Archive for November, 2014

Why Invest In a REIT

November 21, 2014

Investment alert:  According to RISmedia, the most significant innovation to hit the residential real estate market in decades occurred in 2012 to little fanfare: A first single family REIT (real estate investment trust) went public. For the first time in history, everyday people can now own shares of the American Housing Market, one share at a time. REITNot since the creation of the 30-year fixed mortgage can so much capital flow into the single family market as will flow into it in the next ten years, via single family REITs.

And what, you may ask, is a REIT? The letters REIT stand for real estate investment trust, which is sometimes called “real estate stock.” Essentially, REITs are corporations that own and manage a portfolio of real estate properties and mortgages. Anyone can buy shares in a publicly traded REIT. They offer the benefits of real estate ownership without the headaches or expense of being a landlord.

Howstuffworks.com advises that investing in income-generating homes can be a great way to increase your net worth. But for many people, investing in real estate is simply out of reach financially. But what if you could pool your resources with other small investors and invest in real estate as a group? REITs (pronounced like “treats”) allow you to do just that.

As well as providing a tax benefits for investors, single family REITs provide a path to homeownership to everyone with a minimum down payment of one share. In this way, it is lowering the barrier to homeownership – to $100.  Imagine if, instead of buying a $200,000 house with 20 percent down, a family opted to lease a $200,000 home and put the $40,000 into the REIT that owns it. They would then own shares in a portfolio of thousands of houses, including their own. Their down payment money would be in houses, including their own, and be completely liquid.

Simply put, real estate investment trusts (REITs) give investors a chance to invest in real estate without the added risk of buying real property.  Single family REITs offer a way for people to get in on the institutional investment of homes for conversion into rental units. The collapsed U.S. housing economy and accumulation of distressed homes has given large-scale investment firms an opportunity to buy in bulk, and now many are looking for public funding through REITsClick here for more info.

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!

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Elia Receives New “Certified Negotiation Expert (CNE®)” Designation

November 18, 2014

Professional negotiation skills are necessary for all real estate agents
in helping home buyers and sellers, especially in the current market

Karen Breen Elia has been awarded the Certified Negotiation Expert (CNE) designation from the Real Estate Negotiation Institute (RENI).  The CNE is earned by real estate professionals after certified negotiation expertsuccessfully completing formal negotiation training over two days.  Agents who receive this certification are among the top agents in the country in negotiation skills.

With professional negotiation skills, agents are able to help clients obtain better results in the sale or purchase of their home.  CNE agents have a higher skill level which enables them to 1) communicate more effectively to uncover desired information, 2) help clients understand their options, 3) work collaboratively with others, and 4) resolve deadlocks.  CNE agents have a thorough understanding of how to negotiate effectively to help achieve their client’s goals.

The Real Estate Negotiation Institute is the leading negotiation training and coaching company in the real estate industry.  Collectively, the Real Estate Negotiation Institute’s instructors have over 300 years of real estate and negotiation experience.  Tom Hayman, the CEO and Co-Founder of the Real Estate Negotiation Institute, asserts:  “Any Buyer or Seller who hires a CNE agent can feel confident they have one of the best trained negotiators in real estate.  They should achieve superior results and have better resolution of all issues when represented by a CNE agent.”

For more information visit http://www.theRENI.com.

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!

4 Tips To Avoid Common First-time Homebuyer Mistakes

November 13, 2014

First-time homebuyers owe it to themselves to do a lot of research about the finances of buying a home. Here are four first-time homebuyer mistakes to avoid.

homebuyer1. Spending the maximum amount on a mortgage a lender will loan.

Lenders often qualify buyers based on incomes and debt-to-income ratios without considering how much the borrowers spend on other budget items.

Financial experts recommend that consumers decide how much they want to spend each month on housing before meeting with a lender. It’s up to you to know your budget and to not just jump at a mortgage amount that a lender says you can afford.

2. Not getting pre-qualified.

This should be the first step toward homeownership. Many first-time homebuyers wait until they are ready to start house hunting before contacting a lender.

Buyers need to get pre-qualified early enough in the process so that they can make changes if they need to or correct errors on their credit report. Some first-time buyers may need to spend up to a year saving more money, increasing their incomes or cleaning up their credit before making an offer on a home.

3. Underestimating the importance your credit score.

While most consumers know it’s important to have a high credit score, not everyone understands how costly a low score can be. Mortgage lending is done with a tier of interest rates and terms based on consumer credit scores. Learn about credit scores the minute you start working. Many websites provide information about how to improve your credit score.

And remember, even after a mortgage approval, you must avoid applying for new credit or taking on new debt, because a second credit check is now often required before settlement.

4. Choosing the wrong mortgage product

Many first-time homebuyers opt for a 30-year fixed-rate mortgage only because it is an industry standard. Alternatives to a 30-year-fixed sometimes make more sense. For example, buyers certain they will be relocated by their companies within five years may find a 5/1 ARM could be a much better mortgage.

Homebuyers eager to build equity in their homes or who are older and want to live mortgage-free in retirement should consider a 15-year fixed-rate loan or even a 10-year mortgage to reach their goals.

Do your homework and don’t jump at a mortgage because it will buy you a bigger home.

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!

Ways To Pay Off Your Mortgage Sooner – And Why

November 7, 2014

According to a DexOne Corporation survey, as reported by CT Power Team, “42% of Americans say that their mortgage is the debt they most want to eliminate.” That is a completely understandable goal when you consider the savings. The important question is “How can I do it?” Here are some examples…

  • mortgageIncrease your monthly mortgage payments simply by adding a fixed amount to your required payments. The easiest way to do this is to use an increase in your income from time to time to increase the amount of your mortgage payment. Doing that does two things for you…
  1. It decreases the amount of principal owed by a larger amount each month.
  2. The following month, after making an increased payment, you pay less interest because of the larger decrease in the principle. The combination of the above two changes results in paying off the mortgage in less time than originally scheduled and you will pay significantly less total interest.
  • Make additional payments on the principle at any time if you can’t increase your regular monthly payment. You can do this anytime you have a little left over at the end of the month, or you get a bonus at the end of the year, or you receive a gift. No matter how much, or how little, you pay extra it will decrease the time it takes to pay off the mortgage. That means you will save interest.
  • Refinance with a shorter-term mortgage if you see the interest rates come down. Just keep in mind that refinancing means spending money on loan closing costs. Only consider this if the interest rates are lowered enough to justify paying closing costs. Otherwise, you can always choose to keep your original mortgage, but increase the monthly payment as outlined above.

Here’s just one example of how paying off early works…

Let’s assume you are paying on a 30-year mortgage for $200,000 at a 5% interest rate. If you pay off the mortgage in 30 years, you will pay $186,512 in interest. If you pay off that same mortgage with even payments over 20 years, you will pay as little as $116,779 in interest. That’s $70,000 that stays in you pocket.

Visit bankrate.com for more in-depth information. Also, use their online mortgage calculator. You will never regret paying off your mortgage sooner then planned.

MAKING A POSITIVE DIFFERENCE IN PEOPLE’S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago’s North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467  Send An Email

We know Chicago Real Estate!  Call us today!