Archive for July, 2009
Real Estate Ethics Needed For A Better Market Scenario
In the aftermath of the U.S. housing bust one California woman recently sued her real estate agent for fraud blaming him for getting her into a home with an inflated price. The woman claimed that other comparable homes in the area were selling for much less but the agent concealed the information from her in order to collect a hefty commission on the higher sale price.
Unfortunately this is not an exceptional tale from the nowpast housing boom. With home prices appreciating at light speed in many areas of the country greed took over for not only real estate agents but homebuyers speculators mortgage lenders home appraisers and Wall Street investors. The traditional rules that guided the homebuying process were tossed out the window as people on all sides of the deal saw ways to get rich quick.
So whose fault is it? Who created the mortgage mess and is there still a place for ethics in the real estate market? The answer is varied and complicated but two things are clear. One is that many different participants share the blame for the housing crash. The other is that the real estate scene can only properly function with the ethical cooperation of all involved.
Where does the guilt start? Let’s begin with speculators. Several years ago investors across the country started pouring money into homes in order to fix them up rent them out or sell them for greater profits. This led to a buying frenzy as people heard tales of the financial killing that was to be made from flipping houses. The result was an abundance of homebuyers. Homebuilders stepped up to the plate by overbuilding in many areas to capitalize on the housing frenzy.
As homes were being bought up after only minutes and hours of being on the market the prices started to increase. Increased demand equals scarcity and higher prices right? At that point average homebuyers started to have difficulty getting into the market as their incomes were not growing as quickly as were home prices. In order to get around this many lied to their mortgage lenders claiming higher salaries and greater assets.
Banks and mortgage lenders were willing to go along with the fraud because home prices were escalating so quickly that most buyers would be able to refinance or take out home equity loans with ease if they needed more cash to pay for the mortgage. Largely forgotten were the timehonored requirements of 20 percent down payments and good credit reports. Lenders created and pushed creative financing programs that included little or no down payments risky adjustable interest rate plans and plenty of noincome documentation loans.
Borrowers gobbled up these loans like crazy barely pausing to read the fine print or find out how much they would be paying for their mortgage after the initial low interest period.
And of course real estate agents and housing appraisers got in on the act. They inflated appraisals to make more commission money and steered buyers into homes that were not worth as much as they were selling for.
Don’t forget Wall Street. Investors across the country and the world invested billions into these risky loans because they seemed like a sure bet with the housing market on fire. With more investors demand for these loans increased causing many lenders to guide borrowers into exotic mortgages even when they were not a good fit.
The result is that millions of homeowners are facing high resetting interest rates and payments hundreds and thousands of homes are in foreclosure and default and the stock market has plummeted with the related losses.
Rebalancing has already begun in the real estate market with lenders reverting back to strict standards of good credit and large down payments. Borrowers now have to wait and save instead of diving into huge purchases and stock investors have started looking elsewhere for safer ventures. The process will likely take several years to complete and many have suffered and will suffer financial ruin in the mean time. Only ethical and wise behavior on the part of all involved can save the market from another devastating crash.
About the writer: Recently experienced phases in the real estate market have created a need for strict standards of good credit and ethics to be followed. Real estate Asheville NC helps you understand the real estate scenario better. You can visit http://www.preferredrealestatecenter.com for more information.
Purchasing An Apartment In Torrevieja Spain
Torrevieja Spain is a popular summer vacation destination. It is located approximately thirty miles south of Alicante in the Costa Blanca region of Spain. A significant number of people from Europe in particular travel here each year to enjoy the beautiful climate many attractions and nearby beaches. If you plan to visit often or stay longer when you do visit you may want to consider purchasing Torrevieja property. You can find the best place to purchase property by visiting various areas and renting apartments and soon you may just find that home away from home.
Visiting the area often will help you determine if you love it enough to purchase property. You should travel at various times throughout the year which will give you the opportunity to experience it in the off seasons and not only the peak summer season. When you do visit try renting apartments rather than staying in a hotel. This will give you a better idea of that specific area your neighbors and generally the quality of life. It is much easier to get a taste of apartment living in Torrevieja when you are experiencing it in an apartment. Be sure to make a list of the various areas you have visited and stayed. This will help you compare the neighborhoods you have visited and your opinion on it and at some point make a decision on the neighborhood that best meets your lifestyle and accommodation needs.
Do not rush to make a decision on the property to purchase. It is a big commitment and you want to ensure that you are getting everything you want. Though the price of the property is a very important factor in your property comparison include other factors such as the area nearby attractions and convenience. Consider your shortterm and future needs in both summer and winter seasons. If you intend to rely on public transportation look at your property’s accessibility to available public transportation. You should also look at the property’s proximity to restaurants stores the beach and other amenities which are of interest and important to you.
Finally take into consideration the property’s condition. You may get a better deal on property that needs some work but not being at the property fulltime may make renovations more challenging. With this in mind be sure to consider the extent of work needed and whether or not it is reasonable to complete.
About the writer: Steve H. Wentworth writes for www.movinghelpsite.com where you can find more detailed information regarding each of the moving options listed above.
Property Investors Need To Keep Up With Their Tenants!!
In todays information age anyone can find anything they ever want on the Internet. There is no lack of information by FAR there is excess more often than not. In todays world mothers arrive at the doctors rooms with 50 pages of data printed from the internet of what can be wrong with their child. There only reason for a visit to the doctor is to confirmation what they think they already know is wrong. This may not be such a good practice but it is no joke. From doctors to property investors and tenants anyone can find out anything about everything. For landlords this means that tenants today also have information at their fingertips and property investors must take heed to that or else!
To give you a simple example in todays world we get inquiries for rental flats in the Johannesburg CBD by potential tenants who are sitting in Internet cafs. How is that for access to information? Pretty cool. Though this is great and businesses run easier and faster by the day knowledge also travels at the speed of the Internet which at a minimum is at the speed of a 56K modem. Still pretty fast when you consider the information gather techniques of yester year.
Now imagine a tenant that is upset with a Landlord. The tenant visits the internet caf to learn more about tenants rights then researches and comes to the conclusion that his rights are being abused or that the landlord is behaving unlawfully. What then? Well then the tenants can take action for free through the Housing Tribunal and lay a complaint. The the landlord must then deal with the consequences. Not a comforting thought for many landlords.
Often we find that property investors and proud landlords are mainly focused on their jobs and professions. They are smart and professional people but when it comes to property it is not their profession. Such landlords count on agents or other sources that seem reliable and hope they are do the right thing. To them it takes far too much time to research all the laws and governing municipal rules and regulations court cases and so forth. But the unhappy tenant easily takes a few hours after or at work to do just that; research. The tenant is motivated to find a solution to the problem that seems to make them unhappy whatever that may be.
The property investor on the other hand often has no clue of what is going on or even if he or she does they have more pressing issues to deal with such as their day job or businesses or they just heed to the many so called gurus and motivational speakers that emphasize how property investing doesnt need to be a hands on business. Though this is very true for such a business to be hands off there must firstly be a set of processes and procedures to follow. Correct legal documents and good agents have to be put in place for things to run smoothly and that by itself takes time and effort. The notion that property investment can be a case of buyrentandforget pasttime doesnt exactly work in the real world or at least not without some major risks.
So the property investor leaves the matters be or leaves it to the agent until such time as out of the blue they end up with a major problem to solve. By this time it is too late to fix the problem quickly cost effectively and easily.
Property investors need to take heed to what is going on. They need to ensure that they are fully conversant in matters pertaining to renting and the rights of their tenants. They need to pay as much attention to such matters as the do when it comes to finding best practices on reducing the management associated with their properties.
Whether you are buying selling or renting property it is a peoples business. No software package can offer a golden formula and financial spreadsheets do not take into consideration the human factors of the business. As access to information increases and tenants become better informed landlords must keep pace and strive to gain the knowledge and expertise required in order to manage both the legal and social aspects of the buytolet business. Investing in such skills could be the best investment they ever made.
About the writer: Sean is a property investor and estate agent in Johannesburg South Africa. He is the founder of Property Investor Network a community knowledge portal. He also owns several other property related businesses and associated websites including REPOSSESSIONSTOPPER a service frontend for people wanting to avoid repossession.