Lending Money to family may be the only way to have a purchase close... but there are positives and negatives to doing this-- I think it can truly be a win-win, but do not blindly go into this!! Make sure you know the facts and the law, so that all can be informed and protected...
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Daily Real Estate News | November 29, 2010 | Share
How to Lend to a Family Member
Carrying a mortgage for a family member can be a good investment, but it can also be tricky. Here are a few things to consider.
The lender must be comfortable with the deal. While a 30-year term is a popular bank loan, private lenders are sometimes more comfortable with shorter loan periods like 15 or 20 years. A 30-year term could be made more attractive to the lender by introducing a higher rate of interest at 10-year or 15-year intervals.
Questions to answer before agreeing to make the loan include:
▪ How will the loan be paid off if the borrower dies or is otherwise unable to complete payment or sell the property for enough to pay off the loan?
▪ What happens if the borrower goes into bankruptcy?
▪ What if the borrower fails to make timely payments?
▪ Will the lender require the borrower to escrow the property taxes and insurance?
Also, put the details of the transaction in writing and record it at the local recorder of deeds office so the borrower can’t get another loan on the property or sell the home without paying off the borrower.
Source: Real Estate Matters, Illyce R. Glink and Samuel J. Tankin (11/27/2010)
http://www.realtor.org/RMODaily.nsf/pages/News2010112906?OpenDocument
Monday, November 29, 2010
Bank Owned sales and problems...
Below is from Realtor.com regarding some of the problems with bank-owned homes... I recently had a sale where the bank/asset manager had forgotten to sign a couple of our CAR addendums (we had all agreed to their addendum so the contract could move forward) and because of that the loan funding was threatened (just a delay, but every day counts!)...
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Daily Real Estate News | November 29, 2010 | Share
Foreclosure Mess Leaves Some Buyers in Limbo
An increasing number of buyers of foreclosed homes are finding that they can’t close on the property because the foreclosure — and the sale — is derailed by a problem with the foreclosure paperwork.
“Many of these transactions will probably never close,” said Greg Rokeh, a manager of bank-owned real estate in Longwood, Fla., for Watson Realty Corp.
Rokeh said he has about 25 pending sales that are tied up in the document reviews. He predicts that most of buyers will give up and purchase a different property.
“We understand it is a huge inconvenience to buyers,” Freddie Mac spokesman Brad German said.
Source: Bloomberg, David Henry (11/24/2010)
http://www.realtor.org/RMODaily.nsf/pages/News2010112904?OpenDocument
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Daily Real Estate News | November 29, 2010 | Share
Foreclosure Mess Leaves Some Buyers in Limbo
An increasing number of buyers of foreclosed homes are finding that they can’t close on the property because the foreclosure — and the sale — is derailed by a problem with the foreclosure paperwork.
“Many of these transactions will probably never close,” said Greg Rokeh, a manager of bank-owned real estate in Longwood, Fla., for Watson Realty Corp.
Rokeh said he has about 25 pending sales that are tied up in the document reviews. He predicts that most of buyers will give up and purchase a different property.
“We understand it is a huge inconvenience to buyers,” Freddie Mac spokesman Brad German said.
Source: Bloomberg, David Henry (11/24/2010)
http://www.realtor.org/RMODaily.nsf/pages/News2010112904?OpenDocument
After-Thanksgiving
Hello! I hope your holiday weekend was a smashing success... I certainly have to get back into exercising now, but I think it was worth it :)
So... for the real estate world during the Holidays. Hmm. Quiet in Mendocino County. There was activity, but not much, before Thanksgiving... and a little is stirring today-- Monday-- but I think it will take another day+ to gear back up. However, I do think we shall be seeing activity through the winter, and not for the first time in Mendocino County. In other states, the weather simply prohibits certain real estate (showings/etc) from taking place, but here we see a decline and change-- but still forms of activity. Sometimes properties that are a bit more challenging receive further attention and finally offers-- and some investors are scrambling to exchange before time runs out, which becomes advantageous to a seller...
Other than that, I have seen the interest rate creeping up a bit... and, so, we truly do not know if that was the bottom for the interest rates, or perhaps we shall briefly see them again. If we do, it probably will not be for long. Not that any of us forsee rates going sky-high... but slowly heading back up? Seems natural...
Okay! Back to work. More soon.
-Karena Jolley
So... for the real estate world during the Holidays. Hmm. Quiet in Mendocino County. There was activity, but not much, before Thanksgiving... and a little is stirring today-- Monday-- but I think it will take another day+ to gear back up. However, I do think we shall be seeing activity through the winter, and not for the first time in Mendocino County. In other states, the weather simply prohibits certain real estate (showings/etc) from taking place, but here we see a decline and change-- but still forms of activity. Sometimes properties that are a bit more challenging receive further attention and finally offers-- and some investors are scrambling to exchange before time runs out, which becomes advantageous to a seller...
Other than that, I have seen the interest rate creeping up a bit... and, so, we truly do not know if that was the bottom for the interest rates, or perhaps we shall briefly see them again. If we do, it probably will not be for long. Not that any of us forsee rates going sky-high... but slowly heading back up? Seems natural...
Okay! Back to work. More soon.
-Karena Jolley
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