10
Sep
By support
Home Buyer Tips

The Pros and Cons of Paying Cash When You Buy Your Next Home

The Pros and Cons of Paying Cash When You Buy Your Next HomeWith mortgage bubbles and real estate issues still in recent memory, one might feel that their best option is to buy their next home using cash instead of borrowing the necessary funds. In today’s article we’ll explore the pros and cons of paying cash for that next house or condo.

The Pros Include A Feeling of Complete Ownership

There’s a feeling of pride and joy that comes with owning a home outright. There are several other reasons for paying cash instead of signing on the dotted line and getting and being strapped to a 30-year mortgage. Perhaps the best reason is having 100 percent equity in the home.

The cash will be there to borrow in case of an emergency. Having cash on hand is great if a water pipe bursts or there’s a huge car repair bill. In addition, instead of paying a monthly mortgage, that money could be used to start a college fund, to grow savings or to invest.

And, credit problems wouldn’t be an issue since there wouldn’t be a need to check credit history in the first place. The homeowner may be able to negotiate a better price, which may result in a likelihood of a smoother sale, and attract more prospective buyers.

The Not So Great Reasons To Pay With Cash

Buying a home is one of the largest financial investments a person will make in his or her lifetime.

However, buying a home outright most likely means that a significant percentage of cash will be tied up in the house. Less cash will be on hand for savings, college funds, and emergencies like a plumbing malfunction or an expensive car repair.

While paying in cash may result in a mortgage life, if the property value drops for whatever reason, there’s no purchase protection. For instance, if the market value of a $100,000 home loses 10 percent that will be a loss of $10,000. Take this example and apply it to a mortgage down payment. If the market value falls, there’ll be a loss of $10,000, but the bank would take a loss for the remainder of the property value.

Also, when paying with cash, there is no third party property evaluation to ensure the buyer isn’t overpaying for the home. Banks will send a professional to provide a property evaluation check to verify the correct home value.

Buying a home is a significant personal decision. In today’s tough economy, homeowners are finding ways of cutting back on expenses. Owning a home outright, without the stress of mortgage payments can be extremely liberating. Comminting a large amount of your cash to this large of an investment needs careful planning.  Sit down with your trusted mortgage professional today before making the decision to use cash to pay for a home.

03
Sep
By support
Home Buyer Tips

How to Submit an Offer Below the Asking Price Without Spooking the Seller

Going Low: How to Submit an Offer Below the Asking Price Without Spooking the SellerYou’ve found it: A large new home for your family. It’s in the area of the city that you love, with the perfect architectural style and lots of room for entertaining guests. It would have been perfect for you, but there’s only one problem – you’re not quite ready to pay the price the seller is asking for. You’ll have to put in an offer below the seller’s asking price – a risky move.

Although you will be rolling the dice with an offer below asking price, there are ways that you can increase the likelihood that your offer will be successful. Before you submit your offer, use these three strategies to make it more appealing.

Work Out Other Terms In The Seller’s Favor

If you’re going to ask for a lower selling price, it helps to show that you’re willing to compromise on other terms – that way, you come across as a reasonable human being and not a bargain hunter. By offering to give the seller the better deal on other terms, you’re showing that you want to close a sale – and the seller will see you making an effort to come to an agreement and respond in kind.

There are several ways to do this. When you submit your offer, see if you can negotiate an arrangement that has you paying the closing costs or a closing date that works better for the seller. Or, offer to make the down payment in cash or give the seller a larger deposit.

Arm Yourself With Facts To Make Your Case

If the home you want to buy is priced well above fair market value, you can easily use that to your advantage and turn it into a benefit for the seller. First, you’ll want to look up property values for similar homes in the area. You should also investigate how long it takes homes in that area to sell and the difference between the average asking and average selling price in the area.

If you can show the seller that their asking price is above their neighborhood’s average sale price or that their home has been on the market longer than the average home (or both), then you can make a strong case for a lower offer.

Submitting an offer below asking price can work, but it’s not something that should simply be done on a whim. It takes careful planning and a great strategy to actually win a bid if you’re coming in below asking price. 

19
Aug
By support
Home Buyer Tips

Buying an Investment Property? 3 Key Home Features That Will Help Ensure You Turn a Profit

Buying an Investment Property? 3 Key Home Features That Will Help Ensure You Turn a ProfitIf you’re entering the real estate investment market for the first time, you’re embarking on a great adventure – and with a solid plan, you can turn a tidy profit on your investment.

The key to a successful real estate investment is choosing the right property. A great property will reap dividends for years to come. Look for these three features in your next investment property and you’ll have no trouble finding one that turns a profit.

Location: More Important Than You Think

The location of your investment property will be critical in determining how much you earn on it and how long you’re able to keep tenants. And as the saying goes, you can change the color of the walls, you can change the type of flooring, and you can change the layout of the home, but you can’t change the location. So before you do anything else, make sure your new investment property is in a good location.

High cash flow investment properties tend to share certain location characteristics. They tend to be in neighborhoods with great schools and great amenities like pools, parks, movie theaters, and public transit. They also tend to be in an area with quiet, low-traffic, well-kept streets. Great neighborhoods have a low crime rate and don’t mix housing types.

Average Rent Price & Vacancy Rate: Look For Marketability

Aside from local amenities, you’ll also want to consider the average vacancy rate and rent price in your neighborhood. If you can’t cover your costs by charging the neighborhood’s average rent, then the home is a poor investment.

Keep an eye on vacancies in the neighborhood. If there are a high number of vacancies in the area, it could mean that the area’s rental market is seasonal or that renters are no longer interested in it. A low-vacancy area will allow you to charge more rent, and you’ll be more likely to find renters.

Floor Plan: Know The Trends And Buy Accordingly

There are a lot of things you can change if you don’t like your home, but the floor plan is a challenge to rearrange. That means in order to make your property competitive on the market, you’ll want to choose a property with a modern floor plan. Watch the trends and buy a home with a floor plan that’s in demand – you’ll have an easier time finding tenants.

Buying an investment property is a great choice for smart investors, but it’s important to make sure you are in the right position to turn a profit. An experienced mortgage professional can help keep your costs down on your mortgage so that your profits stay high. Contact your trusted mortgage professional today to learn more about what mortgages would work best for your situation.