Buying Real Estate

Buying real estate has been the great American dream since there was an America.  It has long been regarded as one of the basic elements to being an American with all the rights and privileges we enjoy.  Buying real estate is one of the biggest purchases most people will make in their lives, but it also encourages us to examine our goals, commitments and lifestyle.   So is it any wonder that on the list of stress producing events in our lives, buying real estate ranks as one of the highest.  Even with the stress produced with buying real estate the right guidance, advice, and an increased understanding of the many facets to buying will help you to identify your own objectives and make the whole buying process relatively easier.

People buy real estate for a variety of reasons from personal use to an investment in their futures and the steps and strategies followed will vary if you are a first-time homebuyer, upgrading or downsizing, or investing in income property.  As said before buying real estate is typically one of the biggest investments in your lifetime and you will want to make sure you do your homework before committing to any sort of purchase.

There are several factors that need to be taken into consideration to reduce the stress and to feel confident you are accomplishing your primary goal.

  • Get your credit checked and apply for a mortgage.  Obviously you will need money or the promise of money to purchase any type of real estate and speaking with your bank or mortgage company to get a pre-approval is the first step to take.  Sadly, too many people skip this step only to be disappointed when they find out they cannot afford the home they have already fell in love with.
  • Identify what you are looking for and what is important to you.  Any easy way to do this is to rank your “must haves” and those that are an “absolutely no go”.  You might think a fixer upper is a “no go” but in the right location it might be exactly the right choice.
  • Find a real estate agent.  Sounds simple but when buying real estate it can make all the difference in the world.  Traditionally real estate agents represent the seller even when showing buyers properties.  Many potential home buyers are not aware of this and assume their agent is looking out for their best interests.  To be certain you are being represented look for a Buyer’s Agent whose sole responsibility is to represent you and accomplish your goal of owning a home.

Buying real state is certainly a stressful activity but with the right examination of your goals and the right preparation you will end up accomplishing the great American dream.


Foreclosed Condos

As the number of foreclosures steadily increases, so do the opportunities to take advantage of the slumping housing market and to take the leap from renting to owning. Foreclosed condos are affordable investments that can provide you with the potential for return in your future. Now is the perfect time to purchase your own property instead of throwing all of your money away paying monthly rent. 

If you have been stuck in the viscous cycle of renting for a number of years now is the time to break the cycle. Monthly rents are on the rise in order to accommodate a number of rising costs. Energy prices are steadily increasing and so are property taxes as cash strapped cities and villages that are running out of other options. With monthly rents on the rise, how much longer will you be able to afford the cost of living? 

Instead of throwing your money away every month you could be applying your monthly payments towards your own property. The money that you spend every month will be recouped when you sell your property. Instead of merely paying a price to live somewhere, you will be investing in property that you will be able to sell for a profit in the future. If you purchase a foreclosed property that is selling below market value and you hang on to the condo for a couple of years until the real estate market improves, you will see a significant increase in value. 

Foreclosed condos are selling well below market value. Banks are requiring low down payments in order to get rid of the properties. There are many incentives currently available for buyers. You may find that the monthly payments on foreclosed condos may be even cheaper than the monthly rent payments that you were making. There are also a number of tax incentives that are being offered to first time buyers and anyone that purchases a personal residence. 

With the high number of these condos available you can even be selective in which unit that you choose. Many complexes have several condo units that are being foreclosed on and you will be able to find a condo that has the number of baths and bedrooms that you would like. Many of the condos are new construction or have recently been remodeled. It is a complete fallacy that foreclosed condos are in a state of disrepair or are old and dilapidated.


Buyer Agency Presentation

An exclusive buyer agency representation is much different than being represented by a traditional brokerage that works with buyers and sellers. An exclusive buyer agency only represents buyers. The sole focus of the agency is buyers' and making sure that they get the home of their dreams at the price of their dreams. An agency of this representation will typically provide the buyer with a presentation so that the buyer understands exactly what services the buyer agency will provide.

The first step is discussing the buyer agency representation. You will be presented with all of the state-required agency forms to help you understand the legal relationship between the agent and the buyer. The agent will also discuss the advantages of an exclusive buyer representation. The next step would be to cover all of the resources the company has to offer to make the home buyer experience as easy and convenient as possible.

It is always important to make sure that the agent covers fair housing laws and equal opportunity to ensure the client that the agency takes this very seriously. The agent will cover some of the agency laws to make sure the client understands that there are some things an agent cannot do for them because it is against fair housing laws. The agent will then explain the process of mortgage pre-approval and the importance of getting pre-approved before the search process begins.

The next step is really to discuss the search plan. The agent will map out the process of locating the home to finding the right home to negotiating the best offer to purchase the home. This can often times be a lengthy process which can get side tracked very easily. It will be the agents’ responsibility to make sure the clients stay on track with the home buying process.

Once the contract gets accepted, it will be the real estate agents responsibility to ensure a smooth closing. The agent will explain the closing process and what documents are needed. The agent will also advise the buyer to contact a lawyer to represent the buyer legally throughout the closing process.

The agent will not only explain the process of securing a new home, but they will also cover the differences between an exclusive buyer agency and what one can do for you vs. a traditional brokerage that works with buyers and sellers. The agent will cover the advantages of working with an exclusive buyer agency. At the end of the presentation the buyer will have a clear understanding of the agency relationship.


Closing Costs

Closing costs are something that must be considered when buying a condo or house, especially because they have been rising across the country in 2010.

However, many buyers, especially those going through the process for the first time, are not even sure what closing costs encompass. Essentially, closing costs are the fees that must be paid for items required by the lender as conditions of the loan. They include the cost of title searches, loan applications, recording the deed, appraisals, credit checks, homeowner’s insurance and mortgage insurance.

The total amount of closing costs vary because they are a percentage of the cost of the property being bought, usually between 3 and 6 percent. Prior to the closing, it is advisable to ask your lender for at least an approximate cost, so you will have an idea what to expect and will come prepared.  In some cases, a motivated seller agrees to cover the fees for a cash-strapped buyer, but that doesn’t always happen.  

Furthermore, the average mortgage closing costs have been increasing across the country in 2010, according to an online survey by personal finance company Bankrate Inc., which released its findings in August.  For instance, the closing costs jumped 40 percent in Illinois in 2010. For instance, the origination and third-party fees on a $200,000 mortgage added up to $3,505 in the 2010 survey, up from $2,486 a year ago.

The story was similar across the United States, which saw, on average, a 36 percent increase in closing costs over 2009 numbers. Bankrate attributed one of the reasons for the  increase to the new regulations implemented in January.  Lenders now must provide an estimate of title and closing fees within 10 percent of what the final cost will be, or they will risk penalties. The regulations require more labor in getting a loan together, but they are meant to benefit people financing a condo by providing them with as much information as possible before the closing.

In the Bankrate survey, which assessed average closing costs in the 50 states plus Washington, D.C.,  Illinois ranked as the 43rd most expensive, and moved up to 31st with the increases this year. But still trails behind New York, which was found to be the most expensive, with an average fee of $5,623.  The survey excludes property taxes, recording fees, homeowners insurance and prepaid items such as a partial month’s mortgage interest. It also does not include any discount points.

You want a Realtor with excellent negotiating skills to help you get the best deal possible. Because after all, if you have your heart set on buying a condo that you really like, you don’t want closing costs to be a deal-breaker.


Condominium Insurance

When looking for condominium insurance there are crucial questions to ask to help guide you to the coverage you need.  To state the obvious, a condominium is not the same thing as a house.  Usually, there is no backyard or basement, and you don’t have to worry about cutting the grass or shoveling the front walk.  Insurance is another area where homes and condos differ.  Condo owners are typically responsible for insuring just a portion of their property on their own.  However, rules differ from complex to complex, and it is important to ask the right questions to ensure you have proper insurance coverage. 

What are your ownership and insurance responsibilities in the condo association’s Master Deed?  In other words, what does the association expect from you regarding your condominium insurance requirements?  Individual owners have a collective responsibility for insuring areas of the complex owned in common - building exteriors, hallways, pool area, etc.  Individual unit owners typically are responsible for separately insuring everything within the four walls of their unit.  The condo association’s master policy , as well as association rules, should spell out clearly which parts of the complex are insured through association dues and which parts are not.

How much is the association deductible?  This is an area many condo owners don’t think about.  Condo association insurance typically includes commercial insurance coverage for the commonly shared building and common areas which usually includes an association deductible.  In the event of a natural disaster or hurricane or whatever and the condo association needs major work the association will tender the claim to their commercial insurer.  But would be a deductible and that deductible would be assessed against all unit owners so if there were 10 unit owners, it would be divided 10 ways.  You could really be hit with bill you weren’t expecting or did not know about if you didn’t do your homework.

It is also important to know how to lower you condominium insurance.  Several questions need to be asked that can factor in to reducing your costs.

  1. Have your agent properly estimate the value of what is being insured by you for your condo.
  2. Apply modification credits.  For condos that can mean sprinkler systems and central monitoring burglar and/or fire alarm.
  3. Shop around.  It is often inconvenient and may require some effort but finding the right policy and coverage can save you money in the long run.  Finally, keep in mind that there may be discounts.  Many companies offer discounts such as non-smoker or retired.

Real Estate Investors

For decades - and especially the last decade - real estate investors  seeking income have been advised to allocate a portion of their assets to real estate. After all, real estate offers a relatively high level of income (up to a 15% rental yield in some locations) and - as a hard asset - offers at very least some protection of principal.

In recent years, investors often sought diversification into real estate through real estate investment trusts (REITs), since owning actual properties outright was too expensive for the average retiree or income investor.
Bubble-era housing prices and the low interest rates that fueled them made it more attractive than ever for developers to build condos all around this country, but a recent decline in households' net worth, coupled with tighter lending standards, has made it harder than ever for developers to sell their properties. This bust for lenders has been a boon for savvy investors.

By employing a real estate auction company, savvy real estate investors  are able to pick up condominiums in desirable locations like New York, Chicago, and Los Angeles for sometimes less than half of their original asking price.

And the case for buying condo properties now is compelling for many reasons. First, as an income-producing asset, real estate is almost unrivaled, since income can be realized in perpetuity (or until the building collapses) - try getting that yield with a bond!

Second, the prices that many real estate investors are paying through a real estate auction company often augment those yields and account for a good deal of greater downside in the market. Third, as a hard asset, real estate will outperform bonds or cash in an inflationary environment. And fourth, real estate is useful - it can be used as a residence. What high-yielding stock provides walls and central air?

Joking aside, most metropolitan real estate markets have taken huge hits, but there are some signs of stabilizing. The buyers who will make the most money in an inevitable long-term rebound in real estate are those that are willing to stick their necks out early.

Owning a condo offers an alternative to owning a soft-asset REIT for diversification and has the added bonus of being a hard asset that investors can live in or pass on to children, grandchildren, etc, and the ability to buy at auction offers the opportunity to get away with paying prices that - years from now - will seem impossibly low.


What Am I Getting Charged For on a Good Faith Estimate?

The time has come when you are about to close on your new home and you are informed that you are going to have to come to the closing table with money. In order for you to better comprehend what the closing costs are, it is important for you to understand the Good Faith Estimate and the costs you are responsible for.

One of the sections on a Good Faith Estimate is an explanation of your loan terms. It will underline what you loan amount is, the term of your loan, and the interest rate. It also explains the initial monthly amount owed for principal, interest and any mortgage insurance. This will help you clearly understand the summary of your loan.

The next section is the Escrow Account information. When purchasing a home you can have two options for paying your taxes. You can either pay your taxes in a lump sum every year, or you can have the mortgage company escrow your payments into your mortgage. This way you are paying small amounts every month.

Following this section is the summary of the settlement charges. The first line item is the adjusted origination charge. This is the charge that you will pay the mortgage company for getting you the loan. The second line item is your credit or charge (points) for the interest rate. This amount depends on whether or not you used your money to pay off some points on your interest rate or whether you received a credit.

The second portion of the summary of settlement charges is the charges for all other settlement services. This may include required service fees. The mortgage company will charge a fee to complete your settlement. You will also pay a fee for title services and lenders title insurance and also for owner’s title insurance. The next time item you will need to pay for is government recording charges. These charges are for the state and local fees that you will have to pay to record your loan and title documents. The following charge is for transfer taxes. The charges are for state and local fees. You will also pay an initial deposit for your escrow account. This is a sum of money that will get you started with your escrows. You are also charged for your daily interest. It starts on the first day of your loan and you will pay up to the next month. The last line item is for your homeowners insurance. You must buy home owners’ insurance to protect your home from a loss.

Section B is a total of your charges for all other settlement services that were involved in the loan process. Closing costs are not cheap, so it is important you know exactly what you are paying for and where your money is going. Since recent changes have been made, all Good Faith Estimates have an instruction section that will explain the charges, which again will allow you to better understand what the settlement charges are for.


Vacation Condos

With winter approaching, it is no wonder that residents of Chicago, New York and other northern cities start making plans to escape the cold weather, even for a few days, to places like Miami, Las Vegas and other hotspots. Finding a place to stay is the first task for anyone seeking to a break from the cold weather, and vacation condos are a great option when trying to get the most “bang for your buck.”

These vacation condos, often found in upscale high rises in prime tourist destinations, are ideal because of their location and relatively low cost. By renting a condo, for the price of a nice hotel room, and sometimes even less, you will get the opportunity to say in a much more spacious condo, and enjoy access to hotel amenities such as state-of-the-art pools and fitness centers.

 The owners of the vacation condos, especially those in resort communities in Florida and elsewhere, are often snowbirds themselves. They buy condos with the intention of renting them out for long periods of the year when they will not be using them. Of course anyone who owns a condo or house can make their property available to vacationers, but it is harder to get the word out as an individual.  In condo high-rises, however, the rental process is handled by the condo management. All the owner has to do is provide a schedule when the condo will be available to rent. The income can go toward the mortgage.  

Many people who find themselves renting condos for regular vacations in Florida or Las Vegas end up buying one of their own, especially if they are attracted to a certain location, and go back there often. Some people buy them as investment properties with the intent to eventually retire there. In the meantime, they are used as second homes or vacation condos. Of course, vacation condos can be found in Chicago and other cities too, so the travel goes both ways

Due to continuing low interest rates, together with the high volume of real estate available for sale, especially in places such as South Florida, Las Vegas, and California, now is as good a time as any to buy a vacation condo. Florida, especially in areas around Miami and Fort Lauderdale, now has some of the most affordable real estate in the country. The Las Vegas area, and Phoenix too, is equally good.

For these reasons, buying a vacation condo now could definitely work out to your advantage economically. In addition to the benefits of renting it out when you are not using it, the property values are sure to increase in the foreseeable future, so investing in condos is still a profitable venture.



Internships can be a great way for students to get an idea of what truly goes on within industries and companies.  The internship experience can be a win-win for both students and companies where students gain experience, network with employees and managers who later could assist with career choices.  Internship programs are a start in the decision-making process regarding lifelong career options and their importance should not be taken lightly.  A positive for the company is to have the added assistance of young employees, meeting and reviewing possible full-time hires which contributes to the educational experience of the students who participate.  These are just a few of the benefits of starting an internship progam.

Many different industries offer internship programs and students do not always need to major in the exact business type to gain experience and knowledge that will be valuable to whatever career choice they make.  A good example is that most real estate companies offer no internship programs due to the traditional model of that industry.  The industry is changing with new technologies and more and more companies establishing their niche markets enabling a variety of programs never before offered.  Many of these real estate brokerages are entering into these markets with not only cutting edge technologies but non-traditional programs designed to segment the market to represent only one aspect of the transaction, specifically  Buyer's Agency and Condomium properties exclusively .  Today many real estate companies have embraced the buyer's agency concept and find that the general public is very accepting of this type of representation.

How does all this relate to internships?  As stated earlier, you do not have to major in real estate or finance or other related fields to see the benefit of an internship with a real estate company.  The technology available to real estate agents today rivals any type of sales industry anywhere.  Interns can be part of the information technology field and be challenged far beyond what they imagined with customer relationship management, pipeline management and telephony technologies common now with most successful real estate companies.  Communication and media majors can contribute to companies by helping in designing websites, analyzing sites for search engine optimization improving rankings and assisting less tech savvy agents the use of social media to improve their business.  Many  potential interns may think of a real estate company as sales-only but there may be more opportunities than expected.

Students interested in internship opportunities with OwnACondo.com are invited to call 1-866-696-2266 for more information.


Rental condos

Rental condos are great, and can be found in moderately priced and luxury developments alike, in cities across the United States. But the percentage of rented condos in a particular development is an important piece of information to know for many people interested in buying condos there.

 One reason the percentage of owner-occupied condos in a complex is an important consideration for many condo buyers is that if they are looking for an FHA mortgage, the percentage will have a bearing on whether they will be approved for the loan or not. The FHA recently made a slight adjustment to its rules, permitting 50 percent of the condos to be owner-occupied, whereas the minimum used to be 51 percent. This was done in part to encourage ownership. More people are applying for FHA loans now because they only require 3.5 percent down payment, while banks and other lenders want a 10 percent down payment, which many people are unable to come up with.

But the issue remains a conundrum for many condo associations. So while the FHA is becoming more lenient, many condo associations want to reduce the allowable percentage of rental condos in their own buildings to as little as 25 percent, if they are allowed at all. Of course, any change in the condo laws have to be approved by a majority of owners, and if most of the owners are investors who don’t live in the complex, they might not go along with it.

If there are too many rental condos, owner-occupants in the building often feel like they are living in an apartment complex, and express concerns that others considering moving into the building might be hesitant to move in for the same reason.

 At the same time, having the ability to lease condos give owners more flexibility, if their job takes them out of the city and they are not ready to put the property up for sale. Also, many people like the idea of being able to rent a condo, rather than an apartment, because condos are usually larger and there are often more amenities in condo developments than in apartment complexes. Many also sign rent-to-own contracts, so they will eventually become owners.

So the two sides have come to some sort of “happy medium” regarding the issue of  rental condos, because while some condo owners would rather not have any rented units in the complex, feeling that renters do not have as much invested in, others point out that having units rented is definitely better than having them empty.