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I agree with this article. I suggest you read and study the market and act!!!

“As interest rates rise and the number of eager new buyers begins to diminish, adding supply to an already bad real estate market for sellers may mean a very good market for buyers and for property investors.”

To see more go to…

http://finance.yahoo.com/columnist/article/richricher/5766

I previewed 4 duplexes last week priced between $115,000-$119,000 located in a very clean and safe neighborhood in Missouri. Rents average $550 per side. These look like good solid investments. Call on these!

Buyers will often need to consider many options when purchasing a home. Especially investment properties. One item you might want to consider is getting a Seller to hold all or part of the financing of a home you wish to purchase.

Pros
The qualification and paperwork may be much less of a hassle. And, if you are going to have limited cash down, with a traditional lender you will either have to pay a higher interest rate or mortgage insurance. But you might consider getting a bank to loan 80%, an owner to finance 15%, and you put down 5% and pay your own closing costs. Then you would be able to avoid mortgage insurance. Of course you will want to document all of this and make sure that it is a real “owner carryback” and not an attempt to defraud the bank. Yes, it goes on, sadly.

Cons
A Seller willing to hold all or part of financing is going to want top dollar for their property. Yes, they will be earning good interest. But in their mind they will not be completely rid of the responsibility of thinking about that property. Afterall, if you should default they have to chase you down, file liens… Not what they really want to do. So by getting top dollar they get rewarded for some of their risk up front.

For both parties it can be a highly desirable outcome. Just make sure you work it out, all of it in great detail, before moving forward.

I don’t know about every REALTOR out there, but I have been busy. And the more I’m in the market the more I keep realizing how basic this all is.

There are still about 9.5 homes for sale for every one that sells. Now think about that. If you are a Seller, you better price your home correctly if you are going to sell it. By correctly I mean that if the condition is rotten you are not going to get top price. If it is in excellent condition do not lose perspective as to what your home will bring. Just because it’s nice doesn’t mean it’s as large as the one down the street.

If you are a Buyer, you are going to like this market. But it isn’t quite like Buyer’s markets I’ve experienced before. Sellers are being a little “pie in the sky”. If they are backed against a wall they will really move on the price. But because so many Sellers have refinanced their homes, and then refinanced again (how do you like those vacations/SUV’s now?) they are locked into the price they are asking or they’ll have to bring money to the table.

What Buyers are able to do now is pick and choose. Make a fair offer on this place and if they don’t like it, go to the next one. If they are offended, they’ll move on again. Again, I’m not seeing huge price reductions. But I am seeing Buyers cherry pick. And that is definitely to the Buyer’s advantage.

Have you read anything by Bob Bruss? I enjoy reading his articles in the paper and on the web. One of the reasons I think I’m a good REALTOR is because I learn from not only my own good/bad experiences but I’m smart enough to learn from others, as well.

I do not agree with every single thing Mr. Bruss says. However, I believe that he is one of the handful of people who keeps real estate “real”. No fly by night financing ideas. No quick fixes to damaged credit. No “turn and burn” schemes that will get you in the poor house.

This is not a paid advertisement and I’ve never even met Mr. Bruss. However, you should take some time and occasionally visit this site;

http://www.inman.com/bruss/

My next workshop will be held on May 13th at 9:30 am. It will be held at my office and will end by 11:00 am. No charge. But it is my hope you’ll see what a great REALTOR I am and that you will want me to help you!

I’ve said it a thousand times and here we go again! Here is a real life example of not doing your numbers before you buy;

A house came up for sale in a neighborhood I am very familiar with. It was being sold “under market” as a bank repo. The bank was initially asking $159,900 (close to fair market value IF it was in salable/updated condition) but after three months of no offers dropped the price to $149,900. At that offering price the place sold in another 45 days or so at $142,000. Wow, what a great deal you say!

Let’s do some numbers…

At the $142,000 price he would have closing costs of, let’s be conservative and say the seller paid for part of the costs, about $3,000. And let’s figure he took a mortgage out (most people don’t pay cash) and that mortgage was 6.5% on 80% of the purchase price for thirty years. That would figure to $718 P&I holding costs per month (after the first month) and roughly $60 per month for insurance and $175 per month for taxes. (We aren’t even going to get in to utilities.)

I saw the place before the “rehab” and I’m not that impressed with the change. The home still looks a little dated. Having said that, they did do some painting and installed some new faucets, cleaned the carpets, etc. So let’s say they spent, conservatively again, another $5,000 in rehab costs.

Also, figure at least a three month holding time, probably four in today’s market if you are going to ask top dollar.

This would be rehabber then put the home on the market after FOUR AND A HALF MONTHS! (To do what little work I recognized should have taken two weeks.) The asking price was $165,000 paying a 6% commission to the REALTORS. Again, this is probably fair market value if in top shape for this particular neighborhood. And, again, I state that the home still was not in “top shape” and is looking at a lot of competition at that price point.

Naturally, the home did not sell right away and at the end of 32 days reduced the price to $155,000 and reduced the REALTOR commissions to 5%.

Now, most houses don’t sell at full asking. So let’s be generous and say that he gets an offer next week at 98% of the asking price, as is, with no repairs to be made by seller. (Doubtful, but let’s be optimistic for the guy.) Also, the home will close at the end of May.

Now the hard numbers;

151,900 sales price minus
7,595 sales commissions
542 title work
96 release of lien fee
145,000 purchase cost (sales price + closing costs)
5,000 rehab costs
5,718 holding costs
________
– $12,051 net to seller.

Yes, folks, I said NEGATIVE $12,051. This guy, for his risk and trouble, gets to bring, out of his pocket and his family’s needs, $12,000 of his hard earned dollars to the closing table. (Yes, I know it will just come out of his 20% he has in the home to get the lower mortgage payment.)

And this is the reason it’s hard to find a good Buy & Sell on the market right now. Too many people willing to lose money because of a lack of preparedness before acting!