Secret to Wealth #461 – Avoid the Arm

Believe it or not the mortgage industry is bringing back the ARM (adjustable rate mortgage). The utilization of this product was a major factor in the foreclosure crisis of 2007. The banks were milking hard working men and women of the equity in their homes by refinancing ARM’s with new ARM’s charging them thousands of dollars every time the homeowner refinanced their mortgage. ARM’s were originally started to help people with lower credit buy a home. Typically after 2 years the mortgage rate would adjust upward and the homeowner would refinance with a fixed rate mortgage. What the mortgage industry began to do was to refinance the mortgage with another ARM charging thousands of dollars in fees and then repeat it in two years. As soon as the values of homes stopped rising and went down, the homeowner holding the ARM was not able to refinance because they did not have the equity in their home.

The Secret to Pricing Your Home for Sale

First is a Realtor comes into your home and tells you they know the exact price your home will sell for, they are lying to you. If the price seems high and they do not have a clear reason for the price, tell them to pull out there check book and you accept the offer.

First things first. Look for all the homes that have sold in the last 6 months and as close of a proximity to your home as you can find. You need at least 4 homes that can be used as comparables to your property. These properties that you select should be within +/- 15% of the same sq. ft as yours and also with the same amenities as far as bedrooms, bathrooms, basements, lot size and year built.

From this point on determining the asking price for your home is as much of an art as it is a science. I also believe that you should price your home a little bit above what you believe the value of your home. The reason for this is buyers want to feel like they are getting a bargain and .by making the price a little higher you have room to lower your price.

For more information on selling tips click here – Home selling tips

If you would like a quick home valuation click here –  Automated Home Valuation

The Hassle of Buying a Short Sale

Is it really worth the effort to buy a home that is a short sale. This all depends on a few things. Something that you may want to consider is the length of time it will take you to complete a short sale transaction. Typically it takes 3 to 4 months from the time the purchase offer is submitted to close on the property. If you are in a hurry to move into a new home than purchasing a property that is going through a short sale process is probably not for you.  The reason it takes so long is that typically the people in the banking industry are overwhelmed by the number of properties that are in foreclosure and the short sale process. They tend to have a hard time keeping track of documents that are sent in by realtors and the realtors on many occasions have to refax the documents. A second hassle to buying a foreclosure is you never know if the bank is going to approve the offer. The bank hires other realtors to do what is known as a BPO. This is a basic appraisal of the property so the bank has a better idea on whether to approve the offer or not. They may approve the offer, however in addition they may want the seller to pay them additional funds. If the seller is required to pay money at closing they have the ability to not approve the short sale and then your time spent waiting to purchase the property is all for naught. Also if the bank does not approve the offer the buyer may not be willing to increase the offer and again the time spent is all for naught.

If you have any questions on a short sale, foreclosure  or other real estate question feel free to contact me by email at or call me at 810-347-5354.

Why Blog

I’ve created this blog to inform people about the buying and selling of real estate. I will provide you with informative articles from many sources. Are you trying to figure out whether this is a good time to be buying or selling  your home. Have you thought about investing in real estate and have questions. The team at Tremaine Real Living real Estate has over 30 years of experience. If there is anything you want to know feel free to contact us and we will do our best to get you the answers you need.