You heard it here first, or maybe you didn't. I just found out about a site that will allow you to create your own font that, theoretically, will look like your own handwriting! As a Realtor, I think it would be great to have my own font so I could type out an address on an envelope and have it look like I wrote it longhand.
(Marketing studies show people open envelopes addressed personally much more often than they do those that are not. They also will open envelopes written with blue ink more often than other colors too. That may be more than you care to know about how far marketing people will go to increase their chances to get their envelopes opened, but the lure of making money does light the fire pretty well. In fact, I saved an article from somewhere about the 13 fallacies about marketing envelopes on my desktop. As a marketer, I actually found it very interesting! If you think you will too, email me and I’ll send it to you.)
I see a big problem with this idea: if you look carefully at all the "handwriting" fonts out there, you will see that the letters are crafted so that they join up when they are next to each other. I don't know about you, but my writing surely doesn't do that. Not in any way, shape, or form.
But if that doesn't deter you, here's the link: http://www.fontifier.com/signature.html
You download their form, write your letters in the boxes, upload the form, and you can preview the font before you buy it. If you like it, you hand over all of $9.00 and you can download it for your own use.
They just introduced a cool feature, though, that I might take advantage of: instead of uploading letters, you can upload your signature, pictures, sayings, greetings, or anything else you might like to add to an email, memo, or whatever to make it look more personal or folksy.
Now that’s cool. You can do the same thing, by the way, if you have a notebook computer that allows you to write on it and assorted software to create a jpeg, which is what I’ve done for my own signature, but if you don’t have the notebook and the Adobe Acrobat and Photoshop or whatever, for nine bucks you can’t beat it.
I get no profit from recommending this site, by the way.
Time to cover another important number, but first a regression to yesterday's topic.
As I said in part two of this series on contracts for deed, as the Seller of some fine Mankato real estate, I wouldn’t go for anything but a standard 30 year amortization schedule with a two or three year balloon unless there were special circumstances. But that doesn’t mean you, as the Buyer, shouldn’t make the attempt to negotiate the terms. There are no rules that state that a contract for deed needs to be written this way or that way. The thing about contracts is that they basically commit to paper what two people or two parties have agreed about. It’s conceivable you could buy a home on a contract and have the entire amount of your monthly payment go towards the house and not pay any interest at all! It would probably take some serious convincing on your part, or you might just be in the right place at the right time to find someone who is feeling extremely generous to buy from, or maybe you’ll buy from someone who should have spoken to their lawyer or financial planner before agreeing to your terms. But that is life. If you get a good deal, I’m not the one to say you shouldn’t take it. You have to be able to sleep at night, though, so think it through.
Now, having said that, we can get on to the topic at hand: the interest rate on your loan.
We’ll now assume that you, as the Buyer, will be paying me, the Seller, according to a 30 year amortization schedule with a three year balloon payment at the end. I want the interest rate on my loan to you to be higher than the going rates for a regular bank loan for a couple of reasons:
· I’m not a bank, and I don’t have systems set up to deal with losses associated with problem properties. I just have me and my bank account. That means that I will want to see more cash flow to allow me to protect myself if you should begin, for whatever reason, to stop paying your monthly payment. Banks have lots of money; I don’t, so I want to have more in case of emergencies.
· If you’re paying a comparatively high interest rate to me, it will encourage you to refinance with a bank or other lender to pay a lower interest rate. And when you do, I’ll be out of the deal.
Normally, I will want you to pay anywhere up to 3% more on our contract. (But that’s negotiable. Sound familiar?) You talk me down and we agree on 7.25%.
Next time: Down payments.
Before we get to the actual balloon payment, I want to talk about amortization schedules. In my contract with you, I’m going to insist on a regular amortization the way a bank would. None of that “Every $800 payment will be $200 towards the house and $600 interest”* stuff for me. That works out for you as the Buyer much better than a regular amortization schedule would, so I’m not going for it. Besides, regular amortization schedules are standard for contracts for deeds. With every payment you make the amount of principal paid will go up while the amount of interest will go down. (This is a link to my favorite amortization calculator, and you can use it to see how amortization works if you’re not already familiar with the concept.)
[*However, if I was in your position as the Buyer, I’d definitely suggest that kind of payment arrangement to the Seller! Worth a shot.]
So what is a balloon payment, anyway? A balloon payment is a single payment when all the rest of the money owed on the contract is owed all at once. Yep, every penny.
So the date the balloon payment is due becomes a major deadline for you. By the time the balloon payment gets here, two or three years from now (or whatever length of time we agreed on) you will have to get your hands on a large enough amount of money to pay me off. Usually, the only way to do that is to refinance your home loan, typically with a bank or other commercial lender. So between now and then you had better be working on getting your credit situation in order! That’s actually one of two main reasons to sell on a contract for deed:
· you get some time to fix whatever credit problems you might have so you can get a regular mortgage with a regular bank, and
· it’s easier to refinance your home (the house you are buying from me is your house, just like anyone else who buys a house with regular financing) once you own it and have made payments for a while than it is to finance it in the first place.
So if you’re careful with your credit you should be able to refinance when the time comes. If you can’t, you are in danger of losing the house altogether, but that’s a subject for another time.
Any questions on balloon payments?
Next up: your interest rate.
In Minnesota, contracts for deed are called contracts for deed, obviously, but elsewhere they might be called land contracts or installment sale contracts.
So, your credit isn't the greatest, and you've heard a contract for deed might be a good idea, but you don't really know what they're about. To illustrate, let’s pretend you will be buying my house on a contract for deed.
Instead of you having a loan with a bank, I will be your banker instead. Why would I do that? First, I want to sell this house that you want to buy. That’s a good thing. The down side is that your credit is bad enough that you can’t get a loan from a bank. So that means if I want to sell you my house, I have to provide the financing for you until you can get a loan from a bank. Usually there will be a balloon payment in two, three, four or five years, although it could be anything. I could even give you a contract that lasts thirty years, just like a regular bank, although I wouldn’t. I need to have you out of my life long before that. Nothing personal, it’s just that I’m not a bank, and I don’t want to be. That’s why there will be a balloon payment when you buy from me.
Next: the balloon payment.
Last time we checked, our hero had spent time, money and energy on his real estate website, www.MankatoHomesOnline.com , but really, there was little chance for a new website of getting out from the shadow of Mankato real estate's electronic Goliath of a website run by one of the largest brokers around. Most search phrases you might think of to search for a Mankato home for sale generate results with the Goliath site organically in first place, on many of the major search engines. Dang. What to do?
Contacted by a company that works with Google, our hero paid to have his site show up on the first page as a sponsored ad site for some of the most common search phrases a buyer might use if looking for Mankato real estate. This helped, as the ad appeared 24/7, and wasn't pay per click, thank God, because if it was, as soon as I ran out of money, my ad would stop appearing.
Time passed, and our hero bided his timei, updating pages, creating more unique content, and getting rid of the pages that repeat content from other sites. Slowly, slowly, search results became more impressive.
Finally, one day, the premier search phrase "Mankato real estate" brought first page results on Google. That had been a goal for a long, long, time, as the Little Website That Could was always just around the corner in eleventh or twelfth place. More time has gone by, and now the site pulls a solid 7th place, and always on the first page. Better results on different engines and different phrases, generally, and we beat the Goliath site hands down for some phrases. No more sponsored ad costs. Not for this site anyway!
There's still more work to do to keep improving search results, but getting listings in front of buyers looking for Mankato homes and Mankato real estate, always the hardest job of a listing agent, is now a reality. And this story doesn't even mention Realtor.com and associated websites...
Call if you have questions or want to talk internet marketing.
Jim Scheller
www.MankatoHomesOnline.com
Google. The very name strikes fear into the hearts of men. In the world of search engines, Google rules.
Of course, there are lesser perils, and many of them, but none can compare to the utter might and terrible magnificence of Google.
So, how to tame the beast? Well, when it comes to real estate web pages, quite a bit, it turns out. I've had my site, www.MankatoHomesOnline.com, and running for a few years, and am only now finding that I consistently come up on the first search results page on Google (and several other engines) for search terms I think are important.
I started with a template site. That means the whole site is initially exactly like everyone else's sites, with the same content, same pictures, same everything. So the first thing is to put unique content onto your site. Using the WYSIWYG (What You See Is What You Get) editor, I changed much of the universal content page to my own, cutting stuff here and adding more ther. That was a start. Next I created my own content pages describing the different towns and neighborhoods in and around Mankato.
Why? To bring Mankato home buyers and Mankato home sellers closer together.
(To be continued.)
The other day I decided that winter was over. (Just after we had the last cold front move out, that is.) Now we're seeing sixty degree days and a nice south wind to dry things out. It won't be long before the farmers can get out into their fields. Life is good.
Along with the temperature, it seems buyers' collective interest is heating up. We've had lots of people come to open houses, and I've had buyers call me to look at places they've been eyeing for a while online. One set even coming from California! (Don't you love the internets?)
So, what does that mean for you?
If you're a buyer, get out there NOW, because there are a lot of you starting to look at Mankato real estate. Real estate outside Mankato, too. (Check out my $5,000 Buyer Savings Guarantee.)
If you're a seller, you might want to put your home on the market sooner than later to catch some of this springtime enthusiasm. Buyers love real estate in the spring. (Don't forget, I have an Easy-Exit Listing Agreement, and some of the best online marketing around.)
And this morning I saw my first robin! But the person I was showing a house to told me that, actually, robins don’t really go anywhere during the winter, that they just hang out in sloughs with lots of tall grass. He said he sees them in his backyard all winter long.
I guess I’m not sure what I think about that. Robins heralding spring is pretty traditional, after all.
Maybe I’ll google <robins in winter> and see what I can find out. I’ll let you know.
When it comes to the price attached to a home for sale, buyers and sellers are looking for opposite things. Sellers want to sell their home for as much money as possible. Buyers want to pay as little as possible for their new home. Who wins? It depends on the state of the market: how many homes are available, and how many buyers are looking? Market saturation is the term relating those two numbers.
An average market is considered to be one in which there are roughly three to six months worth of homes on the market. That means that if no more homes came on the market, it would take three to six months for the Buyers who are looking to buy all the homes available. The market saturation is three to six months.
Much less than that and you have a Seller's market, in which Sellers generally have more say in a home's sale price than Buyers. An example of an extreme Seller's market was in the early 2000's, when homes in some parts of the country (including some in the Twin Cities) sold so quickly that in some cases a Seller had multiple offers before their home hit the MLS. At that time the market saturation was probably three weeks or less.
Let's talk Mankato real estate now. The Mankato/North Mankato real estate market is about as far from a Seller's market as it can be. At the moment we have a little over 12 months worth of inventory on our hands. This is a serious Buyer's market, and looks to stay that way for a while.
Happily spring is on the way, and we should see more closings in the coming months than we saw in the last few. That will help with our numbers.
If you want to take advantage, give me a call.
Jim Scheller
www.MankatoHomesOnline.com
Spring is coming, and now is the time to give you home's chances of selling a shot in the arm.
A study done recently by the University of Michigan showed that increasing a home's "Curb Appeal" increased home value by anywhere from six to eleven percent! That's huge.
Here's a good way to look at it: Let's say you have home you're thinking of selling, and it's worth $200,000 in today's market. You know the yard and the front of the house could look better, but you never knew it could mean so much to your pocketbook. You call me up, I give you a couple of ideas and the names of good contractors, and you find you'd need to spend $10,000 to get this work done (assuming you don't do any of the work yourself to save even more) and make the home look absolutely tops from the street. (And on the web, where this can be your home's biggest draw.)
Is it worth it? If you just increased your home's value by the six percent minimum, that's in increase in the eventual sales price of $12,000, meaning you picked up $2,000. If you top out at the eleven percent maximum, you gained an extra $22,000 in sales price, netting you an extra $12,000. So if you stand to make $2,000 at worst, and pick up $12,000 at best, why wouldn't you?
And here's another point: if you do nothing, your home may sell quickly or it might not, no matter how much you market it. In this kind of market, it's not unusual for a home owner to have to take a price cut eventually, sometimes for much more than $10,000. Doesn't it make more sense, now that warmer weather is coming, to spend some money now instead of taking a price cut (or two or three) after the home's been on the market for a few months?
You decide to give it a shot: you bite the bullet, but you don't want to go crazy. You decide to spend $7,500. Your home still looks a ton better than it did before, and I capture that in my photos and video of you home (which I put on youTube and link everywhere...). Because of this, even though you increased the list price from $199,900 to $219,900, your home sells within 30 days for $209,000.
You didn't quite make the six percent threshold, but you did clear $1,500 more than you spent on the upgrade, and your Mankato home sold quickly to boot!
I'd say it's worth it. BUT, you need to take advantage of good marketing to make it happen; if Buyers don't see your home, it will have been a waste of time and money. That's where I come in. I make sure Mankato Buyers see your home, and lots of them.
Call today to find out about my extensive web marketing reach. And think about upgrading your home's curb appeal! It can pay off.
Jim Scheller
Nu Star Realty
www.MankatoHomesOnline.com
Dang. I thought it was going to be anyone who bought a personal residence that would benefit from the tax credit that recently passed as a part of the stimulus package. That was something the NAR was lobbying for. Unfortunately, the $8,000 tax credit only applies to "first-time homeowners".
However, did you know that you can qualify as a first-time homeowner even if you've owned a home before? All you need to have done is to NOT have owned a home for the last three years. So if you're been thinking this might be a good time to buy a Mankato home and get your own piece of the American dream, this year is the year to do it.
With this kind of incentive in place, I expect to see sales pick up quite a bit. If it was me, I'd start looking sooner than later so you can still pick from the cream of the crop.
Call, email, text, Facebook, or tweet me for more information, to receive listings, get lender recommendations (there are first-time homebuyer programs out there too), or to go looking for your Mankato home.
And don't forget, I have a Buyer's $5,000 Savings Guarantee. And a Mankato MLS Map Search. Check them out.
Jim Scheller
www.MankatoHomesOnline.com
Here's a chart (provided by the National Association of Realtors) which describes the program changes in comparison with the previous version passed in 2008 legislation:
FIRST-TIME HOMEBUYER TAX CREDIT
As Modified in the American Recovery and Reinvestment Act
Major Modifications Italicized
February 2009 FEATURE | CREDIT AS CREATED JULY 2008 APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008 | REVISED CREDIT – EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009 |
Amount of Credit | Lesser of 10 percent of cost of home or $7500 | Maximum credit amount increased to $8000 |
Eligible Property | Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence. | No change All principal residences eligible. |
Refundable | Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser. | No change Purchasers will continue to receive refund for unused amount when tax return is filed. |
Income Limit | Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000). | No change Same income limits continue to apply. |
First-time Homebuyer Only | Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase. | No change Still available for first-time purchasers only. Three-year rule continues to apply. |
Revenue Bond Financing | No credit allowed if home financed with state/local bond funding. | Purchasers who utilize revenue bond financing can use credit. |
Repayment | Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing. | No repayment for purchases on or after January 1, 2009 and before December 1, 2009 |
Recapture | If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale. | If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009. |
Termination | July 1, 2009 (But note program changes for 2009) | December 1, 2009 |
Effective Date | Purchases on or after April 9, 2008 and before January 1, 2009. Repayment to begin for 2010 tax year. | All revisions are effective as of January 1, 2009 |
The provisions of the new stimulus package have been ironed out and the bill is now awaiting President Obama's signature. If you buy a Mankato home (or a St. Peter home, or a Madison Lake home...you get the idea) sometime in 2009, here's how it will effect you:
You will be eligible for a tax credit equal to 10% of the value of your home purchase, up to a maximum of $8,000. Unlike the 2008 housing bill this tax credit will not be repayable. So that means that you will get a direct reduction of the actual amount of tax you owe of your eligible tax credit, and if you have any left over, you will receive a check for that amount from the government.
Here's an example. You are just starting to look around, but this whole tax credit thing sounds good. You like the area so Mankato real estate is what you decide you're after. You decide you like the Mankato MLS Map Search on my site, so you go to www.MankatoHomesOnline.com and look around a bit for a three-bedroom home. You decide you could use one for you and your spouse, one for the girls, and one for your home office.
You find a few likely candidates, give me a call, we figure out your status with your lender, and go out looking. Together we find just the Mankato house for you and we put in an offer. After a bit of negotiating, we come to a price and terms amenable to all the Principals involved.
The inspection and appraisal both come back okay, and you close on your new home successfully in the next month or two. Time to unpack! You love your house and your new neighborhood, the months fly by, and sooner than you can say "Jack Frost" it's Christmas. Then tax time. You breathe a sigh of relief, because the Mankato house you bought in 2009 is going to make this a very good spring indeed.
You take your taxes to your tax person, or you buy some software, or you just sit down and crunch your numbers. Turns out your tax liability is $5,200 dollars for 2009.
However, and this is a big however, you paid $179,000 for your new Mankato house (which you thought was a steal), and your income is not high enough for the reduced eligibility to kick in, so you qualify for the entire $8,000 tax credit.
The money your employer took from your paychecks for Federal taxes totalled $4,800, so the net amount you would have owed to the IRS if you had not bought your new home would have been $400 ($5,200 - $4,800). Instead, the government writes you a check for $7,600. Not taxable, not anything. Spend it (as the President would have you do), save it, or put it against your credit cards. Whatever.
The point is, you can do anything you want with this money. And you can only get it if you buy a home in 2009.
Give me a call.
Jim Scheller
www.MankatoHomesOnline.com
Keep your fingers crossed; there may be a pretty decent tax break coming for home buyers. In their version of the new stimulus package, the Senate has included a tax break worth 10% of the price of the home they buy (up to $15,000) for all home buyers who will live in their home for two years. Get that bill through committee and onto Obama's desk!
Good news! You can now search the Mankato MLS with a map function at my site: www.MankatoHomesOnline.com. You can pick a price range, or any other search criterion, and only those houses that match will show on the map. So you can see where they are, and get a picture of the home just by rolling the mouse over the little balloon.
It's fun and informative, and my site is the only place in Mankato you can find it. Try it out today. And tell your friends!
Jim Scheller
www.MankatoHomesOnline.com
jim@MankatoHomesOnline.com
Soon (maybe as early as today), you'll be able to come here and search the local MLS with a map-based interface. You can see all the homes available, or all the homes in a price range, or even all the three bedroom homes in a price range, for example.
www.MankatoHomesOnline.com is the only local site with this capacity, so I hope you BOOKMARK THE SITE once you find out how useful it can be.
One more service provided by yours truly, Jim Scheller, your friendly neighborhood Realtor. 
Jim Scheller
www.MankatoHomesOnline.com
Okay, my recent blog on pricing notwithstanding, if you want to sell your home for the most money as quickly as possible, you need to get it in front of the right buyers. Namely, those buyers who will be interested in your home.
Not many Realtors appreciate the subtlety of that statement. Sign it up, put it on the MLS, throw up a sign and a lockbox, and wait.
I don't do that. I can't go into much detail here, or every Realtor worth his or her salt will start copying me, and what kind of unique selling proposition does that leave me with? Suffice it to say I have a much more involved system to get your home in front of the right buyers.
Give me a call, and I'll be happy to share.
Jim Scheller
www.MankatoHomesOnline.com