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    Is a hard money loan right for you? VLOG

    This week, Rich talks about 3 more real estate topics you NEED TO KNOW.

    First, what is HARD MONEY and why should I consider using it to finance my real estate purchase?

    Second, are we currently in a SELLER’S or BUYER’S market…and what’s the difference?

    And third, should I sell my house BEFORE I buy a new one? Stay tuned for these answers and more!

    What is ‘hand money’?

    Hand money, also known as private, non-contingent funds is a fancy way of saying that Person A is going to lend Person B a certain amount of money to buy a house. This transaction is a CASH DEAL because one person is simply giving the money to the other. It’s almost like using a bank – except in this case, Person A is the bank and the money is already there and no further financing is necessary.

    We aren’t entirely sure where the ‘hard money’ phrasing actually came from; maybe one day, some guy had a briefcase full of money and said ‘here you go’!

    Why would someone use hard money versus a regular bank?

    And what are the benefits for someone lending the money? Typically the person lending the money is going to get anywhere from 9-12% as an interest rate. That’s a pretty fantastic return on your investment, and typically the short-term loan times are anywhere from one to five years. Someone may want to take this high-interest rate over going to the bank and taking advantage of historically low-interest rates when the house they are interested in doesn’t qualify for a conventional or FHA loan. Often this happens when the home is going to be a renovation project rather than a typical home.


    Is it a seller’s market or buyers market? And what is the difference?

    Right now, it’s simply a fantastic market. Statistically, the inventory is so low that a buyer has a lot fewer choices. However, buyers have SO much buying power because of historically low-interest rates. It’s a fantastic time to be in the market whether you’re a buyer or seller.

    Typically, we are in a buyer’s market when the inventory is really high and there are a ton of choices, and when there are very little inventory and little choices, we are in a seller’s market. Right now, there’s a lot of fighting over little inventory because coming out of Covid in June and July and the market was on fire – and it’s still very very solid right now.

    Should I sell my home before I buy my next one? What are the pluses and minuses of that choice?

    If you can sell your house before you buy, that’s going to make your offer significantly more attractive because you’re not going to be contingent upon selling your home. If you are even able to stay with family and friends during a home search after selling your home, that’s a fantastic way to do it if that’s possible for you. Many people don’t have that interim place to go, so you absolutely can write a contingency-based offer, it is just a little bit tougher to get those offers accepted in this market.

    The benefit of selling before you buy is that you’re going to be able to place stronger offers on the home you’re buying. The benefit of NOT selling before you buy is that your transition will be a whole lot easier. When you move straight out of your previous home into your newly purchased home, you have time and flexibility when making that transition. Plus, it’s often more convenient for us to sell your home when you are not currently living there. We won’t have to bombard you with constant showings or worry about keeping your home extra clean.

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