Things You Should Know About Pocket Listings

June 26, 2012

Pocket listings have become more popular in recent months.  Many home buyers are not familiar with the term, but if they are looking for a home in the near future they may hear it.  A pocket listing refers to an off-market listing that the realtor doesn’t advertise or place online.  These listings are usually held for specific clients who the realtor feels would be best suited for the property.  Although the seller has signed a listing agreement with a realtor, the property isn’t officially listed in the MLS.  Other methods of advertising are also not used.

Pocket listings are growing in popularity among sellers.  Because of the problematic state of the real estate market, pocket listings are being used more often now than in previous years.  This method of selling is perfect for sellers who are determined to the sale price they want.  In today’s real estate market, it has become more difficult for sellers to receive their full asking price.  By using a pocket listing, sellers will not be pressured by how long their house sits; these sellers are only selling their home if their price is met. 

By using the pocket listing method, sellers and their agents are allowed to test the market without officially listing their home on the MLS.  Sellers can see how the asking price is accepted among buyers and can also help them determine if the price may be too high.  The agent is able to spread the word about the home’s availability using different marketing techniques except the MLS.  Agents may opt to hold a small open house or offer private tours.  These steps will help spread the word that the home is available to other agents. 

In some cities websites have been developed to showcase pocket listings.  These websites provide other agents with information on the property and any upcoming viewings.  This method of selling homes has gone from a way to spread the word about homes available to a secondary market of available homes for sale among well-connected real estate agents.  It is still to be determined whether this method will become the norm in some markets or if it will fade away once the market improves.

If you’re a seller interested in testing the market then perhaps a pocket listing is right for you.  There is no time limit; you can test the market for one to two weeks to determine if your home will sell for the asking price.  If during the time you have it listed, you may find someone who feels that your price is reasonable and is willing to make you an offer.  In today’s market you never know what is possible until you try.

Home Financing Programs for Low Income Families

June 18, 2012

For many families, owning a home is a dream that appears to be far out of reach. Thanks to a variety of programs, low income families can achieve the dream of owning their own home. The United States Department of Agriculture (USDA), the Federal Housing Administration (FHA), and many states all offer programs that are designed to help low income families own their own homes.


The USDA backs two different types of loans for low income families. Applicants must be unable to get credit through any other source. Family income cannot exceed 60 percent of the area’s average income. All applicants must have a reasonable credit history and need to be able to prove that they can afford their monthly mortgage payments. Guaranteed loans can be used to buy, repair, or build a home. Direct loans are available for very low income families to build or buy a home and do not require a down payment. Both of these loan programs have 30-38 year terms and some families are eligible for a payment subsidy to help with the costs of owning a home.


The FHA offers government backed home loans that make it easier for first time home buyers to buy their own home. FHA loans require low closing costs and low down payments. Most of the fees associated with buying a home as well as the closing costs can be included in the loan so not as much money is required once the transaction is completed. FHA loans are considered to have more lenient credit requirements but this can vary depending on the lender. These loans can be used to buy a regular single family home, mobile homes, or manufactured homes. FHA loans can also be used by families who want to buy a home that is considered to be a fixer upper. The costs of buying the home and repairing it can all be included in the loan. These kinds of loans are also available to make a home more energy efficient.


State programs can help low income families buy a home. Most of these programs are designed for first time home buyers but some states allow those who are buying a second home to receive help. What help is available for home buyers varies from state to state. Some states offer programs that help with the costs of the down payment only while other states have both low interest loan programs and programs for help with down payments. Many state programs require counseling so that home buyers will fully understand the responsibilities of owning a home. These programs often have less strenuous credit requirements but applicants will need to demonstrate payment history for rent or utilities if no credit history is available.

Will Rising Rent Rates Mean More Property Purchases

June 11, 2012

As the demand for rental properties increases, so does rent in many parts of the United States. As this occurs, the cost of buying a home is decreasing, thus making renting seem like a more viable option.


More and more people are choosing to rent apartments and other types of property, but the supply is actually going down. This is a direct result of the demand, but it has presented a few problems for those looking to rent. It has also made it easier for property owners who lease units to be choosier about who rents from them.


Over the past couple of years, the number of foreclosures has risen, making it necessary for people to rent homes. It’s also easier to just pay monthly rent instead of a mortgage payment, taxes, and property insurance. Then there are all the maintenance fees associated with owning a house that can take a toll on the finances over time. The decline in house prices, however, has made many people take another look at what they are paying and begin reconsidering their options.


For some, renting is absolutely necessary. Those who are unable to make a down payment on a home will wind up paying more each month. Likewise, the bigger the down payment, the less paid monthly. The problem is many people aren’t able to save for that down payment in the current economy. Rent costs aren’t declining and it can be tough to find the right home or apartment at a reasonable rate.


According to current predictions, the trend of more demand and less supply where rental properties are concerned is expected to continue over the next five years. Add to that the rise in rent costs that is sure to occur, and more and more people may decide to buy again.


Whether or not rising rent rates will cause an increase in home purchases will depend on a number of factors. While job opportunities are expected to increase, this doesn’t mean all those who have been laid off won’t have difficulty finding work. Those who are unable to find work, or who will be forced to accept salaries lower than what they previously earned will most likely find it impossible to save up for the down payment and other associated house buying costs.


Those who are able to make enough to begin saving for the purchase of a home will most likely begin planning for this in the very near future. This is, in great part, because as renters, they are not receiving any return on their investments. 

Tips for Buying Your Vacation Home

June 4, 2012

You have finally made it. You are in the position to buy a second home for leisure and recreation. Now you are ready to purchase that home and get started enjoying your vacations more than ever before. However, buying a vacation home is a bit different than buying your first residence. Learn all you can about buying second homes before you even start looking.


The location of a vacation home will almost always be quite different from your first home’s location. Convenience is still important to a certain extent. You may want to be as far from civilization as possible. Do not go too far, though. Kiplinger suggests you stay within 3 hours driving time of a major city and stay away from areas where the roads are extremely rough.

Steady Use

Until you get ready to retire to your second home, there may be large blocks of time when you are away from your vacation home. There are several reasons to keep the home in use during the time you spend at your first home. It is a good way to keep vandalism down, bring in extra income and or take advantage of tax breaks. Kiplinger explains tax issues such as claiming depreciation of a vacation home you rent out.


Although you may be focused on fun and enjoyment when buying a vacation home, it should also be considered an investment. That is why you need to get a home someone else would want. CNN Money discusses why you need to choose a vacation home that can be rented out, even if you do not plan to do so yourself. The next person you sell it to may want that advantage. A rentable property is easier to sell if you ever need to sell it.


Financing a vacation home is also different from financing a primary residence. According to Kiplinger, bankers once thought second homes were too risky to finance, at least at a low rate of interest.  As long as you stay within the correct ratio of income to debt, there may be no difference at all. However, staying within that ratio may be hard with two mortgages. Many people will pay cash for the second home by tapping into a home equity line of credit, especially if the vacation home is not extremely expensive.

A vacation home is a wonderful place to relax and enjoy your downtime from work. Sometimes it is great to get away from the busy life you lead in your primary home. Yet a second home is more than a getaway. It is also an investment and a responsibility. It just makes sense to make wise choices when you get ready to buy.

Kiplinger: Buying a Vacation Home

CNN Money: 5 Things to Know About Buying a Vacation Home