Real Estate (mobile home loans) Investing And Purchasing Terms You Should Know
No commentsBy Jerry Glynn
Home buying can be a tricky process. Here are some home buying terms that you will most likely encounter as you purchase your home. Familiarizing yourself with these home buying terms will help you make decisions regarding your purchase.
Amortization is a schedule that outlines your loan payments for the duration of the home buying loan. It details how much of each monthly payment goes toward the principal and how much goes toward the loan. Initially, the bulk of your payments will be applied toward the interest.
Appraisal is generally paid for by the home buyer, the appraisal provides an estimate of the propertys worth. Required by most lenders, it must be performed by a licensed appraiser before your home loan will be approved.
A buyers agent, as opposed to a sellers agent, represents only the interests of the home buyer. For an agent to be considered a buyers agent, an agreement must be made between the buyer and the agent. Without such an agreement, the agent could end up representing the seller in a real estate transaction.
Closing is the final step in the home buying process in which the transfer of the deed is made from the buyer to the seller. The mortgage is also finalized at this point.
Closing Costs are required to be paid at the time of closing. Closing costs are usually between 3 percent and 5 percent of the price of the home and include such fees as loan origination fees, attorney fees, and recording fees. As part of your home buying negotiation, you might get the seller to pay some, or all, of the closing costs.
Earnest money is the process in which buyers can make a deposit on the home to demonstrate the seriousness of the offer. When an earnest money deposit is made, it is held by an escrow until closing. It is then added to the down payment.
Escrow describes the funds held before closing by a third party, usually including the earnest money deposit. Future taxes and homeowners insurance, held by the mortgage company after closing, are also considered escrow.
FSBO or For Sale By Owner is a term refers to property that is being sold without a real estate agent. FSBO is also used to refer to the home owner who is selling the property.
Foreclosure is process after home buying is complete by which a lender repossesses and resells a property after the owner has defaulted. A lien is a legal claim that keeps the property from being sold until the lien is paid off.
A loan origination fee is the fee charged by the lender for processing the loan. The loan origination fee is due at closing. Private mortgage insurance may or may not be required in every situation.
When you make a down payment less than 20 percent of the loan amount, the home buying lender requires you to pay private mortgage insurance. This insurance protects the lender if you default on the loan. Finally, title Insurance protects your title from claims against it.
Keep these terms in mind as you go through the real estate investing purchasing process, and you will be well on your way towards making smart real estate decisions.
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Different Real Estate Schools Of Thoughts
By Prudence Wong
Many people are out there in the real estate investment field as this field has been considered as the best investment opportunity with maximum return and minimum risk. While discussing with real estate investments, it is essential to think about various schools of thought in this field. In fact there are many kinds of real estate schools of thought.
I would like to share with you two of most important schools of thought on real estate investments.
As a practicing economist analyzing the real estate investments, I know that there are many factors affecting the real estate business prospects and investments. These factors basically are indicators of the economic conditions in the market and the country as a whole. First kind of school of thought considers the perfect analysis of real estate investments based on these factors.
This school of thought primarily takes the signals from many of the economic indicators to identify how the market will perform in the near future. The factors considered are various economic yardsticks at all levels, local, national and global.
It considers all socio economic factors to have a thorough analysis of the prospects of real estate investments.
This school of thought invariably considers inflation, wholesale price index, mortgage rates and also the expected value of money within few years. Based on these thorough scientific and economic analyzes this school of thought comes out with the prediction of how the real estate market will perform in years to come. In nutshell, this school of thought evaluates the buying power of the people to evaluate the real estate prices.
As I know, most of the real estate investors do not want a global picture when looking for the purchase of a property. They want only assessment of the real estate market based on local factors. In this case, this school of thought considers factors like unemployment rate, demand and availability of the properties, infrastructure facilities, industrial developments, tax policies and many such items, which can affect the real estate prices.
This real estate school of thought also considers the neighborhood of the property and also the real estate trend in that area. The real estate consultants and investors who are well versed with financial and socio economic analysis follow this school of thought. This is only one among the many school of thoughts.
As all of us know, this approach is very complex and many of us would not able to follow this school of thought. We just follow, including me, another school of thought, which is very optimistic. For us, the real estate market is always lucrative all over the period and all over the country. There is no global or local picture of how the market performs. You have to just look for great deals.
This real estate school of thought advocates for getting good deals with maximum returns. You can look for public auctions, short sales, mortgage foreclosures, and dispute and distress sales and so on. Hence this practical school of thought focuses on getting the information on great deals in the location and gets the advantage of maximum returns.
You can follow any of these schools of thoughts or both together. But one thing is sure; the success in the real estate business always depends on the efforts and time you spend.
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The Four Attributes of a Good Owner Builder - Your Construction Loan and Project Depends on Them
By Chris Esposito
Owner builder construction can save you 15% to 35% during the construction of your own home by cutting the costs of hiring a general contractor. However, if you don’t take the planning and construction seriously, then you could end up losing a lot of money and your dream home. Therefore, you need to have these four attributes to be a successful owner builder.
1. An owner builder will need to have strong project management skills. Owner builder construction loans are designed to allow you to act as your own general contractor. That means that you are going to hire your own sub-contractors and oversee their work. Therefore, an owner builder must be able to successfully manage the hiring of multiple sub-contractors as well as manage their labor during construction.
Owner builder construction is simply a long project. And, if you have sound project management skills, then you should be able to manage the construction of your new home. For example, you will need to make sure your sub-contractors show up to work on time, stay through a full day’s worth of work, and actually perform quality work during construction.
Because an owner builder is the general contractor for the construction loan, it will be your job to keep all of the sub-contractors informed about the timeline of the project. For instance, if your foundation is taking longer than anticipated, you will need to let your framing crew know immediately so you can schedule when they need to be on site to start the framing. If an owner builder doesn’t keep the labor strictly scheduled, he will lose precious time and money during construction.
2. A successful owner builder will be good at planning. Most people unfortunately make the mistake of assuming that the most important aspect of owner builder construction is during the actual construction phase. But a smart owner builder knows that the battle is won or lost during the planning phase.
In fact, owner builder construction loans are designed to help you with this part of the process. During the loan and planning stages, an owner builder will take the time to find the right piece of land to go with the right home plans. Then, a budget needs to be compiled based on written bids and quotes from local sub-contractors who have reviewed the blueprints.
If an owner builder fails to take these steps seriously, they will fail during construction. In other words, if you rush through the planning stages, you will have trouble getting your building permits and will lose a lot of time and money in labor and materials during the actual construction.
3. A good owner builder understands the value of follow-up and inspections. If you don’t take the time to inspect the materials that are delivered on site or inspect the labor that your sub-contractors have completed, then your home will be riddled with problems by the time you move in.
This is not to say that an owner builder has to be able to personally inspect the sub-contractors’ labor to ensure it meets specific building codes. That would require years of experience in the building industry, which is not a requirement to be a good owner builder. Instead, you need to take the time to be on site with local county building inspectors.
As each phase of construction is completed, make sure that the county inspectors are doing a thorough inspection to ensure the labor and materials in your home exceed the minimum building code requirements. In fact, you should not pay any of your sub-contractors for their labor until their work has been thoroughly inspected and deemed satisfactory. An owner builder who pays their sub-contractors for labor before satisfactory work is completed will have a very hard time getting those sub-contractors back on site to make any necessary corrections.
4. Owner builder construction requires strong negotiation skills. If you want to save as much money as possible while building your own home, then you will need to be willing to negotiate for lower labor and material costs.
In today’s housing market, an owner builder truly has a great advantage when it comes to negotiating with sub-contractors. A few years ago, sub-contractors were in high demand as everyone was building as many homes as possible. With the current housing market slow down, the construction has also slowed down.
This means that there are a lot of hungry sub-contractors looking for work. This means that a savvy owner builder can negotiate for lower labor and material costs to save as much money as possible. Don’t be shy about it. Remember, the sub-contractors will be working for you - not the other way around.
So, if you want to be a successful owner builder, you will stand a much better chance if you know and fully understand the importance of these four attributes. Notice that not one of these attributes mentions anything about having to be able to swing a hammer or hang drywall. Instead, owner builder construction is won or lost at the planning and management level.
Chris Esposito specializes in owner builder construction loans, helping people act as their own general contractor to build their homes. Visit Owner Builder 101 for more information about owner builder planning and financing. Go to Owner Builder 101, or call (877) 876-3688.
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Friday, August 29th, 2008 at 1:20 pm and is filed under realestate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
