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First Time Buyers: Start House Hunting Now!

August 21, 2009 By Debbie Leave a Comment

Start house-hunting now to qualify for tax credit for first-time
home buyers

First-time homebuyers-those who have not owned a home for at
least three years-may be eligible for the $8,000 federal tax
credit, but the window of opportunity is closing rapidly.

To qualify for the credit, the buyer must close escrow by midnight
on Nov. 30, when the tax credit expires. Buyers hoping to take
advantage of this benefit are advised to start house-hunting
early, as the buying and lending processes takes time.

MAKING SENSE OF THE STORY FOR CONSUMERS

I really think that since finding the right house can take some time, so  I reaally believe that home buyers should start the process when they think they are able and ready to buy.  Buyers also should allow for more time in getting their mortgage loan since that process is taking about two weeks longer to process this year compared to last year.

The tax credit is equal to 10 percent of the purchase price, up
to $8,000, subject to income limits. Single taxpayers are
eligible if their modified adjusted gross income is $75,000 or
less, while married taxpayers filing jointly must have a
modified adjusted gross income of $150,000 or less.

In order to qualify, you must live in the property. Vacation homes and investment homes do not qualify. Houseboats do qualify as do manufactured homes.

The seller cannot be related to the buyer in any way.

Married people filing as such cannot claim the credit if either
spouse has owned a primary residence within the last three
years. However, unmarried joint purchasers may allocate the
credit in any way they see fit, as long as it does not exceed
the $8,000 maximum.

The government will allow those who finance their purchases with
a federally insured loan to apply their anticipated credit
immediately toward closing costs or as additional down payment,
rather than waiting until they file their 2009 taxes to receive
the refund.

Filed Under: Buyer Info, News, Real Estate Advice Tagged With: government tax credit

Banks Slow to Modify Mortgages…US Treasury Dept reports

August 19, 2009 By Debbie Leave a Comment

An article in the L.A. Times discusses how some banks are making up excuses by telling home owners that they do not qualify for a loan modification because….. My associate Dan Dobbs, loan manager at
949 250-3981  who made me aware of this article states that the banks are not following the Obama Plan as they should. Basically, the article is about some banks who are making it difficult for homeowners to obtain the loan modifications they may be qualified to obtain.

If you would like a copy of the Plan, please let me know and I will send it to you.

Filed Under: Foreclosure Information, Loan Modifications, News, Seller Info Tagged With: loan modification

CREDIT REPAIR

August 16, 2009 By Debbie Leave a Comment

Did you know how a bad credit score can hurt your employment?

Did you know that  companies and employers check individual credit reports before hiring a worker. Yes, it’s not just about good academic grades and training. Your credit status can also make or break your future in a respected company.

This applies to executive job levels and regular jobs now require good credit. More employers today screen their applicants based on their credit history. Statistics show a 55% increase in the number of employers who inquire credit reports.

Can a bad credit score really affect your reputation? Apparently, a history of unpaid charges, late payments or too many credit cards with existing balances can send negative impressive to prospective employers.

With so many people looking for a job, it may be difficult to compete with others who can present good grades, college diploma and a high credit score. Having a good credit rating would surely give you the advantage you need over other job applicants.

Think about this, if you were the owner or the manager of a company, would you be confident to hire a person with bad credit? Or would you question the new hire’s sense of responsibility, the reason why this person seems to have problems in managing his own finances? Would you be confident to entrust company tasks to someone who doesn’t seem capable of handling repayment obligations to creditors. So you see, building an early credit history and maintaining a good credit standing can make a big difference in your search for employment. By the time you need to get a car loan, a mortgage or a credit card, a solid credit history can give you the break you need.

Filed Under: Buyer Info, News, Real Estate Advice Tagged With: Buyer Info, buyer tips, News

Another Thought for the Day….

August 15, 2009 By Debbie Leave a Comment

Quote of the day: “Pain nourishes courage. You can’t be brave if you’ve only had wonderful things happen to you.” – Mary Tyler Moore

 

“Everything is always impossible before it works. That’s what entrepreneurs are all about; doing what people have told them is impossible.”

– R. Hunt Greene, Venture Capitalist

I have no money, no resources, no hopes. I am the happiest man alive.” – Henry Miller

 

Try not to become a man of success, but rather try to become a man of value.”

– Albert Einstein, physicist

“The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term is the indispensable prerequisite for success.”

– Brian Tracy

 

 

 

 

 

Filed Under: News Tagged With: money, resources

What is a Short Sale?

August 15, 2009 By Debbie Leave a Comment

Simply put, the property is legally owned by a person or corporation and is often occupied by an owner or tenant or it could be vacant. However, the owner owes more on the property than what it is worth, therefore the bank or lender needs to approve the sale since the lender stands to lose money.

Paperwork / Rules for Offer Submission: A standard purchase and sale agreement is used along with an addendum acknowledging the fact that this is a short-sale transaction.

The asking price can be whatever the homeowner chooses since they still own the property. The seller might be pricing it low to encourage multiple offers, might have it high to try to recoup as much money as possible or it might be priced correctly. In most cases the lender has not approved a sale at the list price so a Buyer doesn’t know if his offer even at list price will be accepted. The buyer should perform their own market analysis and make an offer close to that. Submission of the market analysis to the listing broker at the time of offer may also be a good idea.

While it might be nice to have repairs made, the seller certainly doesn’t have the resources to make them and the lender is very unlikely to do so since they don’t own the property. So an “as-is” sale is the best and most likely to be successful. This makes trying to buy a short-sale property that needs repairs using conventional or FHA financing challenging at best and an exercise in futility at worst. This also contributes to the low success rate of completing a short-sale transaction.

Buyer should give a check to escrow after the offer is accepted. A Buyer can be flexible with this unlike a Bank REO situation. The Buyer should also supply proof of funds for down payment and pre-approval from the lender for any new loan to make your offer stronger.

 Closing can occur within 30 days but the 30 day clock will not start until the lender gives their approval – see below.

What is the time frame in this scenario? Initially this type of offer is handled like it would in a non-short-sale situation. The listing broker will present it to the seller but once they approve it, it will be forwarded on to the lender for their approval. At that point the listing broker has no control over the process and is in a wait and see mode like the Buyer.

This approval process may take one week or it may take up to three months. One thing to keep in mind is that while all parties are waiting for an approval of the offer another department of the lender/bank is working on the foreclosure and may actually foreclose on the property with offers in for approval.

If that happens, the deal is dead and the listing terminated as the former seller is no longer the owner of the property and does not have authority to sell. If that happens and the Buyer is still interested in purchasing the property work with your broker to follow-up on the property as it will come back to market with a different listing broker and usually a different listing price.

In addition to brokers, a short-sale negotiator may be involved who attempts to negotiate with lenders on behalf of the buyer and seller. By having experience working with lenders the hope is that they will be more successful than the inexperienced seller going it alone. It has proven to be somewhat effective but there is also a fee involved. It is a contingent fee that typically runs in the $2,000-$5,000 range and it is expected that the buyer pays this fee if they are successful. If the seller is using a negotiator it should be disclosed in the listing description so if you don’t see it, ask the question to avoid a surprise down the road. You really need patience.

Filed Under: Buyer Info, Foreclosure Information, News, Seller Info, Uncategorized, reo Tagged With: buyers, real estate news, Seller Info, sellers, short sale

What is an REO?

August 15, 2009 By Debbie Leave a Comment

Did you know that the bank or servicer will own the property in this scenario?
Your real estate agent or broker will negotiate this purchase for the buyer between a bank employee instead of an owner/seller).

Paperwork/Rules for Offer Submission: Standard purchase and sale agreements are used as well as the banks’ own addendums and disclosures. Offers must be complete and filled out in accordance with the banks’ rules in order for the buyer’s offer to be considered. These offers are either delayed until corrected or rejected by the bank regardless of the price being offered. Any delay on a desirable property severely limits your chances of getting your offer accepted.

The bank orders an appraisal or a BROKR PRICE OPINION. Then at the time of foreclosure/listing they have the listing broker determine if that value is still valid. Most of the time the Bank is pricing near market and is expecting to transact the property close to the asking price. If you feel the asking price is well over market it is best for the buyer to perform your own market analysis (something your agent or broker can do) and provide that information to the listing broker along with the offer. Stories, letters, opinions etc that are not supported by facts are of no value and cannot be used by the listing agent to help your offer. Many times the listing agent is working within a system where all they do is go online and fill in a few boxes – price, loan type, down payment, close date, indicate if the earnest money is in cashier form or not and if there is a preapproval. The lender never has the opportunity to see additional paperwork nor do they care. But if the market analysis is done well, the listing broker might be able to use that to justify a lower price thereby making your offer acceptable.

Repairs: The Bank prefers not to make repairs so an “as-is” sale is best. If a few repairs need to be made to facilitate FHA or Conventional financing the Bank might be willing to accommodate that so it is certainly ok to ask for. It’s best for supporting bids for the repairs to accompany the offer so the Bank knows the buyer is not just making numbers up. Often times the house will be a fixer or in a condition such that traditional lenders will not lend on the property. In those cases, an all cash offer or possibly a construction loan are necessary to get the deal done. The bank does not like to consider FHA offers since many of these properties will not qualify, and the bank may prefer all cash offers.

Earnest Money: It will need to be in the form of a cashier’s check (not a note). Proof of funds for the down payment and loan approval for the balance will also need to accompany the offer.

Closing Date:  A short escrow closing is favorable. Many institutions are beginning to have penalties for closings that run beyond some date so make sure your lender can perform in that time frame. If there is any doubt you either need a different lender or need to have the lender agree to cover those late fees if they don’t perform timely.

 In all cases, the listing broker does not have any control over the response time no matter what timeframe you put in the offer for acceptance. The best approach is to ask the listing broker for an approximate length of time needed for response and use that in your offer. If the offer is for far less then the asking price do not be surprised if the response is an outright rejection. Banks are trying to maximize their returns and are not looking to give properties away. They are also usually unwilling to go through multiple counter offers and if they feel the potential buyer is trying to “steal” the deal they will not try to negotiate. If the offer is a solid offer (close to asking, few contingencies) it may get accepted without a counter.

Filed Under: Buyer Info, News, Real Estate Advice, reo Tagged With: Buyer Info, Real Estate Advice, reo

Feel Better!

August 11, 2009 By Debbie Leave a Comment

Do you ever feel anxious, sad  or depressed? How do you help yourself feel better? Do you eat, drink alcohol or take drugs? Some people disappear into sex, work, isolation, or just “veg out” on the couch watching  TV. These are only temporary fixes and lead to drug addiction, obesity, lethargy, and illness.

I think a better way to feel good is to MOVE. Walk around the block, dance and breathe deeply as you do it. This is great theerapy for anxiety and depression. LAUGH out loud, go to a movie – comedy of course. Listen to a stand up comedian’s tapes or go to a comedy club. TALK and share your feelings with someone you love and respect while they give you words of encouragement.  FRIENDS and FAMILY will give you attention, care and affection which you will give back.  VOLUNTEER your time to a children’s hospital or old people’s home.

These positive helpful remedies stimulate the brain to make endorphins which cause us to beel exuberant or happy with no side effects. Try it, you will really love it!

Filed Under: News Tagged With: love

Foreclosure and Loan Modifications

August 10, 2009 By Debbie Leave a Comment

There is so much information out there about foreclosure and loan modifications in the news that the consumer does not know what to believe. I am in the process of gathering information to benefit the consumer. Therefore, I ask you to please send me your questions or post them here so that I can research them and post the correct information.

My view as a Real Estate Broker is to advise and educate when I can. Please post your questions here. You may also send me an email if you wish at Debbie@DebbieFranklyn.com. It would be my privilege to help you.

Filed Under: Buyer Info, Foreclosure Information, Loan Modifications, News, Real Estate Advice, Seller Info Tagged With: foreclosure, loan modification, realtor

Homebuyers benefit from current market conditions

July 23, 2009 By Debbie Leave a Comment

Wednesday, Jul. 8, 2009 – 12:00 am | Page 8B

A new survey of California homebuyers shows that nothing prods behavior like falling prices and low interest rates.

Among 1,400 buyers surveyed statewide by the California Association of Realtors:

• 68 percent said price decreases finally set them in motion to buy a house.

• 39 percent said lower interest rates helped them move to a “better location.”

• 23 percent cited the likelihood of rising interest rates as a reason to get off the fence.

First-time homebuyers especially responded to falling prices in distressed inland areas such as Sacramento, the Central Valley and the Inland Empire of Southern California. Statewide, first-timers accounted for 38 percent of sales – twice that of the same survey a year earlier.

“It’s just a dramatic improvement in housing affordability,” said California Association of Realtors  Chief Economist Leslie Appleton-Young. “These are individuals who haven’t experienced a loss. They don’t struggle with a home to sell.”

The 86-page report was California Association of Realtors’ Report 10th annual look at homebuyer behavior, a span running from housing boom highs to the bust that has followed. Released Tuesday, it consists of telephone interviews with Californians who bought existing houses in the second half of 2008, a time when the economy stumbled, foreclosures multiplied and bank repos became abundant.

Results showed that 51 percent of buyers bought homes with a history of distress. Inside that category, 38 percent bought bank repos and 13 percent bought “short sales,” homes in which lenders accepted less than owed to avoid higher costs of foreclosing. The other 49 percent of those surveyed bought homes from individual sellers, a category known as “traditional.”

Collectively, those buying repos reported the hardest time getting financing. They rated their level of difficulty in getting loans at 8.9 when asked to rank it on a scale of one to 10.

Yet those buyers were often investors, and more savvy than others about mortgage products. The CAR survey said three in five repo buyers used adjustable-rate mortgages and most claimed to understand their loan terms.

By contrast, 88 percent of loans used to buy traditional homes were fixed-rate mortgages. Nearly a third of these borrowers, however, claimed afterward they didn’t fully understand the terms.

Buyers also reported longer waits to close escrow. Just 37 percent said they closed on time; it was 55 percent in 2006.

Other key findings:

• 26 percent of buyers plan to live in the home for two to three years; 44 percent three to four years. Thirty percent aim to stay up to five years.

• 84 percent of buyers used the Internet as the key tool in their house hunting.

CAR said its survey results have a margin of error of 2.6 percentage points at a 95 percent confidence level.

Filed Under: Buyer Info, News, Real Estate Advice
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