Yes, it is possible to sell a house, even during a recession.
There are a lot of good reasons not to sell a house when the economy is slow. There are many houses and few sellers in the market. People are afraid to buy. Prices are low.
But, there are also reasons to sell. In my case, I had a rental property that I wanted to sell. It was a property that I had trouble finding good tenants, it was old and required a lot of maintenance, and in general, it was a house with bad karma.
We had a buyer make an offer on the house 6-weeks after it was on the market and we closed on it last week. The neighborhood was full of houses for sale, and some other houses in the same neighborhood have been on the market for over a year. How did we do it? We followed three guidelines.
1. We made the house more attractive than other houses.
People like to buy houses that are ready to move into. They like everything neat and nice. For our house some of the key actions we took were:
- replaced old carpeting with new tile for the floors. It doesn’t have to be expensive. We bought very inexpensive tile and requested several bids before accepting one for $2100 for the 1400 square foot house;
-painted everything that didn’t move;
-fixed cracks;
-installed a new split wood fence in the front yard. A nice fence in the front yard makes a house look like a home. Materials were less than $100;
-replaced bathroom caulk
2. We set a moderate price
Prices are lower now, but you can still get the price you want if you are sensitive to what the market is allowing. I bought my property in 2002 for $85,500 and sold it for $124,000. Of course, I could have sold it for more 2 or 3 year ago, and I could sell it for more in the future. But, because I’m ready to move on a better rental property, I’m happy to take my $38,500 profit and call it a day.
3. We were flexible
You have to expect buyers to request favors from sellers. The buyers are in the driver’s seat since there are so many houses to choose from. But, if you set your house apart by making your house look unusually attractive compared to other houses, and you set a moderate price, you put yourself in a better negotiating position.
We offered the house at $130,000, expecting an offer of $125,000. We got an offer of $124,000 along with a request that we pay the closing costs of the seller. We counted by offering to sell for $124,000 but no closing costs. The seller agreed.
Don’t let the slow economy stop you from selling a house. There are still buyers out there looking for a house like yours!
Terry Sprouse is author of the award-winning book “Fix ‘em Up, Rent ‘em Out,” and the newly-released CD-Course “How to Start Your Own House Fix-Up and Rental Business in Your Spare Time.”
Sign up for a FREE Teleseminar or Investing course at Terry’s blog.
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When you are renting, you have to deal with a landlord. Most of the time this isn’t a big deal when the landlord does a good job. At times there may be things that you are unsure of and need some answers to. Learn the answers to some very common landlord questions.
Can a new landlord that takes over change your rent on you?
If you have a previous lease with the old landlord, then your rent should stay the same through the end of your lease. Whatever was agreed upon should be acknowledged by any new owners or managers that might be there. After the lease is over, landlords whether they are a new one or not can charge whatever it is that they want. If you don’t like the new terms, you can move and avoid paying the higher prices.
Can a landlord enter your property?
In most places if there is an emergency like a water leak or other situation that needs to be dealt with else the property could be damaged, a landlord can legally enter. If it’s for other situations like looking at the paint on the wall or random inspections, the landlord should not enter the property unless you are notified. Different states have different laws, but it is your personal space since you are renting and it should not be intruded upon. Generally you should be notified of such entries before they happen.
Can you sue a landlord for not dealing with smoking tenants?
While you might not like smoke in your apartment, there is very little that can actually be done about this situation in most states. If your neighbors smoke in their rental unit and it comes into your place, it’s unfortunate but little can be done. If it’s a no-smoking apartment, then you could sue your landlord for loss of time, dry cleaning costs, and even health concerns because of the smoke that you had to deal with when you did not expect to do so.
I’ve both rented and been a landlord. I write on many topics, including rentals and other home issues. See some of my latest articles at best wine opener and also at Tabletop wine opener.
Buildings are responsible for at least 40% of energy use in most countries. These figures are rising as construction booms in countries like China and India. So it is important that we act now since we can make major contributions is to tackling energy use and climate change by using existing technologies.
What is meant by energy efficiencies in commercial office buildings?
Energy Efficiency involves reducing energy consumption to acceptable levels of comfort, air quality and other occupancy requirements including the energy used in manufacturing building materials and in construction.
The need for improved energy efficiency presents risks and opportunities for many organizations involved in the construction and real estate management industry. So how can building owners and real estate management firms combine their relationships to address energy consumption and related environmental concerns?
We can start with educating the people at the top, the decision makers. That means the owners who can fund the investment and the corporate executives who can approve the specific energy saving projects. We need to find ways that we can inform and arm the decision makers with the necessary information so they can make an educated decision.
More and more I see commercial real estate organizations employing the services of an Energy Consultant (EC). Not long ago you might see an EC involved in a large renovation project, however, once the project was complete, the EC would move on to another client. Over the past few years I have seen medium and even small property management firms hire a full time EC that not only participates in current building project management but also works closely with the property manager and engineer to make sure the building’s hvac, lighting and other major energy consuming equipment is operating at peak efficiency. For most properties it is not difficult to justify this position since measurement of energy savings is part of the job description.
In addition, I have seen the increase in the number of building engineers completing educational classes designed specifically towards energy efficiencies that focus on the mechanical equipment as well as the overall operations of an office building.
This is a “crawl before you can walk” type of situation. As we all become more informed and knowledgeable in how to reduce energy consumption, more and more energy saving projects will be accomplished. Although this is not a new topic, there are plenty of commercial property managers getting educated and in the “LEED” program sponsored by the United States Green Building Council (usgbc.org).
If you would like to learn more about a career in commercial property management and how to benefit by becoming LEED certified, visit us at http://www.officebuildingmanagement.com
Whenever you fail to make your monthly loan payments due to financial misfortune, the lender initiates the foreclosure procedure to recover the unpaid debt. At the end of foreclosure, you not only lose your property, but your credit score also falls down significantly. Moreover, it becomes exceedingly difficult to get a new home mortgage, at least for a period of five years. The best way to avoid foreclosure is to opt for deed in lieu of foreclosure.
What is deed in lieu of foreclosure?
It is an agreement whereby you transfer all your interest in the property to the lender, and in return the latter pardons off your debt. In simple words, you simply hand over the keys of your house to the lender. Deed in lieu of foreclosure is the easiest way to avoid all the hassles related to home loan that has gone bad like foreclosure, short sale and deficiency judgments.
What are the benefits of deed in lieu of foreclosure?
It helps you to move out of the mortgage quickly. Moreover, as foreclosure doesn’t take place, therefore your credit report remains neat and clean. You can easily take another home loan that you can afford and buy another piece of land. The lender, on the other hand, will also accept the deed in lieu of foreclosure quickly because without spending a single dime on attorneys and lawsuits he gets control of the house. By selling off the property, the mortgagee gets back the loan balance.
How to proceed with deed in lieu of foreclosure?
To take advantage of a deed in lieu of foreclosure, you have to submit an application in which you have to clearly state that you wish to enter into negotiations. Once the lender receives your application, he will invite you for settlement negotiations. After the final agreement, you walk out of the lender’s office without the load of loan on your shoulders. In some instances, particularly when the outstanding loan exceeds the current fair-value of the house, the lender can reject your application. In such cases, you should honestly communicate your financial troubles and try to convince the lender to accept your offer.
Jeremy has been publishing articles for almost 4 years now. Why not come and visit his latest website over at My Air Filter Review.com which helps people to find the best HEPA Air Cleaners and other related products that they need when looking for clean air products.
A short sale is a kind of real estate sale where the mortgage lender agrees to give a discount on the unpaid loan, and the homeowner sells his property to generate funds that are used to pay back the discounted debt. Often, the sale of the property produces an amount that is less than the reduced loan balance. Under such circumstances, the lenders opt for short sale deficiency judgments to clear off the debt. These judgments are lethal weapons that are used by the mortgage lender to recover the every single penny of the loan balance from the homeowner.
What is a short sale deficiency judgment?
It is a legal suit that is primarily based on the promissory note, which is an agreement between the lender and borrower whereby the latter promises to pay back the loan. Depending upon the law of the state, sometimes personal liability is also attached to the promissory note. If the borrower fails to pay back the debt, the lender gets the right to take away his assets, as mentioned in the note. A short sale empowers the lender to take stringent action against the defaulter.
How to avoid falling into the trap of a short sale deficiency judgment.
The best way to avert short sale deficiency judgment is to negotiate assertively with the lender. Hire an experienced negotiator and give him a free hand to deal adeptly with the lender. The negotiator will make the lender understand that your financial health is not good and you won’t be able to pay back the debt. Thereafter, he will convince him not to pursue deficiency judgment against you. Finally, he will convince him to waive off the deficiency. All in all, the negotiator will leave no stone unturned to save you from the havoc of a short sale judgment.
Often, lenders don’t use the deficiency judgments themselves, but sell them off to collection agencies for a few dollars. On the basis of the purchased short sale deficiency judgments, the collection agencies use all sorts of tactics to extract the money from the homeowners. In such instances too, negotiation is the best strategy. By negotiating deftly with collection agency, you can easily reduce the deficiency amount as well as ward off the deficiency judgment.
Jeremy has been publishing articles for almost 4 years now. Why not come and visit his latest website over at Portable Solar Power.com which helps people to find the best Portable Solar Panels and other related information that they need when looking for Portable Solar Products.
Just wanted to drop a little bit of information about commercial real estate since I’m sure your getting plenty of emails about how its the next big thing to learn. In deed, commercial short sales are going to be a tremendous opportunity for those who understand what they are looking at. So, I just wanted give a little bit of free information about commercial real estate.
Gross Income – The total amount of money the business generates.
Expenses – The overhead the business has to pay for or the cost to operate the property. Does not include debt services i.e. mortgages, liens etc.
Net Operating Income (NOI) – The amount of money left over after deducting operating expenses, taxes, and insurance from the properties gross income.
Capitalization Rate (Cap Rate) – Price divided by NOI. this is the baseline or “measuring stick” when analyzing the value or price of property relative to its income. Example: If a property is being sold at 1,000,000 and the NOI is 100,000 the “cap rate” or rate of return is 10%. (Tip: for those looking for passive investors. If you find a deal that is offered at a 12-14 cap and the market is currently at a 10 cap you can offer your investor 10% rate of return and pocket the difference).
Market Cap – This is the rate of return associated with your property type within a specific market. This is very important to understand what the market cap is because if you find a property being offered at a 17 cap and the market cap is 15, your deal may not be worth the risk due to such a high market cap and only a potential 2% discount and return.
Debt Service Coverage Ratio (DSCR) – Calculated by taking the NOI and dividing it by the total debt service. This is the income to debt service ratio. This is also a very key ratio when analyzing a property. A property may of a descent NOI but has a high DSCR ratio. Easy ways to look at this is if a property has a DSCR ratio of 1 it is breaking even. Most lenders require the DSCR ratio to be 1.25-1.5. A great deal is 2.0 and higher.
Occupancy Rate – This is how much of the facility is occupied. Example if your looking at a 100 bed assited living facility and only 70 beds are occupied, you have a 70% occupancy rate.
Lets put all of this together in an example for a 200 unit self storage facilty being sold at $480,000 where the market cap is 9%. Mortgage is 2,600/month. 83% occupied.
Gross income = $180,000 @ 100% occupied.
Less Vacancy 17% = $150,000 (rounded up for the example)
Expenses = 97,500
——
NOI = 52,500
Cap Rate = 9.14
DSCR = 1.68 (52,500 / 12 = montly NOI divided by 2,600)
With this example you can see the property can stand on its own, however, doesn’t provide a great discount.
When looking at these commercial short sales it’s important to understand that every deal is not a deal. Being able to analyze the current property value and forecast the future value is very critical and will also prevent you from wasting your time. When looking at commercial short sales you need to understand the current market conditions, competition, in addition to how can someone buy this cheap property and make it profitable. Understanding how to perform high level due diligence in a market area will save you time and money.
When evaluating commercial property there are a couple approaches such as the income capitalization approach or comparable sales approach. If dealing with a short sale the bank will order the appraisal when defaulted. If your not dealing with a short sale, find a MAI appraiser and see if they can give you a better idea.
I hope this little bit of information helped.
Take Care
P.S. I forgot to mention what types of properties you should look for. You have probably been email blasted by guru’s who say self storage, senior or independent living, and trailer parks. The reason why these properties are desirable is because they have the least amount of defaults and banks look at these properties as lower risk. However, don’t let that scare you from apartment buildings and complexes. No matter what property type you pursue, make sure you find a professional property manager to assist you. Get property manager referrals by contacting the state the property resides in association specific to the property type, i.e. self storage association of Florida.
Get your free Commercial Short Sales Blue Print at http://www.reibeast.com
Carl Medley
If you are in deep financial crisis, don’t throw up your hands and let the lender take all the decisions on your behalf. You have the right to know everything about short sale vs. foreclosure. This in-depth comparative analysis will help you to take an informed decision to shed off your debt load as well as avoid getting trapped into the catacomb of deficiency judgments.
Deficiency judgments
In both the cases, there may be some difference between the debt owed by the borrower and the amount collected by the sale of the property. This difference prompts the lender to file a deficiency judgment suit against the borrower to recover the differential. Once the lender succeeds in acquiring the deficiency judgment, things literally go out of your hand.
The best way to avert short sale or foreclosure deficiency judgments is to negotiate assertively. According to the experts, it is easier to negotiate deficiency judgments after a short sale than after foreclosure. With respect to the latter, the lender won’t listen to a word and use all sorts of lines of attack to make you cough up the deficiency. He even has the right to sell off the judgment to a collection agency.
Effect on credit report
After a foreclosure, the FICO score drops down by 200 to 400 points, and the fallen credit score will remain on your credit report for about 10-years. On the contrary, short sale does not appear as a derogatory mark on your credit report. It is just reported as ‘paid less than agreed’ or ‘paid as agreed’. Your FICO score will also not fall.
Loan application
In the case of short sale, your loan application won’t be rejected; you just have to report that you sold your home in the past. However, with regards to the foreclosure, you won’t be able to get a home loan for at least 5-years.
Tax benefits
You don’t have to pay tax on whatever money you get after selling your home through foreclosure or short sale and clearing off your debt.
Eviction time
If foreclosure has been filed, and you do not apply for short sale, then the lender won’t allow you to stay in your home for even a day. You would be compelled to vacate the house immediately. On the other hand, if you request the lender to consider short sale, then you would get at least 2 to 3 months to stay in your home.
Future prospects
Unlike short sale, foreclosure can affect your future prospects adversely. You won’t even get a good job with ease.
Jeremy has been publishing articles for almost 4 years now. Come visit his latest website at Solar Powered House.com which provides plenty of information about the Home Solar Panel including reviews and other related information that you need when looking for solar power products and accessories.
In the Mexico Real Estate market, Cancun Real Estate is one of the main beachfront areas chosen by foreign buyers. One aspect of Cancun which is promising to bring growth to this real estate market is Cancun’s recent development as an international travel and business convention hub. An upcoming example of this is the annual meeting of the Inter-American Development Bank (IDB). In addition to being a reflection of Cancun’s growing role as Mexico and Latin America’s prime choice for business conferences, meetings such as this are expected to bring further growth and opportunities to the market, a fact which Cancun MLS will reflect.
The more than 1,500 registered guests at the meeting of the IDB, which will meet in Cancun Convention Center, mixed with thousands of American and Canadian university students on their spring break, bring an especially large influx of visitors during the end of March – a time already marked as a high season.
Cancun’s tourism industry has shown a great deal of resilience; despite a world-wide low point last year in tourism due to the recession, which hit Mexico especially hard because of the flu-related travel advisory, Cancun’s tourism has shown full recovery with renewed beaches and a newly developing focus on its status as an international travel and business hub.
This strength in tourism is a positive sign for real estate buyers, reflecting a confidence which will guarantee that properties in Cancun will continue to be supported by an ever expanding urban infrastructure, with an excellent road network, stores, restaurants and many activities. Many high-quality Cancun properties are currently available, and MLS listings will continue to reflect excellent property choices.
Of the 28,500 hotel rooms, about 74% are currently occupied, according to data from the Cancun Hotel Association, a figure expected to increase during the coming days with the arrival of participants the annual IBD meeting. The IDB meeting is also only a month before the 40th anniversary of the founding of Cancun, a city built from up from zero by the Mexican government.
The meeting and the anniversary also have special significance since, as IDB President Luis Moreno observed, “the first IDB loan for tourism was granted to Cancun” during its construction where “the funds were used to build an airport, a port and the first hotels in the city.”
The IDB meeting celebrates an important anniversary not only in kick-starting properties for international buyers in this area, but one of the most significant steps in the development of Mexico real estate during recent decades. The meeting also reflects Cancun’s more recent, and ever growing, role of being an international convention hub – a development which promises to bring further growth to the area’s real estate industry.
Thomas Lloyd graduated from Purdue University Krannert School of Management with a degree in Management/Financial Option Investments. He has been living, investing, and working professionally in Mexico for over 15 years. A Mexican Certified Realtor he is the current president of Mexico Real Estate, you can contact him at (512) 879-6546.
In the Mexico Real Estate market, Cancun Real Estate is one of the main beachfront areas chosen by foreign buyers. One aspect of Cancun which is promising to bring growth to this real estate market is Cancun’s recent development as an international travel and business convention hub. An upcoming example of this is the annual meeting of the Inter-American Development Bank (IDB). In addition to being a reflection of Cancun’s growing role as Mexico and Latin America’s prime choice for business conferences, meetings such as this are expected to bring further growth and opportunities to the market, a fact which Cancun MLS will reflect.
The more than 1,500 registered guests at the meeting of the IDB, which will meet in Cancun Convention Center, mixed with thousands of American and Canadian university students on their spring break, bring an especially large influx of visitors during the end of March – a time already marked as a high season.
Cancun’s tourism industry has shown a great deal of resilience; despite a world-wide low point last year in tourism due to the recession, which hit Mexico especially hard because of the flu-related travel advisory, Cancun’s tourism has shown full recovery with renewed beaches and a newly developing focus on its status as an international travel and business hub.
This strength in tourism is a positive sign for real estate buyers, reflecting a confidence which will guarantee that properties in Cancun will continue to be supported by an ever expanding urban infrastructure, with an excellent road network, stores, restaurants and many activities. Many high-quality Cancun properties are currently available, and MLS listings will continue to reflect excellent property choices.
Of the 28,500 hotel rooms, about 74% are currently occupied, according to data from the Cancun Hotel Association, a figure expected to increase during the coming days with the arrival of participants the annual IBD meeting. The IDB meeting is also only a month before the 40th anniversary of the founding of Cancun, a city built from up from zero by the Mexican government.
The meeting and the anniversary also have special significance since, as IDB President Luis Moreno observed, “the first IDB loan for tourism was granted to Cancun” during its construction where “the funds were used to build an airport, a port and the first hotels in the city.”
The IDB meeting celebrates an important anniversary not only in kick-starting properties for international buyers in this area, but one of the most significant steps in the development of Mexico real estate during recent decades. The meeting also reflects Cancun’s more recent, and ever growing, role of being an international convention hub – a development which promises to bring further growth to the area’s real estate industry.
Thomas Lloyd graduated from Purdue University Krannert School of Management with a degree in Management/Financial Option Investments. He has been living, investing, and working professionally in Mexico for over 15 years. A Mexican Certified Realtor he is the current president of Mexico Real Estate, you can contact him at (512) 879-6546.
In the Mexico Real Estate market, Cancun Real Estate is one of the main beachfront areas chosen by foreign buyers. One aspect of Cancun which is promising to bring growth to this real estate market is Cancun’s recent development as an international travel and business convention hub. An upcoming example of this is the annual meeting of the Inter-American Development Bank (IDB). In addition to being a reflection of Cancun’s growing role as Mexico and Latin America’s prime choice for business conferences, meetings such as this are expected to bring further growth and opportunities to the market, a fact which Cancun MLS will reflect.
The more than 1,500 registered guests at the meeting of the IDB, which will meet in Cancun Convention Center, mixed with thousands of American and Canadian university students on their spring break, bring an especially large influx of visitors during the end of March – a time already marked as a high season.
Cancun’s tourism industry has shown a great deal of resilience; despite a world-wide low point last year in tourism due to the recession, which hit Mexico especially hard because of the flu-related travel advisory, Cancun’s tourism has shown full recovery with renewed beaches and a newly developing focus on its status as an international travel and business hub.
This strength in tourism is a positive sign for real estate buyers, reflecting a confidence which will guarantee that properties in Cancun will continue to be supported by an ever expanding urban infrastructure, with an excellent road network, stores, restaurants and many activities. Many high-quality Cancun properties are currently available, and MLS listings will continue to reflect excellent property choices.
Of the 28,500 hotel rooms, about 74% are currently occupied, according to data from the Cancun Hotel Association, a figure expected to increase during the coming days with the arrival of participants the annual IBD meeting. The IDB meeting is also only a month before the 40th anniversary of the founding of Cancun, a city built from up from zero by the Mexican government.
The meeting and the anniversary also have special significance since, as IDB President Luis Moreno observed, “the first IDB loan for tourism was granted to Cancun” during its construction where “the funds were used to build an airport, a port and the first hotels in the city.”
The IDB meeting celebrates an important anniversary not only in kick-starting properties for international buyers in this area, but one of the most significant steps in the development of Mexico real estate during recent decades. The meeting also reflects Cancun’s more recent, and ever growing, role of being an international convention hub – a development which promises to bring further growth to the area’s real estate industry.
Thomas Lloyd graduated from Purdue University Krannert School of Management with a degree in Management/Financial Option Investments. He has been living, investing, and working professionally in Mexico for over 15 years. A Mexican Certified Realtor he is the current president of Mexico Real Estate, you can contact him at (512) 879-6546.