Comet Settlement Real Estate

Many parts of the country remain seller’s markets. With not enough inventory and too many buyers, many houses are actually selling for too much.

This happens when the contract price exceeds the appraisal value of the property. The buyer must then come up with the difference, or the seller must reduce the sales price.

Many buyers are beefing up contracts without going over the appraised value of a property. This keeps them from having to renegotiate or lose the contract entirely.

Their strategies include using monetary and non-monetary offers. With one recently winning contract in a hot market, it wasn’t the sales price and bottom line to the seller that enticed the seller — it was the offer to allow the seller to remain in the condo for a week after settlement. Quite clever as this is a time-honored strategy used in buyer’s markets the other way around. Most times, sellers offer unusual attachment to the contracts, but now the tables have turned.

Another addendum frequently used is to offer a bonus to the seller instead of a higher sales price. You have to check with your lender to make sure that this is allowed. This works quite simply. If you know the house will only appraise for $225,000, it’s a waste of time to offer $235,000. But you might have an extra $10,000 in savings. You can offer this to the seller as a bonus, rather than making it part of the sales price.

Take the time to meet the seller on a deeper level. The relationship angle can win in a contract war. Many home sellers don’t care that they recevie $2,000 more from one buyer over another. If they truly loved their home, it could be that they are looking for a good feeling about who is buying the house. A great selling point is to market yourself to the seller.

For example, one family wrote a letter to the seller explaining how the home would be perfect for their handicapped little girl. They stressed that it would meet their family’s needs so well that they hoped their offer would be accepted.

The sellers verified the story and were so touched that the family won the contract.

Letters to the seller are nice, but keep them brief and to the point. Simply explain how the house fulfills your dreams or needs and what you love about the house. Compliment the seller on the upgrades, colors, additions, etc, that they have done. Don’t just kiss up, tell them why you care about the home.

When it comes to writing the contract, have your agent call the listing agent and find out what the sellers are looking for. Many agents should already know to do this, but many need a little nudge. If you can find out why the sellers are moving, where the are moving, if they are retiring or if they need money, you could have an edge in winning the contract.

There is a real difference between someone who just plops down a lot of money and someone who takes an interest in you. The bottom line isn’t always the bottom line. Find out what the seller wants and give it to them.

Martin Lukac, represents http://www.RateEmpire.com, a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies! Visit http://www.RateEmpire.com today.

[tags]seller market,real estate economy,real estate trends,real estate,buying homes[/tags]

Tags: buying homes, real estate, real estate economy, real estate trends, seller market

Many real estate investors enjoy “flipping houses,” or buying and selling houses quickly for profit. Not all flips are fixers. However, rehabbers make millions turning ugly houses into dollhouses. On the other hand, some inexperienced investors lose money buying houses that just don’t turn a profit.

If you’re looking to get started investing in real estate by fixing and flipping houses, you’ll want to know what type of property to buy.

THREE TIPS TO HELP YOU FIND THE PERFECT FIXER

1. Know Your Market

Your first task, exploring your market, helps you know a bargain house when you spot one. Look at many houses for sale in your area. Keep track of sales and how long the houses take to sell. Ask selling real estate agents about the terms of these sales because this helps you understand how sellers market their property (some of this information is public record). For instance, if a seller paid closing costs for the buyer, did the price rise from the listed price accordingly? Or, did the seller come down on the price and also pay the buyer’s costs?

Examine the sales that sell quickly. What home features and financing options prompted the fast sale?

Also, look at model homes. Buyers often buy resale homes because they can’t wait for a new home to be finished. However, these buyers like the distinctive features new homes offer. Visit model homes and take notes on how details like a water fountain or a new state-of-the-art appliance makes a house sell itself. When you remodel your fixer, you’ll know what attracts buyers and you’ll make smart redesign choices.

2. Know When “Ugly” Means “Gold”

When you first start out in your real estate “flipping fixers” business, you’ll want to look for houses needing only cosmetic work. Look for houses that just need cleaning up, painting, and new flooring. Use your imagination when viewing these homes. Try to visualize the finished dollhouse as you look at structural features and the surrounding homes. Make offers on the ugliest houses in decent neighborhoods.

Don’t be afraid of stinky houses that show horribly. Search for fixers with peeling paint, holes in the wall, stained carpeting, and trash in the yard. Remember, these houses won’t look good to most buyers, but other real estate investors see them as gold mines.

3. Know When “Ugly” Means “No thanks”

When you’re new to real estate investing, always remember your limitations. Use caution when considering houses that need structural repairs. Some rehabbers replace walls, plumbing, structural beams, sub-flooring, and electrical systems. These experienced real estate investors acquired those skills after years of experience or they have the money to pay for professional help.

If you find a house with structural problems, get estimates from reliable contractors to do the work. If the walls have too many cracks and bumps, you may need to hang new sheet rock or hire a professional plaster refinisher. Check for signs of plumbing problems such as water stains under sinks and loose flooring, and get estimates for professional repair. Take professional estimates into account before deciding whether or not to purchase an investment property. Any big expense decreases your eventual profit.

Turn Yucks into Bucks

Why would anyone want to do this hard work? How much does the average rehabbers make? In Ohio, real estate investors buy houses expecting a profit of about $30,000. In Southern California, many investors make $50,000 to $100,000 on each house.

When you find a garbage-filled, flea-infested house in a family neighborhood, take your bug spray, hold your nose, and get ready to make a difference, in the neighborhood and in your bank account.

You can make a fortune fixing nasty houses. Know your market. Know when “ugly” means profit in your pocket, and when to keep looking for the house with the hidden gold mine.

Copyright © 2005 Jeanette J. Fisher. All rights reserved.

For more articles about finding, financing, fixing and flipping houses, visit Jeanette Fisher’s Doghouse to Dollhouse for Dollars website. Learn about decorating to attract buyers. Professor Fisher teaches interior Design Psychology college courses and professional real estate seminars. She also writes books and articles on home staging, credit for buying real estate, and other topics. Free “Design Psychology for Selling Houses” Report http://doghousetodollhouse.com Questions? http://doghousetodollars.blogspot.com

[tags]Flipping Houses,fixers,ugly houses,rehabbers,real estate investors,fixing houses[/tags]

Tags: fixers, fixing houses, flipping houses, real estate investors, rehabbers, ugly houses