31. January 2012 by Kristian Alekov.

Whenever a bank forecloses on a property, it is bad news for the bank and for the owner of the mortgage. That is a loss on both sides. So here is what they are not telling you about foreclosure—and what you can do when you see listings for foreclosed homes for sale. Take advantage of the foreclosure process and its results so you can buy and live in your dream home.

The first thing banks do not tell you is that they want to get rid of the property. Upkeep, maintenance plus the amount unpaid all goes back to the bank. This is why they often sell the house to a servicer as soon as they can—to make up for the loss. This is where you come in. Banks are willing to sell homes at a much lower rate than before and you can take advantage of that. In this case, the value of foreclosed homes is less for the bank and more for you.

This is why banks only foreclose after they go through loss-mitigation techniques such as reducing payments or even going through periods of forbearance to allow the mortgage holder to catch up on payments. However, most people do not approach their banks when the foreclosure notice threatens, too used to nightmare scenarios where the bank simply takes without dealing.

Finding a short sale home in the foreclosure market can be easy. Many auctions and real estate listings carry foreclosed properties as a way to make up for the loss. When you step in to buy a home in the short sale listings, you have the potential of finding a home worth at least twice its market price up for grabs for a price you can easily afford. Look for deals that allow you to take a mortgage through the same bank with a smaller payment and interest (this is where good credit can work well for you) or direct sales that allow you to put a larger down payment that you can afford.

Make it simpler by looking for homes that have been rehabbed and remodeled for sale, and have them checked and inspected before you even sign anything. You have to be smart so you can get the best deal you can afford. That way you avoid the pitfalls of buying a short sale house that is in dire straits or needs extreme repairs to function. Also check the neighborhoods where you will be buying for the things you need, such as good schools or ease of commute to your place of work.

Buying a foreclosed home is not stealing or the work of the hopeless. It is a legitimate and even money-savvy way to segue into home ownership. Playing it smart and knowing your foreclosed properties can help you buy a home you love in a neighborhood you like without breaking your back over impossible mortgages or payments. Finding a good home can be a lot of hard work, but a little sweat and some savvy can get you a home you will love living in at less than its asking price.

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30. January 2012 by Kristian Alekov.

There are a number of common questions about leases on rentals for both tenants and tenants landlords. For tenants, one of the most important questions about rentals concerns the ramifications of breaking a lease, including fees or legal actions by the landlord. A tenant may also want to understand the key differences between lease agreements and rental agreements. Tenants may also have questions about how they can determine if the lease terms within rental agreements are fair and legal.

For landlords, their questions about rental leases may focus on what they can and cannot include in rental agreements, what can be changed in rental leases, and how rental agreements can enable a smooth process for rentals and help maintain long and mutually beneficial relationships with tenants.

Answers to these common questions about rentals can be found on various websites and in numerous books about rental leases and rental agreements. Taking the time to get answers to these questions will help educate tenants and tenants landlords for a better experience with rentals.

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29. January 2012 by Kristian Alekov.

Month-to-month agreements, used to occupy rental apartments, can work well for some and become a nightmare for others. As with most fairly negotiated agreements, the success or failure of the arrangement often directly relates to the wishes of the parties. Month-to-month residential lease agreements are a perfect example of this proven theory.

First, both parties should understand the basics of month-to-month arrangements as they apply to rental apartments. Most of these agreements stipulate that the tenant agrees to occupy and the landlord agrees to allow the rental property to be occupied by the tenant for a term of one month at a time, possibly with no future stipulated end of term. Hence, the term may last as short as 30 days or may continue, technically, forever — as long as both tenant and landlord are happy with the arrangement.

From a landlord’s perspective, this arrangement allows quick reaction to market changes (increasing rents, taxes, the need to sell the rental property, etc.) that help protect against economic downturns. The tenants enjoys the same flexibility should he want it. Since he is not committed to long term residency, should the rent increase, he secures a fabulous new job offer in another state or another housing opportunity presents itself, he has the freedom to move and improve his quality of life quickly.

Unfortunately, every coin has two sides. Landlords enjoy little security that their current tenants will remain over the long term. As experienced landlords are well aware, a vacancy and the related costs to find a new tenant can make a serious dent in one’s bank account. Tenants are also often afflicted by this lack of security. Moving from one rental property to another is not usually classified as an enjoyable activity. An agreement that allows a short 30-day notice of termination does not provide a very effective time frame to look for, rent, and move to a new home.

The flexibility offered by a month-to-month term for rental apartments, however, often works well for both landlord and tenant. The downside risks to one, the other, or both are, however, potentially a problem. Month-to-month residential lease agreements are still widely used but should be carefully considered by both parties before a contract is executed.

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28. January 2012 by Kristian Alekov.

Paying someone else’s taxes may not seem like the smartest thing to do, but when it comes to foreclosed properties you might consider making the investment. This is one of the ways government agencies like your local county try to collect on back or delinquent taxes. While there are a few risks, many consider tax sales to be a win-win situation no matter which type you invest in.

Tax sales come in two different forms: tax lien sales or tax deed sales. If you buy a property this way, you offer to take over the payments from a homeowner who either cannot afford to or has gone delinquent. Your county government normally offers tax sales at public auctions. Why do this? The outcome is you either buy the property for a tiny part of its market value or collect a higher interest rate when the lien is paid off.

Making a well informed decision can turn this into a great investment and moneymaking opportunity for you. You are looking at modest, yet profitable returns on what can be a small investment. If the delinquent homeowner pays off the taxes in time, then you receive your principal back including interest. Depending on the credit situation of the homeowner in default, it can take anywhere from 6 months to 5 years. This is known as the redemption period for the back taxes.

If you are looking for the former, look for tax deed sales. This means that the tax comes with ownership and full possession of the property (or in some cases properties). Either way, you win.

Check your with your local country, newspaper listings or around the web for a listing near you. Rules and regulations vary per county but a little bit of research should help you get started. In many cases, the delinquent taxpayer pays what he or she owes and you get your money back with interest. In others, you get a house.

It is important to remember that rates of return differ per state. Iowa, for example, offers 2% per month guaranteed (that is 24% a year). Florida’s maximum is 18%.

If you decide to purchase a tax lien, you do not get the deed when you pay the back taxes. However, if the debt is left unpaid, you can go ahead and get a tax foreclosure on the property or deed of sale to return the investment. These are safe and viable investment opportunities if you know where to look. Just remember what kind of sale you decide to bid on and do research so you can invest smartly. Arming yourself with a little knowledge can help you not just outbid competitors, but get the best rates.

One thing you have to remember about tax sales is that they never need brokers. You buy the taxes directly from your city, county or government. Many auctions are now held through the Internet, making investing as easy as clicking a link. You can make a steady, sizable income simply from a few well placed dollars through a tax sale.

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28. January 2012 by Kristian Alekov.

Many people are looking into purchasing a preforeclosed property in the hopes of cutting a good deal. This is well and good. In fact, now is the best time to go for that dream house of yours, while the prices are still extremely low. However, if it is your first time to purchase a house, you need to come properly prepared of the ins and outs, especially in view of the tough financial climate.

How to Avoid Unpleasant Surprises

You have found the ideal foreclosed property and you are looking forwarding to getting the keys to the house. What could possibly go wrong? Here are some of the most common pitfalls you can deftly avoid:

Roadblock #1: When the Property Appraisal Kills the Deal

Even if you and the seller has already agreed on the price, the appraiser or the expert assigned by the bank will need to authenticate the value of the property – which can potentially ruin a perfectly good investment opportunity.

To have a better understanding, the banks and other lending institutions these days are overly cautious when it comes to granting home loans in view of the economic crisis. With the growing number of foreclosed properties and REO homes today, they want to make sure your home will not be added to this pile. Your bank will send over an appraiser to determine the value of the property. Typically, appraisals will be based on the prevailing value of recent sales in the neighborhood. If your appraiser is not familiar with the community, a deal could potentially slip off your grasp.

What you can do about it?

Get a good real estate agent who has an extensive experience in facilitating foreclosed property sales in the neighborhood. He can show the bank appraiser some of the nearby homes with the same floor plan and size that have been sold for a higher value. This can prompt the appraiser to revise the property to a price that you and the seller had originally agreed.

Roadblock #2: Your Lender Requires Home Repairs

Lenders these days can potentially hold up a sale if the appraiser will point out some repairs need to be done. The home loan will not be released until your preforeclosed home seller will comply with the required fixes. Lenders these days want to make sure that the properties they will finance are in good condition.

What you can do about it?

You need to anticipate for possible issues by taking a critical scrutiny of the preforeclosed property you want to house as against the inspector’s report. This can help you identify potential problems. Make sure that all the conditions that have been listed in your purchase as well as the sale agreement will be met to avoid unnecessary delays.

Roadblock #3: The Preforeclosed Property Comes with Extra Baggage

Unpleasant surprises may crop up when you least expect it. While we all look forward to a smooth sale, one can never be too careful. Among the possible issues include the following:

1. When there is another party aside from the preforeclosure seller who has claim on the property, such as creditors, contractors or suppliers, tax liens or lawsuits that you may not be aware of.
2. Missing permits can also be a major roadblock.
3. The property boundaries are inaccurate due to title errors.

What you can do about it?

Make sure to purchase an insurance title, so you can make sure your claim on the property is well protected. If your insurer will decline from providing insurance to the title of that preforeclosed deal, it is best to walk away and consider other prospects.

Now that you have a better idea of the common roadblocks, you have better chances of ensuring a deal to pull through without a hitch. Keep in mind that these pitfalls should not pose as a deterrent or discourage you on purchasing a perfectly good preforeclosed home. Economic crisis or not, these are common issues that come with home purchases.

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27. January 2012 by Kristian Alekov.

Many things can happen if landlords or tenants break material terms of leases on rental apartments. Most would agree that the majority of the “things” that could happen are unacceptable for one or both parties. If one of the parties is accused of breaking the terms of a lease, the importance of a clear, concise, and complete agreement will be evident to both parties rather quickly and emphatically.

The potential activities and/or remedies typically depend on which party has violated the lease agreement terms. If the tenant has performed actions that may have violated the tenant lease terms, the landlord may have the legal authority to be awarded reparations (damages) or eviction of the renter. Should the landlord have allegedly broken the promises of the lease, the tenant may have the legal ability to have the court mandate correction of the problem or receive monetary awards from the landlord.

Whether you are a landlord or a tenant, understand the complete list of terms to which you agreed when signing the lease agreement. Many potential problems with leases on rental apartments can be avoided if both parties fully understand the contents of their contract.

The end result of a violated residential lease agreement invariably involves time and money, at the least. The results of this situation typically terminate in a lose/lose situation. No one wins. The loss of time and money, normally by both parties, usually outweighs any anticipated monetary gain. Often, only the attorneys involved in litigation make money, while the tenant and landlord live through an unpleasant situation.

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26. January 2012 by Kristian Alekov.

If you are wondering, where you are going to get funding for your future foreclosure investments, then now is the time to shed yourself of pre-conceived notions and learn from the best. Buying foreclosed homes, short sale properties or bank-owned estates may not be your idea of a get-rich quick scheme (and it is not). Nevertheless, careful management of the funds you have on hand and courting good investors can give you the capital to beef up your investment portfolio. Here is a quick rundown of the different ways one can acquire funding, and get started on foreclosure investment today.

Cash on Hand

The first thing you can look at is the cash you have on hand and how much access you have to easy sources of cash such as a savings account, retirement/IRA plan or goods/merchandise that you can liquidate.

This may come from assets you decide to sell, investments you already have or returns from previous loans or insurance policies. Many foreclosure investors also rely on a network of family and friends, especially when it comes to securing the first deal.

Keep in mind that many short sales, tax sales and even some foreclosure deals ask for the full amount when it comes to paying for the property. Think twice before using any of your current mortgages or personal property as collateral.

Bank Investments

Like many traditional loans or investments, getting funding the traditional way can be possible, especially if you have average to good credit standing, a low debt to income ratio and a good head for handling investments, payments or debts. The upside of going through the traditional bank route is you get steady interest rates and know what to expect.

Mortgages and traditional financing are a wonderful option if you are looking at foreclosed properties or secondary homes as a buy for your own family.

Make sure you pre-qualify for a mortgage or loan before you make a bid so you have the money to back it up in the event you win the auction.

Private Investments

Another way of securing funding is through private investment. This is a good option if, for example, you have less than stellar credit or prefer not to have this loan affect your credit. Keep in mind that the lenders dictate interest rates for private lending and you may end up paying higher interest than you really want. Otherwise, it is a low-risk investment, which can pay back without early pay or penalties.

Plan for Contingencies

Wherever you get your funding, it is always good to have a little extra set aside for sudden repairs, renovations, fees or other surprise costs that closing on a property can give you. This extra cash can also help you avoid unpleasant surprises when the deed is turned over, if you use it for inspections or appraisals.

Regardless of how you get your funding, your end goals when it comes to investing will determine how much you are willing to spend. The amount you do invest will also determine your profit—and the potential for profit is huge.

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26. January 2012 by Kristian Alekov.

Rental apartments are more often occupied under a lease versus a month-to-month, more “casual” agreement. The question of who benefits most — landlord or tenant — is sometimes asked as if this agreement were a win/lose proposition. However, a fairly negotiated and written lease benefits both parties equally if the parties understand what they want and include these items in the agreement.

The primary benefits to BOTH parties typically include the following items.

• Stability. Both the landlord and tenant have agreed to a set of conditions, acceptable to all, which should provide some level of stability for the parties. Longer term leases fro two to five years increase the stability factor.

• Continuity of income (landlord) and housing expense (tenant). A residential lease agreement benefits both landlord and tenant by stipulating a continuity of income/expense over the term of the contract. Since both parties agreed to the terms, both should be satisfied with the monetary factors.

• Commitment that should be comforting for both parties. Both landlord and tenant have shown commitment when rental apartments are occupied through a lease agreement. Often a house rental becomes a home rental because of this commitment level. Whether you use a standard sample lease form or more complex custom document, both parties win.

There are a few instances, usually unforeseen, that may give an advantage to either landlord or tenant. For example, suppose you’re a tenant whose been offered a fabulous new job in another state. Wonderful, right? But, you’re in the second year of a five-year lease of your home. Now what? The landlord has an advantage because the lease must, legally, be fulfilled. If your residential lease form allows you to sublet your house, you’ll probably have to do that to fulfill the terms of the contract.On the other hand, suppose your landlord unexpectedly needs to sell your house. Having a longer-term lease, instead of a month-to-month rental term, gives you some security knowing your rental lease agreement cannot simply be terminated on 30 days’ notice. In this example, the tenant normally has an advantage.

Under typical circumstances, however, both parties enjoy equal benefits under a standard lease used for rental apartments and houses.

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25. January 2012 by Kristian Alekov.

There are many similarities and a few important differences between lease and rental agreements. First, here are some similarities of agreements pertaining to rental property.

Both a rental and a lease agreement should have the following attributes:

• Both agreements should always be in writing. There are no known exceptions on this planet to this rule. Of course, it’s easier and more pleasant to make an oral rental lease agreement because both landlord and tenant are happy to be making a deal. However, should a problem arise, oral agreements are less useful and unenforceable.
• A residential lease agreement should have a clear identification of the monthly rent or lease amount for rental apartments and when, during the month, the rent is due. Most agreements call for the agreed payment to be made in advance, unlike a mortgage loan which is paid in arrears – on the first day of every month during the term of the agreement.
• There should be a clear statement of the length of the agreement. Whether your agreement is a pure month-to-month occupation or a five-year rental lease agreement, the length of the term should be clearly specified. Also, any agreed-upon renewals or extensions of the agreement terms should also be clearly identified.
• Identify whether or not this is a fixed-term rental or lease agreement, which normally specifies that the landlord cannot increase the rental amount during the term of the agreement or a more open-ended and flexible contract. For obvious reasons, this can be a critical component of any tenant lease or rental agreement.

Primary differences in a rental and lease agreement often include:

• Lease agreements tend to be longer than rental agreements, but this is not a requirement. Many people tend to consider a rental agreement to be a short-term agreement (normally month-to-month), while typical use of the term “lease” often refers to a longer-term document — six months to five years or beyond.
• Oral lease agreements are often invalid. You learned above that neither agreement should ever be an oral contract. But many state courts will at least consider ruling on oral rental agreements that were intended to last less than one year. The majority of state courts will often decline to even hear or consider enforcing an oral lease agreement with original terms longer than one year.
• Unlike short term rental agreements (e.g., month-to-month), the majority of lease agreements do not automatically renew themselves. Many month-to-month rental agreements have language that states the agreement will automatically renew every month, while both parties (landlord and tenant) have to provide only 30 days’ notice of a termination of the contract. A three-year lease may state that the parties agree to the term and rental amount to be fixed for three years.

There may be other differences important to both parties, almost all of which are negotiable before any contract is signed and executed. As long as the language is clear and the terms are acceptable to both parties, either agreement should be workable.

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24. January 2012 by Kristian Alekov.

When you want to find a home for rent, there are a number of tenant rights that you should be aware of to ensure that landlord responsibilities are met during that arrangement. While California renter’s rights and California tenant rights may vary from the rights of renters in Boston or Chicago, there are some basic renter’s rights that fall into specific categories related to homes and rental arrangements.

A home for rent must fulfill obligations on tenant rights in such areas as how to market homes for rent, unlawful discrimination against certain types of tenants, rights of renters in terms of how a lease or rental agreement is worded and explained, and renter’s rights while living in the home for rent. Then, there are other areas, such as dealing with problems while in the rental homes, having repairs made as part of the landlord responsibilities, moving out, dealing with eviction, and receiving refunds on security deposits. Knowing your rights as a renter will ensure that you do not get taken advantage by a landlord and that you have a smooth rental relationship with your landlord.

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