Home Finance – 3 Reasons To Do It Yourself
Home finance just isn’t what it used to be. If you have been following my articles, you know I’ve been preparing you for the situation that is developing in the housing market. In this article I will share with you three reasons why it may be advantageous for you to finance your own home sale.
First, most mortgage lenders are reeling from the effects of the historic levels of real estate foreclosures. Even though a national real estate market doesn’t actually exist, indications are it may have just been virtually created. This is actually more a result of wide spread business practices that are being modified and adjusted because of the problems they have caused.
Generally speaking, the home finance problems have been created by overzealous mortgage lenders that allowed home buyers to make purchases that were not likely to ever succeed. What initially began as a concern for the sub prime mortgage market has now made it’s presence known throughout the industry, including the highest levels.
This reality has caused the mortgage lenders to re-group, reconsider, and revise their previous underwriting guidelines and requirements. As you might expect, the so called pendulum has swung to the other extreme. That would be the extreme of caution and the associated paralysis of analysis.
Even though they are still in the lending business, many mortgage lenders are reluctant to make loans. It doesn’t matter whether you are dealing with a prime or sub prime lender, the thrill is gone because of so many bad loans to recover from. I guess we can call this phenomenon some kind of post traumatic disorder. The reality is, it is taking longer to process mortgage loans and there are more hoops to jump through.
The second reason you might want to consider financing the sale of your home is the tremendous amount of housing inventory in the marketplace. Some estimates suggest it will take at more than nine months to liquidate the existing inventory.
That depends on how well all of the elements fit together so houses can actually be sold.
One of the major elements is the amount of time it takes for sellers to realize that the sale prices are trending downward. Typically that trend will continue until the market determines the actual value of each property. Since most home sellers resist the idea that their property has actually lost value, it is difficult to say just how long this phase will last.
Some experts have reported more than a trillion dollars in specialty mortgages are set to adjust over the next two years. Unless dramatic actions are taken we are likely to see some huge additions to the foreclosures already in existence.
Additions of this magnitude will certainly drive the housing prices down further and faster.
Neither of the two reasons described is an issue you can control. As a matter of fact, right now no one appears to be in control.
The fact no one is in control of this housing fiasco is the third reason you may like the idea of seller financing your property. When you don’t have to worry about the source of home finance funds, one of your biggest worries is over. Seller financing actually puts you in control of the funding. With you in charge of the funding there is no need for you or your buyer to wait for lender approval. You become the bank.
Now, this is important. Since you are going to provide the financing for your home sale, you want to be very certain your loan will be repaid. You don’t want to be guilty of the same kind of misguided underwriting that has caused so much grief in the financial industry. That means you must focus on your buyer and his or her total package.
The total package includes considerations like the amount of the down payment, the credit score and profile, the ability to pay you, and their character. It would also be really great if there is an active savings account in place.
Here’s one more thing about seller financing you may like. You will attract more buyers than with any other type of financing. In the midst of everything that’s going on in the real estate marketplace, as a home seller you need to stand out and be recognized as the resourceful, creative, financially astute, problem solver you are!
Here’s one more thing. Did you know that you can provide “seller financing” for your buyer’s home loan and get all your cash at closing? It’s true. You can.
Why Early-Stage Startup Companies Should Hire a Lawyer
Many startup companies believe that they do not need a lawyer to help them with their business dealings. In the early stages, this may be true. However, as time goes on and your company grows, you will find yourself in situations where it is necessary to hire a business lawyer and begin to understand all the many benefits that come with hiring a lawyer for your legal needs.
The most straightforward approach to avoid any future legal issues is to employ a startup lawyer who is well-versed in your state’s company regulations and best practices. In addition, working with an attorney can help you better understand small company law. So, how can a startup lawyer help you in ensuring that your company’s launch runs smoothly?
They Know What’s Best for You
Lawyers that have experience with startups usually have worked in prestigious law firms, and as general counsel for significant corporations.
Their strategy creates more efficient, responsive, and, ultimately, more successful solutions – relies heavily on this high degree of broad legal and commercial knowledge.
They prioritize learning about a clients’ businesses and interests and obtaining the necessary outcomes as quickly as feasible.
Also, they provide an insider’s viewpoint and an intelligent methodology to produce agile, creative solutions for their clients, based on their many years of expertise as attorneys and experience dealing with corporations.
They Contribute to the Increase in the Value of Your Business
Startup attorneys help represent a wide range of entrepreneurs, operating companies, venture capital firms, and financiers in the education, fashion, finance, health care, internet, social media, technology, real estate, and television sectors.
They specialize in mergers and acquisitions as well as working with companies that have newly entered a market. They also can manage real estate, securities offerings, and SEC compliance, technology transactions, financing, employment, entertainment and media, and commercial contracts, among other things.
Focusing on success must include delivering the highest levels of representation in resolving the legal and business difficulties confronting clients now, tomorrow, and in the future, based on an unwavering dedication to the firm’s fundamental principles of quality, responsiveness, and business-centric service.
Wrapping Up
All in all, introducing a startup business can be overwhelming. You’re already charged with a host of responsibilities in which you’re untrained as a business owner. Legal problems are notoriously difficult to solve, and interpreting “legalese” is sometimes required. Experienced business lawyers know these complexities and can help you navigate them to avoid stumbling blocks.
Although many company owners wait until the last minute to deal with legal issues, they would benefit or profit greatly from hiring an experienced startup lawyer even before they begin. Reputable startup lawyers can give essential legal guidance, assist entrepreneurs in avoiding legal hazards, and improve their prospects of becoming a successful company.
Think Twice Before Getting Financial Advice From Your Bank
This startling figure comes from a recent review of the financial advice offered from the big four banks by the Australian Securities and Investment Commission (ASIC).
Even more startling: 10% of advice was found to leave investors in an even worse financial position.
Through a “vertically integrated business model”, Commonwealth Bank, National Australia Bank, Westpac, ANZ and AMP offer ‘in house’ financial advice, and collectively, control more than half of Australia’s financial planners.
It’s no surprise ASIC’s review found advisers at these banks favoured financial products that connected to their parent company, with 68% of client’s funds invested in ‘in house’ products as oppose to external products that may have been on the firms list.
Why the banks integrated financial advice model is flawed
It’s hard to believe the banks can keep a straight face and say they can abide by the duty for advisers to act absolutely in the best interests of a client.
Under the integrated financial advice model, there are layers of different fees including adviser fees, platform fees and investment management fees adding up to 2.5-3.5%
The typical breakdown of fees is usually as follows: an adviser charge of 0.8% to 1.1%, a platform fee of between 0.4% and 0.8%, and a managed fund fee of between 0.7% and 2.1%. These fees are not only opaque, but are sufficiently high to limit the ability of the client to quickly earn real rates of return.
Layers of fees placed into the business model used by the banks means there is not necessarily an incentive for the financial advice arm to make a profit, because the profits can be made in the upstream parts of the supply chain through the banks promoting their own products.
This business model, however, is flawed, and cannot survive in a world where people are demanding greater accountability for their investments, increased transparency in relation to fees and increased control over their investments.
It is noteworthy that the truly independent financial advisory firms in Australia that offer separately managed accounts have done everything in their power to avoid using managed funds and keep fee’s competitive.
The banks have refused to admit their integrated approach to advice is fatally flawed. When the Australian Financial Review approached the Financial Services Council (FSC), a peak body that represents the ‘for-profit’ wealth managers, for a defence if the layered fee arrangements, a spokesman said no generalisations could be made.
There are fundamental flaws in the advice model, and it will be interesting to see what the upcoming royal commission into banking will do to change some of the contentious issues surround integrated financial advice.
Many financial commentators are calling for a separation of financial advice attached to banks, with obvious bias and failure to meet the best interests of clients becoming more apparent.
Chris Brycki, CEO of Stockspot, says “investors should receive fair and unbiased financial advice from experts who will act in the best interests of their client. What Australians currently get is product pushing from salespeople who are paid by the banks.”
Brycki is calling for structural reform to fix the problems caused by the dominant market power of the banks to ensure that consumers are protected, advisers are better educated and incentives are aligned.
Stockspot’s annual research into high-fee-charging funds shows thousands of customers of banks are being recommended bank aligned investment products despite the potential of more appropriate alternatives being available.