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July 17th, 2007 3:39 PM by Ron Mastrodonato

6 Incentives to Attract Buyers to Your Listings
Flashy buyer incentives — such as a new TV or car — may entice some buyers, but bottom line perks are more likely to close a sale, say experienced real estate professionals.

Here are the six most common buyer incentives in today's market:

1. Reduce the price. "The price is something that is a common currency it appeals to everybody," says Gene Rivers, who owns four Keller Williams offices in Florida.

2. Pay points. One point is 1 percent of the loan amount, charged as prepaid interest. Sellers can pay these points on behalf of the buyer, so for the first year or two, the buyer has a lower mortgage payment.

3. Assist with the down payment. First-time buyers without enough money for a down payment appreciate this kind of assistance.

4. Pay closing costs. Closing costs generally add up to somewhere between 2 percent and 7 percent of the loan value, according to Freddie Mac. Buyers who are stretching to make a down payment like this type of help.

5. Add a home warranty. A residential service contract is some insurance that the buyer won’t encounter high repair costs in the first year or two of home ownership.

6. Pay home owner association fees or pool maintenance. Paying these kinds of predictable maintenance costs at the beginning can be a nice welcome to the buyer when money will be tight.

Source: MarketWatch, Amy Hoak (07/15/07)

 

Fed Feels Pressure to Prevent Unfair Lending
Lawmakers particularly House Financial Services Committee Chairman Barney Frank, D-Mass. are demanding the Federal Reserve exert its authority over the lending practices of 7,000-plus national banks and the entire mortgage industry.

The Federal Reserve has the power to prohibit unfair and deceptive practices, but it has been hesitant to do so in recent years because it did not want to hinder the development of innovative lending products, experts say. Frank expects the central bank to take aggressive action by the fall, or he will call for its authority to be transferred to other federal watchdogs.

Meanwhile, in response to criticism from Senate Banking Committee Chairman Christopher Dodd, D-Conn., Fed Chairman Ben Bernanke went from saying in May that the central bank has "authority" over lending practices to announcing in June that it "has the responsibility" to outlaw certain unscrupulous practices.

Although it remains to be seen what action the central bank will take, consumer groups and Democrats want it to focus on prepayment penalties imposed on borrowers who are refinancing out of adjustable-rate mortgages, among other practices.

Source: The Wall Street Journal, Damian Paletta (07/17/07)

© Copyright 2007 Information Inc

 

Investors Eye Mobile Homes to Boost Profits
Some real estate investors are starting small these days by buying a single mobile home and renting it out.

Selling mobile homes is an economically sensitive business, says Doug Ottersburg, a New Mexico investor. “When times are good, it's a good business. When people think times are getting bad, it's a great business,” he says.

Seller financing is key to the business. Many successful mobile home entrepreneurs operate like a bank, holding a portfolio of home buyer loans that yield multiple streams of income. But when buyers don’t pay, the seller must repossess the property, which can be a headache.

Robert Raskin, owner of Mountain High Homes Inc., flips mobile homes with minimal improvements. He has purchased mobile homes from $3,000-18,000 and hopes to get double or triple the price he paid when he goes to sell, which is made possible by financing the purchase.

Scott Van Ramshorst started buying individual mobile homes five years ago. Now he owns four mobile-home parks in four states with a total of 300 homes.

Ottersburg, author of a set of training material called Secrets of a Mobile Home Millionaire, says thanks to mobile homes, his net worth is “a good seven figures.”

Source: Denver Post, Tom LaRocque (07/15/07)

Posted in:General
Posted by Ron Mastrodonato on July 17th, 2007 3:39 PM

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