Navy Fellas Realty Group

Real Estate, Residential sales and purchase

How To Maximize The Resale Value Of Your Home

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There are a few things to consider, when selling a home, that will help you maximize your potential for a better sales price. Seasoned real estate professionals are one of your best resources for these tips.

The Buyer’s First Impression Is Emotional

The first goal is to improve the buyer’s first impression when they see photos or a video of the home, do a drive-by, or make an appointment to view the home. Work with a real estate agent on staging the home and pay particular attention to curb appeal.

Staging means that a home has no clutter. Remove any personal items (family photos, toys, pets, etc.). Make closets less than one-third full. Make sure the home is immaculately clean. Use nice decor and minimal furniture. 

Logical Backup For The Buyer’s Emotions

Once a buyer has a positive emotional reaction to the home, then to cement the deal at a good price, offer logical backup to support the emotional reaction. Create a handout that lists the amenities and positive attributes of living in the neighborhood, such as good schools. If possible, sell the neighborhood and the community along with the home.

Answer a buyer’s, often unspoken, question of “Why should I live in this area?”

Like-New Condition

Homes that are in perfect condition usually sell for a premium price and may attract multiple purchase offers. Make any repairs that are necessary to ensure all the systems in the home are in working order.

Another confidence builder for a buyer is when the seller reimburses the fees for the inspections needed, from the escrow closing. Let the buyer choose the inspection companies from a pre-approved list that is acceptable for the seller.

Kitchen and master bathroom upgrades usually have a positive impact on the sales price. New appliances can be included in the sale and covered by a home warranty.

Go Green

Homes that are energy efficient and have an alternative energy system, such as solar, are usually more desirable. This is especially true in parts of the country where the monthly utility bills are very high. Add information about the savings on the monthly utility bills, when compared to other homes that are not green, to the home’s selling brochure.

Summary

Top-selling real estate agents know that homes with these characteristics usually command the best prices, receive more offers, and spend less time for sale on the market. Another benefit is that agents get excited about listing high quality homes. They typically feature them prominently in their listings from the agency, on their website, and in all other marketing efforts.

What Are The Pros And Cons Of Covenants, Codes and Restrictions?

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What Are The Pros And Cons Of Covenants, Codes and RestrictionsThere is a joke about gated communities that says the walls are not just there to keep the people out but to keep the residents in. Living in a gated community that is subject to the rules of a homeowners’ association (HOA) can be a pleasant or a severely irritating experience, depending on the perspective a homeowner has about lifestyles.

The Good, Bad, And Ugly About CC&Rs

Gated and master-planned communities may have an HOA and also may have covenants, conditions, and restrictions (CC&Rs) that are part of the property rights (or lack thereof) that a home buyer accepts when they buy a property in those neighborhoods.

The developer records a registered copy of the CC&Rs with the county where the development is. Every homeowner is subject to the rules found in the official CC&Rs. A copy of the CC&Rs may look like an old-style telephone book with hundreds of pages.

Prospective home buyers should force themselves to take the time to read the entire CC&Rs extremely carefully. This may take many nights to read because reading the CC&Rs may put a person to sleep. However, failure to read them can cause serious problems in the future and extremely stressful levels of frustration.

What Can Be In The CC&Rs?

It is not surprising to see in the CC&Rs rules that prohibit a homeowner from filling the front yard with broken-down cars or having a pig farm on the property. In a nice, gated, community nobody wants to see a neighbor’s property in that condition. The benefit of having reasonable CC&Rs is that homes, which are eyesores, because the people do not maintain them properly, are prohibited.

So far, so good. However, what about when the CC&Rs state the maximum measurement of grass before cutting it is 1.25 inches. That is an odd number to use as a measurement standard but don’t be surprised to see stuff like this in the CC&Rs. In such a neighborhood, you can be cited for a grass height violation. It may seem funny to see the enforcers in the front yard measuring the grass with a ruler until a homeowner gets a fine for a violation. This is just a simple example of the many rules potentially found in the CC&Rs that are very easy to violate.

Want to put up lighted holiday decorations? Check the CC&Rs because it may not even be allowed to put a wreath on the front door.

Think it would be a nice idea to repaint the exterior of the house? Check the CC&Rs first because there are usually severe color restrictions. If the paint is one shade lighter or darker than an approved color, this may cause the need to redo the entire paint job.

Conclusion

Personal taste differs significantly between people. When buying a home subject to CC&Rs, be sure to read them carefully and be able to live with all the details. Otherwise, a homeowner may find it really frustrating to live in a neighborhood with so many controls over personal freedom and choice.

If you have any questions or concerns about a prospective HOA, be sure to discuss it with your trusted real estate professional before making an offer on a new home.

How To Buy A Bargain Home As A Short Sale

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How To Buy A Bargain Home As A Short SaleA short sale is when the mortgage lender(s) agrees to sell the property for a lower amount than the loan-balance remaining.

During the worst moments of the 2006 to 2008 real estate crisis, homes sold as short sales for a fraction of their value. Lenders had so many properties with loans in default that they could not manage the ones that they had in foreclosure.

Foreclosure is an expensive legal process that causes a lender to lose more money on a property. This is one of the motivators that encourages lenders to accept a short sale because sometimes through a short sale the foreclosure process is avoided.

Are Short Sales Still Available?

The number of short sales peaked in 2012. The inventory of homes available for a short sale transaction is much lower than the massive numbers caused by the 2006 to 2008 real estate crisis; however, they still do exist.

Short sales are still worth exploring as long as a qualified buyer has enough cash on hand or is pre-qualified with home-purchase financing that is acceptable for a short sale transaction.

A short sale may be a bargain; however, the buyer must be careful because there are some pitfalls to avoid in short-sales transactions.

The Challenging Dynamics Of A Short Sale

There are three (or more) parties in a short-sale transaction. They are the seller, the buyer, and the lender(s). All must agree to the closing sales price of the home and the terms and conditions of the sale in order for the transaction to succeed. The lender(s) forgives part or all of the mortgage loan that is secured by a lien on the property and agrees to take a loss on the sale.

A short sale only occurs when the home cannot sell for the amount of the mortgage loan(s) on the property. The home is considered to be “underwater,” which is a colloquial term for a home, with a loan(s) that is more than the home is worth.

Short sales do not close quickly because the paperwork is complicated. If there is more than one lender on the property, the process is even slower. Buyers in short sale transactions need to be patient. They must be approved for financing and also approved by the existing lien-holder(s) on the property that is for sale by making a successful short-sale application.

A buyer may need to make a “good faith” security deposit to initiate the short sale application process. The deposit, which is refundable, may sit in a trust account for quite some time before the deal is approved.

Even with proper planning, a short sale deal can still fall apart. Buyers must also take on the risk that the property may need significant repairs and buy the property “as-is.” Homeowners who cannot pay their mortgages usually are not very diligent at taking care of their properties.

Summary

Short sales are an important strategy to consider when searching for a bargain property. Buyers must have cash or significant financial strength and be willing to complete the complex process for the transaction.

To reduce risk, a buyer needs to get careful inspections of the home and have a very clear idea of the costs to bring it up to a nicely-repaired condition, in order to profit from this strategy.

Your trusted real estate agent will be a reliable and necessary ally in your short sale transaction. 

Buying A Home In Foreclosure

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Buying A Home In ForeclosureForeclosure is a process that happens over many months. There are various opportunities to acquire real estate that is in a different stage of foreclosure, including before the foreclosure process completes. This short guide identifies the different stages and the opportunities that may exist to acquire a property at a discounted price.

Get The Money Lined Up First

To acquire a property at any part of the foreclosure process requires cash or pre-approved credit. Have the full amount of cash available to pay for the transaction or have a recent pre-approval letter from a reliable lender. The letter shows the amount of mortgage financing available and approved for buying a foreclosure.

Pre-Foreclosure

Before a lender forecloses on a home, to take legal possession of it, they must go through a legal process filed with the courts. All those legal filings are public records.

The borrower, who is in default on the loan, gets a legal “Notice of Foreclosure” that gives a date when the foreclosure will occur. There are subscription services that collect these dates from the court records and assemble a database of information about the properties coming up for foreclosure.

Up until the foreclosure date, it is possible for the homeowner to make a deal to sell the home, which pays off the lender and that stops the foreclosure.

Sometimes the existing loan can be acquired and the past-due payments brought up to date and that is all that is needed to satisfy the lender. In other cases, the outstanding loan must be paid off entirely or refinanced by the new owner.

To find an attractive deal in this stage of the foreclosure, a real estate investor looks for a property that has significant equity and the loan(s) on the property are far below the market value of the property.

If the home continues to foreclosure then the existing owner will lose all the equity they have in the property. This makes the owner very motivated to sell the property at any price, even at a steep discount, which helps them to not lose everything.

Foreclosure Auction Sales

Some lenders immediately put a property up for auction right after foreclosure. An investor with an interest in these foreclosed properties, bids with other bidders at the auction. The highest bid wins.

All that is needed is to get on the mailing list to be informed of upcoming auctions and have a cashier check in hand for the required deposit at the auction to be able to bid.

REO Properties

Other lenders take ownership of foreclosed properties and then sell them off through authorized broker/dealers who work for the lender. Some lending systems, like HUD, for example, maintain a public database online that shows all the foreclosed properties that are for sale and their minimum offer price.

Creating personal relationships with the bank/lending officers who manage REO properties is a terrific way to get leads. It helps to have the first chance to buy a foreclosed property, which is recently added to a lender’s REO system, that other investors may not yet know about.

Conclusion

Foreclosed properties may create significant opportunities; however, there are also serious risks when buying these properties because they are sold on an “as-is” basis. This type of investment is definitely a “buyer be aware” opportunity. It can be lucrative, yet investors need to be careful as well.

If you are interested in trying to find a foreclosed property, be sure to contact your trusted real estate professional for assistance.

Making Money Buying Homes And More From Estate Sales

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Making Money Buying Homes And More From Estate SalesAn estate sale is the sale of the property owned by a person after a person dies. This sale may include real property, such as a home, and personal property, such as the home’s contents.

There are two ways to buy property through an estate sale. One way is to buy it from the person who inherited the property. The other way is to buy it from the estate through the executor of the estate. The executor is the person with the legal authority to dispose of the estate’s assets according to the last will and testament of the person who died.

The executor of the estate may be working with the state authorities in a probate court if the estate is in probate. Probate is an action by law that occurs automatically if the person died without leaving a will. Probate legal proceedings may also happen if the beneficiaries of an estate dispute a will that exists.

Opportunities In Estate Sales

Usually, the property purchased from an estate sale is available at a discount from its market value. Sometimes, this discount may be significant. When a person buys a home sold this way, the purchase is usually on an “as-is” basis. That means the buyer takes all the risk when acquiring the property. The buyer may have to make significant repairs to the property if it needs them.

For this reason, the price of these estate homes is often much less than their market value. Moreover, when buying the contents of the home, it is possible to find treasures in the contents. Unfortunately, it is also possible to find only trash and junk that costs more to remove and throw out than it is worth.

Disadvantages Of Property Acquisition Through Estate Sales

The main disadvantage is buying something without really knowing what it is worth or having a complete evaluation of its condition.

Other disadvantages are that if the sale goes through probate, it may take a very long time to close, perhaps up to a year or more. There is a need to check all the familial circumstances, the legal title, and the will carefully. Otherwise, there may be legal complications and claims of ownership even after the property is acquired.

This is why having competent legal counsel to review a deal before making the purchase is critical. Nobody wants to buy a property that brings them into a lawsuit.

Finding Estate Sales

If a disputed will, or the lack thereof, puts a property through a legal probate process, then this is part of the public records. These records are available to anyone who wants to look at the information. Properties may be put up for public auction as part of the probate process.

For properties sold through the executor for the purpose of dividing up the proceeds among the heirs, they can be found by reading the obituaries and making contact with the executor after a person died.

Summary

Buying property through an estate sale may be very profitable. Many specialists make their careers in real estate investing based on these opportunities. To be successful in this effort requires patience and careful attention to details with competent legal support.

Whether you are interested in buying a home through an estate sale or a more traditional sale, be sure to contact your trusted real estate professional.

What’s The Value Of Water?

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What's The Value Of WaterWhen investing in real estate, few people think about water as a high priority. All of us have become used to water being readily available and rarely give it a second thought. Most would think that water is only a consideration for farmers who need it to irrigate agriculture. However, due to climate change and population growth, the world is experiencing large impacted areas and major cities that are running out of water.

Will Water Run Out?

Las Vegas expects to run out of water by 2030. Lake Mead near Las Vegas is the water supply for more than two million people. Its level has been declining steadily for decades. Las Vegas gets a limited supply of water from the Colorado River that goes through Nevada all the way to Southern California. The river water is not sufficient to support the population there either.

California now has droughts that last for many years. This makes wildfires more likely, like the one that burned the entire town of Paradise and the surrounding area to the ground in 2018. This wildfire named “Camp Fire” burned over 150,000 acres, destroyed nearly 19,000 buildings, and cost $16.5 billion in damages. Sounds more like hell than paradise.

NASA scientists predict that California could run out of water by the end of 2020 and thereafter experience a mega-drought that might last for decades. All of a sudden, that multi-million-dollar luxury house in the desert or in beautiful, sunny California seems much less appealing.

Investing In Water Rights

Major investors, including gigantic hedge funds, have been buying up water rights all across the United States. Water rights are like any other mineral rights for a property in that they can be sold separately from the land.

Real estate investors who are interested in participating in the potential success of companies that own water rights can now consider investing in exchange-traded funds (EFTs) that include a bundle of stocks from companies that own these rights.

Water Everywhere And Not Drop To Drink

A homeowner might have beautiful lakefront property or a lot with a river running through the land. However, if the owner does not have the rights to access any of that water for residential use it is only a nice view and not a water resource.

Oceanfront properties have a vast supply of seawater that sits in front of them. However, again the legal right to use it may not exist and the cost of desalinization of salt water is still prohibitive.

Properties in rural areas may need to get a permit to drill a water well that must be approved by the county authorities. Even with an operating well on the property, it is possible for a well to run dry.

Conclusion

Real estate investors and home buyers looking to acquire a property now need to include the serious consideration of the access to water and any available water rights as part of their due diligence process.

If you are in the market for a new home or interested in listing your current property, be sure to contact your trusted real estate professional.

The Incredible Value Of A Business Mentor

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The Incredible Value Of A Business MentorIf someone says that they are a “self-made” success who did it all completely by themselves with no help from anyone, they are probably stretching the truth. Success never usually happens in a vacuum. The definition of success is that something is recognized and respected by others. 

Honest business people recognize and appreciate the help that they received from others. They know it was a big part of what made them able to achieve success. Clever people, when they are just starting out in something new, find a mentor. A mentor is a person who is willing to help a new person trying something for the first time.

Why Would Someone Want To Be A Mentor?

If you ask a mentor why are they a mentor, you are very likely to hear a story about how they were helped by another person when they were just starting out. Mentoring is a powerful way to give back. It is rewarding on both sides of the relationship of being a mentor and a mentee. It is so rewarding because both people learn something about themselves by sharing information and experiences with another person.

Mentoring Is Best When It’s A Balanced Relationship

In a healthy mentor/mentee relationship there is a nice give and take that is balanced. The mentor may know much more than the mentee about a subject matter of mutual interest. However, a mentor does not necessarily know everything. A mentee may also have unique experiences to share that the mentor knows nothing about.

Mentorship Is Different From Internship

Having a mentor is different from an internship. Both are meant to be a learning experience, but having a mentor is more about sharing knowledge that includes life skills, whereas an internship is usually limited to job skills.

For example, it is perfectly reasonable to ask your mentor questions like:

  • How did you deal with setbacks?
  • Did you have self-doubt?
  • What kept you from giving up?

The Rules Of Mentorship

There are no specific rules in mentorship. It’s a unique relationship each time based on individual circumstances. The relationship can be as formal or as informal as you like. If the relationship feels strained or uncomfortable for either party, it is time to break it off. The period of a mentor/mentee relationship may come and go; however, sage advice lasts a lifetime.

Finding A Mentor

Many choose a mentor from someone that they already know. One way to meet a mentor is to volunteer for service work in your community. Many times you can make valuable contacts with successful people who are also giving their time and expertise to these projects.

There are also formal mentor programs such as one offered by the Small Business Association. It is called the SCORE program and the services are free.

SCORE is a good program for aspiring entrepreneurs. It can help, if you do not know of anyone who is the kind of mentor you need. Seeking out help through the SBA puts you in touch with an experienced businessperson who is a part of their volunteer mentoring program.

Real Estate Agents Can Be Great Mentors Too

If you are interested in learning about investing in real estate in your local community, a great place to start a mentoring relationship is with a professional real estate agent.  Real estate professionals are well versed in the local market and can answer questions and guide you through your transactions to avoid major pitfalls. The best real estate agents can also find special opportunities to bring to investors that they are mentoring and help make your real estate investments more profitable.

Summary

Dale Carnegie wrote his classic self-help book How to Win Friends and Influence People in the 1930s. Carnegie was a great business mentor. He recommends that if you want to be a success in a particular area of life, be around people who are already successful in that area and copy what they do. That advice is still good, even almost ninety years later.

If you are in the market for a new home or interested in listing your current property, be sure to contact your trusted real estate professional.

What Is Eminent Domain?

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What Is Eminent DomainEminent domain is a law that gives the federal, state, county, and municipal governments in the United States the legal right to “condemn” property and then seize it to allow its use for development. Eminent domain is supposed to be used by the government at the various levels to do things for the public benefit, such as to build new roads or construct new public schools.

Compensation Under Eminent Domain Seizure

The government cannot take property without compensating the owner for its market value. Disputes that lead to lawsuits arise when the property owner and the government have a serious disagreement about the value of the property.

Imagine an acre of desert land in Nevada with no water, nothing built on it, and no utilities. The owner would be lucky to get $10,000 for it. Now, imagine it is less than a few miles away and that same amount of land is on the world-famous Las Vegas Strip. Now, it can sell for up to $10 million per acre.

What if the vacant land becomes a part of a new extension of Las Vegas? Is it worth $10,000 or $10 million? This is the type of thing that causes major legal disputes over the property valuations.

Abuse Of Eminent Domain

Eminent domain is supposed to be only used sparingly for the public benefit. Unfortunately, that is not always the case. Developers sometimes use eminent domain laws with the complicit help of government officials to seize all kinds of property that the owners have no intention of ever selling at any price. People may lose their family homes where they lived for generations so that the city can allow a developer to build a parking lot.

To make matters worse, in 2005, the U.S. Supreme Court ruled in a case called Keto v. City of London that the city could seize property on the mere expectation of increased tax revenues for the city or jobs.

This landmark case basically removed any restrictions and expanded the ability of the government to seize property on a mere pretense of having an expectation of revenues. In response to the U.S. Supreme Court ruling, 44 states enacted laws restricting eminent domain seizures in those states.

Summary

When a property owner gets hit with an eminent domain action, it is usually a surprise. The owner should immediately seek out competent legal counsel to help protect their rights and not necessarily let the abusers get away with using eminent domain laws inappropriately. There are non-profit organizations that are legal action groups, such as the Institute for Justice working on these issues that can help as well.

If you are in the market for a new home or interested in listing your current property, please contact your trusted real estate agent.

The Community Reinvestment Act Explained In Simple Terms

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The Community Reinvestment Act Explained In Simple TermsThe federal government adopted the Housing and Community Development Act in 1977, and the Community Reinvestment Act (CRA) portion was designed to prompt lending institutions to provide mortgages for low- and moderate-income Americans. The underlying reasoning for the CRA was to discourage discriminatory lending practices that inhibited low-income communities and neighborhoods.

Over the years, its regulations have been revised to improve effectiveness. During the early 1990s, upwards of five changes were made and more following the 2007 financial crisis. With the country currently in the midst of an economic comeback, the Office of the Comptroller of the Currency announced that it favored making changes to the rules that govern lending under the CRA. These changes could have a significant impact on the real estate market.

Modernization of the Community Reinvestment Act

Critics of the CRA say that it has failed to keep pace with the emerging technologies readily available in the low- to moderate-income communities it was designed to serve. Falling behind in this capacity reportedly inhibited the worthy goal of the policy.

Organizations such as the American Bankers Association are said to be in favor of modernizing the CRA. This group continues to press regulators to bring resources into the technology era. Improved technological resources appear to be critical elements to meeting community borrowing needs and improving banking transparency.

Another aspect of the CRA some feel has trailed behind the times is that not all lending institutions are subject to CRA guidelines. If the goal of the CRA is to give low- and moderate-income families a fair shot at the American dream of homeownership, other financial organizations may need to come under the CRA umbrella. A greater CRA borrowing pool is likely to increase residential and commercial buying.  

How The CRA Helps Communities Build Wealth

The current administration has made some hay about pushing policies that centralize ownership in community members’ hands. Several of the potential rule changes to the CRA point to improved home and business ownership within low- and moderate-income communities. In essence, the changes are a kind of throwback to the days when the person who owned the local bakery, breakfast restaurant and hardware store lived within the community.

If successful, the discussed policy shift would encourage residents to buy residential and commercial real estate where they live. In some sense, the administration appears to be shielding living, breathing communities from the widespread corporate takeovers that occurred in the 1990s and early 21st Century.

Critics seem to worry that tinkering with guidelines may lead to quantity over quality lending. However, proponents see a long-term plan to revitalize communities by restoring and increasing localized property ownership.

If you are in the market for a new home or interested in listing your current property, be sure to contact your trusted real estate professional.

Pros And Cons Of Installing A Pet Door

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Pros And Cons Of Installing A Pet DoorIf you’ve just moved into your new home and you have a pet, you may be thinking of installing a pet door. A pet door is a permanent door feature that is cut into the bottom third of an entry door. Before making a permanent alteration to your door, consider the pros and cons of installing a pet door. 

Pro: Your Pet Can Come And Go As Needed

A pet door could cut down on indoor pet accidents if that’s a problem you’ve had to deal with in the past. This is especially convenient if you get home late to let the dog out, or if they have a temporary gastric illness that requires more frequent outings. 

Con: An Unwanted Visitor Could Get Inside

Pet doors are designed to give egress to pets, but your pet door might give indoor access to an unwanted animal. It’s not common, but it does occur, particularly in areas where wildlife is abundant.

Pro: You Could Do Without A Litter Box

Cats can be trained to go outdoors instead of using a litter box. With a pet door, you can dispense with the odorous litter box entirely, knowing your cat will always be able to take care of business outside.

Con: It’s Something Else You Must Remember To Lock

Most pet doors have a locking mechanism for times when you need to secure the home, such as at night. But this is just one more thing you’ll have to remember to do, along with setting the alarm and locking windows. And, the more you have to remember, the more you could forget.

Pro: Better Energy Efficiency

Anyone with pets knows that they can ask to go out and come back in numerous times per day. Every time you open the door you’re letting hot air in, cooled air out, or vice versa. With a pet door, your conditioned air stays in the home much better because there’s a smaller opening, and less time spent with the door open.

Con: New Homebuyers Might Not Want It

If you ever sell your home, the new homebuyers might see a pet door as a negative. Since a quality new door costs around $500, they could ask for a price discount on the home purchase.

A pet door can be a huge convenience, but there are some drawbacks as you can see. However, depending on your view (and the opinion of your pet!) the pros may outweigh the cons.

If you are interested in buying a new home or listing your current property, be sure to contact your trusted real estate professional.