Author's Nick: Bill Fulton - Orlando Real Estate
Website:
About the Author: Prior to receiving his real estate license in 2005, Bill held positions in sales management within the Flavor & Fragrance Industry. He has also self published a collection of short stories titled "The Garage Sale Man" that is available at www.lulu.com. You can learn more about Bill at Orlando Real Estate
Buying a home can be difficult decision to make in today’s market. The fragile state of the economy can have one constantly looking over their shoulder at the boss, wondering if there is another wave of layoffs coming. And, some may question the historical assumption that real estate always goes up. After all, there is a limited amount of land, etc, etc. How hollow those words sound after the last two years of carnage.
In today’s real estate market, Orlando home values, not unlike home values in other parts of the country, have plunged like an anvil. This is a harsh reality to face for someone looking to sell their home. Nevertheless, when you are a seller in a buyer’s market it doesn’t suggest that you have to get rid of your home at a loss. But it you would like to maximize value in the buyer’s market, working with a quality realtor is vital.
A significant percentage of the population went into shock back in 2008 as they watched the 24 hour news programs announce the evaporation of their home values while utilizing a myriad of charts and graphs to drive home the devastating news. In my circle of friends, more than I care to admit got waylaid by the turn in the economy. And, as it has been discussed ad nauseam, there are many people that should have known better. However, not everyone facing foreclosure is in that situation because they spent all their home equity traveling the globe, or they needed their McMansion to keep-up-with-the-Jones’. There are many hard working people that managed their household finances responsibly yet are on the precipice of losing their home to foreclosure.
With the influx of REO properties into the market, this is a good time to again consider flipping those properties as an investment strategy. However, what is different today is that it’s not simply a buy and sell scenario where a raising market will insure a profit. It will take an eye for value, understanding the cost that will be incurred in upgrading the property and knowing if it will possibly be necessary to rent the property for a period of time before the market will yield you the profit that you want.
As a real estate professional I have to remind myself on a regular basis that, over time and with experience, the basics of mortgage finance become intuitive to us. Most of us can rattle off, almost without thinking, the monthly payments of any principal amount. But our clients do not have the same bank of experience and many people are not comfortable with numbers. Remember all your friends that failed elementary algebra? And although we are familiar with any number of lender’s websites and know all the front end and back end income and expense ratios that are used to determine weather a consumer qualifies for financing, the fact is that our clients don’t. “It’s Greek to me,” is the look that I see in many clients’ eyes when I start asking about their personal finances. That’s why I quickly pass them along to a mortgage broker.
Read more on Understanding the Financial Metrics of a Home Purchase…
Buying your first home is one life’s biggest events. The simple magnitude of the dollars involved and the length of the mortgage commitment can be daunting. And few exercises can be as stressful as looking for and finding the right property. But, once the search through the endless stream of potential properties yields the needle in the haystack, the diamond in the rough, the proverbial jackpot at the end of the rainbow, it becomes time to actually execute the transaction and get the deal done. I personally remember being in the room when my wife and I were making this grand acquisition, but I don’t remember anything that was said, I just remember signing and initialing paper after paper as if I were trying to initial every scrap of paper at a ticker-tape parade! So, as an act of mercy, I’ve put together the following notes on the various clauses and conditions of the sales contract so it doesn’t sound as if the attorneys are speaking Kilingon during the closing.
Sales contracts are binding legal documents, period. Ignorance is not an excuse when, after the contract is signed, you realize you didn’t understand what the fine print, the terms and conditions, actually meant. This fact can be scary, there is no fudge factor allowed, so it is important that you take steps to make certain that everything in your sales contract is factual and completely accurate prior to signing.
As liquidity slowly seeps back into the economy and some qualified buyers, perhaps encouraged by the first time homebuyer tax credit, tentatively stick their toes into the proverbial home buying waters, bank owned properties have become the jewel de jour. Nightmarish stories of endless waits for banks to approve short sales have put a dingy taint on the short sale property. Buyers want to know at what price the property is available not a best guesstimate of a real estate agent, comps or no comps.
The dust has not yet settled on the near total implosion of our economy in general and the real estate market in particular, yet there are indications that some investors, perhaps those from foreign countries where the exchange rate is favorable, or those that saw the fiscal Armageddon on the horizon and liquidated their holdings, have decided that, yes, this is the true bottom and they are starting to step back into the market place. There have been a number of investors from Brazil, the Netherlands and The United Kingdom that have crossed my path recently.
Purchasing a home or investing in real estate can be an emotional experience, particularly for those that are engaging the process for the first time. It can be confusing, particularly to the seller, as to what the broker is doing or has done to earn the agreed upon commission. It is important to understand where the broker fits in as; ultimately, the responsibility for any transaction you may enter into is attached to this person.
It is no secret that the decision to buy or sell a home is froth with emotional hurdles. When either selling or buying, the best case scenario is that your income and equity have both increased as your need for additional room, caused either by a growing family or a loved one coming to live with you, has grown. Then the relocation to a larger property can easily be handled, economically at least.
