Buying Short Sales or Foreclosures

There’s no question that negotiating the short sales or a foreclosure can be time-consuming and frustrating. It can take months. But if you’re patient and willing to do the work, your reward will be a great house at a bargain price.

Short sales

For a distressed property, you could be dealing with third parties, each with their own agenda and process rules.

On short sales, banks will price a home close to the market value, but they are often willing to take less to avoid a costly foreclosure. The average short sale in the past year has sold at14 percent off the list price, compared with a 7 percent discount for foreclosure and regular sales.

Dealing for a foreclosure

Because banks are eager to unload properties they own, they list the home at a price at which they think it will sell quickly. These properties are often bought for cash by investors. In California, 31 percent of recent deals were by cash, according to Money magazine.

In some cases, the bank that handles the foreclosure may not own the loan. During the real estate boom years, many loans were sold off to other investors. In that case, the bank who owns the property has to consider the amount investors who own the loan are willing to accept.

Wells Fargo short sale and foreclosure servicing department says, on loans insured by the Federal Housing Administration, lenders can accept no less than 88 percent of appraised fair market value in the first 30 days. That declines to 84 percent after 60 days.

How to make an offer

In deciding what to bid on a foreclosure or short sale, remember that banks aren’t interest in making several counteroffers, though they may come back to you once or twice. In weeks to come, you could resubmit the offer and it might be accepted.

Your initial bid should be 10 percent to 20 percent below the list price.

How To Grow A Vegetable Garden

With summer finally showing its true colors, it is the perfect time of year to grab a pair of gardening gloves and beautify your yard.

Growing a vegetable garden or beautiful flower bed it not as daunting a task as it may seem, and can increase a home’s perceived value when on the market.

A vegetable garden is a practical idea; you can grow your own organic food and fresh herbs, saving money at the grocery store.

The video below shows how to start growing a vegetable garden in your yard. Take a look!

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The Complicated World of Credit Scores

Lenders use different credit scores for different purchases.

If you have successfully navigated a website that offers to sell you your credit score, you may think you have all the information you need in order to apply for a loan or new credit card.

Not necessarily. The score you received could be quite different from what a lender receives. Different scores are offered for mortgages, car loans, insurance and more.

Under the Fair Credit Reporting Act that took effect January 1, lenders must either tell those who apply for credit what score was used, or tell them how it was used if the applicant doesn’t receive the best terms available.

Here are some reasons why a credit score (a number between 300 and 850) still won’t tell you how a lender evaluates of you:

* Some lenders give the best rates to people with a score of 740, others may use 760 or higher. Some give credit to people with scores in the high 500s, but others require 620 or more.

* Credit scores don’t reflect whether you are making good financial decisions or poor ones.
If you refinance your home at a lower interest rate, inquiries could show up on your report. Inquiries lower a score.

* Late payments show up on your score for a couple of years, but paying down a high balance has an immediately beneficial impact.

* If you pay your credit card bill in full every month, you don’t get a zero balance on your credit report. The report shows the balance at the end of the billing period, before the payment.

* Rather than checking your score frequently, you are better off making sure the information on your report is correct. Make your payments on time and reduce monthly balances for a month or two before applying for a loan or mortgage.

Loan Pre-Approval and Turning Yourself Into a “Cash Buyer”

Being pre-approved for a loan puts you in a great position when buying a home. It puts you on equal footing with an all-cash buyer, in essence turning yourself into a cash buyer.

With a real pre-approval, the buyer is the next-best-thing to being a “cash buyer” because the seller can rest assured that the buyer will qualify for a loan.

A truly “all-cash buyer” does not have to worry about lender approvals, but will typically still be concerned with a property appraisal and an acceptable title report.

Being pre-approved for a loan puts a buyer in a better position with the seller of the property. It allows the buyer to understand the costs associated with the purchase as well as the monthly costs associated with the ongoing ownership.

The Pre-Approval Process

The pre-approval process simply means that a buyer is getting approved for a loan prior to reaching an agreement with a seller of a property. The buyer will provide the lender with current income, asset and credit documents and the lender will determine the loan amount for which the buyer will be able to borrower.

The pre-approval process can take anywhere from 2 – 30 days, depending on the variables surrounding the possible transaction (credit worthiness, location of assets, calculation of income, etc).

Once a loan amount and purchase price have been determined by the lender, the final approval will usually be subject to an acceptable purchase contract, property appraisal, title report and final interest rates.

While it will vary from borrower to borrower based in the individual characteristics, a lender will typically be able to pre-approve a buyer within 5 days of receiving all of the applicable income, asset and credit documents.

Being pre-approved for a loan puts you in a great position when buying a home. It puts you on equal footing with an all-cash buyer, in essence turning yourself into a cash buyer.

With a real pre-approval, the buyer is the next-best-thing to being a “cash buyer” because the seller can rest assured that the buyer will qualify for a loan.

A truly “all-cash buyer” does not have to worry about lender approvals, but will typically still be concerned with a property appraisal and an acceptable title report.

Being pre-approved for a loan puts a buyer in a better position with the seller of the property. It allows the buyer to understand the costs associated with the purchase as well as the monthly costs associated with the ongoing ownership.

The Pre-Approval Process

The pre-approval process simply means that a buyer is getting approved for a loan prior to reaching an agreement with a seller of a property. The buyer will provide the lender with current income, asset and credit documents and the lender will determine the loan amount for which the buyer will be able to borrower.

The pre-approval process can take anywhere from 2 – 30 days, depending on the variables surrounding the possible transaction (credit worthiness, location of assets, calculation of income, etc).

Once a loan amount and purchase price have been determined by the lender, the final approval will usually be subject to an acceptable purchase contract, property appraisal, title report and final interest rates.

While it will vary from borrower to borrower based in the individual characteristics, a lender will typically be able to pre-approve a buyer within 5 days of receiving all of the applicable income, asset and credit documents.

Best Eco-Friendly Lightbulbs

For the best eco-friendly light bulb, consider how and where it will be used in your home.

Compact fluorescent bulbs (CFLs) and light-emitting diodes (LEDs) have improved dramatically and are getting even better. You can choose a light bulb that makes everything look as nature intended and still get energy savings.

The best LED bulbs can cost $10 to $70, but considering that they last for up to 25 years, they are a worthy investment.

When selecting a bulb, lighting expert Michael Hsu says considering how it will be used makes a big difference. His recommendations:

For Recessed lighting, Hsu uses the Sylvania Ultra Professional Series LED. It’s exceptionally good at highlighting colors when illuminating people, plants and furniture. It works well in track lighting ($33 to $70 at sylvania.com).

For a shaded floor lamp, the Phillips L Prize LED bulb sends light in all directions ($50 at usa.lighting.phillips.com). The GE Reveal CFL does the same and has very pleasing light (from $8 at gelighting.com).

For task lamps, which cast focused light, LED’s are a good match and don’t produce as much heat as incandescents. Quoted in The Wall Street Journal, Hsu likes the Sylvania Ultra Professional Series PAR20 ($33 at sylvania.com), because it renders beautiful colors.

For mood lighting, the GE Energy Efficient Reveal Clear halogen is about 30 percent more efficient than an incandescent, and the light quality is crisp and white. It creates a cozy pool of light ($5 at gelighting.com) and has a standard light bulb base.

The halogen, a form of incandescent, is the least efficient, but its light closely resembles that of a traditional bulb and creates ambience.