|
Training for Book Authors
|
|
|
Other Resources for Book Authors & Publishers
|
|
|
Please Support Our Advertisers
|
|
|
|
|
|
Buying And Selling a Home During a Credit Crunch
Copyright (c) 2009-2023 Cory Shrader
As President Obama is taking office, many people who had hoped to buy a home in 2008 or 2009 are stressing as to whether a bank will be found, which will finance a home purchase.
The TARP bill (Troubled Assets Relief Program of 2008) was intended to secure bad assets in our banking institutions, in order to permit banks to open their vaults once again and issue new loans. Four months down the road, banks are still holding onto their cash in a miserly way.
Contrary to most Americans and my fiscally conservative roots, I supported the passage of the TARP bill. I honestly believed that once the federal government secured the bad debt on the books of various banks, the banks would start loaning money again for commercial loans, new car loans and home mortgages.
All around us, businesses are going under because they cannot secure the loans they need to buy inventory or to pay staff during the production cycle.
The automotive industry is suffering for two reasons, one because their cars don't get good enough gas mileage, but more importantly, because consumers cannot get auto loans.
Homeowners who need to sell homes cannot sell, because there is no one around who can get a home loan. Even those individuals with really good credit are having a hard time finding a bank, which will loan on a home purchase today, except in certain small pockets around the country.
For those individuals who have taken a new job in a far-off location, owning a home in two cities is a very daunting situation. But in the current real estate market, the owner of two homes has to consider letting one home fall to foreclosure, because it looks like the current financial crisis could continue for several more years.
The TARP bill passed, money was given to troubled banks, and we taxpayers got screwed. Along with many others - including the likes of Donald Trump - I was wrong. We underestimated the self-serving idiocy of the people who run our banking institutions.
Instead of using TARP money to secure the financial well being of their banks, the banking managers bought competing banks, remodeled their bathrooms, threw extravagant parties and gave themselves huge bonuses!
The credit crunch is still deeply entrenched in the United States and around the world. If TARP was unable to fix the credit crunch, I can only surmise that we will have a long and difficult, economic road in front of us all.
But What If You Need To Sell A Home Now?
Home sellers who need to sell a home now, and homebuyers who want to buy a home now, likely have only one option open to them, during this financial crisis. Interestingly, the option for home sellers and homebuyers is exactly the same - FSBO homes, or in layman-speak, For Sale By Owner homes.
As a home seller, FSBO can seem quite scary, but it shouldn't be scary. As a seller, you have options available to help ensure that your buyer will stick to the path of righteousness.
As a seller, it is important to remember that you have something that someone else wants. And so long as there is someone out there that wants to own your home, you have the leverage to ensure that you will get the terms that you want in the transaction.
If you are wise, you will ALWAYS have your attorney review any paperwork in relationship to the sale of your home.
It must be noted that many mortgages have what is called a "Due On Sale Clause" in the paperwork. In essence, what this means is that your bank or mortgage holder has the "option" to call the mortgage "due in full", when you sign interest in your property to a third-party. It should also be noted that if you sign a Lease With The Option To Buy with a third-party, and you do not tell your bank, then this amounts to fraud and is a federal crime.
With the legal issues on the table and known upfront, we can go to the next step. The "Due On Sale Clause" in your mortgage paperwork is only an "option" that a bank holds in a property, to ensure that they get paid what is owed to them. Basically, that clause is in the mortgage paperwork to ensure that if payment to them stops, then they still have the right to evict the lessee and take over the property.
BUT - and this is very important to realize - just because your mortgage has a "Due On Sale Clause" in it, does not mean that your mortgage holder will not authorize you to do a Lease To Own or FSBO agreement on your home. The Due On Sale Clause is an option that banks have, but banks do not always automatically take advantage of that option.
You have to put yourself in your banker's shoes to understand why they would not force the "Due On Sale Clause" on your mortgage.
If you still owe, let's say $60,000 on your $100,000 home, the bank stands to lose as much as $30 or $40,000 if they have to foreclose your home. When banks foreclose homes, they have to sell the homes as soon as possible at auction. But, homes typically sell at auction for as little as 20 to 40 cents on the dollar. So if you still owe more than 40 cents on the dollar against your original mortgage, chances are that the bank will lose a ton of money, if you force them to foreclose your home.
Banks as a rule - and more so in the current economic crisis - are typically more interested in having the house "paid off in full" than forcing a homeowner into taking more drastic actions, like deciding to let the bank to foreclose on the property. More often than not, the bank will permit the FSBO arrangement, on the condition that they continue to receive all monthly payments on time.
As a result, many banks will permit you to bypass the Due On Sale Clause, if you are willing to speak to them directly about the possibility. But, you have to open your mouth and talk to your banker, and then you need to get all of the legal agreements necessary to protect your interest and the bank's interest in your property.
Talk first to your banker, then talk to your attorney and have the paperwork drawn up on a Lease with Option To Buy or other For Sale By Owner arrangement. With the appropriate permissions gained and the appropriate legally-binding paperwork in hand, you are now set to sell your home FSBO.
In most cases, your buyer will lease your home on yearly renewals, and then the moment they can secure a bank loan of their own, they will buy out the lease, permitting you to escape the mortgage on that home and permitting them to transfer the property into their own name.
Are You Seeking To Buy A Home?
People, who are serious about selling their home now and not holding that home until the financial crisis has ended, have started to get creative about how to sell their homes.
If you see a home listed as For Sale By Owner, chances are that the home seller has already taken the above-described steps to ensure that they will be able to sell their home now.
So, if you have a down payment available and you want to buy a home now, it may be in your best interests to seek out FSBO homes in the area where you wish to buy.
A friend of mine recently bought a quarter million dollar home under a Lease with Option To Buy agreement. Before the financial crisis, he had been waiting to find the perfect home, and in the current economic market, he was able to find the exact home he wanted to buy for the exact money he desired to spend on the purchase of his dream home.
The best thing about the Lease with Option To Buy is that you are only locked into the home for generally one or two years at a time, and if you decide that you would like to secure a home mortgage after the banks have started loaning money again, then you have the option to pay the homeowner the amount of money owed to take full ownership of the home.
We Cannot Afford To Wait Until The Banks Fix Their Mess
With the TARP bill, it was assumed that the banks would take the money from the federal government and fix the broken credit system. Unfortunately, the bankers screwed us and only fixed their personal bank accounts.
So, until the credit system magically fixes itself, we the consumers need to take matters into our own hands and get our own financial houses in order - no pun intended. If we are selling a home, we need to take action to get that home sold. And if we are trying to buy a house, seek out those people who are most motivated to sell you their home - look for that FSBO sign in front of the house or that FSBO ad in the newspaper.
Let us fix our economic system one FSBO at a time, and maybe we will be able to shorten the financial crisis that our politicians seem unable to fix for us.
|
Cory Shrader writes for the Liberty Home Sellers website. If you are ready to buy a home now, and the bank has tightened its credit policies, putting home ownership out of reach for you now, we might be able to help you. We buy and sell homes in north central Oklahoma. We offer owner financing on many of the homes we sell. Be sure to fill out the form on our website, so we can help you find your next family home. Learn more about available Oklahoma homes for sale at: http://www.LibertyHomeSellers.com
|
VOTE ON THIS ARTICLE
Needs Work >>
0 -
1 -
2 -
3 -
4 -
5
<< Excellent Article
Tell our authors what you think about their article.
|
Top-Level Category: Real Estate Articles
10 Most Recent Articles Written by Cory Shrader
Home Financing in a Foreclosure-Heavy Market
Written by: Cory Shrader |
Distributed: 2009-02-24 |
Word Count: 936 |
Page Views: 4068
| Votes: 17 |
Rating: 2.47
Getting a home loan from a bank is becoming more difficult with
each passing day in today's home marketplace. But, what if you
have a good deposit now and you need a home now, not five years
down the line or whenever the housing market picks back up? Do
you have any options? In short, yes.
Understanding The Due On Sale Clause On Your Home Mortgage
Written by: Cory Shrader |
Distributed: 2009-02-04 |
Word Count: 1835 |
Page Views: 7870
| Votes: 25 |
Rating: 3.20
The Due On Sale Clause is among the most frequently misunderstood
and most-feared legal terms in American contractual law. In this
article, we are going to take a look at what it is, what it is
not, and how to avoid violating it.
All of Author's Articles on this site: Cory Shrader Articles
Most Recent "Real Estate" Articles
Amendments to Construction Lien Law in New Jersey
Written by: Steven Nudelman, Esq |
Distributed: 2011-07-25 |
Word Count: 1136 |
Page Views: 5607
| Votes: 5 |
Rating: 0.40
Based on a report issued by the New Jersey Law Revision
Commision, a revision to the Construction Lien Law was
signed by Governor Christie in January, 2011.
Saving Time and Money Working with a Real Estate Buyer's Agent
Written by: Darrell Self |
Distributed: 2010-05-06 |
Word Count: 926 |
Page Views: 3972
| Votes: 6 |
Rating: 0.83
Consumers interested in residential real estate too often
make the mistake of answering a "homes for sale" ad rather
than carefully hiring a buyer's agent to protect their
interests and to help them make the best purchase for their
needs, tastes, and finances.
How To Buy Real Estate in Mexico
Written by: Fernanda Rodriguez |
Distributed: 2009-10-15 |
Word Count: 1059 |
Page Views: 4288
| Votes: 10 |
Rating: 2.50
Buying property in Mexico has become more popular every
year. Whether you would like to purchase a vacation home or
are planning on retiring there, owning real estate in Mexico
is easy and safe. With its incredible natural resources,
rapidly improving economy and modern facilities and
infrastructure, Mexico is the place to make your dream home
a reality. This article will answer most of your questions
about buying real estate in Mexico.
Tips About Vacation Villas In Chianti, Tuscany
Written by: Teresa Cambi |
Distributed: 2009-10-15 |
Word Count: 512 |
Page Views: 3489
| Votes: 8 |
Rating: 2.25
Travelers who enjoy wine, food, beautiful scenery and a
relaxed pace will love Chianti. Not only is the region home
to its namesake wine which is one of the most beloved and
popular wines in the world, but it is also home to some of
the most characteristic farmhouses and villas in Tuscany.
Find The Right Property For Sale In Tuscany
Written by: Alice Migliorini |
Distributed: 2009-10-14 |
Word Count: 529 |
Page Views: 3583
| Votes: 11 |
Rating: 2.36
All the basics as far as real estate are essentially the
same. If you are buying a condo in Miami or a property in
the rolling hills of Tuscany you follow the same road. The
road just meanders a little bit more when you deal with
purchasing a house in Italy rather than the US.
Sarasota Florida: Top Ten Reasons to Visit in 2009
Written by: John C Allen |
Distributed: 2009-08-04 |
Word Count: 877 |
Page Views: 4804
| Votes: 20 |
Rating: 2.30
An abundance of visitors from around the world visit
Sarasota each year to enjoy all of the amenities this small
city on the Gulf Coast of Florida has to offer. Each year,
Sarasota's warm climate attracts "snowbirds" down to the
Sunshine State for its high season from January through
March. Visitors and residents alike enjoy the city's
internationally recognized cultural amenities matching those
of the nation's largest cities. A world-class destination,
Sarasota, Florida has many reasons to live, work and play in
this gorgeous coastal setting.
Longboat Key Florida: How to Make the Most of Your Visit
Written by: John C Allen |
Distributed: 2009-07-30 |
Word Count: 625 |
Page Views: 4870
| Votes: 19 |
Rating: 2.63
Longboat Key Florida is an 11-mile long island that borders
the Gulf of Mexico to its west and the calm waters of
Sarasota Bay on to its east. The 8,000 permanent residents
of Longboat Key live in a variety of residential styles from
condominiums, townhouses, small single-family homes to
luxury waterfront estates. While providing activities such
as beachcombing, walking, swimming and fishing, the Key is
manicured and secluded allowing a relaxing lifestyle.
Longboat Key is known throughout the world for its
outstanding beaches, sweeping water views, excellent dining,
great weather, luxury lifestyles and don't forget the
sensational sunsets.
Lake Toxaway Homes for Sale - Your Dream Home Away From It All
Written by: Alan Nilen |
Distributed: 2009-04-30 |
Word Count: 472 |
Page Views: 3565
| Votes: 6 |
Rating: 3.17
Lake Toxaway NC provides quiet living away from it all, with
natural beauty wherever you look. It's the perfect place to
live, to retire, or just to own that summer home that takes you
away from the hustle of your busy life.
Buying Property In Italy On The Cheap
Written by: Fabrizio Giglioli |
Distributed: 2009-02-24 |
Word Count: 511 |
Page Views: 5066
| Votes: 9 |
Rating: 2.11
An Italian property expert offers invaluable tips on
where to buy the cheapest properties in Tuscany.
Home Financing in a Foreclosure-Heavy Market
Written by: Cory Shrader |
Distributed: 2009-02-24 |
Word Count: 936 |
Page Views: 4068
| Votes: 17 |
Rating: 2.47
Getting a home loan from a bank is becoming more difficult with
each passing day in today's home marketplace. But, what if you
have a good deposit now and you need a home now, not five years
down the line or whenever the housing market picks back up? Do
you have any options? In short, yes.
Most Viewed "Real Estate" Articles
FHA Loans- Affordability Solutions for First Time Homebuyers
Written by: Jared Martin |
Distributed: 2008-06-05 |
Word Count: 1131 |
Page Views: 8904
| Votes: 29 |
Rating: 3.10
This article discusses the features of the FHA loan, both good
and bad, and presents the circumstances under which it’s a
beneficial program to the homebuyer.
Understanding The Due On Sale Clause On Your Home Mortgage
Written by: Cory Shrader |
Distributed: 2009-02-04 |
Word Count: 1835 |
Page Views: 7870
| Votes: 25 |
Rating: 3.20
The Due On Sale Clause is among the most frequently misunderstood
and most-feared legal terms in American contractual law. In this
article, we are going to take a look at what it is, what it is
not, and how to avoid violating it.
Is Downtown Condo Living For You?
Written by: Lynn MacKenzie |
Distributed: 2008-02-22 |
Word Count: 462 |
Page Views: 6256
| Votes: 10 |
Rating: 1.70
In the last year there has been an increase in the number of
buyers moving into downtown condominiums. With the closeness of
amenities and affordable prices it's easy to understand why
buyers want to live in a condo for sale in Calgary. Many buyers
see condo living as an attractive option because of the traffic
congestion nightmares, the longer commuting times and the ever
increasing construction of the Calgary roads.
Residential Builders Need to Re-create the Leave it to Beaver Lifestyle
Written by: Catherine Wilson |
Distributed: 2006-07-31 |
Word Count: 566 |
Page Views: 5985
| Votes: 21 |
Rating: 2.62
Do you ever wonder where the neighborhoods went that held the
picket fences, window boxes brimming with flowers, uniquely
designed houses, sidewalks, canopied streets shaded with 100 year
old oak trees, front porches, swings and homes placed close
enough so that neighbors can be neighbors? In our fast paced,
electronic, motorized world a simpler way of live is one that
many desire.
Finding Irish Castles for Sale
Written by: Patricia G. McKinney-Lins |
Distributed: 2009-01-20 |
Word Count: 635 |
Page Views: 5748
| Votes: 19 |
Rating: 2.11
It is possible to find an Irish castle for sale. If you are
determined, patient, and have the resources, you can buy a castle
in Ireland. If you do the research and are committed to the
project, you can own a very special property!
Amendments to Construction Lien Law in New Jersey
Written by: Steven Nudelman, Esq |
Distributed: 2011-07-25 |
Word Count: 1136 |
Page Views: 5607
| Votes: 5 |
Rating: 0.40
Based on a report issued by the New Jersey Law Revision
Commision, a revision to the Construction Lien Law was
signed by Governor Christie in January, 2011.
Is Renting Better Than Buying, In This Economy?
Written by: Mark Felder |
Distributed: 2006-07-19 |
Word Count: 315 |
Page Views: 5217
| Votes: 10 |
Rating: 1.80
With the real estate market changing dramatically in the past few
years and some regional markets more than doubling in property
value, is it a good time to buy property? Consider the factors:
real estate has increased in value while interest rates have
dropped to record lows.
Ten Questions to Ask Your Realtor When Buying a Home
Written by: Craig Elliott |
Distributed: 2007-10-10 |
Word Count: 619 |
Page Views: 5114
| Votes: 10 |
Rating: 1.50
When buying a home, the questions you ask your realtor are
crucial. Your realtor is assisting you with an important
financial matter, so you need to be sure that the decision is in
your best interest. The following are ten questions you should be
asking as you are working with a realtor or before you hire them
to assist you.
Buying Property In Italy On The Cheap
Written by: Fabrizio Giglioli |
Distributed: 2009-02-24 |
Word Count: 511 |
Page Views: 5066
| Votes: 9 |
Rating: 2.11
An Italian property expert offers invaluable tips on
where to buy the cheapest properties in Tuscany.
Foreclosure Property: Homes Up To 30 Percent Off
Written by: Robert Wade |
Distributed: 2006-09-13 |
Word Count: 329 |
Page Views: 5047
| Votes: 9 |
Rating: 2.22
The key to real estate investing is acquiring property for a low
price and selling or renting for profit.
Highest Ranked "Real Estate" Articles
Why Parties Engage in Real Estate Litigation
Written by: Austen Koberstein |
Distributed: 2007-01-09 |
Word Count: 712 |
Page Views: 4328
| Votes: 8 |
Rating: 3.25
Owning a home is a big part of the American Dream. For many
people, this will be their ultimate investment. Therefore, it is
no wonder that homeowners do not blink twice when it comes to
protecting their most valuable possession. These days, real
estate litigation is to the property owner, what the mamma bear
is to her cub.
Understanding The Due On Sale Clause On Your Home Mortgage
Written by: Cory Shrader |
Distributed: 2009-02-04 |
Word Count: 1835 |
Page Views: 7870
| Votes: 25 |
Rating: 3.20
The Due On Sale Clause is among the most frequently misunderstood
and most-feared legal terms in American contractual law. In this
article, we are going to take a look at what it is, what it is
not, and how to avoid violating it.
Lake Toxaway Homes for Sale - Your Dream Home Away From It All
Written by: Alan Nilen |
Distributed: 2009-04-30 |
Word Count: 472 |
Page Views: 3565
| Votes: 6 |
Rating: 3.17
Lake Toxaway NC provides quiet living away from it all, with
natural beauty wherever you look. It's the perfect place to
live, to retire, or just to own that summer home that takes you
away from the hustle of your busy life.
FHA Loans- Affordability Solutions for First Time Homebuyers
Written by: Jared Martin |
Distributed: 2008-06-05 |
Word Count: 1131 |
Page Views: 8904
| Votes: 29 |
Rating: 3.10
This article discusses the features of the FHA loan, both good
and bad, and presents the circumstances under which it’s a
beneficial program to the homebuyer.
Las Vegas Real Estate: High Stakes or High Gains?
Written by: Mark Felder |
Distributed: 2006-08-09 |
Word Count: 243 |
Page Views: 4065
| Votes: 12 |
Rating: 2.92
Las Vegas Real Estate has certainly become a buyer's market in
recent months, especially for condominiums. Real estate investors
grabbed property at just about any cost during the real estate
boom this past year, boosting prices 137 percent over 2000
levels, states USA Today's Noelle Knox...
Real Estate Investing: Real Estate - The Hidden Investment
Written by: Robert Wade |
Distributed: 2006-07-07 |
Word Count: 303 |
Page Views: 3882
| Votes: 17 |
Rating: 2.88
With REITs and 1031 Exchanges, real estate investing can be
confusing landscape. But It's also a fun and challenging
opportunity. What exactly is it, and why has it made so many
millionaires in this latest boom?
Closing on Your Home
Written by: Clint Wooley |
Distributed: 2007-01-08 |
Word Count: 430 |
Page Views: 4194
| Votes: 18 |
Rating: 2.83
The closing process of purchasing a home can be one of the most
confusing parts. This article is an attempt to help first time
home buyers understand the basics of the process to settle fears
and anxieties about the process.
Longboat Key Florida: How to Make the Most of Your Visit
Written by: John C Allen |
Distributed: 2009-07-30 |
Word Count: 625 |
Page Views: 4870
| Votes: 19 |
Rating: 2.63
Longboat Key Florida is an 11-mile long island that borders
the Gulf of Mexico to its west and the calm waters of
Sarasota Bay on to its east. The 8,000 permanent residents
of Longboat Key live in a variety of residential styles from
condominiums, townhouses, small single-family homes to
luxury waterfront estates. While providing activities such
as beachcombing, walking, swimming and fishing, the Key is
manicured and secluded allowing a relaxing lifestyle.
Longboat Key is known throughout the world for its
outstanding beaches, sweeping water views, excellent dining,
great weather, luxury lifestyles and don't forget the
sensational sunsets.
Residential Builders Need to Re-create the Leave it to Beaver Lifestyle
Written by: Catherine Wilson |
Distributed: 2006-07-31 |
Word Count: 566 |
Page Views: 5985
| Votes: 21 |
Rating: 2.62
Do you ever wonder where the neighborhoods went that held the
picket fences, window boxes brimming with flowers, uniquely
designed houses, sidewalks, canopied streets shaded with 100 year
old oak trees, front porches, swings and homes placed close
enough so that neighbors can be neighbors? In our fast paced,
electronic, motorized world a simpler way of live is one that
many desire.
How You Can Benefit from All The Foreclosures
Written by: Bob Johnston |
Distributed: 2008-11-05 |
Word Count: 957 |
Page Views: 3705
| Votes: 13 |
Rating: 2.54
Foreclosures are at an all time high and people are getting
scared. One look at the markets over the last few weeks will tell
you the tale. Is it possible that a person could actually prosper
in times like these? Are there opportunities in the foreclosure
market that we are missing? It is possible; there have been many
people who started their fortunes during tough economic times.
|
|
|
|
|
|
|
Article Reprint Rights
|
This work is
licensed under a
Creative Commons
License
You are not required to show the creative commons license notice when you reprint this work.
|
|
Article Statistics
|
Word Count: 1580
Total Views: 5636
Article Rating: 2.07 of 5
Votes Cast: 15
More Articles By Author:
Articles On This Website
Last Distribution Date:
2009-01-27 14:00:00
Internal ID: #6536
|
|
|
Home