Real Estate Investing

First, I want to express my sincere gratitude to all the men and women who have served in the Armed Forces of the United States.  I grew up an Air Force brat, so I know the sacrifices made by our soldiers, airmen, sailors, and marines.  They have to be ready with just a moment’s notice to defend our country.  They often serve overseas - far away from home and loved ones.  They are also sent on short-term missions the coincide perfectly with holidays.  Many have been injured, killed, or mentally wounded.  Others have been more fortunate.  But ALL OF THEM are heroes, whether they’ve served in wartime or in peace.

Fortunately, veterans are eligible for VA loans if they served on active duty - they must have been discharged under conditions other than dishonorable and must have served during or after World War II.  According to Mortgage 101,

Veterans with service only during peacetime periods and active duty military personnel must have had more than 180 days active service. Veterans of enlisted service which began after September 7, 1980, or officers with service beginning after October 16, 1981, must in most cases have served at least 2 years of continuous active duty…

The VA does not actually fund the home loan, but it guarantees the loan on behalf of the borrower so a lending institution is more willing to lend.  The U.S. Department of Veterans Affairs says,

When VA refunds a loan, the loan is purchased from the private lender. VA only refunds a loan when the veteran has had problems making the payments due to circumstances beyond his or her control, the problems have improved so that payments can now be made or will be in the near future, but the loan holder is not willing to wait before taking action to terminate the loan. Refunding is rare because most lenders prefer to work out the problems, if at all possible, rather than selling the loan to VA and thereby giving up the right to future income from that loan.

Loans are transferable - as long as the person taking it over meets the same qualifications as the original borrower.  The VA will also require the house being purchased to be livable - it must have heat/air, flooring, finished walls, and the ability to cook.   A VA appraiser will visit the property prior to funding to be sure the requirements are met.

If you’re a lender or a Realtor, be sure to mention the availability of VA loans to your veterans.  If you’re a veteran,  take advantage of this government benefit there to help you.

Again, my gratitude to all of our veterans and current service members.

I may be jaded, but I’m not convinced that short sales are as easy as outlined by Christina Inman over at Real Estate Dispatch in her piece called Real Estate Agents Can Process Short Sales in Seven Easy Steps.

But, I’m not sure agents realize just how simple this process–which can net them some serious profits and help them build some great contacts for the future (remember that homeowners could qualify for another mortgage at a reasonable interest rate in as little as 18 months if their short sale is completed successfully–which means they’ll probably be needing an agent to find them another home in as little as a year-and-a-half…).

Yes, the steps she outlines are sensible and smart.  BUT I agree with one commenter who said “Im afraid its not quite that easy. Short sales have many more pitfalls.”  There are so many stumbling blocks to getting a short sale through - first and foremost is getting the bank to allow it.  Yes you can document and support your comparables, photos, etc. but given the huge stack of short sale applications and foreclosures in front of yours, TIMING is the next biggest issue.

I tell my clients that if you want to buy a short-sale, be prepared for it to take anywhere from two months to a year.  Because that’s the reality.  Short sales used to be fairly straightforward - prove there is a need, prove that the loan is bigger than the home is worth, prove that financially you are unable to make your payments.  Even then, though, it was hard to talk to a real person.  And to CONSISTENTLY talk to the same person - impossible.

It is not insurmountable to get a short-sale, however . Just know that patience will be your friend in the long run.

A growing trend in real estate marketing is virtual staging for empty houses.  We all know that staging a home for sale is an important step in getting top dollar for a seller. It helps to be able to define a room, to show beautiful possibilities to would-be buyers.  However, the cost of staging an empty home can be out-of-reach for many sellers, especially if they’ve already moved away and don’t have furniture to rearrange, rugs to put down, a nice chair with a woven throw over the back.

According to the National Association of Realtors all homes need to look their best but it can be cost prohibitive,

To professionally stage an occupied house can cost from a few hundred dollars to more than $1,000, says Barb Schwartz, a staging pioneer and founder of StagedHomes.com. The price tag is even higher for vacant properties; add rental furniture and the costs can skyrocket.

The article goes on to tell about the growth of virtual staging through technology.  There are several web sites available that offer products that can help you change wall colors, flooring, and more.  Included in the NAR list are:  Obeo StyleDesigner, Home Design Studio, and Live Interior 3.  Although I may not be a graphic designer by trade, I’m certain I could figure this out on behalf of my sellers!  I will be bookmarking each of these sites for future reference.

However all good intentions aside, agents must be careful to disclose that the images they post on the MLS and in their marketing materials are computer generated. It would be quite a shock for a buyer to walk in expecting to see a lavishly decorated home and see bare white walls.

Photo from Obeo StyleDesigner.