Advice

Downsizing Could Make Sense

Current numbers show that 12.5% of the entire population is 65 years of age. This is not a huge number, but it is still a number to take a look at. I would be willing to bet a good portion of those 12.5% are considering downsizing because they do not need the space they once did. Not only that, but there’s a great sense of freedom once you have gotten rid of some of your age old “stuff” that you no longer need.

Making a move to a smaller, less expensive home could free up some money that could be well used elsewhere. Savings in the utility department will also be noticed, as well as the lower premiums for insurance and property taxes.

Leaving the home where you raised your family may be difficult, but downsizing to a smaller home may be the most logical move. Depending on your situation, your interest may have changed and a different part of town might look more attractive than it once did.

The IRS use to have a once-in-a-lifetime exclusion of $125,000 of gain from a principal residence but it was changed so that homeowners’ are eligible for an exclusion of $250,000 of gain for single taxpayers and up to $500,000 for married taxpayers who have owned and used their home two out of the last five years and haven’t taken the exclusion in the previous 24 months.

Consult your tax professional to see how this could apply to your situation!

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Landlord Won't Fix Your Repairs List? Here's What To Do

If you have a landlord and have a repairs list, sometimes it can be difficult to get a hold of them and get things fixed, so here are a few things you should know about how to handle those situations.

 

Know your rights: To find an apartment is step one. If you are a renting tenant, memorize these words, “Implied warrant of habitability”. Residential landlords need to maintain their rental units in a safe, operable, and sanitary condition. What makes places unfit to live vary by state. Here are some general rules that you have a right to have during your lease period:

  • Hot water and drinking water
  • Heat during winter months
  • Electricity and plumbing
  • Locking doors and windows
  • A place free from bugs, rats, and other pests
  • Building code requirements met

If there’s a problem with your rental unit that makes it unlivable, now is not the time to try and take advantage of the landlord. If you think you can get away with living rent-free for unfavorable living conditions, think again. The best you can probably do is withhold rent for a short period of time, but that’s it. Instead here’s what you should do:

  1. Tell the landlord the problem and request it be fixed immediately. You should have open and honest communication with your landlord.
  2. Send a certified letter if your relationship with them is poor, or if you didn’t receive a written or oral response from them. Be sure to state the problem in the letter and when it began. Have a copy of this letter.
  3. Be sure to give the landlord a reasonable amount of time to fix your requests’. The general rule is 30 days unless it is an emergency.
  4. Let the landlord or repairman in to fix, but make sure they tell you when they plan to fix it.

Not every repair is always their responsibility. Sometimes it can be your fault if you forget to scrape the dyer...

Selling Your Home in a Hurry? Try Pricing it a Bit Higher

If you are trying to sell your home in a hurry, your first instinctive thought might be to drop the price in order to attract more buyers. Maybe you should try another approach. It seems counterintuitive, but increasing your asking price just slightly can attract more potential buyers. The theory is, in a competitive market as we know; you may actually sell your home faster by pricing it a little higher than other homes in the area.

This is all based from a study published back in 2013 in the Journal of Economic Behavior & Organization. Their findings were that homes listed for 10-20% more than comparable homes sold more often. The study had a 14,000 survey population of real estate transactions with the average sale prices of properties of $234,000. For every 10% increase in asking price, homes sold .05-.07% higher.

The author wrote, “Pricing a home 10 percent to 20 percent lower than comparable homes led to a…decrease in the expected price”. Here are the reasons and a way to make this strategy work for you.

The Power of Perceived Value: Any marketer knows consumer see more than just a number when they look at a price of an object. They see it as a direct reflection of the items value.

For example: when you walk into a shoe store and see two pair of shoes, one pair for $80, and the other pair for $40. You will automatically assume the $80 pair is better due to higher technology, more comfort features, etc. The thing is though that you have no idea how much these actually cost to make, so the retail price is your best indicator.

This perceived value can also work for home sales. When a buyer is looking at identical listings other than price, (same number of bedrooms, same location, square footage etc.) they assume the more expensive house is either overpriced, or has better features than make it more valuable.

This can lead to a higher priced home being snatched up faster for several reasons:

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Are Pocket Listings Unethical?

As the housing market continues to rebound (slowly but surely), “pocket listings” are have become questionable part of the real estate process. Brokers and sellers always like some privacy, but to what extent does it become unethical?

A pocket listing is a situation in which real estate agents peep sales information about a home off the multiple listing services (MLS) and brokers only show that house to individuals who they expect to actually buy the property.

The National Association of REALTORS doesn’t have specific rulings on pocket listings, but it’s an unwritten rule it isn’t a fair practice. However, in New York “pocket listing” does indeed violate the Universal Co-Brokerage Agreement, which requires agents to share listings.

Some would claim that a gray area is created with pocket listings. The idea is that agents can collect double commission from the deal by being agent for the buyer and seller. If the agent is putting their own personal interest ahead of his clients, then that does in fact violate the law, as well as business ethics.

Some agents will advise their clients to lower the price of their home when the “pocket listing” doesn’t sell quickly. They also let me know about putting their home up on a public MLS site. Some agents also think a few sellers may like the privacy of pocket listings because they aren’t too eager to move, that is unless a “make me move” deal is made with an incredible price.

Use your own judgement when it comes to pocking listings. If you think what you're doing is shady, it probably is. If there is no harm in what you're doing to any party involved, by all means have yourself a good ol' pocket listing.

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5 Credit Habits to Break in 2015

So you’ve decided 2015 is the year you’re going to make a major housing change. It’s now time to confirm your credit behaviors are at the pinnacle. Because buying a house is the biggest expense you’ll probably ever undertake, your credit needs to be looking strong because it plays a major role in the terms and conditions you get from a lender.

                If credit is on your list of items to improve this year, there are a few options to tune up the way you think about and interact with your credit score. Just knowing the answers to boosting this score can take you quite far. Let’s begin…

  • Being Disconnected:  Not checking your credit report

Break the habit of not checking your credit report. Check your report regularly to know where you stand. You should consider your credit report like a map to all your credit behaviors. It’s important to know how your report will be viewed by lenders and others when they see it for the first time.

  • Overspending: Running up or maxing out your credit cards

It’s best not to have a credit card, but if you must, do so responsibly. Keep your spending under control and within your budget. Keeping tabs on how you spend now will help you evaluate how much your budget can fluctuate when you decide to buy a house.

  • Managing Balances: Just paying the minimum balances due on your accounts

Pay more than the minimum. Throw everything you have without starving yourself or your family at the debt you’ve accumulated. Not only will this look responsible on your behalf, but it will also save you money on the interest in the long run.

  • Seeking too Much: Applying for credit indiscriminately

Once again, don’t have a handful of credit cards, but if you must, then do it sparingly. If you have numerous credit...

The Top 4 Regrets of Real Estate

This post is going to reveal all the hidden costs when you’ve moved in, and sort of make you feel sorry for doing so. So let’s begin!

                When buying or renting, there always comes a point when “buyer’s remorse” sets in. We all have it, moving, buying, renting, and all the chaos that surrounds the process will sometimes leave a few stones unturned. If you’re the lucky one these stones won’t be unturned until you have every box unpacked and you are finally settled into your new home. Call it buyer’s remorse, second-guessing, or what have you, but this can be avoided if you know what you’re getting into before you take the new keys to your new home.

Where are we going to put all this?

                According to a Trulia.com survey, 52% of all homebuyers have at least, one regret about their new home, or the process they took to get it. The largest regret: wishing they had chosen a larger home. The most common complaint is there isn’t enough space to put all their belongings once they’ve unpacked. Older apartments and homes will probably lack in closet/storage space since our lifestyles have grown in the past 60 years.

                Look at the other hand too. The beautifully decorated home looked perfect with the scaled-down furniture, but now that you’ve moved in with all your giant new age furniture, the room looks a bit smaller now doesn’t it?     Nine months is usually when a young couple starts to regret moving into their first house.

We have no money left!

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Twelve Things To Do After A Move

Finally, every last box is packed up in the moving van and you are closing the door for the last time on your old home. The move isn’t quite finished though, here is a checklist of the final things you need to do before you move into your new home!

  1. Check all your expensive appliances and furniture. Most movers and insurance companies have a deadline in which you can file a claim. Check to make sure all appliances and furniture are not damaged and are working properly.
  2. Hire an exterminator before you start unloading all your belongings. If time allows, give the new home a thorough cleaning before you start unpacking and organizing.
  3. Open one box at a time; don’t open every box at once. Have a plan to organize and unpack room by room. Opening everything at once will tempt you to start stuffing things in closets to get them out of the way and then you’ll forget about them. Make a timetable of a certain room a day, or three boxes a day, that way you will be completely unpacked within a week.
  4. Change all locks and alarm codes. Do you know if the previous owner has kept any spare keys? Maybe, but it is best to play it safe.
  5. Be sure that all smoke detectors are working within the house.
  6. Update your current address with your job, the bank, post office, insurance provider, etc.
  7. Meet your neighbors. Invite them over for a meet and greet over tea or coffee. Knowing them will give you the feeling of settled in.
  8. Update your driver’s licenses and license plates. Visit the local DMV to find more info.
  9. Register to vote in your new area.
  10. Find the local healthcare professionals in the area. Dentist, doctor, vet, pediatrician, etc. Ask your insurance provider for the closest hospitals that come under their network.
  11. Make sure all moving receipts are kept in a single place. They will be needed when you do your taxes for tax deductions.
  12. Find out about trash disposal policies and if curb side pickup is available in your area....

How to Stage You Bathrooms for Sale

It’s no secret when you are getting ready to sell your home, a lot of effort must be put in to embellish every room. This will enable you to maximize every room’s potential and get the best deal possible. Keep in mind though; you don’t really have to account for these expenses since you are increasing the value of your home.

            Bathrooms are always the starting point when trying to stage your home. It’s a small enough room and easy enough to do that professional help is not needed.

 

  1. Perfectly Clean Surfaces: It’s no ones dream to come home after work to take a relaxing bath in a moldy tub with old cobwebs looming over them, alongside a nasty old shower curtain. Your buyer especially won’t want to even see this. A sparkling bathroom is one of the most crucial things a seller can do to entice the buyer. Spend a weekend to clean every inch of it for the next open house. Caulk any cracks, clean all mirrors, and buy an air freshener to eliminate all foul odors. You’ll be surprised how different of a room it will look once it’s perfectly clean.
  2. Remove All Personal Items: People are judgmental so be sure and remove all personal hygiene items, toothbrushes, toothpaste, lotions, medications, etc. It’s best to put them in a plastic shower basket s so they can easily be transported when a new buyer is coming. An empty and clean mirror cabinet allows the potential buyer to envision their own belongings to be sitting in there.
  3. Less is More: Despite having a love for the flashy shower curtain, and crazy floor mats, these must go. These items tend to be looked at as dirty even if they are brand new. Another item to hide is your dirty clothes hamper. No one wants to see your underwear from the week.
  4. Add Luxury & Details: A simple vase with pretty flowers in it goes a long way. Even scented candles will do the trick. The point is to make...

Top 5 Things Buyers Want From Their Real Estate Agents

Here are the top five most important traits home buyers want from their real estate agents.

 

  1. Honest and Credibility: This stems from buyers having terrible past experiences with their real estate agents. These agents would be rather pushy, trying to get them to buy a more expensive house, and the urgency agents placed on the buyer. Everyone knows how difficult it can be to trust anyone in real estate today, so that is why it is essential for agents to help them feel more comfortable.
  2. Area Familiarity: Buyers look heavily on which agents who sell homes in a specific neighborhood, but also which ones know the neighborhood well. They want to know which agent can tell them about the local schools, parks, restaurants, safety, and even the hidden gems of the neighborhood.
  3. Good Follow Through: The most frustrating aspect for buyers is when they wait forever for their agent to do what they promised they would do. If an agent says they will do something, it is expected to be done relatively soon. It is ok to gently remind them here and there to make sure they still know it has to be done. Agents should do what they say they will, with some honesty, and this will help the buyer feel they can trust a little bit more.
  4. Organization: If you are honest, know the neighborhood like the back of your hand, and try your hardest to follow through but it’s difficult to return every phone call, text message, and email. Home buyers expect you to at least be organized and have your stuff together. Just be organized and following through won’t be such a problem.
  5. Good Listener: Most of all, agents should be expert listeners. Agents shouldn’t assume their client wants this, or would look good in this house. They want an agent who will listen to their wants and needs, and one who asks questions to understand what they are truly looking for.  
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How Home Apprails Can Derail Your Refinancing

Current rates are quite low, so now would be an excellent time to refinance your home. However, there are a few ways a property appraisal can delay or even disqualify you from getting your refinance. Here are a few things you should know before you decide to get your appraisal.

 LOAN OFFICERS CANNOT TALK TO YOUR APPRAISER

                Until 2009 your loan officer was able to communicate market value trends in your neighborhood with your appraiser. From this information they were able to set target loan amounts and rates. Now new federal laws prohibit the two parties from communicating. This was designed to safeguard appraiser independence, which changes the way a homeowner can pre-screen their property before a refinance.

YOU CAN AND SHOULD ESTIMATE VALUES BEFORE ORDERING APPRAISALS

                Appraisals are not free and can range from $300 to $1,200 depending on the property type occupancy status and location. So it is still in your best interest to find the estimated value of your property before you order an appraisal, especially if the outcome could render your refinance unqualified.

                The first thing you can do is to find out the estimated value of your home on your local real estate website. The next thing you can do is look at the estimated value of similar homes in your neighborhood. Once you have an estimate of where your home stands versus similar homes, then take into consideration the proximity of that home to yours, date of sale, location, quality of construction, number of rooms, lot and room sizes, parking, and condition.

                Then ask your real estate agent to gather the comparable sales and analyze it. Give your appraiser this data,...

Tips for Cutting Energy Bills During Winter

Winter is here, and the temperatures about to drop while your energy bills rise. I’m going to let you in on a few tips to save some money on your energy bills this winter. These are fairly easy to do and should save you a noticeable amount of money.

The whole point to saving energy is keeping the heat locked inside the house, so your heating system won’t have to be working around the clock. Most of all heat that escapes the house, escapes through doors and windows. This is a relatively quick fix- try weather-stripping, spray-foam insulation, plastic window film, heavy curtains, and even make-shift door sealers. These all should reduce the amount of heat that escapes. But if you really want to get serious about keeping in the heat, investing in high-grade windows will do the trick. Ask a local window and pane company which windows are ideal for winter.

The next best investment you can make is a Wi-Fi connected programmable thermostat. These new age thermostats allow you to control your homes temperature though your smartphone. How many times have you left for work in the morning without turning off your heat and warmed and empty house; same for air conditioning? There is also the benefit of switching on your heat on the way home from work and coming home to a toasty house. Not only is that efficient, but it’s also smart.  

Another helpful tip is to get an energy monitor. These allow for homeowners to observe how much energy they’re using. It can show how quicker showers over a month can make a difference. It will subconsciously remind you to turn off lights when leaving a room.  Maybe a drying rack should be brought out instead of tumble drying clothes one last time?

The last tip is to switch to LED bulbs. Reasons why:

  • LED lights are brighter while using less wattage
  • They last 50x longer
  • They don’t emit nearly as much heat as the incandescent bulbs, reducing the risk of a fire

Yes, these bulbs do cost a tad more than the standard bulbs,...

WHo Pays for Damage in a HOA

     In common walls, damage can happen under a variety of reasons. There can be roof leaks, water supply pipe leaks, toilet/bathtub overflows, and washer house ruptures Who is actually responsible for these damages, the owner or or HOA?

     First determine the cause of the damage, then find out if either party was negligent in their maintenance. Next look over the governing documents to determine the guidance there may be for maintenance and repairs. Pay special attention to the definitions of words like: unit, common element, limited common element, maintenance of responsibilities of owners and the homeowner association, insurance responsibilities of the owners and the homeowner  association and enforcement of procedures. The difference often lies within each HOA.

     Normally homeowners are usually responsible for everything that lies underneath the roof, but the HOA is responsible for maintaining the common elements and limited elements. However, limited common elements are usually allocated to the exclusive use of a unit owner, and they may be responsible for repairs. One important principle to remember is that the obligation to maintaining a particular component doesn't really mean there is an obligation to repair it.

     Say the water heater in unit A fails and damages another unit B. From most governing documents unit A bears the expense for repairing the water heater and unit  A. There is no obligation for the damage to cover Unit B. If it was known that unit A was leaking slowly, and they let it leak long enough to damage unit B, the owner would be negligent. On the other hand if unit A erupted spontaneously and damaged unit B, there would be no negligence.

     Bearing negligence each unit owner bears the repairs to his own unit. The same thing applies if there is a leaky roof which is maintained by the HOA. It is in your best interest to tell the HOA that there is a leaky roof, otherwise they won't...

Buying Your First Louisville Home- Know How It's Yours

     There is no perfect home. Too many clients say "I wish I could take this home and put it on that one's lot". There are plenty of Louisville homes. With the size of Louisville, homes are not difficult to find. Currently there are 5,800 single family homes and 1,000 condos. This doesn't even count the vacant lots, multi-family homes, farms. Do yourself a favor and read about the Louisville real estate market and get informed.

     There are not-so-good neighborhoods, houses with structural damage, and you need to become aware of these factors. However, there isn't one thing you cannot read about; and that is the moment when you realize after countless hours of search, you've found the right house. It is the feeling of finding home.

     As a first time home buyer, you may get discouraged after all the searching, but don't get down. It may take awhile before you find the right place to call home, and you may feel that it was all wasted effort. Many clients find the point of frustration right before they find the right home. Louisville adds 20-50 listings every day. So the numbers are out there, just find the right home design that inspires you.

     You will know when a home is right for you when you feel it. You can just walk in and image your furniture in it. You can imagine mowing the grass and everything fits in perfectly and all the small imperfections don't really matter. Your real estate agent will want you to be happy with your purchase, so it is crucial that you communicate effectively to them stating the criteria desired. They will need a feel for what you want and then show you what is available. A good agent will never give up until you find the place that you've wanted from the beginning. 

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Top 10 Home Tools

     Not every home owner is supposed to be the master handyman. But most home repairs are simple and should be easy enough that everyone can do them. Here is a list of the top 10 tools homeowners should have and know how to use.

     Number one is the screwdriver. Invest in both the Philips head and flat head. You can tighten drawers, cabinets, and all the countless children's toys laying around the house. Next you will need a hammer. How to use this is pretty self-explanatory, but they're also useful in removing small nails here and there.

     Get yourself an electronic drill. I prefer battery operated ones vs. ones with the cord. Countless home projects can be solved with a drill. Pliers are a really handy tool. You will find ways to use them everyday if you try. Tightening and loosing bolts are a prime example of how they're used.

     Get a tape measures. Measuring things left and right is always useful. Next get yourself a shop vac. These machines can clean anything everywhere. They're good for removing standing water, cob webs in hard to reach places, and anywhere holding dirt in a crevasse.

     Exacto blades are an awesome tool. Opening boxes, cutting perfect angles, cutting roof shingles, etc. The list can never end with this tool. Get one! Chop saws might intimidate some home owners, but they're great for cutting trim, moulding, and even decks. Finally use a level to hang the perfect frame. Sometimes our eyes deceive us, so get a level and make it perfect.

     All these tools can be used by anyone, male or female. They are great for simple home projects and hold a lifetime value. They will be good for hundreds of repairs. You'll save money doing things yourself and have a sense of pride that you did it yourself.

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Recognize Flawed Foundations at the Start

     One of the leading problems for first time home buyers is being able to assess the condition of homes from the start. It's easy to tell a top conditioned home compared to a lousy home, but first time home buyers have difficult evaluating the properties that are in between. Here is a small blog that will help you identify home conditions from the star, knowing what the real estate agent is talking about. 

Problems start at the bottom

     We start with the floors. Most houses and apartments constructed with a base, called the foundation. This is often just concrete poured in a flat sheet on the ground. The weight bearing system is above that called the sub-floor. The sub-floor is often times a weight bearing system set up with pieces of wood, and smaller pieces of wood connecting them. Then a smaller floor is laid on top of that which usually consists of hardwood, oak, or bamboo planks. The floor that is laid is usually depending on what the room is used for. For example, bathroom floors are usually tile that are laid on top of concrete. This is because wood would not hold up well with exposed water all around it.

Cracked Foundation

     Picture a house like a wedding cake, there are layers upon layers, and the whole cake would be ruined if the bottom layer was ruined. Like buying a house, it is essential to watch for cracked foundations. This can cause major problems in the value, and the upkeep of your home. Construction companies will fix this by lifting your entire house, fixing the crack and lowering it back down again, and this is extremely expensive.

Mismatched Heights

     Another problem that can happen is different floor heights. Either the floor rises, or lowers in different parts of the same room. Pipes may need to run through one room and cause rising floors, which is disastrous. This isn't a huge flaw, but it is annoying, and it will annoy you the entire time...

Three Simple Ways to Avoid Moving scams

     Everyone knows the complexities of moving, but it can be much worse when you realize you've been taken advantage of by a mover who has several operating rings out there. that's why it's critically important that consumers are put in a position to know how to avoid being scammed. Not only will you be able to have that piece of mind knowing you didn't get ripped off, but you will also be able to feel the enjoyment of your new home. Keep these three things in mind when moving.

     1. Get Multiple moving Quotes- The best way to spot a scam from the beginning is to compare competitors. Try at least five different moving companies. Having five different quotes will allow you to see the average price range for their service, and spot which ones are looking to take more of your wallet. If you see another company that is drastically lower than the rest, you should immediately think there is something wrong.

     2. Get Binding Moving Estimates- A binding moving estimate is just a legal document reporting everything about your move, including the costs that you will pay from the company. This is the contract you and your moving company will have to abide by. When you have a regular moving estimate, there is no law stating that the movers have to abide by it. However, if you have a binding estimate the movers cannot charge you more than 110% of what the cost is.

     3. Know the Best Moving Practices- Know what you're getting into, how to go about dealing with movers, and know what your rights and responsibilities are so you know you will not be taken advantage of. From tipping, to dealing with demands for deposits when scheduling your move, do some research to know how to handle each aspect of the moving process. Be sure to look at the Federal Motor Carrier Safety Administration's website designed to specifically for consumers who are moving. In the end, knowing how to protect yourself will save you time and money and avoiding these scams.

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Mums the Word

     Fall is obviously the end of summer, but this season still holds opportunities to amp up your home's curb appeal. Curb appeal is important for several reasons. We judge the condition and value of a home on first impressions. This is why staging and cleaning a home before buyers see it is very important. Curb appeal is a giant factor in creating excitement for a home and luring in new buyers.

     If a buyer drives by a home that has an ugly lawn, chipped painting, weeds everywhere, they will probably assume the inside is just as disastrous. They will be looking for a good first impression, and Fall will give you the opportunity give them that first impression.

     It's time to add color in the fall season to reinvigorate life into your property. Fall colors like orange, dark reds, browns, and yellows are the perfect colors to give your home a good feel. Mums are a good and inexpensive way to add brilliant color. Be sure to buy mums that have a lot of unopened blooms. If they already look awesome it means they are nearly done with their blooming cycle. Mums can be planted directly into the ground, in a pot, and they even look great around your mailbox.

     Another great fall plant is the pansy. These flowers last quite awhile into the winter and look awesome for beds. Seasonal decorations get people into the holiday spirit, just remember that too much is considered less tasteful. Less is more.

     Pumpkins are always a great idea. Try different sizes, shapes, and colors. Wreaths can also infuse color and fun into the season. They always look terrific on your door, so hang it there and see how you like it. They can be removed at the end of the season without any damage to your door.

      As the final step be sure to tend to your yard. this means keep the grass mowed, leaves raked, bushes trimmed, etc. Revitalize your home this fall and let buyers see how fantastic your home actually is.

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Stop Complicating the Uncomplicated Things

Things today are over complicated. There is paperwork for everything. There are special passwords for different accounts, special characters for each password, cannot have numbers in that password for this account etc. The markets (any market) are so specific.

     A market is only as good as its basic participants. One person has something to sell while the other wants to buy. If these happen to be the same thing, then both parties would find the value of that something and make a sale or transaction and swap resources. Simple. If there are enough of these transactions then you have yourself a market. depending on which political party you are talking to, or which news station you are watching, they'll tell you different interpretations of the same information regarding any market. But the complications come in when there are artificial interferences that happen  to change the market. No one likes complicated issues, so why don't we break it down to its simplest elements.

     Shelter is a basic necessity of life, everyone needs it. As Jim Weichert says, "if it has a door and you can finance it for 30 years at 5%, buy it", or something close to that. It really doesn't get much simpler than that. one person wants a home, and one person is looking to sell it. It is the real estate agents job to get those people together to work out price, time, and all the other factors involved. The agent has created their own market if they do that enough.

Make your own market, make it simple, and make it uncomplicated.

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Real Estate Investing: Investing in Short Sales

     If you don't know what a short sale is, ask your agent. In the mean time I'm going to try and explain it for you. A short sale is the sale of a piece of property that is sold for less than what is owed on the property. The proceeds of the sale are much lower than what must be paid back on the mortgage. This usually happens when a borrower cannot pay their mortgage, so they decide to sell it for what they can instead of foreclosing. They would rather take a loss than foreclose.

     The process: Both parties agree to the short sale process in order not to completely be sunk. They avoid a foreclosure with is a mess in itself. There are hefty bank fines, credit score annihilation, and social embarrassment.  However, this doesn't mean the borrower isn't responsible for paying back the rest of the loan that they still owe. This is known as deficiency.

     The bank or lender also agrees to discount the amount owed due to knowing the economic hardship the borrower is going through. Once the debtor sells the property for less than the outstanding balance of the house, they return the proceeds over to the lender.

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Real Estate Strategies

Here are a few quick tips to understand the real estate industry.

1. Always understand insurance, it will let you know change. Understand every aspect, every sentence of it. Ask your agent if you are confused by something.

2. Never keep a building empty.

3. Never buy a property that has no equity.

4. Only sell out of necessity.

5. House prices can fall, as well as rise.

6. make sure you have a good deal if you are going to buy.

7. Always compare mortgage rates.

8. Take expert advice when looking for a home inspector.

9. Create leverage.

10. Always check terms of contract. Make sure you understand and agree to the terms.

11. Look for properties that require little work. If much work is needed, make sure you are up to the task physically and financially to perform the tasks.

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