What cool Real Estate Stuff can you find online?

Ok, Quick Post here of really cool and vital information that can be found,  FOR FREE online.

  

NEIGHBORHOOD SCOUT

http://www.neighborhoodscout.com/pa/philadelphia/crime/

CITY DATA NEIGHBORHOOD INFO: able to get information on all major Pennsylvania cities

http://www.city-data.com/nbmaps/neigh-Philadelphia-Pennsylvania.html

CITY DATA BY ZIP CODE: same information site as previous but search by Zip Code.

http://www.city-data.com/city/Philadelphia-Pennsylvania.html

MONTGOMERY CO PROPERTY & TAX RECORDS:

http://propertyrecords.montcopa.org/Main/Home.aspx

MONTGOMERY CO FREE PUBLIC DATA SEARCH: Public records on EVERYTHING from inmates, to Commercial properties, traffic cams and Sheriff sales.  Great Site.

http://publicrecords.onlinesearches.com/PA_Montgomery.htm

DELAWARE COUNTY PUBLIC ACCESS: 

http://w01.co.delaware.pa.us/pa/publicaccess.asp?txt.x=1  TEXT ONLY

DELAWARE COUNTY REAL ESTATE AND TAX RECORDS

http://w01.co.delaware.pa.us/pa/publicaccess.asp?real.x=62&real.y=59  GENERAL PAGES

DELAWARE COUNTY RECORDER OF DEEDS

http://w01.co.delaware.pa.us/delcopa_net/(S(kikjex55aql0m1nucn1vg1mi))/ESP.aspx RECORDER FO DEEDS

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When houses come out of the shadows- General interest post

Picture this scenerio:

A house not a particularly memorable home sits occupied by a quiet family that has livd there for around 7-8 years. They keep to themselves, the homelooks a bit more unkept than you recently remember it and the family of course like most, seem to be working and not home quite as much. You can remember that a ways back, the daughter was ill and taken to the hospital but you are not sure what became of it. You see all three children leave to get their school bus in the morning and that is about it.

Under the surface, the “Jones'” are actually in the final stages of the home forclosure process. The did not take the bank’s offer of a short sale because they would have no other home to move into. A slow economy causing less hours for the dad, coupled with a child’s illnss cost a great dead in care and needed medicine, has caused this family to fall more than a year behind in their mortgage. You say how? they work right? Well actually some mortgage companis will (after a certain point in time) not accept anypayment except for a lump sum payment of the amount owed. Sooo, now we find this family facing many legal letters and leters from their bank and related items stating that they are “in forclosure” but somehow, some way, no one hs come to serve them, to remove them or anything of the like so they say, pray and continue to do what they normally would do.

The reason this has become more common than not s because they are in the limbo land of being considered “Shadow Inventory. Where banks know they can and probably will eventually foreclose and take possession of the property but either choose not to at this point or are forbidden in doing so at this point in time.

On Wednesday of this week, Corel Logic reported that as of January 2012, the U.S. had approximately 1.6 million units of residential shadow inventory. This is a little more than half of the 3 million total properties that are currently seriously delinquent, in foreclosure status or bank-owned properties (known as REOs, for real estate owned). CHARTS BELOW !!

FC: Foreclosures

REO: Real Estate or “Bank Owned” (Already foreclosed)

“‘Shadow inventory” broadly speaking, refers to all the homes in the foreclosure pipeline that will eventually flow into the market but aren’t there yet. In practical terms, the definition of shadow inventory varies considerably depending on which analyst you ask, and there is truth to be gleaned from each of their carefully calculated studies.”

Huffington Post : Adam Heller March 31, 2012

The ‘Shadow Inventory’ Darkening Housing

Home sales can’t rise until the foreclosure backlog gets cleared. But that’s not happening nearly fast enough

Mar 23, 2012, 11:31 am EDT | By Ethan Roberts, InvestorPlace Contributor

Reducing inventory in the real estate market these days is like trying to shovel your driveway clean in the middle of a blizzard. No matter how fast you work, new falling snow just keeps covering over any progress you have made.

And housing’s biggest problem continues to be a blizzard of backlogged foreclosures, aka “shadow inventory,” which before the recent agreement with the 50 state attorneys general were backed up in the pipelines of the major banks.

http://www.dianomioffers.co.uk/smartads.epl?id=860

1.6 million homes in the current “shadow inventory”

1.6 million homes in the current “shadow inventory”

1.6 million homes in the current “shadow inventory”

That 1.6 million units equate with a about a six-month supply, and the good news is that’s a two-month reduction from the levels seen in January 2011. The bad news is the level of shadow inventory remains the same as it was six months ago. As fast as investors and cash purchasers snatch up these properties, new shadow inventory is released.

This is the frustrating Catch-22 of today’s real estate market. Prices can’t rise until inventory declines, and inventory can’t decline until prices rise. Let’s take a closer look at why this is the case.

Sellers Can’t Sell

Imagine you need to sell your home due to a change in job or family situation. But the problem is that you bought your home with a 30-year mortgage less than eight years ago, and you’re upside-down on your mortgage. If you sold your home, you would have to bring $30,000 or $40,000 to the closing, and that’s money you just don’t have.

One solution is to short-sell your home (sell for less than what’s owed on the mortgage). But if you do that (assuming your bank even agrees), it hurts your credit, could take up to eight months to get lender approval — and it ultimately brings down the value of the surrounding homes in your neighborhood.

Another solution is to rent your home, but depending on when you bought your home, your mortgage payment could be several hundred dollars a month more than your potential rental income.

Faced with this dilemma, many homeowners have chosen to simply walk away from their mortgage, a practice known as “strategic default.” But doing this has ruined their credit and now prevents them from buying another home for as long as seven years. The ongoing strategic defaults have continued to feed the shadow inventory levels, which eventually trickle down into the inventories of the local Multiple Listing Services (MLS).

Inventory rises and prices decline or remain low.

Buyers Can’t Buy

Some buyers can’t buy due to poor credit or high debt loads. Lenders are demanding better credit and lower debt-to-income levels than they did several years ago. Another obstacle for would-be buyers is higher down payment requirements and an increase in loan fees, especially on FHA loans.

Other buyers can’t buy because of their recent foreclosures or bankruptcies, thanks to that hit to their credit ratings.

Along with the buyers who can’t buy are those who “won’t” buy, either because the recent downturn in real estate has left a sour taste in their mouths or because they fear further decline is probable. These buyers won’t move until they see evidence that prices are rising again.

Since inventory is showing few signs of diminishing, prices are stagnant in many areas of the country, and buyers in those areas continue to hold off. By doing so, they perpetuate the cycle in which inventories remain abnormally high.

Solutions

As I have noted in a recent InvestorPlace article on homebuilder stocks, employment and the real estate market remain inexorably linked: Each relies on the other for growth. New construction creates thousands of jobs, and each re-sale provides additional revenue for dozens of independent contractors and service providers, who can then afford to hire more help.

So the key to a better real estate market remains an employment rate that will give more first-time buyers the wherewithal to qualify for loans. Additionally, the government needs to stop hindering the market with the kinds of programs now in force, including new FHA loan fees, excessive environmental regulations on older homes and a centralized appraisal system that’s destroying market values.

Another solution is for the government to give real estate investors incentives to purchase homes — without destroying property values, which is what happens when thousands of homes get sold in bulk to hedge funds. Incentives such as tax breaks or the ability to roll the cost of needed repairs into conventional home loans would help reduce the inventory of the foreclosures more quickly and would not hinder property values.

Until and unless we break through the stalemate that simply replaces one sold foreclosure with another from the pipeline, the housing market will continue to muddle along at the bottom for several more years.

Mar 23, 2012, 11:31 am EDT | By Ethan Roberts, InvestorPlace Contributor

My final words on this is that My prayers go out to all that are behind on their mortgage and the hope is that some of this inventor stays in the hand of the original owners. There is also talk of other programs on the horizon that may help homeowner.

Home Inspections:What to know & to keep in perspective.

A home inspection is a limited,  of the condition of a home, often in connection with the sale of that home. Home inspections are usually conducted by a home inspector who has the training and certifications (ASHI) to perform such inspections. The inspector prepares and delivers to the client a written report of findings (usually very detailed). The client then uses the knowledge gained to make informed decisions about their pending real estate purchase. The home inspector describes the condition of the home at the time of inspection but does not guarantee future condition, efficiency, or life expectancy of systems or components. A home inspection is anywhere from 20-100 pages depending on the issues found.

Ok that is the definition of a home inspector.  The general description of a home inspector is that the home inspector, inspects a home in a detailed manner and gives a written report and usually a verbal description on particular item in the home.  However, the home inspector can only observe conditions that are visible.  In other words, the home inspector cannot and  generally DO NOT open walls, disconnect components or do inspections that involve other deconstruction of home parts or items. 

They do what is call a NON-INVASIVE inspection.  Kind of sort of like a  physical.  During a physical the doctor uses tools and knowledge to give you a general overview of your health.  Ironically, a home inspection can feel much like a physical “in the end”, much like a Prostate Exam.  For both sides Buyer and Seller. 

                         

 

 

Ok I will break down the issues and pit fall for both buyer and seller in terms of home inspections. 

  • Sellers Side issues

As a Seller, home inspections always come with great angst.  They have already filled out their Sellers Disclosure. Seller Disclosure is a form of disclosure where the seller identifies any and all specific problems with their home (that they are aware of) and is a legal document. Now they have to endure an inspection that will ALWAYS, I TRULY MEAN ALWAYS WILL FIND ISSUES.  Even new construction homes I have seem come back with “issues”

In my opinion, many home inspectors may almost feel obligated to earn their payment and find “something” or things to justify their involvement in the process.

 Now, the inspection comes back with “issues” and you as the seller must choose whether to :

  1. give credits for negotiated repair items to get fixed by buyer
  2. fix items yourself before sale
  3. refuse and lose the sale
  4. any combination of the above

Now remember the only items that are definitely required in most cases to be “mitigated” are the ones listed as material defects.  Sometimes listing issues that are more signs of deferred maintainance or other minor issues, become pretty big when listed on paper and cumulative with ten (10) other small items.  It would make a good house look not so good and often scare first time buyers.

JWK Inspections: “What is Inspected”

  • BUYERS SIDE ISSUES

From the Buyers side it is a bit more involved since of course you are the one needing/ requesting the inspection in most cases and you are again the one paying.  Usually a home inspection for a buyer has two or three purposes:

  1. As a contingency to walk away from the deal if needed.
  2. To determine the cost, state of “health”, and concerns related to the property.
  3. As a negotiating tool to negotiate additional terms, repairs  or price adjustments in addition to the already agreed upon terms.

With this in mind, the factor most important is the ultimate goal or purpose of the inspection for the buyer.  Do they want a cheaper price? do they want repairs to an already seemingly sound home,? Do they want an “escape clause”, do they love the home and are being safe or responsible or any combination of the above.  Their ultimate goal matters and should be understood and discussed between buyer agent and buyer. 

The home inspector should be an impartial judge , reporting on the condition of the home without offering unsolicited opinions.  THIS IS VERY IMPORTANT.  VERY IMPORTANT.  I have witnessed new or inexperienced home inspectors either scaring home buyers into backing out of a deal or assuring them that a condition is “fine”.  Also a home inspector should have a current knowledge base on codes, exceptions, repairs and costs of repairs for many items in the hom AND NOT AFRAID TO RESEARCH SUCH INFORMATION AND GET BACK TO THEIR CLIENT.  This is important.  I recently had a deal fall apart due to a seemingly over zealous and a bit inexperienced home inspector WRITE in a report that a water heater that was “off”, was inoperable and worst yet state that the cost of the replacement STANDARD WATER HEATER was between $1500-$2500, WOW !!! 

I cannot name the company because I did not hire them but I can tell you that their estimate  is at least $700.00 TOO MUCH from even their lowest estimate.

Below is a cost estimate put together by a home inspection chain.

Cost Estimate: Repair or Remodel

Something important to remember is that as with any home or apartment you currently like in now, they are and will always be issues that need “looking at” in a residence with some being an emergency and other being a matter of preference or convenience.  A home inspector (in my opinion should point out issues, but also make sure to put them in perspective as to the cost,and overall effect on the home.  I am not saying to minimize issues, but I am sure the home they live in are not clear of “issues” not is any home they inspect.  I think they should protect home owners from bad buys and horror stories but to also be professional that can relate to buyers (especially 1st time buyers) and their already heightened anxiety around this most important purpose.

GET A HOME INSPECTION, KEEP IT IN PERSPECTIVE.

Now for a clip of the most famous home inspector MIKE HOLMES the INSPECTOR.  Note: What he does is far over and above what is considered non-invasive inspection.  Issues are highlighted for the show and there are many homes that are not this way.  This show is sensationalized for television just as Reality Shows are as well.  Not to say the issues don’t happen but, Really?

HOLMES INPSECTION: HGTV

Yes We Can – Barack Obama Music Video

Vodpod videos no longer available.

“A Home of Their Own”: Women and Home Buying

1st HAPPY NEW YEAR !!!

This will be your best year YET !!!

Women and Home Buying

I will take my time with this post because I know of:

  1. Its importance impact
  2. It truthfulness and validity

First for some facts (data):  these are numbers taken from the study done in 2006 from the Joint Center of Housing Policy of Harvard,  by Rachel Bogardus Drew

  • Women make or direct 91% of home buying decisions. (Price tag: about $2 trillion)
  • Women make 75% of the decisions about new homes. (Price tag: at least $250 billion)
  • Women initiate 80% of all home improvement purchasing decisions, especially when it comes to big ticket orders such as kitchen cabinets, flooring, and bathroom overhauls.
  • Women represent 51% of consumers that usually hire professionals for home improvement and remodeling projects.(Price tag: at least $100 billion)
  • Women purchase 94% of home furnishings.

Now I know this for a fact anecdotally as a Realtor.  If I were to count, about 85% of my current, active client base are  women and 100% of my total clients are women (married couples). So you are either a women or you have a women in your household. And if you are a married couple, it is quite clear (even from my own experiences) that the main decision maker in the home buying process is the fairer sex.  A fellow Realtor/ Investor and I had a lively conversation related to being a Realtor dealing almost primarily with female buyers and the women who love us…  I will not expound on the conversation too much but I will repeat his quoted words “It takes being married to a strong women to deal with a Realtor having women called all hours of the day and night in ‘distress’ over home buying issues“.Anon

Vodpod videos no longer available.

What does this mean?  Well for starters that as an Realtor I need to know what you ladies want, what are your fears and expectations in the process and work with both your level of comfort and knowledge.  Early in my Real Estate career I believe I lost a client due to not quite understanding the specific needs of this very important client base.

Taken from http://www.she-conomy.com is a list of current was marketing in gearing itself towards it most “rewarding” customer.

The following are six simple steps to take when marketing to women:

  • Use language that evokes feeling and thought. For example, describe a granite’s origin in a way that helps her visualize where it came from.  Don’t ever underestimate the power of description. She will probably use many of those same words when describing her new home’s granite to friends over cocktails.

  • Use color and textures in your collateral. Unlike men, women will actually read every word of a marketing piece, hang on to it and show it to their friends. And, when they can’t find it on their desk or in the file, they’ll describe the piece as “this really cool brochure that has this beautiful artist’s rendering of my dream home on it.” They may or may not remember the name of the model complex — because they often see 20 or 30 of them — but they will remember the pieces they collected from the sales office as long as those pieces are equal to the experience they felt as they went through the model.

  • Engage all five senses. The experience of buying or remodeling a home is the most personal journey a woman encounters in her lifetime. If you want her to remember her experiences in your home, appeal to all five of her senses. Engaging her sight is imperative, followed by her keen sense of smell. You don’t just have to use candles as air fresheners — there are all types of air fresheners on the market that are sight unseen without being overpowering. Then invite her to touch everything. Let her explore the appliances and open the closet doors. Accentuate spaces in the home that give her ample storage. Have music playing throughout the home she’s visiting. Finally, to appeal to her sense of taste, have snacks she can nibble on available throughout her buying experience.

  • Do something extraordinary. Women like to be pleasantly surprised, so take ordinary activities and make them extraordinary. For instance, if your demographic has a high percentage of single working mothers or down-sizers, it’s likely they work long hours so hold your grand opening in the evening. Be sure to have candles in the rooms and offer her a glass of wine as she unwinds from her day. Or, if the demographic is primarily young families, have a reading of a children’s author at your grand opening and send the children home with autographed copies. She’ll never forget the effort — and she will tell all of her friends.

  • Educate her. Today’s woman wants to know how her house works. Show her where the electrical panel is and label each connection. If you are a green builder, showcase the process with see-through panels to show her the insulation. If you feature Energy Star products, give her the supporting material in your sales office.

  • Ask for her feedback. This is perhaps the scariest thing for a builder or remodeler to do, but your best return on staging or modeling your homes is finding out what you may have missed and, better yet, what you got right. If you’ve done a great job, ask if you can use her testimonial in your campaign. If you missed the mark, ask her back after you’ve incorporated some of her ideas. According to She-conomy.com, 51% of women buyers will give a company a second chance if they feel the product or service missed the mark the first time. YOU !!

    She-conomy Video
    – Watch more Videos at Vodpod.
    There are organizations like She-conomy as well as writers and advocates that are geared specifically to help the female consumer not just in home buying but in many financial matters.  A favorite of mine is Tara Nichole-Nelson of http://www.REthinkrealestate.com.  As a matter of fact NEW followers that comment will receive a copy of the first Chapter of her book:
    Trillion Dollar Woman that is dedicated to educating women around home buying and one follower will get mailed to them a copy of the book:
    The Savvy Woman’s Homebuying Handbook: 150 Insider Secrets, Decision-Making Guides and Online Resources, plus the ONE Action Plan You Need

    Ok ladies!!  This is for you.

    Vodpod videos no longer available.

Fear and Owning Part Two !!

Ok where did I leave off..

1st I would like to say I am sitting in the stands, watching my daughter at swimming practice. The sounds of 30 plus children swimming about 6000meters in a night is almost enough to put you to sleep just listening.

Ok back to Real Estate.

The Survey done my Yahoo ( ) that were referred to in the previous post also gave other valuable insight.

I ask you how satisfied are you with where you currently live? In fact I will make this a poll because this was a question on the survey as well. I will not put their findings chart up until the end of this post (will give you some suspense & something to look forward to).

I will not yet discuss these finding but will move us along to the findings of WHY most renters WANT to move and discuss those findings.

The top three (3) choices out of five were:

  • MORE OR LARGER LIVING SPACE (45%)
  • HOME BETTER SUITING MY STATION OR PHSE IN LIFE (44%)
  • HOME BETTER SUITING MY STYLE (42%)

Followed by:

  • MOVE TO A BETTER NEIGHBORHOOD (30%)
  • A “GREENER” or MORE ENERGY EFFICIENT HOME (27%)

Do any of these surprise you? Actually the “Greener” alternative being as high pleasantly surprises me a bit. But the top three and patented answers to the common reason to move or hopefully buy. I would like to add one more that is increasing more relevant as well as real. How would the option of wanting to move to *Save money on my tax footprint* or to *Pay less living expenses* or *Save responsibly*?

I hope I don’t sound preachy or that I am spewing the typical “industry line” in saying these three options, because ALL of them are good reasons and all are true. From the last post you can see that renting is more expensive, it gives you no tax advantages and it also does not allow you the opportunity to take advantage of my friends equity and appreciation.

I will talk about these at a later date.. maybe as the market allows for more of each (inside joke)!!

Ok as promised I will give the results of the Yahoo Home Horizons 2012 Survey

Home Satisfaction Survey

Also I have a bonus. Two Buying vs Renting Videos to hit home the point of my posts and what bore out in the Survey.

Enjoy

Renting vs. Buying a home 1
– Watch more Videos at Vodpod.
Renting vs. buying a home (part 2)
– Watch more Videos at Vodpod.

Fear and Owning

Ok, as we prepare for the New Year and add losing 15 lbs, gym membership/ trainer, better job, taking relationships/ friendships more seriously and other pieces of the “moving my life forward” puzzle, many add Owning a Home to their “resolutions” as well. In my life and experience with home ownership I went from

  1. living at home
  2. paying what was left of a mortgage at home when my mother moved and “gave” me our childhood home
  3. looking for a home of my own and being scared away a bit due to not getting what I wanted for what I wanted so we (wife and I) purchased our first “investment property” to later use to purchase our home.
  4. Later finding our “Dream Home” after a few missed opportunities after placing offers (we purchased during the height of the boom when multiple full price offers was the norm.. ). *NOTE: so you know where my home value is now! LOL.

This being said, I never had the first hand experience of renting for any period. I often wanted to do a survey on renters and what would or does motivate them to finally buy. Is it totally up to them or are there other circumstances and situations at play that dictate this move. Well lucky for me, Yahoo did such a study, sort of.

In this post I will summarize and offer my views on this survey. Full disclosure dictates that I also give credit to Ms Tara-Nicholle Nelson and her article also summarizing this issue.

Reasons for Renting Yahoo! Home Horizons Survey 2012

Source: Yahoo! Real Estate Home Horizons 2012 survey — based on responses 496 buyers/renters in the market to purchase a home.

Ok, Lets break this down. In fairness I will attack this from the standpoint of my belief that everyone should endeavor to own and part of my job is to help facilitate that.

  • DON’T HAVE MONEY FOR A DOWN PAYMENT 53%
  • INSUFFICIENT CAPITAL/ INCOME 51%
  • WON’T QUALIFY FOR A LOAN 38%
This is the top three reasons from the 415 respondents as the main factors for renting and not buying. I will approach the Down Payment and Income Responses with a Trulia chart.

Trulia Rent vs Buy Index

Ok, in Philly and the surrounding area, for that matter 95 plus % of the country it is cheaper to buy currently. You pay more renting than owning (unless buying in New York.)

As a landlord, I k now that a fully rented home or duplex makes me usually $200 more than the mortgage even before all the downturn.

Second as said by Ms Nelson in her article.

A full 30 percent of the owners and renters who self-identified as interested in buying a home expressed concerns that they might not be able to scrape up enough cash for a down payment.

As an agent my past 2 property closings have cost the client :

  • $1000 +$500 deposits
  • $700 home inspection
  • about $1200 at closing
for a home in the 130k range. How you might ask? Well…. because as an agent for a buyer, I always suggest Sellers Assist as well as exploring FHA mortgage options.
Sellers Assist is when a buyer requests assistance from the “seller” to be used for closing. This can be $0 to in some cases up to 6% of the price of the house. Keeping in mind that with a FHA mortgage TOTAL closing costs average around 6.5%-7% of the cost of the house. Hopefully you can see how Seller Assist can greatly reduce a buyer’s “contribution” at closing.

Now for the third point. I have to honestly admit that currently THIS is or could be an issue. Mortgage lenders have become more stringent with loan approval. However, with the right mortgage broker or lender it is definitely possible. More than possible, it is probably. I have seen approvals with a credit score of 630. Contact a broker they can and will also help you understand and guide you into what to do to improve your credit score.

Some other insightful findings.

Home Ownership

Cost of Owning a Home

I will give more on this later.. more on the survey and what it means

What motivates you more to purchase a home these days?

Ok as the season moves on and the market continues to slowly move forward.  I pose this question to you.  Which factor would make you more motivated to purchase property now.  You can answer it as an investor , a owner-occupant or a rehabber.  Whatever role you wish, please answer the poll.

Interest Rates vs Home Prices

Short Sales

Ok I want to talk a bit about a pretty hot topic currently. Unfortunately spinning off of the previous post related to the sad phenomena of foreclosures now, I will talk about Short Sales & Deed in Lue.

Distressed Homeowner Leads
– Watch more Videos at Vodpod.

On occasion, one of the options that various mortgage companies suggest for families that they are refusing to grant a loan modification is a Short Sale. A Short Sale is where the mortgage holder or “bank” offers to allow the home owners to sell the house for whatever it can sell for and the BALANCE either the bank will forgive OR may require the previous home owner to pay. The term comes from selling the house SHORT of what the held mortgage is.

Short Sale

Short Sales

Short Sale

Short Sale

I will take the roses & thorns for each transaction seperately (buyer & seller).

Ok Seller’s side Short Sale:

As a Seller in a Short Sale, you are in the unique position of negotiating the loss of your property.  Your options are that you either having to endure a foreclosure of your property or the lesser of evils of

1. Short Sale or

A mortgage company or lien holder will usually offer this option if a foreclosure is eminent or it is an investment or secondary residence.  They will state that if you wish you can seek to SELL the home and whatever you get for it, the difference or SHORT-fall will either be “forgiven” or due to the mortgage holder.  Whether they forgive or not generally depends on the owner’s perceived ability to pay.  There are usually a slew of documents that a seller will need to provide to the bank as well as acquiring a buyer for the property. The sale side transaction side generally goes according to a typical sale of property except that instead of negotiating with the owner of the bank, you are negotiating with both the owner AND the mortgage holder.  Guess who has the most leverage?  Most terms have to be agreed to by both owner and mortgage holder including the fees paid to everyone even Realtors.  Once the buyer and seller(s) agree with terms of the sale.  the bank (mortgage or lien holder) will require documents from the seller to help decide whether they will complete the Short Sale and if the seller/ owner will need to pay the deficiency.  The bank (mortgage holder) usually goes not pay any other bills connected with the house unless they are liens that directly relate to transfer of title (can talk title later).  Sometimes they will decline a short sale because there are other bills that are high such as a Gas or Water bill or even tax or other judgements.  After the bank is satisfied that the seller cannot pay the deficiency, an appraisal is done to find out EXACTLY what the house is worth.  Once this is done, generally some loos ends are tied up and the sale os allowed to move forward.  As you can imagine, this process DOES take longer than a typical sale.. thus to the buyers side….

Buyer’s side of the transaction is very similar to a general purchase except a couple more forms and the WAITING !!!!!. The WAITING is the biggest issue and many buyers cannot or will not wait the time it takes to close the transaction and become frustrated with all involved.

                SIDE NOTE:   I once had a client that was very interested in purchasing a Short Sale.  The particulars that I can share were that the property worth about 750k was being “Short Sold” at an agreed upon 629k or so.  Now the rub was.. as all the work that was put in making this work, the Seller’s agent was less than honest and after a month wait and 2 postponed closings, the Seller’s agent “just found out” about two (2) additional liens for a Tax and business lien totally about 40-50k.  Of course, the deal feel through because no one was willing to pay this lien including the  bank.  So of course the waiting on behalf of my client AND the failed transaction my client decided to “take a break” from looking.  Fast forward a few months, they found another agent that sold them a house from an open house that “suggested” they complete the entire transaction through him and his “people” to allow it to go smoothly.  LESSON: Short sales are tricky for everyone involved and that a bad agent on the other side will make you look bad and lose a client at no fault of your own.

Two new forms are an affidavit to make sure that there is no shenanigans going on where you, your agent or anyone involved gain illegally from this sale (kick backs etc.), and one that gives the bank permission to act in the matter of the sale of the home.  Not much changes, except the waiting and that more can go wrong as well as the bank may be less willing to negotiate terms.

 

2. Deed in Lieu of forclosure:

I will not discuss much about this in this post because honestly I am NOT A FAN OF IT.  Ok that is out of the way.  Basically, you (the owner of the property voluntarily give all rights back to the bank and just leave.  Give keys, sign deed and are done with it.  Saves the bank the time and expense of the proceedings as well as putting the owner in better favor with the bank in terms of credit “dings” and overall responsibility.  I take pride in home ownership, thus my disfavor with this option.  Banks would disagree.

Deed in Lieu (Not my fav..)

 

Occupy Our Homes!! WOW, Bravo!

I know this is a complicated issue but me as a REAL, Real Estate Agent I work to see people find their home and keep it. I understand the economics of these situation but again as an agent I say.. grant modification because WE KNOW that many of the homes were overpriced in the first place.

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Home finance closing costs

Vodpod videos no longer available.

10 Most Common Mistakes 1st time Home Owners

1. Not checking your credit report and score

You’ve clicked through hundreds of online listings, compared floor plans and square footage, and are eager to jump-start your search. But before you even think of setting foot in an open house, make sure you get a copy of your credit report. The cleaner your credit report and the higher your credit score, the more likely you are to be preapproved for a mortgage at a low interest rate.

Free Tri Credit Report

Credit Reports (TransUnion, Experian, Equifax)

Review your credit report a few months before you begin your house hunt, and you’ll have time to ensure the facts are correct and dispute mistakes before a mortgage lender checks your credit. You can access a free copy of your credit report at annualcreditreport.com once every 12 months.

2. Not getting preapproved

Pre Approval

Sample PreApproval Letter

After you’ve assessed your credit report, it’s time to establish with a qualified lender how much you can afford. First-time home buyers need to take the time to get an approval from their lender before looking at homes. Getting preapproved can help you save time by looking for homes that you know you can afford instead of lusting after something out of your price range. And it will put you in a better position over another bidder with no preapproval.

3. Not creating a long-term budget

Home buyers should create a budget before beginning their search to determine just how much house they can really afford (regardless of what you are Preapproved for). A good rule of thumb is to devote no more than a third of your monthly household income to housing costs, which include mortgage principal, interest, taxes, and insurance. There are several work sheets available online to help you figure out how your income, debts, and expenses affect what you can afford each month for the next 15 or 30 years. Please email or tweet me if you wish for one.

4. Forgetting about the hidden costs

There are several hidden costs that first-time home buyers neglect to prepare for. They can be anything from the closing costs to appraisal fees, escrow fees, homeowner’s insurance fees, property taxes, and even moving costs. Another factor is the cost of repairs and maintenance. When you’re renting and the furnace goes out, what do you do? You call the landlord. When you own a house, you have to fix it yourself. You may find there are numerous “nickel and dime” things to account for that could add up to a significant chunk of money over time. Think.. your first used car….Plan accordingly.

5. Not using professional help

Your Friendly Neighborhood Professional Realtor

Sure, it’s possible to go out and buy a home without the aid of a professional real estate agent. But think about how much time and stress a good agent can save you. For starters, Realtors have access to all the homes on the market through the multiple listing service, or MLS, plus all the ones that are under contract and have been sold. A specialist (like me) has time to sift through all of these listings, says Boss, and make the appointments to show you the houses, create comparative market analyses to determine proper pricing, and meet with necessary inspectors. It is like having a family member that has bought and sold many, many homes and is willing to walk you through the process step by step. I have to admit I get the most satisfaction from 1st time home buyers and their joy in purchasing the house they never thought they would own.

6. Picking your real estate agent and lender blindly

Sometimes people make the mistake of finding a Realtor they aren’t comfortable with. Ask relatives, friends, neighbors, and coworkers for referrals. BY the way I am NEVER to busy for your referrals!!

First-time home buyers, are generally more time-consuming than the average buyer and require more attention. A good real estate agent will be friendly and accommodating, show only homes that fit your parameters, and help you with strategies during the bidding process—but never pressure you into something you’re not comfortable with. It’s important that the Realtor be experienced with first-time buyers, understand their wants and needs, and be able to connect with them well.

7. Thinking you’ll get everything on your “wish list”

BIG ONE !!! Another mistake people make is being too close-minded while searching for their home. He suggests sitting down with your real estate broker before searching for a home and creating a need/want list. Some of the items you might want to include as “must haves” or deal breakers are the towns you’d want to live in, square footage, or accessibility to transportation. The second part of the list would be things you don’t necessarily need but wish to have, such as a garage, new kitchen appliances, or an extra room for an office. Understanding that a certain amount of flexibility is essential. You want to be able to afford everything you need—as well as some items you want, remember it is a negotiation between TWO parties that have to meet at common ground.

Negotiatons

Negotiations

Negotiations 2

Negotiations 2

8. Not keeping your feelings in check before hiring a home inspector

You’ve already chosen the perfect paint color to match your living room set. But hold on: Before you start picking out accent pillows for your sofa, you need to bring in a home inspector to check the safety of your potential new home. Inspectors will evaluate the structure, construction, and mechanical systems of the home and will give you the approximate price of repairs that may be needed. They will examine everything from the electrical system, water heater, and HVAC system to the foundation and floors. Buyers should find and hire their own inspector—independent of the real estate broker—to ensure there isn’t a conflict of interest. When you make your offer, make sure the seller is aware that your offer is contingent on the house passing inspection. You can also add a clause to the contract stating that the seller will pay up to a certain amount for any repairs required as a result of the inspection. NOTE: Also understand that I personally have NEVER seen a Home Inspection that has not found any “issues” whether small or big in a house whether older or new construction. Be REASONABLE.

Home inspection

Home Inspection

Home Inspection

Home Inspection

9. Not researching your neighborhood

You may be living in your dream home, but your neighborhood’s a nightmare. Or you may have children or are planning to have children in the near future, but you didn’t consider the quality of the school districts or parks in the vicinity. You should ask yourself a number of questions during your home search, such as “Are there good schools nearby?” and “Do I feel safe coming home at night?” If schools are an important factor, you should go check them out personally. To learn more about the community, open up the local newspaper.

10. Not considering the resale value of your home

This one has moved down in my view solely because as homes are so undervalued most recently, there is no doubt that most homes will appreciate adequately when the market turns. If you plan to stay in your home for the next 3 years or so, you should see appreciation. One thing you can do to increase and add to the value of your new home is to take care not to OVER PERSONALIZE your home, thus narrowing the type of buyer that would be interested, minimizing the overall value of the property.

HONORABLE MENTION

Falling in love with the first house you see: It can be easy to get caught up in the excitement and think you have found your dream house. Still, if you don’t look around first and explore all your options, you may regret it.

I love house

Falling In Love with the 1st house

Misunderstanding the realities of home ownership: With home-ownership comes responsibility. Not only will you have to foot the cost of repairs yourself, but you will also be responsible for landscaping, lawn mowing, gardening and all the other things apartment-dwellers don’t have to worry about. Furthermore, you can’t just pick up and move when you have a house.

Home Ownership

Home Ownership

Home Repairs

Home Repairs

Perfect Storm

As a science teacher, my students that love the Solar System often talk about our largest planet Jupiter and the large “red dot” on it’s surface. They are amazed that the “dot” is actually a tornado or storm that has been swirling and spinning on the gaseous surface of Jupiter for at least 300 years.
Enough with the Science now for what that has to do with Real Estate.

Jupiter and Giant Red Spot

Jupiter and its Giant Red Spot (Storm)

The perfect storm that has been brewing since about late 2007 in real estate is as the “bubble” burst …

and house prices began to plummet, (can I use the term plummet?) so did the mortgage rates. For those unaware of what mortgage rates are and how they are “decided”, let me give you the skinny.

Historical Interest Rates for Housing Mortgages

The APR or Annual Percentage Rate vs. Prime Rate

This is a graph of the Federal Prime Rate in US

The Perfect Storm (APR Rates)

The Prime Rate is the rate that the government sets on loaning money to banks. In other words the price of borrowing money from the government. It is currently about 3%.
Now, that is the rate that the government charges financial institutions (banks) to borrow from them. However it does not end there. We then need to borrow from those banks that borrowed from the government (capitalism at work). Of course in order to make money, the bank puts a “price” on their money usually in the form of percentage points.
Example:
Federal Prime Rate 3%
Banks Annual Percentage Rate: 4%
Difference: 1%

APR Rates for various Mortgage Types

Generally as the Prime rate goes down, the APR does too but the are some individual exceptions (but that is for another post).

Now, back to the red spot…. The storm. We already know how houses are more or less on sale (cheapest they have been historically),

but now because the Prime Rate is historically low (to stimulate the general economy), so s the mortgage APR. These graphs are mages will help. Also loom at the video for more info.

There we go.. PERFECT STORM to purchase a home. You pay less for the house in the beginning because it is a rock bottom prices AND you will pay less over tie because APR interest rates have NEVER been lower.

I’m just saying….

Hello world! Welcome to my newest Blog!

Welcome to my Newest Real Estate Blog. I will post many different types of information, comments and factoids concerning Real Estate and will LOOK FOR your comments. If you are looking for specific information please comment and let me know.

Ok, information that you might need:

Twitter: d21parker

Facebook: dirkparker@facebook.com

Website: http://www.dirkparker@prudentialfoxroach.com