The Top 3 ways to Determine a Homes Value
In most states there are values determined by the tax assessor’s office. It might be called your tax value, assessed value or something similar. That number might not be 100% of the property value. Usually there is some type of formula that each city or state uses.
Unfortunately using the taxable basis fails to take into account a number of things, like:
1. What are homes actually selling for in your neighborhood?
2. What is the condition of your home?
3. What upgrades have been made to your home?
As you might be able to guess, all of these factors can have a huge impact on the value of your home and would be in no way reflected on the taxable basis. The result, your home will either be over- or under-priced.
Here are the top 3 ways to determine a value of a home:
1. Appraisal
An appraisal is probably the most accurate way of determining a home’s value. While it seems to be the most costly in the short term, what it can save you in the long run by having your home accurately priced offsets the upfront cost. If you are going to sell your home on a “For Sale by Owner” basis, I cannot encourage you enough to have an appraisal done. When you order the appraisal, make sure you ask for a market value. This will give you the closest possible pricing guide for your home.
1. Real Estate Agents
Making use of a real estate agent can be an excellent way to determine the value of your home. Real estate agents, like appraisers, actually look at recent sold comparables and look at your home to determine how its condition affects its value, and then suggest a price before listing your home. Unlike appraisers, they also take into consideration the current competition. They will perform an analysis of value, for no charge in most cases.
When you meet with an agent, ask to see “comparables”. They should show you recent sales comparables as well as what is currently on the market. Ask the agent WHY they are suggesting a particular price. Also ask them what you should expect to receive for a sales price on your home. A good real estate agent should easily be able to justify the asking price with accurate comparables and condition analysis of your home.
2. Your Neighbors
Another method I have seen employed quite often is to price a home’s value based on what your nearby neighbors are trying to sell their homes for, and then almost always adding some. Why would you add some? Of course, your home is better, right? It might be or it might not be. But most sellers think their home is nicer or more updated than their neighbors. Be careful with this, as it can be a dangerous way to price your home.
This method makes several assumptions that will likely lead to pricing trouble:
1. You are assuming that your neighbors’ homes are priced accurately.
2. You are assuming that your home is genuinely comparable to your neighbors.
Even if you happen to live in a neighborhood of identically sized ranch houses with identical lots, there can still be pricing differences based on the condition and improvements in the home. If you have a finished basement or a newly remodeled kitchen, you need to be able to accurately set a value for those improvements.
Want to learn more about selling your home as a rent to own? See Wendy Patton’s book, Rent to Sell, Your Hands on Guide to Sell Your Home When Buyers Are Scarce.
Wednesday, March 31, 2010
Friday, March 26, 2010
How to Get Sellers to Call You and Offer you Their Home for a Rent-to-Own
How to Get Sellers to Call You and Offer you Their Home for a Rent-to-Own
Now that we’ve discussed ways to find rent-to-own homes, what would you say to having rent-to-own sellers call you and offer you their home? That’s right. You can just sit by the phone and wait for sellers to call you and tell you about their rent-to-own home.
Many of these sellers will not have their homes listed with a real estate agent, so if you are working with an agent, this may not be for you.
The advantage of having the seller call you is that you already know he is willing to consider rent-to-own. You just need to figure out if his home and terms will work for you.
“Alright Wendy! So how do I do this?”
Posting ads is a way to get sellers to come to you.
Posting Ads
The first way is by posting ads about yourself and rent-to-own. Here is one example:
Can’t sell your home? Thought about renting it?
I’m looking to rent with an option to buy.
We could be the perfect match!
(123) 456-7890
This is a sample ad of what you would put in the newspaper where space is an issue – the more space you use the more it costs you. These ads though are just enough to get the attention of a home seller who has started to think about what choices he must make if he doesn’t sell soon.
You can also post an ad on FREE sites like Craigslist, Yahoo! groups and Google groups. I also recommend posting some flyers on community bulletin boards as well as posting flyers using these FREE Internet sites. These methods are much cheaper than the newspaper classified ads and may be all you need.
The whole purpose of these ads is to filter out the home sellers who don’t want tenants and to get the ones that would consider tenants to call you.
Here are some questions you can ask sellers once they call you:
* Where is your home located?
* Can you tell me what price you are looking to get for your home?
* How many bedrooms and baths does it have?
* Do you know what the rental rates are in your area? About how much were you thinking for monthly rent?
Not only will these questions help you gain more information about the sellers, it will also help you build rapport with the seller as well. Check out my book Rent-to-Buy to learn more about other ways to get sellers to call you.
Rent to Buy is your hands-on guide to buying your next home as a rent to own. You can get your next home NOW without having to qualify for a mortgage until later. To Learn more about Option Agreements purchase your copy of Rent-to-Buy today.
Feel free to comment and let me know of other ways you have sellers calling you!
Now that we’ve discussed ways to find rent-to-own homes, what would you say to having rent-to-own sellers call you and offer you their home? That’s right. You can just sit by the phone and wait for sellers to call you and tell you about their rent-to-own home.
Many of these sellers will not have their homes listed with a real estate agent, so if you are working with an agent, this may not be for you.
The advantage of having the seller call you is that you already know he is willing to consider rent-to-own. You just need to figure out if his home and terms will work for you.
“Alright Wendy! So how do I do this?”
Posting ads is a way to get sellers to come to you.
Posting Ads
The first way is by posting ads about yourself and rent-to-own. Here is one example:
Can’t sell your home? Thought about renting it?
I’m looking to rent with an option to buy.
We could be the perfect match!
(123) 456-7890
This is a sample ad of what you would put in the newspaper where space is an issue – the more space you use the more it costs you. These ads though are just enough to get the attention of a home seller who has started to think about what choices he must make if he doesn’t sell soon.
You can also post an ad on FREE sites like Craigslist, Yahoo! groups and Google groups. I also recommend posting some flyers on community bulletin boards as well as posting flyers using these FREE Internet sites. These methods are much cheaper than the newspaper classified ads and may be all you need.
The whole purpose of these ads is to filter out the home sellers who don’t want tenants and to get the ones that would consider tenants to call you.
Here are some questions you can ask sellers once they call you:
* Where is your home located?
* Can you tell me what price you are looking to get for your home?
* How many bedrooms and baths does it have?
* Do you know what the rental rates are in your area? About how much were you thinking for monthly rent?
Not only will these questions help you gain more information about the sellers, it will also help you build rapport with the seller as well. Check out my book Rent-to-Buy to learn more about other ways to get sellers to call you.
Rent to Buy is your hands-on guide to buying your next home as a rent to own. You can get your next home NOW without having to qualify for a mortgage until later. To Learn more about Option Agreements purchase your copy of Rent-to-Buy today.
Feel free to comment and let me know of other ways you have sellers calling you!
Friday, March 19, 2010
How to find Motivated Sellers for Lease Options
How to find Motivated Sellers for Lease Options
What Makes a Motivated Seller
There are, of course, different circumstances and situations in the lives of people that motivate them to need to sell their home. This can include a job transfer, bankruptcy, foreclosure, divorce or upgrading to a bigger home -- any number of reasons. However, the circumstances of the sellers may also be affected by the state of the two vying economic real estate markets – buyers and sellers – which also affect seller’s motivations. For real estate investors it is crucial to buy homes from truly motivated sellers -- sellers who have an extra urgency, usually financial, however, not always. You can’t get a good deal from a seller that is not motivated, because, they will have no reason to negotiate any part of a transaction.
There are different degrees of motivated sellers and different reasons sellers need to sell their homes, but overall there are two basic categories of motivated sellers:
1. Desperate and distressed (bad debt) – someone in trouble financially, behind on payments, going in a bad direction, lost their job, divorced, foreclosure, etc or
2. Not desperate or distressed (good debt) – someone not in trouble financially, not behind on payments, but motivated for other reasons: possibility have two house payments, inherited a home, burned out landlords, job transfers, etc.
Most real estate investors only go after #1 above, but there is also huge profit potential with sellers that fall in #2. All of the lease option sellers should fall into number 2, because these sellers are safer for a lease option buyer.
What Makes a Motivated Seller
There are, of course, different circumstances and situations in the lives of people that motivate them to need to sell their home. This can include a job transfer, bankruptcy, foreclosure, divorce or upgrading to a bigger home -- any number of reasons. However, the circumstances of the sellers may also be affected by the state of the two vying economic real estate markets – buyers and sellers – which also affect seller’s motivations. For real estate investors it is crucial to buy homes from truly motivated sellers -- sellers who have an extra urgency, usually financial, however, not always. You can’t get a good deal from a seller that is not motivated, because, they will have no reason to negotiate any part of a transaction.
There are different degrees of motivated sellers and different reasons sellers need to sell their homes, but overall there are two basic categories of motivated sellers:
1. Desperate and distressed (bad debt) – someone in trouble financially, behind on payments, going in a bad direction, lost their job, divorced, foreclosure, etc or
2. Not desperate or distressed (good debt) – someone not in trouble financially, not behind on payments, but motivated for other reasons: possibility have two house payments, inherited a home, burned out landlords, job transfers, etc.
Most real estate investors only go after #1 above, but there is also huge profit potential with sellers that fall in #2. All of the lease option sellers should fall into number 2, because these sellers are safer for a lease option buyer.
Friday, March 12, 2010
5 Ways to Improve Your Credit for Rent-to-Own Buyers
#5 Close out old accounts
In some cases if you have TOO MUCH available credit on your credit report it can hurt your score and reduce the amount lenders are willing to loan you. This can happen to people who have long credit histories. Old, unused accounts are never closed but they do count as available credit nonetheless.
If your credit score is suffering from too much available credit it may be to your advantage to close out a few of those old accounts. However, if you do this you need to close these accounts early, well before you apply for a mortgage. Closing them too close to the time when you apply for a mortgage won’t help your credit score at all.
# 4 Don’t take on new debt
Boy, I can’t emphasize this one enough. When you move into a new house how tempting is it to go out and buy new furniture or new appliances? It’s a new house right? You want new things to go into it.
This is like suicide for rent-to-owns. You are supposed to be improving your credit and not taking on new debts is critical! Not only that, but the payments on those new debts will also reduce the amount of mortgage you can qualify for. Even a monthly payment as little as $25 can reduce the amount of a mortgage you can qualify for by $4,000. Is that new couch really worth it if you can’t buy the house at the end of the option period?
That being said there is one case in which taking on new debt can help you - if you don’t have enough established credit to qualify for a mortgage. This only applies to people who are very new to building their credit. It is not intended for people who are trying to RE-BUILD their credit. Additionally the only way it helps is if that debt is PAID OFF at least 3 months before you apply for a mortgage. If it isn’t paid off long enough before you apply for a mortgage it won’t register on your credit report as paid off yet. These things can be slow to update so you need to give yourself plenty of time.
# 3 Stop using your credit cards
Even if you weren’t trying to improve your credit I would suggest this one. Credit cards are just sickeningly easy to get in trouble with. I don’t know many people that have credit cards that haven’t gotten into trouble using them at some point in their life. Just keep this in mind – the more credit card debt you have the lower your credit score.
Just stop using the darned things. Not only do they lower your credit score when you have higher debt, but remember that when the monthly payment on your credit cards goes up the amount of mortgage you can qualify for goes down – by thousands of dollars!
# 2 Pay everything on time
This is the second-most important thing you can do when it comes to improving your credit score. If you want to qualify for a mortgage you absolutely MUST make all of your monthly payments on time! NO late payments. NO bounced checks. NO excuses!
Consistent, on time payments will really help your credit score. Not only that, but if you make even one late payment during your rental period you may not be able to qualify for a mortgage at the end. Lenders HATE to see late payments on your credit, so once you start an option period make sure that you make those payments on time. Remember if you can’t qualify for a mortgage your option fee is non-refundable. You don’t want to lose that money or the house.
# 1 Sign up for a credit repair service
When our credit reports have damaging items on them, sometimes the only way to get your credit score high enough to qualify for a mortgage is to get those damaging items off. This is where credit repair comes in. A REPUTABLE credit repair company can help you repair your credit and help you remove damaging items from your credit report. In fact, in cases where a buyer cannot qualify for a mortgage and wants to do rent-to-own, I almost always recommend they sign up with a credit repair company.
If you are serious about doing rent-to-own, working with a credit repair company is a must. I recommend www.renttoowncreditrepair.com. They are a reputable company that can often achieve impressive results at rebuilding your credit.
In some cases if you have TOO MUCH available credit on your credit report it can hurt your score and reduce the amount lenders are willing to loan you. This can happen to people who have long credit histories. Old, unused accounts are never closed but they do count as available credit nonetheless.
If your credit score is suffering from too much available credit it may be to your advantage to close out a few of those old accounts. However, if you do this you need to close these accounts early, well before you apply for a mortgage. Closing them too close to the time when you apply for a mortgage won’t help your credit score at all.
# 4 Don’t take on new debt
Boy, I can’t emphasize this one enough. When you move into a new house how tempting is it to go out and buy new furniture or new appliances? It’s a new house right? You want new things to go into it.
This is like suicide for rent-to-owns. You are supposed to be improving your credit and not taking on new debts is critical! Not only that, but the payments on those new debts will also reduce the amount of mortgage you can qualify for. Even a monthly payment as little as $25 can reduce the amount of a mortgage you can qualify for by $4,000. Is that new couch really worth it if you can’t buy the house at the end of the option period?
That being said there is one case in which taking on new debt can help you - if you don’t have enough established credit to qualify for a mortgage. This only applies to people who are very new to building their credit. It is not intended for people who are trying to RE-BUILD their credit. Additionally the only way it helps is if that debt is PAID OFF at least 3 months before you apply for a mortgage. If it isn’t paid off long enough before you apply for a mortgage it won’t register on your credit report as paid off yet. These things can be slow to update so you need to give yourself plenty of time.
# 3 Stop using your credit cards
Even if you weren’t trying to improve your credit I would suggest this one. Credit cards are just sickeningly easy to get in trouble with. I don’t know many people that have credit cards that haven’t gotten into trouble using them at some point in their life. Just keep this in mind – the more credit card debt you have the lower your credit score.
Just stop using the darned things. Not only do they lower your credit score when you have higher debt, but remember that when the monthly payment on your credit cards goes up the amount of mortgage you can qualify for goes down – by thousands of dollars!
# 2 Pay everything on time
This is the second-most important thing you can do when it comes to improving your credit score. If you want to qualify for a mortgage you absolutely MUST make all of your monthly payments on time! NO late payments. NO bounced checks. NO excuses!
Consistent, on time payments will really help your credit score. Not only that, but if you make even one late payment during your rental period you may not be able to qualify for a mortgage at the end. Lenders HATE to see late payments on your credit, so once you start an option period make sure that you make those payments on time. Remember if you can’t qualify for a mortgage your option fee is non-refundable. You don’t want to lose that money or the house.
# 1 Sign up for a credit repair service
When our credit reports have damaging items on them, sometimes the only way to get your credit score high enough to qualify for a mortgage is to get those damaging items off. This is where credit repair comes in. A REPUTABLE credit repair company can help you repair your credit and help you remove damaging items from your credit report. In fact, in cases where a buyer cannot qualify for a mortgage and wants to do rent-to-own, I almost always recommend they sign up with a credit repair company.
If you are serious about doing rent-to-own, working with a credit repair company is a must. I recommend www.renttoowncreditrepair.com. They are a reputable company that can often achieve impressive results at rebuilding your credit.
Wednesday, March 10, 2010
Credit Repair for Yourself
Credit Repair for Yourself
Previously, I spoke about a few tips from my book Rent-to-Buy that will help you once you have been approved by the seller. I want to take it a step further and talk about the most important step you should take. If your credit needs improvement before you can qualify for a mortgage, you absolutely want to jump right on this. You should sign up for this as soon as you are approved by the seller and have scheduled your move in date. Credit repair is absolutely critical. Unless you already have excellent credit, this is something you definitely need to focus on. You won’t be able to get a mortgage if you don’t improve your credit. If you are working with a seller who has read my book ‘Rent-to-Sell’, they will almost certainly require you to take this step.
Without this, you may not be able to qualify for a mortgage when it comes time to buy. A credit repair company will help you get your credit in shape so that you can qualify for a mortgage. If you are looking for a quality credit repair company, go to: http://www.wendypatton.com/credit-repair. Don’t put your option fee at risk and don’t waste all of those months of rental payments with nothing to show for it. Chapter 17 of my Rent-to-Buy book goes into details about credit repair.
Also, join me on Thursday, March 11, 2010at 8 PM EST so that I can introduce you to my credit repair specialist. His ability to repair credit issues and get my Lease Option buyers to the closing table is incredible.
CLICK HERE to reserve your spot.
In addition to helping your tenant buyers, you may also want to consider credit repair for yourself.
Even if you currently have good credit, I will show you an example where an increase of just 22 points (from 679 to 701) saved an investor over $100,000 in interest on just one investment property.
CLICK HERE to register now!
Thursday, March 11, 2010
8:00 PM (EST)
7:00 PM (CST)
6:00 PM (MST)
5:00 PM (PST)
View this post from it's original source here: http://www.wendypatton.com/blog/credit-repair-for-yourself
Previously, I spoke about a few tips from my book Rent-to-Buy that will help you once you have been approved by the seller. I want to take it a step further and talk about the most important step you should take. If your credit needs improvement before you can qualify for a mortgage, you absolutely want to jump right on this. You should sign up for this as soon as you are approved by the seller and have scheduled your move in date. Credit repair is absolutely critical. Unless you already have excellent credit, this is something you definitely need to focus on. You won’t be able to get a mortgage if you don’t improve your credit. If you are working with a seller who has read my book ‘Rent-to-Sell’, they will almost certainly require you to take this step.
Without this, you may not be able to qualify for a mortgage when it comes time to buy. A credit repair company will help you get your credit in shape so that you can qualify for a mortgage. If you are looking for a quality credit repair company, go to: http://www.wendypatton.com/credit-repair. Don’t put your option fee at risk and don’t waste all of those months of rental payments with nothing to show for it. Chapter 17 of my Rent-to-Buy book goes into details about credit repair.
Also, join me on Thursday, March 11, 2010at 8 PM EST so that I can introduce you to my credit repair specialist. His ability to repair credit issues and get my Lease Option buyers to the closing table is incredible.
CLICK HERE to reserve your spot.
In addition to helping your tenant buyers, you may also want to consider credit repair for yourself.
Even if you currently have good credit, I will show you an example where an increase of just 22 points (from 679 to 701) saved an investor over $100,000 in interest on just one investment property.
CLICK HERE to register now!
Thursday, March 11, 2010
8:00 PM (EST)
7:00 PM (CST)
6:00 PM (MST)
5:00 PM (PST)
View this post from it's original source here: http://www.wendypatton.com/blog/credit-repair-for-yourself
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