As a personal rule of thumb and as an Allen Tate company policy we ALWAYS recommend a property survey when purchasing a home or vacant land. I say that up front because so many buyers choose not to have a survey performed when buying. We see the choice made, not to have a full survey frequently in platted subdivisions or existing homes where sellers sometimes provide the new buyer with an old survey, thus luring the buyer into a sense of security which may not always be accurate.
To start, let's define what a survey is. According to dictionary.com a survey is to determine the exact form, boundaries, position, extent, etc., of (a tract of land, section of a country, etc.) by linear and angular measurements and the application of the principles of geometry and trigonometry.
Now, this may sound complicated because it is. Eye-balling corners or assuming that tree lines are boundaries and that fencing setbacks are correct, is not something that a lay-person can perform with any semblance of accuracy. It takes a trained eye to determine boundaries by looking at historical metes and bounds references, old irons and landmarks and other varying documentation and topography.
Recently, surveys have "saved" several of my clients by providing additional information that was not discovered during the abstract research process that the attorney performs for title, by identifying ownership and therefore maintenance obligations of fencing and by determining appropriate setbacks for desired future improvements to the property.
In the grand scheme of things, surveys are a small price to pay in order to make sure you are getting what you bargained for. Not to mention the actual copy of the survey can be attached to or referenced in the new deed in order to insure additional confidence for yourself and future buyers.
So don't skimp...buying real estate is one of, if not the largest investment, you will ever make. Make sure you have a survey every time you buy so you DO get caught holding the "flag"...
Happy House Hunting!
Brooke
Showing posts with label real estate. Show all posts
Showing posts with label real estate. Show all posts
Wednesday, September 28, 2011
Sunday, August 29, 2010
Which comes first? The chicken or the egg?
Just ran into a frustrating situation this past week on an appraisal where the value came in significantly lower than the contracted purchase price and tax value. Where as I have been preaching for years that tax value has little if anything to do with actual market value, I would hate to think that a seller/owner would pay close to 50k more than the home's "market" value as determined by one individual, in this case the appraiser, who is following a governmental set of guidelines. I say this because I in no way believe that the appraisal was the accurate indicator of the home's value. Real Estate 101 tells us that the value of a home in a given market is determined by the price that the buyer and seller can agree to on a particular day. It takes into account what is on the market during that period of time, the price the competition is available for and the overall thought that the buyer will choose what is best suited for them at the best price.
Well, how things have changed. As we are in the midst of "recovery" and the real estate market is taking a deep breathe as we enter what has been historically a slow period, it is now no longer good enough to bring said buyer and and seller together on price and terms, you now battle an unknown set of rules. Those rules are the ones determined by the lender or quasi-governmental entities such as Fannie Mae and Freddie Mac, as they throw down regulations depending on the loan program that the buyer is using, that will dictate which set of criteria will be used to determine the value of the home.
Buyers and sellers are spending unheard of amounts of time and money to find the "real" value of their home in a historically unique marketplace. As they are trying to discover and negotiate this value, the lack of comparable sales, due to the depressed market is being used as an excuse as to why values are not there. This is happening in markets that are considered to be somewhat "stable". Meaning that nothing has been sold in the past several years because nothing has been on the market, because folks actually LIKE to live there! That usually means high demand and a relatively safe investment. Banks say NOT SO FAST! No comps, no values or they will compare and adjust the subject home with homes of varying age, quality of construction and design...for instance comparing a one level home to a two story with a basement.
The moral of the story is to
1-be aware of these risks as you are searching for homes or trying to sell your home
2-have comparable homes in your back pocket should an appraiser ask for assistance in establishing value
3-use more traditional forms of lending when possible, such as conventional loans with lower LTVs that have fewer governmental strings attached
4-don't buy anything unique (just kidding, but it does present challenges on on Fannie Mae/Freddie Mac backed loans)
Have anymore questions? Don't forget to give me a call or post if you have had or heard of a similar experience.
Well, how things have changed. As we are in the midst of "recovery" and the real estate market is taking a deep breathe as we enter what has been historically a slow period, it is now no longer good enough to bring said buyer and and seller together on price and terms, you now battle an unknown set of rules. Those rules are the ones determined by the lender or quasi-governmental entities such as Fannie Mae and Freddie Mac, as they throw down regulations depending on the loan program that the buyer is using, that will dictate which set of criteria will be used to determine the value of the home.
Buyers and sellers are spending unheard of amounts of time and money to find the "real" value of their home in a historically unique marketplace. As they are trying to discover and negotiate this value, the lack of comparable sales, due to the depressed market is being used as an excuse as to why values are not there. This is happening in markets that are considered to be somewhat "stable". Meaning that nothing has been sold in the past several years because nothing has been on the market, because folks actually LIKE to live there! That usually means high demand and a relatively safe investment. Banks say NOT SO FAST! No comps, no values or they will compare and adjust the subject home with homes of varying age, quality of construction and design...for instance comparing a one level home to a two story with a basement.
The moral of the story is to
1-be aware of these risks as you are searching for homes or trying to sell your home
2-have comparable homes in your back pocket should an appraiser ask for assistance in establishing value
3-use more traditional forms of lending when possible, such as conventional loans with lower LTVs that have fewer governmental strings attached
4-don't buy anything unique (just kidding, but it does present challenges on on Fannie Mae/Freddie Mac backed loans)
Have anymore questions? Don't forget to give me a call or post if you have had or heard of a similar experience.
Sunday, July 11, 2010
10 Years....
Almost a month and how time flies! My daughter just turned 10 yesterday, so it seems fitting to reflect on the past 10 years. Months after Maddie was born, I took the real estate course and state test and began selling real estate. My how times have changed and haven't!!
When I first started my real estate career, the market was not exactly what you would call "stellar". Meaning, rates were around 9%, there was a pretty large inventory and I felt, as I sat on phone duty rearranging Post-It notes, that buyers were few and far between. So few and far, that on my very first transaction, the buyers could not secure financing and we negotiated an owner finance agreement, that eventually worked out in every one's best interest.
Banks and lenders at the time were still requiring sizable chunks of cash down and the first-time buyer had to save (gasp!) money or have it gifted in order to make a go of purchasing their first home. I remember one office meeting I sat in at the first firm I worked at, when someone came and spoke to our office about 100% financing and USDA rural housing loans. They showed a slide-show, (yes, not PowerPoint but slide show) of the various income levels and how they correlate to the number of people in the family. I remember the buzz around our office as to how could this be sustained and do these folks really need this kind of governmental assistance if they can't qualify under the current standards of lending....Well, you can now sit back and Monday morning quarterback, but you also know where that got us. Now the government backs over 90% of all loans and establishes outlandish criteria and hoops to jump for legitimate buyers while still offering, up until a very short while ago, these SAME exact loan programs!! Guess we still haven't learned...
As I became more experienced, changed companies, owned and sold my own company, my perspective changed. I grew into a position that allowed me to consult and advise buyers and sellers on the purchase and sell real estate. No longer, cold calling (done away with by Do Not Call registry), no longer giving recipe cards and tossing candy in the parade, time and experience blessed me with a trusted and loyal client base that is always sending new leads and referrals my way. Folks now understand my job for them doesn't stop at closing, it continues as an advisor for home remodeling, refinancing, additions, real estate tax questions, advocacy on their behalf to banks and attorneys and so much more. This career is fulfilling and challenging, ever-changing, rewarding, sometimes emotionally-draining and sometimes down-right sad.
Our family has gone from sitting in our first 800 square foot home, with a computer hooked up to a phone line and an AOL disk received in the mail...to wireless and handheld SmartPhones, able to download documents anywhere and databases that includes thousands of names and contacts with a key-stroke.
Easier? No. We sit here today and have no idea where the market truly is because of a false-floor placed on real estate. At least 10 years ago, the buyers and sellers drove the market and the supply and demand, not bureaucrats in DC. Until fewer regulations and requirements are placed on real estate and lending, rather than more and the market settles because of a good dose of old fashioned common sense, then we will continue to speculate on what the next 10 years will look like. Locally, we are in good shape and for that I am grateful, but our market is affected by those trying to sell in other areas and true recovery can't happen until the job market stabilizes and the private sector adds and innovates. And until then, our industry will have to be innovative to not only survive but find a way to thrive in this period of ambiguity.
When I first started my real estate career, the market was not exactly what you would call "stellar". Meaning, rates were around 9%, there was a pretty large inventory and I felt, as I sat on phone duty rearranging Post-It notes, that buyers were few and far between. So few and far, that on my very first transaction, the buyers could not secure financing and we negotiated an owner finance agreement, that eventually worked out in every one's best interest.
Banks and lenders at the time were still requiring sizable chunks of cash down and the first-time buyer had to save (gasp!) money or have it gifted in order to make a go of purchasing their first home. I remember one office meeting I sat in at the first firm I worked at, when someone came and spoke to our office about 100% financing and USDA rural housing loans. They showed a slide-show, (yes, not PowerPoint but slide show) of the various income levels and how they correlate to the number of people in the family. I remember the buzz around our office as to how could this be sustained and do these folks really need this kind of governmental assistance if they can't qualify under the current standards of lending....Well, you can now sit back and Monday morning quarterback, but you also know where that got us. Now the government backs over 90% of all loans and establishes outlandish criteria and hoops to jump for legitimate buyers while still offering, up until a very short while ago, these SAME exact loan programs!! Guess we still haven't learned...
As I became more experienced, changed companies, owned and sold my own company, my perspective changed. I grew into a position that allowed me to consult and advise buyers and sellers on the purchase and sell real estate. No longer, cold calling (done away with by Do Not Call registry), no longer giving recipe cards and tossing candy in the parade, time and experience blessed me with a trusted and loyal client base that is always sending new leads and referrals my way. Folks now understand my job for them doesn't stop at closing, it continues as an advisor for home remodeling, refinancing, additions, real estate tax questions, advocacy on their behalf to banks and attorneys and so much more. This career is fulfilling and challenging, ever-changing, rewarding, sometimes emotionally-draining and sometimes down-right sad.
Our family has gone from sitting in our first 800 square foot home, with a computer hooked up to a phone line and an AOL disk received in the mail...to wireless and handheld SmartPhones, able to download documents anywhere and databases that includes thousands of names and contacts with a key-stroke.
Easier? No. We sit here today and have no idea where the market truly is because of a false-floor placed on real estate. At least 10 years ago, the buyers and sellers drove the market and the supply and demand, not bureaucrats in DC. Until fewer regulations and requirements are placed on real estate and lending, rather than more and the market settles because of a good dose of old fashioned common sense, then we will continue to speculate on what the next 10 years will look like. Locally, we are in good shape and for that I am grateful, but our market is affected by those trying to sell in other areas and true recovery can't happen until the job market stabilizes and the private sector adds and innovates. And until then, our industry will have to be innovative to not only survive but find a way to thrive in this period of ambiguity.
Sunday, June 06, 2010
That's What I Call a Great Deal!
What a wonderful and relaxing weekend, after the madness of tax credit deadlines, soccer tournaments and end of school activities, it seems as if life has gotten back to normal...well at least until tomorrow!
Several interesting bits of information to be relayed to you that have recently occurred...great home on Fielding Drive in the Post Oak subdivision is back on the market after only have recently exchanged hands in the past month or so. One of my close friends asked me to confirm if the first sell actually went through and it did, but for any of you looking for a great one level brick ranch in an established and super convenient Kernersville location, contact me for the specs...listed at just $205k--not much more than what it sold for only a few weeks ago!
Several of my listings have recently been reduced...placing them in a category that I call "What a Great Deal!" That means if I had millions of dollars, I would grab these homes up and hold on to them for a few years and well, you know the rest of the story. One of these is my mother-in-law's home in Salisbury Crossing at 605 Charles Conner. She just authorized another reduction of 5k, making this a steal at 195k!! Check it out www.allentate.com/brookecashion/564429
Another one of these "deals" is a new listing located in Tredegar at 1719 Tredegar Road. Things have been pretty slow for this subdivision for some reason, but this home is priced to sell at just 250k...4 bedrooms, all-brick and a huge, level fenced backyard. www.allentate.com/brookecashion/581968
Also, if you know of anyone looking for something below 150k that is move-in ready check these HOT PROPERTIES out!! Perfect for an investor wanting to hold and flip, great for rental property or for someone just needing some great space for the money! Check out the lot sizes, condition and location for the price.
908 Huntington Run in Kernersville www.allentate.com/brookecashion/573015
1140 Ziglar Road in Northern Winston-Salem www.allentate.com/brookecashion/572220
Anything else that you hear of or have questions on please don't hesitate to call me, text, email, Tweet, FB or post to the blog...we'll pick it up and get back to you!
Stay tuned for days on market updates, inventory and new listings!
Keep an eye out for the June e-newsletter coming your way this week with tons of new info!
Brooke
Several interesting bits of information to be relayed to you that have recently occurred...great home on Fielding Drive in the Post Oak subdivision is back on the market after only have recently exchanged hands in the past month or so. One of my close friends asked me to confirm if the first sell actually went through and it did, but for any of you looking for a great one level brick ranch in an established and super convenient Kernersville location, contact me for the specs...listed at just $205k--not much more than what it sold for only a few weeks ago!
Several of my listings have recently been reduced...placing them in a category that I call "What a Great Deal!" That means if I had millions of dollars, I would grab these homes up and hold on to them for a few years and well, you know the rest of the story. One of these is my mother-in-law's home in Salisbury Crossing at 605 Charles Conner. She just authorized another reduction of 5k, making this a steal at 195k!! Check it out www.allentate.com/brookecashion/564429
Another one of these "deals" is a new listing located in Tredegar at 1719 Tredegar Road. Things have been pretty slow for this subdivision for some reason, but this home is priced to sell at just 250k...4 bedrooms, all-brick and a huge, level fenced backyard. www.allentate.com/brookecashion/581968
Also, if you know of anyone looking for something below 150k that is move-in ready check these HOT PROPERTIES out!! Perfect for an investor wanting to hold and flip, great for rental property or for someone just needing some great space for the money! Check out the lot sizes, condition and location for the price.
908 Huntington Run in Kernersville www.allentate.com/brookecashion/573015
1140 Ziglar Road in Northern Winston-Salem www.allentate.com/brookecashion/572220
Anything else that you hear of or have questions on please don't hesitate to call me, text, email, Tweet, FB or post to the blog...we'll pick it up and get back to you!
Stay tuned for days on market updates, inventory and new listings!
Keep an eye out for the June e-newsletter coming your way this week with tons of new info!
Brooke
Tuesday, February 23, 2010
When Details Matter...
I had lunch today with a former client and a dear friend of mine who is considering a career in real estate. I look forward to continuing our conversation as she works step by step to obtain her real estate license and moves into the position of "trusted advisor" and Realtor.
As we were discussing opportunity and risk, the conversation took an interesting turn as she was filling me in on details of a friend of hers that is in the market for a home. She gave me their information and let me know that they would be contacting me in order to start the home-buying process. We would work in this fashion until she obtains her license and is able to help them if they haven't found the "perfect house" by that time.
She started talking about why she told them that they should work with me, and I have to admit I have never seen it from the outside in quite like she was discribing. Keep in mind this person had just sold and bought a home with me this year, wants to work with our group of associates and is now referring me a friend! Wow! My ego was really getting inflated! The points she made regarding my service and what I could offer her friends buying a home were these...
*Anticipation of problems before they arise "nipping it in the bud" , "worst case scenario" and then "most likely case scenario".
*Taking time to find the right house for a buyer...because of my experience and established clientele, having the patience and resources to spend the necessary time finding a home that works, rather than "pushing" someone into something that doesn't.
*Understanding the marketplace...what it means to understand home values, future development and growth areas and what homes meet varying and ever-changing governmental guidelines.
*Team of Experts...working with the right partners in lending, inspections, attorneys to make the deal go smoothly and knowing that everyone working on the deal is working together to get the job done right the first time!
*Having a system to take care of the details...I admit...I am a little OCD when it comes to my system of business practice...everything is filed, categorized and noted so that we can refer back to previous conversations, provide documentation and make sure that your interests are taken care of...
All of this works to make my clients' real estate experience the best it can be and I love her for taking the time to tell me WHY she trusts my advice! So on that note, I'll refer back to one of my previous marketing mantras and thank my friend for helping me to revive...
"WHEN DETAILS MATTER....EXPERIENCE COUNTS!"
Happy House Hunting!
Brooke
As we were discussing opportunity and risk, the conversation took an interesting turn as she was filling me in on details of a friend of hers that is in the market for a home. She gave me their information and let me know that they would be contacting me in order to start the home-buying process. We would work in this fashion until she obtains her license and is able to help them if they haven't found the "perfect house" by that time.
She started talking about why she told them that they should work with me, and I have to admit I have never seen it from the outside in quite like she was discribing. Keep in mind this person had just sold and bought a home with me this year, wants to work with our group of associates and is now referring me a friend! Wow! My ego was really getting inflated! The points she made regarding my service and what I could offer her friends buying a home were these...
*Anticipation of problems before they arise "nipping it in the bud" , "worst case scenario" and then "most likely case scenario".
*Taking time to find the right house for a buyer...because of my experience and established clientele, having the patience and resources to spend the necessary time finding a home that works, rather than "pushing" someone into something that doesn't.
*Understanding the marketplace...what it means to understand home values, future development and growth areas and what homes meet varying and ever-changing governmental guidelines.
*Team of Experts...working with the right partners in lending, inspections, attorneys to make the deal go smoothly and knowing that everyone working on the deal is working together to get the job done right the first time!
*Having a system to take care of the details...I admit...I am a little OCD when it comes to my system of business practice...everything is filed, categorized and noted so that we can refer back to previous conversations, provide documentation and make sure that your interests are taken care of...
All of this works to make my clients' real estate experience the best it can be and I love her for taking the time to tell me WHY she trusts my advice! So on that note, I'll refer back to one of my previous marketing mantras and thank my friend for helping me to revive...
"WHEN DETAILS MATTER....EXPERIENCE COUNTS!"
Happy House Hunting!
Brooke
Monday, January 25, 2010
Real Estate Stats--January 2010
"If prices come down by another 10% but interest rates increase by 1 percentage point, that would mean the same monthly payment today versus waiting."--New York Times 7/27/2009
"As the Fed begins to wind down its purchases in the next few months, rates will become less enticing. Analysts expect them to rise to at least 6 percent from the current 5 percent."--New York Times 10/24/2009
In 2009 the percent of total sales in the Winston-Salem, NC market were as follows
$0-100,000---30.0%
$100,000-250,000---54.2%
$250,000-500,000---12.3%
$500,000-750,000---2%
$750,000-1,000,000---.003%
$1,000,000-2,000,000---.002%
Should YOU wait until the market rebounds to sell? According to Housing Wire 9/21/2009 and Moody's analyst:
At least another decade will pass before housing prices return to peak 2006 levels, according to analyst Celia Chen at Moody's Economy.com. She wrote that housing prices will decline for another year bottoming out in the second quarter of 2010 before rebounding.
"The correction will be not only deep but also lengthy. The national price level will not regain its 2006 high until 2020."
"As the Fed begins to wind down its purchases in the next few months, rates will become less enticing. Analysts expect them to rise to at least 6 percent from the current 5 percent."--New York Times 10/24/2009
In 2009 the percent of total sales in the Winston-Salem, NC market were as follows
$0-100,000---30.0%
$100,000-250,000---54.2%
$250,000-500,000---12.3%
$500,000-750,000---2%
$750,000-1,000,000---.003%
$1,000,000-2,000,000---.002%
Should YOU wait until the market rebounds to sell? According to Housing Wire 9/21/2009 and Moody's analyst:
At least another decade will pass before housing prices return to peak 2006 levels, according to analyst Celia Chen at Moody's Economy.com. She wrote that housing prices will decline for another year bottoming out in the second quarter of 2010 before rebounding.
"The correction will be not only deep but also lengthy. The national price level will not regain its 2006 high until 2020."
Wednesday, January 13, 2010
Free House? Depends on how you view the glass...
Well, there isn't such a thing and home ownership does come with a ton of responsibility, but nothing is more American than owning your own home. With the extension and expansion of the tax credit and the raising of the limit of how much money you can make in order to qualify (125k-singles**225K-couples), there has never been a time that felt more like, well, free!
If you take the notion of a borrower paying $900 in interest and property taxes each month, this would equate to a loan amount of $165,000. At this loan amount, the interest is around $690 and the property taxes, let's say are $210 for a total of $900--both of these items being normal tax write-offs.
So on this $900/month budget or $10,800 per year they are probably close to a 25% tax bracket with federal and state taxes, so they could potential recognize $2700 in income tax benefits PLUS the additional $8000 in credits from the stimulus!
WOW! They just got their home for $100 this year! Of course, back to the expenses...there is of course home owners insurance, which should be a little more than the renter's insurance they SHOULD be carrying and they will have to maintain their new home.
In this situation it is obviously one scenario and as I tell all of my clients, even those who look like they have "cut and dry" situations, that they need to consult their tax advisor. I also have to say that this novel idea was not mine, but passed on to me by a dear mortgage associate.
Bottom line is this...the tax credit was extended and expanded and if you are even remotely considering moving up or out, NOW IS THE TIME! Any financial advisor that you read in the WSJ or see on t.v preach that this is a historic time for buying real estate...imagine the value 20 years from now!
Make the credit work for you and give me a call so that I can help point you in the right direction so that you too can take your piece of the stimulus pie!
If you take the notion of a borrower paying $900 in interest and property taxes each month, this would equate to a loan amount of $165,000. At this loan amount, the interest is around $690 and the property taxes, let's say are $210 for a total of $900--both of these items being normal tax write-offs.
So on this $900/month budget or $10,800 per year they are probably close to a 25% tax bracket with federal and state taxes, so they could potential recognize $2700 in income tax benefits PLUS the additional $8000 in credits from the stimulus!
WOW! They just got their home for $100 this year! Of course, back to the expenses...there is of course home owners insurance, which should be a little more than the renter's insurance they SHOULD be carrying and they will have to maintain their new home.
In this situation it is obviously one scenario and as I tell all of my clients, even those who look like they have "cut and dry" situations, that they need to consult their tax advisor. I also have to say that this novel idea was not mine, but passed on to me by a dear mortgage associate.
Bottom line is this...the tax credit was extended and expanded and if you are even remotely considering moving up or out, NOW IS THE TIME! Any financial advisor that you read in the WSJ or see on t.v preach that this is a historic time for buying real estate...imagine the value 20 years from now!
Make the credit work for you and give me a call so that I can help point you in the right direction so that you too can take your piece of the stimulus pie!
Monday, January 04, 2010
X Marks the Spot...
Well, now the holidays are behind us and 2010 or the Year of X is now upon us. I have been super busy listing and consulting folks who are weeks away from listing, so there will be plenty to choose from if you are a first-timer or move-up buyer looking to take advantage of the extended and expanded tax credit before April 30, 2010.
The numbers show the "hot spots" in the market and I have some stats from November 09 I would like to share that demonstrate just that.
These stats are residential stats for Forsyth County-November 2009
Homes closed between 100,001 and 150,000---112 sold
Homes closed between 150,001 and 200,000---41 sold
Homes closed between 200,001 and 250,000---17 sold
Homes closed between 250,001 and 300,000---12 sold
TOTAL of home sold that were over 300,000---29 sold!
Hot market is definitely between 100-200K and those over the 300K mark are going to have to price aggressively, still be the shiniest apple in the bunch and be open to buyer incentives at least for the next quarter or three.
December and January's numbers will be very interesting since it is my opinion that these figures above from November 09 are artificially inflated due to the perception that the tax credit was ending on Nov 30...we'll see how we adjust to the new deadlines and where the market ends up after April 2010...As far as bottoming of the market, it is my hope that X will truly mark the spot as the bottom and we can go onward and upward from there.
Wishing you a healthy and prosperous New Year!
The numbers show the "hot spots" in the market and I have some stats from November 09 I would like to share that demonstrate just that.
These stats are residential stats for Forsyth County-November 2009
Homes closed between 100,001 and 150,000---112 sold
Homes closed between 150,001 and 200,000---41 sold
Homes closed between 200,001 and 250,000---17 sold
Homes closed between 250,001 and 300,000---12 sold
TOTAL of home sold that were over 300,000---29 sold!
Hot market is definitely between 100-200K and those over the 300K mark are going to have to price aggressively, still be the shiniest apple in the bunch and be open to buyer incentives at least for the next quarter or three.
December and January's numbers will be very interesting since it is my opinion that these figures above from November 09 are artificially inflated due to the perception that the tax credit was ending on Nov 30...we'll see how we adjust to the new deadlines and where the market ends up after April 2010...As far as bottoming of the market, it is my hope that X will truly mark the spot as the bottom and we can go onward and upward from there.
Wishing you a healthy and prosperous New Year!
Monday, December 07, 2009
Changes to Good Faith Estimate Just Around the Corner...
At our office meeting last week our Allen Tate mortgage VP spoke to our group about the changes on the horizon for Good Faith Estimates (GFE). For those of you out there who haven't purchased a home in a while, you may not remember that a GFE is required from the lender prior to loan commitment. Due to so many recent lending changes and loan defaults, the government has stepped in to simplify the process--thanks!
What was once a one page form has grown to three pages and is a basically a hand-holding, step by step worksheet for buyers to compare and contrast lenders and the loans they have to offer.
There are still caveats...dates are important to pay attention to because rates change, programs are eliminated and funds for certain programs can be limited.
It is still crucial to go with a reputable lender who can explain your options and make sure you are comparing "apples to apples" so to speak. Meaning that origination fees, points, transaction fees, estimates of expenses and escrows are broken out but can vary widely.
The one thing that jumps out at me and some of my colleagues is the fact that the lenders must disclose up front fees for services by third-party vendors. These fees cannot change but a certain percent from the overall cost. This means that your lender may say that they have an average price for legal services (closing attorney), but you want to choose someone you know. If the person you choose costs significantly more, bundled with other items that are variable, and your lender is basing their estimates on folks they have historically used, this may upset that proverbial "apple cart". If it does it could mean essentially limiting your choices because by using someone not in the "pool" could throw the estimates on the GFE out of whack, thus delaying the closing.
How, you say, if I am ok with the fees and the possible change can this delay my closing? Well, another change is that if these amounts charged change outside of the allowed percentage...the lender has to draw up another GFE and make sure that the closing occurs no sooner than three days from receipt.
There will definitely be "tweaking" of this document and though lenders are required to use the new GFE now, they are also in a transitional period to allow for instruction and adjustment.
Bottom line is that as a consumer of real estate it is necessary to find a means of understanding the cost of borrowing money and transacting real estate. Find a professional lender that understands the various programs and their ups, downs, ins and outs. Once you have several GFEs from various mortgage lenders, share them with your professional REALTOR so that you can talk about the programs and how they may effect what kind, what price and what location of the home you are going to purchase. That way everyone, most importantly yourself, is on the same page regarding your strategic plan to buy a home or investment property and that my friend, will bode for a smooth and professionally executed transaction!
Feel free to post questions or your own experiences with this new Good Faith Estimate or any other questions or comments you have regarding the real estate process!
What was once a one page form has grown to three pages and is a basically a hand-holding, step by step worksheet for buyers to compare and contrast lenders and the loans they have to offer.
There are still caveats...dates are important to pay attention to because rates change, programs are eliminated and funds for certain programs can be limited.
It is still crucial to go with a reputable lender who can explain your options and make sure you are comparing "apples to apples" so to speak. Meaning that origination fees, points, transaction fees, estimates of expenses and escrows are broken out but can vary widely.
The one thing that jumps out at me and some of my colleagues is the fact that the lenders must disclose up front fees for services by third-party vendors. These fees cannot change but a certain percent from the overall cost. This means that your lender may say that they have an average price for legal services (closing attorney), but you want to choose someone you know. If the person you choose costs significantly more, bundled with other items that are variable, and your lender is basing their estimates on folks they have historically used, this may upset that proverbial "apple cart". If it does it could mean essentially limiting your choices because by using someone not in the "pool" could throw the estimates on the GFE out of whack, thus delaying the closing.
How, you say, if I am ok with the fees and the possible change can this delay my closing? Well, another change is that if these amounts charged change outside of the allowed percentage...the lender has to draw up another GFE and make sure that the closing occurs no sooner than three days from receipt.
There will definitely be "tweaking" of this document and though lenders are required to use the new GFE now, they are also in a transitional period to allow for instruction and adjustment.
Bottom line is that as a consumer of real estate it is necessary to find a means of understanding the cost of borrowing money and transacting real estate. Find a professional lender that understands the various programs and their ups, downs, ins and outs. Once you have several GFEs from various mortgage lenders, share them with your professional REALTOR so that you can talk about the programs and how they may effect what kind, what price and what location of the home you are going to purchase. That way everyone, most importantly yourself, is on the same page regarding your strategic plan to buy a home or investment property and that my friend, will bode for a smooth and professionally executed transaction!
Feel free to post questions or your own experiences with this new Good Faith Estimate or any other questions or comments you have regarding the real estate process!
Wednesday, November 04, 2009
For The Record...NC Real Estate Update
Per Issue 6, November/December 2009 North Carolina Realtors Association:
Just some quick factoids regarding the current state of NC real estate. We hear so much nationwide news, I thought it would be beneficial to share some state numbers with you. Keep in mind, all real estate is local and even though these are state numbers, numbers specific to your area and/or neighborhood can be obtained by contacting me, Brooke Cashion at 336-817-3598 or brooke.cashion@allentate.com
*First-time buyers continue to fuel the housing rebound. Most are between the ages of 25-45 and they have accounted for nearly 50% of the homes sales in the first 7 months of 2009!!
*NC existing homes sales posted its fourth consecutive month of improvement in September, the longest period of gain in 5 years. **My commentary** This may be attributed to prices adjusting to more "normal" levels**
*NC ranks as the 6th most popular state in the nation when it comes to where people want to love, according to a recent Harris interactive poll.
*National foreclosure rates soared in the 3rd quarter with 1 in every 136 homes going into foreclosure...HOWEVER in NC, we had the 14th lowest rate of foreclosure with only 1 in every 417 homes going into foreclosure.
Please feel free to post commentary on your observations of these facts and figures and contribute any additional pertinent information you may have, including references and links.
Just some quick factoids regarding the current state of NC real estate. We hear so much nationwide news, I thought it would be beneficial to share some state numbers with you. Keep in mind, all real estate is local and even though these are state numbers, numbers specific to your area and/or neighborhood can be obtained by contacting me, Brooke Cashion at 336-817-3598 or brooke.cashion@allentate.com
*First-time buyers continue to fuel the housing rebound. Most are between the ages of 25-45 and they have accounted for nearly 50% of the homes sales in the first 7 months of 2009!!
*NC existing homes sales posted its fourth consecutive month of improvement in September, the longest period of gain in 5 years. **My commentary** This may be attributed to prices adjusting to more "normal" levels**
*NC ranks as the 6th most popular state in the nation when it comes to where people want to love, according to a recent Harris interactive poll.
*National foreclosure rates soared in the 3rd quarter with 1 in every 136 homes going into foreclosure...HOWEVER in NC, we had the 14th lowest rate of foreclosure with only 1 in every 417 homes going into foreclosure.
Please feel free to post commentary on your observations of these facts and figures and contribute any additional pertinent information you may have, including references and links.
Tuesday, October 20, 2009
Feds Hedging on Extension of Tax Credit....
This article appeared today. What are your thoughts on whether or not the tax credit should be extended or revamped to include "move-up" buyers?
HUD Secretary Hedges on Extension of Homebuyer Tax CreditOct 20, 2009 11:30 AM
By Richard Rubin,
CQ StaffHousing and Urban Development Secretary Shaun Donovan equivocated Tuesday on whether Congress should extend an expiring tax credit for first-time homebuyers.“I can assure you that the administration will work with Congress to fashion appropriate and effective homebuyer incentives, mindful of both their benefits to stimulating new demand and their costs to the American taxpayer,” he said in prepared testimony for a Tuesday morning hearing of the Senate Banking, Housing and Urban Affairs Committee. Donovan acknowledged congressional support for an extension, but he did not endorse it himself.The current $8,000 tax credit for first-time homebuyers, created in the economic stimulus package (PL 111-5) enacted early this year, expires Nov. 30. Housing and real estate interests and their allies on Capitol Hill are pushing hard for an extension. Some also want to make the credit available to all home purchasers, not just first-time buyers, and to loosen the income eligibility limits.Various extension proposals have drawn support from lawmakers in both parties, including Senate Banking Chairman Christopher J. Dodd, D-Conn.“The credit is set to expire in five weeks,” Dodd said in his prepared opening statement. “But the work of stabilizing the housing market won’t be done. We still need to use every tool at our disposal to fix this problem.”The intensified focus on the tax credit’s looming expiration came as the Commerce Department said Tuesday that while construction of new homes and apartments rose 0.5 percent in September, new applications for building permits fell 1.2 percent. That was the sharpest decline since a 2.5 percent drop in April and may have reflected uncertainty about the tax credit.Under questioning from Dodd, Donovan said there was “clear evidence” that the tax credit has helped housing markets, but he added that the administration wants to do more research on the costs.“We understand the urgency of this situation,” Donovan said. “And we believe that within the next few weeks, we will have additional data that will allow us to sit down with you” and discuss whether and how to extend the credit.Donovan downplayed the potential impact of allowing the tax credit to expire as scheduled next month. “The end of the tax credit would have some negative implications for the market,” he conceded, “but I do not believe based on all of the other actions that we’re taking . . . I do not believe that a catastrophic decline would be the result of the end of the tax credit.”The lead Senate supporter of an extension, Johnny Isakson, R-Ga., also testified at the hearing.Under a plan he is trying to attach to legislation extending unemployment benefits (H.R. 3548), the tax credit would be available to all purchasers of a primary residence. His proposal would double the allowable income of homebuyers eligible for the tax credit, to $150,000 per year for individuals and $300,000 for married couples. The credit would be available through June 30, and the Joint Committee on Taxation estimates it would cost $16.7 billion, according to Isakson’s office.“It brings a lot of Americans to the market that are sitting on the sidelines today,” Isakson said of his plan to broaden the credit, pointing in particular to the “move-up” market among people who already own homes.Isakson said that based on his conversations with administration officials and his Senate colleagues, he did not think there was support for boosting the maximum credit to $15,000, as he originally proposed, or extending it beyond June 30, 2010.“It’s the art of the doable and the art of the possible,” he said.Many economists have criticized the tax credit, saying that it would subsidize people who would buy houses anyway.Sen. Richard C. Shelby of Alabama, the committee’s ranking Republican, echoed those concerns and said “some basic questions need to be answered” before the credit is extended. He also said that a credit offset by a reduction in government spending would have a much different impact from an extension offset by higher taxes elsewhere.Supporters of the bill have varying ideas on whether and how any extension should be offset. Isakson and Dodd said they are looking for offsets.“If we can find a pay-for, I’m all for it,” said Dodd.
Source: CQ Today Online News
HUD Secretary Hedges on Extension of Homebuyer Tax CreditOct 20, 2009 11:30 AM
By Richard Rubin,
CQ StaffHousing and Urban Development Secretary Shaun Donovan equivocated Tuesday on whether Congress should extend an expiring tax credit for first-time homebuyers.“I can assure you that the administration will work with Congress to fashion appropriate and effective homebuyer incentives, mindful of both their benefits to stimulating new demand and their costs to the American taxpayer,” he said in prepared testimony for a Tuesday morning hearing of the Senate Banking, Housing and Urban Affairs Committee. Donovan acknowledged congressional support for an extension, but he did not endorse it himself.The current $8,000 tax credit for first-time homebuyers, created in the economic stimulus package (PL 111-5) enacted early this year, expires Nov. 30. Housing and real estate interests and their allies on Capitol Hill are pushing hard for an extension. Some also want to make the credit available to all home purchasers, not just first-time buyers, and to loosen the income eligibility limits.Various extension proposals have drawn support from lawmakers in both parties, including Senate Banking Chairman Christopher J. Dodd, D-Conn.“The credit is set to expire in five weeks,” Dodd said in his prepared opening statement. “But the work of stabilizing the housing market won’t be done. We still need to use every tool at our disposal to fix this problem.”The intensified focus on the tax credit’s looming expiration came as the Commerce Department said Tuesday that while construction of new homes and apartments rose 0.5 percent in September, new applications for building permits fell 1.2 percent. That was the sharpest decline since a 2.5 percent drop in April and may have reflected uncertainty about the tax credit.Under questioning from Dodd, Donovan said there was “clear evidence” that the tax credit has helped housing markets, but he added that the administration wants to do more research on the costs.“We understand the urgency of this situation,” Donovan said. “And we believe that within the next few weeks, we will have additional data that will allow us to sit down with you” and discuss whether and how to extend the credit.Donovan downplayed the potential impact of allowing the tax credit to expire as scheduled next month. “The end of the tax credit would have some negative implications for the market,” he conceded, “but I do not believe based on all of the other actions that we’re taking . . . I do not believe that a catastrophic decline would be the result of the end of the tax credit.”The lead Senate supporter of an extension, Johnny Isakson, R-Ga., also testified at the hearing.Under a plan he is trying to attach to legislation extending unemployment benefits (H.R. 3548), the tax credit would be available to all purchasers of a primary residence. His proposal would double the allowable income of homebuyers eligible for the tax credit, to $150,000 per year for individuals and $300,000 for married couples. The credit would be available through June 30, and the Joint Committee on Taxation estimates it would cost $16.7 billion, according to Isakson’s office.“It brings a lot of Americans to the market that are sitting on the sidelines today,” Isakson said of his plan to broaden the credit, pointing in particular to the “move-up” market among people who already own homes.Isakson said that based on his conversations with administration officials and his Senate colleagues, he did not think there was support for boosting the maximum credit to $15,000, as he originally proposed, or extending it beyond June 30, 2010.“It’s the art of the doable and the art of the possible,” he said.Many economists have criticized the tax credit, saying that it would subsidize people who would buy houses anyway.Sen. Richard C. Shelby of Alabama, the committee’s ranking Republican, echoed those concerns and said “some basic questions need to be answered” before the credit is extended. He also said that a credit offset by a reduction in government spending would have a much different impact from an extension offset by higher taxes elsewhere.Supporters of the bill have varying ideas on whether and how any extension should be offset. Isakson and Dodd said they are looking for offsets.“If we can find a pay-for, I’m all for it,” said Dodd.
Source: CQ Today Online News
Tuesday, February 03, 2009
Bailout Package
Hi All!
Heading to a board of aldermen meeting here in an hour or so and had a few minutes to write while Maddie is watching Andy Griffith and I am watching the snow fall. I hope that it sticks around!
Well, the title of this piece is about the bailout...I don't have a tremendous amount to say, or a great deal of details but it does reinforce several principles that I believe in:
*Any bill sent through the House or Senate should be "clean"--no stuff attached to it, no special projects, nothing to sweeten or entice representatives--simply put "No Pork" and the president (whoever he may be at the time) should have line-item veto.
*Remember back in October, when the world as we knew it was going to simply cease to exist? Banks would go belly-up the next day, bread lines would form, the value of the dollar would plummet further than it already has and gas lines formed while gas prices soared? The BIG government (including folks I voted for & some I didn't) demanded a HUGE bailout--immediately...WELL, here we are, still no bailout and now we are in the midst of spend, spend, spend...here comes INFLATION!
*Could you use a million or two, or heck say a couple hundred thousands...well, while you and I cut our personal budgets, cease to spend on any extras and basically go on a pinto bean diet...the government wants to borrow and spend MORE of your hard-earned money! I don't suggest that we borrow money from China to give each taxpaying American a portion, I say, we don't borrow at all...
*IF WE DO BORROW...we must focus-focus! Housing--not bailing folks out, but making more money available to borrow to the average American...allow money to get to "Joe-Investor" who will buy up the foreclosures and short sales...they can fix them up, rent them out to the folks who have been displaced and eventually as the housing market stabilizes, they will sell them...contractors will be employed, goods will exchange hands, laborers will be back in business...FIX HOUSING & BANKING, not the arts, or contraceptive programs, or museums, FIX THE BASICS!
*Support the folks who don't take government dollars...THERE ARE BANKS out there who had good, solid lending practices. They loaned to folks who had good credit, assets and money down...yes times may be hard for these folks, but they are paying their bills and other people's too! Some of these banks turned down TARP money--yes, you heard me right! Turned it down! They are cautious and understand that taking government bailout money makes them beholden to the government...Keep in mind Ben Franklin's mantra: A government big enough to help you is a government big enough to control you....that's paraphrased folks and could have been Thomas Jefferson...nevertheless, you get my point!
Heading to a board of aldermen meeting here in an hour or so and had a few minutes to write while Maddie is watching Andy Griffith and I am watching the snow fall. I hope that it sticks around!
Well, the title of this piece is about the bailout...I don't have a tremendous amount to say, or a great deal of details but it does reinforce several principles that I believe in:
*Any bill sent through the House or Senate should be "clean"--no stuff attached to it, no special projects, nothing to sweeten or entice representatives--simply put "No Pork" and the president (whoever he may be at the time) should have line-item veto.
*Remember back in October, when the world as we knew it was going to simply cease to exist? Banks would go belly-up the next day, bread lines would form, the value of the dollar would plummet further than it already has and gas lines formed while gas prices soared? The BIG government (including folks I voted for & some I didn't) demanded a HUGE bailout--immediately...WELL, here we are, still no bailout and now we are in the midst of spend, spend, spend...here comes INFLATION!
*Could you use a million or two, or heck say a couple hundred thousands...well, while you and I cut our personal budgets, cease to spend on any extras and basically go on a pinto bean diet...the government wants to borrow and spend MORE of your hard-earned money! I don't suggest that we borrow money from China to give each taxpaying American a portion, I say, we don't borrow at all...
*IF WE DO BORROW...we must focus-focus! Housing--not bailing folks out, but making more money available to borrow to the average American...allow money to get to "Joe-Investor" who will buy up the foreclosures and short sales...they can fix them up, rent them out to the folks who have been displaced and eventually as the housing market stabilizes, they will sell them...contractors will be employed, goods will exchange hands, laborers will be back in business...FIX HOUSING & BANKING, not the arts, or contraceptive programs, or museums, FIX THE BASICS!
*Support the folks who don't take government dollars...THERE ARE BANKS out there who had good, solid lending practices. They loaned to folks who had good credit, assets and money down...yes times may be hard for these folks, but they are paying their bills and other people's too! Some of these banks turned down TARP money--yes, you heard me right! Turned it down! They are cautious and understand that taking government bailout money makes them beholden to the government...Keep in mind Ben Franklin's mantra: A government big enough to help you is a government big enough to control you....that's paraphrased folks and could have been Thomas Jefferson...nevertheless, you get my point!
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