Archive for October, 2009

FSBO Homes Buyers Should Order Title Search

Tuesday, October 20th, 2009

Although buying FSBO homes is certainly faster than having to work with a real estate broker or agent, there are some perils that one should be aware of. One of the dangers involves the title of the property.

To address this concern, buyers and investors will be more confident about the transaction if they order a title search. Basically, it involves the checking of public documents, particularly land records, to determine who has the right on the property and what these rights are.

If you fail to order a title search, you may find yourself paying for debts that are attached to the property. Keep in mind that such debts stay with the property and not with the owner. It will be possible that you may have to face numerous lawsuits if the property has several liens attached to it.

Some would argue that the purchase of title insurance is enough to protect them. But there are situations where the investor pays cash for the FSBO homes and might not consider the purchase of title insurance as necessary.

On the other hand, you do not have anything to lose if you do decide to order a title search. It is even recommended that you do so even before you start negotiating prices. This way, you do not have to waste any more of your time and money in case there are problems with the title.

To further protect you and your investment, you will still need to purchase title insurance. You will only have to pay for this once and you can enjoy peace of mind knowing that the costs incurred in case of liens attached to the title will be covered.

Experts usually recommend that buyers purchase a separate policy if they will be going through a mortgage lender. Usually, the title insurance required by lenders just protects the lender and not the buyer.

When ordering a title search during the purchase of FSBO homes, look for a company that specializes in state, municipal and even federal lien search. Some companies also provide judgment search, tax status as well as an in depth look on the chain of liens and titles. A full title search involves going back to the very first owners of the property while a current owner search will involve just the last sale.

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For Sale by Owner Sellers Can Help Buyers Get Pre-Approved

Monday, October 19th, 2009

As a seller of a for sale by owner home, the possibility of wasting time with a potential buyer who will not be pre-approved for a mortgage loan is high. Such situation is certainly frustrating especially if you have already spent months negotiating the sales price. What is worse is that you might have even turned down other offers.

With the tighter lending guidelines being implemented today, almost 50 percent of home buyers were lucky enough to obtain mortgage loans.

This is based on a study conducted by the Mortgage Bankers Association wherein they have observed lenders reject applications due to inability of the applicant to shell out a bigger down payment amount or low credit score.

In order to avoid such time-wasting situation, sellers are advised to focus their attention on buyers who already have obtained a pre-approval letter. Keep in mind that this is different from being pre-qualified, which still lacks the credit score, income and other financial background check.

In case the potential buyer is not yet pre-approved, you should first inquire about the steps they still need to take in order to obtain a mortgage loan. Make sure that you do this before negotiating the sales price. This way, you will not be only wasting time but you will also be giving great advice to the buyer.

By doing so, you also encourage them to transact with for sale by owner sellers instead of hiring brokers or agents.

One of the advices you can give the buyer is to look for a mortgage lender either in person or online. There are so many available information and resources they could utilize from the internet in order to ensure that they get pre-approved.

By providing assistance to the buyer, sellers of for sale by owner homes will be able to save time. In addition, they will benefit much from the experience, which they can use to help out a fellow FSBO seller.

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Staging Essentials for Houses FSBO

Tuesday, October 13th, 2009

If you are among the many sellers of houses FSBO, you are probably aware of the importance of staging in attracting potential buyers. If you meet your staging goals, buyers will be able to see themselves living in your home. In addition, they could easily imagine how their things will look.

However, you might not be aware that it is not merely about ridding your home of clutter, cleaning and conducting repairs. You should know that a properly-staged home will successfully display as well as enhance all the room’s potential.

You should know that there is no need to spend money since you can simply use your own furnishings. All you need to do is to plan accordingly and fine tune the staging details.

Consider the following staging suggestions specifically for houses FSBO:

In order to make your rooms appear larger than they actually are, you should make sure that you do not over-crowd or over-decorate. By reducing clutter, the focus will not be on your furniture but on the room itself.

  • It is important that you balance the room by properly placing furniture. If you are able to create a proportional look, buyers will not have any adverse reactions to the room’s appearance.
  • Determine the focal point of the room. For example, it could be the fireplace or a picture window. Remember to look for natural points to which the buyers can focus on. If you want to make sure that the potential buyers see a particular room, make sure that you frame the room’s focal point.
  • You will be surprised to learn that lighting is an effective tool in enhancing and optimizing the room’s presentation. Adjust the lights in your rooms in order to change how the room is seen.

Selling houses FSBO successfully is only a matter of knowing how to transform the home into a desirable and marketable commodity. Always keep in mind that the housing market is tough right now and you should make sure that you come up with a way to rise above the competition.

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FSBO Property Sellers: What Costly Mistakes to Avoid

Friday, October 9th, 2009

Competition is tough in the housing market especially with the large number of foreclosures and existing homes for sale. If you are selling an FSBO property, you must keep in mind that there is no room for mistakes. Without meaning to, you might find yourself jeopardizing your own objectives.

The most important thing that you should do is to listen to the suggestions of experienced and professional realtors. Among the costly mistakes that they would like you to avoid include the following:

Putting a For Sale Sign Prematurely – although you really need to sell your home, it is important that you do not rush into things. Remember that making the right first impression with buyers is the ultimate basis for your success. Prepare and plan everything accordingly and do not have any unrealistic expectations.

Over Improvement – you will be surprised to learn that there is such a thing as over improving. Unnecessary upgrades and additions will make your home stand out for the wrong reason, making it an anomaly in your neighborhood.

Unrealistic Pricing – whether you like it or not, the price of any FSBO property is based on the current conditions in the housing market. At present, buyers have the upper hand and you should take this into consideration.

Becoming Involved Emotionally – this is perhaps the biggest mistake that a seller can make. As soon as you decide to sell your home, you should now consider it a commodity. This means that the pricing and marketing will not be influenced by any sentimental factors. You should also not let any criticism influence your decision to consider an offer.

Failure to Prepare All Documents – this mistake will cause delays and might irritate the potential buyer.

Failing to Provide Full Disclosure – if you try o cover up any problems or issues with the FSBO property, you might end up getting sued.

Follow these recommendations and in no time at all, you will find yourself reaping the fruits of your labor.

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How to Lease Houses For Sale by Owner

Tuesday, October 6th, 2009

The real estate market today has been making it difficult both for buyers and sellers to come to an agreement about financing a sale of a house. Houses for sale by owner need to have more options in financing. With this, a lot of buyers and sellers are settling for rent-to-own, or leasing.

This option is similar to a simple lease. The tenant would be renting the house and would pay for monthly expenses such as rent and other fees. However, this option is different in such a way that there are some terms that can be different, based on the agreement of a buyer and a seller.

For instance, the seller may ask the tenant to give a certain amount to make sure that the house is being sold and “reserved” for them. This deposit would be part of the total value of the house, if the tenant agrees to purchase the house in the future. The seller and the tenant can also agree upon a specific amount of time for how long the house would be rented.

There are advantages and disadvantages to the rent-to-own option for houses for sale by owner. For the homeowner, they would get monthly income from the rent, as well as the deposit that the renter pays at the onset. Aside from this, the option already secures that the renter would most likely purchase the house.

On the other hand, a buyer would be able to experience living in a house that can be purchased in the future. Being able to live in a house that you are considering would help you well in deciding whether or not it is worth your money.

The lease-option also poses the risk of having the house back to the landlord’s ownership. The house can be damaged and be in need of major repairs. To avoid the hassles and troubles associated with this, sellers can specify rules for maintaining the house.

Meanwhile, a tenant, upon deciding that the house is not worth to be purchased, would lose the deposit that was given at the start of the term.

The rent-to-own option can be attractive to a lot of buyers and sellers of houses for sale by owner. It is important to talk it through during negotiation.

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FSBO Houses for Sale: Closing Basics

Thursday, October 1st, 2009

If you are one of the home buyers who chose FSBO houses for sale for their next home, you might have found the experience interesting. Surely, like the home seller, you have learned more about the housing industry.
If you have already made the offer to the house, you have to take note of other details still. Here are some things you have to consider in closing on a FSBO house:

  • Work with an agent. An escrow agent would help you deal with the settlement of your new house. They would help you ensure that you are getting a house in a legitimate and secure manner. An escrow agent would prepare a document that would give details about the costs related to closing. Here are the details you would have to check:
  • A clean title. Not only would an escrow agent check for the title from the previous owner, but would also conduct checks with other owners of the house in the past.
  • A good mortgage. You have to be sure that the house would be financed properly.
  • Closing costs. A mortgage has closing costs that should be ensured. Failure to meet these would cause a lot of trouble for a home buyer. FSBO houses for sale can bring problems to both buyer and seller, due to the absence of an agent on the part of the seller.
  • Utility usage. Make sure that your settlement is clear on this. Electricity, gas, water and other utility fees should be paid by the house seller until the day you move in.
  • Contracts for services. If the seller had already paid for services such as pest control and lawn services, you would have to pay them instead, since you would be the next beneficiary of these services.
  • Cashier’s check. You would need to bring a check on the day of closing. The escrow agent would let you know this. Make sure that you use a cashier’s check, since a personal check would not be allowed.
  • Warranty. It is recommended for all buyers of FSBO houses for sale to get a home warranty. This would cover replacement and repair costs if ever items such as appliances get broken shortly after you move in.

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