternative of building structures, an option that will not include hurting the environment. It is admirable how many professionals have worked hard to ensure that the quality is not compromised while following the principles of eco-friendly building. Such principles include the use of sustainable and eco-friendly materials, conservation of water, efficient use of energy and preserving the quality of air that will be circulating inside the property.

Better understanding of the LEED certification:

Note that there are four levels of LEED. Corresponding points are given to the properties. The number of points will determine the level of certification from the LEED. There is certified, silver, gold and platinum. Each level has a set of requirements. To be certified, the building project has to apply for it and submit the essential documents. If the certification body is satisfied with, the requirements submitted, then a certificate will be issued.

In order to be certified, the construction of the property should embody the eco-friendly practices. This includes the use of recycled materials, reducing or eliminating the waste generated because of the construction and using materials that do not emit harmful substances to the environment.

The LEED for homes is a great way to guide homeowners who want to purchase or renovate their existing homes and make it more environmentally friendly. To be certified is not easy. Aside from the guidelines to be followed, a third party will be assessing the property. They will validate any claims you have made. They will also ensure that you earn the certification by following eco-friendly standards in building or renovating homes.

Following the LEED guidelines is crucial even if you are not aiming to be certified. Following such guidelines will help you conserve energy, which means lowering your utility bills. This will also help you conserve water and provide you with a better quality of air at home.

It is time to pay attention to the real condition of our environment. Through this, we will be able to make the necessary changes and help improve its state. The LEED certification is one way of making our world a better place. Builders will be more careful with the materials and processes they use for the construction. This will also give a better option for homebuyers. Now, they will be properly guided when purchasing an eco-friendly property or renovating their exiting home

Article Source:Ezine Articles Roby Hicks

Categories: Blog, Business Connections, Investing in Real Estate, Real Estate Investing, Real Estate Negotiating, Real Estate Sales, Residential Real Estate, Reviews, Short Sale Pro, Short Sales

Tags: foreclosed homes, housing market, Market Analysis, Real Estate Coaching, Real Estate Investing, residential foreclosure, Residential Real Estate

29 MAR 0

Best Time to Buy is Now

When is the best time to buy? When everyone else is selling. The biggest fortunes have always been made during economic downturns by forward-looking individuals who buy when the market it at the lowest point. As Warren Buffet said, “be fearful when others are greedy and to be greedy only when others are fearful.” Buy low, sell high. No commodity demonstrates this contrarian market strategy better than purchase of real estate.

Right now there is around a 12 month supply of homes for sale in many markets, and in many cases at least a third of those homes are distressed. The next two to three years are expected to see near record high housing supply on the market and depressed prices. Many sellers continue to be desperate to get out from under over-valued mortgages and many are forced to sell because of unemployment and underemployment. When people are selling low, that is the best time to buy.

Many of the major lenders are gearing up to do more business with Short Sales over the next year or two because they realize that they can maintain better value in the distressed property if they do not take the owner all the way to foreclosure. Again, with lenders ready to deal, that’s the ideal time to buy.

Investors who are a little hesitant to jump in ask, “If everyone is selling, will I find a buyer?” That’s a good question, and it can simply be answered this way: If you buy it right and put it back on the market at an attractive price, then there will always be a buyer. There are some things you can do to hedge your bets:

Target your “farming” area to neighborhoods and price ranges that are attractive to all cash buyers. If you don’t have a feel for which areas are highly desirable to cash buyers have your buyer’s agent check recently solds in several target areas to determine who is buying, whether they are buying for cash or are financing, and what the recently sold prices were in the area. This will tell you three things: which areas to target for Short Sales, the price range of properties to target, and the price you can expect to get for the properties you tie up in a transactional Short Sale. Additionally, you should be able to see what lenders have been accepting for Short Sales in the area. You’ll then know what your average profit is going to be.

If you buy to flip rather than to hold you minimize the risk of losing any money if your Purchase and Sale Agreement is structured correctly. If you concentrate on putting many deals in the pipeline the deals that fall through will pale in comparison with the profit that comes in from the regular closings that your pipeline creates.

There are tons of ways to make money in real estate, but all of them are useless unless you have a steady flow of motivated sellers and qualified buyers coming into your business. When you have a solid pipeline of prospects, you pick and choose the best of the best and finally take control of your financial future.

Article Source: Ezine Articles Bob Massey

Categories: Blog, Business Connections, Commerical Real Estate, Foreclosure, Investing in Real Estate, Real Estate Investing, Real Estate Sales, Reviews, Short Sale Pro

Tags: Business Connections, Buying Forclosures, housing market, Investing, Real Estate Transaction Negotiator, Residential Real Estate

26 MAR 0

Short Sale Over a Foreclosure Might Save Your Financial Future

Losing your home due to the inability to meet the monthly payment obligations is perhaps the worst financial situation you could ever find yourself facing. In fact, a foreclosure puts a huge blemish on your credit report, where improving it could take years. Moreover, a mortgage lender may file a legal case against you as part of the foreclosure action. All this would then hinder your ability to obtain any kind of credit, leaving you completely helpless.

Consider a Short Sale as a Better Credit Position

The pitfalls of a foreclosure are frightening and sometimes irreparable. Hence, any option that promises a way out of the situation is a better alternative. This process is one option for homeowners who are mired in financial woes. Simply put, a short sale involves selling your home at a price that is lower than the amount you owe the mortgage lender.

The best part about short sales is that they create a win-win-win situation for all parties involved in the transactions:

The seller is able to evade foreclosure and payoff their mortgage liability.
The lender is able to recover his dues without going through a lengthy legal procedure, and fees, of foreclosure and marketing the repossessed property.
The buyer is able to purchase the home at a reduced price.

Considering a Short Sale? Keep the Following Factors in Mind

The first safeguard measure you must take when settling your mortgage through this process is to get a written acknowledgment from the lender, stating that all your debts are absolved. Other considerations to bear in mind to avoid any potential negative consequences of the process are:

Protect your credit rating: Do not forget that a short sale is mentioned on your credit report. Therefore, get the lender to report it favorably. For instance, if your report merely states that the debt is satisfied, your score will not be impacted. On the other hand, if your lender reports ‘settled for less than the full balance,’ your score will drop automatically.
Get tax advice: A tax liability on a short sale arises when the lender claims that the debt forgiven should be treated as an income. A tax professional can help you find alternatives to limit this liability.

While a short sale is certainly a superior alternative to foreclosure on several grounds, a homeowner often struggles to convince the lender to agree to them right away. This is because the lender has to agree to forgo a part of the mortgage claim that they want to recover. Therefore, when faced with a financial crunch, a short sale must be pursued as soon as possible. The longer you wait, the greater the amount of arrears, and the less likely that the lender will be to agree to the process. With that said, I have seen people live in their homes for many months without paying their mortgage and still complete a success transaction. Of course this is a bit risky and I would never recommend this strategy to anyone.

If you, or someone you know is facing a foreclosure scenario you will want to have a seasoned professional assist you in examining your options. Having an expert work with you could protect you, your home, and your financial future.

Article Source: Jenifer Wehner @ Ezine Articles

Categories: Blog, Foreclosure, Real Estate Sales, Reviews, Short Sale Pro, Short Sales

Tags: Business Connections, Commercial Real Estate, Foreclosure, Real Estate Investing, Real Estate Sales, short sale, short sales

22 MAR 0

Using an Agency in Real Estate Transactions

Agency is simply the relationship between the principle (the seller or buyer) and the real estate professional. In agency, the professional has a fiduciary duty to look out for the best interests of his/her principle. The fiduciary duty is defined as the ‘duty of utmost care, integrity, honesty, and loyalty in dealings.’

There is a form that is used called the Agency Disclosure form (or AD for short.) This is the very first form that is used in every real estate transaction. It has 1 purpose: it discloses (makes openly known) the 3 types of agency that could happen in a real estate transaction.

1. Agent represents the seller only.

In this agency the agent for the seller represents only the seller. He has a fiduciary obligation to get the seller the best price possible for his home. He also has the fiduciary duty to make sure the seller understands all the forms he must sign. The agent serves to protect and promote the seller. In a fiduciary relationship the agent has an obligation to put the needs of the seller first above his/her own needs. He does not have a fiduciary duty to the buyer but does own the buyer the duty of fair and honest dealings.

2. Agent represents the buyer only.

This is the exact same as above except the agent represents the buyer only and has the fiduciary duty to get the home for the buyer at the best price while protecting and promoting his/her best interests. He only owes the seller the duty of fair and honest dealings.

3. Dual agency: agent represents both the seller and buyer

If a dual agency is formed it must be disclosed and agreed to by all parties of the transaction. A dual agency can never be done in secret. This dual status must be known because an agent will know confidential information about his principles. The disclosure forms states that an agent in a dual agency situation must never reveal confidential information to the other party without written permission.

The agency laws were put into practice to protect home owners and home buyers. It establishes that an agent must put the needs of the principle above his own. The law also makes the declaration of who represents who and in what capacity widely known. There are to be no secrets in a real estate transaction.

Dangers of Dual Agency

In most real estate transactions there is one agent representing a seller (aka sellers agent or listing agent) and another agent representing a buyer (aka buyers agent). However, at times, one agent might end up representing both the buyer and seller. This is called dual agency. It is perfectly legal but also can be filled with challenges. In many states, a dual agency status must be acknowledged and agreed to in writing by all parties.

To understand the potential challenge let’s use this as a scenario:
• The house is informally appraised and the fair market value seems to be $270,000
• The seller begins with a listing price of $275,000
• The real estate agent represents both the buyer and seller: a dual agency

It is not unusual in the beginning of the formation of a contract to purchase that the buyer will have his initial offer price and also a back up price in mind. He might tell his agent to offer $260,000 but would not go higher than $265,000.

If this agent represents both the buyer and the seller how does he approach the seller with that offer? He must tell him there is an offer of $260,000 but cannot reveal anything else without breaking his fiduciary duty to the buyer.

Now the seller does not want to sell the house at $260,000 and asks his agent what he thinks would be a good counter offer? Does the agent knowing the house is worth an estimated $270,000 suggest to him to counter at $270,000 and possibly lose the deal? This would be in the best interest of his seller. But he could also recommend the seller to counter at $265,000 knowing the deal would most likely close. This would be in the best interest of his buyer. He could even say, I cannot tell you what to counter it as which might not make his client too happy. The agents’ fiduciary duties to both of them are in conflict.

Other challenges could crop up when further in the process it comes to other concerns; for example, repairs. The buyer might want a carpet allowance. So the agent needs to represent that need. But he also has the duty to get the most money for the seller. This is just an example of another challenge in dual agency situations.

I do not write this to say that dual agency is bad, wrong, or illegal. It can be done and be done successfully. I write this so people understand that agency clarification is important; do not treat it lightly. If you are potentially in a dual agency situation you must consider all the benefits and challenges.

This is why agency clarification is the first form to be filled out in the real estate process. You want to know exactly who is representing who so you do not reveal information to ‘the other side’ accidently.

Let me finish with an interesting twist; 2 different people working for the same broker also creates dual agency. For example, it one agent is with Century 21 Award. They may have several offices in any given sales area with 100′s of agents. I work out of one office and let us say I have a listing. A person that I do not know and have never met works in another office. That agent could bring a buyer to my listing, the buyers like it, and decide to make an offer. This is a dual agency because we both work for the same broker even though we do not know each other and work out of different offices.

Categories: Blog, Business Connections, Commerical Real Estate, Real Estate Investing, Real Estate Negotiating, Real Estate Sales, Residential Real Estate, Reviews, Short Sale Pro, Short Sales

Tags: Business Connections, Commercial Real Estate, housing market, Real Estate Investing, Real Estate Transaction Negotiator, Residential Real Estate

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