Working with Suze Orman and Where is the Market Headed?

Two weeks ago, I was fortunate enough lecture LIVE with Suze Orman at the Road to Person Wealth Conference at Kean University in New Jersey. It was fantastic group of attendees. All wonderful people with lots of questions about what to do in today’s volatile Real Estate Market.ImageBoth Suze Orman and I gave 1 hour lectures. Afterwards we each signed copies of our books. Suze is amazing, and refused to leave until she had a chance to either sign a book or connect personally with each and every person waiting in line.

 The big question at the conference was: What is happening in the market and where is it headed the next few years? I connected with Suze on this as well, and we are in pretty close agreement. So -  Here’s my ball park projection. 

We are looking at 3 more years of nationally overall flat markets. But it’s all about location…So – some markets especially the Sand states (FL, NV, AZ) MI, and WI are going to see more softening as the rest of the foreclosures hit the market and inventories are still high. However, some markets – metropolitan and higher end markets are starting to price stabilize. Stabilize does NOT mean big appreciation – it means less decline, no more decline, and some pockets of small appreciation.

After the 3 years, we should start to see some slow normal value appreciation. Thus, it may be a full ten years before we are back to a National healthily market.

Will home prices hit their price peaks from the frenzy back in 2006 – 2007?  Not for a very long time, as there are now hopefully many more safeguards in place to prevent that kind of artificial run up.

For more information, tips and real estate advise or to order one of my books, please go to my website www.MichaelCorbett.com

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Working with Suze Orman and Where is the Market Headed?

ImageTwo weeks ago, I was fortunate enough lecture LIVE with Suze Orman at the Road to Person Wealth Conference at Kean University in New Jersey. It was fantastic group of attendees. All wonderful people with lots of questions about what to do in today’s volatile Real Estate Market.

Both Suze Orman and I gave 1 hour lectures. Afterwards we each signed copies of our books. Suze is amazing, and refused to leave until she had a chance to either sign a book or connect personally with each and every person waiting in line.

 The big question at the conference was: What is happening in the market and where is it headed the next few years? I connected with Suze on this as well, and we are in pretty close agreement. So -  Here’s my ball park projection. 

We are looking at 3 more years of nationally overall flat markets. But it’s all about location…

So – some markets especially the Sand states (FL, NV, AZ) MI, and WI are going to see more softening as the rest of the foreclosures hit the market and inventories are still high. However, some markets – metropolitan and higher end markets are starting to price stabilize. Stabilize does NOT mean big appreciation – it means less decline, no more decline, and some pockets of small appreciation.

After the 3 years, we should start to see some slow normal value appreciation. Thus, it may be a full ten years before we are back to a National healthily market.

Will home prices hit their price peaks from the frenzy back in 2006 – 2007? Not for a very long time, as there are now hopefully many more safeguards in place to prevent that kind of artificial run up.

For more information, tips and real estate advise or to order one of my books, please go to my website www.MichaelCorbett.com

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Want to Save $100,000? Be Realistic – Put 20% Down

Recently on Amazon, a reader posted an interesting yet misconceived comment on my book page.   It had said that while my latest book Before You Buy: The Home Buyer’s Handbook for Today’s Market  is an invaluable source for home buying in today’s market ”It is unrealistic because coming up with  20% of the value of a house for a down payment today is almost impossible”

Well, the fact that this reader, or any reader, thinks 20 percent down is “unrealistic” is exactly the reason this book is a must-read – and such an important book for these times.

Now don’t shoot the messenger here but, buying homes with less than 20 percent down is what put so many homeowners into horrible financial positions – houses they ultimately could not afford leading to short sales and foreclosures. It is “unrealistic” for anyone in today’s market to think they should buy a house if they have not yet been able to save up enough for a sizable down payment.

As I explain in the book, you do have options. There are ways to bolster your down payment savings. You can shop for less expensive houses that will match your budget and the money you have saved. Or you can simply wait and continue saving.

Among the many reasons to buy a home you can afford with 20% down is that is simply will cost you less, MUCH less in the long run.

  • A $417,00 home @ 5.75% interest rate  with 3.5% down  (402,405 loan amount)

The amount of interest paid over the 30 years of the loan? — $447,421

(Plus you will have to pay PMI until you can remove midway through the loan.

Thus the real figure total of interest and PMI would be closer to $542,856

Vs:

  • The same house with the same interest rate and 20% down  (333,600 loan amount)

The total amount of interest paid over the 30 years of the loan?  -$369,655

  • Bottom line – You’ll save $173,201 in interest!!!

Buying a home is not an automatic entitlement anymore.  And buying a home with no money down, or little money down is foolish and unsafe these days. If anyone is looking at homes that are out of reach of a 20% down payment, then they need to be more realistic and look at lower priced homes. Homeowners need to protect themselves by not over extending themselves. And remember, just because a bank says you can buy a house for little or no money down–doesn’t mean you should!  Protect yourself, because no one else will. Doing anything other than that? Now that’s unrealistic!

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Before You Buy Tip – Shop High to Buy Low!

Before You Buy Tip – Shop High to Buy Low!

Today, as prices are lower and sellers are sometimes getting anxious, always shop 10 percent higher than you really want to spend. Start at the top of your price range. If you feel you can afford a home that is $400,000 then look at homes priced at $440,000. The reasoning is that in a cold or buyer’s market you will probably end up paying slightly under the asking price. There may be room to negotiate down to bring it into your price range. So shop approximately 10 percent higher than what you are planning to pay, and you will still manage to stay within your budget.

For more homebuying tips: pick up my newest best seller Before You Buy! the Homebuyer’s Handbook for Today’s Market!

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Before You Buy Tip – Start Small – Win Big!

Before You Buy Tip – Start Small  - Win Big!— Once you begin shopping you’ll probably realize that the house you want may not match the reality of what you can afford. Especially if you plan to buy smart – by putting 20% down.  You’ll need to match your dream home to your budget—the starter home. You have to remember that “starter homes” or “entry-level homes” exist for a reason. Embrace the concept that the first house or condo you purchase is not going to be the place you’ll live in for the rest of your life. But that’s okay. The good news is that if you buy smart now, you’re able to begin the process of gaining equity and appreciation. Coupled with salary increases and smart savings plans, the opportunity to move up exists. And not only are smaller houses more affordable but in today’s new market, downsizing is in vogue smaller homes are going to be a hot commodity in the coming years. So start Small and win Big!

For more tips on how to buy safe sane and shirt in Today’s Market – pick up Before You Buy: The Home Buyer’s Handbook for Today’s Market!

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The View from The View

I hope you all had a chance to catch my real estate segment on THE VIEW.

It’s amazing to be in LA and working at Extra on Monday then fly cross country be on set Tuesday am at The View in NYC – as Whoopi and Joy are back stage – and Kirstie Alley and Liv Tyler are in the dressing rooms across from me. I go on set to shoot my segment and, then, within a half hour I am whisked back to the airport to be back in LA by 6:00 pm and home for dinner! It is a whirlwind 24 hours.

Michael Corbett on The View

The best part is that I was able to get some fantastic and important home buying information out to people. Here is what they wrote on The View website:

On this week’s The View, Real Estate expert Michael Corbett , author of Best selling Before You Buy was here to answer YOUR questions about the real estate market. Below are some tips, answers and advice he shared:

Will Home Prices Go Up?

Michael noted that, while nationally the real estate market is still soft, real estate is ultimately a local business – so you should be concerned with the home prices in your own city/community.

Certain states, like Florida and California, Nevada, home prices will remain soft  for a while. But according to last week’s Coldwell Banker Home Listing Report in many cities – like New York, LA and Dallas – home prices have stabilized, and in some communities (Jackson, MS and Charlotte, NC for instance) real estate prices are going up.

How Much Money Should You Have Upfront for a Home Purchase?

Michael advises at least 20%. For example, with a $350,000 home, he advises that one should put aside $80,000. This would cover the 20% down payment ($70,000), closing costs ($1,800), points on your loan ($2,900) and other misc. expenditures that pop up.

What is the Difference between a Foreclosure and a Short Sale?

Foreclosure = when a homeowner has to stop making payments on the mortgage, so the bank takes the house back.

Short Sale = when a homeowner trying to sell the house asks the bank to “eat” money because they must sell the house for less than it’s worth. For example, a home you owe $350,000 on but is now worth $300,000 forces the bank to eat $50,000.

How to Buy another Home after Foreclosure

Michael gives some simple yet important tips to help get yourself financially back in shape to purchase another home:

* Never max out a credit card
* Never be late or miss a payment
* Keep a consistent employment record
* Save up for a significant down payment

 For more real estate tips get my latest best-selling book: Before You Buy; The Homebuyer’s Handbook for Today’s Market or go to my website; www.MichaelCorbett.com

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Can Starbucks Help You Get A House Deal?

One of the best ways to stretch your buying dollar is to find a neighborhood that is in transition. Called fringe or transitional neighborhoods, they are typically close to major metropolitan areas and were once neglected and less desirable. Is there a trendy restaurant where a tattoo parlor used to be? These neighborhoods are now beginning to enjoy a new life, and your goal is to find them.

Buying in a transitional neighborhood for your first house allows you to get into the market relatively cheaply and build some equity. Your house gains value as the neighborhood improves. It may not be your dream location, or the seaside beach community you want to retire to, but as I’ve said, over time you will build even more equity and then move on at some point.

But how to find that prefect diamond in the rough?  Here’s two ways:

1.  Wake Up and Smell the Coffee.  Has a Starbucks just opened on the corner or maybe a Whole Foods Market? These are all good signs that a neighborhood is on the upswing. You can bet that big chains like Starbucks spend a lot of money and time analyzing neighborhood potential before they open up a new store. So go ahead, tap into their market research and be their neighbor.

2. One Click for a Trulia.com Crime Check . It may look like an improving area.  But you want to make sure your up-and-coming  block, street and area is safe  and not the center of  a serious crime waves.   Go to http://www.trulia.com/crime/#  Just plug in your city, zoom into to your potential block and get a pretty comprehensive look at what has been happening lately crime wise..  If it looks quiet and surrounded by or adjacent to other low crime areas… you make have found yourself a deal!

For more tips and insights about how to buy Safe, Sane and Smart in Today’s Market.  Order my newest best seller…Before You Buy..The Homebuyer’s Handbook for Today’s Market!

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