Priced out of the real estate market? You’re not alone. Many hard working people just like you, can’t afford a median priced home by themselves either.
Don’t fret, there may still be a way. If you haven’t already considered doing so, think about buying with a trusted friend, colleague, or family member.
If you don’t, you may very well be resigning yourself to renting forever. Even though there is a possibility of conflict, you can easily limit these by crafting a well detailed contract defining each party’s roles and responsibilities.
When choosing your house partner remember, that you are probably making the largest purchase of your life and most likely taking yourself and your partner into debt for the next 30 years or more. So it makes sense that if your partner is already under a high debt load, your relationship may easily become strained. A clear credit record should be a priority when choosing any investment partner.
Of course its best if each of you has a credit score of 700 or more. If that’s not the case, you’re not out of luck yet. Just be aware that you’ll end up paying a little higher interest rate on your home-loan.
If scores are a bit on the middle to low end, it may be best to delay shopping for a new home for a little while, allowing time to pay down credit card debt, while paying bills on time. This should raise your score enough to score a more palatable loan.
Consulting an attorney regarding your partnership would be a very good idea too. You’ll need to begin make decisions about how to hold title to the house. This typically will be Tenants-in-common, where each of you owns a certain percentage of the property, usually 50%. Another option might be Joint Tenancy with right of survivorship. It is imperative that you each do some estate planning also. You’ll need to decide what will happen to the property if one or both of you should die. Depending on how you choose to hold title, one owner may sell his or her share of the property without your consent or knowledge. Also, if a family member inherits a portion of the property by will, you might end up co-owning with someone you wouldn’t otherwise choose.
A written agreement spelling out the terms of your co-habitation is immensely important for your own sake and peace of mind, also to establish procedures in case of a dispute or planned conversion of the property. It doesn’t always happen that both investors will live in the property, but since most people’s decision to buy a home is based on a roof over their head, it usually works out that way. If one of you is looking strictly for an investment vehicle, an agreement to rent, lease, or provide some other consideration for a partner’s share can compensate for not moving in.
In your written agreement, You’ll want to make sure you cover;
Expectations of each party
Terms of sale should either of you decide to sell
How each of you will contribute to the mortgage payment
Any other occupants, relatives, roommates, loved ones, etc.
Who will be responsible for maintaining various aspects of the property.
Most of all, make sure each of you can guarantee that you’ll be able to pay your share of expenses. Financial Guru, Suze Orman, recently suggested creating a joint checking account and for all housing costs and, setting up direct deposit so your share will always be in the account every month. At least once a month, sit down together on a set day, and pay the bills. Make sure each of you has ample emergency cash on hand (at least 3 months each) to handle any unexpected expenses.
Figure out ahead of time, how you’ll end the relationship. You know it will happen eventually, so why not spell it out, so there are no surprises. Plan for every aspect of your split. Will you buy out your partner, or vice versa? Will you sell and split the proceeds? These things should be in a written contract to avoid problems or misunderstandings.
If you plan ahead, choose your partner wisely, and follow some simple rules, you’ll end up a homeowner, build your wealth, and live happily-ever-after (probably).
Friday, March 02, 2007
Thursday, March 01, 2007
MOVING ON: POWERFUL TIPS FOR SELLING YOUR HOME
Maybe you're moving to a larger home to accommodate a growing family, relocating for a new career opportunity, or purchasing a townhouse for retirement. Whatever the reason for the move, you'll need to take the necessary steps to sell your home for the best possible price, within a reasonable amount of time. Where do you begin?
If you're like most people, you'll start by seeking assistance from a professional. A local real estate sales associate, who knows your neighborhood, can help you determine a fair market price. The sales associate should also recommend the extent to which you should make repairs or improvements to your house.
In order to select a real estate professional who's right for you, ask family, friends and neighbors for referrals. Attend open houses and interview several sales associates to find out how professional or experienced they may be. Get a written outline of how they plan to market your property and the services they will offer you.
Once you've identified a qualified professional, the rest is chemistry. Is the sales associate someone with whom you would like to work closely? Do you feel comfortable with the sales associate as your partner, working with you to give you advice and acting as your representative? Does he or she practice a consultative selling approach, focusing on the long-term client relationship and on the importance of exceeding client needs and expectations or is he or she caught up in the proverbial 'hard sell?'
The brokerage firm that your agent is associated with is also important. Research the firm's success rate and commitment to quality service. Does it survey existing clients in order to ensure customer satisfaction? What are the results of those surveys? How in tune are they with consumer needs? Do they offer guidance with mortgages or any discounts for other home related or moving services?
Determining your home's fair market value is one of the most important decisions you'll make during the home-selling/buying process. Your sales associate can help you set a fair price based on local market conditions. For instance, she or he will provide sale prices and other statistics of homes similar to yours that have recently been sold. Prospective buyers will be comparing your home to others on the market. Therefore, setting a comprehensive price can determine if your property will or will not sell.
For the first offer made, it's rare that the prospective buyer matches the asking price. If the offer is reasonably close to the asking price, carefully consider the offer before you consider turning it down. Curiously, it's the first offer that can often be the best offer. If the first offer is unacceptable to you, it may in your best interest to have your sales associate respond with a counter offer. Whenever considering an offer, ask yourself if you would purchase the property for the amount being offered. Always be willing to negotiate, especially if the prospective buyer is pre-qualified for a mortgage.
Once you decide what terms are acceptable, let your sales associate negotiate with the prospective buyer to work out the best agreement for you. You'll need to be patient while the buyer arranges financing and as the real estate company compiles and prepares pertinent data.
Careful planning and sound advice from a real estate professional can make selling your home a very satisfying experience. For further information, please contact, John Wall, Century 21 Results, (562) 531-7000, or e-mail john.wall1@century21.com
If you're like most people, you'll start by seeking assistance from a professional. A local real estate sales associate, who knows your neighborhood, can help you determine a fair market price. The sales associate should also recommend the extent to which you should make repairs or improvements to your house.
In order to select a real estate professional who's right for you, ask family, friends and neighbors for referrals. Attend open houses and interview several sales associates to find out how professional or experienced they may be. Get a written outline of how they plan to market your property and the services they will offer you.
Once you've identified a qualified professional, the rest is chemistry. Is the sales associate someone with whom you would like to work closely? Do you feel comfortable with the sales associate as your partner, working with you to give you advice and acting as your representative? Does he or she practice a consultative selling approach, focusing on the long-term client relationship and on the importance of exceeding client needs and expectations or is he or she caught up in the proverbial 'hard sell?'
The brokerage firm that your agent is associated with is also important. Research the firm's success rate and commitment to quality service. Does it survey existing clients in order to ensure customer satisfaction? What are the results of those surveys? How in tune are they with consumer needs? Do they offer guidance with mortgages or any discounts for other home related or moving services?
Determining your home's fair market value is one of the most important decisions you'll make during the home-selling/buying process. Your sales associate can help you set a fair price based on local market conditions. For instance, she or he will provide sale prices and other statistics of homes similar to yours that have recently been sold. Prospective buyers will be comparing your home to others on the market. Therefore, setting a comprehensive price can determine if your property will or will not sell.
For the first offer made, it's rare that the prospective buyer matches the asking price. If the offer is reasonably close to the asking price, carefully consider the offer before you consider turning it down. Curiously, it's the first offer that can often be the best offer. If the first offer is unacceptable to you, it may in your best interest to have your sales associate respond with a counter offer. Whenever considering an offer, ask yourself if you would purchase the property for the amount being offered. Always be willing to negotiate, especially if the prospective buyer is pre-qualified for a mortgage.
Once you decide what terms are acceptable, let your sales associate negotiate with the prospective buyer to work out the best agreement for you. You'll need to be patient while the buyer arranges financing and as the real estate company compiles and prepares pertinent data.
Careful planning and sound advice from a real estate professional can make selling your home a very satisfying experience. For further information, please contact, John Wall, Century 21 Results, (562) 531-7000, or e-mail john.wall1@century21.com
Starting your search on the internet
A lot has been said about home buyers searching the internet for their next house. In March 2005, we were talking about it. [see March, 2005 post here]
More and more people are using the internet as a launchpad for their home search and we support that. Its important to note however that homes that are listed on the internet are frequently old listings. The status of each property is not always (rarely) posted online so, if there is already an open escrow - searchers end up with false hope.
My advice is to use the internet as a tool in addition to traditional homesearch methods. Its our experience is that websites are best used to elimate possible homes, not find them. Realtors are not photographers or talented writers; the descriptions posted on a listing often fail to tell the whole story and important information might be excluded that a buyer would have strong views on. Photos of properties aren't always the best. Sure, you can see what a house looks like and those 2 big trees in the front yard - but do they show the sedan sized hole in the living room wall?
If you want a 2 story house and you're looking at photos of one story homes, you know that you wont be interested in them and can eliminate those properties from your tour list. When you find a photo of your dream home, call your Realtor and find out if its still available and when you can see it. You'll gain more from using the internet as an addition to your home searching tool kit rather than your sole source of possible houses.
A fantastic use of the internet and something we recomend all clients do is educating yourself about neighborhoods, businesses, demographics, histories, etc in the areas you are looking at moving to. There are thousands of websites that will tell you where the best schools are, quiet parks, shopping centers, and more. You can also find out who your possible neighbors will be. If you're looking for a small town feeling - that dream home you found probably wont suit you if its in an urban city with half a million people.
Remeber, the internet is good - use it to the best of its abilities; but don't rely on all that you find. Trust your agent & if you find something your agent hasn't seen - let them know... They have AOL too.
More and more people are using the internet as a launchpad for their home search and we support that. Its important to note however that homes that are listed on the internet are frequently old listings. The status of each property is not always (rarely) posted online so, if there is already an open escrow - searchers end up with false hope.
My advice is to use the internet as a tool in addition to traditional homesearch methods. Its our experience is that websites are best used to elimate possible homes, not find them. Realtors are not photographers or talented writers; the descriptions posted on a listing often fail to tell the whole story and important information might be excluded that a buyer would have strong views on. Photos of properties aren't always the best. Sure, you can see what a house looks like and those 2 big trees in the front yard - but do they show the sedan sized hole in the living room wall?
If you want a 2 story house and you're looking at photos of one story homes, you know that you wont be interested in them and can eliminate those properties from your tour list. When you find a photo of your dream home, call your Realtor and find out if its still available and when you can see it. You'll gain more from using the internet as an addition to your home searching tool kit rather than your sole source of possible houses.
A fantastic use of the internet and something we recomend all clients do is educating yourself about neighborhoods, businesses, demographics, histories, etc in the areas you are looking at moving to. There are thousands of websites that will tell you where the best schools are, quiet parks, shopping centers, and more. You can also find out who your possible neighbors will be. If you're looking for a small town feeling - that dream home you found probably wont suit you if its in an urban city with half a million people.
Remeber, the internet is good - use it to the best of its abilities; but don't rely on all that you find. Trust your agent & if you find something your agent hasn't seen - let them know... They have AOL too.
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