Are Cash Buyers Beating You to the Punch?

In today’s credit crunch economy, cash is literally King.        

Does it mean that a conventional funding buyer will lose every bid war?

In short, NO.

A seller may have many reasons to sell their property.  An all cash offer, is always inviting to a seller, but an all cash offer does not mean that the deal will close.  Many sellers are experiencing a change of funding source after the offer is accepted, but prior to close of escrow.

Other sellers are having issues before the close, with a potential buyer walking away from the deal, most likely due to a funding issue.  Other issues have been extended closes primarily due to a change in funding source prior to the close of escrow; going from an all cash offer to conventional funding.

Should a buyer lie about their funding source, or offer a higher price than market just to get their offer accepted.

No, lying is not an honorable quality.

Always be up front with a potential seller.  If your funding is from conventional financing then submit a copy of your pre-qualification letter along with your offer.   Show that you can potentially close the deal, but it may take longer.

If you decided to offer a higher price, then be careful with that strategy, make sure the offer price is worth the market value of the property.

Even though there are many cash offers promising quick closings, this is still a real estate market where a conventional buyer can compete.

But if the seller wants an all cash offer, that seller has to be ready to accept a lower sale price.

So, if Cash is King, and you have a conventional funding source, your offer may still be accepted, if you use the correct strategy to get your offer accepted.

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Related articles

• Regular folks transform into cash buyers to compete in hot housing market (sfgate.com)

Buying Real Estate with Inflation Looming

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When in times of inflation not only does the dollar lose value, but real estate values will almost always go down.  Now factoring in the housing crisis which has created a housing glut plus interest rates staying low to no movement upward, this is possibly one of the best times to invest in real estate.

Times only look bleak, if you chose to place your money in a mattress, instead of having the dollar work for you.  There are many deals and duds in the real estate market of today.  But how can one navigate and discern what would be a good, great or bad investment.

Location, Location, LOCATION.

This really means to know whether the real estate investment is in a great location for its specific type.

For example, you would not open a night club in a family oriented neighborhood; business would probably never take off the way you would want it to.  Another example, you would not open a grocery store in a warehouse district where houses were not close by.  Nor would you consider opening a nursery school within 5 miles of a state prison.  Not too many people would build a multi million dollar mansion in an area where the neighboring houses are valued at $100,000.

The aforementioned are just not sound investments.

Considering the location for the purpose of the real estate, should be the leading factor in evaluating and moving forward with a purchase.

Tips to Edge Out All Cash Buyers for Your Dream Home

One way is to include a copy of your pre-qualification letter in your offer.  But you do not want to give away how much, or high you can bid on a property.  Making your offer solid is the key to acceptance.

If you do not want to give the copy of the pre-qualification letter, then let the seller know you can close the deal but it may take more time than someone else with quick cash funds, due to conventional financing.

Not all sellers are looking for a quick close.  Property owners of houses, which you want to become your dream home, may want a nice couple or family to purchase their home.  So don’t be afraid to take the family house hunting.  The kids liking the home and their energy of excitement might be the actual closing factor to your dream house.

Often times doing something as simple as a follow up with the seller and the realtor may also help you edge out your competition.  If you show you want it, and continually follow up the seller will see you are serious about closing the sale of your future dream home.

Remember, to help edge out all cash buyers, be upfront and honest about where your funding is coming from, take the entire family house hunting, and follow up with the seller and realtor.  The home you are trying to purchase, my just become your dream home.

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Related articles

• Are Cash Buyers Beating You to the Punch? (ieaffordablehousing.wordpress.com)
• 7 tips for landing your dream home (cbsnews.com)
• Is Mortgage Pre-approval Just Another Con Job? (debtconsolidationusa.com)

Be Your Own Home Inspector

First, do not let the title mislead you in any way, shape, or form. It does cost upwards of $200 to have a certified home inspector to inspect your future dream home. What if, you like two different possible dream homes, will you have them both inspected? Will you hire two home inspectors? Only to buy one dream home.
Not necessarily in either case.
The remedy, be your own home inspector. This will be the first step to finding, and purchasing your dream home.
From the outside of the house ask yourself, does it have curb appeal? Does the driveway have large cracks? If the driveway has large cracks, this could show that there is a plumbing issue which could cost more than $30,000 to repair.
Do you see any warping in the sidewalk? This is also indicative of a plumbing and/or a root system issue. The root system of a tree tends to buckle the sidewalk. If the root system is strong enough to buckle a sidewalk, that same root system may invade the plumbing of your future dream home. This can become a bigger issue if the roots have begun invading the plumbing system.
It can cost more than $5,000 to remove a mature tree with its root system. If the roots are left it would be pointless to remove the tree. Yes, root removal may be a separate charge.
Is there a tree in the front yard? What type of tree, one with a shallow or deep root system?
At the front door under the eaves or the porch area look at any exposed wood. Does the wood have a light reddish-brown looking substance resembling pebbles?
Do you see any separation in the wood?
Take a look at the window and door frames; do they seem loose or about to fall out?
These symptoms may be indicative of termites. You can still buy a house with termites as long as a termite inspection states that they are controllable, meaning the wood can be treated to suppress the continuation of the termite population.
Also check the attic and crawl spaces in a house; those are the dark areas which may show signs of water damage, pests’ infestation, and weakening structural issues.
Now, look up in every room you enter. Yes, look up at the ceiling for water spots, rust spots, peeling paint in the corners; these things could indicate a present or past plumbing problem. If the stain is newer looking then the problem may have been recently repaired or the problem persists, and will only worsen with time.
The best thing to do is ask questions of the realtor. Ask for paid invoices of recent work performed on your future dream home. Not only will this help to make you feel better about buying a dream home free of preexisting issues, it will also show that there isn’t a ‘mechanics lien’ on the property.
Does the ceiling sag?
If so, the roof may need to be replaced. If you walk into any room and the ceiling is sagging that will show the roof and the ceiling is in need of replacement.
Look under the sinks, bathrooms and kitchen, if there is water leakage or mold that means a leak was allowed to continue, which means you might have to replace the wood in that area.
Being your own home inspector will help you to make a better buying decision when purchasing your dream home. Try to remain objective so your purchase will be a place where your family’s memories will be great ones.

Warren Buffet on Home Buying

Happy Holidays

Thanks!!!!! To All Our Veterans

Not too long ago I had the privilege to meet a few wounded warriors.   It was three young men, no older than 25years old going to Disney Land.  All three had varying types of injuries.  One man was missing his arm, the other man was missing one leg, and the third was in a wheelchair which was pulled by his new service animal named Max.  The man in the chair was missing both hands, legs and thighs.  These men, in the service of our country, were injured but still remain in good spirits.  Many Vets have returned home with injuries to their body, mind, or both.

 

On behalf of Immaculate Enterprises we thank all of our USA Veterans for your dedication and love of this country.

Sound Advice

4 Steps to Credit Improvement

For many first time and upgrading property buyers, stricter credit requirements have become the downfall in the plight for home ownership.
With tighter credit requirements, what’s a person to do to be able to gain ground in the real estate market?
Improve your credit score, streamline your unnecessary debts, and save up for a down payment.
Improving your credit score can improve the interest rate you receive on a mortgage.

The steps to credit improvement:

 Pull your credit file from all three major credit reporting agencies, Equifax, Experian, and Transunion. You will need a highlighter and a piece of paper to get started.

1. Check to make sure all of the information about your name is correct.
What’s in a name? Everything. Check for deviations of your name that you do not use. Make sure all addresses listed were/ are yours. If you see a deviation that you have never used, then you may be a victim of identity theft, or your credit file has been merged with someone else’s file. Eliminate the fake you if one exist.
2. Make sure that all accounts listed are only listed once.

If a creditor, such as a school loan or credit card placed duplicate negative information in your file you will need to dispute it. The information will be removed, the duplicate and the original.

3. All information on your credit file should be up to date.

If you have an old negative on the report, something that was 7-10years ago then have it removed. This does not apply to unpaid student loans. But, if the student loan appears on your report more than once, or has an incorrect amount as owed or paid, or shows you were delinquent when you were not delinquent, any errors require that the information has to be removed from your credit file.

4. If you have many outstanding credit cards with high interest rates, you may want to consider a personal loan.

Personal loans tend to have a higher than a mortgage interest rate, but can be lower than some credit card interest rates. Mainly because a personal loan is an unsecured line of credit.

You will need to find a lower interest rate loan to pay off the higher interest rate credit cards. Once you have the loan, and then consolidate all the higher interest rate credit cards into the one lower interest rate loan. Often times this can free up money since you will be making one payment instead multiple payments.

Just remember once you pay off your credit cards with the loan, the credit cards become, For Emergencies Only. Try not to use the credit lines until the personal loan is paid off, you would not want to double your debt.
The 4 steps is a process which can improve your credit score, but each situation is different but improvement can be seen in as little as 3months.

At the beginning of our article we gave you your first check mark, now it’s up to you to give yourself the other check marks for completing the 4 steps.

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Drains, Stains, and Plumbing Pipes

26yr old Galvanized Pipe

Newer homes and older homes have one thing in common, the plumbing.  Most people when purchasing either a new or old home always ask, or in some way think about the plumbing.  When purchasing your new home be aware of how the toilets drain, presence or absence of ceiling or floor stains, and the age and overall condition of the pipes.

The typical types of plumbing pipes:
Waste lines

•    Cast Iron—Prone to rust
•    PVC (poly vinyl chloride)—Prone to rupture short lifespan as compared to other materials
•   Chromed Brass (used for exposed drains and traps), beautification

Water Supply

• Chromed Copper–Beautification
• Galvanized Iron—prone to rust lifespan of about 25-30yrs.
• Copper— Susceptible to pinholes and prone to bust lifespan of about 30yrs
• CPVC (chlorinated poly vinyl chloride)—Inexpensive rigid plastic
• PEX (cross-linked polyethylene)—withstands temps from below 32degrees to 200 degrees Fahrenheit and also resists corrosion.

Plumbing age and type is sometimes easily discerned by the age of the structure.  Typically homes built in the 1980’s had PVC plumbing installed, but PVC has the shortest lifespan, so more than likely an owner along the way has changed the plumbing to something more durable, such as galvanized or cooper piping.  But you should still ask, and your home inspector should also tell you, its part of their report.

When considering a home purchase look for stains and wet spots in the corner of the ceilings, and also look a little lower, about 1-2 inches from the floor boards.  Stains in the ceilings may mean the problem was corrected but any wet spot(s) means the problem is not only still present but is worsening.  If you notice wet spots near the floor then a pipe(s) have damage and need to be replaced, the bigger the water stain the worse the problem can become.

Flush the toilets, if the water is off, bring a gallon of water to aid in the flushing of the toilets.  A toilet flushing can tell you the flow of the pipes; some pipes are louder than others and look for leaks around the toilet.  You may be able to hear if pipes are missing, something not too uncommon in a foreclosure which has been sitting empty for a while.

If you are looking for your new home in the winter, and it snows were you are looking, make sure the toilets have been winterized.  Most homes will have signage on the toilet letting everyone know it has been winterized, which is basically adding antifreeze, yes the kind which goes into your car.

If the toilets have not been winterized in a cold or snow climate, do not flush the toilets or add a gallon to flush, this could cause the plumbing to rupture causing a house full of damage.

So remember that PVC, copper and galvanized plumbing are the most widely used at this time but there are other types of plumbing materials also in use.  Look for wet spots and water damage stains around the floor boards and in the corners of the ceilings.  Only pipes prone to rust will leave a red stain on a wall or ceiling if leaking or has leaked.  Also take note of peeling paint in the corners which can be indicative of moisture damage.

Remember, just because there is plumbing damage or faultiness, does not mean the problem cannot be corrected.  It is better to be aware of any possible damage before finalizing a purchase price.

Happy home hunting.