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

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

Well, aren’t you lucky…the FED’s bailout is going to help home owners and sellers in trouble.  Really?  And when will this happen, when?

The driving factor for home sales from 2003 - 2006 was the “0″ down bit, accompanied by the ability for buyers to roll their closing costs back on top of the offer = no money out of pocket to buy = very risky loans.

Fannie and Freddie got hit in a big way and now, the mortgage game has some very serious restrictions, no more “0″ down and nearly impossible to roll closing costs into the loan. (Exception being the FHA’s 6% back from the seller and the  203-k program.)

Then again, FHA (founded in 1934 to provide mortgage insurance for lenders, in case of default), is still offering insured loans with only 3% down.  In fact, in 9/07, they insured $6 billion of these…and…this year, they insured $25 billion of these that’s over 4 x the ‘07 #.   Wonder who’s watchin this store?

As I’m writing this post, I checked the MLS for the T/C “core” counties: Ramsey, Hennepin, Dakota, Anoka, Washington, for the number of homes for sale for: less than $100,000, $100,001 to $200,000,  and for the number of homes for sale built in 2003 or newer.  Absolutely mind boggling!  I’ll give you the numbers a little later in this post.

If your selling and you’re too close to the bone, to pay out 5 -6 or 7% to sell your home, call me right away, I can probably save you from 3% to 5.5%…that means you’ll save thousands of dollars…or…not have to bring money to the table to close?

I’ve recently been able to help two home sellers, pay only $495 to get their homes sold.  If we talk, remind me to tell you how this was done.

So many home owners have learned that they can’t refinance because their homes are worth less than when they bought them.  Those who had ARM’s or % only financing, have seen their payments get jacked up past what they can afford to pay.  If they can’t pay, their options are; short sale or let it go into foreclosure.

The homes that are selling now are those that have maximum exposure, show well, have a minimum of repairs necessary, are priced competitively and offer financing help.  You have to look good and get the maximum exposure you need.  We use one website that gets over 6 million visits monthly and we get your home in over 700 other websites as well.

If you’re having trouble with your mtge., you might want to check out the “Hope Now” program, promoted by Tres. Scty. Henry Paulson.  It began as an effort by housing counseling agencies and mtge. service providers, to modify loans on a voluntary basis.  Home owners in trouble are to call 888-995-hope.  The orginization charges borrowers $300 to get help.  Some banks are willing to add past due payments to the loan and structure a new payment plan to bring the home owner current.  In many cases, the new payment is higher than the old one…hmm, what’s up with that?  I may have it wrong though, so check it out at “Hope Now.”

A source for the forms used for short sales and foreclosures can be found at genworthfinancial.com.  If you’re contemplating either solution, check them out.

We’re spending a great deal of time lately on short sales.  The process is complex and if you don’t send in the total package lenders require, your request will go to the back of the line and you may not get an answer for months.  Call me for the list of what you’ll need to send and I’ll mail it to you, no obligation of course.

In general, we find that 1st. mtge holders want to get at least 90% of what you owe them.  The second mtge holders like to get 10% or more of what you owe them, but will often take as little as $1,000.  EG: a home owner owes a total of $300,000…$240k to the 1st mtge and $60k to the 2nd mtge.  The deal may be accepted for $216k to the 1st and $6k to the 2nd = $222k total.  We’ve seen even lower numbers for a case like this.  The key to success is in the ability of the listing agent to negotiate with the lenders.  I feel I offer seller’s this expertise.  So, if you’re in a jam like this, give me a call…can’t hurt to talk, right? Also, if the pundits who surround you tell you that you’ll have to pay income taxes on the difference, Google up: IRS 982 and study this information.  If you don’t understand, talk with an accountant, your pundits may have it wrong…as usual?

Oh yeah, the numbers for paragraph #5 above: # selling for $100,000 or less in these counties = 1,200

# selling for $100,001 to $200,000 = 4,385

# selling that were built in 2003 or newer = 2,031

If you’re buying, see our “Buyer’s Incentives” above…it could be worth thousands of dollars for you!  Plus, we can really deal for you.  We have all the tools for a  strategic approach; price points, amenities +/-, days on market, etc.  Call me, let me help you get the best deal and give you cash back at the closing for your help in the process.  And, if you have to sell to buy, we need to talk about that as well.  Remember, it’s worth thousands for you!

I’ve talked with a lot of prospective seller’s who have put their plans on hold, after we examined the whole truth about this market.  I’ve also helped many home seller’s in trouble avoid total financial disaster.  What you want to accomplish is the most important element, lets talk about your goals and see if we can come up with a plan that makes sense.  Doesn’t cost a dime to plan, let’s get a plan put together for you.

Give us your story,  tell us about any experience you’re having with today’s topics, or selling or buying real estate.

Ed