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

Halloween, Halloween, oh what funny things are seen…Witches hats, cold black cats, Fannie and Freddie too…Homes sinking, rates as well, and banks telling buyers to go to hell!

The Buyer’s market is shrinking a little and “traditional Sellers” are still in a ’sufferin’ state. What a dilemma for them, especially those who had (they thought), built up huge equity in their homes, so they could sell about now and use that equity for retirement.  And…what about those that made sizable down payments, kept their noses clean and have to move now, due to job relocation…trapped? It’s scary, this Real Estate market today.

Trick or treat?  Guess it’ll have to be more tricks, (by Fannie, Freddie, the Banks and the FED), but…no treats this year…and…maybe not for many years to come?

While, in my opinion, all the above, along with the Dodd-Frank debacle, are most to blame. And hey, I was there in 2002-2006, when buyers jumped on the “no doc loan” wagon, and bit off more than they knew they could chew…they can be included in the “blame game,” as well.  Take a look at the HARP program that projected four to five million people would refi by now; only 894,000 did…and…70,000 of those are still underwater…what a program hey?  The news media will say; “only 894k took advantage of the program,” a politico bunch of BS. They don’t tell us how many were turned down…and…not one of us know exactly what is required to qualify, do we?  Should we?  Does the media even know?

I read today, in the WSJ, that Obama, has a new program that will provide immense help to the mtge crisis. People whose mtge is insured by Fannie or Freddie (if your mtge is insured by someone else…or..not insured, you will not qualify), and…who have not missed more than one payment over the last year…and…who have not missed a payment in the last six months, will have a shot at this program.

Soooo, let’s look at this big deal.  If the banks are forced to refi a huge number of the loans, reducing them to market value, that will greatly reduce the balance sheet of these banks, making their stock less attractive.  Yes…no?  Then, if they are forced to do all this refi thing, and reduce their balance sheets, how excited will they be to make new loans?   Will we see another pulling back and/or stricter qualifying conditions for potential buyers? I’d bet on it.  The mess is a mess to recon with, and before the govt comes along with any new deals, these should be carefully thought out and wrung out before put into effect.

How do the banks treat people now, regarding refi? I have a client, great young gal, has a key executive position as an Underwriter for a large re-insurer.  Over the past five years, she has corrected her credit rating from a very low number to the high 700’s.  Not bad ‘eh?  She’s paying over 6% on a 200k mtge, on a home that’s probably, at best, worth 150k to as low as 135k.  The bank won’t play!  What?!  The bank won’t play.  They say she makes too much money.  So through the maniacal approach by the banks, back in the 2000 to 2006 era, they inflated the value of her home to a fantasy level, in a greedy play to expand their vaults, they now tell her she doesn’t count…she can keep paying the 6+% rate.  Your call here…is this fair trade, and…America at its’ best?  Huh?

Really, folks, when we read that the govt, or the FED, is doing this or that, do we get any solid, clear details?  Do they think we’re all jerks, dumbbells staggering around?  Why not send your opine to some of these sources…let’s get on their backs…hey media, give us the whole story, without your opinionated BS.

On a more positive note; we have been helping buyers get outstanding deals on distressed and traditional homes.  We have the tools, experience and skills to get you where you want to be with a home purchase.  In any market, but especially this market, you also need good loan, title, and inspection professionals who can help you to your goal; we have that all in place for you too.

We welcome all opinions and stories about your Real Estate results, good or bad.  How ’bout it gang, got anything you care to contribute?

Hope this is a good day for you!

Ed Klein

Picture this…main watering hole for the agents of  a large Brokerage office…”Happy Hour!”   The agents are having a drink and sharing their weekly  war stories.  Let’s listen in:

“So Freddie, didn’t I hear you nailed a ‘hogger’ this week?”  “Yeah baby, you heard right…I’m at the house, a $475,000 listing, putting up a rider on the sign that says ‘Great N’Hood,’ and a couple drives up and wants to see it.  Ms. Homeowner was just leaving to get groceries and told me to go ahead and show it, so I did.  They liked it and said to write up an offer.  I showed the offer to the sellers and they went with it.  So…I didn’t have to split the commission with another agent…got the whole 6%, $28,500 for myself…hogged that one!”

See, in a normal situation, the listing agent lists the house at 6% and when a different agent brings a buyer, the selling agent gets 2.7% ($12,825) and the listing agent gets 3.3% ($15,675). The listing agent is the one that covers the marketing expense of the house.  Only makes sense the listing agent should get more…to offset expenses , right? 

 The listing agent probably took pictures (no cost?), made brochures ($15. ?), provided copies of the disclosure document ($5.?), had a yard sign installed ($40.?), spent a couple hours working with the home sellers, before the listing was secured, showed the home a few times (4 more hours?), took calls from other agents who showed the home (two more total hours?), wrote the offer (another hour and a half?), and will attend the closing (another 2 hours?).  So, a total of 11.5 hours.  But I usually find an agent will spend about 20 hours per deal.  So lets say the agent worked 20 man hours and had total expenses of $60.  Landing the hogger means he made $28,500 - $60 = $28,440 divided by 20 man hours = $1,422 per hour.  Yeah baby, hog it up!

Most buyers don’t understand this whole process.  They’ll sometimes be working with their agent but attend an open house or call to see one from the info on a sign and the listing agent shows them the house, writes the deal and gets a “hogger” on it.  The agent the buyers has been working with, sometimes for months, gets absolutely nothing and the agent that wrote the deal…spent maybe, a couple hours with the buyers, gets the big reward.  Bad deal, this?

Agents are supposed to not only ask a potential buyer if they have an agent, they’re suipposed to defer to the other agent, if there is one.  Then, if there is no other agent, the listing agent is required to disclose to the potential buyers, on an “Agency” document, how the process works…and…have the buyers sign it.  But do they?  The Hoggers are in waiting…c’mon uninformed buyers…line up!

When you start working with an agent, if you’re happy with them, have them set up all showings and situations for you.  That’s the only way they can get paid.  Don’t hand over the pay to some agent you don’t even know, who hasn’t done a thing for you.  And, if you do look at a home while in the search process, if the showing agent does not ask you if you are represented by another agent, let your agent know about it…the showing agent is either derelict in their procedure or unethical or plain stupid?  Would you want to reward someone like that?

One more thing (I’ll bet many readers are wondering about this), If a listing agent was happy with the normal way home sales pay out…and…an unrepresented buyer comes along…and…the offer is less than the sellers want…why wouldn’t the listing agent offer up all or part of the 2.7% he wouldn’t have to pay out to another agent, to help his sellers?  We do here…we do even more…check us out?

Beware…the “Hogger” may come your way?

Next: How to get the best deal when qualifying for a mortgage!

Ed

Whether you’re downsizing, up-sizing, investing in real estate or buying your first home…buying now, right now…is the best time to buy in 40+ years!

With over 7 million home owners behind on their mortgages, the already huge inventory of homes will get even bigger.  The choices available are phenomenal!

We’ve recently looked at so many foreclosures and short-sale homes and find a good percentage are not beat up at all.  In addition, many are eligible for the super FHA 203k plan, whereby you can get the fix-up cash you need…and…it gets better, since most of these will be devoid of all appliances, this program will kick in cash for that as well.  Nice! 

One of our “pros” recently put his client in a home that sold in the $230k’s just a few years ago.  Now, our client is in a large 4 bedroom, 2 bath home on a large, fenced lot with landscaping, a very big - new asphalt drive, new interior fixtures, new bath fixtures, new electrical box and some wiring, new plumbing, some new carpet and all new - higher end appliances.  He’s on cloud nine, thanks to our pro being informed.

All this was financed through this terrific FHA product and the client has nearly a new home.  He’s in it for the $164,900 he paid, plus the $25k he didn’t have but the FHA plan provided.

If you care to know how this plan could work for you, give us a call and we’ll give you the details.  We have so many first time buyers that know they can get a good deal but just don’t have the money to make repairs.  Find out how this plan can get you in the home you want and put the cash in your hand that you need.

And by the way, for those of you that would like to stay in your home, vs. a short sale or letting it go into foreclosure, give us a call, we’ll help you get the info you need.  No worries, you don’t have to be selling or buying, this one’s on the house!

We come across so many people that don’t understand how the “HAMP” program works…or…they’ve called their mortgage company and get nowhere on the phone with them.  You have to know how to work with these birds and what the rules are because half the time, they don’t know themselves.  Let me share a success story with you:

another of our “pro’s” is talking with one of our clients; a single mom with a serious financial crisis…less hours and very reduced pay, no where near the child support money she needs and…increased mortgage payments from an adjusted rate mortgage plan.  What to do?  She calls her lender and is told they will have to see if she’s qualified to adjust her payment…they’ll get back to her.  Weeks go by, no call back. 

She calls again and gets the same story.  (Enter our guy.)  She tells him what’s going on and he tells her she is qualified and asks her to give him an authorization letter, where he will be allowed to talk with her lender on her behalf.  He called the lender and told them she was absolutely qualified, to read the mandates and get busy helping this lady.  Within days…new ball game.  The lender is cooperating and the mortgage will be adjusted to a comfort level for her.  The family can stay put!

                                                                   Dontchaloveit!

And don’t be embarrassed if you paid too much, have no equity and the bank is on your case. (Cute story,see theWSJ /2/8/2010 by JamesHagerty.)  

My interpretation: the MBA (mortgage bankers association), movers  and shakers…right(?)…paid $79 million for their newer headquarters in 2007.  They thought they might be better off to sell it now.  They have an offer and it looks like they’re going to take it.  They owe the bank $75 million but the offer is for less, only $41.3 million.  Oh shucks…looks like they’ll have to come to the close with the balance…right?  Oh, but some good luck, they may not have drawn the whole amount because the bldg. was under construction.  They’ve refused to be interviewed about their intentions.  Smell fishy to you too?  But wait..there’s more!

Their chief executive, John Courson, in an interview last year, said that people that were “under water” -borrowers owing more on their home than it was worth- should keep paying their loans if they could.  He went on to say defaults hurt by lowering property values and sent the wrong message to their kids.  Well guess what?  He refused to be interviewed about what his Association was going to do about the balance owed.  Can we guess what that means?  Funny stuff, this?  You should feel bad about your situation?

                        Call us, we’d be happy to help you end the financial pain!

Back to the “buy” side; rates we thought were going up are still in the 5% range and jumbo rates are still in the 5.5% range…hey…the time to buy is right now…remember…you make money in real estate “on the buy.”  Also, if you’re buying to occupy, there’s the $6.5k to $8.5k govt. tax credit, or, cash if you don’t owe taxes. But that will blow away if you aren’t under contract by the end of April and scheduled to close by June 29th of this year.  Doesn’t look like they’ll extend it either…so…latch on if you can! 

Next time: “The Hogger.”  (Don’t miss it, it’s pretty funny…pathetic…but funny.)

Ed