Tag Archives: Buy

How to Buy a House Without a Bank Loan

There is an unspoken rule in the real estate market. You must have a bank mortgage to buy a house. But did you know there is a secret way to buy a house without a mortgage.

There is a secret financial trick that you can use to buy the house of your dreams in about 8 years and have NO mortgage payment. I know this sounds ridiculous but it’s true. When I write this article, most of the time, I focus on the negative aspects of home ownership and what to avoid when buying a house. This week I thought I would focus on the other side of the table. What to do if you are NOT in financial trouble or at risk of losing your house.

In the last couple of weeks I have gotten emails from people who are trying to get into their first house or upgrade their current house. I rarely get questions on what to do to save a house. So I will try to give more attention to upgrading your current home. Now back to what you really want to know. How do I get a house with no mortgage? Before I tell you how to do this please remember that having no mortgage on a house, while it is a help, it is not the answer to all your financial concerns.

You will still have to pay property taxes and electric, gas, etc. And remember I said the house of your dreams. Not your current house so more than likely you will be facing higher gas, electric, and utility bills. Your taxes also could be substantially higher. So if you are okay with these issues then I’ll share my secret with you. Have you ever heard of compounding, or compounding interest. Compounding is basically when you start with a small amount of money and allow it to build up over time, then you take the money that has built up and reinvest it with the original money to get an even higher return.

Over time you can reach huge returns by just continuing to reinvest your profits. Well if I haven’t gotten too technical, this technique of compounding can be used for a house as well. You can buy a house for a below market price stay in the house for about two years, do some minor improvements and sell the house at a profit. This is because house values over time always rise, and by buying a house under market value the value rises even faster.

Take all the profit from that house and put it down on your next house that you buy below market value also. Do the exact same technique, by the fourth or fifth house you will have a larger house, very little if any debt and you won’t have paid taxes on any of the profit from the sale of your other houses. The reason you won’t pay any taxes is because the government allows you to not pay taxes on the sale of your home if it is your principal residence for two years and you take the profit from the sale and put it toward your new home purchase. It’s the government’s way of saying thank you for stimulating the economy (by selling your house and buying another one).

Now I know you are probably thinking that you don’t want to move every 2 years. You don’t HAVE to move every two years, two years is just the minimum that you have to be in the house to qualify for the tax exemption. This is a great technique for younger couples who don’t mind moving (especially to a larger house) every couple of years. Now for the disclaimer. Before you start selling your house please check with your accountant to make sure that you can qualify for this exemption. Also, this technique may seem a little complicated. If you have questions about how to do this shoot me an email and I can explain it a little further.

Till next time, Good luck and God Bless and remember… If you have any questions about saving or selling your home or any topics on real estate that you would like to know more about please email me and I will answer your questions in this column.

How to Buy a House For Back Taxes, Dirt Cheap, Without Competition

So you’re looking for a smarter way to buy a property, either to live in, or to invest in. Congratulations. If you’re reading this article, it means you’ve leapt out of the “thinking” phase and into the “doing” phase, and most people never make it that far. There are many deals to be had, if you’re willing to do a little research.

You’ve probably heard that tax foreclosure property is a great investment, and you haven’t been led astray; but now, you’re going to learn how to buy a house for back taxes, dirt cheap, without dealing with the headache of competition. If you’re looking for a cheap property to buy for yourself to live in, stay tuned as well- this technique will work even better if you’re not an investor!

Right now, throw out everything you’ve heard or read about tax sales. If you’re smart, you’re going to figure out quickly that you can’t compete with all the big companies that will be clamoring to bid against you at the sale. Tax sale, be it for deeds or liens, is not a place for the savvy investor in today’s market. There’s a much better way for you to buy a house for back taxes: from the tax delinquent owner himself.

Most people overlook this strategy, which is why you’ll find next to no competition. If you’ve ever tried buying directly from an owner in mortgage foreclosure, then you understand why this is so widely unappealing to failed mortgage foreclosure investors. Frequently you can’t get these owners to return your call for the life of you– and if you do get a deal, then you have to deal with mortgage, the second mortgage, the back bills, the back taxes; but when you buy a house for back taxes, it’s a different animal.

Why?

Because these houses almost never have a mortgage!

That’s right. The mortgage company takes care of any tax problems to avoid losing their interest in the property. So you’ll find almost all these houses are free of a mortgage, or they wouldn’t be up for tax sale in the first place.

Another thing that might seem counter-intuitive is that the owners will almost always return your calls, and when they do, they’re eager to make a deal with you to sell to you, and for dirt cheap, just to get the property out of their name! This is because, as you’ll see, many owners of these properties aren’t people who are down on their luck, and are losing their homes. They’re people who inherited property, or absentee landlords, who have had it with this economy, and actually let the property go to tax sale on purpose, just to get rid of it.

This gold mine of owners can be hard to find, making them great prospects, and you’ll be pleasantly surprised to find how many of these owners are ready to hand over their deed for a couple hundred dollars to you, just because they’d rather see it go to a nice, small-time investor like you, than to see it go to the government. If you’re looking to buy a property for yourself to live in? Even better. Expect to find owners even more excited to give it to you- for almost no money.

The CARDS Approach For Preparing To Buy A Home

Congratulations, and best of luck! You’ve made the decision, to seek, what for many, for generations, has been, which is the essential component of the so – called, American Dream – buying a home, of your own. When one proceeds, carefully, and wisely, and buys, what he needs, likes, can afford, and is located, in an area and neighborhood, you desire, you’ll have the best chance, of achieving your objectives, in a relevant, smart, priorities – oriented way. Since, for most Americans, their ownership of their house, represents their single, biggest, financial asset, doesn’t it make sense to pay keen attention, and get the best results? With that in mind, this article will briefly discuss, consider, and review, using the mnemonic approach, the CARDS approach to home buying.

1. Credit: For those who are well – prepared, before they begin their search and hunt, it has the potential to be, a satisfying, inspiring, motivating experience. An essential aspect and component, is to fully consider, review and prepare, so, your credit is your friend, rather than becoming an obstacle, and/ or worse! Several months before you begin searching, sit down with a recommended, mortgage professional, and gather relevant, meaningful, feedback. Then, address, any, and every area, suggested. Have all the necessary reserves, for down – payment, maintenance, several months carrying charges, etc. Carefully review your Credit Report, and address any issues, and make it, as favorable, as possible! Be prepared!

2. Attention: Pay keen attention to details, and never ignore, even the minor issues, but proceed, in a timely manner, to be, as prepared, as possible. Objectively, introspectively, examine your needs, goals, priorities, as well as limitations, and determine, the best course of action, to pursue.

3. Reserves: Accumulate all the reserves you will need, as well as those which might make you more comfortable! Obviously, you must have the down – payment. Have at least 6 to 9 months, reserves, put aside, for monthly carrying charges, etc. Create a reserve for repairs, renovations, maintenance, etc, so, home ownership, becomes a pleasure, rather than stressful!

4. Debts: Simply stated, reduce all other debts, so you have an easier time, qualifying for the best mortgage! Doing so, also, creates a form of needed, self – discipline! Aim to become your best friend, rather than being your enemy! Also, avoid taking out, any additional, new debts!

5. Savings: Focus on accumulating savings, as well as proceeding, efficiently in areas, such as energy, and other cost – savings, areas

Let the CARDS approach, work for you, so you are best – prepared, for home buying. Will you have the self – discipline?

Can You Compromise? Tips for Couples on When to Rent Versus Buy

There will come a time in the lives of couples when moving in together or getting married is the next step in the relationship. The house or apartment search can be difficult if you are single or in a relationship, and knowing what you and your partner expect out of your new living arrangements is essential to being able to compromise on your next new living space.

There are compromises to be made when choosing whether it is best to rent a property or buy a home as a couple. You and your partner may have had a variety of living experiences between the two of you that may make choosing your future accommodations difficult to make a decision about.

There are pros and cons to renting versus owning a property, whether you are in a relationship or not. As a couple it is important to be realistic about your financial situation as well as your plans for the near future which could make the decision of whether to rent or buy much easier.

If you and your partner have the financial ability to put a down payment on a house and have decent credit in order to apply for a mortgage and other loans, you are in a financially stable position in order to buy a house. If you have consistent employment and are going to be staying in the same place for the next few years and have agreed that buying a house is also a good choice based on your lifestyle, then buying a house isn’t a bad idea.

Couples should remember that a home is an investment. Buying a home can be a good investment or a bad one, just like renting a home could be a valuable time and money saver in the short or long term. In many cities the real estate market is volatile, confusing, and unhealthy for buyers who wish to make a return on their investment in a few years when they sell their home.

Before choosing whether to rent or buy a property check to see the cost differential between the two options. If renting for a few years (factoring in utilities, parking, and other miscellaneous costs) is going to be cheaper than buying a home and taking on the extra costs of that (debt, Home Owners’ Association fees, etc.) then renting might be your best bet. Renting also allows you the flexibility to renegotiate a lease, take advantage of an inexpensive living situation, move easily if you need to, and gives you added time to decide if you want to buy a home in the near future.

Buying a home is not always the best financial option, but if you and your partner are financially stable and committed to living in a location for a few years or longer, then buying a home could be a good choice. Homes give your family room to grow, often have yards, and can offer more privacy than an apartment complex or duplex living situation.

Realtors Vs The We Buy Houses Cash Companies

When deciding to sell your home you have two options. You can either use the services of real estate broker or you can sell it yourself to a “We Buy Houses Cash” company. Each scenario has its pros and cons which we have outlined for you below. Every situation is different and we want to make sure you make the best decision possible. We have also outlined some key questions you should ask yourself before making this big decision.

Realtors. Realtors are the best source for selling your property. It’s a proven fact that realtors will get at least 10-20% more for your property than you would if you sold it yourself. It is also a proven fact that you will sell it 50% faster using the services of a local real estate agent. Since most agents are current on up to date trends they will be able to guide you in what items need to be addressed in order to get maximum price for your house. With an agent who specializes in your neighborhood they may have connections to buyers through colleagues and past clients that you do not have access to. An agents network is a very powerful tool to getting your house sold fast. I recommend using bigger cooperate brokers such as Berkshire Hathaway or Coldwell Banker Gundaker.

With any service provider their is a cost of doing business. The average expense for a realtor is 6-7% of the sales price of your home. For example if you sell your home for $200,000 it will cost you anywhere from $12,000-$14,000 at closing. If you decide to use a real estate professional to sell your property then you will more than likely be dealing with financed buyers which means you might possible have to pay seller commissions ranging anywhere from $3,000 – $5,000. Selling to a financed buyer also means once you sign a contract to purchase you will usually have to wait anywhere from 30-60 days to close. Let’s also not forget the cost of inspections. Most cities require the house pass an occupancy inspection. When the city sends there inspector out there may be items that don’t meet city requirement which may get costly to fix. The potential buyer will also hire a private inspector due to there own due diligence to see what the house may need. This can also get costly if the buyer has high demands before deciding to move forward with the purchase. The extra money you make hiring a real estate professional may cancel out with the expense of broker fee’s and inspection expenses.

We Buy Houses Cash Companies. These companies often get a bad wrap in the area. They are often thought of as scam artists or dishonest people when in reality these companies can be of great service to people. Just like anything there are pro’s and cons to taking this route. Since these ugly house buyers are investors they are not going to give you full price for you home. They are usually buying properties anywhere from 50-60 cents on the dollar.

But before you kick these guys out of your house take a moment to think about the benefits of selling to a cash investor. Fast Cash! In most cases these buyers have the cash to buy the property immediately. Not only will it be a cash sale but you don’t have to worry about paying any seller concessions. Often times they will even cover your closing costs which will save you additional money. These cash buyers will also save you on those hefty realtor commissions. Since your property is a for sale by owner there will not be any broker involved. No broker = NO FEE’s! Did I mention there will not be any inspections done. Since it will more than likely be an AS-IS cash sale the buyer will not bring a city or private inspector through which means you don’t have to do any repairs to the property. So even though you may not get full price for what you think your home is worth you will be saving tens of thousands of dollars in fee’s and repairs. It makes the deal even sweeter knowing they can close in as little as 7-10 days if needed. The best part about selling to a cash investor is that you can leave the unwanted items in the property so you can save even more money on moving expenses.

This is a big decision that should not be take lightly. There are some questions you need to ask yourself before deciding which route to take.

1. Does the home need repairs?

2. Is the home outdated to today’s standards and what other similar homes look like?

3. Do I need to sell immediately?

4. Is the repair list too much for me to handle right now?

5. Will a fast sale take the burden off my shoulders of dealing with this property?

If you answered yes to any of the questions above then you will probably want to consider selling to a local real estate investor who has the cash to close right away. A fast cash offer with no realtor fee’s, closing costs or hefty moving expenses may be the best fit for you. If the home has been kept up and maintained pretty good over the years and you can afford to sit on it for a while then your local real estate agent will be the best option for you and your bank account.

Click the following for more information on Berkshire Hathaway or Coldwell Banker Gundaker.

Should I Buy That Two – Family House?

Some people purchase a two – family house, because, they hope to live, in one apartment, and rent the other, in order to significantly reduce their cost of living! While, this is a great solution, for some, it is not for everyone. For some, they need more privacy, and/ or, don’t want the responsibilities involved, in being a landlord. Other individuals purchase two – family houses, for investment purposes, and it’s essential and important, to begin this process, with your eyes – wide – open, understanding, both the advantages and disadvantages. While, a well – considered, properly priced, property, may be a fantastic investment opportunity, there are some others, that may not be, for certain reasons. With that in mind, this article will attempt to consider, examine, review, and discuss, these two scenarios, and the process, one should go through, prior to making the commitment.

1. Owner – occupied: An owner – occupied, two – family house, is eligible, for very similar mortgage conditions, and requirements, as a single – family home. Often, this is about 0.5% or more, lower rate, than when the owner does not live there. What rate of returns, and other relevant concerns, should be considered? Begin, with considering, cash – flow, meaning, the owner’s outflow, versus, the rent, collected, How will this compare, with your costs, if you purchased a single – family home? How comfortable will you be, being a landlord? Are you handy, or will you need, to hire others, whenever there is a necessary repair, etc? Do you have the type of personality, which might handle, some of the inherent stresses and strains, involved? Will you be happy, sharing the property, ensuring your tenant, takes decent care of the part, they occupy, and any potential challenges, in terms of privacy, and other issues?

2. Non – owner occupied: Begin, with a realistic evaluation, and analysis, of the revenues, versus expenditures. Will you generate sufficient cash flow, to avoid having additional financial challenges, and stresses? Unless, you are convinced, there will be a cash flow – positive, situation, you usually should avoid the investment. Consider only about 75% of the realistic rent – roll, in order to account for vacancies, and other unforeseen contingencies. On the expense side, add your mortgage payment (including principal, interest, real estate taxes, and escrow), to your monthly contributions in various reserve finds, for repairs, renovations, upgrades, etc. If this is positive, then move – on, to a rate – of – return, or ROI/ return on investment, analysis. Consider your total cost of purchasing the property (purchase price plus initial renovations/ upgrades/ repairs), and your annual rent – rolls. Seek at least a 6% return.

An investment property may be your smartest move, or a risky, unwise one! Take these easy steps, from the unset, and proceed accordingly.

Should I Buy a Home In 2008?

Dreadful information about the slumping American housing market is all over TV news and in almost every paper. During this housing slump many potential first time home buyers often wonder, should i buy a house in 2008? While every persons situation is different the next few paragraphs will hopefully help you decide whether or not to buy a house in 2008

It is a fact that property values across north America have dropped, in some areas they have dropped drastically and others its just a slight dip. Buying a home when prices are at the lowest is the best way for buyers to get the most for their money, and many people are now taking advantage of the lower home prices.

The major factor for most people when buying a home is securing a affordable mortgage to purchase the home with. In today’s current market mortgage rates have also fallen to very low levels making financing a new home more affordable then one year ago. When low mortgage rates are combined with reduced asking prices your money suddenly is able to buy you much more home then you previously thought possible!

The only real roadblock to buying a home in 2008 is going to be actually qualifying for a mortgage. Even though mortgage rates are low the lenders have tightened up their lending guidelines since the housing slump began. Since many borrowers need 100% financing it makes things that much more difficult. To deal with stricter lending guidelines borrowers are going to need excellent credit or have down payments in the range of five to twenty percent to secure home financing.

With property values falling and mortgage rates at very low levels 2008 is a great time to buy a new home. Not only is there more selection on the market but you will also be buying when prices are low so when the next real estate boom starts you will make substantial money on your investment.

Why Do You Want To Buy A House?

There is no such thing, as a one – size – fits – all reason, or set of reasons, individuals decide, and/ or desire, to buy, a home, of their own. Some do it, because of family needs, others may want to own pets, etc, and others, decide it makes more financial sense to own (than continue renting), and/ or want to live, somewhere, where they might put, their personal seal, on the accommodations, or seek a specific lot of land, etc. These are just, a few of the reasons, but to ensure, one purchases, when it serves their best – interests, and does so, intelligently, and in a focused manner, prospective homeowners should clearly know their personal reasons, thoroughly, and in a somewhat, objective way.

1. Can you afford owning?: Owning a house of your own, requires accepting a far greater degree of personal and financial responsibility, than renting. Renters don’t have to worry about most maintenance items, especially major expenses, etc, but that, all, changes, when one owns. Start by thoroughly considering your present finances, including savings, earnings, debt, and preparedness. Will you qualify for an affordable mortgage? Have you saved, and accumulated significant reserves, in order to be prepared, and ready, for any foreseeable possibility? Wise homeowners put together reserves for repairs, renovations, upgrades, and maintenance, etc, in addition to possessing a mortgage reserve, of approximately 6 – 9 months, equivalence. Since, for most, the value of your house, represents your single – biggest, financial asset, doesn’t it make sense, to proceed wisely, and in a focused way?

2. Area/ neighborhood: When you rent, your lease is for a finite period, so it is rather easy, and straight – forward, to relocate to another locale, if you discover you, either don’t like the particular area, neighborhood, region, or house, or if your life circumstances, change, such as employment, etc. Obviously, since selling a house, is a little more complicated, timely, and less predictable, this should be one consideration, before proceeding.

3. Really want to own a pet or pets: Only a minority of rentals, permit individuals to own pets, and, even, then, must be clearly specified, and is often limited. For true pet lovers, who simply don’t want to be without a beloved pet, it might be one reason to purchase a house.

4. How much land do you want/ need? Some love having a larger lot, either for flowers, gardens, etc. Others want to have place for patios, pools, or convenient places for their pets, to roam. However, others do not want that type of responsibility, and/ or can’t afford to maintain these (Isn’t that one reason, some prefer condominiums?). While some want large lots, others seek somewhat less. Know thy self!

5. Mortgages: Most home buyers purchase houses, with the aid, of a mortgage loan. One consideration is how much you qualify for, and perhaps, equally important, is how much you will feel comfortable paying. Remember, your payment includes principal, interest, real estate taxes (and other escrow items including insurance, etc). Don’t become, house – rich, and life – poor!

Before buying your home, fully consider your needs, desires, wants, and means, and proceed, wisely, and in a way, where ownership will be a pleasure, rather than a stress! Will you proceed wisely, or impulsively?

Is There A Perfect Time, To Buy, A House?

As someone, who has been a Real Estate Licensed Salesperson, in the State of New York, for over a decade, as well as having, also, had a considerable degree of experience, in financial sales and advising, as a financial planner, and Registered Representative, Supervisor, Manager, and executive, I have often, been asked, when/ if, there is a perfect time, to buy. Whether this is related to buying stocks, bonds, or other investments, or buying a home, the attempt to market – time, has rarely worked, consistently. While, with other investment, a disciplined approach, works best, in most cases, in buying a house, the best approach, is probably, proceeding, in a well – considered, introspective, objective manner, and honestly knowing and understanding your personal needs, goals, priorities, comfort zone, and personal finances. With that in mind, this article will attempt to review, consider, and briefly discuss, how, although, there is no perfect time, it is wise to consider, when it’s best, for you.

1. Personal needs, goals, priorities: Why do you want to buy a house? What about a particular house, attracts you? How many bedrooms do you need, and how many would you prefer, and why? How about bathrooms? What do you seek in your kitchen, and why, and what do you actually, need? Are you able to look past the staging, etc, to determine the difference between quality, and perceptions?

2. Comfort zone: Sit back, and look, objectively, and introspectively, so you know, why you want a house, what you can afford, and what amount of monthly payment, might conform with your personal comfort zone. You don’t want to end up, house – rich, and unable to proceed, with less stress, etc! A wise home buyer, finds a house, which exceeds his needs, meets some of his wants/ dreams, and does so, without excess stress, tension, and/ or, hassle!

3. Personal finances: Do you know, what you can afford? Many factors should be considered, including, down – payment, reserve for items such as contingencies, repairs, renovations, utilities, etc. Simply because you have the down – payment, and qualify for a mortgage, doesn’t necessarily mean, you will be well – served, by the financial necessities of home ownership! Know yourself!

4. When matters!: Certain factors are extremely important. What are the present mortgage interest rates, and how large, a mortgage will you need? Understand, small changes in these rates, matter! What about supply, and demand? Don’t purchase something, you aren’t satisfied with, either to Keep up with the Joneses, or to take advantage of the present market, because if you do, you might be disappointed, in the long – run!

Be a smart home buyer. It’s not about trying to buy at the perfect time, but finding what you need, not over – paying, discovering something, you’re pleased with, and being able to afford it!

A 5 – Step Plan To Prepare To Buy A House

Although, owning a home of one’s own, is often considered, a major component of the so – called, American Dream, wouldn’t it make sense, to effectively, plan, to ensure this doesn’t become a nightmare, instead? After, over fifteen years, as a Real Estate Licensed Salesperson, in the State of New York, I have created, what I, often, refer to, as the RICH IDEAS, for proceeding, wisely, in terms of buying a house. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, a 5 – step plan, for properly, effectively, wisely, being prepared for this process, and proceeding accordingly.

1. Put together/ accumulate sufficient funds, for a variety of requirements and necessities: It’s smart to proceed, as well – prepared, as possible, from the beginning. Well – before, you start searching for a house, begin saving money, in a systematic way. Remember, you will not only need funds, for the down – payment (often, but not always, 20%), but, also, funds for other Closing Costs, including, but not limited to, pre – paid real estate taxes, utilities, and other, so – called, escrow items. In addition, most lending institutions require a demonstration, and proof of funds, equal to several months, of mortgage payments.

2. Obtain a copy of your Credit Report (if husband and wife, get both): You are entitled, once per year, to request a free copy of your Credit Report, from one of the major credit organizations/ companies. Review this document carefully, and correct any errors. If your rating is not, as high, as a lending institution may seek, begin to take steps, to enhance and improve it, sooner, rather than later!

3. Pay – down other debt: Lending institutions use formulas, to determine one’s qualification, to receive funds. These are generally, focused on, one’s percentage of debt to income. Therefore, pay – down your other debt, prior to beginning the process!

4. Don’t add any other debt: Avoid acquiring any more debt, regardless of how convenient, and/ or, appealing, it may seem, at the moment. Don’t fall into the trap, of, accepting new store charge accounts, because doing so, may compromise your credit worthiness, when you seek a mortgage!

5. Shop for homes, within your means: Avoid the trap, of becoming, house – rich, and seeking to purchase a home, beyond your comfortable means! Know, how much, you can afford, comfortably, and securely, so you choose, wisely, and remain, comforted!

Since, for most of us, the value of our house, is our single – biggest, asset, doesn’t it make sense, to proceed, carefully, and wisely? Will you be up to this task?