Having problems with your Realtor?  Have you thought about firing the inept, lazy… shows you too many homes that don’t fit your parameters, only cares about his/her commission, hard to reach person?  Why not?

See, here’s the problem with too many people on a home search, they think they’re stuck with the Realtor they started with, when in fact, they may be not.  If you hired someone to fix your roof and they didn’t perform to your standards, you’d can them, right?  Take heart, in most cases, you can do this with an under performing Realtor as well, but you have to fight for your rights!

Think about it this way…the Realtor will likely get about 3% for getting your deal closed.  Here’s what the Realtor should do: help you find the home you want, drive you around to the homes, conduct computer searches, write the deal, set up a title company and attend the close with you.  All together, on the average, the agent will put in about 20-25 man hours, including all the above.

Let’s look at a typical deal, a home purchase for $350k.  The commission at 3% = $10,500.  That’s $10,500 divided by 20 man hours = $525 per hour! But, did the Realtor perform to your standards?  Did the agent send you hundreds of homes to search through, many of which did not even come close to what you wanted? If so, the agent was wasting your time!  Did you have to cater to the agent’s time schedule…or did the agent accommodate you?  Were you pressed to buy a home you looked at, but really didn’t know if it was what you wanted? Were your calls to the agent answered in a timely manner?  Did the agent offer you Lender resources, so you could shop the mtge rate, for a best deal? Did the agent run a comparable study, regarding the price you were going to pay, to protect your interest…you certainly didn’t want to pay too much?  Of course, the more you pay, the more the gent makes…right?

I’m working with two buyer’s right now.  We’ve seen some homes each may have purchased, had I not encouraged them to, “make sure you get this right, you don’t want to spend a quarter of a million dollars unless it’s the house you really want!”

If the agent you started with isn’t getting it done for you, or, expects you to run around to “open house’s,” and do your own searching, and have you call them to get you in to a house you found, so the agent can get the $525 per hour he/she is not entitled to…CAN THEM!

First, tell the Realtor you don’t care to work with them any more.  If you didn’t sign an “exclusive buyer’s agreement,” that’s all you have to do…tell them to take a hike.  If you did sign an agreement…and…the agent won’t release you, contact the Broker the agent works for and insist that your agreement be canceled.  The Broker may want you to come in and “work it out,” but tell them you have no desire to spend anymore of your precious time on this, you just want to end the arrangement.  Get it in writing!

In most states, the Broker can hold you to the contract, making you stay with them to the end of the agreement.  In that case, if it were me, I’d let them know, I’ll tell everyone I know about the mistreatment I experienced with the agent and the Broker.  That might influence them to release you.  The language in the agreement is critical…do you have any way to get out of the agreement.  If not, call an attorney to see what they would charge to write a letter on your behalf.  It may be worth a couple hundred bucks to get out of the deal?  Raise all the hell you can, don’t lay down for being mistreated!

Warning: if you do buy a home the agent showed you, you will probably be required to pay that agent the commission due them. If you do get released and start working with another agent, if you go back to a home the first agent showed you, and you do decide to buy it, the first agent will have a cause to claim “procurement,” and rightly so.  In that case, the agent you are presently working with would not get paid.  So be careful about this kind of issue.  If the first agent showed you a house you are still considering, tell the new agent you need something in writing that excludes that house from your arrangement with them.

An agent is working for you, not the other way around. Don’t sign an “Exclusive Agreement.”  If the agent is worth his/her salt, they should be confident you’ll stay with them, because they will perform to your standards.  Neither my partner nor myself, require our buyer’s to sign any agreement, we work on a handshake basis and tell our buyer’s; if at any point in the search and purchase process, they aren’t happy with us, they can fire us at will.  That’s only fair, don’t you agree? This applies to our home seller’s as well.

The deals out there today are the best you’ll ever see.  If you can buy, do it soon.  There are so many homes still in the bank’s hands, but waiting to see what comes on the market, could be a huge mistake.  If you find what you like, buy now…rates are great and you’ll have a very manageable mortgage payment.

Ed

Help me…I’m one of 4.5 million that got a letter saying ‘I may be qualified for a mortgage adjustment, for my underwater home.  They say; the bank may have taken advantage of me?

So what’s the deal?  The govt. has told the banks they need to send a letter to 4.5 million owners who may have been financially harmed in the “Robo” signing process.  They may be entitled to compensation as well.  Nice, ‘eh? The banks have begun sending the letters out.  NOW we’ll see some action!  (Not!)

The WSJ/11/2/2011, reported that the reviews cover 14 of the nation’s largest banks and are being overseen by the Office of the Comptroller of the Currency and the Federal Reserve.  Lenders have hired hundreds of employees to conduct the labor-intensive reviews, so says the journal. Sounds good so far…or does it?

This will, no doubt, be much like the original approach the banks had to take, as they didn’t have enough help to handle the enormity of the problem…hire hundreds to thousands of new employees, employees not trained to do what they had to do = big time slow down in the process + lots of errors and corrections = more lost time, etc.!

To qualify, the home owner has to have suffered “financial harm.” And…who’s to prove harm; the home owner, of course.  And…how many documents will have to cross hands?  And…how long will this take?  Another very expensive attempt by the Govt. to solve the problem, and hey…they’re trying, but the plan is not carefully thought out and organized.  Where will they get the new employees who will understand all this and who’ll be qualified to decide who suffered “financial harm?”

What it will do and do well, is slow down the entry of more foreclosure homes, harming the traditional sellers, as prices will continue to drop.  Oh boy?!

(Check out Martin Hutchinson’s, take on this one.  Google him up and read what he has to say.)

By  the way, this only covers people who bought before 3/’09.

Last month, new home bldg was down for the 4th straight month. And, 16 Trillion of home equity has been lost since ‘06.  With the unemployment problem, and many people living in fear that they’ll be the next to get their walking papers, where are the buyers?

If you can buy Real Estate now, you’d better get busy…find what you’re looking for and buy it.  Do you know, some sources are predicting the high side chance of a housing shortage, in the next 10 years?  If you buy now, and that does happen, you will have made a smart choice…your equity will really climb!

Another reason to buy; % rates have to go up. Even if they go down, say a half point, from 3.99% to 3.49%, that will only reduce a mtge payment by about 30 cents per thousand of mtge.  So, a 200k mtge could be $60 per month less, if you did wait and that did happen.  But…what if the rates go back to the 6% level by the time you buy?  You’d pay $1.23 more per thousand = $ 246 more per month, than at the 3.99% rate.  BUY NOW!

The other side of the coin, selling a home…if I wanted to sell, I’d get it on the market pronto, before a rate change is the next thing that slows sales down. If you don’t sell asap, you may have to wait it out for another five to ten years to get anywhere near the price you want.

An article I read said, Citi bank sent out 346 million credit card offers in the 3rd Q, this year.  Can you believe it?  The banks have all the answers?  Very weird, when over 55 banks were shut down by regulators this year…so far!

What’s your opinion on all this, how’s the economy working for you or your business these days…and…do you have any Real Estate stories you care to share with us?  Good or bad, we’d love to hear what you have to say.  Hit the “comments” below and let’s hear from you!

Ed

So much has been written about the housing market problem; who’s to blame, why’d it happen, on and on.  What we haven’t seen much of is the fact that during the “bubble,” mtge lenders were allowing a buyer to have a 61% debt to income ratio.  All their debts, added to the new mtge they were contemplating (mtge payment, interest, taxes and insurance), could be 61% of their gross income.

So, take a family of four, one spouse earning $15k and the other $45k, buying a home with a 61% ratio.

Total income is $60k, and with the new mtge, they have $36,600 of annual debt.  Well, they still have $23,400 left, right?  Oh no, the 61% is of gross income.  If they were lucky enough to have to pay only 10% of the gross income for Fed and State taxes ($6,000), that still leaves them with $17,400, or $1,450 per month, for everything else they need.

Let’s help them budget?  I mean, if the lender felt this approach was OK, who are we to question?

We need money for: utilities, trash service, hlth/life/auto insurance, food, clothes, school supplies, vacation and entertainment (?) and for emergencies.

Let’s use a conservative amount for all the insurance needed…say $650 per month, and use a utility number of $150 per month.  OK, we’ve still got $650 left for the rest of our budget.  Let ‘r snap, c’mon you financial guru’s out there, budget up now!

What you didn’t know is that the couple had a few grand in the bank, a little cushion, in case things got tight.  They have this money because they were provided with a “nothing down” mtge.  They were even allowed to roll the closing costs into the mtge.  No skin in the game here…just monthly mtge payments.

How’s the budget coming?  Did you have to pull out vacation and entertainment money?  Is there enough left after that?

Let’s take this family out a few years and see how they’re doing.  Whoops, the $15k earner lost their job.  Monthly income is now only $1,087 vs the $1,450 they had three yrs ago.  And geez, the savings are depleted as well.

So, the brain jobs that set this program up, the lenders, what did they do wrong?  I mean, let’s just go with basic math, let’s not bother the Actuaries, let’s go back to 6th grade math and try it again.

Today, as in the years before the “bubble,” the ratio used is 31% of gross income.  Whew, they’re on the right track now, ‘eh?  What a joke!  Unfortuneately, the joke is on “Joe the plumber.”  The lenders received bail out money for the errors they made.  Should they have? 

All these homes, homes that have 100% mortgages on them, homes that the buyers can’t pay for, or, realize their home is worth less than it was in 2000, all these (26%) of all US homes, what does it all mean…where and when will it all shake out?

Do you wonder how the banks represent these underwater monuments on their balance sheets?  Would their stock go right down the drain if they held them on their balance sheets at actual value?

I mean…if the bank holds a $600k mtge on a home that is now listed as a short sale, at $200k, is that what’s on the balance sheet?  Or, is it still there at $600k?  How about it bankers, send us the answer.

Well, there is some really good news to go with all this; if you can buy real estate now, you chance to be one of those people who can one day say: “I made my money in real estate!”  The bargains are super!  We’ve been putting our buyers into homes at huge savings.  Just got a single mom into a T/H that sold for over $200k a few yrs ago, for $105k.  A home that had  $925k against it just sold for $510k.  Another that has $4.5m against it, looks like it will get sold for $1.7m; the list goes on.

Today, as I write this post, in the four counties comprising the core Twin City area, there are 1,188 homes for sale for less than $100k, and 3,326 homes for sale in the $101k to $200k range.  If you can buy now, do it!  Rates are so low, we may not see anything like this again…ever.  Buy now and you’ll have bragging rights in 7 to 10 years.

And, if you’re one of the unfortunate home owners who have to sell, give us a call so we can tell you how a “Short Sale,” may help you…or…how to sell and get your equity out.

Do you have an opinion or story to share?  Please do, we love to hear from you even if your opinions differ from ours.

Ed

Have you ever seen ads for pricing your home…”Free service, just sign up and receive your free home analysis.”  Did you wonder what the catch was…whether you’d really get the free analysis?

Well, most of these sites direct your inquiry to an agent who has purchased a zip code, city or county, as an ‘exclusive’ arrangement for obtaining leads.  That’s right - the e-mail or call you’ll get will be from the agent who made this deal with the site owner.  No problem…if you’re OK with that but if you thought you we’re not going to be on an agent’s radar, not so good?

Most any Broker will give you a “CMA,” (comparative market analysis) for your home.  Some will require you let them visit your home and they’ll come armed with their ’sign here’ listing agreement.  Others will e-mail it to you and follow up to try to get your listing.  Hardly ever will you get an e-mail with the info you requested and no strings attached.  Now the home visit is important as whatever amenities you might have could add to the value…things like granite counter tops, ceramic baths, new appliances, etc.

I remember years ago, working with one of these sites, and the surprise and alarm the homeowners displayed when I called. (A very watered-down description of their reaction.)  I cancelled the service as I felt it violated the homeowner’s goals.

Many of these sites host tutoring seminars aimed at teaching the agents how to sneak up on these unaware home owners.  Clever stuff, this?

Here’s what we do here but before I get to that, here’s what you should know about this game:  Realtors don’t get paid to do these evaluations…unless you’re willing to pay them?  Realtors often do a lot of work for nothing and they, much like yourself, don’t like to work for nothing…right?  Realtors are concerned that they’ll do this work for you and find you’re really not ready to sell but were just curious about what your home might sell for…if you were going to sell it.  Or, they’re concerned that they will give you the data you need and you’ll then call some other Realtor to sell your home.  Could happen, right?  So, what’s the answer, how do you get what you want without paying for it or being hassled to list your home with a Realtor you don’t even know?

Simple solution, call us…no obligation on your part…straight forward honest ‘CMA’ will be done for you.  And, when we visit your home, we do not have anything for you to sign.  You’ll get the info you asked for within 24 hours.  We feel that if we treat people with dignity and respect, providing this service without a ‘hitch,’ when they’re ready to sell they’ll get back to us.  So, fear not, no funny stuff, just good and accurate service you can depend on!

So if you’re considering the sale of your home, check it out ASAP…most industry sources feel that a lot more foreclosures will come in the next few months, putting  additional downward pressure on home prices.  Also, in this part of the country, home sales are the highest between now and July.  Again, check it out…can’t hurt to be informed?

Buyers have only two weeks to identify the home they want and get a purchase offer in place, in order to get the govt. tax break.  Why pass on a $6,500 (buyers who have not bought a home in the last five years) to $8,000 check or tax credit from the govt.?  This is big…get your share.  You have to have a signed deal before the end of this month and a close date by the end of June.  The clock is ticking and we know we can find the home you want within the next two weeks.  Give us a call and take advantage of our ‘cooperative search’ process, whereby you also get extra cash when you close on your new home.

Any stories you care to share with our readers?  We’d love to hear from you.  Just click on the title of this post and a comment box will open.

Ed (651-770-5000)

  So on 4/30/2010 this Birdie flys away and takes with it the $8k/$6.5k tax or cash benefit. 

  You won’t miss it, will you?  Buyers still have time to find the home they want and nail

  down this huge govt. hand out!

We can find the home you want in less than 30 days, so hang with us and we’ll get you there in time.  The housing inventory is exceptional, you name it and it’s out there for you.  Best part is; the deals are unreal and you’ll probably never see it better in your lifetime!  Add to this, the rates that continue, at least for now, at record lows…and…the FHA203k program to help you with the cash you don’t have…to make repairs and improvments.  That means you can get a short-sale or foreclosure property that needs some fixin and appliances - to look like new before you move in!  Seriously, if you can buy, BUY NOW!   http://money.cnn.com/pf/loan_center/index.html

FHA is still at 3.5% down, and up to 6% for closing cost request from sellers.  Rates are still just over the 5% mark but all indications are, we’ll see a serious rate increase starting soon.  Don’t let it happen to you…Buy Now!

Home ownership declined some in 2009.  With some of the older short-sales and REO’s getting sold, we’re hoping for an uptick in the traditional home sales.  While some markets report slight price increases, this may still be a ’skewed’ result due to the lower priced, distressed stuff going away.

Many pundits see the market prices dropping even further due to the expected glut of homes that were held back from short-sales, as the owners tried to qualify for mtge payment reductions and/or, principal reductions.  So few have been able to qualify and of those that have, over 35% are back in the soup within months, failing to carry out the plan.  These homes will show up next.  How many, is anyone’s guess.

Another move by the FED, that will no doubt have a serious affect on the market, is their decision to stop buying mortgage-backed securities.  This could result in rate increases and diminish the ability of buyers to qualify for loans, or, limit their ability to buy the house they want?

We have been helping buyers get outstanding deals and rates throughout this housing mess.  We can help you too.  Give us a call to discuss the possibilities.

If you’re ‘upside down’ in your equity position and wonder whether you should jump on the ‘HAMP’ band wagon, or sell or short sell, give us a call and we’ll fill you in.  There’s a lot to learn and it won’t cost you a dime to get this info.

If you’re interested in selling but question whether this is the time to try, call us…we’ll give you all the market info you need to make a decision that serves your best interest.  No charge here either!

We work with a lot of investors to help them meet their goals, both on the buy and the sell side.  If you’re an investor who could use some help, give us a call…can’t hurt to talk?

 We love to hear from ourt readers.  If you’d like to comment on this or any other post, just click on the headline and a comment box will open for you. 

This mess will end.  Mean time, let’s work together to get you where you want to be!

Our best to all of you!

Ed (651-770-5000)