Tips for Avoiding Making Costly Mistakes When Buying Property

According to industry experts, the primary reason for buying property is the pride of ownership. Who doesn’t dream of one day owning land and building a home for their family?

Buying property is the most important investment you can make to ensure stability and security for your family’s future, and it’s important to know how to avoid mistakes once you decide on making a purchase.

SRC Land is committed to making your dream of owning land a reality. Below you’ll find a few suggestions for how you can avoid making costly mistakes during the land buying process.

 

Avoid These Mistakes When Buying Land

1.Be Realistic About What You Can Afford

The prospect of owning land is exciting for everyone, but prospective owners should be cautious when determining how much they’re willing to spend on a piece of property.

When you begin the process, it’s important to have a budget, and to stick to it. First-time buyers should set realistic goals, including finding a loan that offers comfortable monthly payments.

A mortgage affordability calculator is a valuable tool to know your price range and to better understand a figure that makes the most sense for you.

2.Check Your Credit Reports

Take a look at your credit reports and make sure there are no errors that may need correcting.

Different mortgage lenders have different requirements, but banks and financial institutions will look at your credit score closely to determine whether you even qualify for a loan. It’s important to review your scores for accuracy, and it’s easy to do so by requesting a free credit report each year from the three main credit reporting bureaus.

Consumers have the opportunity to dispute errors found and potentially fix the problems that may be preventing them from securing a mortgage loan.

3.Find the Right Source for Funding

Fortunately for buyers, there are several funding options for purchasing land. From a conventional bank or credit union to seller financing, prospective landowners have a number of options to make their dream a reality.

While credit scores may determine whether or not you qualify for a mortgage loan, don’t assume this traditional style of lending is your only opportunity for buying land. When you look into as many options as possible to find the best funding sources to meet your needs, you’ll avoid locking yourself into a financial commitment that may not benefit you in the long term.

4.Inspect a Property Ahead of Buying Land

Have the property you’re interested in professionally inspected.

Never purchase land before knowing what you’re going to get and look closely at the features that will determine how you intend to use the land. Before you buy, important factors to keep in mind should include: access to the property, the area’s topography, neighbors’ use of land, and whether the land is in a flood plain.

Hire a surveyor to show you the property lines to avoid inaccuracies that can ultimately cost you money.

5.Find the Right Agent When Buying Land

Not all real estate agents come with the same level of experience when it comes to land transactions.

Buying land is different from buying a home and you’ll need someone who has prior experience working in land transactions when you decide to move forward. Finding a qualified land professional is easy if you use helpful resources including an agent listed with the Accredited Land Consultant (ALC) Designation.

6.Ensure You Sign Up for the Correct Insurance Policies

Once you decide to purchase land, protect your investment with the right insurance policies. A land consultant will help you determine the best policies for your needs, and may help you understand which additional policies may best suit your situation. Common types of policies for landowners include:

        • Title insurance
        • General liability insurance
        • Property insurance
        • Crop insurance

 

SRC Land: Owner Financed Properties Available in Harlingen

SRC Land offers the best selection of land tracts for customers in Harlingen. We’ve worked with families in our community for over 20 years to ensure everyone has a path toward land ownership. Through our owner financed lots, we offer access to low down payments and affordable monthly payments regardless of bad or no credit.

 

SRC Land offers you the best in seller financing properties and provides an easy pathway toward owning your very own piece of land.

Take the First Step Toward Land Ownership

Contact Us Today

How a Recession Can Impact the Value of Property

The ebb and flow of our nation’s economy may be tricky to understand at times. From one year to the next, there are periods of growth and economic expansion, followed by economic slowdown.

Many industries that contribute to the U.S. economy operate cyclically, and included among them is the real estate market. While many factors may contribute to an economic downturn, it’s important to remember the economy moves in cycles, and that this is a part of the way a healthy economic system works.

What Is a Recession?

A recession is a decline in economic activity for an extended period, lasting from several months to years. A recession results when the country’s economy begins experiencing negative gross domestic product (GDP), increased unemployment levels, decrease in retail sales, and varying degrees of income and manufacturing within an extended period of time.

A recession is an unavoidable part of the business cycle, and results from a consistent pattern of expansion and contraction within the economy. Several factors may contribute to a recession, including effects from uncontrolled inflation or an economic shock. Most recently, the latest recession has been attributed to the COVID-19 global pandemic.

Buying Land During a Recession and Its Advantages

While it’s nearly impossible to accurately predict how long a recession will last, and how soon it may be before the economy bounces back, there are still smart investments you can make as you wait for an upturn.

The advantages of buying land during a recession include lower prices and increased inventory. However, like any major investment, it’s important for you to assess how much property you can afford based on your income and how to take advantage of great deals before prices go up.

During a recession, it’s not uncommon for property prices to drop, making the land-buying process more appealing to prospective buyers. During a recession, you can expect to find purchase prices well below what they would be during a stable and healthy economy.

Another advantage of purchasing property during a recession includes lower interest rates and more attractive mortgage terms. Because the real estate industry plays such a critical role in the economy, the federal government lowers rates to help bolster property sales by offering cheaper interest rates on mortgages.

Owner-Financed Properties Are a Great Alternative During a Recession

As a prospective buyer, if you don’t qualify for a traditional mortgage as a result of federal guidelines stemming from the recession, owner-financed properties are a great alternative on the pathway toward land ownership.

Owner financing means a property is financed by the seller. As mortgage rates rise amid the recession, and with variable property rates occurring, owner-financing is a smart choice during these times.

When you purchase a seller-financed property, you’re offered more flexibility when it comes to a down payment. When working directly with a seller to finance land, a customer won’t be required to meet bank or government-required minimums.

When you decide to purchase under owner-financing terms, you will also benefit from a faster closing, which translates to less time having to wait to begin the process of setting down roots. The benefits of purchasing owner-financed land mean a less stressful financing experience than what you’d usually expect from having to deal with a bank or financial institution.

SRC Land Is a Trusted Partner During Challenging Times

SRC Land has offered buyers quality land opportunities for more than 20 years. Our team has helped land buyers navigate uncertainty because we make the land buying process simple and reasonable.

Our dedicated team of realty experts can share their collective years of experience and knowledge to help you map out a promising outlook that includes land ownership. Recognizing that taking the first step toward land investment may seem daunting, SRC Land is committed to helping you through each step of the buying process.

Harlingen and the communities we serve are resilient, and despite current challenges, we can work together to weather any storm. Let SRC Land help you realize your dream of buying land in Texas, and securing a brighter future for you and your family.

It’s time to take the first step with SRC Land in the pursuit of securing a more prosperous future for you and your family. Reach out to us today to learn more about our properties and owner-financing options.

Contact Us Today

Everything You Need to Know About Seller Financing

Financing real estate transactions follow a standard practice that involves factors such as meeting income requirements, employment verification, and assessing a prospective buyer’s credit score to determine eligibility for a mortgage from a bank or other financial lender. 

But what happens when a buyer isn’t able to satisfy the requirements needed to secure a traditional mortgage loan, yet still wishes to move forward with a real estate transaction? In these instances, seller financing is a great opportunity for a buyer to continue on a path towards homeownership while avoiding the restrictions of bank lending, and it is a service that SRC Land takes pride in offering to aspiring landowners.

Understanding Seller Financing

To put in the simplest terms, seller financing is the opportunity for someone selling a home or property to finance the purchase for a buyer rather than requiring a prospective buyer to seek a bank’s assistance in securing a mortgage loan. 

Seller financing grants the buyer a chance to purchase property quickly and at a lesser rate than that of a traditional and/or conventional transaction. 

Important Aspects of Seller Financed Real Estate

A seller-financed property will likely run for a shorter period than what would be expected as part of a conventional mortgage. It’s important for a buyer to inform themselves on the terms of the financing agreement to ensure a desired and favorable timeline for repayment. 

Both a seller and a buyer should hire a professional to prepare the contract and promissory note as well as discuss any matters that require further explanation or clarification. 

 Why Seller Financing is a Wise Move

Sometimes a mortgage isn’t easy to secure, and purchasing property under seller finance terms is a fantastic alternative in cases where there isn’t a clear path to move forward via a bank or financial institution. Accessing alternative forms of credit is an advantage for prospective buyers, and when a seller is financing a sale, oftentimes a property may command a higher sale price.

Aside from a quicker and less expensive way to buy a home, seller financing offers buyers the chance to save money on fees generally associated with traditional lending. In transactions involving only two parties, it’s appealing to be able to avoid many of the costs associated with conventional real estate transactions. 

Seller financing guarantees better terms than what a bank or financial institution would provide through their traditional lending options. A seller-financed deal may give a buyer more flexible terms, and access to more ideal financial options for their specific needs. 

Quick Guide To Common Types of Seller Financing

  • All-Inclusive Mortgage: Also known as an all-inclusive trust deed (AITD), this option offers the seller the option to carry the promissory note and mortgage on the entire balance of the home price deducting the down payment. 
  • Junior Mortgage: If there’s reluctance from a lender to finance more than 80% of a home’s values, sellers may extend credit to the buyer to make up the difference. The seller carries a second, or “junior” mortgage for the balance of the purchase price, deducting the down payment. 
  • Land Contract: Land contracts don’t involve passing the title to the buyer. Rather, the buyer is afforded an “equitable title,” or temporary shared ownership. A buyer will make payments to a seller, and once the final payment is received, the buyer receives the deed. 
  • Lease Option: This option allows a seller to lease a property to a buyer for a contracted term, much like ordinary rental property. However, a lease option lets a seller agree to sell the property to a buyer within an agreed-upon time frame and in return for an upfront fee. Varying terms under a lease option can be agreed upon between a buyer and seller, offering a flexible alternative to the traditional lending process. 
  • Assumable Mortgage: An assumable mortgage offers a buyer to take a seller’s place on the existing mortgage. In these scenarios, a buyer may assume a Federal Housing Administration (FHA) and Veteran Affairs (VA) loan, along with a conventional adjustable mortgage rate (ARM) with the bank’s approval. 

SRC Land works with customers to make the dream of owning land a reality. For over 20 years, we’ve offered seller financing options that work to put our customers on a clear path to a prosperous future by providing low down payments and affordable monthly payments regardless of bad or no credit. 

Let SRC Land offer you the best in seller financing options and an easier way towards realizing your dream of owning your own property.

Shop for Your Lot Now

Reasons to Buy Land Before the End of 2020

2020 has been a rough year for all of us. For many, life today looks nothing like what it did at the beginning of the year — but life does still go on. Big decisions like getting married and buying a home are still being made. While making those choices is particularly difficult right now, there are some silver linings.

The end of 2020 is actually a great time to invest in real estate. Real estate is generally a smart investment, no matter what the time of year. But some times are better than others. 

Below the team at SRC Land explains why 2020 is a good year for land buyers, and why real estate might just be the investment you’ve been looking for.

Buying Property in 2020

There’s no denying that this year has been unprecedented. The combination of an election year and a pandemic has collided with the other real estate trends that have been developing for years, all of which have come to make 2020 a particularly good time for those interested in buying a home or property.

1. Mortgage Rates Are Low

If you’re considering buying a home, you’re probably considering credit options. While SRC Land offers Harlingen owner-financed lots for those unable to access credit through traditional lenders, low mortgage rates may be one factor to consider if you’re wondering if buying a home before the end of 2020 is right for you. Specifically, mortgage rates have dropped significantly since their peak in 2018. In fact, mortgage rates have hit record lows 9 times this year.

2. Prices Are Low

According to data collected by the Federal Reserve, sales prices on homes have been decreasing since 2017, based on a median price. That decline reached nearly 10 percent by the end of 2019. In 2020, prices haven’t dropped, but they have reached a “softening period.” Those prices are expected to rebound in the coming year.

3. The Stock Market Is Weathering the Storm

2019 was a good year for stock investors, putting them in a solid position to start the year. While 2020 has been chaotic, the stock market is still doing relatively well. This means both that the economy is healthy and that your own investments may be rebounding.

Buying Property at the End of the Year

Just like Halloween candy and airline tickets, you can save money on property by buying at the right time. By being patient and striking at the right time, you can save considerable money on your investment.

1. Thin Competition from Buyers

The one thing all of us probably remember from Economics 101 is the concept of supply and demand. When demand is low, prices are likely to drop. Because of this, October and November are generally a great time for home shopping. This is the time when most buyers stop looking for the year. December is particularly good because most potential buyers will be busy with the holidays.

2. Save on Taxes

Buying a lot or land for sale in Harlingen represents a significant opportunity to save money on your taxes for this year. These savings come in a few key forms:

  • Deductions —  If you buy a home prior to Dec. 31, you can deduct some of your mortgage loan interest, closing fees, and property taxes. Taken together, these deductions add up fast. This is especially true when your mortgage is still relatively new and your payments are primarily covering the interest.
  • Tax Credits — Investment in things like energy-efficient homes can sometimes qualify you for specific tax credits.

3. Sellers Want to Save on Taxes Too

Buyers aren’t the only ones looking to save money on their taxes; sellers want to get in on those potential savings, as well. This is partly due to the fact that many sellers might be waiting to close a sale before purchasing their own home. This need to close in time to negotiate another purchase could lead sellers to be more flexible with the deals they offer you.

4. Save on Contractors

Winter can be an excellent time to do home renovations, especially in Texas. Winter tends to reach a slow down period during which many contractors may offer lower rates or simply be more available. This means you may have an easier time hiring plumbers, roofers, electricians, inspectors, and even moving companies.

The General Benefits of Buying Property

Thankfully, 2020 won’t last forever. Even once the year is over, buying and investing in real estate will still represent a great way to build your financial portfolio and future. There are countless benefits to buying and owning your own home, some of which include:

1. Earning a Consistent Income

Those interested in securing a source of stable passive income should consider purchasing property. Once an investor has a mortgage, the property can be rented out to create a consistent flow of income. This sort of stability is the foundation of an individual’s long-term financial health.

2. Owning Your Own Home

The rental-income opportunities of buying land lead to another benefit of purchasing a home: you won’t need to pay rent anymore. Sure, when you buy a home you will probably have some sort of mortgage, but the payments you make on that mortgage will go towards a home that you own rather than a temporary living space. This also means that you will have the freedom to make any changes to the home that you may want.

3. Building Your Equity

When you initially begin making payments on a mortgage, the majority of that money goes towards paying off the interest on the loan. However, once you begin paying off the principle of the loan, the actual borrowed amount, the equity in your home will begin to grow. After consistent payments, you can borrow against that equity for things like additional properties or college tuition.

 

Take advantage of the great opportunities available to homebuyers in 2020 with SRC Land.

Contact Us