Not exactly Hot Boat speak but this is the kind of info that facilates spending $$$$$ on our rigs.
Watch renting out a home in which you lived! That was my first RE mistake.
If I had sold the home outright the accumulated appreciation I had earned would have had no tax consequences. However after having rented it for three years b/4 I sold it the sale became a taxable event due to it not being my principle residence and a income producing property. Income tax based on difference between the purchase cost basis and selling price less accepted deductions. Really hurt!
Also;
Hope no ordinary earner out there has an option ARM. In order to afford the engines I've gone thru I looked for the least out of pocket home financing. Option ARM's have the lowest initial payments but are an absolute fatel mistake except for the very wealthy.
It has nothing to do with being wealthy. The Option ARM is designed for people who have a clear understanding of how they work. When you pay the lowest payment (which is negatively amoritized) the difference then is added to your principal balance. So say you have the loan for 6 months and you pay the lowest payment, initially your principal balance was 300K and 6 months later it could be 325K-350K. It basically eats up the equity. If you need the cash flow and understand the above then it could be helpful, if you are a first time homebuyer it could be your financial demise.
Agents get more than they are worth already. Drop the price don't give it to them.
dude here me out here...all I'm saying is I've got two comparable homes to show my buyer--am I gonna show them the one that pays me more first?? It ain't rocket science :boxed:
Its Final We Drop The House To 655k...if Ya Know Anyone Looking Its A Cant Lose Sitiuation No Matter How Far The Houses Drop...have A Good Weekend Ya Boat Freaks...lmao
Not exactly Hot Boat speak but this is the kind of info that facilates spending $$$$$ on our rigs.
Watch renting out a home in which you lived! That was my first RE mistake.
If I had sold the home outright the accumulated appreciation I had earned would have had no tax consequences. However after having rented it for three years b/4 I sold it the sale became a taxable event due to it not being my principle residence and a income producing property. Income tax based on difference between the purchase cost basis and selling price less accepted deductions. Really hurt!
Also;
Hope no ordinary earner out there has an option ARM. In order to afford the engines I've gone thru I looked for the least out of pocket home financing. Option ARM's have the lowest initial payments but are an absolute fatel mistake except for the very wealthy.
If you use option arms the way they were designed for, I think it's the best loan out there. I push all of my clients I put into one to take the savings they are getting on the option ARM vs the 30 year fixed, and invest it. Not in the stock market or anything crazy like that, but into investment grade insurance, annuities, and other things. With compounding interest, you can come out way ahead of the game this way. It's how the rich get richer, and it's finally coming to light for the rest of us. It's an amazing revelation I've had over the past 2 years. The media and some people have used scare tactics about the option ARM, but I really believe in it for the right person who isn't using it as a low payment, but using the savings for other purposes. I know a lot of mortgage professionals are using it to get folks into a house that they shouldn't be in anyway, and that's a lot of where the bad publicity is coming from...
BRA
If you use option arms the way they were designed for, I think it's the best loan out there. I push all of my clients I put into one to take the savings they are getting on the option ARM vs the 30 year fixed, and invest it. Not in the stock market or anything crazy like that, but into investment grade insurance, annuities, and other things. With compounding interest, you can come out way ahead of the game this way. It's how the rich get richer, and it's finally coming to light for the rest of us. It's an amazing revelation I've had over the past 2 years. The media and some people have used scare tactics about the option ARM, but I really believe in it for the right person who isn't using it as a low payment, but using the savings for other purposes. I know a lot of mortgage professionals are using it to get folks into a house that they shouldn't be in anyway, and that's a lot of where the bad publicity is coming from...
BRA
OK - How is the Option ARM going to help you in a declining market? Out here in the East Bay all we are seeing is home pricing dropping on a daily descend. Over and over I am talking to clients who are upside down because of an Option ARM eating their Equity and the home value dropping and now they owe more than the home is even worth with an adjustable rate. YUK :yuk:
Perhaps you should consider Value Range Pricing the home. For example if you are at $675K right now then advertise it at $620K-$700K "Seller will entertain offers of $620K-$700K". You by no means have to take anywhere near $620K but it gets people looking at the home that would not see it at $675K.
Often times buyers end up spending more than they originally planned on if they fall in love with a house. Many of my clients tell me they want to spend $500K-$600K but end up falling in love with and buying a house that is $650K. I have found that the Value Range Pricing is a great strategy to get more buyers in the door. Worst case scenario you get a few offers at the low end of the range and it gives you a chance to negotiate the price up to where you want to be.
Also you better make sure your home is the "Diamond in the Pond". Buyers have a lot to choose from and you need to make sure yours stands out.
Mike
thanx mike! that is what me and my better half talked about last night so first thing this morning we drop the price to do excacly what you suggested..just wanna see some offers. right now its priced @ 60k below what it appraised for..we are hoping to atleast get some offers thrown at use...thanx again...
That was not a wealthy bash. When I say it is for the wealthy I say that because they are in a better position to utilize the flexibility the option ARM provides. Plus in recent markets the option ARM has let a lot of folks get RE they would never have ever been able to qualify for and experience the windfall of a rapidly growing market with a much larger number.
However when the market cools and the prices retreat plus the principle balance starts to grow, then the loan resets to a much larger payment, compounded by those who place folks w/ marginal budgets into Option ARMS. It can get ugly.
The value of a home is the price folks will pay for it. If folks will only pay $525 k for a property, no matter what you paid or what you owe, that is all it is worth. $525,000.
I am living this right now. Am in the middle of a personal home transaction with a market retreat starting to sink in. Thankfully no financing is involved but even so just the value shift is daunting.
There are quite a few folks in recently acquired homes w/100% financing who can not move w/o substancial loss.
What you say about using the option ARM to free up $$$$$$$ for other investing is true. However that is not the case w/ a large number of consumers. It IS for the payment that will give them the best Zip code.
I would also like to suggest that carefull involvement in RE investing is much better, at least for me, than annuities. With investment RE held for rent or resale you have control. You can sell, buy, improve or not, whatever.
When you place $$$$$$ w/financial planners / other investers, you lose control. Control is preferred in my planning.
That was not a wealthy bash. When I say it is for the wealthy I say that because they are in a better position to utilize the flexibility the option ARM provides. Plus in recent markets the option ARM has let a lot of folks get RE they would never have ever been able to qualify for and experience the windfall of a rapidly growing market with a much larger number.
However when the market cools and the prices retreat plus the principle balance starts to grow, then the loan resets to a much larger payment, compounded by those who place folks w/ marginal budgets into Option ARMS. It can get ugly.
The value of a home is the price folks will pay for it. If folks will only pay $525 k for a property, no matter what you paid or what you owe, that is all it is worth. $525,000.
I am living this right now. Am in the middle of a personal home transaction with a market retreat starting to sink in. Thankfully no financing is involved but even so just the value shift is daunting.
There are quite a few folks in recently acquired homes w/100% financing who can not move w/o substancial loss.
What you say about using the option ARM to free up $$$$$$$ for other investing is true. However that is not the case w/ a large number of consumers. It IS for the payment that will give them the best Zip code.
I would also like to suggest that carefull involvement in RE investing is much better, at least for me, than annuities. With investment RE held for rent or resale you have control. You can sell, buy, improve or not, whatever.
When you place $$$$$$ w/financial planners / other investers, you lose control. Control is preferred in my planning.
Good points but this one. If the buyer is all cash, then the house is worth what someone will pay, otherwise, it is worth what the appraiser tells the lender it's worth. A buyer that uses a loan to purchase, can only purchase up to the value that's determined by the lender's appraiser, and no more, unless they inject other cash into the deal. Many sellers don't realize this when they go to set the price for their homes. In some cases, only after months of the house sitting do they come to the realization of how realistic values are established, and their importance in getting the house sold, promptly.
On the other side of this, if you have a very recent appraisal, and can't get it sold for that amount, or alittle less, there are probably marketing issues, or the appraisal isn't accurate. 5 appraisers will give you 5 different values.
I just went through the same thing with my house....appraised for $650,000 easily. I had it on the market for $650k and ended up opening escrow last week for $615,000.
What happened To Mr. Watts and his "in the bag" 15-20% increase in values for OC? What a douche!
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