 |
| What is a Lease Option and When Is It Right For You? |
A lease option basically means you are leasing or renting a property with an option to buy it at a future date. The future price of the property should be fixed at the time the lease-option is signed.
Usually there is an up-front payment of some amount to purchase the option. That amount can vary. Sometimes the monthly payment is larger than normal and the excess is used to purchase the option. In some cases, the option money can be applied toward the down payment for the later purchase of the home.
Lease-options are usually done during a slow real estate market. During a hot market, the seller can simply sell the home in the regular manner.
What benefits do a lease option hold for the seller?
- They often get to sell the house at a higher price than they could sell it in a normal transaction.
- They can sell the house during a slow market.
- By being able to collect a larger monthly payment than they could obtain in a normal lease, the property "cash-flows" and they don't have to come up with money out of their own pocket each month to make the mortgage payment.
- They get some up-front option money and when the buyer cannot exercise the option, they get to keep it.
What risks do a lease option hold for the buyer?
Individuals who attempt to buy homes on a lease-option rarely end up buying the home. This often has to do with the reason they try to buy on a lease-option. They usually cannot qualify for a home loan and expect that they will be able to qualify after a period of time. Later, they find they still cannot qualify - whether it is because of poor credit, lack of income (documentable income), or lack of savings to have a large enough down payment. If this happens, you lose any option money you might have paid up front or as part of your monthly payment.
|
|
 |
| Is Buying Commercial Property for Income a Good Idea Now? |
 Buying commercial real estate can be a secure and profitable investment if you take the time to research, get advice from experts and know your risks and benefits.
"There are four main reasons to buy investment real estate: cash flow, appreciation, depreciation and principal pay-down," says Mike McCaffery, Investment Property Consultant, GFS Commercial, a division of the Guiltinan Group Real Estate Specialists.
Owning commercial real estate can be a great way to diversify your portfolio, create tax benefits and build wealth. However, buying commercial real estate can be a risky business, especially these days when many people are getting into real estate without completely understanding the industry.
"There are different kinds of investors. There are some people who are very wealthy and they'll buy trophy properties for example and the returns are very minimal, but they hold them because they want to have a long-term hold. A lot of other investors want the cash flow so they're going to go to other areas that have a higher cash flow or higher return but it's not going to be in the best areas," says Investment Property Consultant Eric Warfield with GFS Commercial.
|
|
Read More...
|
|
|
|
FREE 1st TIME HOME BUYERS SEMINAR!
You CAN buy a Home or
2 - 4 Income Units TODAY!!!
 SATURDAY – October 24th - 11:00 am to 1:00pm |
|
|
| Assuming a Pre-Existing Mortgage |
 An Assumption of Mortgage occurs when you you purchase a home and assume the seller's pre-existing mortgage. You're then required to fulfill the obligations of the existing loan agreement the seller made with the lender. The obligations are similar to those you would incur if you were taking out a new mortgage. When assuming a mortgage, you become personally liable for the payment of principal and interest.
The seller remains liable to the mortgage lender (whether the lender is a commercial bank, credit union, thrift, mortgage banker, or mortgage broker) until the lender agrees to release them. When the seller, or original mortgagor, is released from the liability, they should get that release in writing. Otherwise, he or she could be liable if the new owner doesn't make the monthly payments.
For example, a homeowner owes a 30-year mortgage loan of $250,000 against his house. A prospective buyer wants to purchase the house and assume the pre-existing mortgage. The buyer pays $50,000 cash for the equity and assumes the mortgage, becoming liable for the debt. The original owner remains liable as well if he or she is not officially released from the agreement with the lender.
|
|
Click here to view an example of an Assumption of Mortgage Agreement Form
|
|
|
| Which Is Better: Fixed Rate Mortgage Or Adjustable Rate Mortgage? |
People often assume that because adjustable-rate mortgages "share risk" between mortgage lender and mortgage lendee, they will be rewarded with a lower mortgage rate than if they chose a comparable fixed-rate mortgage.
 The chart at the left proves that thinking false.
Three separate times since mid-September, 5-year ARMs priced worse than a similar 30-year, fixed rate mortgage. It's atypical, but it does happen from time to time.
And it's also why locking mortgage rates is like running a Peyton Manning offense -- you can't call a play until you've stepped to the line and studied what's on the other side of the ball.
Before settling on a specific mortgage plan, remember that mortgage markets change daily and mortgage rates change every 3 hours, 11 minutes. A 5-year ARM may look cheaper in the morning, but by the afternoon, it could be losing out to the 30-year fixed and -- all things equal -- it's better to take that fixed-rate mortgage at a lower rate if it's available.
|
|
|
| Going Green? It's Not Just About The Environment |
 Making GREEN improvements to your home can be good for the environment and your wallet. Going green cannot only improve the earth we all live on but can also help save substantial dollars in energy costs and produce tax savings. If renovations are in store for your home, always consider making them energy efficient improvements. There are tax credits for 30% of energy efficient home improvements for amounts of up to $1,500 for improvements to existing homes. You may also be eligible for state and local tax benefits, subsidized state and local financing deals and utility company rebates. Hopefully, the energy expense savings together with the tax breaks (and any other incentives) will justify the cost. Acceptable projects include:
 • Windows and Doors
• Insulation
• Roofs (Metal and Asphalt)
• HVAC
• Water Heaters (non-solar)
• Biomass Stoves
There are also tax credits available for 30% of the project cost, no limit, for existing homes and new construction. The credit equals 30% of qualifying expenditures (including costs for site preparation, assembly, installation, piping and wiring) for the following types of projects:
- Solar water-heating equipment for your U.S. (not foreign) residence (includes a vacation home)
- Solar electricity-generating equipment for your U.S. residence (includes a vacation home)
- Wind-energy equipment for your U.S. residence (includes a vacation home)
- Geothermal heat-pump equipment for your U.S. residence (includes a vacation home)
- Fuel-cell electricity generating equipment for your U.S. principal residence
Other energy saving changes that are not included in the list of tax saving projects include:
- Wash and dry only full loads of laundry
- Only wash full loads of dishes
- Fix leaky faucets and toilets
- Install aerating low-flow shower-heads and faucets
- Turn off the faucet while brushing teeth and shaving
- Take short(er) showers
- Avoid baths altogether
- Lower the hot water heater’s thermostat
- Getting heating and cooling equipment tuned once a year
- Insulate hot water pipes and hot water storage tanks
- Caulk cracks and gaps on walls, including around door and window frames
- Weather-strip air leaks around windows and doors
- Replace incandescent light bulbs with more efficient compact fluorescent (CFL) bulbs
Reducing the carbon footprint for your home has never been more affordable or had the amount of tax incentives available today. Whether you want to change your windows or alter your home’s heating and cooling source, making changes that make a difference to the environment will help you save money. You will probably feel better about your place on earth as well.
For information on energy efficient tax credits click here.
|
|
|
| Market Snapshot - Real On Time MLS Data |
|
 This month we have again included the latest version of Market Snapshot, an award-winning, real-time MLS graphical report. The industry’s most current online real estate report has a new look and layout which offers even more market information on one page. Key comparative MLS data charts, including Asking price VS. Selling Price, Selling Times, and Neighborhood Inventory, are now available on the front page, through convenient collapsible sections. These enable viewers to remain in one web window and not have to toggle back and forth to compare data. You can have up to 100 of the closest active and sold listings displayed on the map for the Seller’s Market Snapshot as well as the Buyer’s.
|
|
|
|
NO BONES ABOUT IT!
SUPERIOR SERVICE - SUPERIOR RESULTS!
Keller Williams LA Harbor Realty
Catherine Bennison - Realtor Associate
Direct: (310) 707-2162
Cell: (310) 748-7889
Fax: (310) 519-1882
E-Mail: CBennison@KW.com
Website: www.CatherineBennison.com
DRE# 00946724
|
|
|
|
October 2009
In This Issue:
|
|
 |
Catherine Bennison's
South Bay
Real Estate Newsletter
|
|
|
PRICE REDUCED!
$849,000
3 Bedroom 2 Bath Home
Elegance in Upper South Shores. Wonderfully upgraded, two level,view home on a very quiet street to street lot. Big Ocean/Catalina views from every single room!!! Enter the front door into the open & bright living room/great room. Walk out the sliding doors on the balcony & enjoy the sunsets and cool ocean breezes. The well appointed master bedroom and bath are also on this level. Kitchen updated with granite counters. On the lower level is the family room, also with a brick fireplace, two bedrooms, laundry facilities and bath. Both baths have been exquisitely remodeled and also have Catalina views. The large, private backyard is perfect for entertaining and is spa ready
|
|
|
Is Now the Right Time to Buy?
|
Click Image to Watch Video |
|
|
Home Tour Checklist
|
Every airplane, a friend once told me, has something wrong with it. The pilot just needs to know what it is before he takes off. We recommend the same approach when buying a home. No house is perfect. But you can negotiate a better deal if you know about its problems early. Remember, nothing can replace a Professional Home Inspection.
15 Tips for Touring Homes...
- Bring a camera, notebook & tape measure
- You think you'll remember everything but you won't. Compare the home's dimensions to your couch, dining table and guest bed.
- See how much sunlight the place gets
- Visit during the day. Imagine the trees with leaves – they may block your view, or provide some welcome shade.
- Check the bathrooms for rot & mold
On the ceiling above the shower, along the baseboards by the tub.
- Look for wavy or discolored wood siding on the exterior
The south-facing wall gets the most sun; the north-facing is the most damp.
Read the rest of the tips...
|
|
|
Mortgage Calculator- How Much Home Can You Afford?
|
The first step in shopping for a home should be determining how much home you can afford. The general rule is that the payments on your new home shouldn't account for more than 30 percent of your overall income.
Your income, credit rating, current monthly expenses, down payment, and the interest rate will determine the final total that you will be able to afford. If needed, find a housing counselor who can help you figure out how to manage and pay down or pay off existing debt, and give you a solid foundation of information for your plan.
The amount you pay for a home is based on several factors. You are the best judge of what you can comfortably pay every month. Take some time to calculate all your expenses - to include what you spend daily on lunches, coffee, transportation, and other costs that otherwise go unnoticed. Then add in local property taxes and anticipated maintenance of your home, or other improvements/additions that may be necessary in the near future.
Lending institutions use the following criteria to calculate what size loan you are qualified for. The three main things they look at are: 1) Your monthly payments as a percentage to your income; 2) How much cash you have for the down payment and closing costs; and 3) Your credit rating.
|
|
|
Doggie News
|
DoggieNews.com is a weblog publishing news about dogs, the pet industry, new products, and other quirky canine stuff.
Our target audience consists of folks who own dogs, and who seek information to help them make purchasing decisions, health and entertainment choices, and to keep abreast of legislative and regulatory changes that might affect their dog ownership.
Got News?
Please share your dog and pet related news concerning your company or organization. To do so, please write up a news article, and submit it to us at the email address below. We will consider it for publication in our monthly newsletter.
cbennison@KW.com
|
|
|
