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The Property Index site has a vast range of property for sale in Portugal, view the range online.

Notwithstanding the fact that the Property Index service is only a young agency, they were established only in March 2007, they have achieved expert status very quickly. On closer look, they’re a very straightforward agency entirely concentrated on offering experienced guidance to anyone meaning to buy, sell, rent etc. realty in a wide selection of areas across the globe. Their pledge: to offer you assistance to determine exactly what you are calling for swiftly and, too, unproblematically. Property can easily be found no matter where at present, maybe the most fashionable area being property on the market in Portugal. It should be easy as pie to chart the wonderful real estate available in Portugal, the motive for looking into realty here is real estate available for sale and the tremendous chance of being able to live between this spirited and dynamic people.

This is one of the most trendy areas at present, and considering the gorgeous landscape and great climate that surrounds you night and day, how can you go wrong! Property in Portugal is rich in history, this country is and has always been home to several indigenous cultures. Only 30 years back there’d be merely a tiny number of English in search of real estate in Portugal. Ask any individual who has chosen to move to Portugal and they’ll back it up. Quite a few people would look upon it as a transient vogue and others look upon it as a that’s more or less an addiction! Customers who are keen on transferring to this area may range from newly weds keen on a challenge to the retired meaning to rest and enjoy themselves.

Note, though, that you may encounter some setbacks when looking to buy real estate in a foreign country; there are normally hundreds of disparate, complex, actions when plotting, visiting or actually purchasing. If you only miss just a single minor action it can create dramatic setbacks not to forget, preeminently, a financial hammering. As is to be expected with this well-liked area, real estate might be pricey in this place and that is plainly due to the high demand. Nonetheless real estate buyers are choosy in such a place blessed by mega cool terrain and cheery scenery. It’s patently got the whole shebang patrons may feasibly itch for etc.

California’s Mortgage Loan Market

The California housing market, while cooling down somewhat over the past year, still helped drive job growth in the state. Much of this growth was in the mortgage industry, as well as the construction industry. In fact, real estate agencies and mortgage loan companies added nearly 1500 jobs in November of 2005. However, in San Diego county, the mortgage industry lost workers as financial and loan companies are finding it difficult to maintain the job levels that existed during the boom market of the past five years. This is a trend that many analysts say will continue, especially in once red hot real estate markets such as San Diego and Phoenix.

California Real Estate Market

Many economic analysts, while hopeful about the job growth in November, are worried about the real estate sector. If real estate companies and construction companies continue to shed jobs over the coming year, it will certainly have an effect on the number of jobs in the state, as well as the strength of the economy.

San Diego’s Previously Strong Market

San Diego’s strong market can be accredited to the area’s recent trends, including job growth, low vacancy rates, and a decrease in apartment supply. Real estate experts maintain that alongside Miami, San Diego is the only metro area in the country where the supply of apartments is declining. Apartments are inherently converted into condos faster than new ones are being built. This fact, juxtaposed with a growing population, may cause the vacancy rates to become even lower, leading to a further increase in demand for condos in San Diego. Another facet that bolsters the strength of the San Diego market is the number of investors that are buying condos, both natural and converted, some of which will end up reappearing back onto the rental market.

Corey Senn is a Senior Partner with Bad Credit Lender, a California based private lender that specializes in hard money loans and bad credit loans. Located in La Jolla, California, Bad Credit Lender provides competitive private California hard money loans, bad credit home loans, and bridge loans. In addition, Corey is one of the main contributors to the California Home Mortgage Loan web blog.

Need specialist advice for property in Spain? View the PropertyIndex site to find lots of properties!

Regardless the fact that the Property Index online service is only a fledgling establishment, they were set up in March 2007, they have proven their mettle very quickly. De facto, they are a quite incomplex establishment exclusively focused on offering informed instructions to every customer who is planning to let, sell, rent, etc. land in most popular areas of the world. What they promise is to assist you discover exactly what’s desired very swiftly plus in a trouble-free manner. Realty is up for grabs anywhere in the world nowadays, unquestionably the most called for area being property you can purchase in Spain. It should really be straightforward to list the sensational property available in Spain, one motive for opting for property here being the houses and apartments available for sale and the glorious option to live amongst this animated population.

This is one of the most sought after regions nowadays, and considering the scenic beauty and weather surrounding you here, how can you say no! Realty in Spain is steeped in history, this region has been and is still home to a number of indigenous civilizations. Some thirty years back you’d find only very few of British people who are looking for property in Spain. Ask any individual who has emigrated to Spain and they’ll tell you the same. Plenty of people would insist on seeing it as a basically irrelevant fad and others insist on seeing it as a near to an addiction… People interested in moving over here generally range from newly weds keen on a perspective to senior citizens meaning to put their feet up and enjoy themselves.

Note, though, that you may likely encounter a few situations when acquiring property overseas — there’s hundreds of procedures to consider be it when scheduling, inspecting or completing. Even if a single minute step is missed this can definitely give rise to far-reaching situations not to forget, most importantly, financial damage. Obviously, as is to be counted on with this trendy place, property could be pricey in this area and that is only a result of the top buyer demand. However, real estate buyers are presently very spoilt in such a region so determined by fabulous landscape. It’s able to offer all a patron may relish and lots more.

Over the last few years, many people squeezed into new homes using adjustable rate mortgages. With interest rates going up, you now need a new interest rate strategy

Adjustable Rate Mortgages - ARMs

Adjustable rate mortgages carry a bit of a gamble for home owners. Essentially, you trade smaller interest rates and lower initial payments on the gamble rates will not increase over time. If rates stay low, you make out like a bandit. If rates increase, you need to consider your options to avoid getting stuck with a high interest rate loan and resulting cash flow problems from increased monthly mortgage payments.

For the last three or four years, adjustable rate mortgages have been offered with incredibly low interest rates. Many people used these low, low, low rates to buy homes that would otherwise be beyond their means. Starting in 2004, Federal Reserve Chairman Alan Greenspan started making noises about increasing money borrowing rates. He has followed through on these hints. Although mortgage rates aren’t tied directly to the Federal Reserve Bank, they are heavily influenced by it. As a result, many people are now facing tight finances.

Avoid Rising Rates

There are really only two solutions for avoiding the increase in interest rates on adjustable rate mortgages. The first strategy is to immediately convert to a fixed rate mortgage product. Fixed rates are still at historic lows when compared to rates offered over the last 50 years. By flipping to a fixed rate, you will be able to solidify your budget and finances since you will know exactly what you have to pay each month. If rates decrease in the future, you can always try to flip back to an adjustable mortgage loan.

Unfortunately, some home owners are simply going to have to face the fact they lost one the interest rate gamble. Typically, this will occur when you realize you simply can’t afford to make the monthly payments required by getting a fixed rate loan. In such a situation, you are going to have to sell your home and downsize. In most situations, it is better to do this now since you’ve probably built up a sizeable chunk of equity over the last few years and want to avoid a loss of that equity as the market cools down. While this may sound like a disaster, it really isn’t. Yes, you have to downsize, but you should still have built up a chunk of equity.

Interest rates are going up whether you want to acknowledge it or not. The time to deal with your adjustable rate mortgage is now, not when you straining to make payments.

Sergio Haros is with Great Western Mortgage - San Diego Mortgage Brokers - providing San Diego home loans. Great Western Mortgage is a San Diego mortgage company writing San Diego mortgages and San Diego refinance and home equity loan.

Most people, when buying a home, are first given a copy of the
appraisal at the closing table. In the excitement and stress of
signing the final mortgage papers, and arranging to get the keys
to the new house, the appraisal may be tucked away with the
other closing documents to be forgotten. There is information on
the report worth knowing.

The lender probably told you what the home value was soon after
the appraiser completed the appraisal. Now that you have a
written copy in front of you, it offers much detail, and tells
you a lot about your home that you may not have considered. When
you get home pour some coffee, pull up a chair and look it over.

The first several pages of the Uniform Residential Appraisal
Report offer an in depth profile of your property. The
neighborhood section will reflect the appraiser’s analysis of
whether the housing trends around you are increasing stable or
declining in value. The high end and low-end prices and
predominate values are given. This may be important to you as a
benchmark to think about if you are planning to resell in the
next several years.

The section on improvements is where the appraiser gets to
observe the general condition of the home. The comments could
range from noting the upgrades such as new roof, interior
painting or new carpeting. The flip side would be warning about
lap siding now in good condition but subject to premature
deterioration. Any negative comments about condition may be
something that could be corrected by you to maintain or increase
value.

The page on comparable sales gives you the opportunity to see
the exact homes with addresses that your home was rated against.
You will read how the appraiser made the adjustments to each
home’s value relating to square footage, rooms, garage, lot size
and a number of other line items to come to a bottom line. There
may be a page called “location map” that will have arrows
showing where each of the comparable homes are located. You
could take a little time and go for a leisurely drive to check
out the curb appeal of each of the homes.

These are just some of the highlights of the appraisal. In the
back pages there will be photos of the home and likely photos of
the comparable homes. The appraiser will go into more depth
relating to the neighborhood description, additional features of
the subject home and how the sales comparisons were analyzed.
There should be a page reflecting the floor plan of your home as
measured by the appraiser. In addition to the diagrams, there
will be the calculations for total area a breakdown of each foot
of living area. The appraisal will be a fairly complete picture
of your home and will give you a sense of what a financial asset
you really have.

Your home always needs improvement works which range from urgent repairs to adding rooms and modernization. To carry out these works you require large funds which in many instances become difficult to obtain through personal means. You can, however, take home improvement loan at lower interest rate and finish the improvement works. By utilizing home improvement loans you also add value to your home.

Home improvement loans are offered to borrowers under secured and unsecured options. Under the secured option, lenders provide home improvement loans on condition of getting a security called collateral. The collateral consists of the borrower’s any property like home, vehicle, valuable papers etc. After placing the collateral with the lender, position of the borrower in fact strengthens in terms of taking a higher amount loan and bargaining for lowered interest rate.

Lenders generally provide secured home improvement loan up to £250000 It is important to note that in instances where greater loan is required, lenders check equity in the collateral. As higher equity ensures greater security of the loan, the lender therefore has no problem in offering greater amount of loan. Borrowers should prefer taking the loan of their immediate requirement

In secured form, home improvement loans are provided at lower interest rate which is main attraction for the borrowers. The interest rate can be brought down further if borrower compares numerous loan packages showcased online by the lenders.

Borrows can repay secured home improvement loans in larger duration of up to 25 years. While deciding on repayment term, remember that amount paid under monthly installments get reduced for shorter repayment term while increases for longer period.

Unsecured home improvement loans are generally taken by tenants and non-homeowners who usually do not own a property worth placing as collateral. These borrowers take the loan on the basis of their financial position, steady income and credit score. The interest rate, however, may be higher as due to absence of collateral, the lender has to incur expenses towards insuring the loan. But these borrowers also avail the loan at comparatively lower interest rate comparing various loan packages.

People having bad credit are also eligible for home improvement loan. These borrowers should make improvements in their credit score by adding some positive developments like paying off easy debts, in their credit report. On FICCO scale, borrowers are given credit score from 300 to 850 and a score of 750 and above is considered as good and of without risk for a loan deal with borrowers.

Home Improvement Loans can add to your financial well being apart from taking care of your immediate requirements. You should pay monthly installments in time and see that the loan does not turn into a debt.

After having herself gone through the ordeal of loan borrowing, Natasha Anderson understands the need for good quality loan advice. Her articles endeavor to provide you the wise counsel in the most elementary way for the benefit of the readers.She works for the UK secured loan web site uk finance world.To find a Secured or unsecured loan that best suits your needs visit http://www.ukfinanceworld.co.uk

In the North American school system students seeking to be the
best strive for an ‘A’ grade. However, the school system is not
the end of the drive to be the best and earn an ‘A’ grade.
Letter grades are used by rating agencies to rank communities in
terms of investment risk.

Ostrava, in recent times, received an ‘A3′ grade from Moody’s
Investors Service.

What does this mean to you as a potential investor? What are
the other indicators which would point to the health and
prospects of Ostrava’s property market?

What does this rating actually mean?

There are 25 rankings from Moodys in the investor services, an
‘A3′ is seventh from the top and is defined as an upper-medium
grade. A similar grading company, Standard and Poors, also gave
Ostrava an ‘A’ ranking based on their grading system.

What will that mean for the city?

Some investors will only look at cities with ‘A’ ratings. It is
an indicator of the financial and fiscal health of the community.

Since the restructuring of the industry in the 1990s, the
economic platform of the city has changed substantially. In
fact, most of its incomes are no longer dependant on local
economic conditions.

Ostrava, in receiving this rating, achieved the identical level
of rating as other mid-sized cities in Central Europe. Brno, for
example, also received an ‘A3′ rating (for a complete discussion
of Brno property and economic developments visit our feature on
Brno property.)

Let’s go through some other indicators as to the investment
potential for this Northern Moravian city.

Area: 214 km2

Population (latest data April, 2004): 315 000

Road Distance from important European and Czech cities:

City / kms Brno / 170

Olomouc / 93

Prague / 360

Vienna / 310 Bratislava / 300 Warsaw / 300

Budapest / 389 Berlin / 540

Paris / 1 500

With the completion of the D-47 highway the infrastructure
capacity will greatly increase as well as the ease of travel.
Travel time to the Czech capital, Prague, will be shortened to a
little over three hours.

Air Transportation:

Ostrava - Mosnov International Airport is located 25 km from
the city centre. It is the biggest regional airport in the Czech
Republic with a capacity of more than one million passengers per
year (current actual figures are just over 200 000 per year and
expected to triple next year) and a runway 3500m in length and
63m wide, allowing it to accommodate the world’s largest
airplanes. Currently it caters to both domestic and
international flights.

Although there are currently not any well-known low cost
carriers flying into Ostrava we expect it will only be a matter
of time.

Average monthly salary for Ostrava region (2004): 18 966 CZK
Average monthly salary for Czech Republic (2004): 18 582 CZK

Average monthly salary for Czech Republic (2005 2nd Q): 18 763
CZK

Education: 16.3% of residents in Ostrava have University level
education compared to 9.4% Czech wide.

Average temperature in January: - 2C to -4C Average
temperature in July: 15C to 19C

(hey, some investors want to know this….)

Economy:

Industrial production has always had a strong factor in the
economy of the Ostrava region. Mainly its been based on the
excavation and processing of coal and on related branches -
metallurgy, the coking industry, the chemical industry, electric
power generation, civil engineering and heavy engineering.
Metallurgy and heavy engineering remain the largest employers in
the City.

Some of the Largest Employers in Ostrava

Employer / Business / Activity / Employees (Jan. 2004)

Mittal Steel Ostrava a.s. / Metallurgical production,
manufacture of metallurgical and engineering final products / 10
968

Faculty Hospital / Healthcare / 3 180

Czech Railways / Transportation and communication / 3 075

Vitkovice Machining / Machining and Metallurgy / 2 697 Vitkovice
Steel / Metal production, processing / 1 682 Ostrava Blast
Furnace / Metals and coking-chemical production / 1 305

Foreign Investors in Ostrava (by no means comprehensive,
only a sampling)

Investor (Country) / Business Activity / Employees (Jan.
2004)

Mittal Steel Ostrava a.s. (UK) / Metallurgical production,
manufacture of metallurgical and engineering final products / 10
968

Vitkovice Tube Mill, a.s. (Cypress) / Steel tube production / 932

Dalkia Ceska republika, a.s.(France) / Heating and Electrical
Production / 697 BorsodChem MCHZ, s.r.o. (Hungary) / Chemical
production / 623 Tesco Stores CR a.s. (UK) / Retail / 580 Ahold
Czech Republic, a.s. (Holland) / Retail / 529 Hayes Lemmerz
Autokola, a.s. (USA) / Production of car wheels and automobile
parts / 410 Ostrava Water and Sewage, a.s. (France) / Production
and delivery of drinking water, removal and cleaning of waste
water / 382 Trefil a Schomberg, s.r.o. (Germany) / Plastics
production / 339

Hayes Lemmerz Alukola, s.r.o. (Italy) / Automobile parts
manufacturing / 310 Connex Morava a.s. (Czech Republic/France) /
Road transportation / 212

Other Investment News

US based Roper Industries Inc. has decided to invest 24
mil. CZK over the next five years into a new technology centre
in Ostrava where it will create 18 highly qualified jobs.

“In Ostrava we will be focusing on projects for the development
and innovation of our laboratory instruments. The Ostrava centre
will supplement the technology centres of our existing
Instrumentation Segment operations located in the U.S., Denmark,
Germany and France employing in total almost 1000 people,”
commented Will Crocker, Roper’s Vice President and Group
Executive for the Instrumentation Segment. “The laboratory
instruments produced from the design work there will serve
foremost our materialography and physical property testing
markets. The results from the product development in Ostrava
will be utilized by our segment’s production plants abroad where
they will produce the final products.”

The new customer support centre of GE Money Multiservis
for Czech and Slovak clients, a subsidiary of one of the largest
and most renowned American companies will be located in Ostrava
(Moravia-Silesia region) and will provide work for up to 500
qualified staff members. The total investment exceeds three
million euro.

“Our primary reason for opening the new centre is the growth of
GE Money in the Czech Republic,” says Jiri Pathy, Chairman of
the Board and General Director of GE Money Multiservis, the
company in charge of developing the new centre within GE Money
group. “In order to maintain a high standard of services, we
will gradually increase the number of staff who are responsible
for operating GE Money group and caring for its customers. The
new customer service centre allows us to continue to fully meet
our customers’ needs,” adds Jiri Pathy.

Taiwan-based ASUSTeK COMPUTER INC. is in the process of
constructing a new plant and repair center in Ostrava.
Investment into the facilities will reach 20 million EUR and
eventually at least 1300 employees will work be employed. The
centre should produce up to 200 thousand personal computers per
month and the capacity of the repair centre should reach 50
thousand computers per month.

“The important factors in deciding on the location of this
plant were mainly the preparedness of the industrial park in
Ostrava-Hrabov and the proximity to the Technical University of
Ostrava with which we intend to closely cooperate. We are
interested in their graduates and would like to take part in
creating specific study programs for their electrical
engineering departments. We are already considering moving part
of our technology-driven activities to the Czech Republic,” said
George Wu, Associate Vice President of ASUSTeK COMPUTER INC.

The best quality and most beneficial industrial zones in the
Czech Republic were handed awards by the Czech ministers. The
fifth annual “Industrial Zone of the Year” awards were
presented according to the recommendations of the Ministry of
Industry & Trade and CzechInvest in cooperation with the
Association for Foreign Investment (AFI) and partners in the
“Partnership to Support Foreign Direct Investment in the Czech
Republic”.

The award for Industrial Zone with the Most Economic Benefits
was given to the “Cernovicka terasa” Industrial Zone in Brno,
while the Zone with the Most Social Benefit in 2004 was the
Ostrava Hrabova Industrial Zone - 1st Stage. The Industrial Zone
with the Best Town Planning Solution is being prepared by a
private developer in Ostrava — CTPark Ostrava, and the
“Brownfield of the Year” was won by the Skoda Plzen Industrial
Zone.

American company CTS Corporation declared plans to
invest nearly 22 million dollars into a new facility in the
Ostrava region of the Czech Republic. CTS Corporation is a
leading designer and producer of electronic components for the
automotive and electronics industry. Their main customers are
Siemens, Magneti Marelli, Pierburg, Toyota, Renault and Nissan.

The new facility is expected to employ over 160 people within
three years. Production in the new plant is targeted for as
early as June 2006.

“This investment in the Czech Republic will enable us to raise
our production capacity and better serve the European market,
which at present is supplied mainly from our plant in Great
Britain,” commented Ron Bell, Director of CTS’s European
Automotive Operations, and added: “In the Ostrava facility we
will be producing electro - mechanical sub - systems and sensors
for the auto industry.”

Ostrava Property Figures

Apartment and Flat Rentals in CZK per month (2005 1st Q):
(average range - exceptions can be found either way)

Size / CZK per month

1 + 1 (studio or bachelor) / 4 000 - 5 500

2 + 1 (1 bedroom) / 5 000 - 7 000 3 + 1 (2 bedroom) / 7 000 - 9
000 4 + 1 (3 bedroom) / 8 000 - 11 000 House Sales in thousands
of CZK per flat (2005 1st Q): (average range - exceptions can be
found either way)

Size / New Build (ave. 17 000 CZK/m2) / Heritage Building

1 + 1 (studio or bachelor) / 650 - 950 / 350 - 700 2 + 1 (1
bedroom) / 800 - 1 200 / 500 - 800 3 + 1 (2 bedroom) / 1 300 - 2
500 / 700 - 1 200 4 + 1 (3 bedroom) / 1 800 - 3 000 / 1 200 - 2
100

Property Examples (common closing prices are commonly 5
- 10% less than the asking price)

Property Description / Link

Studio (1 + 1) flat right in the center of Ostrava. 37 m2.
Completely reconstructed. Floor 5 of 5 with an elevator. Asking
price: 395 000 CZK / Ostrava Property Example 1

2 bedroom (3 + 1) completely reconstructed. Floor 1/3. 76 m2.
The price includes a garage. Asking price: 1 260 000 CZK / Ostrava Property Example 2

More examples added regularly…

As we’ve emphasized before, at Czech Point 101
we are not going to over-inflate figures or try to sell you on
hyped up facts. Our goal is to inform you to make the best
investment decisions possible.

Recommended Reference Websites

Ostrava
city website Ostrava Airport Ostrava Hrabov
Industrial Zone

The sources for this newsletter include the Ostrava city and
CzechInvest.

Securing a mortgage for the first time can be a frightening
time in your life. You want to make sure you understand
what is going on so the mortgage lender cant take
advantage of your lack of knowledge.

In spite of numerous laws and regulations it is still
better to have a very least a basic understanding of the
ideas and systems of the mortgage industry.

There are many different deals, incentives and programs for
the first time mortgage buyer. Its important to look at
each of these in detail to find out if they are worthwhile,
and if so, if they are ideal for you and your circumstances
when it comes time to mortgaging your first home.
The old saying if it seems too good to be true it probably
is should be kept in mind at all times.

There are whole range of starter mortgage plans dependent
on your situation now and what you anticipate will happen
in the future. This is not like buying a new computer game
once you have made a decision you will usually find it will
be difficult to change your mind. Probably one of the most
popular starter mortgages is a fixed rate mortgage. These
are available for periods of 30,20,15 or 10 years,
depending on the lender and situation.

This means that the mortgage rate and the payment rate
will remain the same and will not change throughout the
duration of the mortgage. Usually the rate will be at a
slightly higher rate than the current market rate as
the lender will have to anticipate changes due to market
fluctuation in the future.

These fixed rates are perfect for first time buyers if you
plan to live in the home or property for more than 10 years
and if you like certainty rather than change in your
monthly payments and budget.

its sort of like knowing what your rental payments will be
for several years, many new owners find this comforting
especially when first putting a foot on the property ladder.
But If you plan on staying put in your home only for a
shorter time, maybe you intend to upgrade latter on a short
term first time buyer mortgage might be the better choice
for you ?

If you dont want your mortgage to be the same for the next
10-30 years or feel that the current fixed rates offered is
over estimated and does not really effect the true estimate
of interest rates in the future, you might opt for a
adjustable or variable first loan.

The interest rate and the cost of most first time buyer
mortgages will still remain the same for a specific number
of years, then after the initial period the payment and
interest rate has the likely hood of fluctuating annually,
dependent on the market rate.

Homeowners who have owned homes a number of years can
recall the times when we had higher interest rates than we
are experiencing at the moment but dont forget a mortgage
is a longer term commitment so think carefully before
jumping in to any deal.

These variable type mortgages are ideal if you need
stability at first, but can cope with or accept changes
later on. It can also be more flexible if you plan on
staying put for the duration of the fixed part of the
mortgage but planning a move or an upgrade in a few years
time.

There are different programs both state or federal offered
by different mortgage lenders that provide other options
to first time buyers. This type of mortgage could offer
reduced interest or maybe points if it is your first home
or if you have had a home for a few years (usually three)
There are also incentive options for that can help you
obtain the credit you need to get into a first home.
You will find Federal schemes, such as the FHA (Federal
Housing Administration) schemes as well as more localized
programs both State and those funded by mortgage companies.

If you are a veteran (former military) and looking at
buying your first home youre catered for as well with
special veteran programs. The Division of Veterans Affairs
has arranged a program for you that will guarantee some of
the most popular first time buyer mortgages (such as the 30
or 15 year fixed rate loans).

There are a number of mortgage companies and brokers that
want to help you find a loan. But never forget, this is a
serious commitment on your part and my effect future plans.
It will be in your interest to have a basic knowledge of
everything presented to you when looking for the first time
deal and you must check out all the options before choosing
the deal for you.

Talk to family members and friends, get their views about a
specific loan or use their contacts and experience or ask
them to refer you to a trusted mortgage brokerage. Just
because youre new to this, it doesnt mean you have to be
completely clueless does it?

Show you know the basics and tell mortgage experts that you
have some idea what youre really need for this they will
at least know you have some idea of the process involved
which will help them and you find a better deal quicker and
more effectively. This means your step into property will
not be fraught with problems and regrets.

MONEY MATTERS

Where do you get your information about real estate? Do you count on the media? What you read in newspapers and hear and see on radio and TV may not be an accurate representation of reality. Yet, everyday people turn to the media because they think they can trust the information. Well… think again.

The real estate industry is a VERY POWERFUL special interest group organized as the NAR (National Association of RealtorsTM and the NAR is a very powerful lobbying group in Washington that influences our politicians with campaign contributions to write legislation that favors the real estate industry. One simple and classic example of this is the CAVEAT EMPTOR or BUYER BEWARE clause. This legal jargon is a fancy way of saying “cheating is okay” and that whether you are a home buyer or seller, if you make a mistake in judgement when buying or selling a home, pay too much, sell too low, that’s your fault. You should have known the rules to the game before you play. This provides a way out for agents who may misrepresent or omit certain information, which may cause you legal or financial pain. How could this happen you say? Here’s a simple example…

You are a home buyer, you contact a real estate company and meet an agent. The agent is super friendly, helpful and really works hard to find you a home. Through this process you develop a warm and fuzzy relationship with the real estate agent, telling them about your home dreams, your job, your financing and other personal and confidential information. You and the agent become friendly and you can trust them right? WRONG! Agents LEGALLY represent sellers, not buyers. Agents have a legal or a fiduciary duty to get the highest possible selling price for a property from a buyer. They CANNOT legally show you how to pay less for a property because they represent the seller. And themselves…they are licensed SALES people who get a commission.

But there is more…the real estate industry, nationally and locally, spends BILLIONS of dollars annually on classified ads, radio and TV ads. The media is KEENLY aware of these many billions of dollars and the revenues they earn from advertising. And the media WILL NOT ROCK THE BOAT of these powerful advertisers! Why? Because advertising revenue is what keeps the local and national media profitable. The result? Happy news stories…lots and lots of happy news stories about real estate. When was the last time you read a story about a home buyer or seller getting raked over the coals? The media is not going to cover these kinds of stories because they don’t want to upset their advertisers. So you see, the NAR and the real estate industry controls or influences everything from the real estate laws to the information you see in the media.

And then there is a guy like me…I know this industry, I was licensed in real estate. I was a residential and commercial loan officer. I know how people get screwed everydayI know that simple people get their financial throat cut and don’t even realize they are bleeding. Why? Lack of information. Lack of specific education in real estate. Real estate agents are trained and licensed in real estate principals, practices, law and finance. HOW MUCH REAL ESTATE TRAINING HAVE YOU HAD?

What I chose to do was to reverse engineer the training and experience I got in the business and present it to people so that people, buyers and sellers, could represent themselves on a more level playing field quickly and intelligently by reading a “SMART BOOK”. Smart Books show buyers and sellers how to protect their legal and financial interests during the largest investment of a lifetime, buying or selling a home. It blows me away how many people underestimate what I am trying to say. IF you were smart, you would take this opportunity to click the links below to learn more. If you don’t, well, then you are on your own.

Copyright © 2006
James W. Hart, IV
All Rights reserved

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Louisville realtors, investors and debtors facing foreclosure ask me from time to time how short sales work. Consider this a primer.

I recently brokered the sale of a house for $85,000 to an investor. The house appraised for $120,000, giving the investor substantial immediate equity. The lender took a $60,000 loss. The owner/seller was forced to sell his house, for which he received not one red cent, and had to move into rental. How is it that all parties walked away from the closing table satisfied?!

In the beginning…

When a home owner owes his lender more than he has borrowed, he’s said to be “upside down on his mortgage”. This can come about in many ways, the principal amongst them occurring when he simply stops making mortgage payments, often because he is in serious financial difficulty. If his mortgage payment is $1,000 per month, and he stops paying, or pays intermittently, the fines, interest and principle can rack up pretty quickly. And if the owner can’t pay the mortgage, chances are he hasn’t been able to make necessary repairs to his home. This situation is almost invariably accompanied by despondency, which again leads to neglect of the house.

Stir into the mix bankruptcy, and perhaps divorce, and you’ll understand it’s not surprising to find the homes of these owner/debtors are often seriously degradated. That leaky roof is probably the last of the owner’s problems.

The “F” word

Foreclosure. It’s not a happy prospect for the lender or the borrower. Lenders have different tolerances for late payments. However by the time the debtor is late for the fourth consecutive month the vast majority of lenders begin foreclosure proceedings. In Kentucky the foreclosure sale of the home by public auction takes generally anywhere from 6 months to a year from the time the foreclosure procedures began. It can take longer - I saw one artful debtor drag on the foreclosure proceedings for more that 20 months! Her mortgage payment was $1,300 a month. After 20 months that became a significant debt compounded by late fees, interest, legal costs, and the potential cost of selling the property at a public foreclosure sale. To say nothing of the continuing, moment by moment deterioration of the property. By the time she moved out the bank had written off in excess of $80,000.

The lender’s and borrower’s conflicting interests.
Capitalism is a wonderfully contrived system. It hands not only the power-barons a potent array of weapons with which to fight, but also the poor and destitute. Though the battlefield is nowhere near even, double digit interest thrust too deeply down an indigent debtor’s throat may precipitate his “nuclear” retaliatory option - Chapter 7 bankruptcy. And so these two, symbiotically entwined, are locked in an elegant dance, teetering between dividends and disaster, profit and poverty. One serious mis-step, and the band stops playing.

Thus, from years of bitter experience, lenders have learned that it’s often better (cheaper) to attempt to gain the cooperation of the owner and have him agree to voluntarily sell and vacate his home, rather than evict him under foreclosure. Lenders also understand that the chance of ever recovering the money owed to them by the debtor is slim. But many debtors choose not to sell because, around the time they realize they will never catch up on their payments, they often have another “Ah Ha!” flash of insight: that if they stop paying their mortgage and just wait for the foreclosure axe to fall (or better yet, engage in a hatfull of tricks to keep that axe at bay) they can live “rent free” for at least 6 months. So now the debtor turns from borrower to squatter, perceiving it to be in his best interest to prevent the foreclosure for as long as possible. And if the house, the lender’s “security”, should fall apart in the meantime, so be it.

The solution

The lender is in a position to offer the borrower a very important concession for his cooperation: to write off the entire debt if the borrower finds a buyer to buy the house at a price and terms acceptable to the lender, within the time stipulated by the lender. This is the essence of a short sale. Lenders set their own guidelines for what they will accept. They may say they need to get fair market price, but will in fact often be prepared to sell for much less. They do not want to chance selling this house at auction and risk receiving a very low price. Or worse yet, receive a bid so low that the property does not meet their reserve price, and they end up owning the property. In this case the property is administered by the lender’s REO (real estate owned) department, which will then list the property with a realtor. And the cycle begins again……

The Lender initially said The Willows house was worth $120,000, and wanted it sold at about that price. It got the $120,000 figure from someone it had hired to do a BPO. BPO is short for “Broker’s Price Opinion.” It is similar to a CMA (Comparative Market Analysis) and serves the same purpose: to arrive at a fair market value for a property. Most are done as a “drive-by,” meaning that the “driver” (usually a realtor, maybe an appraiser) drives by the outside of the property, takes one to three photos and leaves. He then completes the lender’s BPO form on-line and e-mails it with the picture. Sometimes an “internal” is requested, in which case the realtor goes into the property, takes about 3 internal and 3 external photos and sends these through to the lender with the completed BPO form.

When the debtor had realized he would not be able to save his house in The Willows, he contacted me to see if I could help. He did not want a foreclosure on his credit report, which would have prevented him from getting a conventional mortgage for three years. Even with a Chapter 7 bankruptcy, the wait period is only 2 years from dismissal. He also wanted to have his debt forgiven. I was able to accomplish both these goals, saving him about sixty thousand dollars.

The short sale process

As a Realtor, the first thing I did was explain to my client all his theoretical options, including deed in-lieu of foreclosure, loan renegotiation and others. He settled on short sale. I listed The Willows property, and had him sign an authorization for me to contact the lender to see if it would agree to a short sale. Remember, when I list the property, the owner/debtor is my client (not customer). This means I must always act in his best interest. The lender is not my client and I owe it no such duty. In a normal sale the seller and buyer have greatly divergent interests: the seller wants to sell at the highest possible price, and the buyer wants to buy at the lowest. In a short sale there is no such contest between the parties: the seller wants to sell at any price the lender will accept, and will generally agree to any price offered, contingent upon the lender’s acceptance. So in a short sale, the lender takes on the mantle of “seller” vis-a-vi the buyer and these are really the parties who negotiate the contract. Now get your head around this one: as listing agent in a short sale I am often in the peculiar position of actively attempting to negotiate for the sale at the lowest possible price acceptable to the buyer! (But always with the caveat that this is in the seller’s best interest, and does not jeopardize the sale). This anomaly has many ramifications for the way I conduct and negotiate these transactions.

Price, Terms and Timing
Price: So how much will the lender lop off that price? I’ve generally found that as the day of auction approaches, lenders become more malleable. Pretty inefficient, because they loose a lot of time and money that way. I supplied the lender of The Willows property with objective material indicating that the drive-by BPO was inaccurate, given the condition of the house. The lender then had an internal BPO done. That was key to getting this particular deal done. I also sent off photos and comps of my own. In some cases I’ve sent the lenders well over 100 photos. Pictures speak louder than words, and it’s critical, when the property is damaged, that the lender understand the shape it’s in . Remember - the BPO realtor may be doing up to 50 BPOs a week - he could care less about this one deal. But as listing agent I need to keep the lender informed of all issues that coincide with my client’s best interests. The second Willows BPO came back at $100,000, and the lender initially tried to obtain that figure. Ultimately, with the foreclosure sale due to occur the next day, it reduced that amount to 80% of the $100,000 plus $5,000 to pay off non-mortgage related liens. At 4.50 pm the lender agreed to stop the foreclosure sale scheduled for 11.00 am next morning.

But hey, it ain’t over ’til the fat lady sings! Because the loss on this loan was $60,000, and because the lender had authority to settle up to $30,000 only, we had to wait for final word from the mortgage insurance company, which we eventually obtained, but not without many hours additional work.

As you see, the price of The Willows property was determined by the lender looking at the bottom line - how much net it would receive. And in order to get this number, all lenders in short sales request a “fake HUD-1″ or a “net sheet” submitted simultaneously with the offer. In a normal real estate transaction the HUD-1 is drawn up at the end of the transaction, after agreement is reached. - in a short sale the title search is performed immediately upon listing, even before there’s an offer, so that the figures can be applied to the net sheet as soon as needed.

Terms: The most common terms distinguishing these deals are that the lender often requires terms such as “sold as is” and “proof of finance or funds required with offer”, and to protect the seller, the realtor should insert terminology indicating seller’s acceptance is subject to release from all liability for debt. None of this is carved in stone, and I’ve negotiated repairs and other concessions from lenders. Each case is unique. Paper will suffer any indignity - write the offer!

Timing: The REO, Foreclosure and Bankruptcy departments often appear to be understaffed and overwhelmed, so don’t expect instant responses. Some will take weeks to reply. Make sure the buyer and seller understand this. But once a deal is struck, the lender will often expect an unreasonably quick closing, and will attempt to penalize you with days interest for closing after a certain date. This all goes back to the net sheet calculations; because you have informed the lender how much it will receive by a certain date, it then attempts to hold the line at that date, even though they are generally very slow to respond. The Willows lender, after having not responded to multiple contacts, gave us just 2 days within which to close! Fortunately we well prepared, but it was very close.

Closing Note
The tax consequences of short sales fall outside the scope of this article. If you want info on how to handle competing offers, dual limited agency within this environment, or need a copy of the net sheet I use, you may contact me.

Update
Here’s a new twist. A couple of weeks ago I submitted a $235,000 offer to a lender on a short sale, (Seller owes about $275,000) which the lender ultimately accepted. However, in it’s acceptance letter, at the very bottom of the sheet, the lender stipulated that it retained its right of recourse against the seller/borrower (my client)! And this despite seemingly contrary language in the main body of the letter. I explained to the lender that the ONLY reason my client had agreed to the short sale (and not to jerk the lender around in the bankruptcy proceedings) was because he expected to obtain a complete release from all liability at closing. After a weeks or so of wrangling, attorneys etc, the lender “saw the light” and agreed to the release.

CMA
Though the information provided is considered reliable, it is not complete, nor warranted accurate. Always consult your broker or an attorney.

My name is Neil Blumberg, real estate broker and recovering attorney (South Africa), currently residing in Louisville, Kentucky. I specialize in the arcane art of creative finance, and assist my clients buy and sell homes and investment residential and commercial real estate. Member of various real estate organizations including Real Estate Exchangers, recent service on the Greater Louisville Association of Realtors Forms Committee and am currently Chair of the Louisville Chapter of the Real Estate Cyberspace Society.

You can write to me at neil@neil4realty.com, and visit me at http://www.GoldenRuleMetro.com. See my cool cyber tips at http://www.recyber.com/cybertips/neil4realty