How to Determine the Value of My Home?

Things to consider in valuing your home are, first, how does it compare to like kind homes that have sold recently? Recently meaning within the last three months, I believe six months is too long, in this markets things are changing daily. Is the asking price fair? In other words is in within reason. What value do you place on the advertised features and amenities and the lack thereof. You need to really take a realistic look at your home, understand that the market is not going to be as emotional as you may be pricing.

Zillow home valuation, RealestateABC.com, Reply.com are among a multitude of websites that can help you arrive at a price. They are not exact but should give you a pretty good idea on the price range. If you have time call around .and ask for Real Estate agent's opinion, go to as many open houses as you can in your neighborhood. Stick with similar properties, same look and feel and withing15% on square footage.

Looking at "Comps"
Knowing whether an asking price is realistic will be vital when you're ready to make an offer on a house. Why? Because if the house is priced too high it will never appraise at the negotiated price, so either you put addition funds or the seller must drop the price.

Check with your agent, Zillow.com, propertyshark.com, or other websites to see recent sales of homes in the area that are similar, or comparable, to what you're looking for. It is advisable to print them out and keep these "comps" in your three-ring binder; you'll be referring to them quite a bit. I know it sound like a bit much, but it may save you thousands. I don't think you will ever lose buying in California as long as you hold on to the property; it doesn't make sense to overpay.

Note that "recent sales" means within the last six months in today's market I recommend three months. A sales price from a year ago is useless it has little or no relation to what is going on in your area right now. In fact, most lenders will not accept comps older than three months.

The market's activity also determines how easy or difficult it is to find accurate comps. In a "hot" or busy market, with sales happening all the time, you're likely to have lots of comps to choose from. In a less active market finding reasonable comps becomes harder. Also with properties that don't fit the norm for the neighborhood, over build homes. And if the home you're looking at has special design features, finding a comparable property is harder still. It's also necessary to know what's going on in a given sub-segment. Maybe large, high-end homes are selling like quickly, but owners of smaller houses are staying put. Normally the cookie cutter homes move quicker, three bedroom, two bath, etc.

5 Don'ts In Selling Your Home

Thinking of selling your home? Reviewing the following tips may save you both money and potential headaches.

1. Don't put your home on the market until both you and it are ready. While this may sound obvious, eager sellers often list their home before it is ready to show and before they fully understand the consequences of a sale. Make sure you've done your homework on pricing and have decided on both the listing price and what you wish to net from the sale. You should have already made the decision on selling by owner or with the help of an agent, and you know which firm you will use to help you. You've checked your closing papers or with your mortgage company to see if your loan has a pre-payment penalty, and all of your touch-ups, clean-up, repairs, or improvements are 100% complete.

2. Don't let emotions cloud your decision making process. Once you've decided to sell, the house is no longer your home; it's a commodity you wish to dispose of. When you're too emotionally attached to it, it's difficult to be objective. Remember, buyers aren't trying to offend you with low offers or criticisms of your home; they are looking for the right home for themselves at the lowest possible price. You will probably do the same thing when you look for a replacement. Never counter an offer with, "take it or leave it." Most often, even if they are interested, they'll leave it. Being turned off by a buyer's comment or offer makes it difficult to analyze and make a proper counter offer.

3. Don't price your home at your "must have price." Few buyers will be willing to pay your asking price. Everyone wants to negotiate with the assumption you've added in more than you are willing to take. Give potential buyers the satisfaction of getting a better deal. But, you must be realistic in your initial price. If the market doesn't justify your asking price, you're asking for trouble by pricing it too high. If you truly want to sell your house, you must be flexible. And, don't price it high just to see if you can snare an uneducated buyer. You'll make it more difficult to sell and when you do lower the price later, buyers may wonder if there's a problem with the house.

4. Don't do extensive remodeling prior to sale. Especially don't over-improve for your neighborhood. While there are legitimate repairs or improvements that you may need to make, understand that major renovations rarely recoup their costs. Put your money where it will benefit you the most.

5. Don't try to cover up problems with your home. Most states require sellers to disclose problems-potential or actual-with their homes. Not being honest opens you to a lawsuit after the sale. Consider hiring a home inspector to do a pre-inspection. While you'll have to pay $250-$400 for their services, you'll be aware of potential problem areas and can begin addressing them. Buyers will respect your openness and, though they probably will still want their own inspection, they will be more comfortable knowing that someone has already thoroughly reviewed the home.

In today's tumultuous housing market, sellers must be pro-active. Developing a plan of action and understanding your responsibilities during the process will put you ahead of most sellers. Then, if your home is priced competitively, and marketed aggressively, it will sell.

A Simple Process to Sell Your Houses Fast in Today's Troubled Market

So you've gotten into the real estate market. You found a motivated seller who was really feeling a financial pinch brought on by the economic crisis. They reached the conclusion that their chances of saving their home was next to zero, so they chose to take the consolation prize: to walk away under their own terms with their pride intact and their credit report in better shape than they expected.

Because of your Real Estate investing education you were able to purchase their property with a subject to transaction. Knowing the smart money was on purchasing their property through a land trust, now you're ready for the next step - finding a buyer in today's market. The chances of quickly flipping the property for a profit are relatively low, so what can you do - short of renting it out and playing landlord?

Let me give you a better option.

What if I told you that instead of simply renting the property out for market rent you could find a tenant who might want to buy the property in the future for much more than it's worth now, is willing to give you a substantial "down payment", will pay a premium rental rate, and will agree to pick up most of the maintenance expenses? I don't need to pinch you; you're not dreaming.

Instead, I need to explain how you can step into a real estate investing goldmine. I'm referring to the lease option strategy to real estate riches.

The lease option is two agreements, although a lot of novice investors think it's just one. The first part is a standard rental agreement, while the second part is an option agreement.

The rental agreement lays out the terms of the rental - how much they'll pay each month for the privilege of living in your house. You'll also spell out all of your rules, explain their deposit, etc. It's a simple agreement. Even though you're a Real Estate investor who may just be starting down your personal pathway to prosperity, you've probably seen one of these agreements even if only as a tenant.

Where this Real Estate investing strategy becomes a work of art, though, is by incorporating a second agreement into the transaction: the option agreement. Don't be afraid of the lease option - it's not scary. You don't need to spend thousands of dollars on a worthless piece of paper that says "Bachelor's Degree" to understand lease options; in fact, you'll spend less time over-complicating the concept if you don't have one. Here's how it works:

- Your tenant-buyer pays you an option consideration fee (generically referred to by some people as a "down payment"). The amount is based on your comfort level - and your tenant-buyer's ability to pay, but is generally between $2,000-$10,000. This money will be credited back to the tenant-buyer when they finally decide to purchase the property. If for some reason they decide to walk away from the agreement or can't complete the purchase within the alloted time, they'll lose this fee.
- In exchange for the option fee, the tenant will have the right to buy the property for the amount that you negotiate before they move in. This price is always more than the property is worth today, which guarantees you a nice profit margin when they exercise their option. They'll have a fixed amount of time - usually 12-36 months to exercise that option.
- For every on-time rental payment for the term of the agreement, you'll grant them a rental credit that will also be deducted from their closing costs when they exercise their option.
- Because a lease option is further up the real estate food chain then a simple landlord-tenant relationship, the tenant/buyer will often agree to pay all maintenance expenses less than a certain dollar amount. Anything more than that you'll pay. What this does is help guarantee they'll be proactive in letting you know about problems quickly and it gets you out of midnight plunger patrol calls for clogged toilets.

When the tenant buyer decides to pull the trigger and exercise their option they'll receive credit for the option consideration fee and any rental credits they've earned along the way. If you agreed to a purchase price of $175,000 and the tenant gave you an option fee of $10,000 and they were to pay $1,500 per month with a rent credit $500 per month for three years, they would only need to bring $147,000 to the closing table.

The lease option is a tremendous tool for you to use in establishing yourself as a real estate investor, but it gives you another benefit you can't easily put a price tag on: It gives your tenant the pride of ownership. They have money tied up in their house, so they're going to be much more willing to pay their rent on time and prevent damage from taking place.

Recent market changes have shaken up the way the lease option works. Knowing this will keep you from making a mistake that could potentially strike a devastating blow to your transaction: lenders have added what are called "seasoning rules" to real estate transactions. All this means is that they're stating how long they want the house owned by a party before they'll approve a loan on that property. This is generally 12 months; since most tenant buyers won't exercise their option within the first 12 months anyway, it's a moot point. However, since you've purchased the property yourself with a subject to transaction and you placed the property in a land trust, you're covered regardless.

So get your real estate investing career off on the right foot by using the lease option in conjunction with a subject to transaction to quickly shove yourself down the pathway towards prosperity. You're gaining a valuable education in real estate; take your profits and invest them in your future by buying even more property creatively. The real estate world is your oyster; let your profit potential increase your drive to prosper in 2009!