It is estimated that about 4 percent of U. S. retirement funds are held in nontraditional accounts, including IRAs invested in real estate.
Self-directed IRAs are billed as” putting the’ I’ back in IRA.” They let individuals determine what, when and where to invest their retirement money.

If your IRA is held in a company plan through your job, the plan’s guidelines might specify what type of investments can be made- and real estate is rarely among them.

If this is the case, establishing a self-directed IRA isn’t an option until you and your employer part ways.

Once you leave, you can roll over the funds in your IRA and 401( k) to a self-directed IRA.

It certainly was the motivation for Anthony Moreno, 56, of Oceanside, Calif., to establish his self-directed IRA.

But concerns about a low rate of return and a lifelong desire to own international real estate led him to research self-directed IRAs with the idea of putting his money into real estate.

His self-directed IRA was set up by Guidant Financial Group, which specializes in facilitating real estate investments using an IRA.

As romantic as the idea of buying an island sounds, many caution that real estate purchases made through self-directed IRAs aren’t the answer to everyone’s investment goals.

Experts, such as Jeff Nabers of the IRA Association of America, strongly urge people to consult a professional adviser before moving their money into one.

The title to the property would be held by a custodian, who acts as a trustee for the account and does not offer investment advice but functions essentially as a conduit for your wishes as they relate to buying and selling.

The fees vary, and investors are advised to check them carefully and do some price-comparison shopping before moving IRA money from a traditional fund to a self-directed one.

(Read More)

Source: Baltimore Sun

A slower U. S. housing market means sellers can no longer bank on having their pick of offers for properties showing their age and the wear and tear of everyday living.

"Walk through the house and remove all the clutter," said Rhonda Duffy, an agent for Rainmaker Realty in Atlanta.

Personal items that will soon have to make the move to a new place anyway should be boxed up and stored ahead of opening the house to potential buyers.

Sellers must try to distance themselves emotionally from the house as soon as the decision is made to list, said Fran Bailey, an agent with Baird Warner in suburban Chicago.

Made beds and emptied garbage cans should become second nature since sellers never know when they may have to show the place on little notice.

Once personal items and extra furniture are out of the way, sellers may want to hire professional cleaners, including someone to wash windows inside and out and to shampoo carpets. (Read More)

Source: Washington Post

Tags: Home Buying, Home Selling, Real Estate,

IRAs have been around since 1974, when Congress offered tax benefits for these personal retirement accounts and from the beginning, sophisticated financial advisers have been using them to buy real estate for their wealthy clientele.

Actually, you can invest in just about anything– foreign as well as domestic real estate, boats, investment companies and start-ups– as long as the assets are not used by the individual investors or their immediate family.

Although they represent a minute percentage of the total IRA market, business is booming.

" About 75 percent of Baby Boomer retirees roll their 401( k) retirement funds into IRA accounts, a market that’s growing by$2 billion every year.

The government is even providing more security for these accounts: IRA accounts now carry FDIC insurance for up to$250,000.

Real estate lenders have come around as well.

Two years ago, banks wouldn’t finance loans for properties purchased through IRAs, so when people wanted to buy real estate with their IRAs they needed to come up with 100 percent cash.

( Of course, this worked only for the very affluent.) Now Kansas-based North American Savings Bank offers IRA loans for real estate in 50 states.

One of the differences between self-directed securities is that there’s no industry doing it for you," said Vince McCord, a CFO from San Jose who has invested in three real estate partnerships with his IRA account.

Legally, the IRA fund( not its owner) not only buys the real estate but administers the property, so funds must be available in the IRA for maintenance and other real estate expenses.

If IRA-funded real estate is at risk of foreclosure, the owner of the IRA can make a temporary loan, but he or she can’t simply pay off the mortgage, without a massive penalty. (Read More)

Source: SFGate: Surreal Estate

Tags: Home Buying, Home Selling, Real Estate,

Q: The house I’m trying to buy has two offers: one at full price and mine, which is above full price and all cash. The seller is apparently trying to start a bidding war by telling people she should get even more. Does she have an obligation to take one of the two offers on the table? Can she list the property again for more?

A: This may surprise you, but (Read More)

Source: The Seattle Times: Real Estate

Tags: Home Buying, Home Selling, Real Estate,

In the calmer market that has taken hold, brokers for sellers and buyers say that negotiation is slowly creeping back into the equation.

“We’re certainly not where we were in the irrational, exuberant days,” said JoAnne Kennedy, the chief operating officer of Coldwell Banker Hunt Kennedy.

“Sellers have become more realistic, and buyers are finding they have more time to select, and they can make an offer that’s not asking price, and it will be considered.”

There are a number of factors that can be part of a negotiation, including the buyer’s qualifications, a mortgage contingency, flexibility on a closing date, a leasing arrangement if the seller cannot move right away, and the furnishings and appliances that stay with the apartment.

Ms. Kennedy said that sellers are often happy to get any bid, but a buyer who submits a very low offer and then engages a seller in several rounds of counteroffers risks losing the apartment.

After apartment hunting for about a year and learning the hard way that their dream two-bedroom for less than $600,000 just did not exist, the Barons shifted their sights and looked at an Upper West Side apartment on the market for $799,000. They decided to make an offer of $725,000, a discount of about 9 percent, even though Ms. Kruglova tried to coax them higher.

“I told them, ‘If you start there, you will never finish it,’” Ms. Kruglova said.

So the sellers countered with $760,000, but the Barons refused to go any higher.

“Then the sellers got offended and stopped talking to us,” Mr. Baron recalled.

With the seller’s demand for a final bid in hand, she persuaded the Barons to raise their bid to $750,000, about 6 percent off the asking price, and they got the apartment. (Read More)

Source: NY Times

Tags: Home Buying, Home Selling, Real Estate,