For Sale By Owners take note

In todays tough economic times, many sellers are taking a stab at selling their home themselves, maybe to save some money on the commission that they will have to give up.  But many of those FSBO homes sit longer than homes marketed by a real estate agent. If you are a FSBO, there are some things that you can do to help.

To start with, A FSBO may want to invest in a Pre Sale home inspection.  This can help determine the true condition of the home and identify any problems that exist which may turn away buyers.  This Pre Sale Inspection will give you the opportunity to repair those issues before buyers start coming around.

Some other common tips are:
Price Accurately and be aware of your competition
Market aggressively with the various fore sale by owner sites out there
Make a good first impression of your house
Declutter the living space and fix up the interior
Create a backyard oasis that a potential buyer can envision themselves being in.

You can read a complete list of 101 tips for selling your home here.

Don't buy a distressed property without this....

With all of the distressed real estate available out in the marketplace(REO's, Short sales, etc) one might find it very tempting to jump in and try to snap up some bargain properties. Whether you are a seasoned real estate investor, or a newcomer to the field, caution must be taken when evaluating the property. Unless your intention is to completely tear down what you are buying, a complete home inspection is a requirement.

Many of these REO's and Short sales are advertised "As-Is". With this in mind you may say to yourself that there is no negotiating with the bank, so why bother with a home inspection. The answer is very simple. First off, a home inspection is not really meant to be a tool for negotiations on the property. It is indeed less of a negotiating tool with a foreclosure property. A home inspection will give the buyer a complete picture and understanding of the true condition of the property. For example, with today's conditions, many foreclosures sit empty for many, many months, sometimes even years. With the lack of maintenance on that home, numerous issues may certainly arise. Some common trouble spots found are:

Moisture intrusion and mold 

Termite damage in main beam

Non functioning mechanical system

Cracked or burst water pipes

Missing piping due to vandalism (cooper mainly)

Electrical issues

Structural damage

A recent foreclosure we inspected revealed a main bean that had been severely compromised due to termite damage and definitely needed to be replaced.

The bottom line is that just because a home is being sold "As Is", and the bank won't negotiate on its already low low price, doesn't mean that it is a bargain. Many of the foreclosed homes we walk into, have so much damage and repairs needed, that the buyers ultimately realize that its a project that will be to big, and much more costly than they could have even imagined. Buyer beware...do no forgo a home inspection...it may cost you much more that the inspection fee.

How's My House Home Inspections serves your full inspection needs for distressed properties. We work with out of state investors and serve as eyes and ears for those transaction.

Get the facts on foreclosures from the horses mouth

Not a horse literally, but from the mortgage giant Freddie Mac.  They may be blamed for a portion of the mortgage and real estate mess that this country is experiencing, but it seems they are stepping forward and putting together a series of You Tube videos to talk about the facts surrounding homeowners that have gone through a foreclosure or are in the process.  The series titled "Foreclosure fact from fiction" reveals some of the misconceptions surrounding foreclosure, such as, not being able to own a home again.  There may be some pearls here to help your clients.

Rehabbing a home- the 203(k) loan

The Section 203(k) Program is HUD's primary program for the rehabilitation and repair of single- family properties. As such, it is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities. Since these are the primary goals of HUD, it believes that Section 203(k) is an important program and intends to continue to strongly support the program and the lenders that participate in it. Most mortgage financing plans provide only permanent financing. When a home buyer wants to purchase a house in need of repair or modernization, he or she usually has to obtain financing first to purchase the dwelling, additional financing to do the rehabilitation construction, and a permanent mortgage when the work is completed to pay off the interim loans.  The Section 203(k) Program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. At this point, the lender has a fully-insured mortgage loan.


To be eligible, the property must be a one- to four-family dwelling that has been completed for at least one year. The number of units on the site must be acceptable according to the provisions of local zoning requirements. All newly constructed units must be attached to the existing dwelling.
This program can be used to accomplish rehabilitation and/or improvement of an existing one- to four-unit dwelling in one of three ways: 

1. to purchase a dwelling and the land on which the dwelling is located and rehabilitate it;
2. to purchase a dwelling on another site, move it onto a new foundation on the mortgaged property, and rehabilitate it; or 
3. to refinance existing indebtedness and rehabilitate such a dwelling.

Mortgage proceeds must be used in part for rehabilitation and/or improvements to a property. There is a minimum $5,000 requirement for the eligible improvements on the existing structure(s) on the property. Minor or cosmetic repairs by themselves cannot be included in the first $5,000, but may be added after the $5,000 threshold is reached. 

In order to determine the maximum mortgage amount, the 203(k) valuation analysis consists of two separate determinations of value; a as-is value, and a value after rehabilitation.

Home buyers who purchase a property with cash can refinance the property using 203(k) within six months of purchase, the same as if the buyer purchased the property with a 203(k)-insured loan to begin with.

For complete details of the 203(k) loan program, visit the HUD site.