Purchasing a home always involves reading through the contract and signing on the dotted lines. Most people that purchase a home, surprisingly do not read through the whole contract. They just seem to trust the fine print and the person guiding them through it. Most contracts are pretty standard and most people have a general idea what it contained. When reading through a contract, it is a good idea to know not only what the contingencies are, but also what they mean.
In every contract, there should be an attorney review. Typically the period is 3-5 days on a standard contract. This period is intended to give the buyer an opportunity to secure an attorney and have the attorney look over the contract. The attorney has the right to accept the contract as is or write in some modifications to the contract. The contract is still considered an offer at this point so if they modifications are not accepted then the offer becomes null and void. It is always a good idea to have an attorney review the contract before moving forward on a large purchase such as a home. This review period is put in place to protect the buyer and also to allow the buyer to rescind on the offer if need be.
Another contingency that can be found on a contract is the financing contingency. The amount of days the buyer has to secure a loan can vary per contract. The buyer has the responsibility to try to not only get pre-approved but also obtain a loan commitment letter as well. This loan commitment letter locks in a rate for a guaranteed period of time and also proves the buyer can qualify for the purchase of the home. If the buyer is unable to obtain financing for the home than the contract becomes null and void and all earnest money (if any) is returned. This contingency is put in place to protect the buyer and the seller.
The inspection contingency is not found on all contracts but it is a good thing to have on a contract. Inspections can make or break a deal. If the inspection does not go well then the buyer and seller have a few options. They can come to an agreement to either fix the problems or take more money off the offer so that they buyer can fix the items on their own or If the buyer does not want to fix the issues or the problems are too serious, than again the buyer has a right to rescind the offer.
There are a few other optional contingencies on a contract, such as a house to sell contingency. This is put in place if a buyer has to sell their home before the purchase of the new home. If someone else is interested in the property and they put an offer on the place without the house to sell contingency, then the buyer with the contingency typically has 72 hours to purchase the home.
While the U.S. real estate market in general continues to remain soft, office condos represent one niche that is still doing well, according to Realtors in New York and other cities who have reported increased sales in that area, particularly to foreign business owners who want to take advantage of dropping property values.
Newspaper reports in New York and elsewhere have included anecdotes from Realtors® asserting that sales of office condos has remained steady or even increased, while other areas have slumped. Also, they report getting a lot of business from international clients, especially from China and other Asian countries with booming economies. The company owners want to buy condos
in commercial buildings rather than just rent the office space, especially considering the reduced real estate prices, which are said to have dropped as much as 40 percent over the past year in Manhattan, for instance.
Some companies just like the added control and security that comes with owning office condos rather than renting an office. They point to benefits such as being able to budget for the mortgage, and knowing what the property will eventually increase in value, and turn a profit when it is sold.
Realtors® have also noted some unusual requests made by clients. But in this type of market, condo sellers are willing to be flexible in many ways. For instance, some Chinese business owners and others follow the guidelines of feng shui, an ancient Chinese system of aesthetics that takes astronomy and geography into consideration when designing work space or living space in order to promote positive energy, or ch’i.
Feng shui is widely used to orient buildings of all kinds, including residential and commercial condos in a certain pattern, taking into consideration local features such as bodies of water or stars. The practice has gained in popularity, particularly in the United States, and followers decide where to place beds, desks, mirrors and other elements of existing offices and homes depending on where the windows and doors are, and following feng shui principles.
Numbers often come into play too. Some buyers who focus on feng shui or numerology want their businesses to be on certain floors, and avoid others, depending on the floor number. Therefore, companies might want to buy office space on widely separated floors, rather than nearby ones, if the numbers are not right.
People selling condos will work with the serious buyers as much as possible too, sometimes literally “working the numbers” to ensure that the sale goes through. For instance, one Realtor® recalled having a buyer who was interested in buying two office condos, but only if the price was knocked down from $550 per square foot, to $548, because he did not like the other number combination. He said he would make up the difference in another transaction.
If you are not familiar with Real Estate, then you may not understand what is involved in a listing presentation. Although listing presentations may vary by Realtor, there is a list of things that should be covered in the presentation. Some of these items include explaining how the agent will prepare the property in order to market it, going over what marketing strategies will be used to inform the general public that the property is listed, and going over the listing agreement and explaining what it means. It is also a good idea for the Realtor to explain what happens after the listing agreement is signed.
It is important for the Realtor to prepare the property in order to market it. During the listing presentation the Realtor should make sure that the home is clean and if repairs and/or improvements are needed, that they are taken care of. The Realtor may suggest trimming trees, adding some landscaping or painting some walls. The idea is to make the property as attractive as possible. Once the property is ready, then the Reator will want to come over and take pictures of the property. He/she will also want to take measurements of all the rooms and gather the information needed to list the property on the MLS. Once the necessary information is gathered, the Realtor will want do a competitive market analysis to see what would be the best price to market the property.
The Realtor will want to explain to the seller how he/she will be marketing the property. The agent will explain what websites, signs, open houses and/ or other forms of marketing that will be used. It is important for the seller to understand the efforts the Realtor will make in order to sell the property.
After the Realtor explains what mediums will be used to market the property he/she will want to sit down with the sellers/owners and go over the listing agreement. The Realtor will go over all the details of the agreement and have the sellers sign and initial where needed. This is also the time where the agent will guide the sellers as to what price would be the best to market the property. The agent will use his or her expertise and knowledge and the information from the competitive market analysis to suggest a listed price. Once the price is agreed upon and the listing agreement is signed, the agent will then send the listing agreement and disclosures to the broker. The process of what happens after the listing presentation should also be explained to the seller/owner.
For instance, once the broker receives the listing agreement, the broker/owner will review it and sign it. The broker is responsible for getting the listing agreement back to the Realtor as soon as possible, so that the agent can not only provide the seller with the contract but also list the property on the MLS. The property needs to be listed on the MLS within 5 days after the broker signs the agreement. This begins the marketing period for the listing of the property.
People considering buying apartment buildings as an investment will be encouraged to hear that while sales of condos and other real estate slowed due to the downturn in the economy, apartment rentals are showing signs of recovery, despite the spike in unemployment and other factors.
That could explain why people are looking for rental condos too. For instance, the analytic firm of MFP Research found that the number of occupied apartments increased by 215,000 in 64 major U.S. markets in the first six months of the year, according to analytic firm MFP Research. That is almost twice the number of occupancies added in all of 2009.
The National Multi-Housing Council, a trade group for the nation's largest landlords, agrees that vacancy levels are improving. Its most recent quarterly index of occupancies is the highest it has been in four years.
Chicago-area landlords also are doing well, according to statistics that show the suburban vacancy rate remaining about 5.5 percent, and about 6 percent in the city. This is an improvement from 9 percent vacancy rates several years ago, and both sectors of apartment rentals are low enough to be considered a balanced market, according to many observers.
Ordinarily, when unemployment levels are as high as they are, apartment rentals would be expected to decrease because college graduates and other young people looking for jobs are not in a position to move away from home and get their first apartment. But there are other economic factors contributing to the evident uptick in renters. These include the fact that people do not feel secure enough to invest in a condo or house due to the state of the market, so they continue renting. Also, people who have experienced a home foreclosure or short sale have now returned to renting condos and apartments.
The fact that on average, monthly rents being charged have not increased too much in recent years, and have even remained level in many areas, also encourages more people to rent rather than buy. Then the supply issue must be taken into consideration also. In Chicago, the number of new rental units has increased only slightly in recent years, according to industry observers, who say that practically no new apartment buildings have been built in the Chicago suburbs.
Because apartment rentals have been going up, this might be a good time to invest in apartment buildings. And anyone who wants to use renting as a steppingstone to ownership can look for rent-to-own programs, which many condo owners offer.
Following the fluctuations of the U.S.
real estate market these days can be mind-boggling, especially if you are trying to decide if this is the right time to buy or
sell a condo. But there is some good news to be had.
According to National Association of Realtors® survey data released Aug. 11, home prices nationwide firmed up in the second quarter of 2010, particularly in metropolitan areas. The price increase was partially attributed to a surge in home sales caused by the now-expired homebuyer tax credit, the NAR said.
The average price of existing condo and co-ops in 55 metro areas across the United States showed little change. It was $175,700 in the second quarter, down 0.5 percent from the second quarter of 2009. Median condo prices grew in 26 metro areas over last year, while 29 areas had declines. Four metro areas saw price gains over the second quarter of 2009.
The national average for existing single-family home prices was $176,900 in the second quarter of 2010, up 1.5 percent from $174,200 the same period last year. Also in the second quarter, 100 of 155 metropolitan statistical areas in the United States had higher median existing single-family home prices compared to the second quarter of 2009, including 14 with double-digit increases; two were unchanged and 53 showed price declines. In the first quarter of this year 91 areas had higher prices, while only 26 experienced annual price gains in second quarter of 2009.
Depending on the region, the real estate market news was mixed. The median existing single-family home price in the Northeast declined 3.2 percent over the same period a year ago, and 2 percent in the South. However, average prices rose 1.4 percent in the Midwest, and 2.6 percent in the West.
Total existing-home sales, including single-family homes and condos and townhomes, rose 9.1 percent to a seasonally adjusted annual rate of 5.61 million in the second quarter. This is compared to 5.14 million in the first quarter. That was 17.3 percent above the 4.78 million-unit pace in the second quarter of 2009. Sales increased from the first quarter in 44 states and the District of Columbia.
NAR President Vicki Cox Golder said the ongoing record low mortgage interest rates will help cushion a summer slowdown. "As expected, sales are slowing down now that the homebuyer tax credit has expired, but record-low mortgage interest rates (4.91 percent on average for 30-year mortgages, according to Freddie Mac), along with stable and affordable home prices in most (real estate markets), provide opportunities for buyers who weren’t able to take advantage of the credit," she said.
While the latest reports state that
condo foreclosures are up in the Chicago region, particularly in the suburbs, that doesn’t mean it is all bad news. If you’re in the market to
buy a condo, for instance, now is the time to do it because prices have come down.
According to information compiled by the Woodstock Institute, condo foreclosure filings within the city of Chicago rose 37.5 percent during the first half of 2010, but if suburban condo foreclosures included, particularly in hard-hit northwestern Cook County, regional condo foreclosures have swelled 53.8 percent compared with 2009's first half, the Woodstock Institute study found.
Although a plethora of foreclosed condos can be detrimental to the complex they are located in, they are usually not visible from the outside, so they don’t have the immediate effect on local property values. This makes them unlike foreclosed, and boarded-up single-family homes, which are very visible in many neighborhoods, and have a detrimental effect on surrounding property values.
Also, observers have noted that many of the condo properties going into foreclosure were bought by developers, rather than individual homeowners. Many developers bought four or more apartments ir condos, with the intention of converting them to condos, or just fixing them up and selling them . But then the housing bubble burst and they were unable to sell them for a price that give them a return on their investment.
In any case, the high number of condo foreclosures is bringing the average price of property down, so it is a good time to buy a condo. And don’t be afraid of buying a foreclosed condo either, they are often in very good shape, and many banks are willing to make deals and negotiate the price.
Many homeowners considering moving have put off selling condos until they see the real estate prices going up, and that is bound to happen sooner rather than later. But there are plenty who are selling, and it is wise to remember that while there are deals available, few people are willing to just "give away" their property for a rock-bottom price. So if you are in the market to buy, don’t wait too long, expecting the prices to keep decreasing down to nothing. If you like a particular property, whether it is a foreclosed condo or not, and the price is affordable, you may as well go ahead and buy it. Because it won’t be there forever, and the price could go up.
Looking for condos at any time of the year is very tempting, but especially so in the summer months, in part because the pools, fitness centers and other upscale amenities that many condos offer are particulalrly inviting at this time of year.
As a general rule, home sales increase in the summer months, often because people with school-age children want to get settled in their new home before the new school year starts in September. But whether you have children or not, in many parts of the country, it is easier to move during the warm summer months than during the frigid winter. Plus, if you play your cards right and get lucky, you can get settled in before the winter sets in, and interest rates go up. While the economy is still recovering and not quite healthy, interest rates are remaining low for now, which should bode well for the real estate industry.
But speaking from a personal perspective, I know that even more than interest rates, the prospect of having to mow the lawn on a corner lot for another year has caused me to think seriously about moving to a condo, where the outdoor work is handled by a professional landscaper and I will have my weekends to myself. The monthly assessment would be well worth it. Judging by the number of people who have come to the open houses I have attended, a lot of similarly middle-aged people have the same idea about looking for condos.
Another good thing about condos and townhomes, is they come in a wide variety of styles and prices—and places too, so there is something suitable for everyone, no matter what they can afford or where they want to live geographically.
In short, searching for condos can be an adventure and a fun activity at any time of the year, even if you have not decided that you definitely want to buy one. You can keep your options open and just have a look at what is available, and perhaps pick up ideas for decorating your own home. If you are doing more than just looking, and are serious about buying, it is best to contact a professional Realtor®, because he or she can cut through a lot of red tape and find the ideal place for you.
There is also no need to be frightened off by the term "luxury condos," thinking the price might be unaffordable. You never know, they might have all the luxurious bells and whistles, but with a price that isn’t astronomical. Even if it is, you can find something out there that won’t put you in the poorhouse. get a lot of "bang for the buck." So relax and enjoy yourself, looking for condos.
Since the downturn in the economy occurred, many cash-strapped homeowners have been having trouble paying their mortgages. Many who find they owe more than their property is worth have been turning to what are called "short sales" as an alternative to foreclosure. People in the market to buy condos or other homes can get great deals if they are lucky enough to find a condo they like that is being sold that way.
"Short sales" are sales in which properties are sold for less than what they are actually worth. Anyone who wants to sell a home that way must show proof of financial hardship and get permission from the mortgage holder to do so. The arrangement benefits the seller, because the only alternative would likely be foreclosure, which damages credit scores, and mortgage holders would rather get 80 percent of what the property is worth, and accept the loss. Otherwise, they would have to take possession of the property and maintain it before selling it, often for even less than it was worth. Having the property occupied rather than boarded up and abandoned, also helps the neighborhood stay strong and residents appreciate the bank’s efforts.
But buyers and sellers would be well-advised to work with an experienced Realtor to make the short sale process work to their advantage. This is because the process often takes longer than usual, and keeping on top of the progress, and in touch with your lender and attorney, is key to a successful outcome. Also, buyers should be aware that the initial list price for the "short sale" property is often lower than what would actually be accepted, but a Realtor could do research and advise them about what an acceptable offer would be.
Sellers are also advised to enlist experienced Realtors to properly market their property, showing it off to its best advantage in order to get the right price. A good attorney should be enlisted by sellers too, to make sure the short sale process goes smoothly.
As the old saying goes, "It’s an ill-wind that doesn’t blow anybody good," and while the need for short sales indicates a slow-down in the economy, they really can benefit all parties involved. The mortgage holder receives most of the money it is owed, and is able to clear its books, while the seller is able to get out from under an unaffordable mortgage without any credit score damage. And, of course, anyone buying a condo can get a great deal on a beautiful condo or house, often for more than 20 percent less than what it is actually worth.
When most people think of auctions they think of buying but in order to buy someone must be willing to sell. Selling at auction for real estate is definitely not for everyone. In the best of situations your property should be in the same price range as all the other properties in the auction. The last thing you want to see is that the majority of the properties in the auction are derelict homes in a low value area when you are trying to auction off your four bedroom, 3 bath, updated kitchen and family room home. You are most likely to not have much luck selling your home at market value since everyone at the auction is comparing prices on the other available properties.
Selling at auction requires a legal agreement and most auctioneers will wish to enter into a sole agency agreement. This means they will advertise your property in brochures and catalogues on your behalf with the understanding you will be liable for the costs of that advertising, as well as a portion of the room fee, regardless of whether someone buys your property or not. This may not seem fair but in reality you will have a hard time finding an auction company who will sell your property without such a legal, binding agreement. And these may not be the only fees involved so find out about the charges before you sign any documents. Once you have satisfied yourself with the agreements you should discuss pricing. Find out the likely market value of your property and seek advice at what price to advertise as the reserve bid.
Now that you have everything in place there is nothing left but attend the auction. As the seller you must attend the auction due to a variety of reasons, one of which is you may want to take a lower offer than the advertised reserve bid to get your property sold. When the gavel goes down that last time it signifies the agreement of a binding contract between buyer and seller and you have sold your home at true market value. The buyer must now pay 10% of the total sale price before leaving the auction house and in most cases must pay off the remaining balance in 30-45 days. Your responsibility as the seller is to guarantee your ability to legally convey the property to the new buyer. Selling at auction has its advantages for buyer and seller and can be the way to go depending on your motivation and comfort level.
You can’t miss the talk about the economy, stimulus money and bailouts that is the topic of every newscast on every station. The real estate market is no exception and many experts feel that the only way to a lasting economic recovery is through the housing sector. Housing has in many of our other recessions lead the way with employment and the stock market not far behind. No matter what type of economy we are experiencing real estate is not unlike buying any other investment. You want to buy low and sell high but how do you do that with different types of markets.
Real estate gurus and investors talk about a variety of different types of real estate markets but there are really on three types, buyers, sellers, and neutral. In each of these types there are opportunities if you know what each type means and how to best capitalize on it. A buyer’s market is when there is more inventory or homes than buyers. Because there are so many homes available not every home will sell which continues to add to the inventory and this type of cycle can be hard to break. But the buyer’s market also facilitates potential purchasers to buy low with the hopes at some point to sell high. Timing can mean everything in this type of market but as yet no one has come up with a foolproof formula. The next type of real estate market is a seller’s market which at face value doesn’t seem like there would be many opportunities for buyers but not so fast. In a seller’s market there are more buyers than homes available for purchase. You might think sellers have the only advantage but buyers can make money by quickly flipping properties because in a seller’s market prices tend to move up quickly. Again trying to hit the right timing can make the difference in making money or losing it. The last type of real estate market is a neutral market. This is the type of market we would like to stay in for most of our economic life. The other two are far too volatile and the risks are much greater. Typically, interest rates are affordable and the number of buyers and sellers are relatively equal. Neutral markets offer positive results for buyers and sellers alike with no real indications that favor one over the other. The opportunity in this market has a positive effect on buyers and sellers. Buyers get the home they want and sellers can move up to more expensive housing or downsize preparing for retirement.
