• ---------BETTER JUDGEMENTS--------- Better Judgements eZine Terria Judge, Realtor CRS, ABR, GRI, Broker Associate Better Judgements is a newsletter on home matters, from Terria Judge, your Garden City, KS real estate agent! Contact Terria Judge at 620-271-2129! Terria Judge Coldwell Banker, The Real Estate Shoppe, Inc. John P. Judge, Broker 1135 College Dr. Suite E Garden City, KS 67846 620-275-7421 x 223 http://terriajudge.com http://gardencityksrealestate.com http://gardencityrentals.com Terria@TerriaJudge.com --NEW EMAIL ADDRESS!! Subscription Management at end of newsletter. Thanks for your subscription to Better Judgements, the newsletter from your Garden City Kansas Realtor, Terria Judge. ---------BETTER JUDGEMENTS--------- In this Issue ============= 1. Article: Buy houses at discount prices 2. New Features at TerriaJudge.com 3. Featured & New Listings 4. Article: 4 Thinking Points Before Buying a House 5. Article: Home Equity Line of Credit – Great for Remodeling Projects ---------BETTER JUDGEMENTS--------- Buy houses at discount prices by John Whiteside Buying a house is the best way you can create immediate equity. Gaining equity through buying a house is something which is very easy to do, as long as you follow these guidelines. If you are seeking to buy a house under discount value you must have the right mindset: "The deal of a decade comes along about once a week" - Dolf De Roos, Real estate investor. Houses being sold below market value are out there, its just a matter of knowing where to look and the buying strategies you use. So where can I find houses being sold for a discount? Find motivated sellers. Some examples of these sellers are people who have experienced death, divorce, bankruptcy, the less intelligent (editor's note: Terria in no way endorses this author's view of "the less intelligent", although the point is well made that it is a smarter move to use the assistance of a qualified realtor if you do not understand the real estate market! Terria can help!), people who have deadlines, and are developers. Bankruptcy/Foreclosure: When bankrupt an individual will have the option of selling their house to a third party, most likely at a cheaper price than market value because they need the money fast. If an Individual is bankrupt and the bank is the creditor, the bank will take the asset (the house) and have a foreclosure sale. You will often find a cheap price there as well. Death: Although this may seem like profiting of someone else's misery, its not really. If the house is not included in the persons will, it must be sold, someone has to buy it. If the deeds to the property are transferred to someone else there is often a good chance they will not want to hold onto it and want to sell it quickly. Divorce: When couple breaks up things often get nasty and they both want to be separated as soon as possible. They will often settle on selling their house for a lower price but quickly. Less intelligent: (editor's note: Terria in no way endorses this author's view of "the less intelligent", although the point is well made that it is a smarter move to use the assistance of a qualified realtor if you do not understand the real estate market! Terria can help!) Sometimes people are selling properties with out the help of a real estate agent and will not know the exact value of their house. They will usually price their houses too high because of emotional attachment to it. On the flip side they might be ignorant of the real market value and sell it for less than its worth. Deadlines: Often the best place to find deals. People with deadlines need to sell their property quickly. They may be going overseas or need the money fast. Almost all people with deadlines will sell their houses at a discount. Developers: In some circumstances property developers may have over extended themselves on a project and need to cut their loses. You can pick up discount houses from their mistakes. Always ask why the house is being sold so you can determine whether the seller is motivated or not. Other sources Great places to look are under the classified section in the newspaper, look for things like "Urgent" or "Heavily reduced". What I love about ads under the classified section is that real estate agents are not often involved. This is good because real estate agents will often try to push up the price of a property so it is above market value. People without real estate agents often do not know the true market value of their property. Just because there isn't a "For Sale" sign on a house does not mean the home owner would not sell for the right offer. Although chances of finding someone to sell there house through this method aren't very high, you can find great deals by making offers that a home owner might just take. If you've been to auctions or looked at properties which have not sold in a while and are being no longer advertised, follow up on them. After so much hassle of advertising the house and no sale, the vender may be tempted to sell at a discount. Buying strategies: Instead of looking for properties to purchase, let the properties come to you. Get your own add in your local Newspaper saying something like," Serious property buyer, wants to buy houses from motivated sellers quickly". You'll be surprised at the number of calls you'll receive. Don't reveal all your cards, as in try not to say why you want the property or how quickly you want to buy. Never make the first offer, let the seller make it. Once the seller states their price tag, say you want twice the discount you want off their price. So for example, the seller says they will sell it for $100,000 and you want a 5% discount, (5% of 100,000 = 5,000. 5,000*2 =10,000) offer $90,000 and counter offer up from there. Staple a check for the deposit payment to your next offer. If the seller countersigns the contract and banks the check they have accepted the deal. The psychological impact of this tactic is amazing. This tactic shows the seller that you are deadly serious about purchasing the property quickly. It is also very tempting to just bank the check right now even though they will be selling the property at a discount. Don't put emotions into the picture. Even if you are purchasing a house that will be your home, just because you think a bathroom looks 'adorable' you must not be willing to pay any more than its worth! This especially applies at auctions where the atmosphere makes it very hard to not bid. Can I loose the equity that I have created: Yes, but not likely. If you are savvy about it you can time your purchased property to gain even more equity from appreciation of the housing market in addition to creating immediate equity. Increase of real estate value by percentage in Australian Districts To look at the graph: http://www.use-your-equity.com/BuyingHousesatadiscount.html As we can see from the graph, housing prices eventually all go up due to increasing demand. The only time you can loose money is if you sell. If you never sell you will never loose money. You may loose equity when the market goes into recession, but eventually as population and demand for housing increases the property you have purchased will appreciate. If you are looking to continuously gain equity you must purchase in high capital gain areas. When the market is booming try to purchase properties for a 5%-10% discount. When the market is flat try to purchase properties for a 10%-15% discount. When the market is in recession try to purchase properties for a 15%-30% discount. http://www.use-your-equity.com For information on real estate investing, investing, and how you can use and create equity in your home. About the Author Property investor and equity user! Owner and writer of www.use-your-equity.com ---------BETTER JUDGEMENTS--------- New Features at TerriaJudge.com ==================================== MORTGAGE CALCULATOR: http://terriajudge.com/calculator.html OPEN HOUSES: http://terriajudge.com/calendar.html ---------BETTER JUDGEMENTS--------- FEATURED & NEW LISTINGS ======================== If you're interested in listing your house with Terria, you might be able to have your own website like www.123yourstreet.com! Just visit Terria at http://terriajudge.com/marketevaluation.html to fill out an interest form! ---------BETTER JUDGEMENTS--------- 4 Thinking Points Before Buying a House by Roger Sorensen So you've been renting an apartment for a while and your friends are all buying houses and settling down to nice, quiet suburban lifestyle. Is this something you should be doing too? To put even more pressure on you, every other evening news cast is talking about the rapidly increasing value of houses in your area. Before you rush out and buy the first house you can get a loan for, perhaps it would be wise to stop and decide if buying a house is really what you should be doing. To help you, here are four things to think about. 1. How long will you live there? If your job requires frequent moves, or you are pretty sure you will not be in the same city in five years, do not buy a house. Real estate prices do sometimes dip and if you move you may have to sell your house at a loss. 2. Are you a Flipper? Flipping is the art of buying a house, living in it for a time as you fix and improve it and then selling it for a profit. You then buy another house, live in it for a time, and sell it for a profit. The risk here is similar to that in the previous paragraph; the resale value of the house may go down. So if you are going to be a flipper, be sure to buy a house you would want to live in for the next ten years. 3. Does renting cost more than owning? Sometimes you can find a house that is actually cheaper to own than the place you are currently renting. If you are purchasing a house purely for the sake of less cash outflow each month, be sure to consider all the costs of ownership: mortgage, insurances, maintenance, snow removal, etc. If you still find that owning is more cost effective than renting, go for it. 4. Is it what you really, really want to do? Occasionally owning a house is what you really want to do, even if it doesn't make economic sense. In that case, make sure you do your homework, consider the three thinking points above, and make the best choice you can. Buy the most house for the least money in the best neighborhood. Buying a house can be an emotionally charged time in your life. It is also an enormous user of your resources. Take your time and be confident that you are ready to move into another stage of your life where you can be proud to say "This is my house." About the Author Roger Sorensen is America's Financial Guide. Learn more at his website www.Slave2Work.com – ask and receive answers to your personal finance questions, read his writings, or join the newsletter Money Basics. "How-To Be Debt Free!" is now for sale, read about it today at www.Slave2Work.com/debtfree.html ---------BETTER JUDGEMENTS--------- Home Equity Line of Credit – Great for Remodeling Projects by Charles Essmeier Many homeowners are lucky enough to find a house that represents exactly what they want in a home. They buy it, make the payments on it, and live more or less happily ever after. Others are not so fortunate. Some buyers who live in a pricey market may have to settle for less house than they need, hoping to find a solution to their lack of space later. A third group of buyers may find that their housing needs change over time, as their family size increases. What can be done in these situations? A common solution to these problems is to add on to the house, often accomplished by converting a garage to a room, adding a room over the garage, or simply adding a room somewhere else on the property. For these projects, a home equity loan is a great source of financing. The home itself is used as collateral for the loan, and the addition actually increases the value of the house. As most of these projects involve a fixed cost, the payments can be structured at a fixed interest rate over a specific period of time. But what about the do-it-yourself project? What if the problem with the home isn't a lack of space, but a lack of taste on the part of previous owners? Is there a better financing choice in these situations? If your problem is gold appliances, lime green carpet, and smiley face wallpaper, you may be looking at a remodeling project of indeterminate duration. For such a project, a better financing choice would be a home equity line of credit, or HELOC. A line of credit offers greater flexibility, both in interest rates and repayment terms, than a traditional line of credit. The loan amount is based on the amount of equity in the home, but the funds aren't dispersed all at once. Instead, the borrower is given a checkbook, a special credit card, or both and can use them to draw upon funds at his or her leisure. Payments only apply when money is actually borrowed, and the repayment plans can be arranged with both fixed and adjustable interest rates, depending on the lender. This is ideal financing for someone who has purchased a fixer-upper home that needs a variety of changes, repairs, or modifications. The credit card can easily be used to purchase paint, drapes, flooring, appliances or whatever the homeowner requires to make the home fit their needs. If you just need to hire a contractor to add a gameroom to your home, a traditional home equity loan would work well. For ongoing projects with indefinite timeframes and budgets, a home equity line of credit may be the best choice. About the Author ©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation and credit counseling information and HomeEquityHelp.net, a site devoted to information on mortgages and home equity loans. ---------BETTER JUDGEMENTS--------- This newsletter is compiled and published by Mitone Griffith, http://brightideagraphicdesign.com

  August 5th, 2005 at 2:49 pm

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