Tell me what you know about the housing market…are things getting better? Worse? The same?  If you don’t know, who does? 

We read about Fannie and Freddie coming to the rescue but we’re still rescuing both of them…with Freddie asking for another $10.6 billion the other day.  Sure Freddie, no problem, where should we send the check…and…let us know when you need some more.  We’ll be sending a check to Fannie too.

Perhaps you’ve read some of what I’ve been reading lately…that over 4.6 million homeowners are more than 60 days behind on their mtges.  Oh no, wait, another source says the number is over 6 million.  Maybe it’s worse than we’ve been told…think?  Most of these mortgages are backed by these two giant bunglers…what does that mean…we’ll need to write more checks?  But hey, I’m running short myself…are you?

And get this, in July, a new program will be kicked off by these two - to help homeowners who have to give up their homes in a short-sale, come back to the table in two years and buy again.  Huh…What?  Is anyone checking the checkbook?

Funny story in MoneyNews.com…a big guy at JP Morgan Chase, David Lowman, when at a congressional hearing not long ago, says to the question - who could mortgage borrowers turn to if they felt his bank’s employees were not helping them hold on to their homes - “Come to me!”  Well, 50 borrowers came forward from the audience, at this invitation, presenting him with a document alleging his bank reneged on a pledge to help struggling homeowners.  So what did our hero do?  “He ran like a dog with its tail between its legs,” said Bruce Marks of the Neighborhood Assistance Corporation of America (NACA), which helps homeowners avoid foreclosure.  Didja know about this organization?  I didn’t.  If you know someone who should know about them, please pass this along!

Not all banks are equal though and some are loosening up on the lending side.  The majority are still pretty tight though.  The Fed Reserve’s senior loan officer survey recently showed most banks kept credit tight in the first quarter and residential mortgages saw continued tightening in terms.  This according to an article by Sudeep Reddy in the WSJ.

Now you need a minimum credit score of 640 and 5% down for conventional or 3.5% down for FHA mortgage qualification.  Terms are getting tougher so if you’re in the market to buy a home, get busy before terms get even tougher and rates (rates that are still terrific today) go up.  You do know that rates will definitely go up…?

Where the short-sales and foreclosures will take home prices is still a guess but if you’re putting money on it, I’d go with continued price drops and amazing deals for the next 18 months or so.  If you can buy…buy now!

If you need cash to fix up a short-sale or foreclosure purchase, we have sources and programs that you can use to get it done…roofing, siding, windows, floors, even new appliances!  So call us today and we’ll fill you in.  Take advantage of the greatest buyer’s market in the history of Real Estate!

The amount of inventory leading to outstanding deals is enormous. 

We’ll e-mail a list to you today.  Just tell us where and what you’re looking for.

If you need help selling or buying, call us for more info today!

Can’t hurt to talk ‘eh?

Ed

http://www.dailywealth.com/1338/Another-Way-to-Profit-from-the-Coming-Plague-of-Busted-Banks

  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)

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

You’re probably not old enough to have known a better time to be investing in Real Estate.? For Home Sellers, they’ve probably never seen a worse time to be for sale?   It’s not only a “buyer’s market,” its as hot as it can get for Investors!  You make money in Real Estate on the buy! Buy now, don’t wait, let’s look at why.

The bank bail-out deal did not work according to plan.  The banks got to borrow at 1/4% and lend out at 4.75%+.  Who wouldn’t jump on that arrangement!  Trouble is…few loans are being made, except to highly qualified buyers.  Not only are the Banks messing up the housing market, the PMI insurers are fighting with the Banks, refusing to pay according to their original agreements.   In some cases, the PMI Insurers don’t have the reserves they need to pay up. Case in point, a sad story…

I’m helping a young couple try to short-sell their home.  Both have been laid off, she has cancer and couldn’t return to work even if she wanted to.  They have a young son, have moved in to less than desirable quarters but it’s all they can afford,  they are both under 30 years old, they owe $270k on their mortgage and they’re 5 months behind on their payments.

So I get a ridiculous offer…$167k and the buyer wants $10k back for closing costs.  (I really don’t think the bank will get more than $185k for this house.) The bank does an appraisal and turns down the offer.  Not surprising?  Next, I get an offer for $190k and this buyer only wants $6k for closing costs.  The bank will look at it.  Weeks go by and no answer.  I have to work through a couple different Reps at this bank, to get the proposed deal looked at.  Meanwhile, the buyer wants an answer soon - they don’t want to miss out on the second choice.  We get an answer; the bank will go with the deal but the PMI Insurer wants the young couple to sign a $25k promissory note.  I’ve already sent the bank tax records, closed bank account records, a hardship letter, monthly budget and “comps.”  This young couple couldn’t sign a note for $25 bucks, let alone $25k?  The bank won’t allow me to negotiate with the Insurer.  When I informed the prospective buyer’s agent, she came back to us with a $200k offer and I informed the bank.  They said they would take another look.

Several days later, the agent withdrew the offer and I informed the bank that the deal was dead.  Several days  after that, the bank notified me they would accept the offer - they hadn’t even read my e-mail to them from days earlier.  Who’s in charge at this bank?

We now work with an attorney and a staff totally dedicated to doing short-sales.  This strengthens our marketing efforts and reduces the time necessary to get these done.

This whole mess adds value for the Realty Investor. The stumbling and bumbling of these banks has put a huge number of homes in front of Investors that have good financing sources.  If you can close fast and have savvy lenders, you’re in the drivers seat!  What we’re finding though, is that too many Investors are sitting on the fence, hoping for even more price reductions, before they snap the trigger.  More and more realty tracking firms are projecting a slide in prices for up to another 18 months.  There’s more to consider though…an increase in rates is inevitable and those rate increases may eat up the dollars saved on the buy, within a few years.  The time to buy is right now, especially since the banks, Fannie and Freddie are going to make it harder for buyers to get financing.  Look at these guys…struggling with depleted reserves.  Last week, a WSJ article pointed out that these reserves were supposed to be at 2% but were only at less than .6%

Fan/Fred put the ‘touch’ on the FED to the tune of $111 billion so far.  FHA requires lenders to have cash reserves of $250,000.  But now they’re considering to raise this reserve amount to $2.5 million.  You can guess how many Lenders will no longer be offering their services for FHA deals if this goes through.  They’re in trouble folks - and the loan game is going to tighten up like nothing we’ve seen.  The time to buy…if you can…is now!  Rates will go up, they always have.  When this will start is hard to say but when it does, it will be swift and severe!  Don’t get trapped, buy now while there’s plenty of choices and some money still available!

Now, where to go for the deals? We always look at the areas that offer the best potential for rental and resale.  If you’re not working with a proactive, ambitious Realtor that’s taking their time to do previews for you and pulling ‘comps’ to find the very best deals for you, give us a call…we can find you what you want in less than 30 days.  And…December is one of the best months for an Investor to be busy in the market.

But wait, there’s more!  Sound familiar? There really is more though, here’s how we work with you:

We get together to set up a strategy to find you what you want.  We nail down the best areas to search in.  We set you up with a search program that gets all new listings to you, the same day all Realtors get them…you’ll be at the front of the line so you don’t miss anything.

If you’re too busy to see the homes you have the greatest interest in, we’ll preview these for you and give you a report on them.  That will save you time  - we’ll only set up showings for the homes at the top of your list.  Make sense?

Once we find what you want and close on it, you’ll get 25% of the commission paid by the sellers.  This is to compensate you for your work in the search process.

There are over 1,525 homes for sale at prices less than $150k right now, in just 4 counties! Many of these were purchased and renovated or updated within the last few years.  This means you may have only minor items to repair or just cosmetic work to do in order to rent them out or re-sell them.
Time is money…don’t get caught in a rate increase and lose out on some of the hottest deals ever!  We just put a deal together for an Investor at 5.25%.  If that same deal ($150k) was 7%, it would require an additional $170/month.  Get in while you can ‘cash flow!’

Ed