Title Seasoning: 10 Real Estate Investing Tips

If you are planning to buy homes and flip them for profit you will most certainly come up against title seasoning issues. Title seasoning is gaining in importance for real estate investors who wish to make a quick profit from real estate. It will be financial suicide to jump into the real estate investment business without having a thorough knowledge of title seasoning issues. The following are 10 important facts about title seasoning that every real estate investor must be aware of.

  1. During the recent real estate boom everyone seemed to have thrown caution to the wind and there were more scammers than genuine real estate investors operating in the real estate market. This has resulted in the unprecedented number of foreclosures. Gone are the days when you could take a small piece of paper, write a few words and some monetary value, hand it to the person behind the counter and walk away with huge amounts without having to show even your driver’s license.

 

  1. During the real estate boom it was possible for an unscrupulous investor to cheat a gullible home owner into agreeing to sell the home cheap and find a naive buyer to buy the home at a hefty premium. The buyer would be sent to an unscrupulous loan officer and appraiser who will validate the hefty premium price. The buyer would be sold a mortgage he could ill afford and the investor, loan officer and appraiser would make good money. Not surprisingly a year later the home would go into foreclosure. This became the norm during the real estate boom. Now the FHA and the lending institutions have become wiser and have brought in the title seasoning requirement.

 

  1. Mortgage insurance is provided throughout the United States by HUD, which is part of The Federal Housing Administration (FHA), on loans provided by FHA approved lenders. Alarmed by the spate of foreclosures in the recent past FHA and most of the lending institutions have enforced title seasoning requirements on real estate properties in whose mortgage they are involved.

 

  1. The FHA requires that a seller of a home must have been the owner of record of that home for more than 90 days. Even though there are some exceptions they do not apply to fixed-and-flipped homes.

 

  1. Further if you are selling a home to a retail buyer within a period of 12 months of purchasing it and the selling price is more than your purchase price then FHA may ask you to substantiate the increase in price through documentation like list of improvements made, receipts, before and after photos, etc. Additionally, if you are selling the property within 12 months for more than 100% of your purchase price the FHA may ask for a second appraisal.

 

  1. Other conventional lenders also have similar title seasoning rules. The title seasoning requirements however would mostly depend on the buyer’s debt service history and credit score. Therefore if you are selling within 180 days of purchasing a real estate property you should check with the buyer’s lender to find out about their stipulations regarding title seasoning. If you go ahead without checking it out you may end up with the house off the market for 30 days unnecessarily.

 

  1. Another scenario where you can land in deep trouble is when you take a hard money loan to buy a property, do a quick rehab and put it back on the market but find no takers. As they interest on a hard money loan is very high it would be better if you can avail a conventional refinancing of the home and pay off the hard money lender so that your interest burden can become manageable. However it will be very difficult to find a lender for the refinancing if you have held the title for less than six months because of most lenders’ title seasoning rules.

 

  1. It is not necessary that you have to deal with title seasoning issues in all cases where FHA is involved. Take the case where you are working on a foreclosure short sale involving a property having a FHA insured loan. As the FHA has insured the loan it must approve the short sale. Once the short sale is approved by the FHA you can buy the property with the FHA loan, flip it and sell it to a buyer who is not getting a new FHA loan. Here the title seasoning rule does not come into play.

 

  1. The above does not mean that you cannot use some creative financing to overcome traditional lending institutional guidelines regarding title seasoning issues. If you find yourself stuck then you can use the strategy of creating a seller financed note for structuring a deal. You can sell this note at the closing to a note investor for financing the deal. If you want to know more about note funding then look for note funding investor forums in Google or Yahoo and learn about it there. You can also visit www.notefunding.com and look under the title Creative Strategy to Buy/Sell Property.

 

  1. Another way a real estate investor can overcome title seasoning is through land trust. In essence land trust involves a bunch of papers but it is highly effective. Land trust involves three important things – land, beneficiary and trustee. The advantage of this is that conveying real estate property into a land trust will not break the chain of title. For example if a property has been owned for 5 years by the previous owner and after that you have owned the property for 3 months then title seasoning will show 5 years 3 month when the new lender requests a title binder from the closing attorney. Even though the fact of the conveyance of the property to the land trust will show it will not break the chain of title.

 

Real Estate in Ephrata, Pennsylvania: Best Times to Buy or Sell

Estate

If you are looking to buy or sell a home in Ephrata, PA, there are a few guidelines to consider which will help you to determine the best time to make your purchase or sale.

For the seller, there are some times of the year that are much more suitable for selling than others. I consider the spring and summer to be the best times to sell a home in the area. Ephrata, PA is stunning during these seasons. Wildlife and natural beauty abound. Amish roadside vendors offer a safe and family-friendly atmosphere. The natural beauty of the surrounding landscape will help to add curb appeal to your home. This is also a good time for open houses which are wonderful to attract buyers to your property.

The winter months are not the best times for a seller who is looking to find buyers for their property. Ephrata can be very cold during the winter which can intimidate some buyers. Snow and ice can also play a role in the sale of your home. These weather conditions can make it difficult for some buyers to see the real value of your home and can also make it difficult to schedule visits to the property.

For the buyer, there are also times that are more suitable than others. As I stated above, the spring and summer are wonderful times to purchase a home in Ephrata because you are able to see the true beauty of the property and its surroundings. The summer can also be a more suitable time to buy for families. It is a much easier transition for children if they are able to begin school in a new school year compared to changing mid-term. While there are benefits for purchasing a home during this time, there are also some downfalls. The buyer’s market is more competitive in the warmer seasons. There are generally more people who are looking to purchase homes during this time which could possibly lead to bidding wars.

For a buyer, I believe the best time to purchase, while keeping finances in mind, is during the winter. Sellers who put their homes on the market during the winter are normally more eager to sell. This fact combined with the slower market during the winter enable the buyer to get a better deal. Another tip is for buyers to become very friendly with their local real estate agent. A real estate agent can allow a buyer to see a property before it is even listed. This is a wonderful advantage for those who are looking to find their perfect house.

Whether you are a buyer or a seller, there are some times of the year that are better to make your sale or purchase. For both the seller and the buyer, it is important to become close to your real estate agent. The agent is the key to getting the best price for your home in both cases.

California Real Estate Investing Tips for New Investors

California

California real estate investing can be tricky for investors inexperienced in buying properties for profit. California has taken a hard hit in foreclosures since the subprime lending crisis. According to DQ News, nearly 80,000 foreclosures occurred within the third quarter of 2008 and continued to rise through the first quarter of 2010.

California real estate investing could turn out to be the next gold rush for investors who purchase foreclosure properties. DataQuick states, “At formal foreclosure auctions last quarter, an estimated 24.6 percent of foreclosed properties went to investors. That’s up from an estimated 17.6 percent a year ago.”

 

Some California markets have witnesses housing prices drop as much as 30-percent; making real estate more affordable in the Golden State. However, home prices are beginning to rise in inland areas and property sales rose by nearly 10-percent in Los Angeles, San Diego, San Bernardino, and Orange counties. Investors who desire to purchase investment property should develop strategies now as real estate prices are expected to escalate throughout the year.

 

In order to turn a profit with California real estate investments, investors must take time to learn about the market as well as real estate laws. This is particularly important for investors who plan to use properties as rentals.

 

California has some of the most stringent landlord tenant laws in the country. Investors should visit the California Department of Real Estate website before buying investment properties. First time investors would be wise to work with a real estate attorney to ensure they are in compliance. Otherwise, they could be subjected to exorbitant fines.

 

The U.S. Census Bureau reports nearly 500,000 people move to California each year. This presents profitable opportunities for real estate investors who understand the needs of new residents. Many people who relocate need suitable housing with easy access to interstate systems and located within desirable school districts.

 

Investors who take time to review real estate trends and comparable sales reports can better determine housing market trends. Investors should locate the best school districts and focus on providing affordable housing to families with school-aged children. Networking with other real estate investors can shed light on what types of homes tenants and home buyers want.

 

Another niche investors should consider is offering houses for sale using creative financing options. Many people think of creative financing as illegal, but nothing could be further from the truth.

 

In today’s economy, obtaining a home mortgage loan has become difficult for buyers with less than perfect credit. Many California residents want to purchase homes but are unable to qualify for financing. Investors can solve this problem by offering properties as lease-to-own or providing seller carry back financing.

 

With lease-to-own homes, buyers provide a down payment and a portion of rent monies are contributed toward purchasing the home. This type of financing typically extends for two or three years to give tenants time to rebuild credit. When the contract expires buyers obtain financing through a conventional lender.

 

With seller carry back mortgages, investors act as the lender and carry all or a portion of financing. Buyers provide a down payment and submit monthly installments to the seller. Most investors carry back a portion of financing and borrowers obtain a home loan for the balance. Seller carry back contracts usually last between two to five years. Once the contract expires, buyers refinance mortgages into a conventional home loan.

 

Investors who buy homes in the state of California have many opportunities to obtain a good return on investments. However, they must engage in due diligence when buying distressed properties or offering creative financing.

 

It is best to develop of network of real estate professionals including attorneys, realtors, mortgage brokers and private investors. Join California real estate clubs to locate potential business associates and expand investment opportunities.

 

Sources:

 

DQ News (DataQuick) – www.DQNews.com

DQ News – California Foreclosure Statistics – www.dqnews.com/Articles/2010/News/California/CA-Foreclosures/RRFor100420.aspx

California Department of Real Estate – www.dre.ca.gov

U.S. Census Bureau – www.census.gov

Tree Top Drive, St. Charles, Missouri, Real Estate Slide Show

Estate

Tree Top Drive is a drive through community of homes with a main road and several courts located off the main road. The subdivision is completely surrounded by residential communities on all sides and is a passageway between Country Club Road and Muegge.

The location is the greatest aspect of the community with immediate access to Interstate 70 and easy access to Highway 94 or 364 (the Page Extension). Shopping on Zumbehl road or Cave Springs is just minutes away. On a nice summer day, you could even walk to shopping. There is a plaza just around the corner that includes a grocery store, fast food, and a craft store among many other types of retailers, hair salons, and such. Because everything is in close proximity, you will often see walkers, bike riders, and pedestrians within the community. Bogey Hills Golf Course is just around the corner as well.

 

Tree Top Drive has sidewalks and streetlights and does not allow parking on the main road, which adds to resident security. Because the community creates a shortcut between two major roads, it does receive quite a bit of non-resident traffic, which can be a huge deterrent for individuals with small children. The multiple courts located off the main road would be a better option for those with children, but still not ideal.

 

Homes for sale in this community are typically below average price. Most of the homes are ranch style homes with basements. Bauer Realty has had listings in this community. You can contact them directly at 636-447-3300 for information about current pricing and homes available.

 

If you live on Tree Top Drive you will need to contact the Francis Howell School District to determine if your subdivision is located within their school district. Boundaries for school districts can change so you will want to determine which district you are in before purchasing a home if schools are important to you. Their main website page can be accessed at fhsdschools.org.

 

Before moving into any subdivision, you will also want to be aware of any potential dangers that may exist including any registered sex offenders. You can determine if this subdivision is at risk by visiting the Missouri State Highway Patrol Registry on line at the following link: SEX OFFENDER REGISTRY

 

SEE SLIDE SHOW of SUBDIVISION

Bluff Meadows at the Bluff, Subdivision, Real Estate, Slide Show

Estate

Bluff Meadows Subdivision is located in “The Bluffs” of St. Charles, Missouri. The Bluffs are an exclusive and private community composed of several subdivisions including Bluff Meadows Estates, Woodmere, and Bluff Meadows. The community is located off Caulks Hill Road on the southern most end of St. Charles. It is set back from any main access roads, which creates a very private and intimate woodsy feel. The subdivision is surrounded by collective neighborhoods but also by mature trees and nearby conservation areas. There are sidewalks and streetlights throughout the community providing safety and convenience for children, runners, and dog walkers. The subdivision is very family friendly. Many of the homeowners have pools or outdoor play equipment in their oversized lots.

Having a private setting in this community means forgoing some conveniences, like access to main roads and shopping. Caulks Hill has become a very busy road for residents with an abundance of neighborhoods located off this once country road. While commercial locations are growing in numbers along this busy road, shopping is limited. There are a few salons, dog grooming services, and insurance agents, but the closest grocery, retailer, or fast food establishment is at least 8 to 10 miles away at the Harvester Shopping Center off Highway 94. Access to Highway 70 is not very convenient either, but a 15 to 20 minute drive will get you there. The Mid Rivers Mall will be a longer drive from this community at about 30 minutes.

 

Much like the subdivisions that surround this one, it is comprised mostly of modern 2 story homes and lots that are above average in size. Home prices in January of 2010 are in the 200’s. It is very secluded, quiet and serene. The main entrance is located off Bluff View Drive, which stems off of Caulks Hill Road providing private access to residents.

 

Bluff Meadows Estates is located in the Francis Howell School district. Elementary children would attend Castlio Elementary, middle school children would attend Barnwell, and High School students would go to Francis Howell North according to the Francis Howell School District website: http://sup.fhsdschools.org/streetlist.asp. You can reach the school district directly to confirm and register at 636-851-4000. Their main website is located at http://www.fhsdschools.org/.

 

Anytime you have small children, you will want to learn of any potential dangers in the area. Most people check the Missouri State Highway Patrol, Sex Offender Registryas a precaution. You can access their website at: http://www.mshp.dps.missouri.gov/MSHPWeb/PatrolDivisions/CRID/SOR/SORPage.html. Agree to the disclaimer and enter your zip code for an updated list of offenders in the area and be sure your child is aware of the possible dangers and where they exist.

 

TO SEE FULL SLIDE SHOW OF THE COMMUNITY, CLICK HERE

An Analysis of the Lynchburg, Virginia Real Estate Market

Analysis

If you are the type of person who is tired of the everyday troubles from living in the city and are looking for something a bit more peaceful, then perhaps you should consider the Lynchburg, Virginia Real Estate Market. If you are not ready to become a complete loner and still want to have easy access to restaurants and theaters, then the Lynchburg, Virginia Real Estate Market is for you.

Lynchburg is a very open community in that it opens its doors to not only new comers from other parts of the state, but also from other parts of the country. For a family desiring to relocate the Lynchburg, Virginia Real Estate Market has a wide array of free information on their educational system and specialized centers.

 

In fact, Lynchburg, Virginia has been recently rated by Money Magazine as one of the top fifty places to raise a family within the United States. The Federal Bureau of Investigation has named it as one of the most safest places in the United States as well. You could not ask for a better area to raise your family, plus it also has one of the best health care systems in the nation.

 

Oftentimes, when you relocate into a medium sized town like Lynchburg, Virginia you might experience such problems as you would in a much larger town in regards to living expenses, traffic congestion, and crime rate. However, you will the same amenities that you would get in a large city in Lynchburg, Virginia without having to deal with all the other underlying problems.

 

One of the best investments right now the Lynchburg, Virginia Real Estate Market would be Richland Hills. It is a smooth blend of old and new in the southern region that is not only alive with colors, but has that protective feel to it. There are many moving packages available that offer a variety of brochures to help you will all your personal amenities once you select a home.

 

Richland Hills could be your families’ key to a new home and the beginning of a new future within the mountains of Virginia. Take time to inquire about all the available listings in the Lynchburg, Virginia Real Estate Market, which is among one of the fastest growing places in Virginia right now. Lynchburg, Virginia is a rapidly growing city where you will never run out of fresh new things to do.

Owners Selling a Home – First Steps to Follow: Privately or Professionally Selling Property Means Fixing, Upgrading

Moving is not an easy assignment. Besides the emotional toll it takes on everyone, one also has to deal with the home one is vacating as it will demand a great deal of attention before getting a good price.

Home Selling Advice: First Steps

A good question to start with is, “What work should be done by a professional, and what can the sellers do by themselves?” Deciding which repairs can be undertaken by the homeowner, and which need professional work is important. Sharing the work by having some of the burden borne by professionals will help a lot. The cost will be higher of course, but the emotional cost the seller feels at this time is extreme, and one less headache offers a positive step.

Preparations that can be done by either the professional or the home owner:

  • Carpet cleaning
  • Painting of walls
  • Concrete driveway repairs
  • Window cleaning
  • Dry wall patching
  • Wall paper fix ups
  • Wood cabinetry varnishing or painting
  • Grout work

For Professionals Only:

It is suggested that these jobs be done by a professional:

  • Carpet replacement
  • Electricity faults that need mending
  • Roofing
  • Air conditioner and or furnace repair or replacement.
  • Window repairs of locks and screens

Selling a House Checklist

An honest assessment of home repairs that need to be done is essential. Make a list, room by room, of issues that are obvious; for example, a dripping tap in the bathroom, a leak in the roof in the laundry room, a light switch that has never worked.

Follow up this check list by going room to room. Examine all the features from the ceiling to the floor in the following way, noting what action needs to be taken:

  • Celing:check paintwork, fans, cobweb removal
  • Mid wall: remove picture hooks, nails, patch holes
  • Light switches: Clean, replace, test
  • Millwork: beading, decoration and walls need dusting, painting
  • Floor: cracks, cleaning, carpeting
  • Doors: oiled, painted, easy to open and close
  • Door handles: on cabinets and doors
  • Cupboards/Cabinets: clean, straighten or replace bent shelves,
  • Bathrooms: grout, toilets, showers must be cleaned and face the new buyers in their best condition. A dirty bathroom is a turn-off to most new home searchers.
  • Patio: Ceilings, floors, brickwork, outside light fittings, switches, power points to clean and be repaired

Selling a Home Fast

Helpful advice is to get the home and property into perfect working condition as soon as possible and ready for the first interested home searcher. Staging the house, which means decorating a house for a sale, is worth the effort. The following website, one among many offer some suggestions in this regard.

Realtor.org offers links and suggestions about staging a home.

After the Sale and Moving Out

When vacating the house, ensure that every item personally owned is removed. Remember that nobody wants other people’s old stuff, so don’t leave anything in closets, storerooms or on the patio even if the item could be useful for someone else. Keep it yourself, or dispose of the item appropriately.

As daunting as it may be to get a home sold, this simple list will organize some of the steps to help get the house or apartment into good order. Hopefully a very good price will be agreed upon and the property can be left standing proudly, waiting for its new owner.

Getting a Mortgage with Bad Credit: How to Get Approval from Poor Credit Mortgage Lenders

Refinancing with bad credit is undoubtedly more difficult, but it needn’t be an insurmountable obstacle. Those who have missed and made late payments on past/existing credit agreements will find that lenders will have reported this to all three major credit reference agencies (Experian, Equifax and TransUnion). This makes securing finance or remortgaging far more difficult. Getting a mortgage with bad credit can prove difficult, but there are ways to get around this problem.

Getting a Mortgage with Bad Credit

In order to get approval, it is important to establish the criteria that poor credit mortgage lenders will want to satisfy. The best way of achieving this objective is by understanding that financial institutions are seeking to protect their balance sheets by ensuring that each borrower is in a position to maintain their repayments. In the event of default, they want to be able to recover their money through mortgage repossession. This means that the level of home equity needs to be sufficient to cover the loans secured on the property.

Poor Credit Mortgage Lenders Require a Stable Employment History

The longer the applicant has been in the same job, the more likely they are to receive approval for an adverse credit mortgage deal. Those in temporary employment or who are still in their probationary period are unlikely to get their application for refinancing approved. The application will either be immediately declined or, in the best case scenario, the cost of borrowing money will be extremely high.

Income to Debt Ratio

All poor credit mortgage lenders will want to see that a potential customer has a sustainable level of debt relative to their income. The higher the borrower’s debt, the more likely they are to default on a bad credit mortgage. This is because they have less scope to pay their bills in the event of a change of personal circumstances. Those who have an income to debt ratio of less than 36% are more likely to get approval for a bad credit mortgage deal.

Required House Deposit for an Adverse Credit Mortgage

An adverse credit mortgage is far more likely if the borrower is able to provide a house deposit of 20% of greater. This is because the poor credit mortgage lender needs to be able tor recover their money should the borrower default on the arrangement.


How to Get a Bad Credit Mortgage

Whilst getting a mortgage with bad credit is undoubtedly more difficult, it is possible to increase the likelihood of approval. Those who are able to demonstrate a stable employment history, have a house deposit of upwards of 20% and an income to debt ratio of under 36% are far more likely to be approved. Don’t make too many applications for credit as each search will show on a credit report for a period of 12 months.

What Homebuyers Hate about your House

This can happen the moment her car drives up to the front of the house. While you may not be able to rectify issues with the neighborhood, address your house’s negative features before the potential buyer arrives.

Improve the Curb Appeal

While yard ornaments can dress up the front yard, some potential buyers perceive yard ornaments as tacky and a distraction. It is not necessary for the prospective buyer to appreciate your decorating ability; you simply do not want to turn off the buyer before he enters the house.

 

If you sincerely believe your ornaments add to the property, seek a second opinion from another person, such as your real estate agent. If they recommend you remove the ornaments, follow the advice and do not take offense. If you are not sure the person feels comfortable giving an honest opinion, remove the ornaments.

Prospective buyers do not appreciate the weeds and trash in the front yard or the dying bushes. They especially hate the pet droppings you failed to pick up. Freshly mowed green lawn welcomes the prospective buyer, while brown, dying and shaggy grass is a turn off. Instead of visualizing the possibilities of the front yard, they will simply see work.

It only takes a few minutes to wash the front door, removing smudges and fingerprints. Many buyers will never remember the front door, in spite of the fact this is typically where they first enter the house. The exception to this is if the door is especially attractive and dramatic, or if it is filthy. Entering a home through a dirty and neglected front door sets a poor tone for the showing.

Odor is a Major Turn Off

If the buyer hates the smell of your house, they will inevitably hate your house. Remove the smoke, pet and cooking odors. Since the person living in the home rarely notices the unpleasant odor, you might want to proceed as if it does smell badly, and take steps to improve the condition. Go lightly on strong smelling cleaning products, as those can trigger a negative reaction.

The buyer hates what you have done with the place. Sellers take offense at the fact the buyers may hate their décor, or the clutter of knickknacks and family pictures on display. Yet, if you really want to sell your property as quickly as possible, do not alienate potential buyers just because they are not capable of seeing beyond your stuff. Pack up the pictures and clutter. After all, you will be moving the stuff after you sale.

The buyers really hate the old car, RV and boat parked in your back yard. You know you plan to move the junk before escrow closes, but all buyers can think about is the hassle of hauling that junk away after they purchase your house. Remove all the old junk from your yard and house.

While not every potential buyer will love your house, it will take longer to find one that does, if your house gives a poor first impression.

Must Know Tips for Purchasing Bank Owned Homes

Real estate is local except when it comes to bank owned homes where it suddenly becomes national. This is because the lenders selling these homes are neither aware nor concerned with local nuances, instead opting for standardized addenda designed to amend the purchase contract into one appropriate across multiple states.

Differences still remain from state to state but these tips generally will smooth the way for those who wish to buy a lender owned property:

Know the Local Market

Market conditions vary wildly not just from state to state but from city to city. In many areas and at many price points, bank owned homes are selling in a matter of a few days at full list price or higher. Knowing the state of the local real estate market up front is the key to knowing how quickly a purchase offer need be made and at what price.

Recognize Price Has Meaning

Depending on the condition of the property, what seems like a bargain soon came become quite pricey once the additional costs of even cosmetic items such as new paint and flooring is added to the list price. Buyers need to recognize up front that homes priced below comparable properties likely are priced lower for specific reasons.

Understand the Lenders’ Motivation

While it’s true lenders don’t want to carry real estate owned – REOs – on their books, it’s also true that they are not willing to give homes away for pennies on the dollar regardless of the local cocktail party chatter. Lenders generally only will sell at close to market value, or what they perceive as market value, even if this means they reject offers at price points now that they would be happy to accept later. Illogical, but true.

Bank Owned Home Sales are As Is

Purchases of bank owned homes are nearly universally as is sales – what a buyer sees at the time a purchase offer is written is what they get at the close. Some lenders will make repairs required by the buyers’ lender in the case of FHA or VA loans but not all, leaving many foreclosed homes ineligible for those types of financing.

 Home Inspections are Critical

While lenders won’t make repairs to bank owned properties, it’s still vitally important for buyers to have a professional home inspection conducted to determine the home’s true condition. An up-front cost of a couple hundred dollars can save thousands in repair bills later.

While the basics of the transaction on a bank owned purchase are similar to buying a traditional resale home, there are distinct differences that can cost the unprepared buyer time and money. Buyers should take care to check with a local real estate professional who can guide them through the slightly more complicated bank owned purchase process.