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How to sell
The financial and legal aspects of selling a home are complex. Most sellers hire a real-estate agent and pay a commission to get the job done.
You can save that cost if you have the time and knowledge to manage this important transaction. You'll also be responsible for placing ads, answering calls and showing your home to potential buyers. And buyers may insist on a lower price, knowing that you're not paying an agent's commission.
Be sure to consider the value the agent brings:
* Do you have the experience to price your home appropriately? A home priced too high can linger on the market and suffer lasting damage in marketplace appeal. * A professional can help you market your property appropriately, including working with other agents. * An agent's network can be invaluable. Studies by the National Association of Realtors show that 82 percent of real estate sales are the result of agent relationships -- previous clients, referrals, friends and family.
Don't choose an agent just because you know the person socially. Interview several and determine which effective sales people are. Interview the agents at your home and get their reactions to the property as well as their suggestions for improvement.
Never choose an agent just because his suggested listing price is the highest -- it may not be a realistic price. How's it looking from the street?
You've heard the term "curb appeal"?
You'll know what it means when you see a car slow down and crawl past your home once it's on the market. There will be buyers in that car making a snap judgment about your home based only on what they can see from the street. Make sure your home passes this first test.
Some suggestions to help your curb appeal:
* Keep the lawn and shrubs trimmed and looking their best at all times. * Give the exterior of your home a good washing. You'll be amazed at the dirt and spider webs you'll wash away. * Does the exterior need paint? Do it. Double-check the paint on the window casings and doors. * Wash the windows. (You'll be doing this inside and out.) * Are the sidewalks and driveway in good shape, free of cracks? * Check the chimney, gutters and walls and address any problems.
Taking care of the inside We've all visited model homes. They're usually decorated in a generic sort of way, with no true personality. They have less furniture than most of our homes. Everything is clean and in perfect running order. Maybe you don't live in a model home, but you need to take those lessons to heart. Start by trying to see your house with a stranger's eyes. Walk through every room and look critically -- is it appealing and spacious? Open every closet. Stick your head into every cupboard. Pull back the shower curtain. Pay attention to every faucet, every piece of plumbing. Be sure to visit the garage. Stick your head in the oven. That's what buyers will do. So what should you do? Think two words -- clean and spacious. The house must sparkle -- immaculate windows, freshly cleaned carpets, retouched paint, a clean smell. Pay attention to the out-of-the-way places too. Nothing will be off-limits when a buyer comes calling. Help make the house more spacious by removing furniture wherever possible. Imagine the family room without the recliner. If it's a plus, put the recliner in storage. You'll be amazed at how much larger this can make a room seem. Getting rid of clutter is another essential. Clean up shelves. Empty the closets (they'll seem so much larger). Don't use the garage for this storage -- the garage needs to be spacious too. Fix any dripping faucet or running toilet. Make sure the windows open easily. Oil any squeaky hinges. Change the heat and A/C air filters.
About the Author
Sharon Samraj is an expert author, who is presently working on the site We buy houses, Sell home for cash. He has written many articles in various topics. For more information about Sell house, We buy house, We buy home cash. Visit our site We buy houses for cash.
Rabu, 07 Mei 2008
Caring For an Apartment: your Rights and Responsibilities by Bruce Roberts
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As a tenant, you have rights. Though it will depend on where you live, you typically have the right to live in your space without harassment from your landlord, the freedom to request 24-hours notice and permission before your landlord enters your property, and the expectation that the property and included appliances will be maintained to a particular standard. On the other hand, you also have responsibilities.
If you're a new tenant or have questions about caring for a rental apartment, keep reading.
The Lawn: Whose Job is It?
Exactly who is responsible for maintaining the grounds and sidewalks will depend on your lease or rental agreement. Most landlords take on this job themselves.
Regardless of who is caring for the outside of the property, you should respect the land and keep it free from debris and obstructions. If you're using the driveway, you need to also keep it clean and clear.
Holes and Marks on the Walls
While a reasonable amount of wear and tear is to be expected, you likely won't receive your full deposit back if you return an apartment to your landlord with holes in the walls and giant scuff marks on the ceiling.
Before you make any major renovations or start painting, check with your landlord and scan through your lease to see what you can and can't do. Also, if there is an accident that requires major repair, talk to your landlord about either fixing the problem yourself or forfeiting part of your deposit to pay for the problem.
A quick fix for scuffed up and marked walls is to wash them down and paint them in a similar neutral color before you leave the space.
Flooring
Do your best to keep the floors in the condition in which you found them. Try putting felt pads on your furniture legs to minimize scratching. Also, avoid wearing your shoes inside, and always clean up spills quickly.
If you're worried about your deposit, have the carpets cleaned before you return the apartment keys. Alternatively, some landlords charge a standard cleaning fee at the signing of any lease, so you may be able to skip this step.
Ideally, you want to return the apartment in the condition it was in when you first rented it. For your own protection and the security of your deposit, take photos of the apartment when you first move in. Then, if a "he-said-she-said" problem arises with your landlord, you'll have your original photographs to back it up.
About the Author
For information on exciting vacation rentals, please visit http://www.rentalpropertytips.com, a popular site providing great insights concerning vacation destination ideas, such as a St. John villa rental, Smokey Mountain cabin rentals, and many more!
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As a tenant, you have rights. Though it will depend on where you live, you typically have the right to live in your space without harassment from your landlord, the freedom to request 24-hours notice and permission before your landlord enters your property, and the expectation that the property and included appliances will be maintained to a particular standard. On the other hand, you also have responsibilities.
If you're a new tenant or have questions about caring for a rental apartment, keep reading.
The Lawn: Whose Job is It?
Exactly who is responsible for maintaining the grounds and sidewalks will depend on your lease or rental agreement. Most landlords take on this job themselves.
Regardless of who is caring for the outside of the property, you should respect the land and keep it free from debris and obstructions. If you're using the driveway, you need to also keep it clean and clear.
Holes and Marks on the Walls
While a reasonable amount of wear and tear is to be expected, you likely won't receive your full deposit back if you return an apartment to your landlord with holes in the walls and giant scuff marks on the ceiling.
Before you make any major renovations or start painting, check with your landlord and scan through your lease to see what you can and can't do. Also, if there is an accident that requires major repair, talk to your landlord about either fixing the problem yourself or forfeiting part of your deposit to pay for the problem.
A quick fix for scuffed up and marked walls is to wash them down and paint them in a similar neutral color before you leave the space.
Flooring
Do your best to keep the floors in the condition in which you found them. Try putting felt pads on your furniture legs to minimize scratching. Also, avoid wearing your shoes inside, and always clean up spills quickly.
If you're worried about your deposit, have the carpets cleaned before you return the apartment keys. Alternatively, some landlords charge a standard cleaning fee at the signing of any lease, so you may be able to skip this step.
Ideally, you want to return the apartment in the condition it was in when you first rented it. For your own protection and the security of your deposit, take photos of the apartment when you first move in. Then, if a "he-said-she-said" problem arises with your landlord, you'll have your original photographs to back it up.
About the Author
For information on exciting vacation rentals, please visit http://www.rentalpropertytips.com, a popular site providing great insights concerning vacation destination ideas, such as a St. John villa rental, Smokey Mountain cabin rentals, and many more!
7 Benefits of Real Estate Investing by Hunter Craig
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Real estate investment has proven itself again and again as a way to build wealth. To learn more about the benefits of real estate investing, keep reading.
Benefit 1 - Good Returns
Typically in an average market, most real estate investors will see an annual return of between 8 to 10 percent. This steady incline in real estate values is often a lot better than what you'll earn with a money market or standard savings program.
Benefit 2 - Fairly Easy
Almost anyone can get into the real estate market at some price point, even if you only have modest means. While you may not be able to buy a penthouse in Manhattan, a small property in a rural town could fit the bill.
Benefit 3 - It Provides Leverage
Leverage is being able to use credit to finance the purchase or development of a real estate investment. Because real estate can be used as collateral, you're able to invest in something without putting up all the cash yourself.
Benefit 4 - It Appreciates Over the Long Term
Real estate will appreciate over the long term, and do so consistently. Unlike a tech stock or a hot mutual fund, a real estate investment will continue to appreciate.
Benefit 5 - Stability
Unlike a sometimes risky stock investment that may yield high returns initially but drop like a rock later, real estate is often a sound and stable investment. Overall, real estate is slow to fall and slow to rise, meaning with patience - you will make money.
Benefit 6 - Tax Benefits
Setting yourself up as a real estate investor means you can claim or deduct expenses like property improvement or upkeep to offset your investment income.
You can also defer some of your real estate investment income by using IRAs and 1031 Exchanges. For example, as long as the profits from your real estate investment remain in your IRA, they will be tax-deferred until you buy another.
Meanwhile, 1031 Exchanges work by allowing you to take the profits from the sale of one property and invest them into another within a certain time period without having to pay taxes on those capital gains.
Benefit 7 - Sweat Equity is Rewarded
Just because you invest in a company's stock doesn't mean you can walk into their office and start making improvements in marketing while giving their retail outlets a thorough cleaning.
On the other hand, real estate investing actually rewards sweat equity. You can paint walls, replace hardware and invest your own elbow grease to actually improve the value of your investment.
About the Author
For information on exciting real estate locations, visit http://www.realestatelocale.com, a popular site providing great insights concerning home purchase ideas, such as Manchester New Hampshire real estate, Senoia real estate, and many more!
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Real estate investment has proven itself again and again as a way to build wealth. To learn more about the benefits of real estate investing, keep reading.
Benefit 1 - Good Returns
Typically in an average market, most real estate investors will see an annual return of between 8 to 10 percent. This steady incline in real estate values is often a lot better than what you'll earn with a money market or standard savings program.
Benefit 2 - Fairly Easy
Almost anyone can get into the real estate market at some price point, even if you only have modest means. While you may not be able to buy a penthouse in Manhattan, a small property in a rural town could fit the bill.
Benefit 3 - It Provides Leverage
Leverage is being able to use credit to finance the purchase or development of a real estate investment. Because real estate can be used as collateral, you're able to invest in something without putting up all the cash yourself.
Benefit 4 - It Appreciates Over the Long Term
Real estate will appreciate over the long term, and do so consistently. Unlike a tech stock or a hot mutual fund, a real estate investment will continue to appreciate.
Benefit 5 - Stability
Unlike a sometimes risky stock investment that may yield high returns initially but drop like a rock later, real estate is often a sound and stable investment. Overall, real estate is slow to fall and slow to rise, meaning with patience - you will make money.
Benefit 6 - Tax Benefits
Setting yourself up as a real estate investor means you can claim or deduct expenses like property improvement or upkeep to offset your investment income.
You can also defer some of your real estate investment income by using IRAs and 1031 Exchanges. For example, as long as the profits from your real estate investment remain in your IRA, they will be tax-deferred until you buy another.
Meanwhile, 1031 Exchanges work by allowing you to take the profits from the sale of one property and invest them into another within a certain time period without having to pay taxes on those capital gains.
Benefit 7 - Sweat Equity is Rewarded
Just because you invest in a company's stock doesn't mean you can walk into their office and start making improvements in marketing while giving their retail outlets a thorough cleaning.
On the other hand, real estate investing actually rewards sweat equity. You can paint walls, replace hardware and invest your own elbow grease to actually improve the value of your investment.
About the Author
For information on exciting real estate locations, visit http://www.realestatelocale.com, a popular site providing great insights concerning home purchase ideas, such as Manchester New Hampshire real estate, Senoia real estate, and many more!
A Key to Your Real Estate Success: Free Online Seminars on Investing by Terry Bryan
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Real estate has become a lucrative profession for those interested in wealth building. However, investing in real estate is not very easy. One wrong move on your part may result into unprofitable or less profitable deal. So you must educate yourself on the various processes, issues, and other significant matters pertaining to real estate investment.
There are various modes of learning about real estate - CDs, books, online courses, classroom programs, clubs, etc. Another good way of learning about investment is by participating in free online seminars on investing .
For a profitable investment in real estate, you need to develop a good understanding of the market and the various issues associated with investment. It is always a good idea to seek the advice of experts.
These days, domain experts conduct various seminars and courses on investing. These online seminars provide a helpful learning experience that will guide the decision-making process toward the right, profitable direction. Also, they teach you about the appropriate strategies for making your deal a big success .
Free online seminars on investing are a very good and convenient method to learn all about real estate investing. These seminars provide a good platform for verifying the information you know. The best thing about these seminars is that you can watch it whenever you want at your own pace and convenience. Learning and gaining new knowledge of real estate investing is not demanding any more.
For those who do not have time to attend regular seminars, free online seminars are a good option.
Before choosing any free online seminar on investing it is very important to evaluate your needs. You need to consider your objective and your expectations from the seminar, as every person’s need is different. Besides, while signing up for any seminar, check whether the seminar is actually aimed at teaching the nuances of the trade or the purpose is just to market the products and services of the promoters of the seminar.
In most cases, the organizers of such seminars try to promote their products such as books, CDs, tapes, etc. apart from providing information. Before buying them make sure that the quality of there materials is good. In addition, finding good, genuine real estate advisors is an important task. You must go for the ones who are experienced and are successful. Today, the popularity of free online seminars on investing has grown tremendously. Investors from all over the world want to learn and develop good strategies on real estate investment. It is very important to stay updated in real estate investment. Also, it is important to apply the strategies that you have learned. Remember, the more seminars you attend, the better equipped you are to make the right investment decisions.
About the Author
Terry Bryan has been called the "Warriorwiz" and is an internationally acclaimed martial artist, success coach, real estate investor and self-made millionaire .
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Real estate has become a lucrative profession for those interested in wealth building. However, investing in real estate is not very easy. One wrong move on your part may result into unprofitable or less profitable deal. So you must educate yourself on the various processes, issues, and other significant matters pertaining to real estate investment.
There are various modes of learning about real estate - CDs, books, online courses, classroom programs, clubs, etc. Another good way of learning about investment is by participating in free online seminars on investing .
For a profitable investment in real estate, you need to develop a good understanding of the market and the various issues associated with investment. It is always a good idea to seek the advice of experts.
These days, domain experts conduct various seminars and courses on investing. These online seminars provide a helpful learning experience that will guide the decision-making process toward the right, profitable direction. Also, they teach you about the appropriate strategies for making your deal a big success .
Free online seminars on investing are a very good and convenient method to learn all about real estate investing. These seminars provide a good platform for verifying the information you know. The best thing about these seminars is that you can watch it whenever you want at your own pace and convenience. Learning and gaining new knowledge of real estate investing is not demanding any more.
For those who do not have time to attend regular seminars, free online seminars are a good option.
Before choosing any free online seminar on investing it is very important to evaluate your needs. You need to consider your objective and your expectations from the seminar, as every person’s need is different. Besides, while signing up for any seminar, check whether the seminar is actually aimed at teaching the nuances of the trade or the purpose is just to market the products and services of the promoters of the seminar.
In most cases, the organizers of such seminars try to promote their products such as books, CDs, tapes, etc. apart from providing information. Before buying them make sure that the quality of there materials is good. In addition, finding good, genuine real estate advisors is an important task. You must go for the ones who are experienced and are successful. Today, the popularity of free online seminars on investing has grown tremendously. Investors from all over the world want to learn and develop good strategies on real estate investment. It is very important to stay updated in real estate investment. Also, it is important to apply the strategies that you have learned. Remember, the more seminars you attend, the better equipped you are to make the right investment decisions.
About the Author
Terry Bryan has been called the "Warriorwiz" and is an internationally acclaimed martial artist, success coach, real estate investor and self-made millionaire .
Make Money Investing Courses: Your Guide To Real Estate Success by Terry Bryan
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Everyone dreams of building a fortune. And real estate investing is one such lucrative opportunity where you can earn high returns on your investment in a very short period compared with other jobs.
Real estate investing or “make money†investing is a sure-shot method of building great wealth. It is a known fact that real estate investing has produced more millionaires than any other job. There are a lot of people who wants to get into real estate investing but don’t know how to do it.
On the contrary, there are those people who have already taken the plunge but still don’t know how to ensure maximum return on their investment. This is where the “make money investing courses†come into handy.
There are several ways of learning about real estate investment. Numerous books and CDs are available in the market. There are classroom programs in all the states where make money investing course is provided. Also, there are several clubs (e.g., The Colorado Association of Real Estate Investors) for educating the budding and experienced real estate investors . In such clubs, regulars meetings are organized where real estate investors get the opportunity to network with other real estate investors. Seminars and conferences are also held from time to time.
Besides, they also have training programs to learn real estate investing, be it commercial or residential. All these provide a great learning experience.
Today, there are various make money investing online courses. Online courses are best suited for professionals who don’t have time for classroom programs. Such make money investing courses are very popular because of their flexibility, accessibility, and low cost. In fact, a lot of online courses don’t charge any fee. These courses are open for everyone. Apart from guiding, the course will equip you with all the little knowledge about real estate investing. In addition, you will get to learn about other essential matters like tax savings schemes for real estate investment.
Make money investing courses provide knowledge on various aspects of real estate investment. This greatly helps in your decision making. The field of real estate investment provides ample opportunities. All you need to do is just make the right decisions. The make money investing courses are actually guiding light. They will direct you to make the right choices for your real estate success.
About the Author
Terry Bryan has been called the "Warriorwiz" and is an internationally acclaimed martial artist, success coach, real estate investor and self-made millionaire .
plug it
Everyone dreams of building a fortune. And real estate investing is one such lucrative opportunity where you can earn high returns on your investment in a very short period compared with other jobs.
Real estate investing or “make money†investing is a sure-shot method of building great wealth. It is a known fact that real estate investing has produced more millionaires than any other job. There are a lot of people who wants to get into real estate investing but don’t know how to do it.
On the contrary, there are those people who have already taken the plunge but still don’t know how to ensure maximum return on their investment. This is where the “make money investing courses†come into handy.
There are several ways of learning about real estate investment. Numerous books and CDs are available in the market. There are classroom programs in all the states where make money investing course is provided. Also, there are several clubs (e.g., The Colorado Association of Real Estate Investors) for educating the budding and experienced real estate investors . In such clubs, regulars meetings are organized where real estate investors get the opportunity to network with other real estate investors. Seminars and conferences are also held from time to time.
Besides, they also have training programs to learn real estate investing, be it commercial or residential. All these provide a great learning experience.
Today, there are various make money investing online courses. Online courses are best suited for professionals who don’t have time for classroom programs. Such make money investing courses are very popular because of their flexibility, accessibility, and low cost. In fact, a lot of online courses don’t charge any fee. These courses are open for everyone. Apart from guiding, the course will equip you with all the little knowledge about real estate investing. In addition, you will get to learn about other essential matters like tax savings schemes for real estate investment.
Make money investing courses provide knowledge on various aspects of real estate investment. This greatly helps in your decision making. The field of real estate investment provides ample opportunities. All you need to do is just make the right decisions. The make money investing courses are actually guiding light. They will direct you to make the right choices for your real estate success.
About the Author
Terry Bryan has been called the "Warriorwiz" and is an internationally acclaimed martial artist, success coach, real estate investor and self-made millionaire .
Joint Ventures in Real Estate by Gary Ashton
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Group investment in a property is a growing trend among people who do not individually have the capital to purchase real estate. The benefits can be many, including home ownership, shared expenses and shared equity. However, there are some pitfalls that need to be recognized and addressed before you embark on this venture.
Joint ownership is certainly not a new thing, but it is more commonly seen as a dual investment between a husband and wife or siblings. Multiple people sharing the expenses of a property can greatly defray the individual costs and save more money down the road, especially if one of the parties has some knowledge of maintaining and improving buildings. Also, if one person gets sick or dies or is otherwise unable to make their payment for one pay period, the others are more likely able to take the shortfall. This won't mean that they'll be okay with it, but it will mean that the bank won't foreclose on the house.
Pitfalls with joint ownership usually involve lack of communication between the parties at the time of purchase. No matter how strong the bonds of friendship, family or romantic attachments, it is wise to have everything spelled out in the contract. It helps to get a clear idea of what everybody is looking for in this venture and put down clear guidelines of conduct in the event of a conflict between the owners.
Things to consider before investing with others to buy a property are:
- What are the goals of this purchase?
- What kind of budget is going to be needed?
- What kind of taxes are each of the parties going to be looking at?
- How are the parties going to resolve differences of opinion in regard to how the property is managed?
- How are the parties going to handle repairs/maintenance of the property?
- Is there going to be money set aside for emergencies? Where is it going to be held and how are people going to contribute to it?
- If all parties are living together, are they going to be able to do so amicably? What rules are going to be set out so that this can happen and what consequences will there be for not following them?
- What happens if one of the members loses a job/gets sick and can't make a payment? How will they repay the others?
- What happens if one of the members dies?
Issues that are addressed early stand a good chance of being resolved early, so that differences don't end up splitting up the investors and causing loss of money through mismanagement of the property or legal battles. It would be wise to involve a real estate law professional in your purchase in order to clearly explain to all the buyers what legal and financial ramifications are involved with this kind of purchase and ownership.
A joint purchase of a property can get people a foothold on the real estate market that they wouldn't otherwise have. However, this is not a venture that can be conducted on a whim or without serious discussion on the problems that a group may encounter in the event that things don't go smoothly. With careful planning, budgeting and open communication, though, co-ownership of real estate can bring about significant rewards. It is up to the individual to determine whether this form of ownership is right for them.
About the Author
NashvilleBuyers.com makes searching for Nashville real estate a breeze, with user-friendly maps, community information, and access to Nashville Property Search, as well as land for sale, and more.
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Group investment in a property is a growing trend among people who do not individually have the capital to purchase real estate. The benefits can be many, including home ownership, shared expenses and shared equity. However, there are some pitfalls that need to be recognized and addressed before you embark on this venture.
Joint ownership is certainly not a new thing, but it is more commonly seen as a dual investment between a husband and wife or siblings. Multiple people sharing the expenses of a property can greatly defray the individual costs and save more money down the road, especially if one of the parties has some knowledge of maintaining and improving buildings. Also, if one person gets sick or dies or is otherwise unable to make their payment for one pay period, the others are more likely able to take the shortfall. This won't mean that they'll be okay with it, but it will mean that the bank won't foreclose on the house.
Pitfalls with joint ownership usually involve lack of communication between the parties at the time of purchase. No matter how strong the bonds of friendship, family or romantic attachments, it is wise to have everything spelled out in the contract. It helps to get a clear idea of what everybody is looking for in this venture and put down clear guidelines of conduct in the event of a conflict between the owners.
Things to consider before investing with others to buy a property are:
- What are the goals of this purchase?
- What kind of budget is going to be needed?
- What kind of taxes are each of the parties going to be looking at?
- How are the parties going to resolve differences of opinion in regard to how the property is managed?
- How are the parties going to handle repairs/maintenance of the property?
- Is there going to be money set aside for emergencies? Where is it going to be held and how are people going to contribute to it?
- If all parties are living together, are they going to be able to do so amicably? What rules are going to be set out so that this can happen and what consequences will there be for not following them?
- What happens if one of the members loses a job/gets sick and can't make a payment? How will they repay the others?
- What happens if one of the members dies?
Issues that are addressed early stand a good chance of being resolved early, so that differences don't end up splitting up the investors and causing loss of money through mismanagement of the property or legal battles. It would be wise to involve a real estate law professional in your purchase in order to clearly explain to all the buyers what legal and financial ramifications are involved with this kind of purchase and ownership.
A joint purchase of a property can get people a foothold on the real estate market that they wouldn't otherwise have. However, this is not a venture that can be conducted on a whim or without serious discussion on the problems that a group may encounter in the event that things don't go smoothly. With careful planning, budgeting and open communication, though, co-ownership of real estate can bring about significant rewards. It is up to the individual to determine whether this form of ownership is right for them.
About the Author
NashvilleBuyers.com makes searching for Nashville real estate a breeze, with user-friendly maps, community information, and access to Nashville Property Search, as well as land for sale, and more.
Selasa, 06 Mei 2008
Financing Your Home Building Dream - Construction Loans - Is Your Banker On Your Speed Dial? by Mel Inglima
Unless you have all the cash you need, building a home will require some type of financing. In most cases, this financing is referred to as a construction loan. And banks can play a big role for you.
Construction loans are short term loans. They typically span only several months up to one year. They act as a bridge loan to complete your home until you've finished construction at which time they are paid off by replacing them with a regular home loan (usually a typical 30 year mortgage.)
YOUR LOCAL BANKER IS AN IDEAL SOURCE OF FUNDS
Ask your banker first. If you have an established relationship with your banker, very often something can be arranged for you to fund your home building project. Your banker, however, may not be set up to offer construction loans so you'll need to approach him with this question before you go too far in your planning. Never assume, always ask.
If he cannot do it, he very well may know of another local bank which can help you. Bankers are in the business of loaning money. That's how they earn their keep! Making wise and profitable loans is what keeps them in business. Yet, a construction loan is a special animal. On the one hand, the loan is a good one because it's dealing with real estate and real estate, over the years, has proven to be excellent collateral.
On the other hand, if the lender is not experienced with construction loans, they may not want to take it on. There is a lot of extra time, effort, and paperwork involved with a construction loan that not only costs more to prepare and administer, but can also be confusing, creating potential problems that can eat away at the banker's profits.
If the banker is experienced and eager to work with you, it might just be your best and least expensive choice for a construction loan. Over the years in the homebuilding business, I've been through a lot of situations. Let me recount some of the questions I've received. The answers should help you:
Q: What is involved in the qualification process when applying for a construction loan with a bank?
A: There is a lot more involved when applying for a construction loan than for a car, furniture, or even a home for that matter. Yes, of course, your income and credit ratings are important but your assets are also involved. The amount of cash on hand (in accounts and various investments) is also looked at. And he'll also take into account the current value of the building lot as well as the future value of the land/home package once the home is built.
Q: How much down will the banker require before loaning the money?
A: Invariably, a banker wants a down payment. This is to demonstrate that you have a financial involvement and are not apt to walk away from the project before you're done. After all, in construction, until the home is completed, there really isn't much collateral there for the banker to recoup should you flake out! Often 20% is the minimum required but there are exceptions to this!
Q: Does my land have to be owned in full before the bank will loan me money?
A: The short answer here is "yes." There are exceptions to this as well, but most bankers want the land as the only collateral they'll have at first. Yes, and they WILL want first position on that land during the construction process. In some cases, the bank will count the land as part or most of the 20% + down payment requirement.
Q: Can I build the home myself without using a contractor?
A: Not likely. While other lenders may allow for this, it is extremely rare for a banker to go this route. He wants assurances that the home will be completed and completed on time and within budget. Owner builders do not have as good a record with this as licensed builders do. In fact, the banker may even want to approve the builder before he okays the loan.
Q: What if I run out of funds in the loan before the house is complete?
A: Find out up front what the bank's policy is on this. It's possible that additional money can be added but only if there is enough potential value in the finished product and you must be able to qualify for the bigger loan if money is added. Many times the bank will not provide additional money. You must be aware of the policy and know where additional money would come from should the need arise.
THE BANKER WANTS YOUR MORTGAGE AFTER YOU BUILD YOUR HOME
Most of the time the bank gives construction loans despite the hassle because they want your other business including the 30 year mortgage once the home is complete and you move in. While there are certain types of construction loans that automatically become mortgages at the end, often this isn't the case and the banker is eager to get you to "convert" at the end of the construction loan.
Knowledge about lending and home building or remodeling will put you way out in front and ensure a great experience. Visit http://www.DreamHomeCreation.com for many tips and tools to help you achieve all the results you're looking for and read more of Mel Inglima's writings.
(c) Copyright 2008 Mel Inglima & Allied Business Solutions
Article Source: http://EzineArticles.com/?expert=Mel_Inglima
Construction loans are short term loans. They typically span only several months up to one year. They act as a bridge loan to complete your home until you've finished construction at which time they are paid off by replacing them with a regular home loan (usually a typical 30 year mortgage.)
YOUR LOCAL BANKER IS AN IDEAL SOURCE OF FUNDS
Ask your banker first. If you have an established relationship with your banker, very often something can be arranged for you to fund your home building project. Your banker, however, may not be set up to offer construction loans so you'll need to approach him with this question before you go too far in your planning. Never assume, always ask.
If he cannot do it, he very well may know of another local bank which can help you. Bankers are in the business of loaning money. That's how they earn their keep! Making wise and profitable loans is what keeps them in business. Yet, a construction loan is a special animal. On the one hand, the loan is a good one because it's dealing with real estate and real estate, over the years, has proven to be excellent collateral.
On the other hand, if the lender is not experienced with construction loans, they may not want to take it on. There is a lot of extra time, effort, and paperwork involved with a construction loan that not only costs more to prepare and administer, but can also be confusing, creating potential problems that can eat away at the banker's profits.
If the banker is experienced and eager to work with you, it might just be your best and least expensive choice for a construction loan. Over the years in the homebuilding business, I've been through a lot of situations. Let me recount some of the questions I've received. The answers should help you:
Q: What is involved in the qualification process when applying for a construction loan with a bank?
A: There is a lot more involved when applying for a construction loan than for a car, furniture, or even a home for that matter. Yes, of course, your income and credit ratings are important but your assets are also involved. The amount of cash on hand (in accounts and various investments) is also looked at. And he'll also take into account the current value of the building lot as well as the future value of the land/home package once the home is built.
Q: How much down will the banker require before loaning the money?
A: Invariably, a banker wants a down payment. This is to demonstrate that you have a financial involvement and are not apt to walk away from the project before you're done. After all, in construction, until the home is completed, there really isn't much collateral there for the banker to recoup should you flake out! Often 20% is the minimum required but there are exceptions to this!
Q: Does my land have to be owned in full before the bank will loan me money?
A: The short answer here is "yes." There are exceptions to this as well, but most bankers want the land as the only collateral they'll have at first. Yes, and they WILL want first position on that land during the construction process. In some cases, the bank will count the land as part or most of the 20% + down payment requirement.
Q: Can I build the home myself without using a contractor?
A: Not likely. While other lenders may allow for this, it is extremely rare for a banker to go this route. He wants assurances that the home will be completed and completed on time and within budget. Owner builders do not have as good a record with this as licensed builders do. In fact, the banker may even want to approve the builder before he okays the loan.
Q: What if I run out of funds in the loan before the house is complete?
A: Find out up front what the bank's policy is on this. It's possible that additional money can be added but only if there is enough potential value in the finished product and you must be able to qualify for the bigger loan if money is added. Many times the bank will not provide additional money. You must be aware of the policy and know where additional money would come from should the need arise.
THE BANKER WANTS YOUR MORTGAGE AFTER YOU BUILD YOUR HOME
Most of the time the bank gives construction loans despite the hassle because they want your other business including the 30 year mortgage once the home is complete and you move in. While there are certain types of construction loans that automatically become mortgages at the end, often this isn't the case and the banker is eager to get you to "convert" at the end of the construction loan.
Knowledge about lending and home building or remodeling will put you way out in front and ensure a great experience. Visit http://www.DreamHomeCreation.com for many tips and tools to help you achieve all the results you're looking for and read more of Mel Inglima's writings.
(c) Copyright 2008 Mel Inglima & Allied Business Solutions
Article Source: http://EzineArticles.com/?expert=Mel_Inglima
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