Financial Planning, Retirement Issues


Reverse Mortgages – Lose Your Home

December 7th, 2015 ernie Posted in Real Estate No Comments »

Reverse Mortgages - Lose Your HomeWe have all seen the advertising about reverse mortgages. But what many people do not appreciate is that Reverse Mortgages – Lose Your Home could actually happen. The advertising paints a nice rosy picture of elderly people unlocking the value of their homes, receiving cash every month and living long comfortable lives. The reality is that it could be true, depending on how long you live. This reverse mortgage is actually a loan and must be repaid at some point. If you die after a few years and your heirs sell your home, they must repay this loan. As long as there is sufficient equity in the home, they can repay the loan. But what if there is not enough equity? Or what if you live longer than you expected?

Reverse Mortgages – Lose Your Home

The bottom line is that a reverse mortgage is a loan. If you draw on the equity in your home for many years using this tool, there will be nothing left in terms of equity in your home. Worse if your home’s value actually declines.

Consider the following situation. Let’s assume the home owner is 70 years old and life expectancy is another 10 years. Their home is fully paid off. They want to stay in their home but need money to enable their continued residency. They take out a reverse mortgage for 10 years and enjoy their money doing many of the things that elderly people like to do including paying for health expenses.

After 10 years, the reverse mortgage ends and the loan becomes due. They can make monthly payments of interest plus principle. However if they are on a limited fixed income, chances are they do not have the cash to make these payments. Faced with this situation, the only thing they can do is to sell their homes.

This Reverse Mortgages – Lose Your Home scenario is quite possible for many people. Before you enter into an agreement of this type, take a good look at your finances, your life style, your longevity and what you will do at the end of the term of the reverse mortgage. Many of the ads are misleading. Have a financial adviser review your situation and prepare recommendations. If you are doubtful about the recommendations, get a second opinion!

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Sell your home fast for top dollar

June 14th, 2013 ernie Posted in Real Estate No Comments »

Sell your home fast for top dollarSell your home fast for top dollar. Selling your home is one of the most important steps in your life. This nine steps system will give you the tools you need to maximize your profits, maintain control, and reduce the stress that comes with the home selling process;

Know why you’re selling and keep it to yourself. The reasons behind your decision to sell, affect everything from setting a price to deciding how much time and money to invest in getting her home ready for sale. What’s more important to you; the money you walk away with, or the length of time you’ve your property is on the market or both? Different goals will dictate different strategies.

However, don’t reveal your motivation to anyone else or they may use it against you at the negotiating table. When asked, simply say that your housing needs have changed.

Do your homework before setting a price.

Settling on it offering price shouldn’t be done lightly. Once you set your price, you’ve told the buyers the absolute maximum they have to pay for your home, but pricing to high is as dangerous as pricing too low. Remember that the average buyer is looking at multiple homes at the same time they’re considering yours. This means that they have a basis of comparison, and if your home doesn’t compare favorably with others in the price range you said, you will be taken seriously by prospects or agents. As a result your home will sit on the market for a long time and, knowing this, new buyers on the market will think that there must be something wrong with your home.

Do your homework. Find out what homes in your own and similar neighborhoods have sold for in the past 3 to 6 months, and research what current homes are listed for. That certainly help prospective buyers will assess the work of your home.

Find a good real estate agent to represent your needs.

Nearly 3/4 of homeowners claim they wouldn’t use the same real estate agent who sold their last home. Dissatisfaction boils down to poor communication, which results in not enough feedback, lower pricing and strained relations. Picking the right agent is one of those critical issues that can cost or save you thousands of dollars. It is important to find out what unique plan And programs and agent has a place to make sure that your home stands out.

Maximize your homes sales potential.

Each year, corporate North America spends billions of product packaging design. Appearance is critical, and it would be foolish to ignore this when selling your home.

You may not be able to change your Holmes location or foreplay, but you can do a lot to improve its appearance. The look and feel of your home generates a great emotional response that any other factor. Before showings clean like you’ve never cleaned before. Pick up, straightened, uncluttered, scrub, scour and dust. Fix everything, the matter how insignificant it may appear. Present your home to get a wow response from prospective buyers.

Allow the buyers to imagine themselves living in your home.

The decision to buy a home is based on emotion, not logic. Prospective buyers want to try on your home just like they wanted a new suit of clothing. If you follow them around pointing out improvements, or if you’re decorous so different that it’s difficult for a buyer to stripping away in his or her mind, you make it difficult for them to feel comfortable enough to imagine themselves an owner.

Make it easy for prospects to get information on your home.

You may be surprised to know that the two marketing tools that most agents used to sell homes are actually not very effective at all. In fact, less than 3% of people purchase their home as a result of calling to classified ad, and less than 1% of homes are sold at an open house.

Furthermore, the prospects calling for information on your home probably value their time as much as you do. The last thing they want to be subjected to is either a game of telephone tag with an agent, or an unwanted sales pitch. Make sure the ad your agent places for your home is attached to a 24 hour pre-recorded hotline with the specified telephone number for your home which gives buyers access to detailed information about your property day or night seven days a week, without having to talk to anyone. It’s been proven that three times as many buyers call for information on your home under the system. And remember, the more buyers you have competing for your home the better, because it sets up an auction like atmosphere that puts you in the driver seat.

Sell your home fast for top dollar – Know your buyer.

In the negotiation process, your objective is to control the pace set the duration. What is our buyers motivation? Does she or he need to move quickly? Does she or he have enough money to pay you your asking price? Knowing this information gives you the upper hand in the negotiation because you know how far you can push to get what you want.

Make sure the contract is complete.

For your part as a seller, make sure you disclose everything. Smart sellers proactively go above and beyond legal requirements to disclose all known defects to their buyers, in writing. If the buyer knows about a problem he or she cannot come back with a lawsuit later on.

Make sure all terms, costs and responsibilities are spelled out in the contract of sale, and resist the temptation to diverge from the contract. For example, if the buyer request to move in prior to closing, just say no. Now is not the time to take any chances of the deal falling through.

Don’t move out before you sell.

Studies have shown that it is more difficult to sell a home that is vacant because it looks forlorn, forgotten, simply not appealing. You could even cost you thousands. If you move, you’re also telling buyers that you have a new home and are probably highly motivated to sell fast. This, of course, will give them the advantage at the negotiating table.

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The real estate market has changed

May 30th, 2013 ernie Posted in Real Estate No Comments »

real estate marketThe real estate market has changed in the last few years partly due to the recession and partly due to the fact that people in general have less money to spend after paying for many of the other things we need to survive in life. Everything has gone up in price, while many people have lost jobs or are in jobs that do not pay well enough for them to be able to afford a home of their own.

Remember not so long ago, when you could make your fortune in real estate. It was nothing then to buy a home, wait a short while, and then sell it at a tidy profit. And then they would do it again. Inflation was raising the price of homes dramatically. Then came the huge recession and the price of homes dropped like a stone with many home owners losing their homes because they could not afford the mortgage any longer. If you had the money at this time, a lot of money can be made in real estate by buying when prices were low. They have since recovered somewhat.

Real Estate Market Seller Mistakes

Well, as you probably know, times have changed. Since markets are constantly fluctuating, real estate markets are unpredictable because of changing prices and interest rates. Therefore, it is now more critical than ever to learn what you need to know to avoid costly seller mistakes in order to sell your home fast and for the most amount of money.

Buyers are far more discriminating, and a large percentage of homes listed for sale don’t sell the first time they are listed for sale. Buyers want everything to be upgraded or they want the home to be priced so low that they can afford to do the upgrades themselves. Then again may buyers do not want to be even bothered with the mess and difficulty of upgrading a home.

For example, if you have an older home with wood framed windows, these windows require painting every few years and they may need to be replaced if the wood begins to deteriorate. Windows can be expensive to replace with some homes costing as much as $15,000 or even more to replace all of the windows. Many buyers want to see that this upgrade has already been completed so that they do not have to deal with it and come up with the money. At the same time sellers will sell their home faster and for a little more money than they would with a home with wooden windows, but they do not reap the entire amount when they sell.

The same situation applies to kitchen and bathroom upgrades. Someone who has taken excellent care of their home may feel that their kitchen and bathrooms are in excellent condition. But the problem is that in a 25 year old home they are out dated and not attractive to someone who is looking for a beautiful bathroom with marble counters and tiled showers. Kitchens need to have granite counter tops, upgraded or modern cupboards and new appliances to be attractive to buyers, particularly the younger buyers.

Real Estate Market – Don’t spend Too Much

Some homeowners will spend up words of $50,000 on these upgrades only to find that the price of their home does not increase accordingly. It will definitely sell faster and they will get more for their home than the guy next door who has not completed nay up grades, but they will not get the full amount that they have put into their house.

For most people this is ok, since they plan to stay in their home for several years and enjoy the work they have done on their homes. When they do decide to sell they at least have enjoyed what they have and at the same time will obtain a higher price for their home than they might have other wise.

Some consumers are willing to purchase homes that need work, however they expect a corresponding decrease in the cost of the home they are buying. With the money saved they plan to do the upgrades to meet their personal taste and then enjoy them. These consumers tend to know the cost of upgrades, are good at estimating the costs and are good at designing their own rooms the way they want them to look. They also are willing to put up with the dust and the construction activity while it is being completed, which many people are not.

The real estate market has certainly changed and if you are planning to sell, you must take all of these factors into account when you prepare to sell or buy a home.

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The seven deadly mistakes most homesellers make

May 14th, 2013 ernie Posted in Real Estate No Comments »

seven deadly mistakes most homesellers makeThe seven deadly mistakes most home sellers make. Our daughter and son in-law are in the process of selling their home and we thought it would be interesting to look at what the right things are to do to sell  a home and what the wrong things are about selling a home. We came across this list of mistakes that many people make when they decide to sell and felt that it would be interesting to examine them in some detail. If you are planning to sell a home in the near future it may be worth a read. Avoiding these issues may help you sell your home more quickly and it may even help you sell for a higher price which is always interesting to many people.

Seven Deadly Mistakes Most Homesellers Make

Here are the seven deadly sins. We will discuss each in more detail.

  • Failing to analyze why they are selling.
  • Not preparing their home for the buyers eye.
  • Pricing their homes incorrectly.
  • Selling too hard during showings.
  • Signing a long-term listing agreement without the written performance guarantee.
  • Making it difficult for buyers to get information on their homes.
  • Failing to obtain a pre-approved mortgage for ones next home.

Failing to analyze why they are selling – knowing why you are selling will lead to making many right decisions vs. wrong decisions during the sale process. It will also help avoiding self sabotage of the sale process. For example someone who is transferred is a pretty clear cut reason for moving. While moving to find a larger home in a better location can be a little more fuzzy especially if one partner is not fully committed to the move.

Not preparing their home for the buyers eye– clutter and too much personalization distracts the potential buyer from visualizing what their furniture and knickknacks would look like in your home. If they begin visualizing there is definite interest which may lead to an offer. In addition most people do want a home that is move in ready and does not need a lot of renovations or maintenance before they move in or major repairs. Get your home ready before you put it up for sale.

Pricing their homes incorrectly – pricing a home is always tricky.  Too low means it will sell fast, but you may leave money on the table. Priced too high and it may not sell at all. Motivated sellers who have been transferred are some times urged by their real estate agents to sell quickly by lowering the price. Beware of agents who will guarantee the sale by buying it from you if it does not sell within a specified time frame. You can be sure that the price they will pay you is below market value.

Selling too hard during showings – potential buyers need time to explore you home and visualize what their furniture etc will look like in your home. They also will visualize what it would be like living in that home, the neighbor hood etc. Pushing too hard will distract them, however knowing when to push a little bit and knowing when to back off is something that many agents learn over time and people who are more observant or are in sales.

Signing a long-term listing agreement without the written performance guarantee – avoid this like the plague. Agents need to be motivated to perform just like everyone else and if there is a chance that they will lose the listing to another agent, they will work much harder to show your home and to sell it through advertising etc. Keep your listing arrangement to a maximum of three months and avoid automatic renewals.

Making it difficult for buyers to get information on their homes – this is a large purchase for most buyers, for some it is the largest purchase they will ever make. They will want to know all kinds of details and the motivated seller will have all of this information readily available. This could include all of the basics about the home as well as dates when the roof was replaced, the furnace, the hot water heater, the air conditioning,  the square footage, the taxes, the cost to heat and cool the place etc. make it easy for the buyer to get interested in your home.

Failing to obtain a pre-approved mortgage for ones next home – obtaining approval takes time and if you are in a hurry you may want to take this step of being pre-approved for a mortgage. Also if you are moving and planning to move into a larger home, you may get a nasty surprise if your mortgage approval gets bogged down because you cannot get approval for the size of mortgage you need due to credit issues etc.

We hope this list helps both buyers and sellers alike and let us know your comments and any additional suggestions that might make sense to be included in this list of seven mistakes that home sellers make.

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